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What is the Metaverse?

What is Metaverse?

Table of Contents

Introduction

Metaverse has become a hot topic recently with a lot of new projects launching and some large companies making metaverse plays. Facebook has even rebranded to “Meta” and is pivoting towards the new technology. Many investors are also jumping on the bandwagon and trying to capitalise on emerging technology. It’s still very much in the early stages and somewhat of an unknown as to where the technology will go in the coming years.  Like with the dot-com bubble, there is a lot of speculation and hype and some projects will inevitably fail. However, just like the dot-com bubble, the technology will continue to advance and large valuable companies like Google and Amazon could emerge. According to Emergen Research, the market was valued at 47.69 Billion in 2020 with an expected compound annual growth rate (CAGR) of 43.3%. Fred Wilson (VC) quoting a friend said “Nothing important has ever been built without irrational exuberance”. 

Did you know? The term metaverse was first coined by Neal Stephenson’s in his 1992 science fiction novel Snow Crash

What is the Metaverse?

So what exactly is this metaverse everyone is talking about? The metaverse is a network of 3D virtual worlds where technologies such as virtual reality (VR), gaming, non-fungible tokens (NFTs) and cryptocurrencies are combined to give a deeper, more immersive experience. It is often referred to as a future version of the internet.

The metaverse parallels our real-world life and has a lot of the same things like shops, neighbourhoods, cars and friends. Some people even see the metaverse overlapping with the physical world augmented reality (AR) overlays. No standards for the metaverse exist and it’s still unsure if different metaverses will have “bridges” or if one metaverse will eventually include everything.

So how did we get to where we are today? In 2003, Linden Lab launched the popular game “Second Life” with the objective of “creating a user-defined world like the Metaverse in which people can interact, play, do business and otherwise communicate”. Games such as Fortnite then emerged and grew huge userbases. At the same time, virtual reality headsets makers like Oculus began to appear and develop better and better technology. Cryptocurrency and token technology was then incorporated into the virtual bringing about many of the use cases we see today. 

The Metaverse can be experienced on many different technology platforms and formats but using VR headsets like the Oculus Rift really transport the user to a different world in a way that a flat screen cannot. When you put on a headset you really feel the immersive experience of a different reality and you can really imagine a future like in the movie Ready Player One

AR as mentioned above is looking to combine technology information and overlays into a real world context to improve the experience of the person. Imagine viewing a historic monument via your phone screen or a version of VR goggles and seeing and hearing information about its past and history or how it used to look.

Metaverse - Building Model
Image Wikimedia Commons, by user Gryffindor

Key Takeaway: The metaverse is a virtual reality space that combines the technologies of gaming, virtual reality, cryptocurrencies and NFTs

What can I do in the Metaverse?

Beyond all the hype and excitement let’s look at what you currently can actually do and what the promoters of these projects and platforms suggest we will be doing in a future virtual world.

Gaming

This one is obvious and already a popular use case. On many platforms, you now enter a virtual world to enter your game which you can play with friends and strangers all around the world. There are many ideas and suggestions with integrating blockchain technology that VR gamers will be able to keep their achievements and special awards or “skins” and port them to new games or platforms within the chosen metaverse. This is expected to encourage loyalty and buy-in from gamers to avoid them jumping to a new platform. This could very well be the killer use case for VR and the Metaverse

Commerce/Retail

With more and more people buying online and getting home delivery they miss the retail experience of visiting and trying on clothes or being able to try something out before committing to the purchase. With the advances in technology and camera scanning you will be able to create an accurate body double avatar (representation of you) in the Metaverse. You will then be able to accurately see how various styles or clothes might fit you and what colours suit you before buying. Or you could take a virtual test drive in a new car or see a virtual representation of a hotel you were thinking of staying in before you book it.

Social

Heavily connected with the gaming side above this is also touted as one of the major use cases for a virtual Metaverse world. Most kids today already meet a lot of their friends online and play games together. This trend is only going to continue especially as more people live further away from each other and interact with like minded individuals they meet online.

In 2020 Fortnite hosted a virtual concert by rapper Travis Scott which had over 12 million viewers. Recently the youtuber Ryan Trahan Spent 100 Days in the Metaverse recently and documented his experiences:

Working

With the move to remote working (especially in Covid times) a lot of companies are looking into the option of building a virtual office where colleagues can interact in a similar manner to a real world office environment. They find that a 2D screen like in a zoom call is lacking a lot of the nuance and gestures present in a face to face meeting. With developments in tracking and gesture emulation, the possibility to accurately mimic a person is not far away. There is also the option to use VR to control semi autonomous robots in environments dangerous to humans but requiring high complexity and dexterity outside the realm of current programming ability.

Tourism

Similar to what I mentioned above about the possibility of checking out a hotel or experience virtually before committing to buying the real world version, some people are doing virtual tourism and using a VR experience to visit places they might not be able to go or have the time to visit. This is already somewhat possible with The VR version of Google Earth where Google has some popular tourist locations ( Eg Rhonda in Spain ) mapped and photographed in 360 degree high definition and you can really feel like you are visiting the real thing doing a virtual tour. Combine that with the possibility of impossible experiences like visiting another planet or the bottom of the ocean will really lead to some interesting experiences.

Media and Entertainment

Of a similar vein it is hard to differentiate between the tourism, social or gaming aspect of the metaverse explained above as they could all be covered as media or entertainment. Some of the earliest examples of this are concerts and films already played in the metaverse that bring friends together to enjoy the experience as a group thus increasing the social aspect, buy in and value of metaverse experiences as a whole. It will be interesting to see how these things progress as the industry grows and develops. Other possibilities are the option to showcase virtual art or people’s NFT collection in an online VR gallery.

KeyTakeaway: There’s already a lot you can do in the metaverse from gaming to working to shopping. The metaverse experiences are only going to develop further and it’s likely you’ll be able to do a lot more in the future.

Companies investing in the metaverse

Here’s just an example of some of the companies investing in the metaverse:

Microsoft

Microsoft recently said it would buy Activision Blizzard for $75 billion, explaining the deal was part of an expansion into metaverse. Activision Blizzard were already one of the largest gaming companies in the world and if they work together with Microsoft’s Xbox project it could see some huge developments in the XR realm.

Meta

Facebook announced a corporate name change to Meta Platforms Inc. (ticker: FB) in October 2021, showing their commitment and belief in the sector as a whole. They are also one of the biggest investors in the space spending up to $10 Billion annually into research and development of their various XR plays.

Mark Zuckerberg said: “We have a global community and wide reaching impact. And we’re now a metaverse company, building the future of social connection.”

Google

Google has adapted many of their apps to support and implement many XR features like Google Earth which can be used with VR headsets and Google Lens via your phone to supply an AR experience in your everyday environment. They also develop hardware called Google glass for an everyday AR experience, though this project has not had much progress lately there are rumours it’s coming back.

Unity Software

Unity Software were one of the earliest developers in the 3D and VR gaming space. They provide tools and gaming engines to provide a platform to users and developers to fully utilise the possibilities in XR. Platform agnostic systems like these really help propel the adoption of new technology across space and more broadly into other areas such as industrial and medical. The company anticipates that there will be huge demand for content creators to build assets to populate the metaverse.

Roblox

Roblox is one of the most successful companies in the metaverse world. They have really leaned into the VR aspect of their online gaming platform and enabled the use of VR headsets within their system. With a huge following among the younger cohort of gamers this could have a huge impact and growth in the future as the next generation will have grown up with this technology being second nature to them. There are already many titles that are VR only within their ecosystem and this will be sure to grow.

Can you buy land in the metaverse?

Yes, you can now even buy land and prime real estate in the metaverse. Should you buy real estate in the metaverse is a separate question! Various projects have their own world and ecosystem and you can buy the rights to a part of that. The Sandbox Metaverse recently sold a plot of land for €3.8 million in December. In another eye watering sale an anonymous buyer paid half-million dollars for the privilege of becoming Snoop Dogg’s next-door neighbour in the metaverse. Overall the sale of “land” in the Metaverse topped €500 million in 2021 and is expected to double this year to peak out at over a Billion dollars in transacted value for 2022. There is talk that the Metaverse property market is overheating and we might be in a virtual property bubble and with these numbers it’s easy to see why.

How does crypto fit into the metaverse?

Crypto is a key element of the metaverse and essentially it is the form of money in this virtual realm. The technology underpinning crypto allows for digital proof of ownership, the transfer of value, governance, and accessibility. These capabilities allow for many of the exciting new metaverse use cases like paying for NFTs, virtual real estate and even your avatar’s new clothes. MANA (currency of Decentraland) and SAND ( currency of the sandbox) are two examples of native cryptocurrencies used in popular metaverses.

Can you get a job in the metaverse?

As mentioned above, many traditional jobs are turning to the metaverse to enhance remote working experiences. There is also some work that is exclusively in the metaverse domain. For example, many play-to-earn models now provide steady income streams for some people who spend time gaming. Some online jobs are also great candidates for metaverse implementation in the future and even new types of metaverse jobs that don’t exist today are likely to emerge in the future.

Conclusion

What sort of impact or future will the Metaverse have on the world in ten years time is impossible to know. Will it just be a place for early crypto investors to virtually display their NFT collections and digital art or will it be a place to meet up and do real world commerce and virtual activities? Much in the same way that the early web tried to emulate real world experiences online, early iterations of the metaverse seem to be taking the same skeuomorphic approach and building analog equivalent experiences from the real world in the Metaverse. The fact people are selling “prime “ real estate in a virtual world for very large sums of money in what should be a theoretically infinite online world where you can teleport anywhere in an instant is a great example of this. It will be interesting to see if this premise holds up as the technology develops, changes and improves to serve the changing needs of the communities that use them.

Whatever the outcome it is likely to be big. With Facebook spending up to 10 billion a year on R&D in the Metaverse,  and with so many new and innovative projects trying different open source solutions integrating DAOs and public blockchain tokens there are likely to be some interesting developments that are impossible to predict.

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Damien

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