Cryptocurrencies in the virtual world: what's the difference?
Although payments in the virtual world are likely to be significant, they are unlikely to involve traditional cryptocurrencies or people.
It's been a tough week for cryptocurrency enthusiasts, with JP Morgan's announcement that demand for crypto as a payment method is falling off. This comes on the heels of FTX's controversial actions, which have cooled the market considerably. It's looking like it might be a long winter for crypto.
I have to say that I am unconvinced that a mass market demand for cryptocurrency payments was ever there. However, even if there was never a mass market demand for cryptocurrency payments, that does not mean that cryptocurrency cannot have a place in the payments landscape.
The Walmart CTO says that crypto will become an important payment tool across the Metaverse and social media. This is great news for retailers because it means that customers will be able to find and learn about new products in these areas.
There is a lot of debate surrounding the future of Bitcoin and whether or not it will be widely adopted as a form of payment. However, it seems that there is a general consensus amongst those in the know that Bitcoin will indeed be used for payments in the future. It is difficult to say how exactly this will play out, but it is clear that Bitcoin is here to stay and will likely play a big role in the future of payments.
There is no one-size-fits-all answer to this question, as the definition of "crypto" can vary depending on who you ask.
There appears to be a disconnect between what Wall Street and Main Street think about cryptocurrencies. While Main Street appears to be bullish on crypto, with many people investing in Bitcoin and other digital currencies, Wall Street doesn't seem to be as optimistic. This could be due to a variety of factors, but it's clear that there is a divide between the two groups when it comes to crypto.
There is no contradiction between the two views – people will be able to pay each other in the metaverse using tokens exchanged using decentralised finance protocols, but those tokens will be linked to actual assets rather than being cryptocurrencies valued by supply and demand. This will allow people to use a variety of assets to trade and pay for goods and services in the metaverse, without having to rely on a single currency.
I predict that metaverse payments will become a big deal in the future. There will be multiple metaverse ecosystems that are interoperable because of digital identity, credentials, and asset ownership. This could usher in the next e-commerce revolution as it gains traction through advances in technology and becomes more mainstream.
I believe that financial services will play a significant role in the development of new metaverse ecosystems. These ecosystems will be complex virtual worlds where scarce digital objects are traded between entities on the basis of their reputations. Financial services will be essential in order to make these ecosystems function properly.
The metaverse is a new economic area that is growing in popularity and size. Fintech companies need to have a strategy for this new area in order to be successful. The metaverse has the potential to be the next iteration of the internet and could be worth trillions of dollars by 2030.
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In the long run, digital objects will be more than just stablecoins. They will be used for a variety of purposes, from paying for car insurance to buying goods and services in the metaverse. This will create a more efficient and convenient way of doing business, and will ultimately benefit consumers and businesses alike.
I have long thought that in this wholly online world, where digital objects can be continually traded in liquid markets, the need for money as we know it as an intermediary fades. This technology would mean the end of money as we know it because in the future "our assets will be 100% invested at all times”.
Matt is correct that transactions will take place through the movement of digital objects rather than money. This is the era of Dr. Edward de Bono's "IBM Dollar" and it will revolutionize the way we do business.
Dr. de Bono's early 1990s thought experiment on IBM issuing "IBM Gifts" as digital objects redeemable for IBM products and services but also tradable for other companies' monies or assets in a liquid market foresaw the need for what we now call digital tokens. By allowing direct exchange of these objects between counterparties, we would not need to first exchange them into money.
In a world of digital transactions between bots, Jaron Lanier's "economic avatars" could be used to negotiate deals and determine value. This world may seem difficult to imagine, but it is one that is full of possibilities.
If Dr. de Bono and Matt Harris are right about the future of financial transactions, it could mean big changes for fintech strategies. Pre-agreed algorithms would determine which assets are sold, and prices would be set accordingly. This would streamline the entire process and make it more efficient. Right now, fintech companies are focused on improving the speed and accuracy of transactions. But if this vision of the future comes to pass, fintech will need to adapt to a whole new landscape.
It's clear that credit risk and identity are closely linked. Matt's vision of an ecosystem where identity is solved and credit risk becomes easier is one that I believe in. Dr. de Bono's prediction that this would depend on instantaneous verification of creditworthiness is one that I think is spot on. In order for this to work, reputation would be key.
The metaverse economy is based on reputation and cannot exist without a digital identity infrastructure. This infrastructure allows users to establish and maintain their online reputation, which is essential for participating in the metaverse economy.
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There is a lot of activity in the digital identity sector right now because the visions of Wall Street and Main Street are aligned. Both depend on digital identity infrastructure for markets and reputation. This alignment creates opportunities for businesses and individuals to trade with confidence.
The technologies of decentralised identity and verifiable credentials are evolving alongside the technologies of decentralised finance and tokens to create a dynamic (and, frankly, unpredictable) new relationships that regenerate the financial system. In my view, this new landscape presents immense opportunities for those who are able to navigate it effectively. By harnessing the power of decentralised technologies, we can create a financial system that is more inclusive, efficient and resilient.
If the picture is correct, it highlights the key role of wallets in next-generation commerce. This is something that I am genuinely looking forward to hearing more about from readers.
The world of smart wallets is one that is growing more and more every day. With associated intelligent agents to handle the financial work that many of us find either too boring or too confusing, the metaverse is becoming a place where digital objects and transactions are the norm. This trend is only likely to continue as smart wallets become more prevalent and more people come to rely on them for their everyday needs.
The metaverse is going to be a huge place for payments, but it probably won't have much to do with cryptocurrency (or people).
