Metaverses are all the rage right now, and cryptocurrencies are likely to be the currency of these new virtual worlds.
- The metaverse consists of virtual worlds where people can do many of the things they do in real life.
- Cryptocurrencies will probably be the main form of exchange in the metaverse.
- Research the metaverse and the companies involved before investing.
The metaverse is a hot topic right now after Facebook’s decision to rebrand itself as Meta. But the metaverses are not so new. Facebook, along with many major companies like Microsoft and Disney, have been jumping on the VR bandwagon for some time.
But what is a metaverse? And how it works? Join us as we take a deep dive into virtual worlds.
Metaverses are virtual worlds where people can do many of the things they do in real life. They will be able to work, play, shop, exercise and socialize. They can set up their own businesses, buy land, make art and go to concerts — all in a virtual environment.
Metaverses use virtual reality, augmented reality, social networks and block chain technology to create places where people want to spend time. They are virtual worlds with virtual economies, although many are still in their infancy.
In the future, instead of buying clothes for your closet, you could buy clothes for your avatar online. And instead of buying a piece of art to hang on the wall, you can buy a piece of digital art to display in a virtual gallery.
Where does cryptocurrency come in?
Every virtual economy needs money. Cryptocurrencies work like virtual money in virtual worlds. Transactions are almost instantaneous and the blockchain technology behind them is designed to build trust and ensure security.
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Existing metaverses already use cryptocurrencies as a form of payment. So if you visit Decentralandyou will need his token, MANA, if you want to buy something.
In fact, metaverse cryptocurrencies like Decentraland, Sandbox (SAND), and Enjin (ENJ) are among the few tokens that could see green this week. Many cryptos are in the red as they fall from early November highs.
There is another aspect of blockchain and cryptocurrencies that is key to metaverses: non-fungible tokens (NFTs). NFTs can be artwork, sports cards, in-game items, and much more. They are essentially unique digital items, where ownership and other information is encoded in the token.
NFTs are transforming the gaming industry because they allow people to own and profit from the items they earn or build in-game, and bring those earnings or items to life. Before, if you played a game like Infinite Axis (AXS), the rewards you accumulated would only have value in that game. Now, Axie players earn cryptocurrency rewards that have a value outside the game.
It’s that idea of ownership that makes NFTs so important to virtual worlds. NFTs mean that people can buy and own land in the metaverse. People can buy and create NFT avatars to move around in virtual worlds. They can also create and sell items for their avatars, like the digital clothing we mentioned earlier.
Should you get involved? And where can you start?
This idea of metaverses is still in its infancy. In fact, there are many different ideas about what form these digital spaces will take and what role they can play.
Meta (Facebook) certainly has big plans, including launching virtual gym equipment and creating virtual business meeting spaces. Virtual reality technology has come a long way, although there is still a lot of work to be done.
As a cryptocurrency investor, there are many ways to get involved in virtual worlds. The most obvious one is to buy metaverse crypto tokens directly, which are available in many top cryptocurrency exchanges. You can also buy NFTs or even consider buying real estate in a specific world.
But if you want to go this route, you’ll need to do a lot of research. Start by visiting an existing metaverse to get an idea of what it’s all about. For example, you don’t need any VR equipment or spend MANA to visit Decentraland as a guest. Simply log in, create your avatar, and you’re good to go.
As with any investment, don’t jump in just because Facebook or another big company or famous person is doing it. Take the time to understand how these worlds work and which ones are most likely to survive long term. Similarly, there is no point in buying a random NFT. You will need to see which NFTs suit your interests, which ones you think could be profitable, and how the NFT market works.
Don’t forget that many of these crypto-based metaverses are based on ecosystems like Ethereum (ETH) or Sunshine (SUN), which can offer a less risky way to invest, as they are not specific to a sector or virtual world. If the dream of the metaverse does not come true, Ethereum and Solana are likely to continue to exist.
You can also decide to buy shares in a company that is involved in the metaverse instead of going through crypto. Crypto is one way to get involved, but it’s not the only way.
Do not rush to make a decision
Ultimately, it’s early days and we don’t yet know how these metaverses will evolve. There has been talk of developing metaverses for years and so far they haven’t come up with much. It may well be different this time, but it’s important not to get caught up in the hype.
Everyone cryptocurrency Investments carry risk, so it’s important to only spend money you can afford to lose. And don’t be afraid of missing out: if the metaverse is worth investing in, it’ll still be there after you’ve done your research.
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