Blockchain Is Key to Metaverse and Web 3 Development

It is the only technology that can “uniquely identify any virtual object independent of a central authority,” and this ability to identify and track ownership will be crucial to the functioning of the metaverse, analysts led by Rod Hall wrote in a note published on Dec. 14.

For Web 3, blockchain allows for the “partial elimination of centralized control,” the note says. In the future, users will be able to log in without the need for a third party, such as Meta, Google or Apple, the note adds.

Web 3 is the third generation of internet services which have been made possible by decentralized networks.

Goldman analysts feel that cryptocurrency is just the beginning for blockchain. Since 2017, blockchain has spread from the banking sector to more distributed applications across multiple verticals, such as communication and media and manufacturing, they note.

The Wall Street bank sees blockchain as the one of the most disruptive technology trends to appear since TCP/IP and HTML “ushered in the internet in the 1990s.”

“Investment implications are hard to predict at this juncture, but companies who are dependent on centralized control of user identity will likely find their business models challenged by the adoption of blockchain,” the report added.

The metaverse is an immersive digital world created by the combination of virtual reality, augmented reality and the internet.

One of the biggest endorsements for the metaverse came earlier this year when social media giant Facebook decided to rebrand itself to Meta, as a sign of its future focus. Meta (formerly Facebook) also announced that it was planning to hire 10,000 staff in the European Union to develop its metaverse.