Blockchain and the Metaverse have become increasingly intertwined in the Web3 space. Blockchain technologies, non-fungible tokens (NFTs), and cryptocurrencies have become hot topics in recent years. NFTs are digital assets assigned to a blockchain to verify and validate your identity.

According to a Security.org survey, familiarity with NFTs had skyrocketed since 2021, with just 7% of US citizens unaware of NFTs in 2022 compared to two-thirds of people the year before.

Despite only 4 percent of American adults owning NFTs, participation doubled from 2021 to 2022. Additionally, 7 percent of non-NFT holders stated they would purchase in the next 12 months, or roughly 16, 3 million people. 15 percent of those surveyed said they thought NFTs were worthwhile investments.

Another Deloitte survey found that 76 percent of respondents said that digital assets such as cryptocurrencies could become a major alternative to fiat currencies, replacing the latter over the next decade.

Blockchain and the metaverse: a regulatory framework?

Recent interest in Metaverse spiked after Facebook changed its name to Meta Platforms at the Connect 2021 event in October last year. Additional platforms like Decentraland, Sandbox, Somnium Space, and many others have also seen a strong increase in public interest.

Organizations have also started to create standards and increased use cases for the blockchain. Groups like the Blockchain Association, the XR Association, and various governments have come together to establish standards, ethics, and frameworks for using the blockchain in the interest of the people.

This is expected to reshape the global immersive industry, despite the uncertainty surrounding cryptocurrencies in recent months. Although platform exchanges such as FTX, Celsius, and Voyager have filed for bankruptcy due to fraud and unstable markets, the rise of Web3 digital assets will continue.

What is the chain of blocks?

Blockchain has experienced a rapid expansion in the number of use cases since its debut in October 2008. Cryptographic technology is a distributed ledger with a growing list of records (blocks) linked to encrypted data. Both digital and real world assets can be linked to the blockchain for seamless record keeping.

Records can include arrival time, name, date, modification, transactions, or any data set necessary to identify an item. The main benefit of the technology is that it remains immutable and immune to fraud. This is due to its end-to-end encryption, transparency, and peer-to-peer (P2P) network properties.

Blockchain technologies can be applied to an infinite number of use cases, such as sharing data sets for healthcare, logistics, finance, music royalties, and others. However, to date it is mainly used for cryptocurrencies or decentralized digital currencies linked to the blockchain and traded online.

Some of the world’s largest cryptocurrencies include Bitcoin (BNB), Ether (ETH) and Decentraland’s native token, MANA.

Blockchain and the metaverse

The Metaverse, the next stage of computing that combines the Internet and spatial computing, will allow users to interact in virtual environments with digital assets. The Metaverse will remain persistent, real-time, and, by consensus, interoperable and decentralized.

Cryptocurrencies can potentially monetize interactions on the Metaverse, i.e. through the buying and selling of digital assets, NFTs, real-world goods, and other cross-platform interoperable digital items.

The decentralized nature of the future metaverse would prevent individuals or groups from owning and controlling the platform. Global protocols, technologies and standards will guarantee decentralization.

The Metaverse would be extended to the physical world with augmented and mixed reality (AR/MR) technologies, including headsets, tablets, and smartphones. The chain of blocks would provide an infinite number of combinations assigned to content that is indistinctly physical and digital (phygital).

Examples of use cases for Blockchain and Metaverse

Several of the most promising current and future use cases for Blockchain in the Metaverse include:

Immutable In-Game Assets

Users can join play-to-earn (P2E) gaming platforms to earn cryptocurrencies, NFTs, and other digital assets to buy, sell, and trade. Then people could exchange their coins for fiat currencies and vice versa.

Players could also transfer their digital assets to other platforms. This makes it possible to save custody assets (centralized) in self-custody assets (user-owned).

Platforms like Decentraland, Timberland’s Fortnite metaverse, Izumi World, Niantic’s Pokemon Go and Safari Par-Tee, and many others, are already facilitating gaming communities around the world.

identity authentication

Numerous metaverse platforms have also taken advantage of blockchain technologies to verify user data when accessing critical infrastructure. Government organizations like the Dubai Ministry of Health and Prevention (MOHAP) and cities in South Korea and China have already taken advantage of NFTs and blockchain to track citizen records, access medical files, and provide secure services.

Additionally, organizations like Interpol have employed similar technologies to develop training and learning metaverses for employees.

In the future, people will be able to access their unique digital footprints with blockchain data linked to interoperable avatars. This will be crucial to creating a metaverse for transacting in the real world.

Real Estate Metaverse

The concept of virtual real estate has also risen significantly in the immersive industry. People interested in building and owning key properties in the Metaverse take advantage of the blockchain. Platforms like Decentraland, The Sandbox, and others facilitate this with virtual real estate in the Metaverse.

Additionally, many real estate speculators allow decentralized autonomous organizations (DAOs) to purchase property. This will provide ownership to people hoping to join the ownership ladder with fractional shares of a DAO that sponsors global properties on the blockchain.

Entities like BRIKN and DAMAC Properties have launched their blockchain-powered DAOs to compete in the era of cryptocurrency investment properties.

Additionally, Dancing Seahorse DAO allows its NFT holders exclusive access to its nightclub franchise at all locations. This provides new use cases for NFT: Community.

Incentives for creators

Today, creatives around the world are taking advantage of blockchain technologies to buy and sell works of art. This will incentivize creatives to expand the reach of their products on NFT platforms.

Many are familiar with the Bored Ape Yacht Club (BAYC) and other NFT collectives, but creatives from around the world will now find a global market for their wares. This could facilitate a boom in creative content for collectors, educational companies, and even future gaming platforms.

Crypto and blockchain technologies could also resolve disputes over asset creation to fight fraud and plagiarism. This will require a legal metaverse industry developed as popularized by Web3.