Metaverse is a portmanteau of “meta” (meaning beyond) and “universe,” literally meaning “beyond the universe,” or beyond physical reality. Before we dive into the technologies that make crypto metaverses possible, it’s worth defining what a metaverse is — and differentiating them from blockchain-based gaming and traditional video games.
A metaverse is an immersive, expansive, and all-encompassing virtual world where one can play games, socialize with others, and even attend workplace meetings in virtual reality (VR). Built on very expansive digital landscapes that can feature anywhere from thousands to millions of other participants, these metaverses combine VR with gaming and the social interaction made possible on major social media platforms.
While metaverse games technically predate crypto and blockchain (such as League of Legends or World of Warcraft), for this explainer we will specifically be introducing you to crypto metaverses that make use of blockchain protocols. Further, it’s worth pointing out that not all blockchain-based games are metaverses — some games simply incorporate blockchain technology into video games; one example is Benji Bananas, a side-scrolling game (think Super Mario Bros. meets Tarzan) that features NFTs and play-to-earn (P2E) gaming.
Let’s break down the technologies behind the metaverse.
To start, you need a way to visually explore and navigate these blockchain-based metaverses. Like traditional video games, you can play these games via computer, smartphone, or through the use of a purpose-built video game console.
To further enhance your experience, many utilize specialized AR/VR headsets that fully encapsulate your visual senses in a virtual world. Beyond these headsets, you can also use hand controls, other wearables, and even motion-sensing technology to further ensconce your senses in these virtual worlds. Examples of popular headsets include the HP Reverb G2 and Meta Quest Pro — with new-and-improved models being continually released.
AR and VR Metaverse Visuals
Augmented reality and virtual reality (AR/VR) bring metaverse visuals to the next level. AR overlays visuals onto a physical world (like Pokémon Go) while VR aims to completely replace the real world with a virtual one. While these can be experienced without specialized equipment to a lesser extent, to get the fully immersive experience you will need AR/VR goggles or smart glasses.
Imagine running and jumping through a metaverse landscape, engaging in a virtual boxing match, or riding a rollercoaster while feeling like you are actually there. As the technology develops, it will become harder and harder to differentiate what’s real with what’s virtual. And while metaverse gaming is the most popular use case, the metaverse can be used for a variety of other purposes.
Imagine a regular remote video work meeting being replaced with a VR meeting where it feels like you and your coworkers are in the same (virtual) room. You can stand up, walk, look around, and shake hands like you would in a real-life meeting. After work, you could meet your friends at a virtual cafe for conversation, go to a virtual indie rock concert, or even go on a metaverse-enabled date.
Metaverse Blockchain Technologies
While the aforementioned technologies enrich metaverse experiences without necessitating the use of blockchain, the following technologies simply wouldn’t be possible without blockchain protocols and cryptocurrencies. Let’s discover how blockchain technology is being leveraged to bring new possibilities to the metaverse.
In-Game Currencies and Play to Earn
Through the use of peer-to-peer (P2P) cryptocurrency, the metaverse is being monetized in a permissionless way that doesn’t require the use of credit cards or payment apps like PayPal, Apple Pay, or Samsung Pay. While some metaverses could technically allow you to use a stand-alone cryptocurrency (ETH for example), many games like Decentraland and Axie Infinity use their own bespoke in-game currency (MANA and AXS, respectively).
While these in-game currencies can often be purchased, they can also be earned through gameplay through play-to-earn rewards. While this currency can certainly be used within the metaverse to purchase characters, upgrades, accessories, and even digital real estate — these in-game currencies can also have substantial monetary value outside their respective metaverses.
You can exchange these metaverse assets for other cryptocurrencies (ETH, BTC), stablecoins (USDC, USDT), and even fiat currency (USD, KRW). This can be done through either a centralized exchange (CEX) or decentralized exchange (DEX).
While the aforementioned cryptocurrencies are fungible (exchangeable), some blockchain tokens are non-fungible (unexchangeable) by design. Called non-fungible tokens (NFTs), these blockchain-based tokens are indivisible, unchangeable, and either completely unique or verifiably limited in quality (think 1 of 10/100 for example).
These NFTs can represent your avatar (your online persona or character), in-game items (armor, weapons, vehicles), and even digital land deeds within the virtual metaverse itself. This allows you to purchase a digital plot of land in the favorite neighborhood of your metaverse — provided you can afford the crypto asking price. This opens up the ability to not only own this virtual area but also build on it, charge a crypto admission price, or even rent it out to another party and monetize it.
Metaverse Decision-Making and Governance
While traditional gaming companies with popular titles often listen to their communities when implementing updates, changes, or sequels, the final say on these matters is ultimately decided by the company itself. While metaverse gaming companies may initially make all the decisions when building and releasing their metaverses, many then transition to ceding control to the metaverse community itself. This is achieved through direct voting measures made possible by the blockchain.
A type of fungible token that features voting rights, governance tokens allow you to propose, submit, and vote on future decisions. For example, you could propose changes to the P2E rewards, suggest new storylines, or vote on adding, changing, or removing gameplay options. This is often implemented through a decentralized autonomous organization (DAO), an autonomous entity that uses smart contracts and runs on a blockchain protocol. With slightly different characteristics, these DAOs determine what can be changed, how long voting periods are, and the voting majority threshold needed to implement changes (such as simple majority, 2/3, or 3/4).
The Future of the Metaverse
Whether for work or play, many predict people will increasingly immerse themselves in the metaverse as these technologies continue to make this virtual analog of the real world more appealing through the use of ever-improving hardware, AR/VR visuals, and blockchain-based protocols and tools. One future aim is for these vast and distinct metaverses to integrate and become interoperable with each other, enabling you to jump from one metaverse ecosystem to another with your in-game currency, NFTs, and avatar in a seamless way. The future of the metaverse is just around the block(chain).
- Metaverses make use of AR/VR visuals that can be best experienced via AR/VR headsets and smart glasses.
- Many metaverse technologies wouldn’t be possible without blockchain protocols.
- In-game currencies, play to earn, NFTs, and governance tokens are examples of blockchain-based metaverse innovations.
- In-game metaverse currencies can be used outside the game and monetized/exchanged for other cryptocurrencies, stablecoins, or even fiat currency.