The cryptocurrency bear market might have brought down the prices of almost every cryptocurrency in the market, but it has not stopped popular Metaverses, such as Decentraland, from making headway.
Some of the biggest events in the world, such as The Australian Open, have joined the Metaverse alongside some of the biggest retail names in the world such as the tech giant, Samsung, and the well-known clothing company, H&M.
With the current crypto bear market, is the metaverse a good investment? This article will take a look at all things metaverse and look at whether or not the metaverse is a good investment.
What Is A Metaverse?
A metaverse is a virtual world built on top of a blockchain where users can work, play, and connect with other users. This is made possible with blockchain technology; a decentralized network of interconnected peers that are able to verify transactions on the network without the need for a 3rd party intermediary.
All activity that takes place in the metaworld is processed in the form of blockchain transactions and is stored on the distributed ledger.
Metaverses gained a lot of popularity during the Covid-19 pandemic. After people around the world lost their jobs, they were desperate to find a way to earn an income. Queue the metaverse.
The Rise of Play-To-Earn
With the growing popularity of metaverses, and the ability for people to earn cryptocurrency in them, comes the birth of the term: play-to-earn. This is the basis of Game Finance, or GameFi for short, as players can now play blockchain games, in the form of the metaverse, and earn cryptocurrency.
This is growing into a viable option for people to earn money as more people join the metaverse due to the impact of Covid-19. This growing popularity has led to a race between projects in the space to create a metaverse that attracts the largest market share.
This race is resulting in metaverses that offer players more ways to earn and subsequently earn more. As this race for a better metaverse continues, the viability of play-to-earn games as a source of income will grow.
Ways To Earn In the Metaverse
Although the concept of a metaverse is still in its infancy, there are still a few ways to earn cryptocurrency in the metaverse. Each metaverse currently in the market offers its own way to earn cryptocurrency.
However, a person can only really earn cryptocurrency in three ways when it comes to the metaverse. The three main ways to earn in the metaverse are: raising creatures, owning land, and resource mining. Let’s discuss each of them.
Raising Creatures
Some metaverses allow users a way to earn cryptocurrency by purchasing and raising creatures. These creatures are often referred to as sprites, and are NFT-based characters in the game.
You can earn cryptocurrency by purchasing these sprites, raising and developing them, then selling them for a profit. Depending on the metaverse that you’re playing in, you can also earn rewards by taking part in battles with other players in the game.
This is one of the most popular ways to earn cryptocurrency in the metaverse, with citizens in the Philippines relying on this method as a source of income when their country was struck by Covid-19, leaving a majority of them unemployed.
People in the Philippines played the popular game Axie Infinity, a game where you purchase sprites, train and develop them for battle, and then sell them for a profit.
Owning Land
Land in the metaverse is now being seen as the real estate of blockchain technology. A lot of money is being pumped towards owning land in the various metaverses available.
The total spent on metaverse land has already surpassed the 100 million Dollar mark. Large companies, and even some celebrities, are joining the race to own land in the metaverse.
Land is represented as a NFT which can be purchased and sold at a profit given the demand for it. However, the average price for land in the metaverse is over 100 thousand Dollars. If you’re fortunate enough, you could also find a project that offers land at around 800 Dollars.
These are metaverses that are still in the early stages of their development, so you will need to do some research to establish the project’s potential before purchasing land.
Once you own land, there are a few things that you can do to earn from it. Like real-world land, you can rent it out. As more companies become aware of the metaverse, they will want to advertise in it. To do so, they will need to rent land to put up their advertisements.
Some of the other ways to earn from owning land include unlocking in-game assets exclusive to land owners, or selling the NFT that represents the land for a profit. When selling, you can also fractionalize your NFT to sell portions of your land for when you do not want to sell the whole land at once. Some popular metaverses to own land in are Decentraland and The Sandbox.
Resource Mining
Some games require that you mine resources so that you can spend the mined resources to mint wearable NFTs. In other games, you can also mine and mint in-game assets that can be sold on a NFT marketplace.
A popular metaverse where you can mine resources to mint wearable NFTs is Decentraland. In Decentraland, you can mint wearable NFTs by mining virtual meteors in a land called Wondermine.
These wearables can then be sold on any of the NFT marketplaces in the market. Other games, like League of Kingdoms, allow you to collect and sell in-game resources as NFTs.
These are the main ways that you can earn cryptocurrency in the metaverse. Although there are currently only three ways to earn cryptocurrency in the metaverse, new projects are looking to add more ways for their users to earn. Some projects also include more than one way for players to earn cryptocurrency, like Decentraland.
Can Make Purchases With Crypto
Any cryptocurrency veteran, maybe even a cryptocurrency newcomer, has been asked the question by at least one of their peers which is the age-old question of what can be bought with cryptocurrency.
Although there are some online stores and some countries where cryptocurrencies are accepted as a form of payment, it is fair to say that cryptocurrency is being used more as a store of value than as a method of payment.
This is mainly due to highly volatile cryptocurrency prices. Imagine paying $10 worth of cryptocurrency when a few minutes or hours later the same amount of cryptocurrency is worth $13 or $20. On the other hand, no merchant wants to be paid an amount of cryptocurrency now which will later be worth less.
This is one of the major obstacles restricting cryptocurrencies from becoming a widely used form of payment, and really gives little to no options when it comes to items that can be purchased using cryptocurrency – until now…
The Metaverse is a virtual world that gives users the ability, among other things, to purchase, sell, and exchange in-game assets. These assets can include character skins, virtual plots of land, wearables, exclusive access tickets, and much more.
Each one of these assets has a finite supply, and are not traded as actively as cryptocurrencies – making them valuable and their prices relatively stable. With this being the case, these assets have all the qualities required to become the next storage of value, taking over the role from cryptocurrencies.
These in-game assets are also relatively easy to create, and will serve as a revenue stream for digital asset creators, which will in turn incentivise more creators to create digital in-game assets that can be sold on the market place.
In a very short time, as this influx of digital creators into the Metaverse takes place, there will be a wide variety of digital goods of value that can be purchased on various marketplaces. Anyone looking to purchase these goods will only be able to do so using cryptocurrency – finally answering the question of what can be bought with cryptocurrencies.
These items may not have much value in the real-world, but they could have significant value in the virtual world as the virtual world becomes more popular.
Most Popular Metaverses
The three most popular metaverses currently in the market are The Sandbox, Axie Infinity, and Decentraland.
The Sandbox
The Sandbox is a metaverse that allows players to create in-game assets and experiences, and then monetize. These assets are created using The SandBox’s VoxEdit software, which is a 3D pixel art and animation editor. Apart from monetizing game experiences and assets, players can also buy land in The Sandbox and rent it out or sell it at a profit.
Axie Infinity
Axie Infinity first gained popularity in the Philippines due to the impact of Covid-19, and is a metaverse where players can purchase, battle with, and sell in-game characters called sprites.
Decentraland
Decentraland is a fast-evolving metaverse that offers players a few ways to earn cryptocurrency. Players can either mine virtual meteors for resources and then mint sellable NFT wearables in the marketplace, or play other games in Decentraland that enable them to mint NFTs. Players can also buy, sell, and rent out virtual land.
Why the Metaverse is a Good Thing
Jobs
There are currently almost 8 billion people in the world. As the global population grows, it’s only a matter of time before the number of jobs globally available in the physical world is no longer able to accommodate the growing global population.
This is where the Metaverse will excel because the number of jobs that can be created in the virtual world are infinite. There will also be jobs in the Metaverse that only make sense in the virtual world and won’t make sense in the physical world.
No Borders
Being built on top of a blockchain, the Metaverse will be borderless. This means that people in the metaverse will communicate and work with people from across the globe like never before – all in the Metaverse. Borders will cease to exist in the Metaverse, changing the way we work and communicate.
Not Limited to One Currency
People in the Metaverse will be able to transact with any cryptocurrency they choose, and will not be limited to one currency, as is the case with traditional government-backed fiat currencies.
People will also be able to exchange between each cryptocurrency very easily by using an exchange platform such as a decentralized exchange, or utilizing platforms that enable atomic swaps.
The Downside of the Metaverse
We live in a digital world where the majority of the population has a mobile device. These mobile devices have become extensions of ourselves. However, the danger of these mobile devices is that we become too addicted to them.
These mobile devices might do the complete opposite of what they were originally intended to do. Instead of connecting us, they are actually disconnecting us from others around us. We can see this already happening when a group of people are together but almost all of them are on their phones.
The Metaverse risks becoming the final wave of innovation that further disconnects us from the real-world around us. People can become anything in the Metaverse as they are no longer confined to their real-world personas.
This may result in addictive behavior which can be detrimental to a person’s personal and social life, as they neglect these much needed aspects of their lives to live out a fantasy life in the Metaverse.
What the Future Looks Like for the Metaverse
When trying to determine if the Metaverse has a future, the main factors to consider are the usability, scalability, and interoperability of a Metaverse. Other factors to consider include the adoption and utility of the Metaverse.
However, when looking at Metaverses built on a blockchain, the usability, scalability, and interoperability are the most important factors to consider as they influence the adoption and utility of the Metaverse.
These factors also need to be analyzed when it comes to the Metaverse’s underlying blockchain framework, as it serves as the backbone to the Metaverse, therefore defining the limits of the Metaverse built on top of it.
Should the scalability, usability, and interoperability of the Metaverse, and its underlying blockchain network, be addressed, then the future of the Metaverse is almost guaranteed because of the benefits that it offers.
Also, more people will be attracted to the Metaverse as more functionality is added to the Metaverse – enabling people to do more things in the blockchain-powered virtual world such as work, play, and interact like never before.
Is the Metaverse a Good Investment?
The metaverse concept, although not a new idea, is practically still in its infancy. Furthermore, the technology powering the metaverse, blockchain technology, still has some scalability limitations that it has to overcome before the metaverse can scale into a full-blown virtual world that runs in parallel to ours.
Interest in metaverse projects also follows the cycles seen in the rest of the crypto market. As a result, there are cycles of hype that affect the prices of metaverse in-game assets. Simply put, there are times that the prices of metaverse assets are arguably unreasonably high.
With that being said, the metaverse does offer an opportunity to earn profits over the medium to long term investment horizon.
Another thing that is in the metaverse’s favor is the fact that the number of in-game assets are finite – which could lead to a positive exponential return on investment when demand in the crypto market picks up again.
The main reason that the metaverse took off like it did was because of Facebook’s announcement that it would shift its focus to the metaverse, with its major rebrand being the first step in its focus shift. Prior to Facebook’s announcement, the metaverse was a sleeping giant that was unable to gain the traction in the market that it had after the announcement.
Whether or not the metaverse will experience the same spike in demand, if not greater, well, only time can tell. One thing is for sure, the metaverse, although in its infancy, does have a lot of potential.
Given the fact that the metaverse also offers people a way to earn while participating in the metaverse, and the job market becoming more and more difficult, the potential for the metaverse may be realized sooner rather than later.
One thing to take note of hoverver, is that not every metaverse project will be a good investment. Whether or not a specific metaverse project is a good investment or not will be dependent on a number of factors, mainly the utility that it offers, the community following the project, etc.
To Recap
A metaverse is a virtual world built on top of a blockchain where users can work, play, and connect with other users. There are a number of metaverse projects in the market, with the biggest players being Decentraland, Axie Infinity, and The Sandbox.
The metaverse follows the same demand cycles as the rest of the crypto market, so there are opportunities to make a decent return on investment. One thing to remember is that not every metaverse project will be a good investment.
