If you’re a fan of Sci-Fi movies, chances are you’ve seen a few time travel ones as well. You know, movies that show a wacky future with flying cars and teleportation? While flying cars don’t seem to be happening any time soon, especially given today’s petrol prices, teleporting into a different world is set to become a reality, with the Metaverse.
So what is this new buzzword that has inspired the rechristening of good old Facebook?
Simply put, Metaverse is the coming together of the physical and the digital worlds. A shared digital space where your ‘avatars’ can interact for work and play. You can attend office conferences, concerts, and even try on new clothes all without budging from your home. More importantly, it’s possible for you to set up and grow your business in the Metaverse, and carry out transactions exactly as you would in the real world. One big difference? You’d be dealing majorly in crypto.
Metaverse has opened up the possibility of crypto functioning as a bona fide currency.
You know those filthy rich artisté kind who spend millions of dollars on a piece of ‘modern art’? -those things that look like a headless chicken stumbled on paint and then the canvas. It’s the buyer that creates value for that piece of art. We can collectively have an opinion that it's a colossal waster of money, but the only sentiment that matters here is the buyer’s.
Something similar happens with every piece of blockchain tech as well, but with one major switch-a-roo. The value of a cryptocurrency or an NFT is determined by the market as a whole, not by individual sentiments. So if the market deems a dog meme fit to hold value, it becomes one of the highest trading cryptos - courtesy Dogecoin. With Metaverse potentially being the future of tech in the next 20-30 years, this volatile set of assets is out to become the economic foundation of this digital world. But is crypto really the wild wild west of currencies as it is made out to be?
Just like the limitedness of gold gives it value, the capped supply of Bitcoins and other cryptos give them value. Their supply is limited, but there is an unlimited demand for stuff it can buy.
This is the polar opposite of what happens with fiat money (paper money issued by the central bank as legal tender), which steadily decreases in value year on year. This is because more money is pumped into the economy every year, which leads to an inflationary trend in the long run. So, say you can buy - 5 loaves of bread at $10 today. In a few years, the price of the same will increase to $12 or $13
Whereas with, say, Bitcoins - since there can only be 21 million bitcoins ever mined - to accommodate for the increasing demand it would only increase in value. Simply put, if today a loaf of bread costs you 1 Bitcoin, a few years later it would cost you 0.5 Bitcoins to get the same piece of bread.
Essentially, no matter which direction the value of cryptos like Bitcoin goes in the short run, it benefits you. If the prices dip, you could chip in and buy more of this limited asset, and if they go up, you’ve increased the value of your money. Starting to sound better than keeping money in its fiat form?
A more compelling way to understand this is to look at money as a unit of time. Say you have to work 1 hour to earn $10 today. You keep this money in a bank and forget about it. A few years later, because of inflation, its value goes down. Now, you would have to work for longer to earn the same amount of money. Sounds… wrong doesn’t it? Unfair somehow.
Say instead, you’ve invested this $10 in an asset that can only appreciate in value, like a Bitcoin or a Cardano. A few years down the line you don’t have to work those extra hours because you have gotten more from what you had originally saved. Your money now gives you leverage over your time.
Yes, crypto is volatile - but that is only a bad thing if it is working against you. Bitcoin has been the highest performing asset of the last 10 years. And if historical data is anything to go by, chances are the volatility is going to work in your favour, especially with a catalyst like the Metaverse on the rise.
Plus, you get to decide what you want to invest in, how much you want to invest, and when you want to take your money out. A freedom that is lacking in the current banking system where it’s often unclear who owns your money. You or your banks?
From a value creation standpoint - almost every asset’s digital version is better than its physical version. Take gold and silver NFTs for instance, or even Uber or Airbnb. What we are seeing with the rise of cryptos right now - is currency surfing the digital wave. The basic idea of a Metaverse is to have a platform that is accessible for everyone to join in on and interact with. This is the same basic idea behind crypto, having a decentralised form of finance that anyone can access from anywhere. In a way, they are both piggybacking each other to change the future of human interaction and finance.
Since we started with movies, let’s end with a quote from another Sci-Fi/Drama - ‘We accept the realities of the world with which we are presented’. Fiat currency is that reality for us, for people before us it was silver coins, and before that, it was exchanging cows for wool. Metaverse brings with it a new economic system for us to be a part of - that would make crypto as commonplace as the Fiat currency. The best part? You get in on this new wave at the very beginning. This is similar to what happened when this bizarre thing called the ‘internet’ became decentralised around 20-25 years ago. But because this concept was so alien and outlandish, not a lot of people envisioned a future where they’d be enveloped by the internet. Consequently, not a lot of people bet on its future. With Metaverse it is a little different - because we have already seen tech changing our lives in such big ways, this seems probable now with every new wave of tech. This utopian virtual world seems a lot more digestible than the idea of the internet was around 25 years ago. Courtesy of these historical trends - it makes sense now to ride these waves to your advantage and to invest in the right places. And who knows, at least in the Metaverse, you might just be able to exchange your crypto for flying cars.