In October 2021, Facebook Inc. was renamed Meta Platforms. We’re off to the “metaverse,” this elusive, hyped and suspiciously eyed digital parallel universe. If Facebook founder Mark Zuckerberg has his way, millions of people will soon be spending their free time there and also working. The establishment of an NFT platform is the obvious choice. These could play a key role in the new Internet economy.
Who exactly is behind the plans?
The Financial Times first reported on the plans of “Meta Platforms”. The U.S. technology company owns Facebook and Instagram, two of the largest social media platforms. In addition, there are other acquisitions such as the messaging service WhatsApp and Oculus, a manufacturer of VR headset. CEO of Meta Platforms is still Mark Zuckerberg, who announced the renaming and realignment back in October 2021.
Facebook wants to enter the NFT market
David Markus, head of F2 (Facebook Financial), is likely to remain involved. He already referred to the fact that (at that time) Facebook was interested in non-fungible tokens in an interview with Bloomberg in August 2021. David Markus was responsible for the development of the Novi wallet, which can store NFTs in addition to the Diem. The only problem: they were still waiting for the approval of their own digital currency Diem (once Libra)
However, regulators were putting on the pressure. Since the end of January, according to a report by Bloomberg, this has ended for the first time. The Facebook cryptocurrency was not up to the requirements of the authorities. According to insiders, they are thinking about selling the assets of the Diem project so that investors can get back at least some of their money. According to the Wall Street Journal, Meta is selling Diem’s technologies and other assets to crypto bank Silvergate. With this, the Diem Association has cleverly maneuvered itself out of the line of fire.
Much is not yet known about the plans
According to the Financial Times report, Meta will allow Facebook and Instagram to create, showcase and sell their own NFTs. It also said that the project is still in an early phase and there could still be some changes. So really, not much is known. It is also not clear which blockchain the creators want to use. Do they want to use Ethereum like many other NFT platforms? Or are they even working on their own distributed ledger?
Facebook, Instagram, WhatsApp
$85.965 million (2020)
Is Meta developing its own blockchain?
If Meta does develop its own blockchain, we should not expect a particularly decentralized network. Let’s take a closer look at Diem (Libra), for example. Facebook’s cryptocurrency was developed by the Libra Association (later Diem Assocation), a non-profit organization based in Switzerland. Diem itself was designed as a stable coin. Users exchange real money for the cryptocurrency, which they can then send via Messenger on Facebook and Instagram. As simple as a text message. The blockchain did not have a consensus mechanism. Instead, it was up to Diem Association members to verify transactions and guarantee their authenticity. This raises legitimate questions for trading NFTs. After all, these are also tokens, require a blockchain for transparent recording of transactions, and a process for reaching consensus. In the eyes of strict Bitcoiners, they are unlikely to pass for cryptocurrencies. That’s because such a system lacks decentralization.
Where is Facebook’s NFT marketplace?
There is no more detailed information on this either so far. According to the report, users will be able to mint (“mine”) and display their own NFTs on Facebook and Instagram. So it is conceivable that this function will be built directly into the respective platforms. A separate marketplace for which users sign up via their own Facebook or Instagram accounts is also conceivable. In any case, every user of these websites should have access to the NFT functions.
In an interview with Bloomberg, David Markus explains the role of the Novi-Wallet and Diem in the new Metaverse. In the process, he also briefly touches on NFTs. The blockchain and smart contracts are intended to ensure that the non-fungible tokens are secure and that their use is subject to clear rules. In addition to owning and trading the tokens, lending is also conceivable.
What exactly can be done with the NFTs?
According to the plans, the following functions should be possible:
- NFTs can be used for profile pictures
- The profile picture could then be a unique token with unambiguous ownership
- It is both conceivable that one can emboss one’s own photo and thus protect it. Or you could create a graphic or other type of digital art and use it as your profile picture
- These images have a unique, tamper-proof address on the blockchain thanks to the minting function.
The marketplace is unlikely to allow people to trade selfies or photos from their latest trip. Instead, the marketplace will likely offer something similar to OpenSea and other NFT platforms. Artists, well-known or unknown, will likely be able to use this marketplace for their own creations. What types of NFTs will be possible, whether images, sound and music files or 3D graphics, is as yet unclear. It should also be important to what extent this function can be applied to one’s own content. Do you want to quickly imprint your vacation photos as NFTs so that no one can steal them? Well, saving them with a right click or creating a screenshot is still possible today (and always leads the principle of NFT ad absurdum). But that is too short-sighted. After all, there is much more at stake here.
NFT marketplace as the next step into the metaverse
The integration with Facebook and Instagram is probably just the beginning. With the renaming of the company from Facebook Inc. to Meta Platforms, Mark Zuckerberg set the direction of travel. The social media platforms of the future are to become more comprehensive and more digital, as far as he is concerned. In the metaverse, we will then have a digital identity, an avatar, equipped with digital clothes. According to some designers and fashion companies, we will then have an immaterial closet, as reported by CNN, for example. How about a house in the digital universe or even an entire property in the virtual world that belongs only to you?
And finally, non-fungible tokens lend themselves to this. The promise: The owners of the tokens actually own them, since only they have the access data to their entry on the blockchain. Not the company, not “Meta” or whatever the platforms of the future will be called. The company behind it provides the infrastructure, takes care of the blockchain and the marketplace. However, they can’t take the NFTs away from you. In such an environment, we are then supposed to spend our digital lives, work, spend money on virtual goods. All by means of blockchain and cryptocurrencies.
What will the metaverse of the future look like?
What is this parallel world that is to be created? Will the worst dystopias come true and we will all end up in a technocratic nightmare while analog life withers away? Maybe it won’t be so bad. The idea is actually not entirely new. The game “Second Life” showed what such a digital second life could look like. Only at that time, the topic of blockchain was not so big. In Second Life, players could build their own worlds, meet each other, and even get married.
Now the question is what influence NFTs and the blockchain will have on this principle. Possibly not too much. Marketplaces where digital goods are traded already existed on Steam and some other computer games. In an interview with Crypto Syllabus, the former Greek finance minister, Yanis Varoufakis, talks about his experience with Steam. Overnight, a market of its own had developed in the 2010s without the intervention of those in charge. In the process, Steam was driven by a fear: What if the market crashed?
Risks and opportunities of the Metaverse NFTs
Steam has over 20 million active users. That’s a lot, but nothing compared to Facebook’s roughly 2 billion daily users worldwide. A dedicated NFT marketplace, integrated with Facebook and Instagram, would open that market to billions. A bubble formation, if it is not already underway, seems preprogrammed. Much depends on how invasive Non-fungible Tokens are to the existing structures of social media. Already, a front has formed against randomized images of stoned monkeys. The issue pisses off many because they believe it’s all about making money.
Nevertheless, the potential is enormous. Opinions can change, especially when personal points of contact with the matter are formed. And the majority of people are likely to be rather unbiased. For most people, NFTs are still uncharted territory. Those who stay away from the future meta-marketplace as artists probably do so for ideological, but not for economic reasons.
What is the metaverse?The term stands for the "metaverse" and refers to the 1992 scifi novel "Snow Crash," which is about virtual spaces where people use avatars and meet each other. Over time, the boundaries between reality and the virtual world become blurred. For people like Mark Zuckerberg, the metaverse represents the next big step in the evolution of the Internet.
FAQ – Frequently Asked Questions
It is not yet known when the integration of non-fungible tokens will take place. There have only been reports about plans. In any case, some preliminary work has already been done with the development of Diem, so cryptocurrencies are not new territory for Meta.
We don’t know much about that so far. If the Diem does come, then it will probably also be the focus of payment transactions. It is also questionable whether the NFTs can be taken down from the meta blockchain and transferred to another marketplace.
Little is known about the payment mechanisms. Diem was planned as a stable coin. This means that fiat currencies are exchanged 1:1 into a cryptocurrency and then used for payments on the Internet. To what extent direct payment with francs, euros or dollars is possible for NFTs at Facebook is questionable. It becomes difficult with refunds and repayments. These are simply not possible on the blockchain.