The metaverse is no longer just a term from science fiction.
When technology changes our lives, it doesn't always happen surprisingly. The Internet, the smartphone, and the cloud, to name a few, all came into the world before they appeared in science fiction. It is likely that the "next big thing" of the digital age is just around the corner, with the potential to change everyday life. It is called "the metaverse."
The metaverse is a blend of virtual reality, augmented reality and the Internet. You may already be familiar with its tendencies, for example in popular video games such as Roblox, Fortnite and Animal Crossing. The term was first coined in Neal Stephenson's 1992 science fiction novel Snow Crash, in which two delivery drivers travel through the metaverse to save themselves from a capitalist dystopia.
The metaverse envisioned by many futurists is similar to that depicted in science fiction stories such as "Ready Player One." While no one knows for sure what the metaverse will look like, its basic features are certain: it spans physical and virtual worlds, is centered on a fully functioning economy, and allows users to travel through the various "places" with relative ease while retaining their purchased goods and avatars.
Like a virtual theme park with no limits on size or creativity, users can move seamlessly from one place to another with thousands of other people, all within the same digital universe.
Why the metaverse matters
Even if the metaverse doesn't achieve the epic vision many hope it will, it could fundamentally change the way we interact with the digital world. A collective virtual experience could open up new possibilities for creators, gamers, and artists, just as non-fungible tokens (NFTs) have done, not just reshaping but reinventing the creator economy.
The virtual world of the Metaverse could become a trillion-dollar industry in its own right. A hub for entertainment, commerce, and for some, even a workplace. The Metaverse is described not as an extension of the Internet, but as its successor. And it's being built using blockchains and decentralized applications.
Venture capitalist and essayist Matthew Ball writes that the Metaverse will become "the gateway to most digital experiences, a key component of all physical experiences, and the next great work platform." He believes it will be the driving force in creating a new generation of businesses, much like it was in the proliferation of the Internet. Perhaps more interestingly, it could lead to the fall of established industry leaders, as we've seen with the rise of digital platforms.
Facebook's appearance
In late June, Mark Zuckerberg told his employees at Facebook that they would be working to "bring the Metaverse to life." The company has assembled a team of its executives to lead the project, including Instagram's head of product Vishal Shah and Facebook Gaming's Vivek Sharma and Jason Rubin.
In an interview with The Verge, Zuckerberg outlined his ambitions for what the Metaverse could be. He discussed the idea of virtual workspaces, which he called "infinity offices." Working in VR, he argued, allows for better multitasking, and meetings in a virtual, metaverse environment can be inherently more collaborative and productive. Zoom calls have their obvious limitations, and Zuckerberg says he already prefers to hold his meetings in VR when possible.
Facebook plans to drive this development with its own investments. It currently owns Oculus, which makes the popular Quest VR headset. Although VR technology still has a long way to go, Zuckerberg says it will be ready for metaverse capabilities "by the end of the decade."
Other tech giants on their way to the metaverse
No one person or company can have control of the metaverse, but the usual suspects in the tech world are already staking their claim to the future of the field. Google, Microsoft, Samsung and Sony have joined Facebook in the XR Association, a coalition of tech companies looking to shape the future of "experiential reality."
The gaming industry is ahead of other metaverse technologies in many ways and could continue to lead the way in this area. For years, video games have used the concept of an in-game economy, where players can buy and sell goods that have no real value outside the game universe. The most recent example is Fortnite, but an older example is the continued success of games like Grand Theft Auto V. Although the game was released more than seven years ago, it generated over a billion dollars in profits in 2020, thanks to a large online community that is still active in the game's online universe.
The Metaverse aims to connect these in-game economies under a coherent umbrella of virtual experience. Unlike the world of video games, the metaverse is not goal-oriented. Our relationship with it will be more akin to interacting with the Internet as a kind of virtual role-playing game.
How cryptocurrencies fit into the metaverse
Behind the scenes of the metaverse will be about providing permissionless identity, financial services, and high-speed exchange. Data will need to be stored and made available to millions, if not billions, of people. The answer to these problems lies in cryptocurrency technology.
Companies like Decentraland and The Sandbox have developed virtual worlds that incorporate cryptocurrencies, allowing players to create structures like virtual casinos and theme parks and turn them into cash. In Decentraland, the currency used is called MANA and can be purchased on exchanges like Coinbase. There are even casinos in Decentraland where you can gamble with MANA, paying merchants with MANA to show up for work.
NFTs will also play a fundamental role in the metaverse, giving people full ownership of their characters, in-game items, and even virtual land. An NFT for a 259-parcel virtual estate in Decentraland recently sold for more than $900,000, the largest sale to date.
Eventually, it will be possible to buy and sell virtual goods from different games and universes on interoperable marketplaces. So someone might be able to sell their virtual property in the world of Decentraland use the money to buy Fortnite skins, for example. Cryptocurrencies could become the only legal tender in the metaverse, with all virtual objects and intangibles expressed as NFTs.
"I think people are really overwhelmed by the amount of money players are spending on digital assets. Hundreds, thousands, probably even millions of dollars are being spent on digital assets," says Arthur Madrid, CEO and co-founder of The Sandbox. "I think turning those assets into NFTs, building an NFT economy, will add a new layer to the existing digital economy."
While no one can predict exactly what the metaverse will look like or when its final form will be achieved, the importance of cryptocurrencies to its growth is a certainty. As we watch the development of technologies like virtual reality and the way current industry leaders like Facebook are engaging, advances in blockchain technology and the cryptocurrency sector will play an equally important role in shaping the future of the metaverse.