The phrase “Metaverse” gets formed from the words “meta,” which means virtual, and “transcendence,” and “verse,” which is a backformation of the word universe. While it sounds like a word straight out of a superhero or sci-fi movie, it is a real and influential aspect of the current cryptocurrency landscape.
As technology advances, the number of people who utilize the Metaverse grows. As activities at the same level as reality continue to progress, gaining more occupants, a vast amount of data gets generated. The metaverse’s data is valuable in and of itself. Moreover, data volume, the relevance of reliability, and the level of security are all expanding in the Metaverse.
In order to ensure the safety and diversity of the content in metaverse gaming, blockchain technology provides a dependable ledger tied to the content in the games. That way, designers and players alike can ensure the dependability of data in Gaming and Metaverse.
This research will tap into the use cases of blockchain in Gaming and Metaverse.
Blockchain Use Cases in Gaming and Metaverse
First, it is crucial to understand that the Metaverse and blockchain are not separate concepts that have evolved in isolation. When used together, they will reach their full potential. Because they all contain various properties and functions that complement one another, merging will make them greater than the sum of their parts.
Some notable blockchain use cases get created by integrating blockchain with the Gaming and Metaverse sector.
Gaming
Within the metaverse, full-fledged games are already being developed. These games will lead to some exciting use cases for the metaverse with the way blockchain can be tied to in-game assets. The Sandbox is a virtual world where anybody can develop their games and landscapes and purchase and trade digital commodities and assets using the Ethereum-based blockchain money $Sand. Notably, Atari and Aardman Animations, the maker of Shaun the Sheep, have already set up shop in the Sandbox.
Crypto gaming is already a big business, encompassing online casino-style games and the more recent gaming concept known as “play-to-earn.”
Currently, the most popular game is Axie Infinity, which has over a million daily active users training and fighting digital creatures in a similar way to Pokemon.
Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018. Nguyen combined his interest in blockchain accountability and the CryptoKitties craze to launch the game in August 2018. Sky Mavis generates the bulk of its revenue via the 4.25% fee it charges on all in-game purchases. This includes land purchases, monster NFT trading, and monster breeding. Axie Infinity requires that all new players purchase three monsters to get started. Since the cost can run into hundreds of dollars, Sky Mavis will lend players the monsters and collect a 30% interest fee once the player starts earning currency.
It varies from Nintendo’s game in that winners are given the cryptocurrency SLP, with the best earning around $250 each day — a substantial sum in the underdeveloped countries where the game is most popular.
The world may anticipate blockchain gaming flourishing in the next several years if metaverse lives up to its hype.
Virtual Currencies
Cryptocurrencies like Bitcoin, Litecoin, and Ether, the Ethereum blockchain’s token, are built on blockchains, decentralized, distributed databases secured by encryption.
The metaverse has the potential to create a virtual world like that of “Ready Player One,” where people may play, work, and socialize with their friends in immersive environments without ever having to leave their homes. And, of course, anyone who knows anything about human nature can predict that one of the most popular activities people will want to do while they are there will be shopping and buying goods.
In this context, people may already use cryptocurrency to purchase virtual real estate parcels within the Decentraland online environment. Aside from property, consumers will purchase digital representations of almost anything they can buy in the actual world. Governments are also getting in on the game, with Barbados recently opening the world’s first metaverse embassy utilizing Decentraland.
On the other hand, buying goods is likely to be just the start of blockchain-based money in the metaverse. Decentralized finance (De-Fi) is a fast-growing field that is well-suited to operate within virtual worlds and surroundings, another reason to expect to see more metaverse-based lending, borrowing, trading, and investing.
Decentralization
It is crucial to keep in mind that, as with all future forecasts, much of this is simply guesswork and speculation; no one knows how the metaverse will work just yet.
However, the future of blockchain remains bright and full of potential. Specifically, blockchain’s ability to enable smart contracts and decentralized autonomous organizations (DAOs) opens the door to alternative digital realities that don’t get controlled by Silicon Valley behemoths. They can be “owned” and regulated by the people who use them through safe voting processes and complex blockchain functionalities like staking.
NFTs
NFTs – which stand for non-fungible tokens and got chosen as Collins Dictionary’s word of the year for 2021 – are expected to play a significant role in the metaverse, according to several forecasts. NFTs are tokens that live on a blockchain and can be used to establish ownership of related digital assets, to put it as simply as possible. They have mostly been used for trading digital art, but they may theoretically get linked to anything, including virtual avatars, game assets, and real estate.
Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.
Accessing sections of the metaverse and showing that someone has the right to regulate who can or cannot visit or use a certain portion of a virtual environment is a key use of NFTs. Moreover, NFTs can get used as a prize in many of the blockchain games that will exist in the metaverse, as an alternative to the other common sort of blockchain-dwelling token – cryptocurrencies – which are fungible and hence, not unique.
In addition, in the metaverse, one of the key functions of NFTs will be to assign value to objects. Because digital data gets made up of solely ones and zeros, it can theoretically get reproduced and distributed indefinitely. Because NFTs may be used to verify that someone is the legitimate owner of a given thing, they provide a framework for attributing value to digital objects.
Conclusion
Various, enormous volumes of secondary and tertiary data get generated in the Metaverse due to the activity of many users. This data has a unique identifying tag and gets utilized as traceable data in the blockchain-based Metaverse.
In the end, individuals are likely to have a mix of both when businesses create and maintain their metaverses in which they set the rules, coexisting with publicly-owned decentralized metaverses. Finally, the world can be quite certain that blockchain will play a critical role in creating the metaverse.
Web3 describes a version of the internet where data will be interconnected in a decentralized way. Web3 is an umbrella that comprises various fields like semantic web, AR/VR, AI at scale, blockchain technologies, and decentralization. The core idea of Web3 moves along the lines of enabling decentralized ownership on the web.
A blockchain protocol is a set of underlying rules that define how a blockchain will work. Based on the underlying rules of the protocol it’s possible to build a business ecosystem. Usually, protocol’s rules comprise everything from how tokens can be issued, how value is created, and how interactions happen on top of the protocol.
In software engineering, a fork consists of a “split” of a project, as developers take the source code to start independently developing on it. Software protocols (the set of rules underlying the software) usually fork as a group decision-making process. All developers have to agree on the new course and direction of the software protocol. A fork can be “soft” when an alteration to the software protocol keeps it backward compatible or “hard” where a divergence of the new chain is permanent. Forks are critical to the development and evolution of Blockchain protocols.
A Merkle tree is a data structure encoding blockchain data more efficiently and securely. The Merkle tree is one of the foundational components of a Blockchain protocol.
The nothing-at-stake problem argues that validators on a blockchain with a financial incentive to mine on each fork are disruptive to consensus. Potentially, this makes the system more vulnerable to attack. This is a key problem that makes possible underlying blockchain protocols, based on core mechanisms like a proof-of-stake consensus, a key consensus system, that together the proof-of-work make up key protocols like Bitcoin and Ethereum.
A 51% Attack is an attack on the blockchain network by an entity or organization. The primary goal of such an attack is the exclusion or modification of blockchain transactions. A 51% attack is carried out by a miner or group of miners endeavoring to control more than half of a network’s mining power, hash rate, or computing power. For this reason, it is sometimes called a majority attack. This can corrupt a blockchain protocol that malicious attackers would take over.
A Proof of Work is a form of consensus algorithm used to achieve agreement across a distributed network. In a Proof of Work, miners compete to complete transactions on the network, by commuting hard mathematical problems (i.e. hashes functions) and as a result they get rewarded in coins.
An Application Binary Interface (ABI) is the interface between two binary program modules that work together. An ABI is a contract between pieces of binary code defining the mechanisms by which functions are invoked and how parameters are passed between the caller and callee. ABIs have become critical in the development of applications leveraging smart contracts, on Blockchain protocols like Ethereum.
A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like the Ethereum’s Casper protocol). Proof of Stake has the advantage of security, reduced risk of centralization, and energy efficiency.
Proof-of-Activity (PoA) is a blockchain consensus algorithm that facilitates genuine transactions and consensus amongst miners. That is a consensus algorithm combining proof-of-work and proof-of-stake. This consensus algorithm is designed to prevent attacks on the underlying Blockchain.
According to Joel Monegro, a former analyst at USV (a venture capital firm) the blockchain implies value creation in its protocols. Where the web has allowed the value to be captured at the applications layer (take Facebook, Twitter, Google, and many others). In a Blockchain Economy, this value might be captured by the protocols at the base of the blockchain (for instance Bitcoin and Ethereum).
A Blockchain Business Model is made of four main components: Value Model (Core Philosophy, Core Value and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
Blockchain companies use sharding to partition databases and increase scalability, allowing them to process more transactions per second. Sharding is a key mechanism underneath the Ethereum Blockchain and one of its critical components. Indeed, sharding enables Blockchain protocols to overcome the Scalability Trilemma (as a Blockchain grows, it stays scalable, secure, and decentralized).
A decentralized autonomous organization (DAO) operates autonomously on blockchain protocol under rules governed by smart contracts. DAO is among the most important innovations that Blockchain has brought to the business world, which can create “super entities” or large entities that do not have a central authority but are instead managed in a decentralized manner.
Smart contracts are protocols designed to facilitate, verify, or enforce digital contracts without the need for a credible third party. These contracts work on an “if/when-then” principle and have some similarities to modern escrow services but without a third party involved in guaranteeing the transaction. Instead, it uses blockchain technology to verify the information and increase trust between the transaction participants.
Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.
Decentralized finance (DeFi) refers to an ecosystem of financial products that do not rely on traditional financial intermediaries such as banks and exchanges. Central to the success of decentralized finance is smart contracts, which are deployed on Ethereum (contracts that two parties can deploy without an intermediary). DeFi also gave rise to dApps (decentralized apps), giving developers the ability to build applications on top of the Ethereum blockchain.
The history of Bitcoin starts before the 2008 White Paper by Satoshi Nakamoto. In 1989 first and 1991, David Chaum created DigiCash, and various cryptographers tried to solve the “double spending” problem. By 1998 Nick Szabo began working on a decentralized digital currency called “bit gold.” By 2008 the Bitcoin White Paper got published. And from there, by 2014, the Blockchain 2.0 (beyond the money use case) sprouted out.
An altcoin is a general term describing any cryptocurrency other than Bitcoin. Indeed, as Bitcoin started to evolve since its inception, back in 2009, many other cryptocurrencies sprouted due to philosophical differences with the Bitcoin protocol but also to cover wider use cases that the Bitcoin protocol could enable.
Ethereum was launched in 2015 with its cryptocurrency, Ether, as an open-source, blockchain-based, decentralized platform software. Smart contracts are enabled, and Distributed Applications (dApps) get built without downtime or third-party disturbance. It also helps developers build and publish applications as it is also a programming language running on a blockchain.
An imaginary flywheel of the development of a crypto ecosystem, and more, in particular, the Ethereum ecosystem. As developers join in and the community strengthens, more use cases are built, which attract more and more users. As users grow exponentially, businesses become interested in the underlying ecosystem, thus investing more in it. These resources are invested back in the protocol to make it more scalable, thus reducing gas fees for developers and users, facilitating the adoption of the whole business platform.
Solana is a blockchain network with a focus on high performance and rapid transactions. To boost speed, it employs a one-of-a-kind approach to transaction sequencing. Users can use SOL, the network’s native cryptocurrency, to cover transaction costs and engage with smart contracts.
In essence, Polkadot is a cryptocurrency project created as an effort to transform and power a decentralized internet, Web 3.0, in the future. Polkadot is a decentralized platform, which makes it interoperable with other blockchains.
Launched in October 2020, Filecoin protocol is based on a “useful work” consensus, where the miners are rewarded as they perform useful work for the network (provide storage and retrieve data). Filecoin (⨎) is an open-source, public cryptocurrency and digital payment system. Built on the InterPlanetary File System.
BAT or Basic Attention Token is a utility token aiming to provide privacy-based web tools for advertisers and users to monetize attention on the web in a decentralized way via Blockchain-based technologies. Therefore, the BAT ecosystem moves around a browser (Brave), a privacy-based search engine (Brave Search), and a utility token (BAT). Users can opt-in to advertising, thus making money based on their attention to ads as they browse the web.
Uniswap is a renowned decentralized crypto exchange created in 2018 and based on the Ethereum blockchain, to provide liquidity to the system. As a cryptocurrency exchange technology that operates on a decentralized basis. The Uniswap protocol inherited its namesake from the business that created it — Uniswap. Through smart contracts, the Uniswap protocol automates transactions between cryptocurrency tokens on the Ethereum blockchain.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
