The metaverse, in a simple description, is a reflection of everyday life, in an online virtual world. From fun and entertainment, to business, it’s likely to encompass a number of our everyday tasks and actions. This includes investments and currency, buying and selling virtual and IRL (in real life) items and property. Clearly everyday dollars and paper money don’t translate well to an online world, except in the form of US Dollar-based “stablecoins”, so it’s important for people to have some other type of currency or stored value. This is where cryptocurrencies based on blockchain technology come into play.
What is a cryptocurrency on the blockchain?
Cryptocurrencies are technically fungible (interchangeable and identical to each other) tokens, verifiable by cryptography on a blockchain. A blockchain is a distributed, hopefully decentralized, ledger of transactions and storage of data. Popular blockchains you may have heard of include Bitcoin, Ethereum, Polygon, and Solana. Those blockchains all have associated cryptocurrencies that are used to pay for transactions (commonly called “gas” on Ethereum and “rent” on Solana) or other uses such as speculative investments.
What are NFTs in Crypto and Why Use Them in a Metaverse?
Blockchains, mainly Ethereum, Solana, and Polygon, can also be used to independently verify ownership and more of NFTs – Non-Fungible Tokens. NFTs can be images, videos, audio, and other media, or even 2D and 3D models. By models we do not mean the fashion show type, but models seen in 2D or 3D movies like cartoons or famous 3D animations such as Toy Story.
So, why you may ask, should these NFTs, particularly the models, be used in a metaverse? Well it comes down to a few key features:
- The ability to verify ownership of individual “avatars”, aka representations of your virtual self
- The ability to buy, sell, and trade items, real or virtual, in the metaverse, and verify they are the actual thing independently. For example a concert ticket in virtual concert, you wouldn’t want to buy a fake ticket, just like in real life, and NFTs will allow you to verify that in, or outside the metaverse.
- The ability to buy, sell, trade, rent and build on virtual property. Just like land in real life, they have land in certain metaverse projects (like Metaversol) and this allows for many of the same real world land ownership rights and abilities. We have already seen some metaverse properties sell for hundreds of thousands of dollars, mostly due to the neighbors and visibility of said property. Many of the same dynamics that play into physical world home and property value seem to be quickly taking shape in the metaverse. It’s all very exciting and can be very lucrative in specific situations. NFTs as the property/land/home allows for this all to take place in a safe and secure manner, without the ability for someone to sell the same property to two at the same time (referred to as “double spend”) It is possible to fractionalize, or have multiple owners of an NFT, but that’s a much longer article we will touch upon later.
Endless Creativity Using Cryptocurrency in the Metaverse World
What else can we do with cryptocurrencies in the metaverse world, besides the NFTs explained above? A ton of interesting thoughts and concepts arise. For example, we could have in-metaverse minting (initial creation/buying) of NFTs, as first seen on Solana in Metaversol. Or we could have DeFi protocols and games, like DefiLand, using multiple tokens (another word for cryptocurrencies) to teach people decentralized finance in a gamified way. Companies could launch their own cryptocurrencies in the metaverse, enabling users to be rewarded for tasks or jobs in realtime, directly into their own wallets.
Those examples are just a few of many… What do you think will come of cryptocurrencies and NFTS in the metaverse? Tweet out your thoughts and tag us @mxmetaversol, as we would love to hear them!