How does crypto contribute to the metaverse?
The metaverse concept took off during the pandemic, as it was the perfect time for this remote technology to set in, and the population had enough time to experience it from the comfort of their own homes. By combining AR, VR, and mixed reality, the metaverse takes the physical world into a digital realm. It has already been implemented by companies we already know, such as Facebook with Meta and Apple with the Apple Vision Pro.
Metaverse worlds allow users to participate in events, play games and interact with others for purchasing real estate or NFTs. Binance data shows that the people interested in these purchases should look into how to buy Bitcoin or own metaverse coins because these are the primary ways through which they can shop for anything they want.
However, there are many more benefits and use cases of cryptocurrencies in the metaverse, and since this ecosystem is developing, it may spur innovation in the future. Here’s how.
Benefits of cryptocurrency in the metaverse
The metaverse is one of the first steps towards Web3, the next Internet generation, where decentralization, blockchain, and artificial intelligence will make people’s lives easier. So, as part of the movement, the metaverse is where digital coins, NFTs, and any other financial assets are leveraged to reward users and fund companies.
Cryptocurrency in the metaverse is also safe for transactions to deploy due to decentralization and continuous maintenance by network nodes that verify all transactions and make it almost impossible for networks to be manipulated or hacked. Security also ensures high levels of transparency since all transactions are visible on publicly distributed ledgers.
Moreover, cryptocurrencies provide flexibility in borderless transactions, so users can trade virtual property anywhere in the world without having to exchange cryptocurrency or fiat money from one currency to another. At the same time, smart contract functions help save time and eliminate centralization.
Current use cases of crypto in metaverse ecosystems
There are a few use cases of digital assets within metaverses, but they will progressively expand as innovation reaches this industry, too. First, since you can buy almost anything in these environments with cryptocurrencies, financial services can benefit the most from the technology, as customers can trade financial instruments with virtual money supported by banks that work with the metaverse.
Online shopping is also a sector that can get amplified through metaverse and crypto, especially since many people are choosing online purchases over in-store due to flexibility. At the same time, new technologies, such as NFTs, can be used to appeal to younger generations and make shopping limitless. For instance, sports clothing companies, such as Adidas, released numerous NFT collections with unique wearable accessories tied to the digital asset.
Finally, crypto is used to govern metaverse environments through governance tokens specific to a certain metaverse. For example, Decentraland has MANA, and Uniswap has UNI. By owning these coins, users have the right to vote and contribute to these digital spaces.
Metaverse coins to consider investing in
Besides regular cryptocurrencies, like Bitcoin and Ethereum, whose impact on the metaverse has been immense over the years, metaverse coins are starting to gain value and popularity since they play the leading role in supporting commerce and exchange in these ecosystems. For now, there are a few metaverse coins that rule the market, such as the following.
Internet Computer (ICP) has the biggest market capitalization currently with about $1.8 billion, and has been supported by renowned companies that influenced its performance. ICP aims to push the boundaries of centralization towards decentralization by employing smart contracts and high-speed internet features to make the internet more inclusive.
On the other hand, Axie Infinity (AX) has a market cap of $835 million and focused solely on gaming, since it’s one of the most popular play-to-earn crypto game, like the Sandbox and Decentraland. The game lives on the blockchain, and playable characters come in the form of NFTs that users can buy with the AXS token.
Finally, the Theta Network (THETA) is a blockchain that acts as a video streaming service like YouTube or Twitch but is decentralized and based on peer-to-peer technology. The company behind it wants to eliminate intermediaries and reduce regular streaming costs.
However, the metaverse needs improvement
The metaverse is a new concept, and it will take some time for it to acclimate to our traditional system, but this aspect will improve with time and as technology develops. Its current struggles and challenges have to do with the regulatory framework, which is not only limited but also not appropriately implemented, hindering its potential. There are a few laws and guidelines on the metaverse and they approach copyright and trademark to digital creations, such as NFTs and other types of content.
Another two-edged sword in the metaverse is that most users can remain anonymous, even if their transactions are public because that’s what makes crypto and blockchain beneficial to use. Unfortunately, this aspect will make it difficult to spot and eliminate illicit behavior and bad actors, which might influence the environment to become toxic and unsafe.
Additionally, safeguarding the metaverse environment is quite complex because while some offer anonymity, others require users to include a lot of personal data, such as VR headsets, which can collect a tremendous amount of information about a customer, which can be later taken advantage of.
Finally, scaling metaverses requires considerable technological involvement for the infrastructure to support the increasing number of users joining various platforms and the transactions that must provide low fees and fast transaction times to appeal to users. Many metaverse ecosystems will compete with each other in regard to these features, which might create tension and widen the gap between metaverses.
Final considerations
Cryptocurrencies have revolutionized the traditional transaction system and the world, allowing blockchain technology to evolve and adapt. However, its contribution to the metaverse, which is the bridge between reality and virtual worlds, can benefit significantly from crypto due to the possibility of trade that can expand these worlds into safe and profitable environments. Still, the metaverses must tackle issues with the lack of regulatory framework, security and scalability concerns.
