Editor’s Note: This analysis is brought to you by American Institute for Crypto Investors advisory board member Helena Margarido. Helena is a former lawyer who got hooked on crypto in 2012 after a client suggested she look into Bitcoin (BTC). In the years following, she turned her new crypto “hobby” into a career never looked back. Today, she is a full-time crypto researcher and partner at financial research company Monett in São Paolo, Brazil. You can check out this interview to learn more about Helena’s background and investing philosophy.

The metaverse has been a huge area of interest so far in 2022, as Big Tech corporations, investors, and even everyday folks start to imagine how it will impact the future and become part of our day-to-day lives.

Billions of dollars are already pouring into the development of the metaverse, and experts are projecting enormous profits for early investors who identify its leading players. (Like these two stocks and one crypto that have the potential to deliver 1,000% gains over the next few years.)

Yet only a few people actually understand what it is, what it does, and how our lives will be impacted by it.

The sooner we are aware, the more benefits we will get from it.

So today, we’re going to bring you inside the metaverse in a comprehensive way that allows us to both understand and see the investment opportunities that come with it.

Then, I’ll share a promising crypto that you can invest in today to claim a piece of the metaverse profits…

The Evolution of the Internet

The Internet as we know it has changed dramatically over time. Today, it’s hard to imagine a world where we don’t have immediate access to the Internet at our fingertips. But it wasn’t long ago that we would use the Internet at night so as not to occupy the telephone line and pay less for the connection.

And to understand the metaverse, we need to look back at the history of the Internet, divided into three major phases so far…

Web 1.0

Web 1.0 occurred roughly between 1991 and 2004, with the popularization of personal computers, along with the evolution of high-speed Internet.

The systems available in an online environment were passive and less interactive, like the first e-commerce and chat rooms. The focus was on consumption and not on content generation. The infrastructure responsible for keeping the network active was physical and centralized.

Web 2.0

Over time, the Internet gained new tools that made it more dynamic, starting the 2.0 phase. From the 2000s onwards, what started to increase greatly on the Internet was the sharing of information by users.

At this stage, users were responsible for massively producing their own content in video, text, and photo. This was the era of blogs, YouTube channels, and photo-sharing networks, which increased virtual interaction between people and showed that the Web is here to stay.

In fact, all this evolution has brought many benefits to the world. It is difficult to imagine our life without the Internet today, as in many countries, it has become as natural as having electricity at the outlet.

Even so, Web 2.0 was still flawed in many ways, especially in terms of centralization. We had to provide our personal data to all these companies to be able to enjoy the services they offer. The problem was that, because we often needed them in our daily lives, we provided all our data for free. And when we do not have to pay for a service, the most likely thing is that the product is us…

Web 3.0

Web 3.0, also known as Web3, is the phase we are currently entering. Web 3.0 is already reaching high levels of dissemination and sharing speed and is becoming more organized every day. Companies are gaining competitive intelligence, reaching their users more efficiently – and the formula for this is the delivery of personalized content, especially in video.

There are some fundamental differences between Web 2.0 and 3.0, but the essence is the issue of decentralization – that is, removing intermediaries so that value can be securely transacted directly between the creator and consumer, between a person and another, without any third party.

Web 3.0 is like a new layer being built on top of the current Internet. As I write these lines, it is being built in a decentralized way by diverse blockchain communities and companies around the world.

The main features of Web 3.0 are:

  • Verifiable and trustworthy (public, open source)…
  • Self-governance (community, polls, tokens)…
  • Permissionless…
  • Constant (always online, decentralized, fragmented)…
  • Harder to attack and corrupt (decentralized servers around the world)…
  • And native payment systems (cryptocurrencies, tokens, DeFi).

In Web 3.0, programmers do not create apps that run on a single server, or that store data in a single database (usually hosted and managed by a single centralized provider, such as Amazon AWS, for example).

Instead, Web 3.0’s dApps (decentralized applications) run on blockchains, decentralized networks hosted around the world and validated by the network’s own users. They don’t do it for free (after all, we know there’s no such thing as a free lunch); instead, they earn financial rewards for keeping the Web running and safe.

The Gateways to the Metaverse: DeFi and NFTs

The existence of the metaverse is only possible due to the development of Web 3.0 and blockchain technologies such as DeFi and NFTs.

Decentralized finance (DeFi) is a way of transacting values ​​(currencies or otherwise) through the blockchain. These transactions do not depend on intermediaries such as brokers, exchanges, or banks. Instead, it uses smart contracts on blockchains, the most popular being Ethereum (ETH).

In short, the only tool we need to get into this economy most of the time is a cell phone with Internet access, a digital wallet, and some cryptocurrencies.

NFTs (non-fungible tokens) are unique and public digital items. It is possible to check which wallet owns each of these items directly on the blockchain in a public and transparent way.

NFTs can represent almost anything: from artwork, graphics, clothing, music, videos, images, 3D files, unique items, real-world redeemable items, and more. The possibilities are practically endless!

Think of NFTs like collectible sticker cards. Some of them are rare and worth a lot of money, while others are more common and worth next to nothing. If you take this into the digital world, it’s a way to start understanding NFTs, but they can be much more than that. Also, in the art and collectibles market, the story behind the item is what brings value, not just the object itself.

So, the result for the equation (DeFi + NFTs) x Web 3.0 is something totally new. The result of this account is called the Internet of Value.

Now, for the Metaverse

Now, let’s get into the metaverse and all the incredible opportunities it brings.

The metaverse is an online 3D virtual space concept that connects users in all aspects of their lives.

Imagine waking up, having your breakfast, and entering a virtual environment where there is a meeting room to serve your clients, a branch of your bank to manage your investments, and game rooms for you to have fun. Once you’re done, you can manage your crypto portfolio and your finances, all within the same place. This is the great proposal of the metaverse: everything together, in one place.

Cryptocurrencies are a must-have for metaverses. They allow the creation of a decentralized digital economy with different types of utility tokens and virtual collectibles (NFTs).

In practice, it is possible that, by using blockchain technologies, you can consume goods and services within the metaverse and pay by using DeFi solutions. In addition, digital goods from personalization items for your avatar (clothes, sneakers, accessories, etc.) to artworks can be represented and sold in this virtual environment by using NFT technology.

In addition to support for games and social networks, the metaverse will combine economics, digital identity, decentralized governance, and other functionality. Today, the process of creating and owning valuable items and coins helps to develop a single, unified metaverse – giving blockchain the potential to power this technology in the future.

In the same way that the Internet was slow and unpolished in the beginning, some of these technologies are also in an early stage. Every technology has its adoption curve, and it was only a matter of time before the Internet fit into each of our pockets like it does today.

Prototypes of the metaverse can already be experienced today through a series of dApps on blockchains; many are still in an initial state but are already actively generating savings and moving millions of dollars.

Among these various initiatives, I have identified one that, in my view, is a great opportunity to invest in considering that we are still at the beginning of the adoption curve of these technologies.

Our Top Pick for Investing in the Metaverse

The metaverse that currently catches my attention the most is the Decentraland (MANA) project. (MANA price as of this writing: $2.68.)

It was first launched in 2017 with the aim of becoming a platform where users can create, use, and monetize content and applications. The virtual world is made up of several plots of land that are tokenized in the form of NFTs. Their owners can rent the land to other users to build whatever they want or even sell it.

The virtual world allows the construction of all kinds of structures: game companies like Atari have a virtual arcade and casino; the auction giant Sotheby’s created a gallery in which it displays several NFTs that will be auctioned on the company’s platform; the list goes on and on. In addition, users can create items for avatar customization to be included in minigames and virtual spaces.

The official currency of the virtual world is the MANA token. Through it, game items, the registration of player names, and the sale of land are negotiated. Marketplace fees that are paid in MANA are all taken out of circulation and sent to a burning address.

Decentraland is a project with great potential and has recently been closing significant partnerships, such as J.P. Morgan bank, which has created its own bank branch in this virtual world.

As the metaverse grows through more partnerships and games developed on these platforms, we expect their tokens to appreciate due to their central role in the economies of these virtual worlds. That makes them great investment opportunities for crypto enthusiasts like us.

Just as the adoption of the Internet was exponential over time, we believe that the same will happen with these new technologies. Why? Because Web 3.0, along with the blockchain technologies, has allowed the creation of the Internet as never before. One can be directly compensated according to the value it creates with no intermediaries.

Metaverses are the perfect environment for this to take place. And because blockchain technologies make it possible for them to be economically feasible, they are no doubt going to take over a huge part of our lives – and sooner than you might think.

Decentraland isn’t your only opportunity to invest in the metaverse, so make sure you also remember to check out my colleague Michael Robinson‘s top three metaverse picks right here.

All the best,

Helena Margarido
Advisory Board Member, American Institute for Crypto Investors


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