Decentraland: The new platform for exchanging virtual goods
Everyone is talking about “decentralization” these days. Decentralized exchanges for tokens such as, OmiseGo, Kyber, and 0x, are around the corner.
So far all virtual assets have been fungible. This means that the only thing that matters is how much of the asset you have. Since every bitcoin or token is exactly the same, the only thing you should be concerned with is how many tokens are in your wallet. Think about the way your bank account works — the only thing that matters is how many dollars are in your account.
Actual goods, on the other hand, are very different. Not all houses or cars are the same. Take a house, for example. Factors like the quality of the finishing, the size, the location, whether you have good neighbors or annoying ones, etc., will make every house different from the next.
A house is much more than just a street address or a number. Every house is unique and before you decide to buy or sell, it’s important to visit the house personally. When you talk about dollars you’re just discussing an amount, which can be done easily over the phone or by email. However, when we are talking about a specific good, you need to see it and experience it because whether or not it works for you is unique to the product itself and your personal needs.
Let’s look at Cryptokitties as an example. Every kitty is unique and has specific features. Which kitty you own is a lot more important than the number of kitties you own because what makes a Cryptokitty valuable are its unique features and properties. The price between two kitties can be very different:
Right now, the only place where you can interact with those kitties is on the website www.cryptokitties.co
The details of the kitty are stored in the blockchain, so while the kitty itself is decentralized, the experience of the kitty is completely centralized. If that site were to go down you would have no way to interact with your kitty.
Imagine now a place where you can interact with your kitty, showcase it to potential buyers, and look at other kitties that are for sale. Then once you’ve purchased it you can show it off to your friends in a virtual world designed to maximize the experience of virtual items.
I believe Decentraland is the place where all this will happen. It’s a virtual reality world built on the blockchain. This means that all of these virtual goods are yours and yours alone, allowing you to fully experience them and show them to your friends without relying on proprietary technology, which may limit the experience.
This virtual reality world will also act as a marketplace where people can showcase their virtual goods on their virtual land and purchase anything they want using the native token, MANA.
Cryptokitties and Decentraland have been working together on ERC-721.
Smart contracts for both Cryptokitties and land in Decentraland are built on this specification, using non-fungible tokens. It’s a sign of the times that virtual goods are becoming more and more important.
We will need to make exchanges to trade them as well as a virtual place to experience the items: Decentraland is poised to do both.
