Goldman Sachs has said that blockchain technology needs to be at the heart of the metaverse.
He also heralded crypto technology as one of the most “disruptive” trends since the early Internet.
Goldman said blockchain enables users to own assets securely and move them across virtual worlds.
Goldman Sachs said encryption technology will be at the heart of the metaverse as it will enable people to safely own digital items in various virtual worlds.
Wall Street banking analysts, led by Rod Hall, announced blockchain technology as “one of the most disruptive technology trends” since the dawn of the Internet in a statement released Tuesday.
The metaverse is a vague term that refers to virtual worlds in which people in the form of avatars can play, work, play, socialize and trade.
In October, Facebook announced that it would change its name to Meta and focus on building virtual worlds that represent the future of the internet.
The metaverse of cryptocurrency-centric games like Axie Infinity and The Sandbox have been attracting users lately as they allow players to create and trade items in the form of non-fungible tokens or NFTs, types of secure crypto collectibles, and have economies within the game using cryptocurrencies.
Goldman analysts said crypto technology should be at the heart of Metaverses development because it allows users to securely own assets or items and move them across different platforms without the need for permission from a central party.
For example, The Sandbox runs on the ethereum crypto network, which allows users to buy and sell in-game land and NFT on exchanges outside of the metaverse like OpenSea.
We believe that the metaverse is probably an amalgam of various 3D rooms and that users move regularly between them, Goldman said.
If a virtual good or service cannot be moved with the user from one room to another, in our opinion its value is likely to be more limited.
Analysts added, In terms of the metaverse, blockchain is the only technology we see that can uniquely identify any virtual object regardless of a central authority.
This ability to identify objects and then track ownership, is used for the functioning of the metaverse when it finally materializes.
A blockchain is a digital transaction book that is monitored by all members of the network and not by a central party. Blockchain technology powers Bitcoin, which requires users called “miners” to solve cryptographic problems in order to validate transactions and keep the network secure.
Although Facebook / Meta has released the first versions of its metaverse, it is not yet clear whether the company believes that decentralized blockchain technology will play a significant role.
Many crypto enthusiasts are afraid that the financial force and power of society into social media mean that this could be dominating metaverse and strictly control creation and trade.
Goldman’s comment was generally optimistic about blockchain, although the bank said it was too early to come up with clear investment strategies.
Analysts said that blockchain “has a much broader and far-reaching impact on decentralized identification and ownership of digital and physical entities”.
They said the technology could increase internet privacy and eliminate the need for centralized control in a variety of industries such as supply chain management.
