How Can Blockchain Technology Support the Metaverse Economy?

The Metaverse has been a long-held dream of many futurists since the 1950s. Only recently have we made any real progress towards making this a reality.

Technology has come a long way, and we now have enough processing power to run a fully digital world – and in future a fully functioning digital ecosystem.

The Metaverse is the first and most significant step in this direction. Since Meta announced its focus on building a fully functional metaverse, there has been a lot of buzz around it. The debate about Metaverse becoming the future has begun.

But first, let’s understand the Metaverse and how it helps digital reality.

The digital world

There are several ways to project an alternate reality – the most popular ones include AR (Augmented Reality) and VR (Virtual Reality).

AR is when you project digital devices onto the real world – for example, Apple’s new camera AR feature lets you project 3D digital structures onto a physical surface like a table or the floor via your phone’s camera.

Conversely, VR is when you project yourself into a fully digital space created artificially by another device, where you can interact with digital objects and other digital identities.

But what can you actually do in a Metaverse?

Life in the digital world

We can experience the digital world (or a metaverse) through external sensory devices such as AR/VR glasses and gloves. While the digital world can be very different from the real world, digital spaces that mimic the real world also exist.

In Metaverse, people can customize and create their avatars, allowing them to express themselves freely. You can also socialize with individuals from anywhere in the world, all in one place – Metaverse brings a sense of realism to ordinary chat room discussions.

Life in the Metaverse can offer a wide range of opportunities for gaming, trading and even content creation – which is not limited to blogs, photos and videos, but also creating digital objects and animations!

Let’s look at some examples of currently functioning metaverses to give you an idea of ​​the potential of this new digital economy:

Second Life: In this Metaverse, you can create your avatar and interact with other users, attend live events and performances, explore virtual environments, and participate in a robust economy where you can buy, sell, and trade virtual goods.

Roblox: In this Metaverse, you can create your games, play games created by other users, and participate in social activities such as chats, groups, and events.

Decentralized country: In this Metaverse, you can buy and manage virtual real estate, create and publish your content, and participate in games and other interactive experiences.

Digital cracks

When we project our entire persona online, we risk the privacy and security of our personal data, as virtual identities and assets can be vulnerable to hacking and theft.

Metaverse has also started offering the ability to trade digital goods and make monetary transactions. Although this may seem relatively simple, it is necessary to ensure that digital goods are authenticated, digital money is secure and digital identities are unique. This can prove to be challenging.

The current state of virtual reality technology is far from perfect, with glitchy 3D rooms and unreliable connections. While the technology is promising, many roadblocks still need to be resolved for Metaverse. But new technologies are emerging that can help support the Metaverse and make it a success.

Blockchain is one of these emerging technologies that has the potential to revolutionize the way people interact with the Metaverse economy.

Blockchain to the rescue

To fully experience the Metaverse, one must immerse oneself in the digital space and interact with digital devices. But doing so can open you up to sharing private data and lead to vulnerable privacy hacks – something we’ve already seen with Meta (now, Facebook).

The most critical support structure for making the Metaverse more secure is the incorporation of blockchain technology!

But how does blockchain technology help the Metaverse become a better world?

One of the key benefits of blockchain technology is that it provides a secure and decentralized way to manage identities. As we know, users with digital representations of themselves need a secure and transparent way to manage their identity. Blockchain-based identity solutions allow users to control data and privacy, reducing the risk of identity theft or misuse.

Furthermore, users can have other digital assets apart from their own avatars in the Metaverse – such as clothing, accessories, in-game items and even real estate! (yes, that’s a thing!) These assets are valuable and can have real value. Blockchain technology provides a secure and decentralized way to manage these assets, allowing users to transfer, trade and sell them without intermediaries.

As transfer and trade become secure on the blockchain, we can take it a step further and introduce monetary transactions as well! This is essentially trading digital assets for digital currency – and the blockchain enables Metaverse to handle transactions, enabling users to purchase items in Metaverse for real money.

How Today’s Metaverse Uses Blockchain Tech

If you’ve followed our journey this far, you must have figured out some very interesting use cases for Metaverse in your lives – here’s how major metaverse players are taking things forward today using blockchain technology:

Decentralized country: Decentraland is a virtual blockchain-powered world where users can create, experience and monetize content and applications. In Decentraland, users own virtual property, and they can buy, sell and trade this property in a decentralized and secure way. Decentraland uses the Ethereum blockchain to manage its virtual world, providing a secure and transparent way to manage digital assets and transactions.

The sandbox: Sandbox is a virtual gaming platform where players can create, share and monetize their gaming experiences. Sandbox uses blockchain technology to provide a secure and transparent way to manage the ownership and transfer of digital assets, such as in-game items, collectibles, and virtual real estate. Using blockchain technology, The Sandbox provides a safe and reliable way for players to monetize their gaming experiences.

Axie Infinity: Axie Infinity is a blockchain-based gaming platform that allows players to collect, breed and battle creatures called Axies. Axes are unique, rare and valuable, and they can be traded and sold in a decentralized and secure way. Axie Infinity uses the Ethereum blockchain to manage its virtual world, providing a secure and transparent way to manage digital assets and transactions.

Blockchain technology has the potential to revolutionize the way people interact with the metaverse economy. By providing a secure layer of transparency, blockchain technology can provide a secure platform for users to transact with each other.

What is the future of Metaverse?

Blockchain technology has solved some major problems to make Metaverse a relatively safe digital escapade. However, many more factors must be considered to assess its success.

The most important factor is today’s technical limitations of internet speeds and unreliable connections. While 5G is in its early stages, we can look to a promising future where internet connections become faster and cheaper – nothing that Metaverse can’t sustain.

Another important factor that determines the success and sustainability of the metaverse is the scale of users on it that keeps it active and alive. Although this may not seem necessary, there is a term for this behavior – ‘Network Effect’ – which means that the platform is only as valuable as the number of people on it.

For example, people use Instagram for the creators and content on it. This is why a clone of Instagram can’t sustain itself – it doesn’t have the valuable content or creators on it that made Instagram famous in the first place.

If you’re still not convinced about the network effect, here are a few large-scale metaverses that fell because they failed to capitalize on this network effect

• Blue Mars: This virtual world promised to bring real cities and environments to the Metaverse, but could not generate enough revenue or user engagement to sustain itself.
• The Entropia Universe: Despite being one of the first metaverses to launch, Entropia Universe struggled to retain a large user base and generate revenue from its virtual economy.
• There.com: This Metaverse failed to attract a large enough user base and was sold to a company that was eventually shut down.

The future of Metaverse is highly speculative and dependent on several factors, including technological advances, social acceptance and economic conditions. There are many forms this can take

• a massively multiplayer online game
• a virtual reality social network
• an AI-powered virtual economy

It is also possible that Metaverse could eventually become a decentralized and autonomous system governed by a decentralized community of users. Overall, the future of the Metaverse is uncertain, but it has the potential to dramatically change the way we interact with technology and with each other.