Metaverse has seen some serious traction lately, thanks to Facebook’s rebranding to Meta, bringing the concept into the mainstream. Although the technology is still at a nascent stage and a few iterations away from becoming the next reckoning force, it’s safe to say that we can see that sooner than expected. Moreover, with the growth of Metaverse, the crypto industry will see a dose of boost from its affiliated segments.
However, before discussing how crypto will benefit from the growth of Metaverse, we first need to understand what sort of relationship does it have with Metaverse. Also, what other types of technologies and standards are involved other than crypto.
Metaverse involves NFTs, VR/AR and a lot of networking
Basically, a metaverse is a digital world blended in the physical reality. More specifically, it allows us to extend our senses of sight, sound, and touch into the virtual world. The suite of technologies involved here is called eXtended Reality (XR). It includes Virtual Reality (VR) and Augmented Reality (AR).
Besides this, Metaverse allows us to have a marketplace for digital items sold/traded in the form of non-fungible tokens (NFTs). NFTs have exploded in popularity this year, surpassing all previous records to date. Due to such a tremendous rise in popularity, major brands across segments have entered this industry. All this provides a newfound arsenal for the industry that trespasses across the Metaverse too.
Finally, the building block for all the abovementioned technologies: crypto. Cryptocurrencies/Crypto Networks allow for a decentralized network that a community can operate and manage instead of a central authority. Besides this, crypto networks such as Ethereum offer execution of arbitrary, turning-complete programs known as smart contracts.
Smart Contracts open the avenue for a bucketload of use-cases, including the ever-popular NFTs.
Metaverseand open standards
Whenever we hear Metaverse and the concept of digital ownership through NFTs, an often-used argument is:
“Centralized-based offerings can offer digital items marketplace too. So why do we need to change the underlying technology from a centralized model to a decentralized model?”
The main difference between centralized-based offerings and NFTs is: Owning an NFT is ‘true-blue’ ownership. In the case of the former, ownership of the digital item is solely dependent on the central authority, which could stop their services in the future.
NFTs don’t suffer that, a user has total ownership of their digital item. This brings us to another vital aspect of the Metaverse.
While initially, the whole Metaverse concept looks like a centralized one, the truth is, it is majorly decentralized and open-source:
- The internet.
- Open Media Standards such as Pixar’s USD and NVIDIA’s MDL.
- eXtended Reality hardware which includes smart glasses, haptics and omni treadmills.
- Finally, Decentralized ledgers and smart contract platforms such as Bitcoin, Ethereum, Flow, Theta and many more.
Crypto will benefit from Metaverse
Metaverse will gain traction in the future, one way or the other. People across industries have been eyeing the concept for a long time. Moreover, we are now seeing a gradual development of it thanks to crypto and blockchain. So it’s safe to say, with the growth of Metaverse, we’ll see a change in crypto too.
The specifics and ‘data-ridden’ analysis of crypto growth due to Metaverse is still some time away. This is because we have yet to see a powerful surge on a specific entity due to its entrant into the Metaverse segment. In the future, however, we’ll have sufficient data to support the analysis of the growth surges in crypto in respect of Metaverse.
Besides growth, Metaverse can fix one of the long-standing pain points in the crypto market: Stability. With Metaverse, cryptos can have a definitive and visible performance parameter, which lowers the new entrants’ learning curve and provides some much-needed insights to existing investors.