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How the average investor take advantage of this massive opportunity
One of the big buzzwords being thrown around these days is ‘Metaverse’. You hear it on the news, you read about it on social media… you may have even heard about it from Mark Zuckerberg. But what exactly is it?
The term is admittedly a bit vague and will continue to be defined as time goes on. However, the best definition thus far is: The Metaverse is a virtual reality space in which users can interact with a computer-generated environment and other users. Think of it as being in a video-game/cyberspace type of world where you can work, play, and even conduct business.
The Metaverse includes gaming, particularly Decentraland, where parcels of digital land are being sold for millions. Imagine owning 5th Ave but in a digital world. The Metaverse includes entertainment, such as going to concerts, where you attend as your online avatar, anywhere in the world. And it has the potential to disrupt many different industries. Projects being worked on in the Metaverse are on the cutting edge of where tech is going; widely referred to as part of Web3–the next iteration of the internet.
It’s important to notate: we’re still in the very early days of this space and it’s important to do your research. There are going to be a lot of projects that ultimately fail and some projects that are flat-out scams. However, in my opinion, as mentioned before, this space is sitting on the cutting edge of tech and there is a significant opportunity. According to Grayscale, a leading crypto investment platform, the Metaverse may represent an over $1 trillion annual revenue market opportunity. Let’s explore this opportunity.
There are 2 main ways to invest: directly and indirectly. Directly meaning NFTs, Metaverse tokens, and indirectly meaning the infrastructure and companies who are investing in the space.
The platform making the most headlines is Decentraland which is a decentralized 3D virtual reality world. In this world, you can buy virtual real estate as if you were buying a house or apartment building. Some of these plots of land are going for a large amount of money, upwards of millions of dollars. One of the most direct ways to invest, if you have the funds to do so, is to buy a plot of land. You would then be the certified owner of the land on the Ethereum blockchain. A similar platform as an alternative to Decentraland is Sandbox. I encourage you to explore both of them which you can do for free or by watching Youtube videos.
If you do not have the funds to plop down on a plot of land, you can buy the cryptocurrencies that are used in the games. For Decentraland the cryptocurrency which is used in transactions is called MANA and for Sandbox it is SAND. You can currently buy them on popular exchanges Coinbase and Gemini; as a disclosure, I did this myself. If you research them, you’ll see they increased over 1000% given their recent popularity. A big advantage of buying the tokens is that it is more affordable (you can buy $10 worth just to get started) and they are more liquid meaning it is easier to buy/sell.
The next way to directly invest is by buying and/or creating your own NFTs. As described in a past article an NFT is a Non-fungible token that is a unique digital asset. For example, a Minecraft skin. You can create an online skin and mint it on the Ethereum blockchain, you would then be the verifiable owner of that asset. You then have the freedom to bring that asset around with you as you move from one platform to the next, it would not be constrained to just one world like we’re used to with most video games. If your NFT became popular enough you would be able to sell NFTs to other users, similar to Cryptopunks or Boredapes.
If the above methods seem a little too wonky or you’re not knowledgeable enough yet, another way to invest is in the infrastructure and companies that are taking an interest in the Metaverse. The biggest companies are Meta (formerly known as Facebook) and Nvidia. Mark Zuckerberg recently changed the name for a reason, he plans on spearheading the Metaverse and sees it as the social media of the future where we will interact, play and even conduct business. Nvidia is a technology company that designs graphics processing units (GPUs) and chip units. This will help build out the tech infrastructure for the Metaverse to grow and scale as more users adopt it. These stocks can be traded on many exchanges like any other stock and can be a safer, easier way for most people to get started.
All-in-all, the Metaverse is a transition from the real world to the online virtual world where people will spend more of their time working, playing, and interacting with others. The Covid pandemic has only accelerated this trend as we spend more of our time indoors. As with any new tech innovations, like the internet in the 1990s, there will be a lot of projects that come and go, but if you do your research and invest for the long term, there can be many opportunities as well.