Understanding the Metaverse and How it Relates to Cryptocurrency
The metaverse is rapidly growing, both in cultural awareness and in financial terms, accelerated by Facebook’s Meta name change last month. Since the concept is slowly starting to become more mainstream as several big-name companies are embracing it and some analysts are calling it “the next big investment theme.”
Igor Tasic, founder of metaverse advisory firm Meta Ventures, says that the metaverse goes beyond VR/AR and technology itself and has the potential to be the ultimate equalizer of the first half of the 21st-century by creating an actual global plaza for people to be included, integrating their physical and digital existence in an authentic hybrid experience.
“We are living in a moment of transition in the metaverse. I believe even the way we refer to “it” will evolve,’ Tasic told GOBankingRates.
“Like in the past, we called the internet the “web,” “Infoway,” and now, “the cloud.” It seems to be more of a natural next step of the internet in which the experiential aspect will take place,” he added.
In a note to investors earlier this week, Investment bank Morgan Stanley said that the metaverse — a concept that includes the construction of an alternate universe where individuals can model their image to whatever they want to be, and perform real-life tasks such as buying things, gaming with friends, and other activities — “can fundamentally change the medium through which we socialize with others,” according to Bitcoin.com.
But what is the connection between the metaverse and crypto and how does crypto play a role in it?
Sina Kian, VP of Strategy at Aleo, a blockchain platform for fully private applications, told GOBankingRates that crypto is a fundamental part of the metaverse because it allows ownership of digital assets, and ownership will create incentives to invest.
Kian added, however, that one of the greatest threats to the metaverse is the prospect of being captured by an oligopoly, thus recreating the menace of monopolies in the digital world.
“The most important thing that crypto offers is a potential alternative to that world, in which ownership is more decentralized,” Kian said.
Phillippe Bekhazi, co-founder and CEO of XBTO Group, a global cryptofinance firm, echoed the sentiment, telling GOBankingRates that crypto is poised to play an immensely important role in the metaverse.
“Obviously, there are the emerging technologies, such as NFTs and social tokens, that could be used for everything from playing games and earning money to even serving as incentives for holding virtual concerts for influencers and their fans,” Bekhazi said.
“What I think is under-appreciated is the role that major cryptocurrencies could play. Digital currencies are primed to be used as a payments system between various parties within a metaverse-like digital world,” he continued.
“Also, it’s not beyond the realm of possibility that in some future metaverse, even crypto traders could trade Bitcoin and other crypto assets on a VR/AR-integrated system within the metaverse. In such a scenario, they could bargain ‘in person,’ in the form of the digital avatars, over what price they would want to trade whichever crypto asset. The possibilities could be limitless, and we are excited to see what comes of this,” Bekhazi concluded.
Other experts explain that the metaverse isn’t just AR/VR and cartoon avatars. It can be any form of online engagement, from a Zoom call to commenting on your favorite creators’ social posts, plus anything that gives you presence, engagement and identity in a digital space can be a metaverse, according to Chris Fortier, Vice President of Product at Rally, a blockchain ecosystem that helps creators mint their own social tokens.
“In this light, crypto has an important role to play in any metaverse,” Fortier told GOBankingRates. “Crypto enables radical ownership of ‘tokens’ but ‘tokens’ are much more than money.”
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“Rally, for example, let’s creators and communities tokenize their time and reward participation in our digital metaverses (both current web and web3 alike). That could mean amplifying a tweet, fulfilling a T-shirt order for a fan or introducing a new community member to crypto. Web3 communities now have the tools to honor and reward that digital labor,” he added.
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