On October 28, 2021, Mark Zuckerberg announced in a 1-hour video how Facebook is rebranding to “Meta.”
Roblox, an online gaming platform, hosted a Lil Nas X virtual concert on November 13, performed entirely within the platform.
Decentraland, a decentralized 3D virtual reality platform, allows users to buy and own parcels of land within the virtual space.
The world, as we know it, is changing. We are gradually shifting towards a new dimension that changes the way we interact with our peers, commodity, and environment. o
The aforementioned case studies, i.e., Facebook’s rebranding, Lil Nas concert on Roblox, and Decentraland, are some of the projects heavily invested in to take us to this new level, virtual utopia we call the metaverse.
This new change has got many people thinking and talking about the potentials this new world has to offer. While on the other hand, some are clueless on what even the metaverse is and how it will fit into today’s world. If you are reading this, chances are you fall in one of these two categories.
In this article we cover:
- What is metaverse
- Who is building the metaverse
- Opportunities and challenges facing metaverse adoption
- The future of metaverse
Need help developing a blockchain solution for your business? We can help! At Iterators, we design, build and maintain custom software solutions that will help you achieve desired results.
Schedule a free consultation with Iterators today. We’d be happy to help you find the right software solution for your company.
What is the Metaverse?
“The Metaverse is a massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”Matthew Ball
Venture capitalist and managing partner at EpillionCo, Matthew Ball, attempted to define what the metaverse will be in his 33,000-word primer on the metaverse. Emphasis on the words “attempted” and “will be.” Because nobody really knows what the metaverse is based on our limited understanding.
Look at it this way, if someone had told you in the 19th century what the internet is, neither you nor the person would be able to get the full picture with pinpoint accuracy because the internet has evolved and iterated several times from its initial structure.
The metaverse, like the internet, demands tacit knowledge and experience-based knowledge to get the whole picture. Right now, we can only predict what it will be based on the direction of many up-and-coming metaverse projects.
In light of these projects, so many people have misunderstood the definition of the metaverse as these projects. So to clarify, we are going to state what the metaverse is not.
The metaverse is NOT.
- Virtual/Augmented reality: Projects like Decentraland are one of the earliest projects that have demonstrated what certain aspects of the metaverse will look like. Still, it does not define the metaverse in itself because the metaverse is so much bigger than virtual or augmented reality. VR and AR only make up a subset of the metaverse and are merely means to access and operate within the metaverse. For context, saying VR is the metaverse is just like saying apps like safari and chrome are the internet.
- A mixed-reality platform: Projects like Microsoft’s Mesh and the recently announced Facebook’s meta video (featuring Zuckerberg interacting with friends and colleagues in a mixed reality world) could be misconstrued as the metaverse. But yet again, it is much more than that. Undoubtedly these mixed reality worlds offer a more immersive medium with which we communicate and interact within the digital world, but it is only an aspect of the metaverse. For context, saying mixed reality platforms are the metaverse is like saying social media platforms like Twitter and Instagram are the internet.
- A game: Usually, when the metaverse is brought into the conversation, games such as Roblox, Fortnite, Axie Infinity, etc., are brought into the fray. They have made significant marks to represent aspects of the metaverse regarding how we do gaming in the future. Plus, they possess some elements of the metaverse, such as a consistent identity (represented as avatars across multiple closed platforms and compensating creators for their content. But it will be a huge misappropriation to tag them “the metaverse.”
- A user-generated content (UGC) platform: This is probably the most common of misrepresentations. The metaverse will certainly allow users to create, share, and monetize their content, but it is only a fraction of what can be done in the metaverse.
So if the metaverse is not virtual reality, mixed-reality, nor a user-generated content platform, what then is it?
The answer? – All of them, and more!
Let us refer back to our Matthew Ball definition of the metaverse, dissect it, and try to piece it all together to get a deeper understanding.
“The Metaverse is a massively scaled and interoperable network of real-time rendered 3D virtual worlds…”
Think of the internet we have today…but in 3D. The internet, as we know it, is a conglomerate of different web pages, apps, interfaces, etc., we all go to experience in different ways. You can decide to socialize on Facebook and Twitter, generate and share content on Youtube and TikTok, Work on Slack, Asana, and Trello, and so on.
In the metaverse, you can do all this as well, but the experience will be much more immersive and interactive. For example, you will be able to socialize but on a platform that allows you to interact, in real-time, with 3D avatars representing your friends and family.
You will be able to generate content that people will experience in unprecedented ways. You will be able to work, game, invest and do everything you usually do on today’s internet on the metaverse.
Just as these parts of the internet do not represent a stand-alone definition of the internet, these 3D virtual interfaces do not also represent the metaverse on their own.
In essence, where the internet is a conglomerate of web pages and interfaces, the metaverse will be a conglomerate of highly immersive, 3D virtual worlds.
Let’s examine the second part of the definition.
“…unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”
Referring back to the internet analogy, different concurrent users use the various interfaces, apps, and web pages that make up the internet. The same will apply in the metaverse. However, there will be subtle differences.
First of all, there will be continuity of data in contrast to that internet. To understand this point, let’s illustrate with an example we are all too familiar with.
Have you ever been in a position where your entire data (maybe in a game or on a social media platform) was erased? Usually, this happens by mistake, an error on your part to save the data, or the platform deciding to remove you.
Either way, this cannot happen in the metaverse because everyone will have a unique identity that represents them and their data. And this data will be immutable. Why? Because the metaverse is largely being built on the blockchain.
The blockchain is a decentralized, distributed public ledger that exists across a network. It is a system that records information that makes it impossible to change, hack, delete, or cheat the system and manipulate data.
When a transaction occurs on the blockchain, it is time-stamped and stored with a unique cryptographic hash function in a “block” with other transactions. This block is then connected to the block before it, creating an immutable, irreversible chain – hence the blockchain. This secure linkage prevents any block (ergo, any transaction) from being altered. More transactions produce more blocks which further strengthens the verification and immutability of the entire blockchain.
This single attribute of the blockchain – immutability – makes it impossible for data to be simply “scrubbed off” the metaverse. This is a good thing because it will be difficult to argue for the metaverse in certain aspects without this key factor.
Immutability is an essential characteristic because the metaverse is set to define ownership in unprecedented ways. Many current metaverse use cases involve users either creating and monetizing content or buying the said content.
Decentraland and Sandbox, for example, allows you to create and buy virtual real-estate on the platform, often with a huge amount of money. It will be a great cause for concern if the data can be deleted or manipulated. That defeats the purpose and realization of true digital ownership – a concept the metaverse will effect.
Non-Fungible Tokens (NFT) will further cement this idea of digital ownership. There is a huge rave around the NFT space right now, and it has got a lot of people talking. Some feel it is a bubble that will blow away, but it is, in fact, a concept that will improve the functionality and applicability of the metaverse.
NFTs are digital signatures of digital items that verify their identity, ownership, and authenticity. It stores its data on the blockchain and can be traded among parties. Anytime an NFT changes hands, the transaction is recorded in the blockchain, and the NFT stamps the buyer or receiver as the new (true) owner.
NFTs will make it easier for digital assets to be owned and traded in the metaverse, further improving the applicability of the metaverse in e-commerce.
Who is Building the Metaverse?
The origins of the internet can be traced to Sir Tim Lee Barnes when he wrote 9555 lines of code that formed the internet in 1995. In the case of the metaverse, however, there is a difference because, as with most technological advancements, there’s a need for several technological changes (plural) to a technological change (singular) to be established.
Today, we live in an electrified world where basically every aspect of our lives is driven by electricity. However, this was not always the case. In 1831, Michael Faraday discovered electricity, but it wasn’t until 1882 that the first electricity revolution began with Thomas Edison’s Pearl Street Station in Manhattan. This power plant produced DC current, and it was later hard and nearly impractical to scale from the mere 500+ customers the station was serving.
Then came Nikola Tesla in 1888 with his AC system featuring generators, transformers, and a transmission system. This triggered another revolution that made the generation and transmission of electricity over long distances feasible and easily attainable. Over time, technological changes(plural) in transformer technology, power generation technology, and so on formed the technological change (singular) – which is the electricity ecosystem – that brings power all the way from power generation plants to our homes.
The same can be said for the path on which the building of the metaverse will take. If first started with the internet that allowed us to connect across borders and do things we never thought were possible. Then virtual and augmented reality came into the fray, which enables us to interact with our environment in a way like never before. Next, the blockchain made its debut, allowing us to The combination of these technological changes creates a roadmap that leads to the metaverse.
That being said, we cannot attribute the building of the metaverse to just one person or corporation. Neither can one single entity build the metaverse. Several big corporations will have to contribute in their way to the realization of the metaverse. Some are already putting in the works, while others are set to kickstart their metaverse projects in the coming future.
Here are some of the few companies playing a role:
In October 2021, Facebook rebranded to “Meta” to align themselves with their vision of contributing to the building of the metaverse. In an interview with Sarah Dietschy, Zuckerberg stated he wants Facebook, now Meta, to be seen as a metaverse company rather than a social media company. The plan was put in motion seven years ago, and they have gone ahead to invest heavily in this vision. This is evident in their $10 billion investment in the metaverse division this year alone and their acquisition of Oculus, a company that produces VR headsets, in 2014.
In the Microsoft Ignite 2021 conference, CEO of Microsoft Inc., Satya Nadella, revealed that Microsoft is gearing up to enter the metaverse space. He later made a tweet on the same day featuring a 2-minute video detailing the company’s metaverse vision and ambitions. Microsoft teams will allow users to create 3D avatars and interact/collaborate in virtual spaces. Their ambition is hinged on virtual/augmented reality and will see them investing heavily in their VR headset – HoloLens. In addition, their mixed-reality tool – Mesh for Microsoft Teams – will also feature heavily in their plans, allowing employees to connect remotely at a deeper level and work together on projects.
SNAP – the company that made and owns snap chat – has been building augmented reality filters to overlay real-world features for a while now. In 2016, they unveiled their AR glasses, Spectacles, allowing users to experience augmented reality filters.
They have plans to enter the metaverse by partnering with brands and creating a different way for these brands to advertise their products. Speaking at a WSJ Tech Live, Evan Spiegel, co-founder, and CEO of Snapchat said:
“One of the most exciting areas that we’ve been investing in recently is around commerce and the try-on of new products; apparel, accessories, beauty products, things like that.”Evan Spiegel
In essence, users will be able to try on clothes, accessories, etc., in augmented reality to see how it looks on them before they proceed to buy.
Often referred to as the “shepherds of the metaverse,” Roblox has been making tremendous strides in this space. They have contributed a lot to the move towards the acceptance and acclimatization of the metaverse. Roblox started as an online game platform that allows users to create their games using its proprietary system – Roblox studios.
During a GamesBeat summit in November, Roblox chief of technology, Dan Sturman, revealed how the company plans to design a metaverse that caters to the needs of their players.
Users will now be able to create virtual worlds within the Roblox platform, and limited-edition items (NFTs) creators can sell. They have several projects lined up, including their expansion into K-12 schools. The CEO, David Baszucki, announced that a $10 million Roblox Community Fund had been put to that effect.
On November 17, Nvidia clearly stated its vision and mission to not only get into the metaverse space but become the foundation or “plumbing” on which the metaverse is built.
The computer chip maker announced the Omniverse Replicator Synthetic-Data-Generation Engine as part of its commitment to building the metaverse. This engine will make it easier to create virtual simulations of real-world buildings, avatars, and so on.
Other companies like Unity, Tencent, Autodesk, and even Amazon are making their foray into the metaverse with their projects. In the coming years, we will continue to see more advancements and contributions towards the building of the metaverse by several other companies.
The Economy of the Metaverse
In the present-day internet, a large portion of our lives is online – from our communication to our work ecosystem and, unsurprisingly, our economy. Most economic transactions of all kinds, including production, sales, distribution, or consumption, occur on the internet because it is faster, easier, and accurately time-stamped (recorded, if you will).
And as we propagate towards a more realistic, faster, real-time experience, even more of our transactions will move online. Some would even say it has already started happening.
There are subtle moves here and there to move our financial system online with the advent of cryptocurrencies and decentralized finance (Defi) networks. The question is, how does all this fit into the metaverse? What will the ionosphere of the metaverse look like?
The Metaverse Econosphere – Value
To understand the direction the economy of the metaverse will take, we need not look too far ahead. We already see glimpses of the metaverse econosphere with projects like Axie Infinity, Fortnite, Decentraland, and the likes. Decentraland, for example, uses an ERC-20 token known as MANA as its digital currency within the platform.
If you own MANA, you can buy a piece of the 90,601 parcels of virtual land on the metaverse platform. Sandbox is another virtual metaverse network that allows users to create and participate in games. SAND is the platform’s utility token used to transfer value – i.e., buying/selling land, paying for gaming experiences, buying/selling assets, and so on – within Sandbox.
These use cases show that value can be transferred within the metaverse, as you would online today and in real life. It also shows that value can be stored within the metaverse in the form of Non-Fungible Tokens (NFTs) that represent ownership.
In addition to the transfer and storage, value can also be created in the metaverse. Roblox, for example, allows developers to create gaming experiences and in-game items that can be monetized on the platform. Other users can then pay for these experiences using Robux – the digital currency of the Roblox metaverse platform.
The Metaverse Econosphere – Freedom
In the metaverse, content creators will have the freedom to monetize their content however they choose without interference from the host platform. In Roblox, for example, developers can unanimously decide the price of their game passes and in-game assets. The interesting thing is, Roblox provides all the tools and platform services to host and manage your game at zero cost.
This system is a far cry from the present monopolistic approach that big-tech companies like Apple and Google operate. Apple, for example, charges you an annual fee of $99 to list an app on their store, and they also take a cut of 30% on your app’s revenue (from in-app purchases). Thirty percent is a lot to give up as an up-and-coming developer because you will need to funnel money into the game to keep it running.
This freedom cuts across all sectors in the metaverse econosphere, not only gaming. Music artists, fashion designers, etc., can all go on the metaverse and monetize their content as they see fit without having to pay one big tech company excessive amounts of money to host their content.
Metaverse Econosphere – Competition
The one thing that keeps value creators and providers in check is healthy competition. Competition ensures no one participant has a full monopoly and autonomy on the dynamics of the market. It also drives the market by ensuring quality value is provided at competitive prices.
Competition is a common factor of any market economy system, and the metaverse econosphere is no different. The metaverse will be open to just about anyone to offer value on a large scale, and the onus will be on the creators to provide quality content at a price that will attract their target market.
The interesting thing about competition in the metaverse is that not only will there be competition amongst content creators, but there is set to be creators amongst platforms.
Many proponents of the metaverse, like Tim Sweeny (CEO of Epic Games), have been advocating for the interoperability of the metaverse. This means that value should not only be interchangeable within a closed system, like Roblox, Sandbox, Fortnite, etc. but should also be transferable across platforms within the metaverse.
For example, a developer on Roblox should be able to move their game from the platform to, say, Sandbox with ease without losing their data.
This interoperability creates competition amongst this platform which, in turn, will eliminate any monopoly that sees a big tech company controlling a large part of the metaverse.
Challenges Facing the Metaverse Construction
With every significant technological change comes challenges that hamper its wide acceptance. This is usually a result of the lack of infrastructure to support the idea at the time. The same holds for the construction of the metaverse. Here are some of the challenges facing the building of the metaverse today.
The metaverse is virtual and yet promises to be interactive and immersive. This can only be made possible with suitable technology that will compensate for the disconnect we experience with today’s virtual world (the internet). Profound advancements in VR headsets, haptic gloves, external sensors, and treadmill technology need to take place for us to fully and truly experience the metaverse everywhere we go.
High Barrier of Entry
We mentioned earlier in this article that several entities will build the metaverse. But right now, the participants are primarily big tech companies. The reason is the high costs of construction that prevent other not-so-big competitors from easily entering the sector. This has to change in the near future to facilitate the construction and growth of the metaverse.
Not too long ago, we in the tech community were glued to our seats anticipating the outcome of the Facebook-Cambridge Analytica data scandal trial that questioned the ethical handling of personal data. This forced the US senate to pass a bill known as the CONSENT Act that provides guidelines on tech companies’ collection, sharing, and usage of personal data.
There will be a lot of data sharing and usage on the metaverse, and it will be more personal than we have on the internet today. In light of this data breach case, legislative bodies might be skeptical about endorsing the metaverse due to the large amount of very personal data that will be made available online. Shying away, however, is not the solution. Instead, drafting appropriate policies that will guide data handling in the metaverse is the way forward.
The Future of the Metaverse
The metaverse is a relatively new technology, and we are only scratching the surface as it is. As a result, there are different speculations as to what the metaverse will look/feel like, how it will operate, and how we will all get to experience it.
It might not exactly make sense to a lot of people right now, just as the idea of the internet did not make sense to David Letterman when Bill Gates tried to explain the concept in an interview back in 1995. But just because there is no broad understanding of the concept nor acceptance at the moment does not mean it will not take root.
Some skeptics have expressed their unawareness on the subject as they doubt the metaverse will ever become part of our lives. But if there is anything the covid-19 pandemic has taught us, it is that life as we know it can function, in large parts, online.
All physical activities ground to a halt in virtually every part of the world at the height of the pandemic in 2020, but that did not stop companies from working from home.
Zoom meetings were the order of the day, and work productivity apps like Trello, Slack, and Asana came in handy. This called to question our need for physical presence to get work done in several industries. Some, to date, are either still fully remote or operating a binary physical – remote work system.
Besides work, several other activities were online – education, social interactions, even entertainment (remember Tory Lanez’s IG live episodes?). All our lives were pretty much online, and the world was able to heal from the blow dealt by the pandemic gradually.
The pandemic created a shift that is looking more permanent – the movement of a large part of our lives online. And the metaverse establishes a way for us to experience this shift in a more immersive and interacting manner. Everything from work, education, entertainment, and even some aspects of the economy will have its place in the metaverse.
The future of the metaverse looks bright as big tech companies are already pitching their tent, trying to bring this concept closer to realization. We have seen serious moves from these companies in investments, acquisitions, with some having a go at building preliminary platforms to give us a glimpse at the future.
Although there is still more work to be done to get to the point where the metaverse will be a place we spend a significant part of our lives and time, it sure is not too far into the distant future.