The Metaverse – The New Digital Economy

Call it a virtual revolution happening socially or a social revolution happening virtually, the Metaverse is the next biggest thing that is upon us. The term ‘metaverse’ was first coined in 1992 in the science-fiction novel, ‘Snow ‘Crash’ by Neal Stephenson. He envisioned the metaverse future as the virtual-reality heir to the internet. Back then, the internet itself was in its infancy. But today, with the advent of Web 5.0, Machine Learning, Artificial Intelligence, 3D reconstruction and the IOT (Internet of Things), it seems certain that the Metaverse is an idea whose time has arrived.

What is the Metaverse?

 Think of the metaverse future as the completely digital version of the world we live in. Just like the infinite internet, it is being continuously built by interconnected platforms as a shared virtual universe. You create your own avatar in 3D and enter this universe through VR (virtual-reality) and AR (augmented-reality) hardware. Since VR and AR are able to completely engage all your senses, together they are aptly known as XR (extended-reality). As XR evolves to its envisioned perfection, real world experiences will be replaced with ones in the virtual metaverse.

The Metaverse Economy

The possibilities are endless. For instance, you can strap yourself in the most dangerous roller-coaster ride and experience all its thrills and chills from the safe confines of your home. You can fulfil your globetrotting dreams without having to shell out huge amounts of money. You can explore the depths of the oceans or even the fringes of outer space without having to undergo arduous training. If there is a designer creating these virtual spaces, nothing stops you from exploring them. Even if there is a nominal entry fee to enter these spaces, it’s hugely cheaper and safer but as REAL, to traverse these spaces!

Now you will begin to understand how the metaverse digital economy starts to build. Just as real estate is valued in the real world, ‘virtual estate’ (spaces in the metaverse) will get valued in the virtual world. Just as producers and manufacturers create in the real world, designers and architects will create in the metaverse. That is because, just like your needs in the real world, your avatar will have needs in the virtual world – clothes, accessories, vehicles, homes and a host of other things. But, unlike the real world, there are no limits to what can be created virtually. Think of it as freedom from the scramble to get the best spaces, raw materials or resources. Everyone can live the utopian ‘American Dream’

Role of Blockchain Technology

The metaverse economy presented the problem of proving ownership. In the real world, ownership of assets is proved through documents issued or backed appropriately by various governmental authorities. Just like the internet has no government owning or regulating it, the new digital economy of the metaverse is being similarly built on open-source, one-for-all platforms. How can then one establish ownership over one’s digital assets? That is where blockchain technology came in.

The blockchain is a universally shared, decentralised, non-tamperable, digital ledger that helps recording transactions and tracking digital assets in the network. It is a large and ever-growing database storing information electronically. In simple words, imagine every person in the world owning a ledger. All transactions that ever occur are recorded in all the ledgers simultaneously! That is blockchain for you. This makes it impossible to tamper records for it involves simultaneously tampering all the ledgers in the world. In fact, blockchain records are safer than even the physical or digital government records.

Non-Fungible Tokens

NFTs or non-fungible tokens are created with blockchain technology, and they serve as ownership records of digital assets. Fungible means interchangeable. For instance, a Rupee is interchangeable with another Rupee. That’s fungible. Non-fungible tokens are unique assets. They are distinguishable and hence, not interchangeable. It is like your dog. Your dog has a unique value for you. You might not want to exchange your dog for the neighbour’s dog though they both are Daschunds. This is because the neighbour’s dog will not have the memories that you have shared with your dog.

NFTs create this uniqueness via cryptographic tokens that make a picture, a video, a piece of art, digital land and everything else that you can create into a distinguishable and non-interchangeable asset.

Cryptocurrencies

A digital universe not governed by any centralised authority will require a similar decentralised currency for all transactions. Cryptocurrency is a metaverse economy impact and it is maintained via the blockchain. Technically, it is sounder than any other currency as it is impossible to counterfeit it or even double-spend it. However, cryptocurrencies or cryptos face governmental resistance.

Despite total transaction volumes over $15.8 trillion in 2021, cryptos are not recognised and even abhorred by several European, American and Asian regulators. Some countries are cracking down on them and many others issue warnings against them. But none of that has prevented cryptos from becoming the favourite obsession of millions who consider them as the inevitable future of the new digital economy.

Metaverse Investment Options

It is totally understandable if you aren’t comfortable investing in cryptos. The metaverse is still in its infancy and you might not have the risk-appetite to dive right in. That is where metaverse stocks come in. Companies like Microsoft, Meta, Roblox, Take Two Initiative, NVIDIA and Autodesk have increasingly invested in the metaverse while maintaining a real-world presence. Investing in them gives you the best of both worlds – the universe and the metaverse.

UAE – The Global Crypto Hub

In this scenario, with a great risk appetite based on a futuristic vision, Dubai and Abu Dhabi are making a dash to rule the cryptocurrency empire. Handing out licences and passing laws for the legal tender of cryptos, the United Arab Emirates (UAE) is welcoming multiple crypto exchanges to set up shop. The dividends are already being seen. In just 2 years, more than 5600 millionaires have made the UAE their new home. The Russia-Ukraine conflict is expected to bring in a tide of oligarchs to the UAE as well.

The UAE has even started accepting cryptos as payment in multiple local businesses. Not surprisingly, the YouGov global survey reported that trust in cryptocurrencies among adults was highest in the UAE. As the world braces for the metaverse economy impact, it is clear that if you are a visionary intending to invest in the future, the best place on earth to be in currently is the UAE.