Into the metaverse: a guide to crypto virtuality
The metaverse is entering mainstream vocabulary in 2021, but it's actually been around for a while. Sci-fi author Neal Stephenson first coined the term 'metaverse' in his 1992 novel Snow Crash. The novel referred to a shared virtual reality world that characters used to escape the limitations of the rather dystopian techno-capitalist future they existed in. In the metaverse, one could have different bodies and special powers like in a video game, but also own virtual territory, run businesses, play games, work jobs and also engage in conflict through espionage, sabotage or outright battle.
Snow Crash was a tongue-in-cheek riff on cyberpunk literature, which explores the effect of technology on our social relations. Cyberpunk speculated on things such as realistic virtual worlds, cybernetic augmentations to the human body, advanced AI, etc. While it often took place in dystopian settings, the futuristic technology imagined by the writers inspired many creators in the tech industry who went on to work on the Internet and social media platforms, games, VR and, of course, crypto.
As major tech platforms such as Meta (formerly Facebook), Epic Games and others announce their plan to take the metaverse mainstream, it's no surprise that blockchain projects are eager to show off their use case in the metaverse. With their expertise in creating digital items of value and automated transactions, blockchains could power the economy of these virtual worlds.
Where does crypto come into this?
One of cryptocurrency's central problems is that it came into a world already controlled by centralised institutional powers. The territory in which people live is controlled by different states that maintain their own fiat currencies and financial institutions. Bitcoin (BTC) was originally created to be a digital currency, as widely usable as cash, but in practice, opportunities to purchase goods and services with BTC remain limited, and it is mainly judged by its dollar value. Even with some countries introducing their own digital currencies, these are still centralised fiat currencies.
Likewise, cryptocurrencies such as Ethereum (ETH), Solana (SOL) and others that attempt to present blockchain versions of existing centralised finance services run into the problem that the latter are going to hold on to their territory, even if it means adopting some blockchain innovations on the way. In a blockchain-based metaverse, however, DeFi could become the standard.
While NFTs have shown how valuable certificates corresponding to digital objects can be, many NFTs around today are still pieces of digital media, i.e., images, video, audio files, etc., without much utility in real life. But what if they could also represent digital objects that had use value in a digital world? Your house, your clothes, even your body in the metaverse could be an NFT.
Digital currency for digital worlds
The metaverse would essentially be the next level of the Internet, in which we ditch interaction via computer screens and keyboards and more naturally interact directly via our senses. It should bring together the worlds of social media, gaming, e-commerce and crypto in virtual worlds, with the exciting potential to make new experiences available to us.
The virtual world of the metaverse represents uncharted territory in which crypto can establish itself without the restriction of having to operate under the traditional power structure of states and banks in the physical world. With our avatars in the metaverse potentially moving and working in virtual land owned by blockchain companies, using cryptocurrencies as cash and NFTs to verify ownership of objects, this brings up interesting use cases for a whole range of tokens that can integrate themselves into such a system.
Metaverse crypto to look out for
Blockchain companies have been involved in virtual reality for some time now. Platforms such as Decentraland, Sandbox and Somnium Space have been creating social platforms in which people can interact, buy digital real estate, purchase and use virtual objects and conduct business. The metaverse is currently a hot trend in the crypto community, with many projects jumping on the bandwagon, but there are some tokens standing out from the crowd. Many of them use the 'play-to-earn' model, in which activities in metaverse games can reward players with cryptocurrency.
Axie Infinity (AXS) is one of the most popular metaverse tokens right now. Axie Infinity itself is a blockchain-based game in which players breed, battle and trade monsters called Axies, in a similar concept to Pokémon. The AXS currency functions as a governance token, giving the players control over the direction of the game's development.
Enjin Coin (ENJ) is the currency of the Enjin Network, a social gaming platform that allows its users (as of the time of writing, about 20 million) to create websites and clans, chat and host virtual item stores. The virtual items are NFTs valued in ENJ that users can trade freely with each other or liquidate to receive their value in ENJ.
Shiba Inu (SHIB) announced a partnership with an AAA game studio along with former Activision VP William Volk for the development of mobile games and its own metaverse. SHIB's momentum and high-profile partners definitely make it one to watch.
How close are we to the metaverse, really? Should you invest?
So, should we all be putting down some money for our metaverse real estate right now? As is always the case with emerging technology, an investment in metaverse projects will be a bet on future events. Will the competing metaverses be interoperable? If not, which projects are likely to succeed? How plausible is their product? How sustainable is it? These are the questions you need to ask yourself when looking to invest in the metaverse. Online trading games and digital land development are just the beginning. If you can pick a winner (or invest in a diverse group to increase your chances), tokens that become widely used in metaverse activities could become very profitable.
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