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An Introduction to the Metaverse

| November 17, 2023

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The amalgamation of human life and technology has begun and is evident with our use of devices and the ecosystem of applications they bring. All aspects of life, including work, communication, entertainment, and payments, are conducted through these devices with the click of a button. As they become a more prominent part of our lives, the line between the real and the virtual worlds is beginning to fade. Our interactions are moving online — work meetings, social interaction, and attending concerts can all be done at the convenience of our homes through modern technology like smartphones, computers, and Augmented Reality gear, just to name a few.

While interactive spaces exist online where people meet to discuss business, play video games, or even attend classes, the race is on to create undivided ecosystems where siloed spaces can be combined into a vibrant virtual world that will become an extension of the real world. Big corporations like Meta, Microsoft, and more are in the process of creating an alternate dimension for everyone to dive into and are referring to as the Metaverse. Likewise, the world of blockchain is also witnessing several developments with Metaverse projects, although more open and fully decentralized, as opposed to the walled gardens that the ecosystems created by centralized corporations are.

What Does the Vision of a Metaverse Look Like?

The metaverse is a yet-to-be-fully-developed concept that mostly exists in abstraction. While developments are being made constantly, it is conceptualized to be a three-dimensional augmented reality space that exists in parallel with the real world. People can access this alternate plane with the use of augmented reality technology — AR goggles, glasses, and headsets — to enter a highly immersive and interactive world. Here, people can carry out tasks and activities from their lives virtually, like attending classes, conducting business, going shopping in e-commerce malls, gaming with friends, or just hanging around witnessing the vibrant landscape of the metaverse.

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The use of technology like AR to enter virtual worlds is already implemented by the gaming industry, which is why it is at the forefront of metaverse development. Video games like Roblox and Fortnite are allowing for highly interactive gameplay and socialization for their users. While this is not the metaverse, it offers us a glimpse of what it is going to be. These projects get massive numbers of people interacting with each other but are barely interoperable with other projects and applications, therefore limiting their use cases and preventing them from becoming what a true metaverse would look like.

The metaverse, once built and ready to use, will allow users to interact with each other on several applications as they move around with portable avatars and digital items through the ecosystem. Think of it like accessing an AR chatroom right after finishing a business meeting — users can spawn from one application to another with the same avatar, the same digital identity, and more. This level of interoperability would allow users to move around the metaverse freely with their digital possessions, imitating how people live in the real world. Although cross-compatibility between different metaverse projects of the now is not something the centralized companies behind them are interested in, the high level of interoperability needed to create a massive open world is possible with the blockchain.

The Role of Blockchain in the Metaverse

Blockchain networks like Ethereum are at the forefront of building interoperable protocols on their ecosystems, allowing users to interact with all protocols and users present on the networks. Several blockchain components will be operating aspects of the metaverse, but the more fundamental ones, like blockchain wallets, NFTs, and cryptocurrencies, will play the biggest roles. Digital identities, ownership, and economies are important features that will go into the makings of a successful metaverse, and such features will be facilitated by blockchain technology. Thus, several metaverse protocols can be found in the development and deployment of blockchain networks as blockchain use cases complement the metaverse.

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Wallets

Blockchain or cryptocurrency wallets are the basic infrastructure allowing users to interact with dApps and web3 ecosystems. Wallets are primarily used for storing cryptocurrencies like crypto coins, tokens, and NFTs. Since token transactions initiate dApp functionalities, wallets are going to be an essential aspect of utilizing metaverse applications. More importantly, however, blockchain wallets act as digital identities for blockchain and web3 users, which will be translated to the metaverse, where user interaction and activity will require digital identities.

NFTs

NFTs, as a blockchain use case, are by far the most versatile. They are already showing great use cases in the form of digital collectables like in-game assets on Axie Infinity, land parcels on Decentraland, and digital real estate, just to name a few. Their ability to convert digital items into unique tokenized assets will bring monetization capabilities to the metaverse, the economics of which will be handled by NFT counterparts — fungible cryptocurrency tokens.

Of course, NFTs will play other important roles in the metaverse beyond adding value to digital possessions. These tokens will be implemented with e-commerce on the metaverse, allowing for proof of ownership with token transfers and allowing for the tracking of ordered products in the real world along their supply chains. Similarly, it will be used by all kinds of entities operating on the metaverse for ownership proof and tracking capabilities.

Cryptocurrencies

Cryptocurrencies in the form of coins and tokens will foster a rich decentralized economy in the metaverse and, along with the underlying blockchain, will function as its primary payment system. Cryptocurrency will allow for cross-border exchange of value over the vibrant digital realm, bringing about employment opportunities, novel streams of revenue, and better financial systems to metaverse users.

While the central components of blockchain technology will play a heavy role in the metaverse, it is in no way an exhaustive list. There are several others that will be involved in shaping up the metaverse as a truly functioning and interconnected ecosystem. Every aspect of blockchain will complement metaverse functionality and bring about use cases and convince individuals and businesses to adopt the metaverse as a plane for communication, business, and entertainment.

Metaverse Use Cases

The use cases brought about by the metaverse will encompass all aspects of digital interaction that individuals experience today. Further, with blockchain decentralization, the metaverse will boast a wide range of DeFi and GameFi applications allowing users to benefit economically from their interaction with the metaverse. Monetary use cases are already being witnessed by those indulging in metaverse gaming projects like Axie Infinity and Decentraland. Users from countries like Vietnam and Venezuela are reporting making full-fledged incomes from such projects, which are forming the foundation of the metaverse.

As new opportunities to generate revenue arise, older systems will adapt to the development of the metaverse. E-commerce, web-based businesses, and traditional companies will shift their models to incline toward the metaverse and generate revenues from the herds of users that will flock to this digital phenomenon. Digital stores, office spaces, and other real-world commercial infrastructures will be set up on the virtual real estate and spaces in the metaverse. Of course, metaverse use cases that are already popular, like education, event attendance, and media streaming, will all be part of a larger ecosystem of applications as a totally formed metaverse comes into existence.

Metaverse Is the Logical Evolution of Technology

The metaverse is still in its infancy and is quite some time away from being fully developed for the masses. Massive corporations and independent developers are working to make this conceptualized idea, first spoken about in the 1992 classic novel Snow Crash, an actuality. Large sums are being invested into metaverse projects — which is a direct reflection of the confidence in the utility it will bring to the world. Logically, the development of the metaverse seems like the natural way to go as technology is taking the world online, and people are spending more time in virtual spaces and relying on web infrastructure to get daily tasks done.

The creation of the metaverse will take several forms, depending on how those developing it defines it. With corporations expected to build an ecosystem of interlinked applications that cannot interact with those outside their realm of development, the real anticipation is on the flipside with the developments taking place in the world of blockchain and web3. Several developers are building decentralized metaverse applications that will provide high interoperability, monetizing mechanisms, and complete openness for anyone wanting to hop into a boundless digital realm.

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