The rhizomes and nodes among our financial, virtual, and physical worlds are interlacing. What distinguishes the metaverse from today’s internet is blockchain. Web 3.0, remains the undercarriage for a metaverse built on blockchain-enabled decentralized uses that scaffold an economy of user-owned crypto assets and data. In many ways, metaverse business models overlap with the physical world. A metaverse remains a dream – a future iteration of the internet that will allow users to work, meet, game, and socialize in 3D spaces. It is unfinished.
But a flip never happens. We can pinpoint when a specific technology was created. But we are unable to say exactly when an era opened. This is because technological change is aggregative. It needs multiple technological innovations to coalesce. The iPhone was a convergence of twelve unrelated technological innovations including solid-state hard drives, lithium-based batteries, and Fast-Fourier-Transform algorithms.
The metaverse will be a gamut of interconnected virtual spaces accessible via VR. Video games presently offer the closest metaverse experience. Developers are pushing the limits of what a game is by hosting in-game events and building virtual economies. Cryptocurrencies and altcoins also align with the metaverse, creating digital economies using tokens and NFTs. The metaverse will also vine from the use of crypto wallets, like Trust Wallet and MetaMask, alongside blockchain technology. The “crypto” in cryptocurrencies refers to the intricate cryptography that is involved in the creation and processing of virtual money, and transactions across decentralized systems.
Blockchain metaverse-like applications already offer many people fresh flows of finance. Vietnam’s Axie Infinity is a play-to-earn game using Ethereum-based cryptocurrencies. Decentraland and Ceek have mixed the blockchain world with VR Apps. The crypto ecosystem, NFTs, blockchain games, and crypto payments are now enfolded inside a mushrooming metaverse. Neal Stephenson coined the term “metaverse” in his novel “Snow Crash”, (1992). Ernest Cline’s novel “Ready Player One”, (2011) is an alternate reference. Matthew Ball in his “Metaverse Primer” (2021) defines the metaverse as, “a massively scaled and interoperable network of…3D virtual worlds” that can be experienced by countless users with an “individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.” Imagine the possibilities!
If the metaverse is money, then entrepreneurs will wish to participate. If the metaverse is money, then the creation and processing of all virtual money and their associated uses across decentralized systems will require scrupulous interrogation and probity. But then, auditing digital assets necessitates a deep departure from old-world audits. Digital assets circulate on technological platforms. So auditing digital assets requires an IT audit. Audits demand verification. Who owns an asset? Where is it? What is its value? For digital assets, including cryptocurrencies and altcoins, the need for verification remains. Jurists are also now troubled that ownership of metaverse real estate may not be governed by property law at all, but rather by contract law. We are in the eye of a great unravelling.
Republic Realm, a pioneer of metaverse real estate, bought 792 parcels of land in the Sandbox metaverse from Atari, with whom they plan to co-develop some of the land. The transaction on November 30, 2021 had a value of US$4.23 million. By purchasing 792 Non-fungible tokens on the Ethereum blockchain, the firm acquired the equivalent of 1,200 city blocks. The transaction represented over 7.9 million square meters of game area. In June of the same year, Republic Realm spent US$913,000 on a parcel of land in Decentraland, another metaverse.
Yuga Labs created the Bored Ape Yacht Club NFTs, blockchain-based tokens with a set of 10,000 computer-generated comic-strip apes. Bored Ape prices have reached hundreds of thousands of dollars and sold at top auction houses. In April 2022, Yuga Labs sold NFTs called “Otherdeeds”, which could be exchanged as plots of virtual land in a future Bored Ape-themed online environment called “Otherside”. The cheapest Bored Ape Yacht Club NFT had a price tag of 146 ETH, or $416,000. Ethereum is an open-source decentralized blockchain with programmable smart contract functionality. Ether is the indigenous altcoin of the platform.
Smart contracts are self-executing agreements with the terms of the contracting parties being directly written into lines of code. The code and the agreements contained therein exist across a decentralized distributed blockchain network. The code controls the execution. The transactions are trackable and this allows trusted transactions and contracts to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.
Commerce will evolve as Augmented Reality (AR) melts the metaverse and our physical worlds into a singularity. When you buy a digital asset in the metaverse, the purchase may assign ownership of an NFT to you, which is actually a unique string of bits. This string is stored in a crypto wallet. Crypto wallets will be linked to real-world Sovereign Identities and will be useful for controlling access to age-restricted parts of the metaverse. Wallets will also be associated with reputational scores or metrics that gauge the liberties you have to publish/ broadcast and interact with persons outside of your social network. Expect the Unexpected Next.