What is the metaverse?
Key points
- The metaverse is the next generation of digital platforms. It comprises a full stack of technologies, including virtual and augmented reality, blockchain and artificial intelligence.
- It is a virtual “sandbox” created by users themselves, who choose what to do. With cryptocurrencies and NFTs, virtually any activity can be monetised.
- Meta, formerly Facebook, is building its own metaverse, Horizon Worlds. Mark Zuckerberg described the metaverse as “an internet you are in, not just looking at it”.
- Other major digital-world projects include Otherside, Decentraland, The Sandbox and Axie Infinity. Each has its own features: in one you can buy land; in another you can breed unusual creatures.
What does the term “metaverse” mean?
The word “metaverse” translates the English “metaverse”. It consists of two parts: “meta” — a Greek word meaning “beyond”, and the English “universe”.
Though complex and multi-faceted, it usually refers to several core components: a three-dimensional digital space using technologies such as virtual reality (VR) or augmented reality (AR), blockchain and NFTs, as well as artificial intelligence.
In the popular imagination, metaverses are the next generation of internet platforms: self-sufficient worlds where users can work, relax, study and do much else. Each such world may have its own functions and features.
What are the main attributes of a metaverse?
The main characteristics of a modern digital world can be found in an essay by Amazon Studios executive Matthew Ball titled “The Metaverse: What It Is, Where to Find it, and Who Will Build It”.
In it, Ball listed the principles on which metaverses are likely to be built in the near future:
1. Persistence. A metaverse cannot be paused or reset. It exists in real time, regardless of external factors.
2. Synchronicity. The metaverse exists synchronously. It is a lived experience that spans both the real world and virtual space.
3. Accessibility. Virtual reality should impose no arbitrary limits on its participants. Everyone can be part of what is happening.
4. Interoperability. There should be direct exchange of data, digital assets and items between different virtual worlds. For example, a weapon skin in Counter-Strike could decorate a weapon in Fortnite or be gifted to a friend on Facebook.
5. A self-contained economy. Participants in metaverses can create, own, invest, sell and earn rewards for a wide range of virtual services that others value.
Is the metaverse just a game?
The short answer: no. Games are primarily for entertainment, and users, with rare exceptions, tend to spend money on them rather than earn it.
The aim of the metaverse is to create new ways for people to interact and to transpose real life into digital form. That spans social, cultural, economic and civic spheres.
There is no single narrative or set of mechanics imposed by a developer. It is more a sandbox in which the space is created by users. They choose what to do. That can include games, but also socialising, creating digital goods and art, building, travelling and more.
What do NFTs and cryptocurrencies have to do with metaverses?
The metaverse concept assumes users will have unlimited opportunities to monetise their virtual lives.
The core building block of the virtual economy is the non-fungible token (NFT). It functions as proof of ownership for any digital items and property created by users.
Developers cannot seize an NFT or delete it from a user’s profile, as it resides on a blockchain. Nor are tokens confined to a single app, allowing valuable property to move between different metaverses.
User “avatars” can also be tied to NFTs rather than to an app profile, making them impossible to steal, copy or delete.
Cryptocurrencies serve as the internal “currency” of metaverses and likewise possess all the attributes of “digital property”.
Is Mark Zuckerberg building a metaverse too?
In 2021 the tech giant Facebook rebranded as Meta. Founder Mark Zuckerberg said the metaverse, not social networks, was now the corporation’s main project.
Meta’s digital world is called Horizon Worlds. It runs via VR and AR headsets and will in time be available on various devices, including PCs, games consoles and even phones.
Zuckerberg himself described the metaverse as “an internet you are in, not just looking at it”.
How does Horizon Worlds work?
In December 2021 Meta opened beta access to its digital world for residents of the United States and Canada.
The platform allows users to interact with each other, move through virtual space, take part in events, and create objects and even worlds. The latter are bounded spaces with various functions — for example, a yoga room, a work office, a cafe or a scenic natural spot for meditation.
The app includes VR building components, including code blocks, sounds and animation effects. You can join Horizon Worlds using an Oculus Quest headset and a Facebook account.
It is integrated with other function-specific metaverse products: Horizon Workrooms — a co-working platform — and Horizon Venues, a venue for online events and concerts.
As Meta said in mid-February 2022, more than 10,000 virtual worlds had been built in Horizon Worlds, and monthly active users had reached 300,000.
Any user will be able to monetise their activity in Horizon Worlds using NFTs. Meta plans to earn commissions on token sales. The company, however, was criticised for fees that were too high.
Meta is also considering issuing its own token as an analogue of “money” in the metaverse.
What other metaverses are there?
Today the crypto market hosts several projects aimed at building metaverses:
1. Otherside. A digital world with gamified elements developed by Yuga Labs, the creator of the famed NFT collections Bored Ape Yacht Club and Mutant Ape Yacht Club. The metaverse launched in spring 2022; its native token is ApeCoin (APE).
2. The Sandbox. A virtual sandbox-style space. In this metaverse users own plots of “land”, implemented as NFTs, and can build any digital objects on them. The project’s native token is SAND.
3. Axie Infinity. A popular blockchain game with Pokémon-like mechanics: users “raise” and upgrade their own creatures and stage battles. Players can also earn passive income by “renting out” their creatures. The developers of Axie Infinity are working on a “virtual land” project: owners will be able to buy plots and build on them, gather resources, team up and fight for territory. The project’s native coin is AXS.
4. Decentraland. One of the oldest metaverse projects, where users can also acquire digital land and build on it, as well as create items. Land plots are implemented as NFTs. Built objects are interactive and can be monetised. Decentraland has its own cryptocurrency, MANA.
How are metaverses developing?
First, money is pouring into digital worlds. Digital “real estate” is especially lively: large banks are already investing in virtual plots in The Sandbox, and Will Smith and The Weeknd have bought land in the Everyrealm metaverse. Anyone can buy land on internal marketplaces. Projects’ native cryptocurrencies trade actively and hold leading positions in the crypto market.
Big companies are taking part more actively. In spring 2022 Decentraland hosted a fashion week featuring many well-known brands, including Dolce & Gabbana and Tommy Hilfiger. Estee Lauder advertised new products there.
Payments firm Mastercard has filed applications for 15 trademarks related to metaverses and cryptocurrencies. McDonald’s is registering a patent under which the chain plans to open restaurants in metaverses and sell food as NFTs.
Corporations are ploughing large sums into building metaverses. Notably, major game developer Epic Games raised $2 billion to create family-friendly virtual entertainment worlds, in partnership with Sony and LEGO.
In South Korea the metaverse has been made a national project, with $186 million earmarked from the state budget.
Various organisations are opening offices in virtual worlds: for example, JPMorgan and Dubai’s crypto regulator.
By Citibank’s estimate, by 2030 the metaverse market could reach $13 trillion, with 5 billion users.
Further reading
What is artificial intelligence?
What are ERC-20 tokens?
What is self-sovereign identity?
What is STEPN?
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