Introduction
The idea of the metaverse can be traced back to the past.
The word “metaverse” was invented by an author Neal Stephenson in his 1992 science-fiction novel “Snow Crash,” which predicts a virtual reality-based successor to the internet. People in the story utilize digital avatars of themselves to explore the online world, frequently to escape a bleak reality.
Some three decades later it’s now becoming a reality, or rather a virtual reality (minus the dystopia of course).
In this article we going to talk all about the metaverse.
What is Metaverse?
Image source: nianticlabs.com
Simply put, metaverse is the internet breaking away from its two-dimensional boundaries.
If we consider the internet to be something we look at, metaverse is a version of the internet that we may experience as an avatar or a virtual representation of oneself in 3D. It’s a spatial construct that is immersive as opposed to the current 2D web on a desktop or mobile.
We could eventually develop a fully fledged multi-trillion dollar economy in the metaverse. Not only an economy of digital products and entertainment, but also of services in an immersive environments, with designers, stylists, or even psychologists.
The Evolution of Metaverse
Image source: Galaxy Digital
This is, in many ways, a linear evolution. Online, multi-player, role-playing worlds such as The Sims or Second Life have been operating for over two decades, with users spending an average of 20 hours per week in these realms. Today’s analogues, such as Minecraft, Roblox and Fortnite, have hundreds of millions of players and massive supporting economies.
Several new technologies have come together to pave the way for this type of metaverse to emerge. Augmented reality and virtual reality headsets have gotten more affordable and powerful, which has improved the user experience. Advent of blockchain has enabled digital currency and NFTs, which have enabled scarcity and ownership of digital goods. The new methods to transact and own digital goods are allowing creators to monetize their activities through tokens. This democratic ownership system, along with the prospect of interoperability, has the potential to provide enormous economic opportunities.
Meta Economy
There are tremendous commercial prospects at this rapidly expanding confluence of the digital and physical worlds. Here are some of the industries that are sprouting up within the metaverse.
Metaverse Fashion
According to Statista, the fashion industry is a $2.5 trillion worldwide sector that affects everyone on the planet. This industry has made its way into metaverse, with companies reproducing the experiences that characterize fashion and culture. Virtual fashion allows for the expression of numerous selves. Avatar dressing has gone a long way with the screen wear being the new street wear.
In virtual fashion world, NFTs are the couture of the metaverse, where the unrestrained creations of digital artisans may out price those of major companies, and such assets, driven by scarcity and authenticity, are fast becoming crypto status symbols.
Digital fashion is being adopted in a variety of ways. To begin, you may put it on yourself using an AR filter, see below.
Image source: vogue business
or you can transform it into an avatar in a metaverse or a blockchain computer game, as shown below:
Image source: business insider
As more individuals begin to shift into virtual worlds and spend more time in virtual environments, we will begin to consume digital clothes, beauty, jewelry, and so on.
Many startups are entering this market in order to make the user experience much more user friendlier, as right now purchasing NFTs can be complicated.
Some of the major brands that have already entered the metaverse are Nike, Adidas, Gucci to name a few.
Games
Image source: popularmechanics.com
The global games market is on course to reach $200 billion by 2023 (Global Games Market Report, Newzoo, 2021), with mobile gaming accounting for the lion’s share.
According to App Annie, a market research and analytics firm, gamers spend more than $100 billion each year on mobile games alone, with over 3 billion people worldwide playing video games. Furthermore, in 2021, gamers downloaded 82.98 billion mobile games, and it’s anticipated that games would account for 71% of Google Play income by 2025.
Gaming is now the world’s leading form of entertainment, but so far only the developers of these games made financial gains while the gamers only spent money to enjoy them. Roblox, Pokemon Go, and Fortnite have generated significant revenues from in-game purchases each year. One major title, Clash of Titans, has been estimated to have generated a total revenue somewhere near an almost incomprehensible $3.5 Billion for developer Supercell.
Due to a centralized economic model, developers and publishers have the rights to all of the in-game assets and the right to distribute such assets as they see fit.
However, with the advent of the metaverse, it led to the rise to a play-to-earn model. In essence, unlike conventional games, ‘play-to-earn’ model means that all the digital assets you own within the game are empirically yours, and you can do whatever you want with them, including selling them on secondary marketplaces. These assets are stored on a blockchain, so you don’t have to worry about their security. The publisher or the developer would not have any rights over any item a gamer has purchased in the game.
Major game developers, such as GTA’s Take Two Interactive, Ubisoft and several others have expressed interest in blockchain gaming.
Digital Real Estate
Image source: medium
Virtual real estate might be the next step in the evolution of digital ownership. There are parcels of land in the metaverse, with each metaverse platform providing a limited amount of parcels for purchase, which are tracked via blockchain technology.
Land is divided into thousands of pieces, each of which is a set size (for example, 16m x 16m) and is its own certified NFT on the blockchain, implying that each single land parcel is fully unique and cannot be reproduced. Please see the following:
Image source: decentraland.games blog
Because each metaverse platform declares the precise number of parcels of land that will ever exist, scarcity is created, which is what gives land value.
You may use various programming tools to build retail developments, art studios, casinos, museums, and whatever else you wish on top of your plot of land.
Image source: vmsd.com
Building a virtual mall that is leased to stores selling fashion avatars is one example. So, in effect, they become 3D analogues of marketplaces such as Amazon, Etsy, or Shopify, where several distinct sellers and retail items or experiences can be found in one location without having to construct all of the technology from scratch.
Location is important in the virtual world, just as it is in the actual world. It all comes down to predicted user traffic, and if a parcel of land receives more user traffic, the land owner will be able to monetize more readily through adverts, selling NFTs, providing a company or service, or providing a game.
Image source: theartnewspaper.com
Tokens.com, for example, paid $2.5 million for land in Decentraland’s fashion sector, which sees a lot of traffic.
Concerts
The next step in the evolution of the music industry are the virtual concerts held within the metaverse. Virtual humans are no longer constrained by physical limitations and during a virtual concert, a musician can instantaneously change clothes or convert the stage from an outer space realm to an underwater one, as an example.
Virtual concerts, in essence, may be just as entertaining and emotionally significant as regular ones. Fans can engage with the pop artist and influence what occurs throughout the concert. More artists are trying out metaverse experiences and brand sponsorships and virtual merchandise are ways for brands to tap into the thriving entertainment trend.
Some of the artists in metaverse include Snoop Dog, Justin Bieber, Lady Gaga, Ariana Grande to name a few.
Social Interaction
“Within the next two or three years, I predict most virtual meetings will move from 2D camera image grids to the metaverse, a 3D space with digital avatars,” — Bill Gates.
Many company owners have already recognized the advantages of virtual meetings over in-person meetings, including cost savings, easier engagement with colleagues all over the world, and more. Zoom is now used for such meetings, but this might change quickly.
Image source: twitter
Instead of a standard Zoom call with a camera and a two-dimensional experience, you’ll be able to put on glasses or a headset, allowing you to fully immerse yourself in that space. These VR experiences have the potential to significantly improve the alternatives available when connecting with other people, regardless of where you are. In many circumstances, the metaverse option may help individuals connect more deeply than a typical Zoom conference. People will be able to participate more effectively instead of just gazing at a screen, which might improve the value of such meetings for many businesses and individuals.
Feeling the Virtual World
Image source: vox.com
The next piece of the puzzle is to be able to feel these virtual environments as well as see them. One such example is the glove that companies are now working on to develop, which will let the user feel sensations like holding an object. The glove has a number of sensors that track the wearer’s motions and inflate air pockets throughout the glove surface to provide sensation.
Which Metaverse?
There are two types of metaverses, blockchain based public ones, such as Decentraland or Sandbox and private ones, such as Meta (previously Facebook).
Decentraland & Sandbox
Image source: zipmex.com
Today, the two largest blockchain metaverses are Decentraland and Sandbox. They both share the same basic premise in that users may explore the virtual environment and interact with other players and objects in it.
Tokens in Decentraland are classified into three types: MANA (the local currency), WEAR (wearables and items), and LAND (the virtual plot of land). In Sandbox, there are four types of tokens: SAND (the native money), ASSETS (user-created items), GAMES (user-created games), and LAND (the virtual plot of land).
The Sandbox and Decentraland metaverses allow users to purchase virtual land and use it to create their own world. In other words, users can create, experience, and monetize their content and applications.
Sandbox intends to deploy the platform on mobile devices by the end of 2022, as well as on consoles such as Xbox and Playstation. Furthermore, they hope to have 5,000 games available on the platform by the end of 2023. Furthermore, Sandbox intends to build in-game jobs that will allow users to work in the same way that they would in the real world.
Decentraland hopes to attract creators, companies, and celebrities to the area and let them to produce NFT drops and commercials by early 2022. What’s more, there’s a proposal in the works to make Decentraland interoperable with other Metaverse worlds.
Meta (Facebook)
Image source: youtube.com
In contrast, while Meta refers to its virtual world as decentralized, it is not the same as “decentralization” from a blockchain standpoint, as Meta is governed by a centralized entity.
Meta’s metaverse is created in 3D, and entrance to the promised virtual environment requires a VR headset. The entire point of Meta’s metaverse is to move beyond the constraints of the computer screen and be right there with others no matter how far apart they are.
Although it’s difficult to predict which will succeed at this point, it’s worth noting that over 77% of respondents who are interested in joining a metaverse are concerned about Meta holding the data, according to a recent poll performed by metaverse gaming business Advokate Group.
Furthermore, 87% favor a metaverse on a decentralized blockchain. This view is stronger among Generation Z respondents, who are 10% more inclined than Millennials to want a blockchain metaverse.
Summary
We are not suggesting that the metaverse, as we know it now, will replace all human interactions, but rather that it could be a successor to the 2D internet of today.
The metaverse will most certainly permeate every industry in some form in the coming years, with JP Morgan forecasting an yearly income opportunity of more than $1 trillion.
Don’t dismiss this as a blip; it’s a game changer, and we have no idea where it can go.
DISCLAIMER: The information contained in this article is for educational purposes only and does not constitute any form of advice or recommendation by Wheatstones, and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
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