Virtual currencies for a virtual world
In the evolving landscape of the metaverse, users are crafting digital experiences that mirror their real-world lives. However, this virtual realm lacks traditional forms of currency like cash or coins. The intersection of the metaverse and cryptocurrencies is driven by the necessity for a digital currency to facilitate transactions within these online environments. While Bitcoin has been established as legal tender in nations like El Salvador and the Central African Republic, most central banks and international regulatory bodies do not formally recognize cryptocurrencies. Despite this, interest among investors continues to grow. This rising enthusiasm has led to the emergence of new cryptocurrencies, with the number of digital currencies potentially rivaling that of traditional fiat currencies.
Acquiring virtual currencies
The simplest method to obtain cryptocurrencies is through major digital platforms designed for this purpose. These platforms enable users to buy various cryptocurrencies, although they often impose transaction fees for their services. Once purchased, these digital assets are stored in cryptocurrency wallets, allowing users to utilize them for transactions in both the physical world and the metaverse. Thanks to blockchain technology, all transactions are processed securely and in a decentralized manner. The value of cryptocurrencies can be compared to that of gold; as investor interest in gold increases, so does its value, and a similar trend can be observed with cryptocurrencies, explaining their soaring popularity in recent years.
The most important cryptocurrencies in the metaverse
Cryptocurrencies serve as the financial backbone of the metaverse, essential for acquiring virtual real estate, digital art, apparel, and even experiences. Just as physical properties can appreciate or depreciate, so too can virtual properties within the metaverse. Notably, high-end fashion brands like Balenciaga, Gucci, and Louis Vuitton have already ventured into this digital domain. In this context, both the metaverse and cryptocurrencies operate similarly to traditional currencies in the real world. Although transactions occur in a virtual environment, acquiring virtual currency typically involves exchanges with real currency.
In the metaverse, the value of cryptocurrencies is influenced by user demand within each platform, leading to fluctuations based on trading activity both within and outside this digital space. Some of the most notable cryptocurrencies in the metaverse include:
MANA: This token powers Decentraland, one of the most well-known virtual realms, primarily focused on the real estate market. Users can create, exchange, and sell virtual properties, and even operate businesses on their land. MANA, an Ethereum-based token, has seen its value surge by as much as 400% since its inception.
SAND: Also based on the Ethereum network, SAND’s supply is projected to reach 3 billion tokens. Currently, around 900 million SAND tokens are in circulation, which has contributed to a substantial rise in value from $0.50 to $8 within three months of its launch. Presently, it has stabilized around $1.50, making it one of the most appealing currencies in the virtual ecosystem in 2022.
ATLAS: This currency belongs to Star Atlas, a multiplayer strategy game set in space that utilizes NFT technology. Similar to the classic O-Game from the early 2000s, ATLAS benefits from blockchain’s speed and security. While it may not yield as high returns as SAND or MANA, its lower costs and risks make it an attractive option.
AXS: Serving as the currency for Axie Infinity, which is also built on the Ethereum platform, AXS transactions tend to incur high costs. Players create creatures called axies (which are NFTs) that can be traded, bred, or won from others. The axies can command prices ranging from $150 to $100,000, creating an in-game economy that exceeds a thousand dollars, although AXS has seen a significant decline from $160 to $20 over the past year.
TLM: In Alien Worlds, the currency Trillium (TLM) is integral to competing for resources in an interplanetary setting. Players can only acquire TLM through mining or purchases, giving it intrinsic value within the game.
NFT, metaverse and cryptocurrencies
Another avenue for cryptocurrency transactions in the metaverse is through Non-Fungible Tokens (NFTs). These unique digital assets can hold substantial value. When an artist wishes to showcase their digital artwork in the metaverse, they must convert it into a format suitable for augmented or virtual reality. Artists produce singular, serialized pieces that are linked to a non-fungible token (NFT), purchasable via cryptocurrency. Prominent digital creators today include Beeple, Tyler Hobbs, Manuel Rossner, and Larva Labs, who are making waves in the NFT space.
