What Are The Roles Of Cryptocurrencies & NFTs In Virtual Worlds?
It's common for virtual blockchain worlds to use their own cryptocurrency instead of the USD$ or any other fiat currency for in-game transactions. There are many reasons behind this.
Cryptocurrency is a digital version of money in virtual worlds. Since cryptocurrencies use blockchain technology, they are designed to build trust and ensure security.
Cryptocurrencies, just like physical money or fiat currencies, are "fungible." This means that they can be exchanged or traded for one another. Their value is also equal — for example, one MANA (Decentraland's native currency) is always worth one MANA; just like one US dollar is always equal to one US dollar. Due to its fungibility, cryptocurrency is a secure way to conduct transactions on the blockchain.
Moreover, cryptocurrencies standardised the currency used by every user of the platform, from sellers and buyers to people working and participating in activities in the virtual world. Transactions in virtual worlds are almost instantaneous. Therefore, using standardised currency makes it easier for landowners and users to access their funds while they're in the virtual world, allowing them to pay for tickets, attend events, and buy or sell things easily.
Aside from cryptocurrency, another aspect of blockchain that's key to virtual worlds is non-fungible token (NFT). It plays an important role in virtual blockchain worlds because it certifies genuine ownership of a unique asset on the blockchain.
While cryptocurrencies are "fungible," NFTs are "non-fungible." You can't exchange them, and they aren't equal to one another. Also, they are unique, can't be replaced with something else, and can't be duplicated. Thus, they give users greater control over lands, avatars, arts, and other items they own. For instance, if you buy a plot of land in Somnium Space, you'll be the true owner of that land plot. There will only be one plot of land in that location in the virtual world, making it unique and scarce.
With NFTs, users can fully own and profit from the items they purchase, earn, or build in the game.