Last Updated on 2 months by Shubham Attri
Investing in Metaverse is becoming a new normal where every major tech company is jumping into the Metaverse trend. If you’re new to this movement and are still in the early stages of completely understanding how this digitally-powered world works, then hop on to our Metaverse and Crypto session today! Let’s uncover the major question revolving around the mind of newbies that goes by- “Why the Metaverse matters for Crypto?”
There’s a crucial link between crypto and Metaverse where they two feed on each other making the virtual world of Metaverse functional while creating a real-world utility. Crypto and Metaverse work hand in hand where they are an indispensable part of one another.
Metaverse needs Crypto in its virtual economy while Crypto needs the Metaverse hype to draw in more crypto users. But this isn’t all! Let’s decipher more of Metaverse and Crypto moving ahead and why the Metaverse matters for Crypto!
The Relation Between Metaverse And Crypto
There exist important links between NFTs, Blockchain, Metaverse, and Crypto which must be clearly understood before jumping into the wider VR/AR world. Here in our Metaverse and Crypto session, we have brought the connecting links between the two and how they are indispensable to each other.
Metaverse is a virtual world where technology and reality meet to form a unique combination of 3-D holograms that were possible in our dreams only. With Metaverse coming into the limelight with major companies turning their interest to this digitally-powered world where anything is possible, crypto and crypto-backed technologies are finding a new ground that they initially lacked.
As we all know, cryptocurrency is a digital medium of exchange that has no regulating authority whatsoever. A cryptocurrency is enabled by a stable blockchain which ensures control and verification of digital transactions.
Now! How is Metaverse related to crypto? The answer is quite simple, so let’s dig in!
With a lack of regulating authority, crypto is prone to speculation and volatility resulting in its bad reputation among cautious investors. The uncertain world of crypto always raises eyebrows and we know that countries like India are even planning to ban it altogether.
This tainted reputation of crypto is hindering its take-off to become something more universal and this is where Metaverse comes in. Metaverse has given the validity that Crypto needs. With the idea of Metaverse sweeping the interest of the masses, crypto is gaining momentum too. The reason? Metaverse and Crypto go hand in hand like close buds where the latter is gaining a new-found ground with the increased hype of the former.
Metaverse is a virtual world encompassing all the elements (and even more) of the real world. And what does the world need? MONEY! A world would need an economy and that economy will work on the principles of demand and supply, and here in Metaverse, the demand and supply will revolve around the virtual Metaverse crypto-backed tokens which will validate transactions in the virtual economy.
The virtual economy will need virtual currency and what that currency would be? Metaverse cryptocurrencies, Obviously! Metaverse platforms like Decentraland and The Sandbox have their native Metaverse Cryptocurrencies via which trading takes place.
Thus, giving us the most important answer of why the Metaverse is important for Crypto. Let’s probe further into this question if you have understood what the important link between Metaverse and Cryptocurrencies is.
Why The Metaverse Matters For Crypto?
As previously maintained, the Crypto and Metaverse are indispensable as they work on and with each other. Metaverse has given a much-needed boost to the crypto world and crypto in turn helps in the smooth trading in the Virtual economy of Metaverse. These two live on each other and that’s why Metaverse matters for Crypto and vice-versa.
Transactions in Metaverse are done through Metaverse Crypto tokens which are mostly built on Ethereum blockchain which signifies how Cryptos and Crypto-backed technologies like Blockchains are being benefited from it. Metaverse requires blockchains for multiple purposes like storing data, authenticating transactions and the sort and this need primarily emerges from the need to have a stable virtual economy.
Moreover, as Cryptos aren’t legal tender yet, their use is rather limited. However, with the emergence of a virtual world where transactions will take place in terms of cryptocurrency and where assets will be stored in the form of digital NFTs, crypto has a high chance of becoming a legal tender in Metaverse.
Many Metaverse platforms use their native Meta tokens to trade and this increases the possibility of Crypto becoming a legal tender in Metaverse. (Although this is only a possibility for now)
Another good news associated with Metaverse is for crypto trading exchanges. As Metaverse crypto tokens are bought and sold through crypto exchanges, these exchanges in turn are becoming more popular with the advent of Metaverse.
The crypto exchanges like Coinbase are increasingly used to trade in Metaverse Cryptocurrencies and their stocks are on the record-high at the moment.
These all reasons combined give us an in-depth view of why the Metaverse matters for Crypto.
Why Is Crypto Important For Metaverse?
All major Crypto groups are reiterating the growing importance of Crypto for Metaverse and it is an irrefutable fact at the moment. As major transactions in the Virtual world will take place via Cryptocurrencies, thus making Cryptos highly important for a Metaverse ecosystem.
Moreover, as the virtual economy of Metaverse allows ownership of assets creating multiple NFTs, this provides crucial investment opportunities for investors (and Metaverse obviously needs it).
Although crypto prices keep on fluctuating, nevertheless Metaverse needs a decentralized currency like crypto to operate in its decentralized world while using decentralized applications like Blockchains.
With the possible Metaverse embassies, auction houses, clubs, and other tradable NFTs in mind, Crypto stands to be the most important part of Metaverse.
In the Virtual economy of Metaverse, Crypto stands at the top of the pyramid whereby transactions and other trading activities will be happening through it. With Metaverse providing virtual investment opportunities in the form of NFTs and other digital assets, Crypto is finding the stable ground that it lacked. Thus, giving us the sole most important reason why Metaverse matters for Crypto.
Accordingly, a decentralized virtual world needs a decentralized currency and that’s what Crypto will provide to Metaverse. Thus making crypto essential for Metaverse too. This brings down the conclusion to “Metaverse matters for Crypto just as crypto matters for Metaverse”.