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The Metaverse Requires a Whole New Vocabulary to Navigate Web3

By Claire Ballentine and Misyrlena Egkolfopoulou

Even if you’ve heard of the metaverse, you’ll be forgiven for not knowing quite what it is.

Because, of course, it doesn’t truly exist yet, despite Facebook Inc.’s name change to Meta Platforms Inc. It’s still a concept that is being manifest piece by piece, but talked about a whole lot more.

Photo by Darlene Alderson from Pexels

And in those conversations are a raft of new words, with more being coined every week.

So to get ready for your future in a virtual environment with little real-life human contact, we’ve pulled together a list of terms you’ll want to know, what they mean and when you’d want to use them.

At its core, the metaverse is the concept of digital, connected places where people congregate for work and socializing, combining social media, virtual reality, video conferencing and cryptocurrencies into one immersive form. It’s a place where 3D avatars can spend money, play games and conduct real-world business. Meta Chief Executive Officer Mark Zuckerberg has called it “the next frontier.”

It’s closely interconnected with the concept of “Web3,” or the next generation of the internet based around public blockchains and decentralized technology. Crypto — and the technology behind it — form the backbone of the metaverse, with the currencies underpinning buying and owning, while blockchain systems enable apps for activities like shopping and gaming. 

Remember the ‘90s, when the internet was just beginning? When companies were setting up “webpages,” and we talked to each other in chat rooms via ICQ or AIM? That was the first generation of the web. That’s when you had to explain the terms HTML, hyperlinks and dial-up.

Then, what’s referred to as Web 2.0 is the early 2000s until today, when a few tech companies solidified their dominant presence as platforms and pathways across the internet. (Remember when you first learned about blogging and a new site called MySpace?) Web3, in contrast, would revolve around non-fungible tokens and cryptocurrencies. Right, it’s a lot to take in. And with companies across industries clamoring to get in early, new products and investment opportunities are being hawked faster than ever before.

You’ll find some basic terms below.

Bored Ape Yacht Club

This is one of the most successful NFT collections, which launched in April 2021. It includes 10,000 profile pictures of cartoon Apes with different characteristics, which often serve as digital avatars for their buyers. Ape owners are part of an online social club that offers certain amenities like Ape parties and meetups in different cities.

CryptoPunks

A collection of 10,000 pixelated human-like characters that were created in 2017, the CryptoPunks collection is one of the most successful early NFT projects. The price of these tokens is often determined by their characteristics and uniqueness. Many buyers often see value in them as a representation of themselves in the form of a digital avatar online and in the metaverse.

DAO

Decentralized autonomous organizations, or DAOs, are essentially groups that govern the rules for projects like coins, without a clear leader running the show. They have a flat management structure, with no CEO or executive team, and raise money by issuing tokens. Members can complete coding or debugging tasks and get paid in the DAO’s cryptocurrency. They’re also increasingly becoming a way for job seekers to get a foothold in the crypto world by creating a kind of publicly available resume through blockchain, and offering networking opportunities.

Dapp

Slang for “decentralized app,” dapps are programs that run on a blockchain, instead of a single computer. They’re designed to operate beyond the control of a governing authority. While apps like Uber or Snapchat are managed by corporations, dapps have no such controlling entity. Examples include BitTorrent for file sharing or media player Popcorn Time.

DeFi

This abbreviation for “decentralized finance” refers to a new system of financial infrastructure based around blockchains and outside the purview of any single entity. DeFi uses cryptocurrencies for traditional banking services such as trading and lending money, and bypasses intermediaries like brokerages and banks.

Digital Hologram

To replicate the real world, the metaverse will use digital holograms that recreate a person, place or object. Other users can interact with these 3D projections. It’s closely connected to — and sometimes used interchangeably with — the concept of an avatar. 

Digital Twins

Imagine a place like your favorite clothing boutique — and its metaverse counterpart. A digital twin is the virtual representation of a real-world system or object, with the two interconnected and able to share data and information. You could try on a new shirt in the metaverse, and then have it delivered to your actual home. Or a business meeting in the metaverse could incorporate a model of a company’s real-world manufacturing plant. 

Gas

In crypto, gas is essentially the fee for using energy in transactions. When smart contracts are executed on the blockchain, or when coins are traded or used to pay for things, there’s a charge that goes to the crypto miners. The fees can be minimal or quite expensive, based on how much traffic is flowing on the network at any given time, as well as on the transaction’s size and complexity.

Interoperability

People who use their crypto to buy avatars, digital-twin T-shirts or sneakers are going to want to be able to use those items across different systems or virtual worlds. That’s why interoperability is important, like having a universal plug or systems that can talk to each other. The metaverse needs sufficient interoperability to achieve mass adoption.

Opensea

This is one of the biggest marketplaces for buying and selling NFTs. Think of it as a digital art gallery that transacts in crypto. All transactions are public on the blockchain, so people can see which crypto wallet bought and sold certain assets. 

Staking

Staking is a way of earning rewards for holding certain cryptocurrencies. Investors that choose to stake their crypto essentially become validators that can confirm transactions in the decentralized computer network and ensure that those recorded in the blockchain are legitimate. For doing so, they are rewarded with more cryptocurrency. Think of it as a way to earn passive income on the crypto that you own.  

Yield Farming

This investing strategy involves lending cryptocurrency for borrowers to speculate with. The potential gains come both from interest paid on the loan, as well as the coin’s appreciation.

THE BASICS

Blockchain

This is the system by which cryptocurrency functions. Think of it as a big, open, online database. The digital ledger proves who owns which coins and, crucially, doles out new ones. Data is stored in chronological order, where a block of data that contains new information is added to the block that comes before it — forming a kind of chain. 

Coinbase

As one of the largest cryptocurrency exchanges, Coinbase is the place for millions to buy, sell and exchange digital coins. The company went public in April 2021, and investing in its stock is seen as a way to bet on the future of crypto.

Mining

Cryptocurrency is created by “mining,” or using computing power to solve complex problems. The electricity used to deploy vast fleets of computers has increased tenfold over the past five years. 

NFT

Short for “non-fungible tokens,” NFTs are essentially digital certificates of authenticity for content ranging from art to music to videos. Their value comes from their inability to be replicated because of an algorithm that creates a barcode for each virtual item. In the metaverse, NFTs are expected to be a crucial component, serving as a way for people to display their digital art and property.

Discord

This group-chatting platform was originally a mecca for the gaming community but has recently become a gathering place for wide-ranging groups, from stock traders to music fans. Many crypto fans congregate here to share tips or hype up the newest coin.

More stories like this are available on bloomberg.com

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