Blockchain use cases in the Metaverse: virtual real estate

22 Apr 2022

Our world has undergone dramatic changes over the last couple of years. The pandemic has thrown us deeper into the digital world, made people work, and even rest “remotely,” sitting at home glued to their gadgets. These lifestyle changes have fostered an explosion of interest in the technology and the development of the Metaverse. So, let’s find out more about this new technology and what it has to offer. 

What is the Metaverse? 

To answer this question let’s start with the history of the Internet. There are 3 stages of its evolution:

– Web 1.0 – is considered to be the earliest stage of the Internet and can be described as a platform with basic informational websites and several ruling companies like Google, Yahoo, and Microsoft. Users’ ability to interact with content was limited, as one could, for the most part, only search for the information written by content creators.

– Web 2.0 – people are given a voice on the Internet, social networking sites, and blogging emerge. It leads to the initiation of user-generated content on platforms like Youtube, Instagram, and TikTok. 

– Web 3.0 – is supposed to be the next stage of development that includes blockchain technology, DeFi, decentralized applications, and the Metaverse itself.
The current version of the Web is two-dimensional, so think of the Metaverse as a three-dimensional platform. Metaverse is a constantly operating virtual space, where people can interact with other users and digital objects via their avatars (personal in-game characters) and virtual reality headsets. It is a combination of physical and digital experiences that allows users to do some of what they do in the real world: attend concerts of famous artists, visit various social events, play games and even meet up with friends. 

Interestingly, the compound word Metaverse (meta + universe) was first mentioned in 1992 in a science fiction novel “Snow Crash” written by the American writer Neal Stephenson.

How can blockchain be used in the Metaverse?

Blockchain technology aims to be decentralized and user-oriented, which are often essential features in the Metaverse. Furthermore, utilizing both technologies can help create an improved and more immersive version of the Internet. Here are some of the use cases of blockchain in collaboration with the Metaverse:

– The Metaverse of NFT marketplaces: currently, they are simply websites that display available NFT collectibles, help sellers and buyers meet. With the implementation of the Metaverse, they can be turned into 3D NFT art galleries where users can interact with artwork and other users on the platform. That will likely create added interest in digital art and help customers make more informed purchasing decisions.

– The next level of blockchain-based games: in the previous article we discussed the concept of NFT-games and now, having VR technology as a tool, developers can add excitement to the gaming process, making it more real and exciting for users. The technology in the Metaverse will make it possible for gamers to use more of their senses, which means having the ability to feel, touch, and interact with in-game objects. 

– Authorization in the Metaverse: when a user signs up, their avatar is created, which requires them to authenticate their identity. This is where blockchain technology can be utilized as it records all the details about users, including their age, location, online activity history, and so on. It can prevent identity theft and fraud in the Metaverse.

Blockchain-based real estate in the Metaverse

This is one of the fastest-growing areas that deserves special attention. There are more and more decentralized virtual platforms based on blockchain emerging and offering a lot of virtual space. What if we told you that real estate won’t be that real after all? For instance, now a user can buy a piece of land or even a virtual prototype of the Louvre and own it, but only inside the Metaverse.

To have a better understanding of how it works, let’s take a look at an example. Decentraland, a virtual platform, was launched in 2015. It has been a pioneering project in the Metaverse, built on the Ethereum blockchain. Decentraland is divided into a total of 90,000 parcels of LAND, which are basically NFTs used to determine the ownership of digital properties. Decentraland also has its native cryptocurrency called $MANA that users can spend on LAND parcels. You might be surprised to find that even the cheapest plots of virtual land start at $11,000.

But what is so appealing about this platform? Why would anyone buy virtual real estate, which has no physical use and can cost a small fortune? For one, investors and companies rather than individuals dominate this virtual space. They find it attractive because once more people get involved in the Metaverse, brands will be able to use it as another platform for sales. For example, having virtual locations, owners can utilize them as venues for their events like concerts or exhibitions and charge users for entrance tickets. Moreover, famous real-world brands can design virtual stores so that customers could buy digital or real-world goods online while having a more realistic shopping experience. 

Another advantage for businesses is the potential of reaching a larger audience. Compared to a real-world shopping mall, a virtual one will offer unlimited space for visitors. In addition, there are no geographical borders, the Metaverse is global. Thus, one can be sitting at home in Munich while doing online shopping and trying on clothes in Milan via an immersive virtual platform. 

Interestingly, Decentraland, together with Adidas, has already organized a virtual fashion exhibition. They presented fashion designs in the form of NFTs which were auctioned off. Seeing popular brands like Adidas collaborating with Metaverse platforms are clear signs it’s heading into the mainstream.

Bottom line

Although we cannot definitively state that the Metaverse is the future of the internet we can say that the blockchain technology that fuels it has opened up new and exciting business opportunities. As a company which prides itself on working with cutting edge technology, Idealogic will keep you posted on the new and exciting developments this new virtual world has in store for us.

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