Blockchain Technology in the Metaverse
On October 28, Mark Zuckerberg launched the rebranding of his company, Facebook, as he announced its new name, Meta Platforms, at Facebook’s 2021 Connect Conference. A company known for its social media apps, Facebook plans on moving away from the social media company tag and rebuilding itself as a company committed to building and delivering the envisioned “metaverse.” After the announcement of their new name, Facebook shared its ideas on relocating its resources and employees into the effort of building the metaverse with actions such as making a deal to buy Within, a company known for its immersive VR fitness service that allows one to build their own fitness routine, providing you your own personal coaches to guide and motivate you and the opportunity to workout virtually anywhere in the world, including Mars.
“Today we’re seen as a social media company, but in our DNA, we are a company that builds technology to connect people. And the metaverse is the next frontier just like social networking was when we got started.” — Mark Zuckerberg
Of course, Facebook isn’t the only company to begin looking into the metaverse. Just a few days after Facebook’s announcements of rebranding to Meta, Microsoft officially announced that its will be building its own metaverse through the integration of Mesh, a collaborative platform for virtual experiences, directly into Microsoft Teams sometime in the next year.
SO, both of these big companies are all moving their resources, investments, and people into building this thing called the metaverse, but what exactly is the metaverse?
The Metaverse
To put it in a definition, the metaverse is a collective virtual space created with the combined aspects of augmented reality (AR), virtual reality (VR), cryptocurrency, social media, and video games that allows people to interact in a shared environment virtually. However, defining it like that makes it a lot more boring than it seems, so let me put it in a much more cooler definition.
The metaverse is, really, anything you want it to be. Yes, anything. Whether it is you fighting aliens in Mars or being able to become the actual character in a video game or, simply, meeting with your team to discuss the company’s next marketing strategies, the virtual world is limitless. It is the place where the digital and physical worlds meet and where users can interact in the digital world in a multidimensional way, rather than just from a viewing standpoint. With just a pair of a virtual headset, the metaverse can become the next reality of our reality with its endless number of interconnected virtual communities, entertainment, and characters.
With the popularity of the term “metaverse” skyrocketing as a result of Facebook’s announcement, it may have been some people’s first time ever even hearing the term…including me 😅. The “metaverse” was actually first coined in Neal Stephenson’s science fiction novel, Snow Crash, a book where people were able to use digital avatars to escape from the dystopian reality into a three-dimensional digital world. A more recent inspiration of the metaverse is in the Ernest Cline’s 2011 novel and 2018 movie, Ready Player One, in which people are able to live in the virtual world known as the Oasis where they can play in, meet in, and, most of all, live in as they are able to hold virtual money that can be used in the physical world, allowing people to earn money through games, but also have the risk of losing everything.
The metaverse will be the next evolution of the internet. Instead of living in the flat world wide web where you are just surfing through the internet while laying down on your bed, seeing and communicating with people through a screen, the metaverse will have texture, dimension and color. People will meet, watch shows, hang out, visit virtual museums, ride virtual parks, go to websites all within the same metaverse.
As the metaverse has continued to develop and become a reality, companies such as Goldman Sachs have established that the metaverse will be powered by blockchain.
Blockchain in the Metaverse
Before getting into blockchain’s role in the metaverse, let’s take a look at what it is and how it works.
To put it simply, blockchain is a continuously updated record of who holds what. Despite its many different applications, blockchain is best known for its crucial role in cryptocurrency systems (Bitcoin and Ethereum) as a decentralized ledger that holds the data of all transactions across a peer-to-peer network. This means that it allows people to make transactions without a central authority.
According to Investopedia, “The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.”
So how does this technology work? While a typical database can be found structuring its data into tables, blockchain, as its name implies, structures its data into blocks and these blocks are secured using cryptography. Each block has a certain storage capacity and when this capacity is filled to its maximum, the block is closed and it is linked to the previous block, thus forming a chain of data that we all know as blockchain. When each block is filled and put into the chain, that specific set of information in the block is set into stone or, in other words, becomes a permanent part of that chain of data. It is irreversible and we’re even able to see the exact time stamp of when that block had been added to the chain.
As mentioned before, blockchain is best known for its use in cryptocurrency, however, in the years since it had first been proposed in 1991, it had led to the creation of decentralized finance (DeFi), non-fungible tokens (NFTs), and smart contracts, which all have recently begun to take the world by storm.
When it comes to the metaverse, blockchain will play a significant role in money transactions and payment, creating digital identities through NFTs, gaming in the virtual world, and making sure that the metaverse is a decentralized economy.
MONEY TRANSACTIONS AND PAYMENT
The most obvious uses for blockchain in the metaverse will be money. Every economy needs money and if the metaverse is going to be the next virtual economy, it’s going to need to use cryptocurrencies such as Bitcoin and Ethereum in order to buy virtual goods as well as make transactions.
What is cryptocurrency? Cryptocurrency is a digital currency that is secured by cryptography, making it impossible to counterfeit or double-spend.
In the metaverse, with cryptocurrency, users will be able to make secure transactions without the use of third -party intermediaries, thus creating a decentralized economy. In addition, cryptocurrency will allow transactions to be made on an instantaneous basis. If the metaverse is going to be the next reality of our reality, this means that transactions should be just as quick and easy as it would be if they were in person.
Existing metaverses such as Decentraland have already begun to use cryptocurrencies as a form of payment! Using the cryptocurrency, Mana, people are able to buy virtual real estate within the Decentraland online reality and recently, a purchase of up to $2.5 million dollars was made on an estate near Fashion Street in Decentraland.
Buying things are just the beginning of what blockchain technology can do in the metaverse, especially as decentralzied finance (DeFi) is increasingly growing. With DeFi, people in the virtual worlds may be able to trade, invest, borrow, and even lend money to one another.
BRINGING VALUE TO DIGITAL OBJECTS THROUGH NFTS
Picked as the word of the year for 2021 by the Collins Dictionary, non-fungible tokens (NFTs) have been rapidly growing in popularity this year as their value have continued to rise and people are seeing their potential in the metaverse.
“Non-fungible” essentially means unique and cannot be replaced and that is exactly what an NFT is. They are unique digital items stored on the blockchain that can be used to prove ownership of connected digital assets. Recently, many NFTs have been seen in the form of digital art with certain pieces such as Cryptopunks or Bored Apes selling for millions of dollars. Some of the surrounding concerns about NFTs were that anyone can just copy or download the digitial file of an NFT and have that piece of art with them. However, one of the main factors that make NFTs so important is the idea of ownership. NFTs allows buyers to own the original version of whatever they are buying. Not only that it includes a built-in authentication that serves as a proof of ownership. Because of this, people who buy these NFTs buy them more for “digital bragging rights” and the fact that they own the “original” art piece rather than the actual piece itself.
Although NFTs have mainly been seen as pieces of art, in the metaverse, they can be connected to anything whether it is virtual avatars, game assets, or virtual real estate. NFTs can allow people to own land in the metaverse, acting almost like a key that allows only certain users to access that particular piece of land. Not only this, but people can buy and own virtual avatars that they can display as part of their virtual identity when going to social events.
NFTs are also transforming the gaming industry because even right now, games such as Axie Infinity are rewarding players with NFTs and this is significant because before NFTs, rewards in games were valuable only in the game; however, with NFTs as rewards, it allows users to profit off the rewards they receive and carry those profits into the real world, outside of the game.
In the metaverse, NFTs play a significant role in assigning value to objects. How? Theoretically, any digital object can be duplicated and distributed an infinite number of times. If everybody had a copy of a certaiun digital object, it wouldn’t have any value since everybody has it, but if there was only one original piece of that art, that means there is only one person who could own it, thus making it valuable. With NFTs, we’re able to prove who is the rightful owner of a certain digital asset and this brings value to that object in the metaverse.
GAMING IN THE METAVERSE
Definitely one of the most exciting uses for the metaverse is virtual gaming and once again, virtual gaming will be run on blockchain technology.
To get an idea of how virtual gaming might look like in the metaverse, let’s look at The Sandbox. The Sandbox is a virtual gaming world where players can create, own, and monetize in digital assets and gaming experiences on the Ethereum blockchain. Because it is based on the Ethereum blockchain, players have complete ownership over anything they create inside the game. It was initially created in 2012 by studios Pixowl and Animoca Brands and appeared on Android and iOS smartphones. It is a game similar to the popular Minecraft in which players live in a game world represented by polygons and shapes. When it was acquired by the company Animoca, they began to make a blockchain-version of the game.
The Sandbox is a gaming platform consisted of three different parts that combined are able to provide users a space where they can build their own experiences in the game.
Vox Edit
Vox Edit is a simple, but also powerful 3D voxel-modeling software on The Sandbox that allows users to create their own NFTs by altering and manipulating voxels, which are square 3D pixels. These voxels act as building blocks and by changing them, players can create 3D objects such as humans, animals, or vehicles, which they can then export from VoxEdit into the Sandbox marketplace where these creations can be sold as NFT assets.
NFT Marketplace
The Sandbox NFT marketplace is where users can upload, publish, and sell their own NFT creations that they made with VoxEdit. When publishing the NFTs in the market, the creations are put on the blockchain in order to prove ownership and after this, they become assets that potential buyers can purchase.
Game Maker
The last product of platform is The Sandbox Game Maker which allows users to create their own 3D games using voxel models made by other users. Users are able to contribute to the metaverse by making their own games that people can join.
In addition to Sandbox, there are other gaming platforms that have begun to contribute to a fast-growing business called “crypto-gaming”, in which players play to earn NFTs and cryptocurrencies. As mentioned before, Axie Infinity is one of them and there’s also others like Oneto 11, which is a metaverse game where players use their sports knowledge to compete against others in order to win the platform’s proprietary blockchain token, Oneto 11.
So what?
The metaverse holds so much potential and with blockchain technology, many of the daily activities that we do in the physical world can be brought into the virtual world. Various aspects of our lives including entertainment, working, or socializing can all be included in the metaverse through blockchain and we may be able to live in a world such as the one in Ready Player One. Despite all this, it’s essential that we continue to do our own research into this new era of technology because all of this is still not set into stone.
We are still not sure what the metaverse may look like and of course, people like Mark Zuckerberg may have their own ideas, but do we even know exactly what they’re planning? Do we want the metaverse to be a centralized tyranny run by these mega corporations such as Facebook or Microsoft? Or do we want the metaverse to be decentralized haven where the people are able to run and govern the metaverse? Of course, these also aren’t the only two options for how the metaverse can work and there are endless possibilities as to how the metaverse will work.
In all, we know that with blockchain technology, at least there is the ability to even have a decentralized metaverse. Creating smart contracts, decentralized autonomous organizations (DAOs), and many others through blockchain have opened up different ideas as to how the metaverse will work, but only time will tell what our future in the metaverse will look like.
