I’m often asked the question, “What is the Metaverse?” Below are my thoughts on what the Metaverse is and is not.
The Metaverse is the next iteration of the internet (aka Web3) and it has the potential to impact our lives, societies and economies in much the same way that the internet and mobile devices have over the last 10-20 years.
Many people incorrectly equate the Metaverse with 3D/Augmented Reality/Virtual Reality (AR/VR) worlds (eg Decentraland, Sandbox, Horizons World). This is mostly due to the fact that Facebook changed their name to Meta and highlighted their massive investment into their Horizons World AR/VR environment. The reality is that the Metaverse is much bigger than AR/VR worlds (aka verses).
In today’s Web2 environment, our data is owned/managed by large corporations such as Google, Microsoft, Amazon, etc. In the Web3 environment, our data will be stored on decentralized blockchain environments which will not be owned by any one large corporation. In some cases, the data might be owned by Decentralized Autonomous Organizations (DAOs) or governing bodies made up of majority shareholders in a platform.
The AR/VR worlds/verses will run on decentralized blockchains and the currencies of these verses will be crypto currencies (e.g. MANA, Sand, AXIE). Purchases made in these verses (e.g. clothing, land, art, etc) will be in the form of Non-Fungible Tokens (NFTs) which can later be traded, sold, etc. The value of these NFTs will be determined by collectors and the communities that they are a part of. Many NFTs will be valued based on their utility or service that they provide (e.g. physical ownership of something, dividends, etc).
In the Decentralized Finance (DeFi) space, investment vehicles currently provided by centralized banks will be replaced by decentralized investment vehicles with lower fees, higher earnings, etc. Examples include borrowing/lending assets, real estate, etc.
Once we realize that the Metaverse is not simply the AR/VR worlds, we can begin to move past the notion that the Metaverse is a world where everyone is running around with Oculus type headsets. On this topic though, I think it’s fair to point out that we expect the technology to improve far beyond its current state. This might look like contact lenses, everyday glasses or even something built into the existing mobile phones.
The reality is that the Metaverse exists today albeit in very immature states. The verses (e.g. Decentraland, Sandbox, etc) tend to be very low quality/fidelity graphics and slow performance. The NFT space is currently littered with Artificial Intelligence (AI) generated JPGs where the color/style changes slightly to produce thousands of variations which have large communities backing them and in some cases offer premium utilities such as memberships to VIP clubs.
The Metaverse is growing quickly and with the rapid growth, comes a slough of growing pains followed by governments and investors scrambling to understand it. My advice – get in now! Find your way to invest, build and grow your presence in the Metaverse.