What is an NFT? A quick beginner's guide to virtual assets and metaverse investing

Understand the True Difference Between NFTs and the Metaverse

Many people confuse NFTs and the metaverse, but these two actually have fundamental differences. What is an NFT (Non-Fungible Token)? Simply put, it is a digital asset certificate based on blockchain technology, while the metaverse is the virtual world that hosts these assets.

For example: you spend 60 NT dollars on LINE stickers, and a collector spends thousands of NT dollars on NFT art. On the surface, both are “virtual items,” but the underlying logic is completely different. The former grants a “usage right” controlled by the platform, which disappears once the service is taken down; the latter grants “ownership,” recorded on the blockchain, allowing free trading across any platform.

Evolution and Core Support of the Metaverse Concept

The term “metaverse” (Metaverse) originates from Neal Stephenson’s 1992 science fiction novel “Snow Crash,” depicting a parallel virtual world to reality. But today, the definition has evolved into: a virtual ecosystem that integrates work, entertainment, shopping, and socializing, with all transactions and ownership verified by NFTs and blockchain.

Venture capitalist Matthew Ball once pointed out that the metaverse represents the fourth wave of computing, following mainframes, personal computing, and mobile computing. This judgment reflects the capital market’s recognition of its long-term potential.

Why Are NFTs Crucial to the Metaverse?

If the metaverse is like a city, then NFTs are the ID cards for every resident and asset. It is because of NFTs that virtual assets have real scarcity and transferability.

A virtual world without NFT support faces three major dilemmas:

• Virtual treasures cannot be truly bought or sold; their value is permanently locked on servers
• Virtual goods created by designers can only be used personally, losing commercial opportunities
• Assets built by players on platforms are at risk of being taken down at any time

Traditional Digital Assets vs NFT Assets: Key Differences

How the Metaverse Boom Drives the Crypto Market

In the last bull market, metaverse projects like Decentraland and The Sandbox sparked massive investment enthusiasm. Virtual land prices soared, with MANA tokens increasing by 4,100% in 2021, outperforming Bitcoin during the same period; The Sandbox virtual land prices jumped from 1,000 TWD to 45,000 TWD, even surpassing Taipei real estate.

This wave of enthusiasm attracted a large influx of capital into the entire crypto market, making the metaverse a market focus. However, after the market peaked and corrected, the floor prices of related NFT projects continued to decline, with many niche projects seeing no trades at all, leaving investors with difficulty exiting.

How Ordinary Investors Can Participate in the Metaverse?

For beginners, buying and trading NFTs or project tokens are the most feasible ways to participate. Here is the complete process:

Step 1: Choose a Trading Platform

OpenSea is currently the most mainstream NFT trading platform, supporting assets across multiple blockchains. Most major platforms have similar features; choosing a well-known platform is the safest.

Step 2: Prepare a Digital Wallet

Set up a wallet supporting Ethereum and other blockchains (such as MetaMask or other common options) to connect to the trading platform for buying, selling, and transferring. When first connecting, follow prompts to create an account—no account opening fee required.

Step 3: Deposit Cryptocurrency

Purchase Ethereum (ETH) or other mainstream cryptocurrencies through major exchanges, then transfer to your wallet. This is the necessary fund source for NFT transactions.

Step 4: Buy NFT Projects

Browse the platform for desired NFTs and complete the purchase step-by-step. If the current floor price seems too high, you can participate in auctions below market value, offering a chance to snag a deal—but assess the risks yourself.

Step 5: Sell Owned NFTs

In your profile, find the NFTs you hold, and choose to list them directly or participate in auctions. You can also accept offers from other buyers (usually below the floor price), depending on your needs.

Three Safety Tips Before Entering the Metaverse

• Never input your private key on unfamiliar platforms — your private key is like a bank password; once leaked, assets are lost
• Avoid using the same password across multiple platforms — reduces the risk of collective theft
• Beware of “guaranteed profit” NFT airdrop ads — most are scams

Risk Awareness and Strategy Suggestions for Beginner Investors

The liquidity of metaverse and NFT investments is generally lower than cryptocurrencies, with many projects facing no buyers. For newcomers, small-scale testing is wiser than large single investments.

Another key risk is fraudulent projects. Many projects claiming to be “metaverse” are essentially applications with no real use, maintained solely by hype. Once market enthusiasm wanes, they can collapse rapidly. Unless you have excellent speculative judgment, it’s best to stay away from unfamiliar or low-profile projects.

Comparison of Metaverse and Other Investment Methods

Long-term Outlook for the Metaverse

From industry deployment, giants like Meta, Microsoft, and Google are heavily investing in metaverse-related technologies, reflecting increasing industry recognition. Virtual reality and artificial intelligence will become core technological supports, and the virtual economy’s share in the overall economy will continue to grow.

The future of the metaverse holds the greatest potential in creating new business models and industry chains, connecting virtual and real worlds. Meanwhile, gradual improvement of relevant laws and regulations will help lower entry barriers and reduce bad actors. In short, the metaverse has the potential to truly change people’s lifestyles, social logic, and economic structures.

In the NFT field, more innovative forms and supporting models will emerge to match the development pace of the metaverse. The ongoing legal and regulatory improvements will further promote industry standardization and mass adoption.

Common Questions About Metaverse Investment

Q: Are the metaverse and NFTs scams?

A: Mainstream and well-known metaverse projects have real applications and are not purely involved in market manipulation or scams. As a development direction recognized by mainstream capital, the metaverse still aims for technological innovation. However, many niche projects are indeed scams, so careful discernment is necessary.

Q: How risky is metaverse investment?

A: All investments carry risks, and metaverse investments are no exception. Participating blindly in cheap “air projects” without understanding can be very risky. But since there is no leverage mechanism, maintaining good trading discipline and ensuring liquidity allows for flexible entry and exit. Starting small and gradually gaining experience is recommended.