Those three words are enough to write a couple of comprehensive books, but my goal is not to write about them but to connect the dots to Metaverse and help answer the question: Are we going, Meta? But in case you are not familiar with the terms, I will explain them in simple words.
Blockchain
To make our perception of value more tangible we need a system that will back it up. And here comes blockchain. I often hear people mixing blockchain with cryptocurrencies, NFTs or other things. I’m not surprised since it’s not self-explanatory. What the blockchain is?
It’s essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger/wallet. The database is known as Distributed Ledger Technology (DLT).
Each block also contains a set of transactions that have been independently verified by each member of the blockchain network. What is important – every new block generated must be verified by each node before being confirmed, making it almost impossible to track and review transaction histories.
Why is it important from the Meta perspective?
Simply we need infrastructure which will bond all elements of our virtual presence together. Let’s think of blockchain as our ground for everything we have in meta. A system which will identify us, and give us possibilities to use and thrive in the virtual world.
NFT (non-fungible token)
No matter how many explanations you will read about NFT this is what it is: the proof of ownership. A token that makes each of the digital pieces unique.
What had zero value 50 years ago now in 2022y might be very valuable. Would you say that digital images can be worth a couple of millions? Yes, digital, physically non-existing images, like avatars made with pixel art sold for thousands of dollars? When money comes to play people want to be sure that they have proof of ownership.
Importance to Metaverse: the ownership and certificate of authenticity for everything we have in the virtual world. A token which will distinguish what is original and what is not.
Cryptocurrencies
Almost everyone heard about Bitcoin. It’s a magic word that appears when we are talking about virtual transactions. In some heads, it has negative connotations due to high energy consumption to sustain and expand this and other virtual cryptos ecosystems. But what is actually cryptocurrency?
Cryptocurrencies represent a new, decentralized paradigm for money a system which avoids centralized third parties, such as banks and other organizations.
- Crypto is a form of digital asset based on a network that is distributed across a large number of computers. The biggest advantage of this system is that a decentralized structure allows them to exist outside the control of governments and organizations. So in simple words – the need which is at the bottom is independence and freedom.
- Many believe that blockchain and crypto will disrupt many industries, including IT, finance and even law.
- The advantages of cryptocurrencies are decentralized systems that do not collapse at a single point of failure. Since they are based on blockchain. From the user’s point, they are cheaper, faster and harder to track money transfers.
- The disadvantages of cryptocurrencies include their big price volatility, high energy consumption for mining activities, and because of anonymously – use in criminal activities.
They enable secure online payments without the use of third-party entities. “Crypto” refers to the various encryption algorithms and cryptographic techniques – therefore the name Cryptocurrencies.
There are many on the market already and new are arising. Just to name a few: Bitcoin is the most popular, we have,
Importance to Metaverse:
An elastic monetary system which allows users to trade, buy and consume in Metaverse. Most probably it’s own new crypto created by Meta.
Summary:
Now… we have a basic understanding of the terms. Let’s connect the dots.
Having those three elements we can create a system which allows us to make transactions in Metaverse. Fast (crypto), anonymous (blockchain) and secure (NFT).
Having those 3 pillars I believe we are prepared to create an ecosystem where you can own, make transactions and be sure they are safe. So from the consumer/business perspective, it looks like we are prepared. So what is keeping us from being there? Let me answer this in the last article of the series. Are we going Meta – Technology Maturity (incoming).
Are we going meta? 1/5
Perception of value 2/5
Gaming and eSport 3/5
Blockchain, NFT, crypto 4/5
Technology maturity (5/5)
