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A Blockchain Powered Virtual And Augmented Reality




The decentralization of VR and AR are changing ideas about governance, work, and currency.

2016 brought in a plethora of advances in blockchain technology across domains such as business, science, and tech. A comprehensive conversation about trending technologies, however, would be incomplete without mentioning virtual reality (VR) and augmented reality (AR). With current VR and AR systems still in relative infancy, the majority of hardware and software for the alternate reality space operates under centralized models. While the blockchain has already begun to disrupt ways VR is being built, the impact that Ethereum smart contracts will have on the technology is both innovative and exciting.

Virtual vs. Augmented

Virtual reality is a computerized creation of a virtual world. A completely computer-generated, three-dimensional version of an environment or image that users can interact with in a seemingly physical way. Considered a realistic, fully immersive experience, Wikipedia describes VR:

“Virtual reality (VR) typically refers to computer technologies that use software to generate realistic images, sounds and other sensations that replicate a real environment (or create an imaginary setting), and simulate a user's physical presence in this environment, by enabling the user to interact with this space and any objects depicted therein using specialized display screens or projectors and other devices.”

Different from VR, Augmented Reality is a supplementation of computer-generated sensory input such as sound, video, or graphics. Instead of being a fully immersive world, it blends aspects of virtual reality with the real world. An example of a new popular AR game is Pokemon Go, which blends characters from the game into the real world, allowing users to be able to view Pokemon characters through their phone screens while also viewing physical locations through their cameras. As players move within their real-world surroundings, their avatar moves within the game's map.

While facilitated in different ways, both VR and AR share the same goal of immersing the user in a real-life experience. With AR, users are in touch with the tangible world while interacting with virtual objects around them. With VR, the user is fully immersed in a fabricated world and isolated from real life.

Although both VR and AR have made great leaps with products such as Google Cardboard and Yelp’s Monocle, both technologies still face challenges to their respective ecosystems and infrastructures. For starters, VR and AR systems lack their own unique codec to deliver content. A codec is a device or program that compresses data to enable faster transmission and decompresses received data. With centralized systems, if too many users are playing a game at once, this causes a major slow-down with central servers of the game.

Dot Blockchain Music’s Co-founder, Benji Rogers, stresses the necessity for VR to adapt blockchain technology:

“In Virtual Reality (VR) and Augmented Reality (AR), I believe that we are about to see the world’s largest deployment of a new format since the CD, DVD or Blu-ray, and there is as yet no standard or format for this new technology. There is no ‘.vr’ file standard that all players will adhere, read or write to. They are currently a mashup of other formats — .exe, .wav, .mov, etc — and so there is, at the present time, a singular moment in the cycle of technology to create and adopt a fair trade format and roll it out through VR & AR. There may not be another time in the next 20 or so years to get mass adoption of a new standard, so I propose that one is created.”

In a recent webinar, Rogers further highlights how the blockchain will directly influence VR technologies who rely heavily on music and sound effects. Because VR uses music and sound to deliver authentic experiences (more so than AR) the licensing of auditory material will play a huge role in both the business and legal facets of VR applications. The blockchain’s ability to create a global database of music rights (metadata) will provide VR developers the correct information to license a track. Because Ethereum and other blockchains are in a constant state of synchronization, VR licensees of music would have the most up-to-date proprietary information on the network. Dot Blockchain Music has designed its own codec for bundling music files that would produce this result.

Gaming and Metaverse

Wikipedia defines a metaverse as a “collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the internet.”

As the realism of metaverses develops, the conversation surrounding virtual sovereignty turns into a legitimate debate as opposed to a lofty concept. Since the blockchain timestamps financial transactions, it can also keep records of events that take place within a virtual world. For users seeking to fully immerse themselves, the blockchain offers identity verification, consensus mechanisms, and systems of governance. The implications for this would allow virtual societies to establish laws while also executing and recording the transfer of virtual properties through smart contracts. Imagine you are playing a Massive Multiplayer Online Game (MMO) in VR and you can amass wealth, perform work, and purchase items using virtual currency. Fully immersive VR games will allow users to be more than just active participants- they will become autonomous virtual versions of themselves with all the capabilities they would possess in the real world.


When other tech industries acclimate to the idea of decentralization, VR and AR game creators could potentially do the same. We already see gamers wanting to eliminate the need for moderators in MMO’s. These moderators obtain their control directly from the companies who build and design the games.

Blogger and VR enthusiast Maciej Olpinksi elaborates on this topic in a recent blog post:

“Consensus is enforced by the platform operator, who determines the actual state of in-game reality that each player sees on their screens. Player identities, item ownership, the order of transactions, the issuance of in-game currencies are all maintained by a trusted 3rd party who makes up the rules, provides entertainment platform and charges money.”

Olpinksi further states:

“The middleman decides what experiences can be offered and most importantly, controls value flows that take place on the platform. An extreme example of that would be Facebook which socializes content production (everyone creates posts, uploads photos etc) and privatizes value extraction (advertising money goes only to Facebook).”

A decentralized gaming model would allow users to establish their preferred currency to be used within games, and player identity could be cryptographically verified in order to protect their private data.

One company that has already begun to test this model is Voxelus. Gamers are able to play single and multiplayer VR games using character avatars in a 3D environment. They can also purchase 3D assets in the Voxelus marketplace, using the game currency, Voxels.

Voxels can be converted into currencies such as Bitcoin and Ether on the Uphold platform. Not only can currencies be exchanged, but it can also be earned by uploading content and selling it in the marketplace.  

VR can also move beyond gaming and transfer over into real-world possibilities. Users could also perform a real-world job through virtual reality, earn cryptocurrency for their work, and then spend the funds in the real world.

A Blockchain VR Future

Proponents and enthusiasts of the blockchain have speculated on the potential for it to drive VR and AR systems in the coming years. Maciej Olpinski and other supporters believe that VR will be the killer application of the emerging blockchain tech space.  

According to Olpinksi:

“The blockchain is a perfect technology that can provide VR worlds with a consensus mechanism for virtual worlds that is independent of any third party. Combined with open web technologies such as Web GL (Web Graphics Library) for in-browser 3D rendering, we’ll get powerful tools to design, distribute and experience virtual worlds with independent economies based on cryptocurrency.

Various forms of consensus could be formed using smart contracts with multiple parallel realities. Virtual worlds with virtual economies could be bootstrapped from scratch on a laptop by anyone in world.”

Ethereum VR and AR

Part of the lure of the blockchain is the capability of an environment with little or no censorship. Ethereum Dapps and other decentralized platforms attract those who seek limited censorship. As VR and AR experience become more realistic and the catalog of games expands, content creators will be faced with the dilemma of what to limit. Regulators may end up writing laws on virtual experiences, forcing developers to comply or face penalties. But how does this proposed regulation occur on decentralized platforms?

As decentralized platforms become more of reality every day, VR and AR applications will come into a sphere of ethical debate. For now, we can only speculate on these innumerable ethical questions, but one thing for certain is that censorship will be a major focus of discussion in the process of building the future of virtual worlds.

Los Silva

Los Silva is a writer and filmmaker who has collaborated with tech and design companies. His interest in Ethereum stems from emerging creative applications that allow artists control of their work through blockchain technology.

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