Feb 15, 2022
What Role do Crypto and NFTs Play in the Metaverse?
The Metaverse was recently thrust into the spotlight when Facebook’s parent company, which also owns Snapchat, Instagram, and Whatsapp, rebranded itself to “Meta”. That said, the Metaverse is not a new concept.
Even before Facebook’s announcement, big names like Disney and Microsoft were exploring the potential of the metaverse as a virtual reality space.
So, what is metaverse, exactly, and how does it function?
What is the metaverse?
Meta CEO Mark Zuckerberg regards the metaverse as an immersive platform that will replace the internet; it will be a place in which users will not only watch content, but experience life through augmented reality.
That said, the Metaverse is not a new concept. The idea was first formulated in 1992 by author Neil Stephenson in his novel “Snow Crash”, where Stephenson created 3D avatars in a virtual environment. Games like Minecraft and Fortnite have taken elements of this idea and used it to design their games.
In essence, the metaverse is a virtual world where people can do almost anything that they can do in the real world. A metaverse would offer a virtual space and a virtual economy where people can work, earn, buy and sell properties, have fun, play games, create art, make payments, and do daily activities that parallel their real lives. Metaverse is a combination of augmented reality and virtual reality that helps people and communities to interact with each other on social platforms. They create 3D avatars, and also allow people to perform extreme physical actions that would not be possible in reality.
The COVID-19 pandemic and subsequent global lockdown served as significant reasons as to why the concept of the metaverse became so popular in the past two years. People staying at home were looking for a way to escape. Online games became popular, not just for younger demographics but adults as well. The online gaming industries leveraged the concept of the metaverse and launched many new products to tap the market. For example, Microsoft is developing XR (extended reality) applications based on virtual and augmented reality and holograms.
The main idea of the metaverse is to help people interact in a virtual environment. People can hold meetings and conferences in a holographic digital world. This concept has great potential to reshape the economy. Experts believe that it can grow into a trillion-dollar industry and bring opportunities and employment for millions.
The role of crypto in the metaverse
Cryptocurrencies are virtual assets used worldwide for digital transaction payments, and to run the virtual economy of the metaverse, we need a virtual asset. In this case, crypto is the most obvious choice.
Cryptocurrencies have been accepted globally and act as a secure, decentralized, and transparent mode of payment. Many metaverse platforms are based on decentralized blockchain networks and use cryptocurrencies.
Implementing crypto into the metaverse would have numerous beneficial implications. For example:
- Cryptocurrency is decentralized and is not subject to the control of any centralized authority.
- It is permissionless.
- Crypto utilitzes high-speed transactions.
- It provides complete anonymity for user, keeping users’ security intact
- It provides a collaborative and open platform for users.
- Crypto gives digital proof of authenticity and ownership to the buyer.
- Participants can take part in the decision-making process in metaverse communities.
- Cryptocurrencies like Polkadot and Avalanche can create interactive blockchains. This allows different metaverse ecosystems to communicate with each other.
The role of NFTs in the metaverse
NFTs (non-fungible tokens) play a crucial role in the future of the metaverse. That’s because NFTs work on blockchain technology, and use crypto tokens to provide ownership to virtual artworks, digital items, sports cards, virtual real estate, music, videos, and gaming items.
NFTs operate on smart contracts. So, a user who wants to buy a virtual property in the metaverse can do it through NFT smart contracts. This transfers the ownership to the buyer. Cryptocurrencies, in this case, become the only token that will be accepted to make all these virtual transactions. People can also participate in virtual games using an avatar and earn rewards through cryptocurrencies. In games, buyers and sellers can use an avatar and create a virtual identity to buy NFT properties, artwork, or music videos on the metaverse platforms.
NFT projects include MetaCity, which is a metaverse gaming platform similar to Minecraft. The platform allows users to buy and sell NFT plots and develop businesses. It also offers a cross-game feature where players can exchange gaming items between games. MetaCity also provides free NFT drops where users can earn rewards. Another unique feature of the platform is that users can create an economy or create a living of their choice through NFT characters.
Built on the Ethereum blockchain network, Sorare is an NFT game for football fans. At present, there are 180 licensed football clubs. Players can use gaming cards to build virtual teams and earn rewards based on the performance of the team.
Metaverse crypto projects worth your attention
Decentraland
Metaverse project Decentraland uses MANA, which is the native cryptocurrency of the platform. It provides governance protocol to its users and the currency can be used for actual transactions. The users of the platform can create customized virtual avatars and play games or go to virtual casinos and earn rewards. Participants can also buy and sell lands on auctions and buy NFT products using MANA currencies. Decentraland’s total market evaluation is $5 billion.
Sandbox
Sandbox is quite similar to Decentraland, with SAND acting as the virtual currency of the platform. Sandbox is a virtual community platform where users can communicate with each other, as well as buy and sell properties and real estate and earn income. Sandbox is also endorsed by big names in the music industry, including Snoop Dogg and Deadmau5. Currently, Sandbox is running slightly behind Decentraland with a total market cap of $2.3 billion.
JEDSTAR
JEDSTAR is a decentralized finance (DeFi) as well as a gamification finance (GameFi) project. It has launched a new token called KRED that can be used in its new CCG (collectible card game), MMORPG (metaverse multiplayer online role-playing game), and NFT marketplace. They will also launch STARDOME, an initiative that allows users to purchase and sell KRED through their usual payment modes.
The metaverse is still in its infancy, and it is too early to predict its future. However, virtual or augmented reality has come a long way, and experts believe that the metaverse’s potential is just getting started.
Originally published at https://www.cryptohopper.com.
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