- Goldman Sachs said blockchain technology must be at the center of the metaverse.
- It also heralded cryptography as one of the most “disruptive” trends since the early Internet.
- Goldman said blockchain allows users to securely own and transfer assets between virtual worlds.
Goldman Sachs said cryptography will be central to the Metaverse, as it will allow people to securely own digital items across different virtual worlds.
In a note released Tuesday, Wall Street bank analysts led by Rod Hall heralded blockchain technology as “one of the most disruptive technology trends” since the early days of the internet.
Metaverse is a loose term that refers to a virtual world where people can play, work, play, interact, and trade in the form of avatars.
In October, Facebook announced that it would change its name to Meta and focus on building virtual worlds, the future of the internet.
More recently, crypto-focused gaming metaverses such as Axie Infinity and The Sandbox have been attracting users. This allows players to create and trade items in the form of non-fungible tokens, his NFTs, a type of secure crypto collectibles, and to have an in-game economy using cryptocurrencies. Masu.
Goldman analysts said cryptography should be at the heart of metaverse development because it allows users to securely own assets and items and move them between different platforms without requiring permission from a central authority. .
For example, Sandbox runs on the Ethereum crypto network, which allows users to buy and sell in-game land and NFTs on exchanges outside the Metaverse, such as OpenSea.
“We believe that the metaverse is likely to be an amalgamation of different 3D spaces, and that users will move between them on a regular basis,” Goldman said.
“We believe that if virtual goods and services cannot move with users from one space to another, their value is likely to be further limited.”
read more: A crypto CEO who just spent $2.6 million on digital real estate shares his approach to metaverse investing and why a crypto crash doesn't necessarily dampen his enthusiasm for the world
The analysts added: “With respect to the metaverse, we confirm that blockchain is the only technology that can uniquely identify any virtual object independent of a central authority.
“This ability to identify objects and track ownership will be critical to the functioning of the metaverse, whenever it is ultimately realized.”
A blockchain is a digital ledger of transactions that is monitored by all members of the network rather than by a central party. Blockchain technology powers Bitcoin, requiring users called “miners” to solve cryptographic problems, verify transactions, and keep the network secure.
Facebook/Meta has launched an early version of Metaverse, but it's still unclear whether the company believes decentralized blockchain technology will play a major role.
Many crypto enthusiasts fear that the company's financial power and influence on social media could allow it to dominate the Metaverse and tightly control creation and trading.
Critics, on the other hand, are highly skeptical of the whole Metaverse idea, pointing out that previous virtual worlds such as Second Life have been around for years, and virtual reality headsets have never caught on. Masu.
While Goldman's memo was bullish on blockchain in general, the bank said it was too early to develop a clear investment strategy around blockchain.
Analysts said blockchain “will have broader and far-reaching implications for decentralized identity and ownership of both digital and physical entities.”
They said the technology could improve privacy on the Internet and eliminate the need for centralized control in various industries, such as supply chain management.
