A Metaverse is a virtual replica of the real world. People can access it without even lifting a finger. In these virtual worlds, users can attend concerts, visit art galleries, or go on vacation to Paris using a virtual self – a custom-made avatar that can look any way they want it to.
There’s more than one Metaverse, too. There are many being developed by different companies, each on entirely unique network protocols. These Metaverses are all based on the same objective – to enable a greater overlap between our real and digital lives.
Cryptocurrencies are digital assets used in these virtual worlds as a means of exchange and a store of value. While cryptos mainly exist as an alternative currency in our physical world, they function as full-fledged ones in the Metaverse, enabling people to pay for virtual concerts or flights to Paris.
There are also NFTs, which make it possible for unique pieces of digital art to be bought or sold on the blockchain. Not just art, though. Homes, commercial property, and real estate too.
When it comes to paintings, only a few can rightfully brag about owning a Monet. While others can certainly make prints of the original, those prints don’t hold nearly the same value as the former.
The same principle applies to NFTs as well. On the blockchain, ownership of the NFT is made clear through various network processes, which establish, beyond a doubt, the actual owner of any piece of art.
While all of this might seem painstakingly random, there is a connection between all these facts of the blockchain.
And that’s what this article is about.
- The Metaverse is a virtual replica of the real-world – one that users can access by creating a customizable avatar for themselves.
- NFTs enable users to have full control over their digital assets in the Metaverse. They also play an important role in creating exclusive environments, enhancing the digital community and the social experiences therein.
- Cryptocurrencies are the money of the Metaverse. They’re used to pay for everything.
- Ethereum is the life force behind these concepts (and most major Metaverses today), in addition to a host of other emerging technologies like DeFi and dApps.
Today, we’ll explore where cryptocurrencies, NFTs, and the Metaverse come together, how they work in tandem, and why someone paid $11 million for a very…ordinary… digital cartoon.
NFT Interaction in the Metaverse
NFTs enable users to have full control over their digital assets in the Metaverse. The blockchain technology that underlines these virtual worlds serves as an immutable confirmation of ownership.
For instance, if you were to buy a bunch of LAND in Decentraland, the Metaverse would provide you proof of confirmation in the form of NFTs, guaranteed by the blockchain.
Since the ownership of digital currency is irrefutable and unique, owners are free to develop their NFTs any way they want, including building various structures like online shops, hosting social events (for avatars, of course), or converting them into commercial space.
NFTs also play an important role in creating exclusive environments in the Metaverse, enhancing the digital community and the social experiences therein. For example, the Bored Ape Yacht Club and CryptoPunks collections allow select users access to premium communities with locked content and even offline parties.
That’s right. NFTs are no longer just “investment vehicles” anymore. Premium NFTs are used as keys to gain access to the richest and most affluent communities in the digital world, not to mention exclusive perks, staking rewards, and other high-end collectables.
Long story short, if you’re looking to buy yourself something pretty in the digital world, you’re going to have to go the NFT route. Most Metaverses usually ask you to connect a crypto wallet with their servers to participate in an auction…
Crypto Interaction in the Metaverse
Cryptocurrencies are the money of the Metaverse. They’re used to pay for everything: NFTs, real estate, shoes for your avatar, the occasional latte, et cetera.
Different Metaverses have different coins. Decentraland, for instance, uses MANA, which is its native token. Pretty much everything on Decentraland can be bought or sold in MANA terms.
The Sandbox, another popular Metaverse, uses SAND, its native token.
How do you buy these tokens? On exchanges like CoinSwitch Kuber. You can exchange your Indian rupees on CoinSwitch for these tokens, which you can then use in the Metaverse of your choice.
Cryptocurrencies are the gateway between the physical world and the virtual one. They allow us to value digital assets in fiat terms and determine their returns over time. The liquidity of crypto on exchanges around the world also lets investors realize their profits by transferring ownership of coins and NFTs to buyers directly.
How the Three are Interconnected
Now that we’ve understood how different tokens are used on different platforms, we also need to understand how Ethereum plays into all of this.
Ethereum is the second-largest cryptocurrency by market cap, right after Bitcoin. Not only a top-rated coin, but it is also a development platform creators use to create these Metaverses.
Well, not directly.
Most tokens like MANA and SAND are ERC20 tokens, which means that they don’t have their own blockchains. They rely on Ethereum’s network to verify transactions for them and build their operations up from there. Therefore, while the platforms themselves might have been built on MANA or SAND, it’s all Ethereum behind the scenes.
Ethereum is also the currency of choice on the biggest NFT platform globally, OpenSea. Most NFTs can be traded using ETH directly through a crypto wallet.
Ethereum is the life force behind these three concepts (and most major Metaverses today), not to mention a host of other emerging technologies like DeFi and dApps. Hence, it can correctly be thought of as one of the only crypto coins that provide interoperability to Metaverses, NFTs, and cryptocurrencies.
Conclusion: The Budding Reality of the Metaverse
While Metaverses are still in an early stage of their development, many corporations are already dipping their toes into the digital world. Louis Vuitton, Gucci, Burberry, and other luxury fashion brands are literally buying into the Metaverse through NFTs, heralding a world where digital fashion will be just as dynamic as physical fashion (if not more).
But it’s not just about access to high fashion, though. Convenience is right up there with luxury, with Walmart also looking to sell NFTs and its very own cryptocurrency to investors soon.
While experts are still divided on what the future will look like for the Metaverse, AnomalousLTD#8c4a of the Decentraland world strongly believes that now’s the best time to treat your avatar to a pair of hipster sneakers just for 5 MANA.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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