Metaverses are not a new thing on the Internet, however, in the year 2021, they have experienced a real boom. This can be partly contributed to the coronavirus pandemic, which has forced many to stay at home and conduct their everyday activities in the virtual setting. Food and groceries are ordered online, virtual classes are held, and companies are letting employees work from home. As a result, many business owners have turned to metaverse as a tool for improving their virtual workspaces.
For instance, the founder of Facebook Mark Zuckerberg has created Horizon Workrooms, virtual meeting rooms with realistic meetings experience. This VR tool takes Facebook employees into a virtual meeting space, with the help of Oculus VR glasses. This is just the beginning for the social media powerhouse. Its founder has recently announced that there are plans to transform the entire company into a metaverse shortly.
According to the press, the CEO of Facebook thinks that augmented and virtual reality goggles will become something almost everybody owns, just like most people own a smartphone and a computer today. Always looking to be at the forefront of innovation, Zuckerberg has announced that the company will take the necessary steps to expand beyond the social network and turn into a metaverse under the new name META. However, the founder of Facebook is not the only one convinced of the metaverses’ bright future.
In a recent article, which appeared on Bloomberg, the value of metaverses is expected to reach a remarkable increase in 2021, and then continue to rise in the following three years until it reaches an $800 billion threshold.
Metaverse: What is it and how does it work?
Metaverse is a virtual, digital world that aims to replicate the real world as much as possible and provide its users with a realistic near-life experience. The metaverse was created as a way of making the Internet more interactive, and allowing users to build their digital games, avatars, clothing, etc.
The term first appeared in 1992. That was the year a science-fiction novel Snow Crash was published, a novel that introduced the idea of metaverses to the world. The author, American science-fiction writer Neal Stephenson, came up with the word metaverse to describe the upcoming transformation of the Internet, that will be based on virtual reality. The term metaverse was coined out of two words, meta meaning beyond, and verse, a short version of the word universe. In Stephenson’s novel, the term is used to mutually connect shared 3D virtual spaces, which, gathered together, create a virtual universe. The metaverses are created from numerous elements that already exist today, tied together into one digital mirror of our reality. The elements of the metaverse incorporate among others email, social media, video-conferencing, virtual and augmented reality, cryptocurrencies, online games, live streaming, and video-conferencing. As more and more of these connected spaces appear, the metaverse will grow in size, and the users will get a chance to interact with a multitude of people from different countries and continents inside a unified, self-sustaining world.
How Metaverse and NFTs Complete Each Other
NFTs are an important element of the metaverse. Inside a metaverse, anything and everything can be a nonfungible token, your avatar’s outfit, your digital home, a fancy metaverse car, absolutely anything. In the following decades, NFTs will likely become a backbone of the metaverse. Non-fungible tokens are also considered to be an excellent way to introduce users to the metaverse. This is particularly convenient for those who already have NFTs but are still uncertain about joining a metaverse. And the number of NFT owners is growing by a second.
NFT’s can be a perfect tool for explaining metaverse to the general public.
But, there are many other benefits of matching non-fungible tokens and metaverses. For starters, there’s the reliability of the NFTs. Since the records of ownership of nonfungible tokens are stored on a blockchain network, their authenticity is verified by complex algorithms, conducted by a network of computers. If anyone tries to forge the ownership records, this network of computers will block the change of ownership, making the transactions safe.
Apart from being reliable, non-fungible tokens are also transparent. Since most NFTs are stored on the public blockchain, anyone can easily check the ownership of the tokens. This openness serves to prevent forgery further and build trust among users of NFTs and subsequently metaverses. This brings us to our next and probably most important benefit of using NFTs to build digital worlds – interoperability. Interoperability means that tokens, once minted, can be used across compatible metaverses, thus connecting them together.
Currently, the NFTs created for one metaverse can not be transferred to another metaverse and can only be used inside one application. However, according to predictions, we are just 5-10 years away from, having interoperable NFTs that can be easily moved from one game to another. In other words, if you have purchased an NFT of a digital painting in one metaverse you will be able to move that painting into another metaverse that uses the same blockchain. As long as the developers allow it, that is.
This is huge considering that inside the digital world you can use NFTs to create literally anything, from accessories and outfits to homes, resorts, art galleries, and casinos.
Also, creators and businesses can mint anything and transform it into an NFT and then sell ownership of objects with a real, tangible value. For instance, a fashion behemoth Dolce and Gabbana recently unveiled a collection that doesn’t exist in the real world but only in virtual space. The collection based on drawings of physical outfits was put up for sale at UNXD a marketplace for luxurious digital goods. People were able to purchase items from this virtual collection as NFTs and use it as an outfit for their avatar, their virtual personification in the metaverse. This NFT collection titled Collezione Genesi was sold for Ethereum crypto coins, and a price equivalent to $5,7 million thus bringing the Italian fashion duo an unexpected profit.
The Uprise of the Metaverse Economy
The sale of NFTs that caused real profit resulted in the making of what’s called a “metaverse economy”. How does this metaverse economy work? The Metaverse economy will rely on various minor or major companies and brands selling digital items online, like in the example above, but it will also enable users of the metaverse to sell and buy the creations of other users.
There has already been an array of major sales within the digital universe. In 2010, for instance, a nightclub from the Entropia Universe video game was purchased for over $600,000. A virtual equivalent of the Dutch capital city Amsterdam has reached the price of $50,000 in the popular metaverse Second Life. A player of a popular online game Fortnite was awarded the equivalent of $3 million for his triumph in the Fortnite in-game World Cup. At the time of his victory, he was only 16-year-old. Participating in a metaverse economy is definitely paying off even in these early days.
Roblox
Today, there’s an array of metaverses that provide its users the possibility of making a profit. For instance, Roblox, a game-oriented metaverse allows players to create their own games within the game, and to make in-game purchases. Roblox is played by over 160 million people on a monthly basis. Anyone who joins Roblox can use the Roblox Studio engine to create their own games, that everyone can play.
In-game purchases are made either with real money or a virtual currency Robux that can be turned into cash on Roblox’s Developer exchange system. The best among developers can earn up to $100,000 a year from the game. Developers can make a lot of money by selling purchasable items and developer products, which can be bought and sold several times. The money developers make can be split with the Roblox Corporation which gets 70% of the profit.
According to sources, the Roblox developers who sold items and games on Roblox earned $250 million in 2020. The coronavirus pandemic has caused Roblox to expand its base and turn into a communication tool. The platform, mostly played by kids and teenagers under 16, is now also being used as a communication platform and a platform for hosting children’s parties.
ZEPETO
ZEPETO is another metaverse that’s quickly gaining popularity. ZEPETO helps people get together, interact and communicate in virtual space. ZEPETO also features some in-house games to make your experience more fun. Users create digital avatars of themselves and hang out in the virtual space. In order to customize their avatars, users can make clothing, shoes, accessories, and other items which they can use themselves or sell to other users.
Users can also buy other products that will make their ZEPETO experience more fun. Apart from making a profit from sales of clothing and products, the users can host a live stream in which their avatar will talk to other avatars in the game and receive donations during the live stream. ZEM is the name of the virtual currency that is used in the metaverse. When users transfer their virtual currency to their PayPal or bank account, it will be immediately converted to dollars. The metaverse has attracted the attention of some big companies such as Disney, Nike, Gucci, and Ralph Lauren, who collaborated with the metaverse to create unique apparel designs.
Decentraland
The use of NFTs in the metaverse is not limited only to clothing and accessories. In a blockchain-powered game, Decentraland, the users have the opportunity to buy and sell almost anything in the virtual world as an NFT.
Decentraland is a virtual land in which your avatar can purchase a lot, build a house or a company, art gallery, or a casino. Everything from houses to gallery art is an NFT stored on an Ethereum network. Decentraland also provides a near-life experience of living in a virtual space where you can interact and communicate with other users. Although overseen by a Decentraland Foundation, the metaverse is completely run by its users.
The platform was founded in 2017 but has experienced a sudden surge in demand this year. At first, parcels were priced at $20 each, but now some lots are reaching a $100,000 price tag. The number of users skyrocketed from 1,500 monthly players to over 10,000 monthly players recorded in March this year.
Decentraland offers users an opportunity to experience concerts and gallery shows, and numerous other activities, which they are enjoying in their real life.
Inside the metaverse, there’s a multitude of ways to make a profit. Firstly, by buying and selling land on the platform. The land is not infinite which contributes to its price. People can buy several lots to create an estate, build houses, galleries, and casinos which they will later sell for cash. MANA is used for sales as a virtual currency, that can be acquired with cryptocurrency. Another way to make money is by selling original designs, organizing art shows in the galleries where you can sell digital art, or by building casinos and inviting people to play with MANA.
