The metaverse is the latest exciting trend in the world of crypto and it is one that major companies like Facebook are betting big on. In this article we’ll give you the tools to answer questions such as should I invest in metaverse and where can I buy metaverse crypto with blockchain security.
New technology can be daunting and challenge us to reconsider much of what we consider normal but we hope this article will help you to navigate this exciting and mysterious world of the metaverse. Let’s jump into the metaverse!
What is the metaverse?
The metaverse is an umbrella term for interconnected digital worlds that people can explore using their computers, tablets or VR. You can move between these virtual worlds by using an avatar, some form of digital representation, of yourself and you can also interact with other avatars sometimes using digital currency. The idea behind the metaverse is that as the world becomes more digitally connected, especially in a post-covid world in which remote work is becoming more common, much of our interactions are moving online. The metaverse can facilitate much more expansive interactions and provide an online playground where your imagination is the only limit. There is a massive transferral of value to the online space, the way in which we currently interface with each other in this virtual world is very static and boring, but with the metaverse we can take our online lives to the next level.
The metaverse describes a virtual world of infinite possibilities where meetings can take place in a virtual conference room and everyone is represented by lifelike avatars, where you can make realistic hand gestures and truly feel like you are in the room with your colleagues. What’s more is the expectation that entertainment will move to the metaverse. You will be able to watch movies live with a friend in the metaverse, or see your favorite band live, perhaps watch a play or get lost in metaverse gaming or exploring fantastical worlds. Education can become much more immersive through the metaverse where is history lesson can take you right into historical moments as if stepping into a time machine or you can be taught mathematics by none other than Einstein himself.
These are just some of the ideas that are floating around in the space and this is just the beginning, we have no clue how far this technology can take us. Now that we have a better idea what is the metaverse, let us consider why big companies are investing in the metaverse.
Why people are betting big on metaverse
Since the announcement that Facebook would change its name to Meta, metaverse cryptocurrencies have skyrocketed in value. Currently, the two biggest names in the metaverse crypto space are Decentraland and Sandbox. Both are virtual worlds in which plots of land can be purchased. On these plots of land you can create any business that you want. Some people create virtual art galleries to showcase their NFTs, others create real virtual stores comparable to Amazon where you can buy real products, then there are companies who buy plots of land to create virtual entertainment environments such as a space to play games or enjoy live music. In order to participate in these worlds all you need is a computer that runs Chrome or Firefox and a metamask hot wallet crypto extension. If you want to just browse around the worlds it is generally free, but as soon as you want to interact with games or purchase virtual goods you need to activate your metamask wallet and pay using SAND or MANA, the respective native currencies of Sandbox and Decentraland which make use of blockchain security measures.
Investing in metaverse makes a lot of sense when you realize that gamers are used to spending lots of money with cryptocurrency smart-cards to either improve the appearance of their character or to get advantages that make the game more fun or easier. This functionality can easily be implemented into the metaverse as players simply need to connect their crypto browser wallets or cryptocurrency smart-card in order to make a purchase and pay using the native currency of the relevant metaverse. Facebook seized the opportunity to associate themselves with the new movement by changing the name of their umbrella company to Meta. They realized that if the metaverse becomes the space in which people spend most of their time throughout the day then that is where all the ad revenue will immigrate, which jeopardizes their current revenue model. Instead Meta has decided to front run and innovate in the burgeoning space.
How to invest in the metaverse
Similar to NFTs, investors can choose to invest in the native tokens of specific metaverses or in the underlying infrastructure or blockchain which the metaverse is built upon. We outline some of the biggest names in the metaverse discourse.
Investing in metaverse tokens
Investing in metaverse can be done in various ways. There are two primary methods that we will discuss in this section. The first and most obvious way to invest in the metaverse is by purchasing the digital currency native tokens of a metaverse platform, for example you can buy MANA to invest in Decentraland or SAND to invest in Sandbox. These tokens are fungible and comparable to other popular cryptocurrencies like ETH or BTC. The tokens have utility within the metaverse ecosystems and economies in which they reside and demand for the tokens are generated by users who wish to use the platform. The more people that are using the metaverse for interactions and entertainment the more the value will accrue to these virtual space and the more valuable and relatively scarce these tokens can become. Similar to cryptocurrencies these tokens can be saved and taken out of circulation, essentially hoarded by investors who expect the price to go up.
The flip side of this demand equation is that everyone who earns SAND or MANA private key crypto in these economies will likely put the token under selling pressure as they sell their tokens in exchange for dollars to pay their taxes, rent and for food. This constant selling pressure makes investing in metaverse earlier a better strategy. As new users enter the space the economies and token price should theoretically increase, but as these economies reach peak saturation and the equilibrium price is established, it is unclear where price appreciation will derive from, no matter the case, be sure to make use of a insurable custody solution when the time comes. The question remains, which platforms will attract the most users, will it be decentralized solutions like Sandbox or Decentraland, perhaps a newcomer that is as yet unknown to the public, or, the centralized behemoth that is Meta?
Buy virtual land
The second way how to invest in metaverse is by buying plots of land in the virtual worlds. Both Decentraland and Sandbox have a set number of land plots that users can purchase and develope if they so choose. Notable companies such as Atari and Samsung have bought plots of land in Decentraland while Adidas bought a plot in Sandbox. These companies are primarily interested in using their land to display branded content and to boost brand recognition. Their brands are visible from the map of the metaverse that everyone can see who navigates the virtual world, essentially a form of advertising. Consequently, the parcels of land surrounding those owned by major brands have skyrocketed in value.
Retail investors investing in metaverse by buying virtual real estate are hoping that the scarcity of the plots will see major brands or similarly minded investors competing to one day purchase the plot of land that they own. This is certainly the most risky version of investing in the metaverse as you are betting not only that the specific metaverse in which you have purchased land will be successful and onboard millions of users, but you are furthermore betting that someone will value the specific plot of land which you purchased at a higher price than you purchased it for. How does one appreciate the value of digital property? This is an entirely new dimension of investing with private key crypto and should be examined with extreme caution before putting your money down.
Can decentralized metaverses compete with META?
Is it possible for these decentralized crypto-driven metaverses to compete with the corporate behemoth that is Meta? We believe so. Perhaps not the current front-runners Decentraland and Sandbox, but crypto-driven, decentralized metaverses will surely have a role to play in the future. Investing in metaverse and being able to own a part of the world may perhaps not even be a viable feature of Meta. It is very likely that the business models of centralized vs. decentralized metaverses will differ greatly, as Meta might offer more experiences for ‘free’ meanwhile they sell your personal data and litter your experience with advertising to generate a profit.
In decentralized metaverses there may be more microtransactions to participate in the metaverse however it could be a more participatory economy where anyone can create experiences and generate revenue, own land, etc. This vision of the future is informed by the current realities of the Facebook business model and philosophical underpinnings of free market, decentralized cryptocurrencies. Though this extrapolation seems logical, we will have to wait and see if that is how these systems unfold. We believe centralized platforms will have unique elements that will make them competitive against centralized platforms such as Meta.
Are metaverse cryptos a risky investment?
The entire crypto market is highly volatile and considered high risk assets. Investing in metaverse tokens or investing in metaverse real estate is no different and does not shield you from this risk. In fact, metaverse cryptocurrencies are arguably even more risky as it is a bet on a specific virtual ecosystem or world that may not find traction in the future.
If you wish to limit your risk profile while still getting some exposure to investing in metaverse then you can always buy metaverse related cryptocurrencies through crypto trading. Indeed, almost every major smart contract cryptocurrency platform has developers building some form of a metaverse. Thus, instead of investing in metaverse by buying the token of a specific metaverse or purchasing land in a metaverse you can invest in the underlying infrastructure. You can buy Cardano or buy Solana, then there is Ethereum, Avalanche, Polygon, Binance and myriad other smart contract platforms to choose from. Buying these tokens are like buying an exchange traded fund of metaverses, DeFi, crypto gaming and buying NFTs that live on these platforms. This greatly reduces risk, but please note that these smart contract investments are also highly volatile in terms of price movement and therefore are still in the high risk category although less so than investing in metaverse directly.
We hope you have enjoyed our guide on investing in metaverse projects. This space is full of exciting innovations and we can only guess what the future holds. The battle between decentralized platforms and centralized giants like Meta is one we will be tracking closely. Keep an eye on our technology page for the latest updates regarding the inclusion of metaverse assets.
If you enjoyed this content and would like to learn more about what is the metaverse and other crypto related topics be sure to check out more of Vaultavo’s guides and reviews. There is much to learn in this blossoming industry!
Metaverse Trading FAQs
What is the metaverse?
As the metaverse grows in popularity more people are looking into the topic and trying to find the answer to this question. What makes the metaverse such an interesting topic is that it is a new and growing space that is still in the process of realizing its purpose and potential and therefore is constantly evolving its very definition. Read our Vaultavo articles on metaverses for an in depth look at metaverses, what you can do in them and how to invest in them.
Where can I invest in Metaverses?
There are different ways for investing in the metaverse. Our Vaultavo metaverse guide takes you on a detailed trip through the processes you will need to start investing in metaverse and the various risks you should be aware of before investing.
Should I invest in Metaverse or NFTs?
This really depends on your personal preference, risk profile and investment strategy. It might be a good idea to have exposure to both asset classes, metaverse and NFTs. But it is important to note that both these investments are very risky and should not make out a large part of your portfolio.