Big Corpo Bets On The Metaverse

OpenSea and Rarible, two major NFTs marketplaces, might face tougher competition in the future. After all, everybody is getting into the NFT space – Coinbase, FTX, and crypto.com just make up a few of the names that have begun making inroads in the burgeoning space.  

Now, a titan of legacy finance might be looking to make their own move – the New York Stock Exchange (NYSE) submitted a trademark application to the United States Patent and Trademark Office for the use of “NYSE” in blockchain and crypto-related products and services. 

The world’s largest exchange, with a market capitalization of over $27 trillion, alludes to offering a “digital currency and a digital token for use by members of an online community” in the filing, also making mention of “non-fungible tokens of value.” However, it’s hard to tell from this language if the exchange will launch a cryptocurrency or NFT marketplace. In general, it reads more as positioning – because while the NYSE has dabbled in NFTs before,  they haven’t done a whole lot more than that.

NYSE said it isn’t planning to launch cryptocurrency or NFT trading in the near future. However, it said it would “regularly assess new products and how they will impact trademarks and protect intellectual property rights accordingly.”

Incorporating blockchain technology, crypto, or NFTs into traditional financial markets may sound contradictory, but it is happening as it will open the doors for new opportunities. A recent example is the SEC’s approval of BSTX, the first national stock exchange based on blockchain technology.

Metaverse – grift, passing fad, or the future? It’s hard telling… but that won’t stop companies from embracing its early state. Investment bank JPMorgan opened a virtual lounge in blockchain-based Decentraland in an effort to capitalize on the perceived “$1 trillion” market opportunity. In the wake of the news, Decentraland’s native token, $MANA.X, climbed by 4.5% before falling by the end of the day.

The Onyx Lounge is in the Metajuku Mall, a shopping district in Decentraland developed by Republic Realm. Inside the mall,  visitors can find roaming tigers and a digital portrait of Jamie Dimon, the crypto-skeptical, Bitcoin-hating CEO of JPMorgan. Users can trek upstairs to watch an executive’s presentation about the economics of cryptocurrency. Some users described their experience on Twitter as “epic.”

JPMorgan’s purpose in entering the meta world is to show that it can operate in the virtual world as a bank, just as it does in the real world. The company liked the idea of working as a bank to assist with loans, payments, and trading in the virtual world since it has its own currency, land, and community. Since there is a rush of content creators using web3 to monetize their content, JPMorgan plans to support them by lending them money or setting up virtual wallets where they can collect money.

To explain more about its plans, the largest bank in the United States published a paper describing how they explore opportunities in the metaverse.

“The Metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues,” according to the paper.

JPMorgan’s foray into the metaverse by opening its own lounge is just one example of large corporations seeking to leverage the metaverse. It follows mainstream brands including Walmart, Nike, Adidas, and most recently Disney, which has appointed an executive to lead its metaverse push. Disney CEO Bob Chapek believes the meta world is “the next great storytelling frontier.”

After Facebook rebranded as Meta, everybody is now talking about the metaverse.  But what is it?

The metaverse is a new term that refers to mostly digital worlds and games. Many gamers who have played open-world sandbox games like Roblox or Minecraft will likely recognize the metaverse as a rebranding for gaming. However, metaverse has a colorful twist – it generally includes elements of augmented reality, virtual reality tech, real estate, or social features. When you put it like that, it’s easy to see why Meta – which has struggled to stoke growth in its Family of Apps – would want a piece of the “gaming space.” 

However, metaverse precedes Meta – and it even precedes the idea of the blockchain. The term was coined in 1992 when Neal Stephenson wrote about it in his science fiction novel “Snow Crash.” The author imagined different avatars meeting in realistic 3D buildings and other virtual worlds.

Games were arguably the first iteration of the metaverse, but it wasn’t until Ethereum came along that people talked about a metaverse where everybody owns their own assets – generally represented by crypto and NFTs representing in-world assets. 

Metaverse might sound like a buzzy new term to you, and it might prove to be one of the latest thematic flavors of grift in the coming years. After all, nobody really talks about ICOs, the Bitcoin Civil Wars, or “Bitcoin Killers” anymore – right? It’s very possible that the metaverse might just be a passing fad used to juice money out of VC…

But what if it’s not? What if we really do log onto virtual worlds, VR goggles and all, and go shopping with our friends? What if we go to a virtual theater to watch new movies in the future? What if we visit coffee shops, go to class, and go to concerts online? It’s already happening, but the possibility it becomes a global phenomenon is not all that farfetched. 

However, there is great contention over who will own the metaverse – the people or Big Tech companies like Facebook? That’s an important distinction for one core reason:

The metaverse is not only about gaming and expression, but also about capital and money.

The metaverse offers players the opportunity to make money. One example could be play-to-earn video games like Axie Infinity ($AXIE.NFT), where players buy their Axies, or avatars, play the game, and earn $SLP tokens as rewards.   

In real life, your avatar can attend a virtual meeting with your colleagues, go out shopping, and swipe your card for a transaction. These kinds of experiences are already available on platforms like Decentraland and The Sandbox.

The metaverse as it is today is primitive, much as the Internet was in the 70s. However, the metaverse’s close relationship with blockchain only solidifies the point – we might very well be in the early stages of a decades-long, global tech revolution involving digital assets, digital worlds, and economies. Companies know they want a piece of it – grift, passing fad, or the future.  However, the real question is: will ‘normal people’ want to be involved too?

Monero, a privacy-oriented cryptocurrency that obfuscates its blockchain data, is in a consensus crisis. One of the chain’s biggest mining pools, MineXMR, has collected as much as 40% of the blockchain’s hashrate – putting it at risk of a “51% attack.”

In old-fashioned, “Proof-of-Work” blockchains like Bitcoin and Monero, transactions and blocks are confirmed by computing software. These contributions are measured in terms of hash rate, which refers to the total combined computational power being exploited by the network.. The miners, or people providing these computational resources, secure the network in exchange for kickbacks – namely fees and block rewards.

However, Proof-of-Work blockchains have a fickle problem – if anybody collects more than 51% of a blockchain, they could theoretically control what happens on it. That’s kind of scary if you’re talking about billions of dollars worth of wealth being controlled by an unknown player. And another fickle tendency of humans – the desire to collaborate – is at the center of this Monero-themed drama.

On Proof-of-Work blockchains, large collectives of miners often get together to increase their odds of success (and distribute their winnings.) These collectives, called pools, help miners get more consistent rewards. However, in Monero’s case, one particular pool controls 44% of the network’s hashrate. 

A 51% attack would require malevolent actors – perhaps not like the people at MineXMR, but other political players – to abuse their footprint. They could then use it to double-spend transactions, deny transactions, and – ultimately – make Monero unreliable. However, the very idea of this hashrate inequality has angered the Monero community – which has responded in-kind by “distributing the (hashrate) wealth.” 

One Monero user wrote: “We need to talk with MineXMR to take some action right now! Please send an email for support@minexmr.com to MineXMR admins to take action; a 51% pool is not in the best interest of the community or the pool.”

However, the most likely resolution will involve users moving their computational power away from that pool. That way, the entire system can continue to function without risks or concerns.  

Investors avoided $XMR.X, the coin for the Monero network, which fluctuated in recent days on the news.