The metaverse. It’s one of those buzzwords that you can’t escape lately, often paired with another hot topic: crypto. Some claim these two are a match made in digital heaven, while others see it as nothing more than a hyped-up fantasy. So, which is it? Are we genuinely on the brink of a new digital era, or is this just another bubble waiting to burst? Let's dig in.
Simply put, the metaverse is a set of interconnected virtual worlds in which you can work, play, shop, and socialize—basically everything you do in the physical world but virtually. Imagine the internet, but lived in 3D. Companies like Meta (formerly Facebook), Microsoft, and even Google are investing heavily in this vision, committing billions of dollars to building it.
But here's the catch: For the metaverse to work, it requires a working economy. That's where crypto steps in.
Cryptocurrencies and blockchain are frequently promoted as the backbone of the metaverse economy. Here's why:
Owning digital properties—whether it's virtual property, avatar clothes, or digital art—is the key in the metaverse. NFTs (Non-Fungible Tokens) make it possible by establishing ownership proof that is verifiable and secure.
Example: In Decentraland, a blockchain-based virtual world, thousands of dollars' worth of virtual property is bought and sold on the platform with its cryptocurrency, MANA.
Unlike corporations' traditional online spaces, blockchain offers a decentralized metaverse. No one can change or own your assets here. This aligns with the spirit of projects such as The Sandbox and Axie Infinity, where users have governance tokens that provide them with a voice in decision-making.
Various virtual worlds will have to communicate with each other seamlessly. Cryptocurrencies can be a common medium of exchange between platforms, just as the U.S. dollar is used everywhere. Blockchain can also ensure that assets bought in one world can be used in another—something that traditional digital economies cannot do.
For all the hype, the metaverse-crypto union has some serious challenges ahead:
Scalability Issues:
Existing blockchain networks such as Ethereum have a problem with high fees and low throughput. That won't do for a busy metaverse economy.
Regulatory Uncertainty:
Governments around the world are also yet to figure out how to regulate crypto, and the metaverse is an added layer of complexity. Overly strict regulation might stifle adoption.
Adoption Hurdles:
Most individuals remain unconvinced or unaware of crypto and the metaverse. Closing this gap will need better user experiences and education.
A virtual plot of land in Decentraland sold for $2.4 million in 2021. Investors are speculating on the future worth of these properties as digital hangouts or storefronts.
Axie Infinity makes it possible to earn cryptocurrency by playing, demonstrating the viability of a working metaverse economy. At its peak, some players in the Philippines earned more from Axie than their regular jobs.
Fashion companies like Nike and Gucci have introduced NFT collections, enabling users to clothe their avatars with exclusive gear. The figures sold are impressive—Gucci sold a virtual bag for more than the physical one.
If you’re intrigued by the potential, here are some actionable steps:
Start Small with NFTs:
Invest in affordable NFTs to get familiar with how digital ownership works.
Explore Metaverse Platforms:
Spend time in platforms like Decentraland, The Sandbox, or VRChat to understand the ecosystem.
Stay Updated on Regulations:
Follow crypto regulations closely—they’ll significantly impact how the metaverse economy evolves.
Diversify Investments:
If you’re investing in metaverse projects, balance it with other assets to hedge against volatility.
The metaverse and crypto indeed seem like a natural fit, addressing each other's pain points. However, it’s too soon to call it a perfect match. The challenges—especially regulatory and scalability issues—are significant.
For the time being, it's safest to remain cautiously optimistic:
Explore, invest what you can afford to lose, and monitor how the technology develops. After all, the next big thing usually begins as hype—until it no longer does.
So, what do you think—are you going to bet on this digital future or taking a rain check on this one for the time being?
