Kristjan Kangro, CEO and Founder of Change, explores the emergence of the metaverse, what it means for crypto and the opportunity it presents to create a fairer, more inclusive digital economy.
The term “metaverse” is everywhere. Ever since Facebook founder, Mark Zuckerberg claimed his stake in the metaverse and renamed his social networking company Meta, it has set off a step-change in innovation as tech giants race to be the first to establish ‘the next iteration of the web’.
This was seen in January as Microsoft acquired game developer Activision Blizzard for $68.7 billion to provide the ‘building blocks for the metaverse’. Apple is also well into the metaverse mix, with it expected to announce a high-end headset that mixes Virtual Reality (VR) and Augmented Reality (AR) later this year. And Google continues to ramp up its AR and VR solutions behind the scenes.
The result? While once a distant, futuristic idea, the metaverse, a virtual space generated by combining virtual worlds, AR and internet services, is coming. And it has the capacity to change everything.
Today, we use the internet as we choose. In the metaverse it will be woven into the very fabric of our lives. This will transform the human experience, from the way we work, play and go about all parts of our daily lives. In theory, it will mean that we spend lots of time interacting with our friends and colleagues in a virtual space and spend money there too. Alongside this it will revolutionise the business world, prompting companies to change their operations and how they engage their customers.
Perhaps though, one of the most interesting yet less documented areas in all of this is the impact the metaverse is likely to have on the crypto world.
The metaverse will, after all, bring with it a demand to deliver permissionless identity, financial services and high-speed exchange, underpinned by the data of millions if not billions of people. The answer to these problems lies in the technology of cryptocurrency.
Of course, companies like Decentraland and The Sandbox are already developing virtual worlds that integrate cryptocurrencies so gamers can create theme parks and music festivals and then monetise them. However, this offers just a glimpse of the possibilities to come.
In the metaverse, it’s expected that blockchain-enabled decentralised payment and financial services will support an economy of user-owned virtual currencies. This is where smart contracts will safeguard transactions for buying, selling and all other digital commerce actions, and encode appropriate incentives.
NFTs will, most likely, play the lead role in this. While we’re all aware of hot-ticket NFTs in the art and gaming space at the moment – this is just the beginning. In the metaverse, NFTs will be the investment of choice for both real-world and virtual assets, giving people complete ownership of their characters, innovations and even virtual land. By taking NFTs out of the niche and into the mainstream, metaverse applications will reduce risks, particularly when it comes to finding a buyer, and ensure on-chain value.
Looking wider, further possibilities include ‘crypto metaverses’. These dedicated metaverse projects on blockchain networks will be powered by fungible tokens, enabling users to purchase digital assets like virtual land or outfits for avatars, and travel across the virtual world with their crypto wallet.
Most importantly, underscoring this all is the possibility of creating a fair, open economy. To look at it more closely, the remit behind both the metaverse and cryptocurrency is very similar. The metaverse offers a place where people are no longer defined by their nationality, ethnicity or background and are able to create a virtual profile of who exactly they want to be. Crypto operates in the same way by providing a wide range of financial solutions to all, even those that might have been deemed ‘unbankable’ by traditional institutions. Taking it one step further, the evolution to a Decentralised Finance (DeFi) system – where traditional institutes are replaced by alternative infrastructure built on blockchain – will result in a truly borderless, global financial system available to all.
In this way, the emergence of the metaverse along with the transition to DeFi offers a powerful combination in terms of enabling social and economic growth without the constitutional bias and barriers found in the offline world.
Even with all the media hype, the reality is that the metaverse is still a long way off. Mark Zuckerberg estimates it as 10 years from now at least. However, that is not to say that businesses can afford to lose sight of the conversation. As with all major technological shifts, it will be those that keep pace that retain a competitive advantage. With the huge benefits presented by the associated promise of a digitalised economy – including a global audience and new market opportunities.
About the Expert
Kristjan Kangro is the Founder and CEO of Change, an Amsterdam-based cryptocurrency investment platform for retail investors. As CEO, Kristjan is responsible for strategic direction and building a community-focused infrastructure as the business continues to grow and deliver its mission of removing the barriers and complexities to wealth creation.