The Metaverse Won’t Evolve Without Blockchain Technology
Jhe metaverse will be our new culture and our dominant reality. It’s not a question of if, only when. We will live in parallel worlds – the virtual and the physical – immersed in two separate but connected worlds through the use of blockchain technology.
The term “Metaverse” was coined by Neal Stephenson in his 1992 science fiction book, Snowfall. In the book, he presented a kind of virtual reality where every interaction could have a direct impact on the physical world. Impossible ? Not really.
Don’t be afraid to dare to dream. Every sci-fi storyline from the 70s and 80s has come true. Think teleconferencing with Zoom or Microsoft Teams; this was considered science fiction in “Back to the Future”. Communicating via wristband was futuristic in “Star Trek” and “Dick Tracy,” but now we can do it with an Apple Watch. Everything we once imagined is now part of our everyday reality and culture, and the Metaverse will be no exception. Blockchain technology will be the catalyst.
Brands not only recognize this next cultural evolution, but also understand the power of blockchain technology in the context of the metaverse, and invest in the metaverse, through the creation of non-fungible tokens (NFTs) and other asset markets. digital.
If the Metaverse is to become more than just a 3D game and emulate our physical reality and beyond, the use of blockchain technology is imperative. Blockchain technology will allow all transactions and actions in this virtual space to have real impact, in the same way as in our physical reality. With the use of blockchain technology, we can not only create and authenticate virtual assets, but above all, enable their transfer of ownership and their transactions. Here are some examples:
Adidas’ line of NFTs, launched in December 2021, was called Into the Metaverse, and it not only revealed Adidas’ intentions to enter space, but also its understanding of the necessity of using NFTs. in the metaverse. Each virtual outfit for dressing avatars in the metaverse has been tokenized and authenticated via an NFT.
Nike has also made inroads. In December 2019, he was granted a patent to symbolize ownership of exclusive sneakers, called “Cryptokicks.” Once purchased, these sneakers are tied to a single owner, all recorded via blockchain technology. Additionally, owners of the sneakers will be able to “mix or replicate the digital shoe with another digital shoe to create a ‘shoe offspring’ and have the offspring be a new tangible pair of shoes.”
Nike too trademarks with the US patent office to sell branded sneakers in the virtual space, and in mid-December 2021 it acquired RTFKT Studios, a digital collectibles company, which will allow Nike to sell sneakers virtual ones to equip people’s avatars in the metaverse. Nike’s investments in NFTs and blockchain technology are a testament to the fact that blockchain technology is a critical component to the existence and scalability of the metaverse. They acknowledge that they will not be able to offer and sell virtual sneakers or other virtual goods in the metaverse without the use of blockchain technology.
On Decentraland, a decentralized 3D virtual reality platform, there are 90,601 virtual plots of land, where each plot is an NFT. Metaverse Group, a subsidiary of Tokens.com, acquired virtual land in December 2021 for $2.43 million. Emulating the physical world, this plot is located in the heart of the Decentraland fashion district. The Metaverse Group plans to expand the domain for catwalks and commerce, and partner with existing fashion brands looking to expand their e-commerce offerings within the Metaverse.
Leading financial institutions are also investing in virtual real estate. In February, JPMorgan opened a “Onyx Loungein Decentraland. In addition, the company published an article that explains how a bank in the virtual world can operate much like it does in the real world, and how JPMorgan plans to provide all of its current services in the metaverse. In March, HSBC partnered with Sandbox, a virtual real estate platform, to purchase virtual land that will focus on sports, esports and gaming.
Financial payment services
Financial payment service providers also rely on the metaverse. In April, Mastercard deposit 15 brands related to NFTs, virtual worlds and more. In March, American Express filed similar trademarks for “downloadable computer software to facilitate the transfer of a virtual payment card to a mobile e-wallet,” among other areas.
Visa was the first to bet on the metaverse and has been entrenched in the ecosystem for some time, adding crypto staff to the team and purchasing a CryptoPunk NFT collectible last summer. These actions support Visa’s “The Metaverse as a Strategic Infection Point” report, published in November 2021.
Why are NFTs an essential component of the metaverse? This is because everything is transaction-based.
To facilitate any transaction and the transfer of ownership, authentication is essential. A transfer of ownership will not occur without authenticating who is transferring and what is being transferred. This is the real power of NFTs, providing authentication and facilitating the transfer of ownership. An NFT can authenticate a physical asset, like a $200,000 bottle of single malt scotch or a virtual package in Decentraland.
The metaverse is not just about creating a virtual space, it is about bringing people together in a virtual space, expanding existing communities or creating new ones. NFTs can facilitate the creation of these communities – locally and globally – and strengthen their relationships and interactions with their brands and with each other. Brands such as Dave and Buster, Adidas and Burberry recognize this and create NFT collection programs to expand their customer base and engage in experiences to improve brand loyalty.
These programs are in their experimental phase; neither the companies nor any third parties provided any data. It’s too early to tell which loyalty or rewards program might work, and some may fail. But brands recognize the power of NFTs and are investing in these experimental efforts.
Transactions and transfer of assets in the metaverse
The ultimate premise of the Metaverse is to emulate our physical world and beyond. How do you ensure that transactions in the metaverse are real, and not fancy transactions like in an online game? How would JPMorgan provide its current services in its virtual lounge to Decentraland? While NFTs provide authentication, decentralized finance (DeFi) applications, which would be automated, self-executing products and services where users interact directly with the application, using blockchain technology, will enable these virtual transactions and connect the virtual to the physical space.
DeFi applications will allow the transfer of funds from the wallet created in the physical world to any virtual space, and Between different virtual spaces (I talk more about the need for interoperability here). But DeFi goes beyond payments. With DeFi applications, you will be able to take a mortgage on your package purchased on Decentraland or use this virtual package as collateral for your business in the real world or in a parallel virtual space. You will be able to borrow to pay for a virtual garment from Dolce & Gabbana, or rent this virtual garment to other members of the community. DeFi will enable all types of transactions in the virtual world – connecting between virtual spaces and the physical world.
Nearly 30 years after the word “metaverse” was coined, we are poised to make science fiction a reality, with blockchain technology as the catalyst. So dare to dream. First we imagine, then technology follows.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.