What is the Metaverse?

The metaverse! It sounds exciting! What is it? Where is it? Who controls it?!

OK, so the metaverse isn’t actually one place. If your only knowledge of the metaverse is from movie versions of it then you might be thinking that it’s one magical place that somehow mystically links everyone across the planet.

Actually, lots of companies are busy building their own versions of the metaverse. What each will be is up to them. The simplest way to imagine the basics of what they will be is to think of any computer game you’ve played that allows you to free roam within it. That’s basically what a metaverse allows you to do. But, whereas a game you play on your Xbox or PlayStation, say, has had its world designed and created by the game developers, in a metaverse only a small amount has been created by the metaverse developers. The rest of it is blank and created by users of that metaverse.  You’re maybe now immediatly thinking of the game Minecraft? Yep, Minecraft is very much like what many of the metaverses will be as a basic concept. But metaverses will be much better, viewed through a virtual reality headset, will have much better graphics and will have all sorts of functionality you can use and ways to interact with other users around you like in the real world.

Exactly how the metaverses will be and how good each will be is a tantalizing guess for now, but many billions of dollars are being spent creating the software to run them.

Metaverse and Web3 and blockchain

Metaverses, Web3 and blockchain are interlinked, basically because Web3 and blockchain are perfect for use within a metaverse.

Web3, because metaverses are all about user-generated content, artists, creators and entrepreneurs. Web3 is all about providing the tools for everyone to be able to create and transact with anyone else, away from the control of corporations who control much of Web2 and our online lives today. 

Blockchain because blockchains provide the tools to allow people to own and sell digital goods and to pay for things using cryptocurrencies.

Many of the big Web2 companies are working feverishly away at their own metaverse designs. The hope within Web3 communities is that the Web3 metaverses will also succeed an attractive community vs the Web2 corporation-controlled versions.

Land in the Metaverses

Many of the popular Web3 metaverses being launched are based on a limited supply of land. The individual land plots within them are sold to users as a land parcel. These sales of land provide the funds the metaverse creators need to build the metaverse software and tools for everyone to use. This is typically done by them issuing NFTs, with each NFT cryptographically proving the owner of that NFT has the sole rights to land at a particular set of coordinates within that metaverse.

Whoever holds that NFT in their crypto wallet owns that land parcel and has the rights to build whatever they want on it. If they want to they can sell that NFT to someone else and as the NFT moves from their wallet to the buyers, the buyer becomes the new owner of that land parcel.

The limited total quantity of land that is released is typically down to two main factors. The first is that metaverses want to be popular and by limiting the number of land parcels within them, they create a level of scarcity and through scarcity they create value to people (scarce things have more value than things there is an unlimited number of).

The other reason is user experience. You could argue that a totally fair metaverse would allocate everyone on planet earth their own unique metaverse land parcel. I expect some will, like the metaverse the likes of meta (Facebook’s owner) are planning. That’s all well and good, but would you want to visit and spend a lot of time exploring a metaverse with 7 billion land parcels? Where would you go in it?! What would be the attraction of such a massive unorganised metaverse? A good analogy here is to think of a popular city centre. It’s probably popular to visit because it has the most popular shops, restaurants, bars and venues in it. Cool buildings an cool destinations. Its popularity is based on all of that being compressed into a relatively limited area of physical land. Imagine if you took those same destinations and spread them all over a large county or state? Would visiting it have the same attraction to you? Walking miles between each bar or shop or building you love, having to pass all sorts places you have no interest in along the way? Probably not, and that’s why the popular metaverses are becoming attractive to buy land parcels in.

In the same way as land in the new hot area of a town becomes expensive when lots of people want to own it, the same is happening for some of the metaverses. Critics say this makes absolutely no sense, it’s the metaverse and it can be unlimited! Why on earth would digital land become expensive?! People who get it know that it’s people and companies speculating on where will be the hot metaverse destinations to visit once they launch. By buying up land plots, they’re either making an investment and hoping they’ll be able to sell them for a profit once that metaverse becomes super popular, or buying now at cheaper prices because they plan to build on it and use it themselves.

Think that sucks? No problem, just don’t buy any, there’s no reason you need to. For most of the metaverses, ownership of the land will only be so you can build on it, you’ll still be able to visit that metaverse and wander around it no problem!

Metaverse blockchain and cryptocurrencies

Metaverses typically chose a particular blockchain to utilise for all of the digital goods and land plots within that metaverse. For instance, for the Cardano blockchain one of the hotly-tipped metaverses is Pavia. Users of that metaverse will need a crypto wallet on that particular blockchain to buy and own things within that metaverse.

One of the big things people expect from the metaverses is the extensive use of NFTs. If you’ve not already, head over to our NFTs on Cardano page to learn all about them. NFTs live on the blockchain and offer unlimited ways to offer and verify ownership of digital goods, from pictures by artists to the clothing items your metaverse avatar wears, to the tickets to attend virtual events within the metaverse. Anyone can create them, anyone can see them, to anyone else. They offer a fantastic decentralised tool that will let the uses of metaverses explode as people come up with all sorts of new and exciting ways to transact with each other.

A blockchain also provides a crypto currency. The metaverse creators can then choose to use the native cryptocurrency of the blockchain they’ve chosen for all of transactions carried out by users within their metaverse (e.g. ADA in Cardano’s case). However, some opt to instead create their own digital currency. In Pavia’s case, they have chosen to create their own cryptocurrency called PAVIA. A modern blockchain like Cardano allows anyone to create their own currency using the Cardano blockchain to issue and secure it.

Should I buy metaverse land as an investment?

If you think a particular metaverse is looking really good and is likely to be really popular, why not? If you can afford it and think it’s a savvy investment by all means – hit the NFT reseller websites and bag yourself some land parcels! Remember, just like any blockchain NFT, all the time you own it you’ll get to use it and do whatever you like with that metaverse land, before you decide to sell it, hopefully for a tidy profit.

As with any speculative investment, do your own research into the metaverse, its team, its policies and only invest afford what you can afford to lose. Metaverses are going to fascinating places, with fascinating community dynamics that emerge.  Right now it’s all speculation as to how that will be and which teams will pull off creating the most popular metaverses for users. Let’s be honest, just like with early internet websites, some of the most popular metaverses probably haven’t even become a twinkle in their creator’s eye yet. There’s a huge amount of building, evolving and learning to be done…

Delve into metaverses on Cardano...

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