Over two million people searched the term “Metaverse” when Facebook announced its name change to Meta late last year. That shows the level of interest in this emerging space, but what is the Metaverse? How and where can investors benefit from it?
This post will introduce you to the Metaverse and its evolution from existing virtual platforms, while also showing you how and where you could start benefiting. So let’s get to it.
What is the Metaverse?
Neal Stephenson, a sci-fi writer, coined the term “metaverse” in his novel ‘Snow Crash’ to describe a 3D virtual space. This was in 1992, three years after Tim Berners-Lee invented the World Wide Web. Neil’s Metaverse describes a 3D virtual world where Hiro, the protagonist, shops, socializes and defeats real-world enemies through his avatar.
30 years later, interaction with virtual worlds is no longer the stuff of science fiction. Technologies such as virtual reality (VR) and Augmented Reality (AR) make this level of interaction possible through immersion.
The Metaverse aims to take this interaction further than immersion. Other advanced technologies such as the blockchain, together with Web 3.0, the next-gen internet technology, will provide solutions for governance, value transfer, digital evidence of ownership, and interoperability, to name a few.
Broadly put, The Metaverse is the network of 3D virtual worlds where anybody anywhere can interact in real-time to form an internet economy that spans and links the digital and physical world. Think of the Metaverse as an internet that you are inside rather than one you are merely viewing from the outside.
The Metaverse has other unique characteristics:
What are Virtual Platforms?
At their core, virtual platforms power the operation and development of these virtual environments and experiences we are talking about. Simply put, virtual platforms combine to create the entire Metaverse. Content produced fits the “community-owned” model as content creators and developers create the majority of content and, in turn, earn a larger portion of the revenue generated on the platform.
This fits Bill Gates’ definition of a platform, where he stated:
“A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.”
We have tasted what these platforms can do thanks to the leaders in this space, such as Roblox and Epic games. Roblox has been a leader in the virtual space. They discovered quite early that allowing players to be creators meant more content for its platform and millions in revenue for its player creators.
We have seen Roblox branching out to other forms of entertainment such as music, where pop stars stage huge concerts inside the gaming platform. This exposes the virtual platform to a non-gaming audience.
That said, we cannot talk about exposure to new technology without talking about Pokemon Go. An augmented reality mobile game that took the internet by storm when it launched in 2016.
First, the game is free and available to anyone in the palm of their hands. The Nintendo-owned app uses your phone's clock and GPS to detect when and where you are in the game and makes Pokemons appear (on your phone screen) as you move around so you can go catch them.
Bringing augmented reality to the palm of people's hands is an impressive feat, so it is fair to say that gaming has been and will be leading us to the metaverse. Jason Rubin, head of content for Meta, agrees as he stated:
“Gaming is definitely a core part of it [the metaverse]. I mean, pulling games out of it for a second, I don't think any of this could exist without the game engine. And gaming created the game engine, right? [...] For a long time, the game engine was the only major tool for real-time 3D graphics. Obviously, there was simulation and other things universities were doing, but for consumers, for the most part, it was gaming.”
What is the big idea of all these technologies coming together anyway? All the technologies mentioned have been existing in isolation, but their true potential will be unlocked when they are applied together. One of the most important technologies that can unlock this potential is the blockchain. It ties everything together and acts as the DNA of the metaverse. There are blockchain metaverses that already exist, such as The Sandbox and Decentraland. Although they are not the final product, they have caught investors attention by allowing them to create, experience, and monetize their content. They are the beginning of what the Metaverse can eventually become, and early investors could find themselves in the metaverse equivalent of Alphabet or Amazon stocks circa 1999.
The Blockchain Metaverse
They changed the way we think about the metaverse. Anyone can access these platforms right from their computer screens. But, how can blockchain metaverses benefit investors?
Real Estate: In real estate, investors can purchase virtual land and benefit from it in various ways. They can choose to sell the land at a higher price and profit. Alternatively, they can build property and rent it out for a steady income stream.
Play-to-Earn Games: Playing blockchain-based games give users a chance to earn in-game assets which can be traded for tokens with real-world value. Also, users can make money by building games for other gamers to enjoy in the metaverse.
Buying and holding native in-game tokens: Holding the native in-gam tokens is basically investing in anticipation of the token price increasing over time. The more popular the game is, the more demand there will be for its in-game tokens, and theoretically the higher the price of those tokens will go.
A closer look at where you can find these opportunities.
The Sandbox initially launched as a mobile game before being acquired by Animoca Brands, a blockchain game software company. Animoca Brands transformed the game into a virtual metaverse world that allows users to create, build, buy and sell digital assets.
SAND is the utility token of the game and the basis of transactions that lets players buy and sell virtual land (LANDS) and digital items (ASSETS). LANDS are essential in the Sandbox metaverse with only a finite supply of 166’464 units available. Apart from value transfer, the SAND token can be staked to earn rewards and provide governance to enhance the Sandbox ecosystem.
SAND hit its all-time high last year at $8.44 and is trading at $3.09 as of late February 2022.
Another very popular platform is Decentraland. It is similar to The Sandbox in that it is a decentralized virtual world that allows users to experience, create, and monetize content. It allows players to buy virtual property and develop it by putting up attraction sites and then monetizing or selling it for profit.
Decentraland is powered by MANA, the primary means of exchange in the game. MANA can be used to buy LAND and virtual assets. The number of LAND units is capped at 90,601.
Players can earn from real estate, creating and selling wearables, or through play-to-earn games. MANA is currently trading at $2.63.
What’s the Future Promise of Virtual Platforms
It’s becoming apparent that the metaverse is the next iteration of the internet. A lot of industry experts are betting on the technology. Matthew Ball, the CEO of Venture Capital firm Epyllion in a Bloomberg interview, said:
“Even if you have more modest expectations, precedent from the digital economy, the internet, the mobile internet, suggests that this is a $10 [trillion] to $30 trillion opportunity that will manifest in a decade or a decade and a half.”
With technology such as augmented reality (AR) yet to be implemented to create a fully-fledged virtual world for entertainment, workplaces, and industries, only time will tell if these ambitious predictions will materialize.
It has been great to see how gaming virtual platforms paved the way for blockchain metaverses. These metaverses have changed how we view virtual platforms and worlds, giving us an idea of what to expect in the coming years. Investors have been getting involved with blockchain metaverses, especially after Facebook’s announcement last year. It is an exciting space to watch in the coming years.
Want to invest in the metaverse right away but don’t know how to get started? Sign up to SMART VALOR and head to the Metaverse section to begin your journey today.