You may have heard the term ‘metaverse’ mentioned on the news, in articles or in general conversation.
This has likely left you asking yourself questions like, ‘what is the metaverse?’, and other questions such as, ‘what is an NFT’?
Well, this article will attempt to answer these questions in a way that is easy to understand (even if you aren’t very technical). In addition to this, we will explain the basics of blockchain technology and crypto. Without an understanding of these, it would be very difficult to grasp concepts such as the metaverse and NFTs.
Before we go any further, we thought our 2016 series on virtual reality is worth a quick mention here. In some ways, this paved the way for the metaverse and makes for an interesting read in conjunction with our latest articles to show how much (and little) has changed since then.
What is crypto in simple terms?
Table of Contents
In this post we will explore the following topics:
- 1 What is crypto in simple terms?
- 2 What is blockchain technology?
- 3 What is crypto mining?
- 4 What are smart contracts?
- 5 What are NFTS?
- 6 What is the metaverse and is this the same as Meta (Facebook)?
- 7 Which companies are investing in the metaverse?
- 8 What does this mean for businesses?
- 9 Conclusion: the future of the metaverse
Cryptocurrency, sometimes referred to as just ‘crypto’, is a digital currency that uses cryptography to ensure safe and secure transactions.
Much like physical currency, digital currencies can be stored in wallets. They can be sent and received to and from other people or businesses via the internet.
Although there are many different cryptocurrencies, the first and most popular cryptocurrency is Bitcoin, which was created in 2009 by Satoshi Nakamoto.
Bitcoin’s recent surge in popularity is largely due to the cryptocurrency being decentralised combined with the fact that it’s deflationary.
This comes at a time when inflation with traditional fiat currency is the highest it has been in 40 years. This has piqued the interest of many new users and investors that were previously on the fence about cryptocurrencies like Bitcoin.
What is blockchain technology?
The best way to think about a blockchain is that it is a digital ledger that keeps a log of all transactions on the network. Instead of this being stored in just one location, it is distributed and replicated to other participating machines on the network.
These machines then collaborate together to verify new transactions as they happen, and have a chance to earn some of the currency as a reward.
This makes the network incredibly reliable and secure.
What is crypto mining?
You may have heard of the term blockchain before with Bitcoin. This is because the way we create new Bitcoins is a process known as crypto mining.
As there are many different cryptocurrencies and blockchains, the type of ‘mining’ will differ from network to network.
Mining is possible when the network is considered a PoW network – meaning ‘proof of work’.
However, not all blockchains work this way. Another popular blockchain type is considered a PoS network – meaning ‘proof of stake’.
Blockchain technology allows for the decentralised storing of information (and records) in a way that makes them almost impossible to hack or tamper with.
What are smart contracts?
In simple terms, smart contracts are pieces of functionality that take advantage of the security features that are inherent within blockchains.
Smart contracts vary and can range from simple applications that log and store data, to fully functional games that work via peer-to-peer connectivity.
These smart contracts appeal to many as they are both reliable and decentralised.
Because of being decentralised as well as functioning as applications, some people refer to these applications as dapps.
As we covered earlier with Bitcoin sending information to multiple ledgers on the network to store information, smart contracts can do a similar thing. Each computer on the network can store information relating to the smart contract, along with all associated data.
What are NFTS?
NFT stands for non-fungible token meaning that the item you are dealing with is completely unique and cannot be replaced. NFTs exist on blockchains where the ownership data is stored. One of the most popular blockchains that supports NFTs at the moment is Ethereum.
NFTs can be bought and sold, but they are one of a kind digital items. This is why the price for many NFTs are incredibly high.
You may be wondering, what can NFTs be used for and what value do they actually have? They can in fact be many things, such as tickets, drawings, paintings and even tweets.
Fans of NFTs will tell you that they allow true digital ownership of items that exist on the blockchain.
People that are heavily into NFTs will also tell you that buying an NFT is comparable to owning art in the physical world, just in digital form.
What is the metaverse and is this the same as Meta (Facebook)?
The metaverse is a term that can be used to describe highly immersive 3D digital worlds that are persistent.
Facebook has shown that it is serious about VR ever since acquiring Oculus in 2014.
Facebook’s rebranding as Meta recently has shown that they are continuing to invest heavily into the metaverse, aiming to blur the lines between the physical world and the digital world. However, it is important to distinguish the difference between Meta (Facebook’s new brand name) and the metaverse.
There are many interesting implications as a result of metaverse technology. The augmentation of ownership between digital and physical products and endless possibilities make it something to keep an eye on.
Metaverse worlds can typically work with any VR headset, but the most popular one tends to be the Oculus line of devices.
Although the metaverse and associated technologies are in their infancy, many metaverse worlds have started to allow users to buy land, products, and assets that exist within these worlds.
It is an interesting time for businesses looking to explore digital real estate in the metaverse.
With metaverse land value skyrocketing as of 2022 after rising by 700% in 2021, it’s easy to see why many are testing the waters with digital ownership and digital assets.
Which companies are investing in the metaverse?
The first company that comes to mind when you think about the metaverse and VR is Meta (more commonly still known as Facebook).
Meta reportedly spent $10 billion on the metaverse in 2021 which shows they are serious about the metaverse and virtual digital worlds.
Microsoft has also invested heavily into the metaverse, looking to create new ways for users to interact with each other via digital worlds.
Other companies that are heavily invested or investing in the metaverse are:
- Epic Games
These companies will be working on virtual experiences for users in addition to the technology that powers these experiences.
It’s quite likely that more and more metaverse companies will be popping up in the near future.
Many will likely offer virtual exhibitions exploring the history of the company in addition to modern gaming experiences within the metaverse.
What does this mean for businesses?
Looking at the amount of investment received from big companies, it’s quite safe to say that the metaverse is the future.
Many businesses should look at marketing opportunities within the metaverse such as running interactive advertisements and other rich visual experiences.
Think of the metaverse as an early version of the internet. It is important to secure a domain name online which is why it should be a priority to secure digital real estate within the metaverse if your type of business is well suited for VR experiences and vCommerce.
Metaverse for small businesses
Does this mean the average small business should be buying into the metaverse? Not exactly. It would be best to keep a close eye on how the space develops, as this also depends on the nature of your business.
An example of how a small business could use the metaverse
If you have a very visually oriented business such as selling watches, jewellery or clothing, you may have a reason to be more of an early adopter of the space. This could allow users to, using their avatar, try on wearables and see how they look, giving them an idea of how the physical world counterpart would look.
Advertising within the metaverse
Does this mean the average business should look to advertise within the metaverse? Yes. It is worth keeping an eye open for advertising opportunities within the metaverse for most business types. These advertising spots can be bought via NFTs in many popular metaverse worlds. They can exist in multiple forms including being on the side of virtual buildings as you would expect to see in the physical world.
Conclusion: the future of the metaverse
As we have seen with VR, new types of immersive experiences may not be a success overnight. Many experiences will evolve over time, granting more interactivity as the technology and infrastructure unnderpinning the metaverse grows.
Remember that the early days of the internet felt a bit barren and empty, much like the early versions of metaverse worlds. What we are excited about currently is the potential and where things could go in the next decade.
As with any new technology, product, or service, there will be sceptics and those unsure of the viability of the space. With time though, we think that more and more businesses and individuals will start to see the potential and value in digital worlds and digital economies.
This article is part of our latest series on the metaverse and what this means for businesses. To jump straight to one of our other titles, please feel free to browse below:
- What Is the Metaverse & What Are NFTS? What Does This Mean for Business?
- Are The Metaverse And Virtual Reality The Same Thing? What About XR & MR?
- Is Metaverse Social Media Marketing a Trend to Watch in 2022?
- Is Metaverse SEO (Or Should We Say Meta SEO) The Future of Search Marketing?
- Should Businesses Think About Metaverse Marketing as Part of Their Digital Strategy?
- Leading Metaverse Companies, Projects & Examples: Who Will Win the Race?
We hope you have enjoyed our article explaining ‘what are NFTs’ and ‘what is the metaverse’. For more on this topic, don’t forget to read more in our series on the metaverse.