Since 2008, the entire world has been witnessing the tremendous disruptive power of decentralization as blockchain-based cryptocurrencies like Bitcoin came to dominate financial news, providing alternatives to government-controlled fiat currencies.
Since then, countless applications of blockchain technology have emerged across virtually all sectors, all taking advantage of blockchain’s ability to store data securely and verifiably in a timestamped, immutable ledger within a decentralized database without the need for a “trusted” central authority.
Decentralized finance, or DeFi, is a system by which financial products become available on a public decentralized blockchain network. DeFi wallets like Metamask and Trust Wallet are open to anyone to use, rather than going through middlemen like banks or brokerages. Unlike a bank or brokerage account, a government-issued ID, Social Security number, or proof of address are not necessary to use a DeFi wallet, increasing its privacy and anonymity.
This revolutionary blockchain technology is helping address the privacy and data protection problems a centralized metaverse would inevitably be plagued with.
In order to realize the true potential of this space there will need to be a transparent and traceable method to 1) conduct transactions, and 2) interact with each other; blockchain and cryptoassets provide a potential answer to this need. The metaverse may, and deservedly so, make headlines, but blockchain and cryptoassets are key components to having this technology reach its full potential.- Sean Stein Smith, Professor, City University of New York – Lehman College
Already, a host of decentralized metaverse projects are taking advantage of blockchain technology to deliver user-owned experiences that are resistant to censorship and interoperable with one another.
Perhaps the most prominent representative of the decentralized metaverse is Decentraland, a fully decentralized world on the Ethereum blockchain, controlled by a Decentralized Autonomous Organization (DAO) made up of individual players who can vote to change the policies that determine how the world behaves. Decentraland has its own cryptocurrency, MANA, and this cryptocurrency can be freely exchanged on cryptocurrency exchanges for other currencies.
Other representatives of the decentralized metaverse include The Sandbox and Somnium Space. Together with Decentraland, these virtual reality universes tokenize in-game assets and land parcels to give players the ultimate control over the world they inhabit and help create—the same control they enjoy over their real-world possessions.
The Sandbox map of land plots owned by individuals, collectives and corporations or brands like CryptoPunks, Snoop Dogg, Atari, Walking Dead, and Smurfs.
These decentralized universes of the metaverse are already seeing a land grab by individuals and corporations alike. Renting plots of land and virtual infrastructure is already underway like an AirBNB for the metaverse where individuals, corporations, artists, and more can rent virtual locations to host events in the metaverse. Digital billboards have already been seen for rent within these unique experiences as shown in the image below.
Digital billboard provided by NFTplazas in Decentraland around Crypto Valley.
Binance owned plot of land in Crypto Valley within Decentraland.
Meet Decentralized Metaverses
Even though the concept of the metaverse has been with us ever since Neal Stephenson released his dystopian cyberpunk novel Snow Crash in 1992, we’re still far away from its realization.
One can review the initial version of the internet (Web 1.0) and tie the overwhelming success to interoperable standards and open technologies that made what we enjoy today possible. Modern collectives like the Blueprints for the Open Metaverse, created by Crucible’s Ryan Gill, are a fantastic example of industry professionals beginning to establish interoperable standards to ensure the metaverse stays open and hopefully decentralized. Web 1.0 established technologies and standards are now taken for granted, such as TCP/IP, URLs, and HTTP, to name a few. Web 2.0 transitioned from a read-only internet to the User Generated Content (UCG) internet we know today with the democratization of content creation to publish various forms of content on the web. Web3 or Web 3.0 will need to have similar standards and protocols established like the initial version of the internet. Once these standards are established, Web 4.0 will be made possible.
At this point, it seems that the metaverse can be built on two different foundations:
one that is centralized and controlled by large corporations such as Meta
one that is decentralized and controlled by the people who will inhabit the metaverse in the future