“How the Blockchain Will Create a New World: The Metaverse” by Julia Beyers
The metaverse used to be a niche concept, present in science-fiction movies and novels — a virtual reality where people could meet and live an entirely different life. And while the internet has made this concept a possibility, blockchain technology is on the path of making it a reality.
In this article, we explore the concept of a metaverse backed up by blockchain technology and how this technology will enable everyone to participate. We will take an in-depth look at how blockchain can tackle the challenges presented by the metaverse concept and how we can ultimately make it a part of our daily lives.
How Does Cryptocurrency Fit into the Metaverse Concept?
While digital currencies like bitcoin made blockchain technology popular, they are not the only application. The technology relies on a digital ledger that allows us to record every transaction in a transparent, immutable, and secure manner. And with the addition of smart contracts, blockchain tech has gained hundreds of new use cases. Some of them are quite fitting for making a metaverse a reality. Let’s see what they are.
Digital Proof of Ownership
Assets that are created on a blockchain are protected through cryptography. Once recorded on a blockchain, an asset can be accessed through a pair of codes, called the private key and the public address.
The private key provides proof of ownership to the user. Only the holder of the private key can access the assets associated with that public address. Users can genuinely possess their digital assets consequently in a metaverse. It is in contrast to centralised metaverse networks and video games, where the digital assets remain the possession of the company that issues them.
Thanks to the proof-of-ownership concept, users can collect various assets on the blockchain. Smart contracts allow us to tokenize almost anything of value on the network in the form of non-fungible tokens known as NFTs. These unique assets benefit from proof of ownership and users can collect them in their crypto wallets.
NFTs can represent a myriad of things in the metaverse: gaming items, characters, avatars, clothing, furniture, even digital land. But the concept can go even further. Through NFTs, users can digitize assets, such as insurance contracts, mobile data subscriptions, etc.
As a result, NFTs can serve as an equivalent of real-world assets, retaining their value within the metaverse or beyond it. They contribute to creating a genuine economy in the virtual world.
Transfer of Value
Blockchain technology was initially designed to allow easy and secure transfers of value over the internet. But more than just transferring crypto coins from one individual to another, users can transact with NFTs and efficiently transfer real-world value.
For instance, digital land registered on the blockchain can be directly transferred from one user to another, without having to go through an intermediary. The recipient needs to share their public address and the sender needs to sign the transaction with their private key. It’s as simple as that.
There’s no need for banks or brokers that have traditionally acted as a trusted third party. Trust is ensured by the transparency of the blockchain network and the immutability of its transactions.
Blockchains are permissionless by nature. This means that anyone, anywhere in the world can access the metaverse ecosystem that is built on blockchain technology. All they need to do is to create a blockchain wallet and have an internet connection to access the network.
Consequently, people that are situated in developing countries can participate in the metaverse economy. They can access advanced financial instruments provided by decentralized financial platforms, without having to provide their private data.
Most Famous Examples of the Metaverse
The metaverse concept has mostly evolved in the video game industry. Below are some examples that encompass some early metaverse attempts, as well as more recent ones that involve blockchain technology.
Second Life is a massively multiplayer game that launched way back in 2003 when blockchain technology didn’t exist and the internet was still taking baby steps. The game didn’t have any objective. The goal was to live a parallel life in its virtual universe. This was a real attempt at a metaverse, as people could own property in the game world, open shops, buy and sell clothes and perform many other everyday activities.
Moreover, users could sell their creations for real money, which makes it one of the first games where users could play to earn.
Axie Infinity is a game where users control digital monsters called Axies. These monsters are recorded as NFTs on the Ethereum blockchain. By engaging in quests and player-versus-player battles, gamers can win prizes in the form of SLP tokens that can be sold for real money on various crypto exchanges. It’s one of the most popular games where users can earn a steady income just by playing.
What Is the future of the metaverse?
As you might have guessed by now, blockchain seems to be the perfect technological fit for creating a viable metaverse. Facebook recently announced the creation of its own metaverse, which is likely to feature its upcoming cryptocurrency, Diem. Elsewhere, we have evolving ecosystems such as Decentraland and The Sandbox, which provide full connectivity to their users and proof of ownership through NFTs.
Keep in mind that this blockchain metaverse is still at a proof-of-concept stage. These still-isolated ecosystems need to start to interact before a genuine metaverse that’s available to all can emerge.