The metaverse can be defined as the next-generation internet, which consists of networks of virtual worlds that are 3-dimensional (3D) in nature.
These 3D virtual worlds are based on social connections, and allow people and businesses to engage in a variety of activities.
These activities include gaming, social networking, and sharing virtual experiences through augmented and virtual reality (AR and VR) technologies. The metaverse also consists of economic activities including financial transactions.
For example, the metaverse has already begun to host platforms that allow companies to market their products, and sell experiences, digital objects, and virtual real estate.
Most economic and financial transactions on the metaverse are supported by cryptocurrencies, enabled by blockchain technology.
In this article, we take a look at what the metaverse is and how it is related to blockchain-based cryptocurrencies. We also try and respond to the question of which blockchain the metaverse is on.
The Metaverse At a Glance
As mentioned above, the metaverse consists of 3D virtual worlds with a focus on social connections. Metaverse is enabled by AR and VR technologies to provide an immersive experience to users on virtual platforms.
It is possible to have multiple metaverses as well, as many companies are currently working on them on their own.
However, these metaverses are connected by certain commonalities, one of which is the cryptocurrency with the help of which financial transactions take place.
What is Cryptocurrency?
Cryptocurrency is a digital currency that does not depend on a central authority such as a bank or a government.
Instead, cryptocurrency coins are stored on computerized databases, known as digital ledgers. This technology is enabled by distributed ledger technologies, usually a blockchain.
There are thousands of cryptocurrencies around the world, of which Bitcoin and Ether (Ethereum) are the most famous. As Ethereum and Bitcoin are supported by blockchain, these currencies are trusted greatly for their immutability and security.
What is a Blockchain?
A blockchain is a list of records, also known as blocks.
These blocks are basic data structures that are connected via cryptographic technology. Each block consists of timestamps, which ensure that data in any of the blocks cannot be changed retroactively without affecting future blocks.
As a result, blockchain serves as the technology to authenticate and secure financial transactions online, including the ones that accept cryptocurrencies.
Blockchain-based cryptocurrencies are used on the metaverse precisely because they are authentic and secure.
These cryptocurrencies can be used to buy and sell digital objects such as non-fungible tokens (NFTs), art, virtual real estate on metaverse blockchain, etc.
What is a Non-Fungible Token (NFT)?
An NFT can be described as a unit of data that is non-interchangeable and authenticated by blockchain.
NFTs are associated with digital files such as media, art, film, etc, which can be bought using cryptocurrency. As they are non-fungible, they cannot be recreated and thus have economic and cultural value.
The authenticity and ownership of NFTs are easy to verify thanks to blockchain technology, which stores their data as timestamps in digital ledgers.
A good real-life example would be a painting by Picasso that is original and non-fungible, and thus, of high value. Although replicas of the same painting can be made, the original, after it has been authenticated to be the original, is worth millions.
Others, not so much. In the digital world, an NFT’s authenticity is verified on blockchains such as Ethereum, making ownership claims transparent.
What Blockchain is Metaverse Using?
Metaverse is quickly becoming the place to buy and sell goods, services, and experiences.
Decentraland, for example, is a metaverse platform that is used for a variety of purposes including marketing, gaming, cultural activities, and financial transactions. A majority of these transactions are enabled by Ethereum.
Ethereum is a decentralized and open-source blockchain. It is used as a development platform to create applications and virtual worlds on the metaverse.
Ethereum’s blockchain network is used to verify much of the transactions on the metaverse, although certain platforms may use other blockchains.
NFTs can be directly purchased with the help of Ethereum’s native cryptocurrency Ether. As a result, it would not be an exaggeration to say that the metaverse is mostly enabled by it.
If you were asking yourself the question “what blockchain is metaverse using?”, one could say Ethereum mostly enables it. However, as with all things technological, the metaverse is constantly evolving.
It is not clear how many blockchains and cryptocurrencies will eventually come to form future metaverses.
Metaverse blockchain is not just a tech buzzword, but a reality. It consists of AR and VR-enabled 3D virtual worlds, on which multiple platforms such as Decentraland exist.
These platforms are places where people and companies socialize, conduct financial transactions, and exchange ideas and digital objects called NFTs.
Non-fungible tokens (NFTs) are supported by blockchain-based cryptocurrencies, which authenticate ownership of digital objects and transactions, and have real financial value.
These transactions are enabled by blockchain-based cryptocurrencies, such as Ethereum. Although several blockchains exist, Ethereum is one of the most popular blockchains to support the metaverse.