Cryptocurrency is a confusing business with a language all its own, in part because it is a genuinely new way of doing business and also because it was created in large part by programmers and cryptographers, who should never be allowed to name anything regular people will use.
Cryptocurrencies have a lot of uses as an investment, as a currency for payments, as a store of value, as well as others. Like any investment, it’s vital to know what you’re talking about and more importantly, what the person trying to sell you something is really saying. And like any other field of finance, industry, art or basically every human endeavor, it has its own lingo, acronyms and definitions — and especially in matters of law and finance, definitions matter.
In this series of articles, we’re going to create a number of glossaries for various parts of the crypto industry, which we’ll combine into a larger reference tool. Today, we’re talking about the hottest, trendiest and most hyper-hyped part of the crypto world: The metaverse.
As imagined, the metaverse is an immersive, virtual reality world that goes far beyond blockchain. Some of the largest — like Roblox and Second Life — have existed for years. Others include Fortnite, a massively multiplayer online (MMO) playing game that is expanding into a full metaverse.
And, of course, the 800 8,000-pound gorilla is Mark Zuckerberg’s Meta, which is pouring about $10 billion a year (and substantially more than that in stock price) into building a metaverse.
Avatar: A virtual representation of yourself in the metaverse, somewhat like characters in massively multiplayer online (MMO) games. These can be very basic build-your-own characters where you choose gender, body shape, hairstyle, skin color, etc. to more outlandish representations (You want to be a purple polka-dotted goat? Good on ya.) Eventually, the goal is for them to be very realistic (or wishfully realistic) virtual representations that allow you to interact and socialize — meaning facial expressions, for example. Some platforms have more realistic avatars than others at this point.
This also is used for referring to NFTs that represent you and presumably represent your personality (to the extent a jaguar-furred Bored Ape Yacht Club chimpanzee can) on Twitter, Instagram and similar sites.
Augmented Reality (AR): This is a digital overlay on reality. Think Pokemon Go, Google Glasses and those smartphone apps that take a picture of an existing field and overlay the house you want to build on it.
Creator Economy: Ways metaverse and other social media sites allow and help people to monetize the art, music or gaming videos they create
Decentraland: One of the two main blockchain-based metaverses.
Deepfake: Not strictly a metaverse concept, a deepfake is a photo or video that has been created artificially but cannot be differentiated from reality by human senses.
Digital goods: More or less any real-world item that can be digitized into an NFT and put into a metaverse for use by others either for fun, marketing or commerce. Common examples are fashion items that can be used to dress an avatar, event tickets that provide some sort of access or are simply collectibles. They can be used only as NFTs in a digital setting or can be usable in the real world — tickets that double as memorabilia.
Digital Twins: A digital version of a real-world item. This can be anything from an NFT of a pair of Nike sneakers to the brick-for-brick virtual version of its New Bond Street, London headquarters auction house Christie’s has built in Decentraland.
GameFi: An amalgamation of “game” and “finance” like decentralized finance is DeFi. GameFi refers to Play to Earn (see below) economics.
Immersive: To the extent made possible by technology, the ability of a metaverse to bring the player fully into its reality. The idea is to use the three-dimensional virtual reality of a metaverse to make players feel they are inside the game rather than sitting in front of a screen.
Land: As metaverses are supposed to be virtual worlds, they are divided up into virtual plots — essentially “real” estate that can be used to build something. Everything in a blockchain metaverse is an NFT, and plots of land are no exception. They are unique based on their location and in theory scarce as metaverses have a limited number. However, it’s been pointed out that, unlike real-world real estate, metaverses are infinite in the sense that more plots of “land” — whole neighborhoods, cities, continents, whatever — can be created. As blockchain-based metaverse are (or are planned to be) DAO controlled
Metaverse: an immersive virtual reality world in which technology like 3D headsets, gloves that translate movement and (in theory/Sci Fi) full body haptic suits allow people to work, play games, socialize, soak up marketing and advertising and generally live a second life. (Which is why the oldest metaverse, launched in 2003, is called Second Life. Other top non-blockchain metaverse-in-developments include MMO game Fortnite, gaming platform Roblox and Meta’s Horizon Worlds.)
They generally allow (or will allow) players to buy plots of “land” on which they can build anything from a billboard or a building to a video game or casino.
Marketers have been swarming, with brands from McDonald’s to Warner Music Group to JPMorgan building outposts in the metaverse.
The word was coined by author Neal Stephenson in his seminal cyberpunk novel “Snow Crash.” In June, Stephenson announced that he’s backing a project to build one in reality, so to speak.
Native Token: Generally speaking, a native token is the cryptocurrency issued by a blockchain or platform. In this context, a native token is the official currency of the metaverse, and generally the only currency for any in-world transaction. (In Decentraland this is MANA, and in The Sandbox it is SAND)
NFT: Broadly, a non-fungible token is a type of cryptocurrency in which every token is unique and is a platform for holding media like art, music, video and documents.
In the metaverse context, NFTs are the building blocks of everything in blockchain metaverses: The land that things are built on, the avatars people use to explore them, and every item in it, from shirts that avatars can be dressed in, to casinos where they can lose them.
Play-to-Earn (Play2Earn, P2E): A type of massively multiplayer online (MMO) game in which players can earn real money, for example by creating something other players need and will pay for. In blockchain-based metaverses these are generally NFTs. Some P2E games let players earn native tokens directly, which can be sold on cryptocurrency exchanges. The concept has a very bad reputation among serious gamers, who often refer to it as play to win.
The Sandbox: One of the two largest blockchain-based metaverses.
Virtual Reality: A computer-generated, immersive three-dimensional virtual world in which technology like 3D headsets, and (at this point) hand controllers, gloves that translate movement to avatars, and (in theory/Sci Fi) full body haptic suits translate movement to allow people to work, play games, socialize, soak up marketing and advertising and generally live a second, virtual life.
AR/VR Headset: A video headset that encloses the user’s eyes to let them more immersively experience a 3D virtual world. While very basic at this point, a number of companies are investing heavily in them, most notably Meta, which makes (in 2022) the top-selling gaming headset, the Quest 2, and is working on a number of far more advanced features.
Web 3.0: A mostly theoretical at this point, a blockchain-based platform for a new decentralized version of the World Wide Web that will be privacy-focused and free from the control of the tech giants that dominate the current web. Metaverses are largely seen as part of Web 3.0, which in some versions is accessed via augmented reality (AR) or virtual reality (VR) headsets.