The metaverse (if developers are smart) won’t necessarily be tied to one cryptocurrency (still a misnomer) or any currency for that matter. Sure, let’s say you want to buy something in the metaverse, you will need some means to do that; however, chances are you’ll need to convert into crypto or tokens or just be able to pay via a credit card like every other online platform. It seems like the plethora of experts from YouTubers to financial managers believe that the metaverse and crypto were made for you each other. To me it reeks of the worst kind of hype and sizzle sales pitch.
One thing is for sure, digital money will be used in the metaverse and if sovereign governments of the world outlaw it (which they should do) cryptocurrency should live on in the metaverse. That said, I’m not a fan of either of these ideas. Digital money is just another unnecessary complexity and the metaverse is just another way to escape reality, similar to drug use, which according to Carl Hart is perfectly fine. I don’t agree; however, I’m also not in the camp that society should criminalize this behavior either.
That’s what I think about crypto currency as well. Don’t ban them, just let them trade. The market capitalization of all the coins (again, misnomer) is now approaching $3 trillion, which means it could be too big to fail. Of course, that doesn’t mean a damn thing. How market caps work is not how retail works. You buy an NFT for 1 ETH, then you just paid $4,500. That NFT was valued at $4,500 for that brief period. However, for the whole of Ethereum to be valued at $532 billion only requires the latest buyers to purchase the token at the current or higher valuations. That’s the problem. It works the same way on the downside. It takes very little to collapse the price, see Squid Game Token for a case study.
The metaverse economy is expected to rival today’s real economy in total value and truthfully, that’s scary. Of course, predictions predictions predictions abound and a phrase that sticks with me as a former stockbroker “predictions are like assholes…” you know the rest.