Blockchain-Based Tech Will Supply the Metaverse With its own Economy

According to Jensen Huang, Chief Executive Officer of hardware giant Nvidia, emerging blockchain technologies such as decentralized finance (DeFi) and non-fungible tokens (NFT) will play a major part in the virtual worlds of the future. Huang specifically refers to the metaverse, the next generation of the internet, which will be enabled by augmented and virtual reality.

Virtual worlds have always required a virtual economy to support their operations, and this is where blockchain technologies come in.

The blockchain promises to make it possible to provide economic support for virtual environments, and, crucially, the blockchain will allow the creation of more reliable virtual economies. Huang explained that, with cryptocurrencies like Bitcoin being used for commercial projects, a virtual economy will provide the financial structure which will enable the commercialization of virtual worlds.

Huang added that huge amount of economic activity will take place with virtual currencies like Bitcoin and Ethereum. These tokens will then be openly traded within virtual worlds, and the virtual currencies will be backed by the financial institutions that have established them as legitimate assets. As can be expected, these institutions will rely on distributed ledgers to manage their accounting, but everything will unfold within decentralized platforms.

The blockchain provides a unique way for the virtual economy to transact without the need for any centralized payment channels. While blockchain technology will always change, Huang explained that it will take time for the development of virtual economies.

What We Learned From the Past Week

We have seen the promise of blockchain technology, and some of its innovative use cases. The use of it in finance is an excellent example.

Joseph Rowntree, a partner at the accounting firm Baring Securities, recently spoke about how blockchain may transform accounting in the future. His solution is to create a system which enables the creation and storage of audited financial records, based on virtual currencies. This will enable audit experts to manage these audited financial records for both clients and employees in a controlled environment.

Blockchain technology allows for the efficient circulation of digital assets, and we are talking about more than just currency tokens. We can't forget about the promise that NFTs currently hold in this regard.