Interest in the metaverse has skyrocketed since Mark Zuckerberg announced the rebranding of Facebook to Meta. However, the term “metaverse” is not new. It was first coined in the 90s, and many science fiction novels have built on the idea of an alternative parallel digital world.
The development of the metaverse is being driven forward by big companies like Meta and Microsoft, as well as by many smaller metaverse projects in the gaming world. Many of the crypto technologies developed in the last few years perfectly match the needs of the emerging metaverse. This allows the development of metaverse applications such as social networks, a virtual real estate sector, investments, metaverse events, and work opportunities. In the process, the metaverse is affecting cryptocurrencies in a huge way.
What Is the Metaverse?
The most simple definition of the metaverse is “a virtual world where people can socialize, work, and play.” You could argue that this already exists in our current social media platforms. But, the key difference is that the metaverse is expanding on this idea to include virtual reality, augmented reality, and crypto technologies.
While the term can be traced back to science fiction from the 90s, no individual or company invented the metaverse. It’s the outcome of a convergence of internet, audio-visual, gaming, and social network technologies over the last 20 years. The hope is that the metaverse will one day become a significant extension of our physical reality — a three-dimensional place you can log in and explore with a virtual headset. It can be a place where you can meet with friends, buy property, attend events, go to work, and trade ideas and digital assets with people you’ve never met in person.
Cryptocurrency Price and Facebook Rebranding
Since the rebranding of Facebook to Meta, the hype around the metaverse has exploded. Crypto tokens and non-fungible tokens (NFTs) related to the metaverse have spiked in price, even as the general crypto market was plummeting downwards. For example, the price of the Decentraland token MANA shot up almost 5X its price following the day of the Meta announcement.
The main reason is that Zuckerberg announced support for NFT projects. As everyone knows, Facebook is one of the most powerful internet companies in the world and the most powerful in the social media space. Facebook has now geared its entire brand towards the metaverse. So, it’s highly likely that Facebook will invest many billions and drive much of the development of the future metaverse. As a consequence, this will also boost the future demand and utility of metaverse-related crypto projects.
Are the Metaverse Tokens Different from the Rest?
The future metaverse is going to be built on metaverse tokens. These include currencies that can be used to purchase assets in the digital world, and also tokens that represent these assets in the world. Cryptocurrencies and NFTs are the perfect technologies for implementing these features of the metaverse, and Facebook (Meta) has given the green light for making them the engine of growth of the metaverse. So, are these tokens different from familiar crypto tokens?
No, these currencies and tokens will be very similar to the ones you’re used to. The main difference will be their applicability in the metaverse.
For example, in Decentraland, a crypto-based metaverse world that’s been around since 2017, you can own parts of the virtual world through tokens. When playing the game, you can explore scenes, structures, and adventures created by other players. You can use the in-game currency MANA to trade with other players in the game, buying entertainment experiences or purchasing and selling in-game assets.
These assets are backed by NFT tokens on the Ethereum blockchain. As the MANA currency and asset tokens can be traded for cryptocurrencies and other fiat currencies, the Decentraland economy works as an extension to the real-world economy. You could theoretically make a career out of the building and selling in-game assets. A similar economy exists with the SAND token in The Sandbox world.
These metaverse cryptocurrencies and tokens exist on familiar blockchains such as Ethereum, and function the same way. But, as they represent assets in a digital world that people value, they have a higher utility compared to many other cryptocurrencies. As the metaverse grows, this utility will grow and so will the value of the currencies and tokens (of course, depending on how the economy is managed).
The reason these meta tokens are going up so quickly in value is that people see this as the beginning of a megatrend towards the metaverse. The thinking is, if you can get hold of some prime real estate in the metaverse now, it will be worth a lot more in the future when everyone in the world joins in.
One Final Thought: Are Cryptocurrencies the Future of the Metaverse?
Cryptocurrencies are developing in parallel with the metaverse. They are two ideas that work so well together, it’s no wonder they are emerging at the same time. Cryptocurrency allows for ownership and trade of digital assets, while the metaverse brings those digital assets to life. For this reason, it’s highly likely the future of the metaverse and cryptocurrencies are inextricably linked. If the metaverse becomes popular (and with Facebook’s huge investment, it’s likely to do so quickly), then cryptocurrencies and NFTs will grow alongside it.
The next question a crypto enthusiast may have is what are the best metaverse tokens to pay attention to. This is uncertain, especially given Facebook’s important role. But, there are some tokens that are proven popular and already have a headstart in the metaverse. Those include Decentraland (MANA), The Sandbox (SAND), Axie Infinity (AXS), Enjin Coin (ENJ), and Facebook Tokenized Stock (FB). Indeed, these have all gone up while the Bitcoin and Ethereum price has been going down.
The metaverse may be a new term for most of us. But, its ideas and underlying technologies have been in development for decades. Now is the time these are all coming together, and interest and investment are starting to soar. If you haven’t yet, now is the perfect time to start exploring the metaverse.
Here is related post: Developing a Solid Crypto Trading Strategy: Here’s How!
