January 29, 2023 Breaking News, Latest News, and Videos

How the Metaverse will shape Cryptocurrency

The concept of cryptocurrency and metaverse appear to go hand in hand. After all, one denotes the virtual world, and the other is the virtual money to spend.

Both are essential components of what is being marketed as “web3”. As we e discovered with Bitcoin, which has utility in both the virtual and real world, the metaverse and cryptocurrency are independent concepts that can coexist amicably. While today, you can use any reliable cryptocurrency trading app to buy Dogecoin or other cryptocurrencies, it is not unlikely that you will use those digital assets to trade in the metaverse in the future. 

Many experts believe that there is a possible synergy between the two notions. After all, people enjoy spending money, and shopping soon became a pivotal factor in web1 and web2. Hence, there’s no reason to believe web3 will be any different! 

It’s also becoming abundantly clear that, although no one knows for sure what structure the metaverse will gradually take, it can substantially impact the evolution of cryptocurrency and its ultimate impact on society.

Virtual realm, Real worth

Virtual worlds have less friction than real ones. If we wish to travel somewhere, we or our avatar can just click a link or button—no need for expensive infrastructure, luggage, or passports.

Cryptocurrency is similar. Traditional money requires a massive infrastructure of regulators and banks to operate as custodians, intermediaries, and clearinghouses. Using cryptocurrency requires only applications on regular PCs.

As the metaverse grows increasingly popular and we spend more time online, we’ll need frictionless ways to pay for virtual products and services. Perhaps we’ll spend money on virtual real estate to amuse friends or create a business.

Metaverse might add $1.5 trillion to global GDP by 2030. This value could be achieved in cryptocurrencies. This might imply they go mainstream as we get acclimated to utilizing cryptocurrencies as a payment method.

As cryptocurrency gains popularity, governments may control its energy efficiency or emissions. Networks that utilize wasteful proof-of-work algorithms may be taxed at a higher rate than those that use proof-of-stake.

The Adoption Journey

As cryptocurrencies become the primary medium of commerce in the metaverse, their consumers will become increasingly accustomed to their acquisition, handling, and storage methods. This implies that it will be used frequently outside the metaverse to transfer money to friends and relatives. Moreover, this includes the funds crossing international borders at a negligible cost. In contrast, fiat currency can entail hefty fees for the same purpose.

This will likely lead banking institutions to facilitate bitcoin or blockchain-based financial models. They must optimize their infrastructure to compete in a world of borderless, mediator-free economic systems.

While some, such as the IMF’s chief, have predicted that cryptocurrency will eventually lead to the extinction of banking, in the short term, it’s probable that companies, in particular, will want to retain the layer of security and control that banks and financial institutions contribute to transactional networks.

Those that survive in this dynamic environment of digital currencies and peer-to-peer banking will be adaptable and forward-looking with their bitcoin adoption strategies. For instance, Mastercard and Paypal are two payment service giants that have already engaged with cryptocurrencies, specifically Bitcoin. Both have stated that it is because it is evident that it will play a significant role in the future of transactions.

How Big Corporations are Already Investing in the Virtual World

Thirdly, businesses will want to partake if the metaverse is wealth. The decentralized structure of blockchain may lessen the requirement for gatekeepers in banking transactions. However, companies will still have plenty of options to generate profit, perhaps even more than in the current economic environment. 

Meta, for example, will provide massive platforms for individuals to work, enjoy, and socialize. Moreover, giants like Dolce & Gabbana, Adidas, Coca-Cola, and Nike also incorporate NFT into their marketing strategies. In the future, acquiring ownership of a coupled NFT in the metaverse may be a condition of purchasing a real-world object from a firm.

For instance, when you purchase desirable brand clothing to wear to a real-world club, you may simultaneously get the crypto equivalent of the garment for your avatar to wear to a digital performance of your favorite pop star. In the same way, you could resell the actual garment; you could also resell the NFT version for somebody else’s avatar.

These are only a handful of the numerous ways metaverse economic models will likely intersect with the physical realm. Such instances will become more sophisticated as augmented reality technology becomes more prevalent, further fusing metaverse and actual-world elements.

What Does the Future Holds?

When (and if) the metaverse becomes seamlessly integrated into our daily life, no one, not even Mark Zuckerberg, fully understands what shape it will truly take. But, based on prior experience, one thing is sure: corporations will use it to generate revenue, and people will use it to spend more money!

Cryptocurrencies are a logical fit for establishing the virtual world’s currency – and since this revolutionary technology is still in its inception, its developmental path is likely to be impacted by modifications to how we lead our lives. Whether for better or worse, a growing number of us prefer to spend our time online, and this trend will only continue as the digital world gets more immersive, interesting, and engaging. 

This further implies that cryptocurrencies will become more prevalent in our daily lives. As a result, we should expect it to become more controlled, ecologically friendly, and efficient.

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