Metaverse and Crypto 101

  • 2022-03-08

The ever-evolving digital world witnesses the emergence of ingenious technologies with the potential to bring profound, positive changes to society. Metaverse is one such term that has become a buzzword and is poised to revolutionize online lives. 

The term “metaverse” first appeared in Neal Stephenson’s 1992 iconic cryptopunk novel – Snow Crash – where delivery drivers travel the metaverse to safeguard themselves against a capitalist dystopia. The metaverse is a superset of Augmented Reality (AR), Virtual Reality (VR), and the internet. It is an imaginary realm where people can create their avatars, attend events, visit buildings and malls, and explore the space. 

In July 2021, Mark Zuckerberg revealed that his company plans to build a more inclusive version of Facebook that would comprise social presence, work, and entertainment. The company renamed itself to Meta in October 2021, which depicts its commitment to creating a metaverse. Giants like Microsoft, Google, Sony, and Samsung have joined Facebook in the XR Association, which is a consortium of technology companies that intend to create the future of experimental reality.  

Relationship between the metaverse and cryptocurrency 

Currently, the majority of the metaverse projects are games that provide the 3D characteristic of the metaverse. These platforms need to deliver financial services and accelerated transactions. In addition, data needs to be shared with billions of people. 

In the physical world, the transactions are carried out using fiat currency that serves as a medium of exchange and store of value. However, in the virtual world, how can transactions be performed? How can users pay for the purchase of land, painting, or any ticket for a concert or any other event? The answer is cryptocurrency. 

Companies like The Sandbox and Decentraland have built virtual worlds that utilize cryptocurrencies to enable the players to build structures like theme parts, virtual casinos, and monetize them. Decentraland enables users to buy property using cryptocurrency MANA, which can be purchased on cryptocurrency exchanges like Coinbase. The platform even has casinos where users can gamble in MANA and the dealers are also paid in MANA. 

In addition, NFTs (Non-Fungible Tokens) play a significant role in the metaverse, empowering people to gain complete ownership of their in-game assets, characters, and virtual land. In Decentraland, a patch of virtual estate NFT sold for $2.4 million worth of cryptocurrency, which is the largest sale to date.   

The following are a couple of key aspects of cryptocurrency that align with the metaverse.

  • Transfer of value

Transferring value is an important aspect of the metaverse. In addition, there is a need for a trustworthy method to transfer the value while gaining and retaining the trust of users. This is when cryptocurrency makes an ideal choice. Cryptocurrencies are more secure on blockchain – their underlying technology – as compared to in-game currencies available on multiplayer gaming platforms. Thus, cryptocurrencies serve as reliable currencies for users spending funds on the metaverse platforms.

  • Uniqueness of collectibles

 A crucial aspect of the metaverse is digital collectibility. There lies a need to show the originality and uniqueness of assets in the metaverse for real-world activities. Non-fungible tokens or NFTs can help create completely unique assets. 

Top metaverse blockchain projects

The value propositions that the disruptive blockchain company offers to the metaverse are a testament to the growth of metaverse and cryptocurrency. The following are some of the popular metaverse and cryptocurrency projects with significant potential. 

  • Decentraland

Decentraland – which is one of the early entrants in the metaverse – provides a 3D universe that allows users to build plots of virtual real estate while participating in other activities. The players can create or attend events and engage in social activities. The platform offers its native token called MANA, which is built on the ERC-20 token standard. 

  • The Sandbox

The Sandbox is a blockchain-based metaverse game that enables users to explore a virtual world. The platform includes non-fungible tokens, user-created environments, and other content. It uses an Ethereum-based native token, known as SAND, to drive transactions. 

Players on The Sandbox platform can create their avatars and link them to their cryptocurrency wallets to manage their SAND tokens and NFTs. 

  • Enjin

Enjin is another metaverse crypto project that has gained remarkable popularity due to its unique capabilities. The platform enables users to create their NFTs and use them as in-game assets. 

The unique differentiator of the Enjin platform is the liquidity for non-fungible tokens. NFTs are beset with the inefficiency of illiquidity as an NFT creator needs to find a buyer to sell the NFT. However, users can convert their Enjin NFT into ENJ tokens to get the desired price for their NFTs. In addition to providing liquidity, the Enjin platform enables digital collectability and scarcity. 

  • Bloktopia

Bloktopia is a VR metaverse game where users can play in a setting with a skyscraper with 21 floors. The platform offers four functionalities, including playing, learning, creating, and earning. These functionalities contribute to the popularity of the platform.

Bloktopia capitalizes on the play-to-earn model through its native token, BLOK. In addition, users can play different user-built games and create their gaming environments. 

Takeaway

Metaverse is a buzzword and the biggest trend in the technology world. The remarkable growth in the value of metaverse tokens and the entry of giants like Facebook into the metaverse world are testament to the feasibility of metaverse. 

However, the metaverse is still in a nascent stage, and the number of metaverse and crypto projects is significantly increasing. Blockchain technology can provide the necessary attributes to the metaverse, including decentralization, security, ownership, and interoperability.  

Cover image source: Forbes

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