If you have been on the internet any time in the last few weeks, you have probably read or heard the term “metaverse” and “blockchain” thrown around everywhere.
You understand it’s the next big thing and somehow it’s making people money; so you want to know how these terms will affect your life.
What is going on in the metaverse?
The metaverse was a term coined in the early ’90s and has already existed in some forms since the early 2000s through platforms such as Second Life and VRChat.
Oddly enough, the term “metaverse” has no clear definition, but the agreed-upon meaning can be summed up as a cyberspace that encompasses and has access to the activities that we do in the physical realm.
So why are we hearing so much about the metaverse now?
The most prominent reason the term has been in everyone’s mouth in the last couple of weeks is due to Facebook rebranding its name to Meta through an 81-minute video disquisition by Mark Zuckerberg revealing the company’s vision for the future.
As we see more and more companies jump on the bandwagon, some consider Meta and other companies’ proclivity to use the term “metaverse” as a branding tool to pool together all of the online technological advancements happening right now.
‘The metaverse’ is used as the singular term to describe several distinct emerging technologies such as cryptocurrencies, NFTs, online gaming platforms like Roblox, and AR and VR technology.
So what are some recent events that we could consider to have been happening in “the metaverse?”
Fortnite, the shooter game with over 300 million players around the world, has become the concert hosting platform for mega artists such as Ariana Grande, Marshmello, and Travis Scott; the k-pop boyband used Fortnite to debut their new music video.
As we can see here, Epic Games, the creator of Fortnite, is now making the one-person-left-standing shooter game into a platform that hosts real-world events online.
“The metaverse” is not only a buzzword but as you can see advancements towards the metaverse are happening before our eyes. This takes us to discuss blockchain.
How do you make money with blockchain?
Unlike the metaverse, the term “blockchain” has been a term in the public eye for quite some time.
Concepts similar to the blockchain protocol were proposed as early as the Eighties but the term was popularized when the Bitcoin white paper was first released in 2008.
From then on many applications and protocols using blockchain have been created, most notably Ethereum where most decentralized applications are run on. So what is blockchain?
Blockchain is a growing list of records, called blocks, linked together by cryptography. Each block contains information about the previous block to it — forming a chain of blocks, hence “blockchain.”
Each blockchain protocol’s utility depends on what record the specific blockchain keeps. For instance, Bitcoin keeps records of transactions; Ethereum keeps records of smart contract transactions.
So what is so special about blockchain?
We now know that blockchain is merely a chain of record-keeping blocks. This in itself is nothing bewildering. But what makes blockchain different from existing technology is that this record is open source and the record is kept by everyone running the blockchain protocol’s node. The nodes collectively communicate and validate the blocks. This process removes the need for a trusted authority or central server.
As a simple example, if you pay a coffee shop $5 for an excellent cup of coffee with your debit card, the transaction is verified by the bank, the middleman, and once verified; the payment is deducted from your checking account and added to the coffee shop’s account.
In this event, we are trusting the bank to handle our money and correctly deduct $5 from my account and add $5 to the coffee shop’s account. We trust that the bank will not make a mistake, that the bank correctly records the transaction information, and that the bank does not have any bad actors that will wrongly update the ledger without our knowledge.
On the other hand, with a distributed ledger used in blockchain, we make the necessary transaction and both you and the coffee shop keep the same record of the $5 transaction. With blockchain protocols such as Bitcoin, we scale this coffee purchase event by multiple magnitudes; everyone using bitcoin keeps and verifies everyone’s transaction — allowing the sentence “Don’t trust, verify” to be a mantra in the blockchain community.
Now that we understand the basics of blockchain, let’s discuss how people have been making money with blockchain. Referring back to the $5 coffee purchase, if we are going through with this transaction on a blockchain protocol, we cannot magically transfer real dollars through the blockchain so we move the ownership of tokens.
How people are making money through blockchain protocols is by using real-world money to “buy” these tokens and then “selling” these tokens once their conversion rate to the real-world money goes up for a profit.
Recently, Bitcoin, broke its all-time high of $68,000 so people that changed their dollars for Bitcoin below this price have now made money. As such, through the buying and selling of tokens, people have been making money. There are many types of tokens, but let’s focus on ERC-721 tokens on the Ethereum blockchain.
How JPGs are selling for millions of dollars
As the name suggests, ERC-721 tokens are tokens created with the ERC-721 token standard. This token standard is special in that it adds non-fungibility to each token making every token created using that standard unique.
What is fungibility? A dollar bill is fungible meaning that if you trade one dollar for another dollar you still have a dollar. With non-fungible items, each item is unique, for instance even if two people are named Satoshi, both Satoshis are unique and may not be a substitute for one another. These non-fungible tokens are shortened as NFTs.
NFTs have been in the spotlight of blockchain-related news with an abundance of fascinating development. ‘CryptoPunks’ has been making headlines when the NFT, which was free to mint when released by Larva Labs in 2017, sold for $11.7 million in Sotheby’s auction.
Beeple, an artist, sold his NFT work titled ‘Everydays: The first 5000 days’ for $69.3 million through Sotheby’s as well. With the recent success of NFTs, companies such as Coca-Cola, Tacobell, and Disney have all released NFTs in the form of videos, images, and 3D objects to be used in the metaverse.
Why the metaverse and blockchain will be connected
With the advent of NFTs, the metaverse and blockchain come together. Let us suppose that we have a car in a particular metaverse, and the car somehow gets destroyed. If the metaverse is not integrated with blockchain, the car is not an NFT; the metaverse administrators can always pretend as if the car was never destroyed.
Since they control a centralized server, nobody can challenge the admin’s authority and the new car you received is the same car before it was destroyed. However, if the metaverse incorporates blockchain and the car is an NFT; if your car gets destroyed, your original car is destroyed for good. The administrators cannot make you a new car and even if you receive a new car, it may have the same properties, but it is a different car.
This is a very important distinction for value-creating activities that happen on the metaverse; especially financial activities. In the above scenario, if we substitute the car for money then it means the administrators can always create more money out of thin air, thereby devaluing the money.
We are experiencing how dangerous this authority is in our current world where Central Banks have been “printing” money out of thin air thereby devaluing our currencies, and leading to inflation at alarming rates. That is why for the items in the metaverse to have meaning, they must be interconnected with the blockchain.
We already know that concerts, business meetings, and product reveals are happening in the metaverse, and many more events that we do in the physical space will take place in the metaverse; events such as birthdays, weddings, reunions, holidays, parties, sports games, religious gatherings, funerals, and so much more.
Four Key Takeaways
There are a few takeaways from this discussion of the metaverse and blockchain.
One: The metaverse encompasses many of the emerging technologies that are moving things restricted to the physical world into the cyber world, and it’s advancing a lot quicker than you might expect.
Two: Blockchain is becoming a catalyst for major changes to the traditional ways of doing things. It is already disrupting the finance and art sector and will become a huge factor in changing our way of life.
Three: The metaverse and blockchain will highly likely become interconnected due to the blockchain’s property of distributed ledgers and non-fungible tokens.
Four: We will be doing a lot more things than attending concerts, parties, and business meetings in the metaverse. Life and death will be celebrated and commemorated in the metaverse.
