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Cryptocurrency is relatively new, and it is already challenging the centuries-old world of traditional finance. Metaverse is a new development that thrives thanks to blockchain, crypto, and NFTs. It is not surprising that after the surge in 2017 and the more recent collapse of the cryptocurrency market, both investors and newbies are asking a lot of questions about cryptocurrency and the metaverse.
What Is Cryptocurrency?
Normally, the definition of cryptocurrency is virtual money that exists on a blockchain, but that doesn’t explain much to beginners. Simply put, a crypto coin is a piece of code. Take Bitcoin as an example. Now, there are more than 168,000 lines of code in the Bitcoin repository on GitHub, and it is available for viewing by anybody. This is a piece of BTC code.
The first 50 BTC generated by Satoshi Nakamoto look like this.
Source: themoneymongers.com
Why Is Cryptocurrency Crashing?
Analysts have been forecasting the crypto winter, and it has come. But no analyst, including me, could forecast the several factors that made the crash so sudden and severe. Europe is embroiled in an unpredictable war that threatens its resource supply. Sanctions imposed on Russia have impacted not only Europe but the world. The inflation rate in the USA surged to 8.6% in May 2022, making the largest 12-month increase since December 1981, but even that record was smashed in short order. In June 2022, the inflation rate surged to 9.1%, the largest increase since November 1981, with the prices for food raising to 10.4%.
Source: usinflationcalculator.com
When people are worried about how to buy food and pay for accommodation, crypto would be of little interest. That’s why the crypto prices are falling.
Why Do I Need a Cryptocurrency Wallet?
Many people believe that a cryptocurrency wallet can be compared to a real wallet where you keep your money. I always insist that the comparison is not entirely correct. Crypto coins are always kept on a blockchain as they are a piece of code that forms part of the blockchain. Your wallet keeps the keys that serve as proof of ownership over a specific coin. This key serves to communicate with the blockchain and access the coin. This is an example of a BTC private key.
What Crypto Shall I Invest in?
My choice is Ethereum if we speak about a long-term investment. There are many reasons for that. It is the biggest platform for smart contracts, dApps, and now, it is powering the proof-of-stake consensus mechanism. I always say that you should do your research and choose a coin depending on your strategy. Metaverse tokens could also be a good option if you choose a sustainable project.
Is Crypto Dying?
The things that are happening now in the cryptocurrency market reflect the global situation. Cryptocurrency is not dying but there will be more losses before the market recovers.
Where Can I Get Crypto for Free?
Nowhere. Cryptocurrency is money, and nobody is going to give it out for free. I understand that many resources advertise mining as an opportunity to get coins without investing. Yet consider the expenses needed to buy mining equipment, energy consumption, and time commitment. You will see that the initial investment is not as low as you might expect. Faucets don’t give you any coins for free either. To get crypto there, you have to watch ads, enter captchas, and more. In the end, you spend a lot of time and earn the equivalent of a couple of dollars per day. Adding in expenses for electricity and equipment wear and tear, you can see that getting coins through faucets might be more costly than simply buying the same amount in coins.
What Is Mining?
It is commonly believed that mining is the mere act of creating new coins, but it is much more than that. Mining is verifying transactions, discovering new blocks, and adding these to the blockchain. When a new block is generated, the successful miner is awarded newly minted coins and fees attached to the block. This is how new coins enter circulation, and why many people associate mining exclusively with producing new coins. I would say that a good way to look at it is that new coins are a side product of mining.
Since Facebook has announced the shift to a metaverse, the term has become a buzzword. The metaverse is a concept of an online 3D universe that enables users to perform any actions that they would perform in the real world like working, resting, traveling, buying and selling property, and more.
The technology is not advanced enough yet to implement the metaverse concept to its full extent but some platforms already provide metaverse-like elements. The closest metaverse experience is provided by video games. Developers have already pushed the boundaries of standard games by introducing such metaverse elements as events and creating entire economies, but the best things are yet to come.
Roblox is the most popular metaverse with approx. 200 mln monthly users.
Source: backlinko.com
Roblox for now has created the most metaverse-like experience and provides a perfect example of how it can grow and develop. The platform now hosts over 40 million games or “experiences” as they are called in the Roblox metaverse. The content is user-generated which means there will always be fresh ideas.
You might be wondering why I didn’t mention Decentraland as the biggest metaverse platform. Decentraland had more than 300,000 monthly users and was one of the largest metaverses operating with crypto and NFTs. Now, the number of monthly users has dropped into the hundreds and the game lost the status of a leader among crypto-metaverses.
Source: DappRadar
Axie Infinity has also lost a lot of its users but even still confidently keeps the leadership among crypto-based metaverses.
Source: DappRadar
I believe that the popularity of Axie Infinity is connected not only with the opportunities to earn but also with the introduction of so-called scholarships where players can rent their NFTs for a percentage of the received earnings to those who want to play but don’t have resources.
Can I Earn in P2E?
Yes, definitely. This is what many P2E users are doing, but you should be ready to invest in a game before you start earning. As an option, you can become a scholar and use the resources provided by another player for a percentage earned by you in a game.
Bottom Line
Cryptocurrency has been around for quite a while, and metaverse technology is being developed actively. However, they still suffer from stereotypes and misconceptions. Many people perceive them as something that should not be trusted. I hope that this analysis and breakdown have helped eliminate at least some public doubts and made crypto and blockchain adoption more acceptable to you.
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By: Dan Khomenko
nftnewstoday.com
