Before we start with what is Decentraland, let’s try and understand the concept of virtual reality, a topic not related to cryptocurrency, but you will come across this term quite a few times in this blog. For people who are into gaming, this might not be a new concept, as virtual reality is essentially creating a virtual picture of reality. It includes everything, from human beings to places to situations. It is widely used in the entertainment industry to give different effects.
This has been made possible by the advancement of computer technology which allows us to create simulated environments. On paper, virtual reality brings you into a world of three dimensions (3D) while you can only see two dimensions. People who have landed on this blog to read about decentraland and MANA must have been bored. But here at Flint, we do not have the habit of letting people get bored and like to start from scratch before diving into more profound knowledge about crypto terms and concepts.
So now that we have understood virtual reality, in simple terms, Decentraland is also a virtual world. Esteban Ordano and Ariel Meilich created it in 2015 to dominate the virtual world. Back then, virtual reality was a growing space, and the creators realized that introducing Decentraland would help the company gain appraisal and power. The virtual world had several issues like price control, censorship of data outflow, de facto taxes, etc. Decentraland was created to provide solutions to all these issues.
The program had a humble beginning, starting with a flat pixellated grid, but with time and the growth of virtual reality, it has an extensive online world spread across 90,601 parcels of land. Users can purchase portions of land and decorate them with things bought from the program itself. These things are available as NFTs or Non-Fungible Tokens. So simply put, Decentraland can be compared to a virtual real estate platform.
As is evident from its names, decentraland is a combination of two words, decentral and land. It means that the platform is entirely decentralized, and the concept of how it relates to land has already been detailed in this blog. Deecentraland follows a Proof-of-Work consensus algorithm allowing its users to invest in tokens through exchanges such as Coinbase.
If you are discovering the world of cryptocurrency, you must have come across this term several times. In brief, NFTs are non-fungible tokens, and these can not be exchanged for similar things like crypto tokens and coins. It gives NFT holders the security of owning their digital assets without the fear of being replicated and put into use without their consent.
In essence, Decentraland is also an NFT marketplace. This was not the intention behind building Decentraland, and it might switch from NFTs in the future (based on the users’ response). Still, as it is entirely decentralized and involves the trade of digital assets, NFTs are the way to go at present.
There are different tokens like LAND, Estate, and MANA that you can use in Decentraland. LAND is the token that helps track the number of parcels of land available at any point in time and is based on the Ethereum blockchain. On the other hand, MANA is the token that will help you trade on Decentraland. In essence, users need to have MANA in their Ethereum crypto wallets to be able to deal on Decentraland.
Users can change their avatars on the system using MANA. People who own MANA can participate in LAND auctions and benefit from several other features available on Decentraland. While auctions occur, MANA is brought out of the system and burned, increasing the tokens’ value.
As per statistics, 1.82 billion MANA are circulated from 2,193,994,727 decentraland coins.
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