Five Things You Need to Know About the Metaverse

Five things you need to know about the Metaverse

There’s lots of buzz about the Metaverse and NFTs right now, and many of us are left scratching our heads as to what it all means. So here are  the top five things we think you need to know about the Metaverse.

1. What is the Metaverse?

Simply put, it’s a virtual reality world where you can interact with the environment and others around you. 

There are different types of metaverses to explore, and although they are similar in offering, they all slightly differ (think of it like the fizzy drinks category – Coca Cola and Pepsi offer similar drinks, but you can taste the difference).

You can access these different types of metaverses in different ways. Owning a computer or console allows you to visit metaverse-like experiences on gaming platforms such as Fortnite or Roblox, which acts as an online playground. Whereas owning a VR headset allows you to become fully immersed in the world around you.

An example of the metaverse is a platform called Decentraland, which you can access on your computer. You can create your own avatar and experience this virtual world just like our own. With its own currency, you can buy land, sell items and experience the digital marketplace.

2. How does it work?

The metaverse is enabled by the blockchain. Confused? Let us explain.

The idea is that the metaverse is decentralised, meaning there is no sole owner of these virtual worlds. To put it in comparison, Banks can be controlled by Stakeholders or the Government, whereas in the Metaverse no one person, business or company owns it.

Because the metaverse is owned by everyone, there is full transparency over what takes place, which is where the blockchain comes in. The blockchain acts as the public digital ledger which stores all the different transactions that take place. Think of it as a big receipt where everyone can see all the transactions that have taken place, and no one can ever alter it.

3. What is an NFT?

So now you understand what the metaverse is and how it’s enabled to work by the blockchain, you now need to understand how it’s powered by NFTs.

NFT stands for Non-Fungible Token, and essentially is a unique code. This means there is no other code like it, making it a one of a kind. NFTs can take different forms, from digital artwork to digital land.

What gives an NFT its value is the proof of transaction when it changes hands. The data from this transaction goes into the blockchain to prove the originality and ownership of the NFT. Because the blockchain is public and cannot be altered, no one can fake that they own something they don’t.

For example, you see a digital artwork you like, so you copy and paste it – great you think, you’ve got that now on your computer. But you don’t own the original, you just have a copy, like buying a print of the Mona Lisa to hang in your home.

4. Why are NFTs taking off?

From a behavioural science perspective there’s three main reasons why NFTs are so prominent:

a) Scarcity

Like the goldrush, people are looking to make their fortune from NFTs. They have different values depending on their scarcity and rarity, meaning some are worth more than others. Many look to buy NFTs cheap in the hope their value will rise and can be sold for a profit.

b) Status

Because of the growing value of NFTs, they act as a way of showing off what you can afford to buy. Designer brands are a good example of this in the real world, as premium brands such as Chanel or Gucci give off signals of wealth and authority. NFTs allow us to do this same signalling in the virtual world. For example, Twitter verifies owners of NFTs who want to use them in their profile picture by offering them an exclusive logo shape to use.

c) Belonging

Owning an NFT also makes you part of an exclusive online community, which for many is as important as the collecting itself. It doesn’t matter who you are or where you’re located in the world, being part of an exclusive community gives you all a shared experience that you can connect over. Many NFT holders are hosting meet-ups or have exclusive access to activation events by the creators, such as Budweiser holding brewery tours for their NFT holders.

5. What are businesses already doing in the Metaverse?

Many big names are entering the metaverse. From collaborations to setting up their own digital stores, brands are looking to get involved in these virtual worlds.

In September 2021 Luxury fashion house Balenciaga collaborated with the popular game Fortnight, to release digital outfits inspired by real pieces for their avatars. Samsung held a launch event for their new Galaxy Smartphones in a virtual replica of their flagship store.

So you may be thinking great, now I understand more, but why do I need to know all this?

There’s even opportunities for virtual realities in the workplace. From hosting VR meetings with colleagues across the globe to attending virtual conferences from the comfort of your own home.

Does this mean you should be in the metaverse and buying NFTs right now? No. But businesses should use this time to research, explore and understand the medium. This is just the start of the growth of digital opportunities. With this new era of the internet emerging, there begins a shift from technology helping you escape from the world to engaging in the world.

By 2026, 25% of people worldwide will spend at least one hour a day in the metaverse to work, shop, attend school, socialise or consume entertainment.

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By Meg Slip

Senior Account Executive