Unless you have been living under a rock, you have most likely heard the term “metaverse” before and perhaps you are vaguely aware that Facebook is very interested in it. I mean, they did change their name to Meta after all…That being said, what exactly is the metaverse?
What is the metaverse?
The metaverse generally refers to online spaces that allow people to interact in a more immersive and meaningful way. This is facilitated through the use of 3D technology. So for example, by wearing a virtual reality headset, you can completely immerse yourself in a digital world, where a little cartoon like person, (known as an “avatar”) represents you. You have full control over the actions of your avatar in the virtual world of the metaverse. And you can interact with other avatars representing real people, in a virtual world in which you are completely immersed, like in a modern video game. If you have watched popular Netflix show “Black Mirror,” you will understand what the metaverse could look like – hopefully without the dark and negative consequences shown in the storylines of the show!
The core idea behind the metaverse is that people should not have to be physically close to each other to interact with each other in an immersive and meaningful way. People should be able to brainstorm, collaborate, educate themselves, purchase goods and services in a much more multi-dimensional immersive manner than what is currently offered by websites, video calls, messaging apps and social media platforms.
What is Web 3.0?
To elaborate on this further, the metaverse is a huge part of something known as Web 3.0. The simplest way to explain the concept of Web 3.0 Metaverse is as follows. Try to think of the internet’s overall, fundamental purpose as being a means to connect people. The internet has evolved dramatically since the explosion in its popularity in the 1990. Web 1.0 can be thought of as the very simple and basic version of the internet in the 1990’s, in which users of the internet passively received information from websites, without the ability to post reviews, feedback, or comments. Images and video were of very poor quality, and there was no interactive content on the internet. This was the era in which Netscape was one of the dominant web browsers, and connection between people and communities was facilitated predominantly by email services such as Hotmail and Yahoo mail.
Web 2.0 is the current version of the internet in which users can create, share, collaborate and communicate their work with others, without any need of any web design or publishing skills. This was not possible in Web 1.0. Facebook and other social media platforms facilitated this, and the internet’s ability to connect communities was much better. Social media was born, and most connection between people and communities was now through Facebook, WhatsApp, YouTube and other social media platforms rather than through emails.
The current early stage Web 3.0 Metaverse greatly enhances ability for users to connect with each other in a much more immersive and decentralised way than the current Web 2.0 does. Web 3.0 Metaverse a vision of the internet of the future, a vision of how the internet will seemingly, efficiently and almost more “naturally” integrate into our daily lives. Entire virtual world and virtual economies will be developed on the block chain, in every sector you can think of.
The metaverse has already produced several useful services. Sotheby’s Auction House have already held virtual auctions. Sotheby’s they are planning for a future where old-school, in-person auctions might be going, going, gone. On 29 June 2021, they sold expensive art masterpieces to an entirely digital audience.
Metaverse and cryptocurrencies
How does the metaverse affect cryptocurrencies? Grayscale, the world’s leading cryptocurrency asset management company, values the metaverse at over $1 trillion dollars. And on one of the most exciting areas concerning the metaverse and cryptocurrencies is gaming. According to the Grayscale Metaverse Report of November 2021, there is a trend away from “pay to play” games towards “play
to earn games.” Pay to play games are ones like Call of Duty, or Grand Theft Auto, in which you pay a sum of money up front to own and play the game. All subsequent in game experiences in game are “free” from that point. Conversely, “Play to Earn” games are free to play, there is no up-front cost required. However there are in game opportunities to make purchases or to earn items which enhance gameplay or social status within the game. These items can be sold as NFT’s in cryptocurrency markets creating income for the seller earned from their skill in playing games. And revenue from online gaming is estimated to increase from 180 billion in 2020 to 400 billion in 2025, according to the same report.
Furthermore we also have virtual worlds built on the block chain, like Decentraland which is built on Ethereum. Decentraland is a fully decentralised, virtual world in which people can develop and own virtual land, or they can wander around and interact with what other users have created and developed on their land. Each block of land can be sold in crypto markets as an NFT. On this land, virtual stores can be built, in which people can purchase items such as real clothing in virtual stores on the land, or virtual clothing for your avatar.
Or perhaps visit an Embassy such as the Embassy of Barbados, which has built an embassy on Decentraland, and apply for a visa to visit that country. Very convenient if you live a long distance away from the physical Embassy. The applications of the Metaverse are endless. The currency of the Decentraland economy and ecosystem is the crypto currency MANA, which is set to increase in value substantially as the Decentraland economy develops over time. Decentraland is currently one of the leading block chain based virtual worlds.
In conclusion, the metaverse is in its very early stages of development and is likely to take years to develop into a fully immersive mature model that substantially enhances quality of life for its users. Current leading Web 2.0 tech companies will most likely need to start exploring and investing in the Metaverse to stay competitive, or risk becoming obsolete. For the retail investor, this represents an excellent opportunity to invest in early stage crypto currency projects such as MANA and SANDBOX.
Taking advantage of opportunities to invest in projects like these or others which are aligned with the metaverse at a low cost relative to their potentially huge value in the months and years ahead could be extremely profitable, once the metaverse reaches a more advanced stage of development.