The idea of the metaverse has been building momentum for years, but Facebook's decision to rebrand as Meta Platforms (META -1.22%) has catapulted the tech concept into mainstream consciousness. Seemingly every media outlet around is talking about the metaverse and how it could change our lives forever.
But the metaverse -- this idea of a digital world that embodies the internet itself, accessible via a virtual reality headset -- extends far beyond video games and shared experiences via the web. Meta Platforms also has cryptocurrency plans in the works, as further entrenchment of the digital world in everyday life will also rewrite the script on what it means to purchase and own something.
Image source: Getty Images.
Facebook rebrands, just like it rebranded its crypto project
Facebook's name change to Meta Platforms is just the latest signal that the company has aspirations that go much further than operating a massive social media empire with billions of users. For a couple of years now, the company has been working on its own blockchain and cryptocurrency, first known as Libra but later renamed Diem after government regulator scrutiny. Diem remains in holdup as it has yet to receive clearance in the U.S. as a digital payments platform.
What does this have to do with Meta Platforms? Cryptocurrency and the metaverse are more correlated to each other than many realize. The term metaverse dates back to the 1992 sci-fi book Snow Crash by Neal Stephenson. And as the internet has grown, a currency built for the exchange of digital assets was the original idea behind Bitcoin (BTC 1.97%). Bitcoin's rise has spawned thousands of other "altcoins" and blockchain networks, many of which try to solve various pain points in the digital economy.
Blockchain developers latched on to the idea of the metaverse early on. As daily use of digital tools and entertainment increases, so will ownership of digital assets over time.
But how do you guarantee the rights to a virtual item -- like a piece of art, work of music, or a video game item? Even more thought-provoking, how about digital versions of personal items such as clothes and accessories? That's where blockchain technology comes in.
An early use for NFTs based on a blockchain has been digital art, but it could become the very fabric of the metaverse itself that guarantees the virtual stuff you own in your digital-alt life isn't stolen.
This is all pretty radical thinking, but the idea was roughly approximated and visualized by Stephen Spielberg's movie adaptation of the novel Ready Player One by Ernest Cline. And that's why Facebook's metaverse focus and Diem cryptocurrency are so important. Simultaneous with its construction of a shared virtual world where people can hang out, interact, and do business, the company is also building a financial framework from which users can purchase and store their digital items as well.
The metaverse could seal the deal for decentralized digital currency
To be sure, it's still early days for the metaverse and cryptocurrencies. In fact, on the Q3 2021 earnings call, newly christened Meta Platforms CEO Mark Zuckerberg said actual financial results won't be meaningful for the metaverse (and, likely for the related crypto project) until much later this decade.
But experimentation with this project is already underway. While Diem (and its bank partner Silvergate Capital (SI)) waits in the wings, Meta Platforms recently launched a crypto wallet project called Novi (which, surprise, was also rebranded and formerly known as Calibra).
The digital wallet pilot program will use the stablecoin Paxos (PAX -0.12%) and partners with Coinbase Global (COIN 5.77%) to enable a small batch of users in the U.S. and Guatemala make peer-to-peer cross-border money transfers (known as remittances). The remittance industry handles hundreds of billions of dollars per year and is highly profitable, and Novi hopes to speed up the process of moving money between family members along with cost savings. For now, Novi will be free to use.
Basically, we are in the early experimentation phase for cryptos and the metaverse, Novi being just one such experimentation by the company formerly known as Facebook. But if Meta Platforms pulls off its aspirations, it could have one of the most robust computing platforms encompassing video games and apps, a payments and asset security system, and all the supporting infrastructure behind it by the end of the 2020s. A patchwork of other interoperable blockchains (like Ethereum), apps (like those built by the likes of Unity Software), and infrastructure (like semiconductors designed by NVIDIA) based on truly decentralized principles could be the main rivals to Meta Platforms.
In other words, Meta Platforms and its billions of monthly social media users all but seal the deal: digital currencies and assets are sticking around for good. Now begins the race to build the best metaverse with a supporting digital asset experience.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Nicholas Rossolillo owns shares of Bitcoin, Ethereum, Meta Platforms, Inc., Nvidia, and Unity Software Inc. His clients may own shares of the companies or cryptocurrencies mentioned. The Motley Fool owns shares of and recommends Bitcoin, Ethereum, Meta Platforms, Inc., Nvidia, and Unity Software Inc. The Motley Fool has a disclosure policy.
FAQs
Facebook recently rebranded to Meta Platforms to signal its new focus on building the metaverse. Meta Platforms also has cryptocurrency projects underway, like Diem and the recently launched Novi wallet pilot program. The metaverse (or metaverses) could increase the need for digital native currencies like cryptos.
Is metaverse crypto a good investment? ›
Looking Ahead: The metaverse is an exciting area with lots of opportunities for investors. Each coin offers a chance to be part of different parts of the digital world. But, it's important to be careful, do your homework, and think about the long term when investing.
What metaverse means in crypto? ›
Crypto metaverses are immersive virtual worlds with immense social and financial potential. Their use of blockchain infrastructure enables them to tap into the wider crypto economy, making virtual items exchangeable for real economic value beyond the confines of the metaverse.
What cryptocurrency is backed by metaverse? ›
Metaverse coins function as a form of digital asset within the broader category of virtual online worlds collectively referred to as the metaverse. ' Numerous metaverse crypto coin projects exist, each featuring a unique crypto token that acts as the medium of exchange within its respective virtual environment.
How much has Facebook spent on metaverse? ›
Meta Platforms Has Spent $46 Billion on the Metaverse Since 2021, But It's Spending Twice As Much on This 1 Thing. Meta Platforms (NASDAQ: META) has invested a huge sum of cash into developing its virtual and augmented reality technology and the software and social platforms to support its hardware.
What are the top 5 crypto metaverse? ›
The top 5 Metaverse crypto coins and tokens are often determined by their utility, adoption, and technological innovation. These assets, such as Decentraland (MANA), Sandbox (SAND), Axie Infinity (AXS), Enjin Coin (ENJ), and The Graph (GRT), are at the forefront of shaping the Metaverse ecosystem.
What crypto is best for metaverse? ›
Top Metaverse Crypto List
- Ethereum (ETH) – Smart contract platform, $275 billion market cap.
- Decentraland (MANA) – Build land NFTs with this metaverse crypto.
- The Sandbox (SAND) – Metaverse crypto used by Snoop Dogg and other celebs.
- ApeCoin (APE) – New metaverse coin has a market cap of more than $825 million.
Concerns about the company's size, dominance, handling of user data, and commercial interests could all contribute to the failure of the Metaverse.
How does metaverse affect crypto? ›
As virtual worlds expand and become more immersive, they offer new opportunities and challenges for crypto projects. One key impact of the metaverse on the crypto industry is the potential for virtual economies. In these digital realms, users can buy, sell, and trade virtual assets using cryptocurrencies.
Which crypto to buy today for long term? ›
Top 10 Cryptos in 2024
| Coin | Market Capitalization | Current Price |
|---|
| Bitcoin (BTC) | $1.30 Trillion | $66.221 |
| Ethereum (ETH) | $390 Billion | $3,254 |
| Binance Coin (BNB) | $86.3 Billion | $577 |
| Solana (SOL) | $69 Billion | $154.53 |
6 more rowsApr 15, 2024
Despite these headwinds, many industry insiders believe the metaverse is not dead -- it's just rebranding itself atop a slower-growing but more solid foundation.
What is the number one coin in the world? ›
1. Bitcoin (BTC) Created in 2009 by Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers.
What is the difference between metaverse and cryptocurrency? ›
In the metaverse, NFTs can be used to track digital property rights and cryptocurrency is used to fund platforms and reward users.
Is Facebook losing money on metaverse? ›
Mark Zuckerberg's bet on the metaverse continues to be a money-bleeding endeavor, with the unit reporting billions of dollars in losses every quarter. In 2021, Zuckerberg changed the name of his company from Facebook to Meta to reflect his vision for the future of computing.
How much money did Mark Zuckerberg lose in the metaverse? ›
Mark Zuckerberg's $46.5 billion loss on the metaverse is so huge it would be a Fortune 100 company—but his net worth is up even more than that. Meta CEO Mark Zuckerberg demos a virtual reality headset at an industry event in 2016. Remember the metaverse?
How much money has Facebook lost since metaverse? ›
Meta's Reality Labs division, which houses the hardware and software for developing the metaverse, has posted cumulative losses of $45 billion since 2020, when the company first separated the unit in its financials.
Will metaverse crypto go up? ›
Recently, Metaverse tokens have made huge noise in the crypto markets. The token had gained huge attention in the past, which faded during the 2022 bear market. However, with the resurgence of strength among the majority of the tokens, the possibility of a fresh upswing emerges.
Should I invest in metaverse stock? ›
Invest wisely in metaverse stocks to buy on the dip, focusing on NVIDIA's GPUs, Unity's platforms, and Roblox's user growth. Nvidia (NVDA): NVDA's advanced GPU and CloudXR technologies position it as a crucial player in the metaverse, with analysts projecting a 26% price target upside.
What are the risks of investing in metaverse? ›
Risks to consider include liability, data security and privacy issues. In the Protiviti survey, 42% of business executives polled said privacy and security risks were the primary roadblocks to implementing their metaverse strategy.
Why should I invest in metaverse? ›
There's good reason to invest in the metaverse. Third-party research groups such as Prophecy Market Insights, Grandview Research, Bloomberg Intelligence, and others predict that the metaverse could be worth $800 billion or more by 2030, making it one of this decade's great secular growth trends.
