JPMorgan reports that demand for cryptocurrencies as payment methods is declining on Wall Street (this was before FTX’s intentions last week shifted the climate so that the crypto winter was replaced by the crypto ice age).
Meanwhile, on Main Street, Walmart WMT CTO Suresh Kumar predicts that cryptocurrency will become an important payment method on the metaverse and social media, both of which are of great interest to retailers as these are where customers will discover new products. And they will understand.
It is difficult to differentiate between the real and the virtual.
People who are aware analyze these statements to mean that in the future, no one will pay for bitcoin with BTC, but they will pay with bitcoin. How do these concepts relate?
Well, that depends on your definition of “crypto” (as do many of these stories).
If you believe that crypto refers to cryptocurrencies (such as bitcoin and XRP XRP), then Wall Street and Main Street are making contradictory claims.
If, on the other hand, you believe crypto is intended to be a decentralized method of trading digital assets, then there is no paradox between these views: people are actually in a metaverse exchanging tokens using a decentralized finance protocol. They will be valued based on supply and demand, but they will be tokens tied to real assets such as dollars, gold, Walmart points, or anything else.
The importance of payoff in the metaverse makes this a fascinating topic of discussion. Deutsche Bank researchers predict a future with multiple metaverse ecosystems (with interoperability due to digital identity, credentials, and asset ownership). Due to technological advancements, they claim it could even usher in the next e-commerce revolution as it gains traction and becomes more mainstream.
(They also emphasize that financial services will play a crucial role in these new ecosystems.) I will not write about those metaverse ecosystems if they are merely Fornite with an NFT Gucci hat to wear or Call of Duty where ether can be used to purchase ammunition. To function as virtual worlds, however, the metaverses I envision, such as Deutsche Bank, require all types of financials. Services that facilitate the exchange of terrifying digital goods between entities based on their reputation will be required.)
Whether or not you agree with management consultant McKinsey’s assessment that the metaverse is “too big for companies” (greater than Japan’s GDP), there is no doubt that fintech players will be able to push this new economic sector forward. There will be money in the metaverse, but it will consist of digital objects (stablecoins and other fungible tokens) rather than Dogecoin.
Metacurrency is more revolutionary than you may realize
What would these digital products be, assuming this approach is generally accurate? Clearly, they will evolve into stablecoins shortly. This will be my first time paying for my car insurance in Metaverse with Digital Sterling. However, what about the long run?
In this completely online world, where digital commodities can be traded continuously on liquid markets, there is no longer a need for money as we know it. Keep in mind that Matt Harris, a partner at Bain Capital BCSF Ventures and one of the most influential figures in the fintech investment community, predicted in Forbes that this technology would mean the end of money as we know it because “our assets will be 100% invested at all times.”
Matt believes that the transaction will occur through the exchange of digital goods between counterparties without the use of a financial intermediary, and I concur. The era of “IBM IBM Dollar” by Dr. Edward de Bono has arrived.
IBM could issue “IBM dollars” redeemable for IBM products and services and tradable on a liquid market for the money or other assets of other companies. In other words, tokens would be used to implement digital goods. will not require modification.)
Keep in mind that this is not about transactions between people, but rather, as I describe in my book “Before Babylon, Beyond Bitcoin,” transactions between “economic embodiments,” which Jeroen Lanier transacted between. It is a world of bot transactions in which bots can negotiate the terms of price and fund transactions.
According to Dr. de Bono, “Pre-agreed algorithms would determine which financial assets were sold by the buyer of the good or service based on the value of the transaction … can match, set prices and make settlements”. Dr. De Bono and Matt Harris are both visionaries that I take very seriously. So if they are right about this version of the future, what does this mean for fintech strategies right now?”
Remember how Matt stated, “Once identity is resolved, credit risk becomes easier,” and how Dr. De Bono predicted that such an ecosystem would rely on “immediate verification of counterparties’ credentials,” or, in other words, reputation.
The digital identity infrastructure is required for the metaverse’s prestige economy to function.
The picture is still in progress. Digital commodities provide market-making pressure, and reputation provides the confidence to trade on these markets. Both Wall Street and Main Street rely on a digital identity infrastructure, which explains why there is so much activity in this area at the moment.
Decentralized identity and verifiable credentials are evolving in tandem with decentralized finance and tokenization technologies to produce a dynamic (and, frankly, unpredictable) new relationship that will resuscitate the financial system.
The wallet is essential to the metaverse
If this image is accurate, and I eagerly await feedback from readers, it highlights the significance of wallets in the next generation of commerce.
It makes reference to the world of smart wallets. By this, I mean the wallet to work the financial ass with the pertinent intelligent agents that are either too monotonous (e.g., paying for parking) or too shocking (e.g., paying for car insurance) (eg, deciding what to do). – For the majority of us, cash efficiency entails placing extra funds in a savings account (or one based on UK equity). Inevitably, the metaverse will become a location where the vast majority of transactions occur between intelligent agents using wallets that exchange digital goods.
There will be vast amounts of transactions in the metaverse, but they will have little to do with cryptocurrencies (or people).