Why and How Crypto Will Rule Metaverse
You may conceive of the metaverse as a collection of linked virtual environments, similar to the World Wide Web but accessible via virtual reality. This is mostly right, however there is a basic but somewhat more esoteric aspect of the metaverse that will distinguish it from today’s internet: the blockchain.
Initially, Web 1 was an information superhighway of linked computers and servers that you could search, explore, and inhabit, generally through a centralized company’s platform – for example, AOL, Yahoo, Microsoft, and Google. Web 2 was defined around the turn of the century by social networking sites, blogging, and the monetization of user data for advertising by centralized gatekeepers to “free” social media platforms such as Facebook, SnapChat, Twitter, and TikTok.
Web 3 will serve as the metaverse’s basis. It will be made up of blockchain-enabled decentralized apps that will support a user-owned cryptoasset and data economy.
Decentralized? Blockchain? Cryptoassets? We can describe the technologies that will enable the metaverse as scholars who study social media and media technology.
Blockchain is a system that records transactions indefinitely, generally in a decentralized and public database known as a ledger. The most well-known blockchain-based cryptocurrency is Bitcoin. When you purchase bitcoin, for example, the transaction is logged to the Bitcoin blockchain, which is spread to thousands of unique computers across the globe.
This decentralized recording system is very difficult to deceive or manipulate. In contrast to conventional banking books, public blockchains, like as Bitcoin and Ethereum, are also transparent — all transactions are visible to anybody on the internet.
Ethereum, like Bitcoin, is a blockchain, but it is also programmable through smart contracts, which are basically blockchain-based software routines that execute automatically when a certain condition is satisfied. For example, you may use a blockchain smart contract to create your ownership of a digital asset, such as a work of art or music, to which no one else can claim ownership on the blockchain — even if they save a copy to their computer. Cryptoassets are digital items that may be owned, such as money, stocks, and artwork.
On a blockchain, items like as artwork and music are non-fungible tokens (NFTs). Non-fungible objects are one-of-a-kind and cannot be replaced, in contrast to fungible items such as cash, which is worth the same as, and can be exchanged for, any other dollar.
Three ladies stand in an image-covered area with slanted walls.
Importantly, you might use a smart contract to state that you are ready to sell your piece of digital art for USD 1 million in ether, the Ethereum blockchain’s coin. When I click “accept,” the artwork and ether are instantly transferred to us on the blockchain. There is no need for a bank or third-party escrow, and if any of us disputes this transaction – for example, if you say that I only paid USD 999,000 – the other may just refer to the public record in the distributed ledger.
What does blockchain cryptoasset technology have to do with the metaverse? Everything! To begin, the blockchain enables the ownership of digital assets in a virtual environment. You will not only possess that NFT in the physical world, but also in the virtual world.
Furthermore, the metaverse is not being constructed by a single organization or corporation. Separate organizations will create different virtual worlds, which will eventually be interoperable — establishing the metaverse. People will want to carry their belongings with them when they travel between virtual worlds, such as from Decentraland’s virtual surroundings to Microsoft’s. The blockchain will confirm evidence of ownership of your digital items in both virtual worlds if two virtual worlds are compatible. Essentially, you will be able to access your crypto items as long as you can access your crypto wallet inside a virtual environment.
Don’t forget to bring your wallet.
So, what are you going to store in your crypto wallet? Obviously, you’ll want to carry cryptocurrency in the metaverse. Your cryptocurrency wallet will also store your metaverse-exclusive digital products, like as avatars, avatar apparel, avatar animations, virtual decorations, and weaponry.
In a darkened theater, a cartoon picture of a young bearded guy wearing sunglasses and a backwards ball cap is displayed on a wall.
Avatars, like as this one of El Salvador’s President Nayib Bukele, are cartoon-like animations that humans inhabit in the metaverse. Salvador Melendez/AP Photo
What are people going to do with their cryptocurrency wallets? Among other things, go shopping. You will be able to buy conventional digital items such as music, movies, games, and applications, just like you can today on the web. You’ll also be able to purchase physical-world products in the metaverse, as well as examine and “hold” 3D versions of what you’re looking for, which might help you make better judgments.
Furthermore, much as you may carry your ID in your traditional leather wallet, crypto wallets will be linked to real-world identities, which may assist simplify transactions that need legal verification, like as purchasing a real-world vehicle or house. Because your ID will be connected to your wallet, you won’t have to remember login details for every website and virtual world you visit — just connect your wallet with a click and you’re signed in. ID-linked wallets will also be handy for restricting access to age-restricted regions of the metaverse.
Your crypto wallet might also be connected to your contacts list, allowing you to transfer information from one virtual world to another. “Come to a pool party in FILL IN THE BLANK-world with me!”
Wallets may be connected with reputation scores in the future, which will affect your ability to broadcast in public locations and communicate with individuals outside of your social network. If you behave like a poisonous misinformation-spreading troll, the system may degrade your reputation and even restrict your sphere of influence. This may provide an incentive for individuals to act appropriately in the metaverse, but platform developers must prioritize these mechanisms.
Large scale enterprise
Finally, if the metaverse involves money, then corporations will undoubtedly want to participate as well. The decentralized structure of blockchain may lessen the need for gatekeepers in financial transactions, but businesses will still have several chances to create income, maybe more than in existing economies. Companies like Meta will build big platforms where people may work, play, and socialize.
The metaverse may not yet exist, but that hasn’t prevented a land rush as individuals and corporations seek for virtual real estate.
Coca-Cola, Adidas, and Nike are among the major brands that have entered the NFT market. When you purchase a physical world item from a firm in the future, you may also get ownership of a related NFT in the metaverse.
For example, when you purchase a desirable name-brand clothing to go to a real-world dance club, you may simultaneously get the crypto version of the garment that your avatar may wear to the virtual Ariana Grande event. And, just as you could resell the original suit, you could resell the NFT version for someone else’s avatar to wear.
Why and How Crypto Will Rule Metaverse These are only a handful of the numerous ways in which metaverse business models are anticipated to intersect with the actual world. As augmented reality technology become more prevalent, such instances will get more complicated, further combining features of the metaverse with the actual world. Although the metaverse has not yet arrived, technical underpinnings like as blockchain and cryptoassets are gradually being built, laying the groundwork for a seemingly omnipresent virtual future that will eventually arrive in a’verse near you.