NFTs have cultivated hardcore followings, mostly from crypto investors who believe the technology could help creators build communities and enable digital commerce. Brands have been interested in NFTs to create loyalty programs that are based on blockchain technology. NFTs have lost some of their caché, however, and marketers are using more accessible terms like “digital collectibles” and “virtual creations.”
Meta was not the only social media platform that embraced NFT creators. Twitter has also given NFT collectors the ability to connect their social media accounts to their digital wallets. The wallets hold the NFTs, which can then be displayed on the social media apps. Reddit has also integrated with digital collectibles.
NFTs are considered a foundational technology for the future of the metaverse because they are unique assets that bestow ownership in the virtual world. NFTs also foster interoperability among games and other online worlds in the metaverse—NFT holders can take their digital goods wherever they go in the metaverse. If a consumer buys a wearable NFT in one setting, the item is transferable to another setting.
Last year, Zuckerberg spoke about the potential for NFTs to enable virtual commerce. “I would hope that the clothing that your avatar is wearing in the metaverse, you know,” Zuckerberg said at SXSW, “can be basically minted as an NFT. You can take it between different places.”
Still, the NFT market has been somewhat fraught with risk. NFTs created opportunities for scammers to use social media to hype projects and leave investors holding the bag. And social media users have been the target of hackers who steal collections. Last year, Bored Ape Yacht Club founders had their Instagram account hacked, and the attackers posted a link that lured other collectors into a trap, ultimately stealing $2.5 million in digital assets.