2021 is bidding goodbye, and what a year it has been! Cryptocurrencies soared, Coinbase went public, venture capital investors rolled out a conveyor belt for blockchain unicorns, non-fungible tokens and dog-themed coins took over the world, Jack Dorsey left Twitter and took Square to 3D (figuratively), Facebook became Meta…
Somehow along the way we’ve all got pulled on a train heading for the metaverse, once merely a dystopian fantasy of Neal Stephenson’s 1992 science-fiction novel “Snow Crash”, referring to a virtual world inhabited by avatars of real people, and 30 years later—Big Tech’s latest obsession, spearheaded by the largest social media company in the world.
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What Is The Metaverse, Exactly?
To begin, there’s no universally accepted definition for the term. Some think of it as an enhanced successor to the current version of the internet—a new frontier for online interaction blending the physical and digital worlds through computer-generated avatars. Millennials and early Zoomers may remember “The Sims”, a series of life simulation video games, launched in 2000, where you could practically build a second life for the digital version of yourself, or a character of your dreams. So think virtual birthdays, weddings—an array of digital experiences connected to our real lives and accessible through VR headsets, PCs, game consoles, and even phones, only that’s just the surface. Venture capitalist and former Amazon executive Matthew Ball, in his essay on the topic (which I highly recommend) notes:
…what’s important is to recognize the Metaverse isn’t a game, a piece of hardware, or an online experience. This is like saying World of Warcraft, the iPhone, or Google is the Internet. They are digital worlds, devices, services, websites, etc. The Internet is a wide set of protocols, technology, tubes and languages, plus access devices and content and communication experiences atop them. Metaverse will be too.
Why You Should Care
According to Ball, what awaits us in the metaverse is an entirely new set of technologies, applications, and, well, financial opportunities. CEO of $28.7 billion videogame company Epic Games, Tim Sweeney, predicts, “over the coming decades, the metaverse has the potential to become a multi trillion-dollar part of the world economy.”
Sweeney has every reason to be bullish. Epic’s Fortnite has evolved from a popular multiplayer game into the preferred social network of an entire generation and has even hosted virtual concerts featuring celebrities like Ariana Grande and Travis Scott.
Brands are also staking a claim in the metaverse. Nike has launched Nikeland, a virtual gaming experience on gaming platform Roblox, where users can dress their digital avatars in the company’s products. In September, Dolce & Gabbana sold the first-ever collection of non-fungible tokens (NFTs) by a fashion brand for about $5.7 million. Five tokens featured in the drop were accompanied by physical versions of the items, and the other four were digital-only pieces. Though seemingly a giant step forward for the legacy fashion house, the collection was apparently limited to the D&G experiences only (each sale included invitations to the brand’s exclusive events) and has yet to prove its utility in the metaverse.
If digital garments sound alien, consider Microsoft’s vision to transform workplace experiences along that vein. Next year, the company plans to roll out a new feature, Mesh for Microsoft Teams, which is designed to make online meetings and collaborations more immersive—again, with the use of avatars.
But of all corporate forays into the metaverse, the loudest is, undoubtedly, that of Facebook, which in October changed its name to Meta to reflect the company’s ambition beyond social media. The re-branding came amid multiple controversies surrounding the company, but nevertheless indicated that the focus on augmented and virtual reality will define Facebook’s strategy going forward. The tech conglomerate said it would spend at least $10 billion over the next year developing the metaverse’s infrastructure.
That includes equipment bridging the real and virtual worlds, such as VR headsets that would, for instance, enable your virtual avatar to maintain eye contact and reflect your facial expressions. Apple, the maker of the world’s most coveted internet-connected devices, will reportedly be releasing a VR device next year, which could cost up to $3,000. If you are not too excited about the idea of yet another overpriced gadget, fear not: some metaverse platforms are already accessible through smartphones, PCs and gaming consoles like Xbox with relevant applications and digital wallets.
But if the world’s biggest companies are pouring billions on building technologies and experiences that promise us an entirely new way of interaction and new wave of innovation, pay attention.
The ‘Open’ Metaverse
Critics say “the metaverse is just a sexy, aspirational name for some kind of virtual or augmented-reality play” of tech magnates, but in the blockchain world, the discussion revolves around bringing down the old guard of the internet—the so-called Walled Gardens of Big Tech, where companies like Google and Facebook own and profit from vast amounts of user data.
“Our goal is to build an open metaverse that can stand against what we call competition that is the Web 2.0 metaverses,” says Sebastien Borget, chief operating officer of The Sandbox, Ethereum-based platform where players can build and monetize in-game assets and even land (In November, Republic Realm, a firm that develops real estate in the metaverse, said it paid $4.3 million for The Sandbox land, scoring the biggest virtual real-estate purchase publicized to date).
By virtue of community-based governance, where users can propose and vote on changes to the platform, blockchain platforms like The Sandbox or Decentraland, another category leader, promise a starkly different metaverse, free of dependence on corporate decision-making and data ownership hegemony. In addition, decentralized architecture reduces friction between different ecosystems through various interoperability protocols that allow for transfer of assets, including cryptocurrencies, utility tokens, and NFTs, across chains.
That said, Meta’s user base and resources dwarf that of blockchain-based virtual reality platforms, whose development still heavily relies on traditional venture capital funding, so the issue of metaverse’s centralization could long remain in the grey area. Meanwhile, the future awaiting us seems far more virtual than it did a year ago.