The Metaverse is a hot topic right now after Facebook decided to rename itself Meta. But metaverses aren’t that new. Facebook – together with many large companies such as Microsoft and Disney – has been driving the virtual reality train for some time.
But what is a metaverse? And how does it work? Join us as we delve deep into virtual worlds.
Metaverses are virtual worlds where people can do many of the things that they do in real life. You can work, have fun, shop, play sports and socialize. They can start their own businesses, buy land, do art, and attend concerts – all in a virtual environment.
Metaverses use virtual reality, augmented reality, social media, and blockchain technology to create places where people want to spend time. They are virtual worlds with virtual economies, although many are still in their infancy.
Instead of buying clothes for your closet, in the future you can buy clothes for your avatar online. And instead of buying a piece of art to hang on the wall, you can buy a digital piece of art to display in a virtual gallery.
Where does cryptocurrency come in?
Every virtual economy needs money. Cryptocurrencies work like virtual cash in virtual worlds. Transactions are almost instantaneous and the blockchain technology behind it is designed to build trust and ensure security.
Existing Metaverse already use cryptocurrency as a means of payment. So if you visit Decentraland you will need the MANA token if you want to buy anything.
In fact, metaverse cryptocurrencies like Decentraland, Sandbox (SAND), and Enjin (ENJ) are among the few tokens that may turn green this week. Many cryptos are in the red when they drop from their highs in early November.
There is another aspect of blockchain and cryptocurrency that is key to metaverse: non-fungible tokens (NFTs). NFTs can be works of art, sports trading cards, in-game items, and much more. They are essentially unique digital items with ownership and other information encoded in the tokens.
NFTs are changing the game industry because they allow people to own and benefit from the items they earn or build in the game – and carry those profits or items into real life. If you have previously participated in a game like Axie Infinity (AXS), the rewards you built had value only in that game. Now, Axie players are earning cryptocurrency rewards that have out-of-game value.
It is this idea of ownership that makes NFTs so important to virtual worlds. NFTs mean that people in the metaverse can buy and own land. Humans can buy and create NFT avatars to move around in virtual worlds. They can also create and sell items for their avatars – like the digital clothes we mentioned earlier.
Should you get involved? And where do you start?
This Metaverse idea is still in its infancy. In fact, there are many different ideas about what these digital spaces look like and what role they can play.
Meta (Facebook) certainly has big plans – including introducing virtual fitness machines and creating spaces for virtual business meetings. Virtual reality technology has come a long way, although there is still a lot to be done.
As a crypto investor, there are many ways to get involved in virtual worlds. The most obvious thing to do is to buy Metaverse crypto tokens directly, which are available on many leading cryptocurrency exchanges. You can also buy NFTs or even consider buying real estate in a particular world.
But if you want to go this route, you have to do a lot of research. Start by visiting an existing metaverse to get a feel for what it is about. For example, you don’t need to spend virtual reality equipment or MANA to visit Decentraland as a guest. Simply log in, create an avatar and off you go.
As with any investment, don’t get in just because Facebook or any other big company or famous person is doing it. Take the time to understand how these worlds work and which ones are most likely to survive in the long term. Likewise, there is no point in buying an NFT by chance. You need to look at which NFTs suit your interests, which ones you think could be profitable, and how the NFT market works.
Don’t forget that many of these crypto-based metaverses are based on ecosystems like Ethereum (ETH) or Solana (SOL), which may offer a less risky investment opportunity as they are not specific to any sector or virtual world. If the dream of the Metaverse doesn’t come true, Ethereum and Solana will likely still exist.
You can also choose to buy shares in a company involved in the Metaverse instead of doing so through crypto. Crypto is one way to get involved, but it’s not the only one.
Not a hasty decision
Ultimately, it is still at the beginning and we do not yet know how this metaverse will develop. The evolution of Metaverses has been talked about for years, and so far they haven’t gotten too big. It may be different this time around, but it’s important not to get caught up in the hype.
All investments in cryptocurrency come with risk, so it is important to only spend money that you can afford to lose. And don’t let the fear of missing out – if the Metaverse is worth investing in, it will still be there after your research.