What is decentraland? Your ultimate guide

What is decentraland? Here, we will take a look at what MANA is and how it works.

The MANA, or decentraland, coin is the cryptocurrency which aims to power an online world which serves as an NFT marketplace. As part of the Decentraland virtual world, it has gathered a lot of attention over recent months. But what is decentraland? How does decentraland work? Let’s take a look. 

What Decentraland is

Before we look at the MANA coin, let’s take a look at the Decentraland system itself and see if we can answer the question: “what is Decentraland?”. Decentraland is, to put it as simply as possible, a virtual world. It was created in 2015 by Argentinian fintech expert Ariel Meilich and his compatriot and blockchain expert Esteban Ordano. The idea that spurred the creation of the system was that virtual reality was growing. Meilich and Ordano were both concerned about the possibility of one single company dominating the virtual reality space. They both believed that, if that were to happen, that company would gain too much power. It would be able to monetise people’s data, censor and control the flow of information and contact, raise de facto taxes and control prices in the virtual landscape. Decentraland was set up to combat those potential problems. 

As Meilich said: “The days are numbered for the ‘walled garden’ type of organization. Take Facebook for instance: users create content for free, attract their friends’ attention, and contribute to a network effect that benefits none of them. The idea behind Decentraland is to build an environment where people who contribute to growing the network will benefit handsomely.”

Decentraland comprises a large online world, not unlike 2000s online experience Second Life. The world itself features 90,601 parcels of land. Originally, it was just a flat pixellated grid but, as time has gone on, it has become a full three-dimensional experience. People can buy a portion of the land and decorate it with things that they purchase in the programme itself. These things come in the form of non fungible tokens, or NFTs.

What are NFTs?

To put it clearly, if something is fungible, that means it can be taken and replaced with something that is identical, but not precisely the same. In the crypto world, crypto coins and tokens are fungible, much like fiat cash. For instance, if you lent someone £10, it would not really matter if you were repaid with a different £10 note than the one you lent. In fact, the chances are you would be happy if the person you lent the money to paid you back with two £5 notes.

Therefore, it follows that if something is non fungible, that means that it can’t be easily exchanged for something that is functionally identical but not precisely the same. This, in turn, means that a non fungible token can be highly collectible. This is precisely what NFTs are, in effect – online, blockchain-based, versions of collectors cards, like Pokémon or Panini football stickers. NFTs have become very big business over recent months, with organisations as diverse as the BBC and the NBA releasing their own NFT collections. 

It so happens that Decentraland is, in effect, a massive NFT marketplace. It may not have been set up for that reason but, in keeping with its founders’ ethos of being decentralised and letting users decide how to use the system, that is what it has ultimately become. It is, of course, entirely possible that in future the program moves away from NFTs as its main attraction as more users decide they want to do something else, but this is where we are right now.

MANA explained

That is Decentraland explained, but that does lead to the question, how do people buy items within the program? The answer is, with coins. One very important thing to note here is that these are not like, for instance, the coins in a Mario game or bottle caps in the Fallout franchise. Instead, these coins have real life value outside of the game. There are two coins that help keep the Decentralised universe going. These are MANA, also known as decentraland, and LAND. LAND is the token which, ultimately, keeps everything moving along. It is used to track who owns what parcels of land at any given time and it is based on the Ethereum blockchain.

MANA, on the other hand, is what we might call the main token of the Decentraland network. The clue might well be in the full name of the coin, which suggests that it is at the heart of how the system operates. The decentraland cryptocurrency is mandatory for users to interact with Decentraland itself. In other words, you need to hold MANA in a Ethereum crypto wallet in order to buy land or to trade items in the program. As well as buying and selling parcels of land and NFTs, holding MANA cryptocurrency also allows users to change their personal avatars in the system. There is also the usual crypto token bonuses, like allowing people who hold decentraland to vote on updates to the system, as well as take part in LAND auctions. When those auctions take place, the MANA used to buy LAND is burned, meaning that it is taken out of circulation and potentially raising the token’s value. 

All of this means that the MANA cryptocurrency is an attractive buy for people who think that NFTs are in a position to keep going forward, and that Decentraland is a platform which can still enjoy future growth.  

One other thing to note is the usage of Ethereum wallets to hold MANA in order to make use of the decentraland coin and to take part in economic activity in Decentraland. The usage of Ethereum means that all transactions are logged and located on that blockchain. This means, at least theoretically, that a boom in Decentraland users won’t just boost the price of the MANA coin, it could well see the price of ether go up, too. That is a side effect of people coming on to Decentraland and buying and trading MANA, but it is still worth mentioning in a decentraland review.

In terms of statistics, there are 1.82 billion MANA in circulation out of a total supply of 2,193,994,727 decentraland coins.

Some Decentraland information

Here are some other things about the whole Decentraland experience that are worth mentioning. Firstly, in November 2021, the government of Barbados said that it would open up a virtual embassy in the Decentraland system. Yahoo News quoted a spokesman for the Caribbean island nation’s government as saying: “Barbados’ Metaverse Embassy will be at the centre of activities to advance the growth of stronger bilateral relationships with governments globally.”

Secondly, in June 2021, London auction house Sotheby’s opened up a virtual replica of its building to showcase digital art. 

Thirdly, also in June, American digital investment company Republic Realm bought land in Decentraland for the equivalent of more than $900,000. This virtual real estate was, ultimately, used to provide an online shopping centre called Metajuku.

FAQs

There are 1.82 billion MANA in circulation out of a total decentraland supply of 2,193,994,727 decentraland coins.

Theoretically, the purpose of the Decentraland system is to create a decentralised virtual reality experience. At present, though, its practical purpose is as an NFT marketplace. As far as the decentraland (MANA) token goes, though, it is used to help buy items within Decentraland itself and can be held for voting privileges.

Decentraland was founded by Ariel Meilich and Esteban Ordano. 

Further reading

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