1. What is Metaverse?

Metaverse, a concept that was prevalent even before Facebook took its name, is a highly interactive virtual way of how we communicate with one another. It can be thought of as a world that fuses different digital technologies such as social networks, virtual reality and augmented reality under one roof. Long before the term “metaverse” became popular, video games were at its forefront. From PokemonGo to Fortnite, all can be thought of as precursors to the Metaverse that’s about to become. The metaverse of Zuckerberg's aspirations is a realm where everyone is connected to a virtual reality, where they can teleport, make things happen just by thinking about them, and effectively step beyond the physical world's limitations into a bold, new digital one. The drive to create something of this kind was ignited by the pandemic which hit the entire world and left people craving for ‘real-world’ interactions, albeit virtual.

2. Who is building it?

Whether it is Fortnite (which is run by a centralised entity: Epic Games), or Microsoft, there are several centralised corporations showing interest in the metaverse, making it evident that the big tech companies want to lead the way.

For many of the world's tech behemoths, the metaverse has become the newest macro-goal, so much so that Epic Games has made it their explicit mission. It's also the driving force behind Facebook's purchase of Oculus VR back in 2014 and its recently announced Horizon virtual world/meeting space, as well as a slew of other projects, including AR eyewear and brain-to-machine interfaces and communication.

Axie Infinity, a leading NFT based online video game can be considered as a foretaste of what is to come, as they give a taste of an online environment dominated by "decentralised finance," or DeFi.

Additionally, Nike, Snap, and Tencent are some more players who are keen on adapting to the metaverse.

3. How will Metaverse affect the world of Fintech?

Metaverse-like platforms are transforming into digital economies with a variety of utility tokens and collectibles due to their open-world character. Furthermore, any future iteration of the metaverse will need to incorporate these economies, digital identities, and decentralised governance, all of which are only conceivable thanks to blockchain technology.

As a result, a decentralised, blockchain-based governance model is formed, in which several users, participants, and community members collaborate to construct and moderate the metaverse network. This is because the blockchain may record user-created virtual places, the transfer of ownership of digital assets, and financial transactions.

Consider a future in which Facebook, Microsoft, Google, and other tech companies join their various apps to create their own distinct metaverses.

For example, a virtual world may exist where users can utilise Facebook's Oculus VR gear to engage with 3D renders of WhatsApp, Instagram, and Facebook platforms.

This 3D virtual universe will most likely not be connected to Google's or Microsoft's versions, and even if it is, it's highly improbable that either of these tech goliaths will enable one of them to manage and control a shared metaverse.

All such transactions are secure, public, and irrevocable thanks to the properties of blockchain, which puts control and power in the hands of users rather than centralised organisations with private access to transaction history.

Interoperability, digital proof of ownership, digital collectability of assets (such as NFTs), cryptographic value transfer, governance, and more are all possible with blockchain technology (and cryptocurrency).

If players spend a lot of time in the metaverse, for example, they'll need a trustworthy currency. Cryptocurrency on a blockchain is safer than in-game currency, which could be lost or stolen if the game's operating company's security is breached.

Furthermore, because the metaverse is made up of a variety of projects, 3D worlds, and virtual places, it necessitates the creation of unique blockchains that can communicate with one another and provide interoperability.

Now talking about cryptocurrencies- prices of cryptocurrency (which would be usable in a metaverse) leaping to 164% owing to the sudden surge of interest in the Metaverse. Just to cite an example: Decentraland’s MANA virtual reality cryptocurrency reached $4.33 from a total of 80 cents to start with. Not far behind are Axie Infinity’s NFT which is wreaking havoc in the crypto world with the increase in prices.

It would be interesting to see how crypto and blockchain will further play a role in the Metaverse segment.

4. What lies ahead?

Clearly, the metaverse is still an emerging and fast growing area, but the underlying truth is that – in order to facilitate and realise a fully functioning metaverse – blockchain and cryptoassets will need to play a prominent role in the future implementation of this idea. In order to realise the true potential of this space, there will be a need for a transparent and traceable method to,

1. Conduct transactions, and

2. Interact with each other; blockchain and cryptoassets provide a potential answer to this need. The metaverse may, and deservedly so, make headlines, but blockchain and cryptoassets are key components to having this technology reach its full potential.