HomeWhat is the Purpose of the Metaverse?

What is the Purpose of the Metaverse?

The Metaverse is a fairly new concept. There’s so much to understand, including its potential purpose in the upcoming Web 3.0

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Mark
Updated: January 25, 2023
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The Metaverse is a digital world that is still in its early stages of development. While it has been around for about a decade, it is still a novel technology that is unfamiliar to many people. The Metaverse is essentially a virtual reality platform that allows users to interact with each other and with digital content in an immersive and interactive way.

For gamers, the Metaverse concept may be familiar, as they have already experienced similar virtual worlds in online games. However, the Metaverse has the potential to be much more than just a platform for gaming. It could become a fully-realized digital environment that impacts many aspects of our lives, from entertainment and socializing to education and work.

Currently, there are three main purposes for the Metaverse that have emerged: entertainment, e-commerce, and trading. Many people are using the Metaverse for entertainment, whether it’s playing games, watching movies, or participating in virtual events. E-commerce is also a popular use case for the Metaverse, as it allows businesses to create virtual storefronts and sell their products to a global audience. Finally, the Metaverse is used for trading virtual goods and real-world assets.

It’s important to note that the Metaverse is still in its early stages, and it is likely that we will see many more uses and applications for this technology as it continues to evolve. The potential for the Metaverse is vast, and it has the potential to revolutionize many aspects of our lives.

Entertainment

Years ago, people began seeing the definition of the Metaverse, according to Snow Crash, come to fruition in virtual world games. These games give gamers access to sandboxes, or open worlds that they could build and explore according to their individual fashions. 

Not only can you create a world within a world in these games, but you could also invite other people to come and share that creation with you. In Roblox, these resulted in “mini-games” within the larger sandbox offered by the digital world. Other games like Second Life seamlessly followed suit.

Both of these games experienced a resurgence lately, specifically after Mark Zuckerberg announced a branding change for Facebook to shift on developing technologies the Metaverse. While there’s still no evidence of interoperability, the Metaverse is expected to retain many of the core features of these games once it is inter-operational.

Thus, theoretically, the Metaverse can provide people with an “escape” from the real world through Virtual Reality. They can log in and immerse themselves via special devices in a space of their own choosing; they can pursue several avenues for entertainment like virtual sports, or remotely travel to digital replicas of tourist attractions around the globe.

Of course, entertainment is not the only benefit that the Metaverse can provide its users when its time comes.

E-Commerce

In-game commerce is another prominent feature of the virtual world games that people now refer to as “mini-metaverses.” 

In these games, you can make purchases that are restricted within the digital realm, using currency that’s exclusively available within that world’s confines as well. Referred to as “in-game currency,” this digital money can be bought using real money, but not the other way around. 

How can you spend this money online? Gamers typically utilize these electronic funds to personalize their avatar, which is their digital representation of themselves in the virtual world. They dress up these avatars by buying accessories. In other games, they can also purchase weapons that enhance their avatar’s combat performance.

This is another feature that the Metaverse is expected to retain when it is launched in the future. In fact, brands have already capitalized on this feature to make their customers know that they’re actively building a presence on Web 3.0, another term used to refer to the budding technology of the Metaverse.

One notable recent example is the virtual Gucci Dionysus handbag that made the rounds on Roblox. The first release of the digital bag, which can only be used within Roblox, generated so much buzz that it was sold at a price higher than its real-world counterpart could fetch. 

It was not even a non-fungible token or NFT; other editions appeared on Roblox but attained only lower prices than the first pressing.

Trading

Trading, in this context, refers to the buying and selling of assets between two parties. Right now, there are only two assets available for trading within the Metaverse – real estate and NFTs. However, theoretically, people can also begin trading futures, stocks and fiat currencies within the digital realm.

Real Estate Trading in the Metaverse

Real estate prices hit a peak in February of this year, thanks to celebrities and whale investors creating buzz for plots of virtual land in 2021. Snoop Dogg, for instance, purchased an immense property in The Sandbox and created a digital replica of his residence. 

Like Samsung’s 837x digital store, the star may have intended to allow users in the future to tour his house without physically appearing at his doorstep. It also had a secondary effect – investors snapped up parcels of land next to his property hoping to potentially profit from higher prices by selling them off to interested buyers. 

Like actual real estate, however, investing in Metaverse real estate could be hit-or-miss. Prices could rise up if there’s enough interest in the location, but such peaks can be difficult to predict. Snoop Dogg may have caused prices of land around his property to momentarily rise, but the miniscule interest for similar properties in the general world eventually caused prices to plummet beginning February of 2022.

Non-Fungible Tokens

Non-fungible tokens (NFTs) are defined as digital collectibles. To qualify as an NFT, each token must not have any other instance sold within the digital world. One could launch a limited series of NFTs as well, but the number be finite for the token to be considered unique and inimitable.

Each non-fungible token carries two certificates; each certificate represents its ownership and its originality. Thus, what investors are buying are not the token itself but the ownership and the authenticity of the item. These certificates allow the NFT to be traded at higher prices than those collectibles considered as fungible, or existing in greater quantities than NFTs.

Like real estate, it can be tricky to invest in NFTs and actually see profit. Creators must make sure that there’s enough value and long-term interest in the project before creating their “digital art,” which is what people see NFTs as. Otherwise, investors will see no reason to buy and hold their creations for the long term.

Unlike real estate, however, NFTs are a better store of value as each token is not dependent on the mood of the public in general. They tend to only target a smaller section of the investing populace on the Metaverse, so to speak.

Conclusion

Indeed, the Metaverse could be seen as one big video game that happens to offer more opportunities that could connect to the real world. For the first time, there’s an opportunity for users to earn real money although the transactions only take place within the digital realm. 

The Metaverse also represents a good opportunity for people to experience aspects of the real world they otherwise find inaccessible. Both Snoop Dogg’s property and Samsung’s 837x store offer people the chance to explore digital replicas of the properties they represent in real life. All of these are possible without leaving their homes, thanks to virtual reality.

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