While the inklings of the Metaverse were previously present in online gaming worlds such as Fortnite, Minecraft, and Roblox, the concept only gained worldwide attention when well-known companies such as Facebook renamed to Meta in an attempt to focus on the Metaverse.
But, what is a Metaverse?
A Metaverse is an online virtual world that combines augmented reality, virtual reality, 3D holographic avatars like NFTs, video, and other communication methods. It's essentially a hybrid of technological features such as virtual reality, augmented reality, and video in which users "live" in a digital realm. Moreover, a Metaverse is also a digital economy where users may make, purchase, and sell things.
While the internet covers many aspects of the Metaverse, the term does not truly capture the value of the concept and the opportunity for disruption. As the world becomes increasingly digital, the Metaverse proposes a shared virtual space where people enter the Metaverse and interact with different parts of it using augmented reality. The projects building their Metaverse are essentially creating their alternate digital realities where people can work, play, and socialize. Thus, the concept of Metaverse makes the vision of creating interactive virtual worlds and economies a reality.
02. How Does The Metaverse Work?
Consider the Metaverse to be a never-ending digital parallel realm linked to our physical reality. It's data that's just out of reach of our physical body, but that can be accessed and engaged with through various technologies.
The structure of Metaverse technology is made up of several characteristics
Interactive - A Metaverse is a collection of interactive virtual worlds that work together to simulate the actual world. It includes social connections, global infrastructure, and other real-world characteristics.
Real-world replica - The Metaverse is a duplicate of the real world in which we live. A Metaverse will soon become a source of amusement and sustainability in a virtual reality experience, as well as a means of avoiding the reality of our life.
Persistent - The Metaverse's technology is persistent by nature. Unlike the internet, which can be turned off or off at any time, the Metaverse cannot be turned off or off. The Metaverse will exist for as long as technology exists, regardless of why it was established.
How do you access the Metaverse?
To access the Metaverse, people can use computers, smartphones, and mobile wireless networks. Smartphones and mobile networks provide Metaverse users unparalleled and near-constant access.
The Metaverse will become more accessible to the rest of the world as we continue to develop new types of linked devices. Infrastructure for the Internet of Things (IoT) and 5G mobile networks is being heavily invested in and will continue to expand over the next decade.
03. The History Of The Metaverse
The history of the metaverse starts with a dystopian science fiction book and contains many open-ended sandbox games. Later blockchain and NFTs started to play a huge role for the development metaverse.
1992: Snow Crash
Science fiction writer Neal Stephenson is credited with introducing the term “Metaverse” for the first time in his 1992 novel “Snow Crash.”
Stephenson envisioned his metaverse only a few years after Sir Tim Berners-Lee invented the world wide web in 1989. The invention of the Internet can be seen as the first step towards the Metaverse, as since then, people transferred more and more aspects of their lives into a virtual world.
2003: Second Life
Second Life is often called the first Metaverse. It was developed in 2003 in San Francisco by Philip Rosedale and his team at Linden Lab. People and journalists often called Second Life a game, lacking a better term to describe this new phenomenon. But the Linden Lab team suggested that it's not a game: "There is no manufactured conflict, no set objective.” Instead, Second Life is a 3-D online virtual world that resembles the real world of humans, objects, and the environment and incorporates a social life for the avatars. Second Life is what Linden Lab calls “an entirely open-ended experience”.
Roblox was launched in 2006, but it was only during the 2020 pandemic that the game became huge. Daily active users went up 85%, compared to 2019. In Roblox, users can play a multitude of different games of different genres, which users can create for other users.
Minecraft is a 3D sandbox game that is often called the best-selling video game of all time. Over 238 million copies of the game were sold and it has nearly 140 million monthly active users as of 2021.
Another dystopian science fiction novel was written by Ernest Cline. It introduces a metaverse called OASIS, into which people escape from an apocalyptic world in 2045, spoiled by global warming, and widespread social and economic problems. Stephen Spielberg directed an adoption of the novel in 2018 and pictured the dystopian world where people have “nowhere left to go, except the OASIS, a whole virtual universe.”
2012: Colored Coins
Bitcoin introduced decentralized money in 2009, and “Colored Bitcoins” were the first unique assets on a blockchain. They were mentioned by Yoni Assia in a 2012 blog post titled “bitcoin 2.X (aka Colored Bitcoin) — initial specs.” We know now that non-fungible tokens (NFTs) have been the next big step towards the metaverse because they allow ownership in the virtual world. More on NFTs in chapter 6.
Decentraland is a decentralized 3D virtual reality platform on Ethereum where people can buy digital land in NFTs with its native token MANA. Decentraland was originally created in 2015 by the two Argentinians Ari Meilich and Esteban Ordano, and started as a pixelated grid that allocated pixels to users through a proof of work mechanism. When a 3D version of Decentraland was launched in 2017, parcels of land were sold for about $20. The price increased tremendously after the NFT boom in 2020 and 2021. The most desirable pieces of land sold for $100,000.
The multiplayer online video game was deployed by Epic Games and generated $9 billion in gross revenue up until the end of 2019. Fortnite was not only a monetary success; it also became a cultural phenomenon. It has a total user base of 350 million.
The first concert in the metaverse happened in Fortnite in 2019 when Marshmello performed, and 10,7 million virtual visitors attended. This number was surpassed by the virtual gig by Travis Scott, which reached over 12 million views.
2018: Axie Infinity
Axie Infinity is a play-to-earn game on the Ethereum blockchain. Each in-game item is represented by an NFT. Users interact with avatars, real estate, and items, which hold actual value. Some Axie NFTs have been sold for as much as 300 ETH.
04. The Year 2021 And The Rise Of Metaverse Projects
Roblox, Decentraland, and Axie Infinity became more popular during the last two years. The rise of the metaverse may have been accelerated by the pandemic. Covid forced people to stay inside and into “social distancing”, leaving the virtual world the only place to safely meet and interact with people.
he peak of the metaverse hype this year was reached in November, when the Market Cap of $AXS (Axie Infinity) and $SAND (The Sandbox) reached their all-time highs. The currencies of Decentraland, The Sandbox, and Axie Infinity are now, at time of writing, No. 29 ($MANA), No. 30 ($AXS), and No. 34 ($SAND) of the most popular crypto assets.
What else happened this year that brought us closer to virtual reality?
Facebook's Rebranding As Meta
Outside of the worlds of gaming and crypto, many people heard of the term metaverse for the first time when, in October, Facebook rebranded as Meta.
While that decision might have surprised a few people, Facebook has been keen on augmented and virtual reality for quite some time. In 2014, Snow Crash was a “required reading” for project managers at the social media giant. In the same year, Facebook acquired Oculus for $2.3 billion. Then, in 2019, Facebook launched Facebook Horizon, a virtual social reality.
Meta published a promotion video in which Zuckerberg is introducing the metaverse. He promises that the company will keep doing what they did - “connecting people” - but on a different level. People’s everyday lives will happen in the metaverse, according to Zuckerberg.
Facebook uses a private blockchain and thus can control the data of its users. This is where the other projects like The Sandbox and Decentraland stand out, as they are building a decentralized Metaverse powered by cryptocurrencies and NFTs.
Let’s take a look at some of the best projects!
05. The Best Metaverse Projects
Although Decentraland was created in 2015, it got polpular after the NFT boom in 2020 and 2021. The most desirable pieces of land sold for $100,000.
The Starl Metaverse Initiative is the first cryptocurrency project to bring on an AAA game development and design team with more than twenty years of expertise. This initiative encompasses LEGO Group, Lionsgate Entertainment, Disney, and Pixar projects Lucasfilm and Playstation.
This metaverse project will serve as a game launch platform, with Wyrmbite Studios adapting and developing the first title, Warp Nexus.
STARL will serve as a link between skillful gaming and cryptocurrencies.
CACA RADIO (RACA)
USM Labs was founded by Universal Metaverse (USM). The USM is a digital environment in which players may interact, own property, construct structures such as businesses and art exhibitions, and play and develop games. Radio Caca (RACA) is the Universal Metaverse’s native token.
The Bloktopia project is a 21-story skyscraper that pays tribute to the twenty-one million Bitcoins in circulation. Users can access cryptocurrency data and immersive multimedia all in one spot.
Bloktopians will make money via owning real estate, selling advertisements, playing games, creating networks, and lots more.
Bloktopia will use the world's most powerful real-time three-dimensional Creation Engine to generate user experiences and spectacular visualizations.
06. The Metaverse Market By Numbers
Following Mark Zuckerberg's support of the Metaverse and rebranding Facebook to Meta, a surge of new capital funds, start-ups, and self-described professional analysts have sprung up to cash in on the newest wave of Metaverse excitement.
In October 2021, there were about 2.62 million queries for the phrase "metaverse." Given how swiftly technical breakthroughs, particularly in the realms of virtual reality and artificial intelligence, are rapidly growing, it is worthwhile to consider what’s coming.
The Metaverse is ruffling feathers among innovation and technology enthusiasts, including Facebook and Silicon Valley as a whole. According to Bloomberg Intelligence , the metaverse market might hit close to $800 billion in 2024, up from $478.7 billion in 2020, suggesting a yearly growth rate of 13.1 percent.
The Metaverse market is expected to develop at a CAGR of 13.1 percent in the next several years. In contrast, the blockchain tech sector is estimated to rise at a 32.4 percent CAGR until 2025, so there is a significant financial motivation to get in early.
Here are some trends that will likely be commonplace in the Metaverse:
Gaming is among the most lucrative metaverse industries. Advertising agencies and resellers have seized the opportunity to promote their merchandise on a renowned platform with a receptive audience. Since the gaming industry is the most significant source of fun in the Metaverse, game advertising has become incredibly common, surpassing both television and movies.
Among shareholders, virtual products have become popular. Aside from cryptocurrencies stored on blockchains, vendors have started buying and selling virtual products such as digital collectibles.
Due to the advent of NFTs (non-fungible tokens), vendors can now build their collectibles and swap them for cryptos. D2A (Direct-to-avatar) has simplified exchange by eliminating trading middlemen. Presently, shareholders can exchange without divulging their login details in the digital world.
Individuals are slowly searching online to escape the monotony of their everyday routines. The world wide web has evolved into more than just a web browser; it has become an entirely new realm in itself. The Metaverse may convert the actual realm into a novel digital reality. More individuals have entered the backlog, leading to the establishment of online communities. The Metaverse has personalized consumers' experiences to reproduce social relationships, culminating in a social realm where you can meet people and socialize.
NFTs In The Metaverse
NFTs are Virtual Assets that depict real-world elements such as in-game commodities, music, arts, and films. They're purchased and traded online, often using cryptocurrency, and they're usually encrypted with the same technology as cryptocurrencies.
Even though they have been there since 2014, non-fungible tokens are currently gaining popularity as a convenient means of transacting virtual artworks. Since sometime in November 2017, a whopping $174M has been invested in non-fungible tokens.
Non-fungible tokens are distinctive and contain unique identifiers. Basically, non-fungible tokens generate virtual scarcity. This is in sharp contrast to the vast majority of digital products, nearly always available in endless quantities. If a certain commodity is in high demand, cutting the supply would theoretically increase its value.
However, many NFTs have been virtual works already in existence in some form somewhere else, such as legendary videos from Basketball games or collateralized copies of artworks already circulating on Instagram. For example, Mike Winklemann, a renowned virtual artist popular as "Beeple," created "EVERYDAYS: The First 5000 Days," arguably the most popular non-fungible token of the time auctioned at Christie's for a ground-breaking $69.3M.
Specific images—or perhaps the full collage of images—can be seen online for free. Therefore, why are individuals prepared to invest significantly in something that might be simply screenshotted or downloaded? Because an NFT permits the purchaser to keep the original asset. It also comes with in-built authentication, which acts as evidence of ownership. The "virtual bragging rights" are almost as valuable as the object itself to their collectors.
Since they permit digital proprietorship, NFTs are vital to the Metaverse. You can possess virtual art inside the Metaverse and a virtual house to display it. Moreover, since NFTs are recorded on the Blockchain, they're irreversible and inimitable; nobody can ever deny that you are the owner of that artwork or house.
The digital economy in the Metaverse will be strong, and non-fungible tokens will be the cornerstone of that economy. Although the metaverse idea is still in its infancy, NFTs are an important step toward reaching its maximum capabilities.
Digital artists represent a new type of job made possible by the world wide web, which could be more profitable than the traditional one. How individuals interact and operate will be transformed by digital environments.
For instance, Roblox creators will fill the Metaverse with digital skyscrapers, parks, furniture, and clothing. Employees who create Airtable applications today will create digital workplaces of the future. Merchants that create Cashdrop or Shopify stores will create digital, 3D storefronts the next day. TikTok stars will create digital entertainment environments.
Digital artists represent a new type of job made possible by the world wide web, which could be more profitable than the traditional one. How individuals interact and operate will be transformed by digital environments.
The Future Of The Metaverse: Centralized Or Decentralized?
Right after Facebook rebranded as Meta, Australian artist Thea-Mai Baumann saw her Instagram account disappear. Her handle has for years been @Metaverse. After fighting for it, she got her account back, but for more than a month, the records of nearly a decade of her work and life were gone.
This was possible because Facebook owns Instagram which controls users’ data. What would happen if Meta (previously Facebook) control users’ life in the Metaverse? Imagine you get banned from life.
When the Metaverse is controlled by a centralized monopoly like Meta, this scenario becomes possible. For such reasons, the announcement of Facebook becoming Meta has caused some discomfort in the web3 space.
Web3 is a movement with the mission to grant everyone ownership over their personal data, while Facebook always prioritized profit over personal and public health. Web3 has the vision that people build and own the metaverse, not giant tech companies. It is a revolution with the goal of changing the power structures of today, where states, companies, and a few powerful people own almost all land and real estate, have control over borders, and decide about the value of work. The metaverse can be a chance to build a fairer, safer, and more democratic world. In an open, decentralized metaverse, any developer can build upon the blockchain architecture.
Decentraland, for example, is governed by a DAO. The DAO owns the most important smart contracts and assets that make-up Decentraland. Through the DAO, the people are in control of the policies of Decentraland, for example, censorship policies.
Among the centralized companies that are now working on constructing the metaverse are Facebook/Meta, Microsoft, and Epic Games. The question is if those companies will make their metaverses interoperable with decentralized blockchain projects.
If Meta controls the metaverse, what guarantees that they finally stop the severe issues happening in their networks? This is why the Metaverse needs to be decentralized and controlled by the people living in it.
08. Metaphysical, Ethical, And Legal Issues With The Metaverse
Centralization is not the only issue around the Metaverse. Here are some more pain points that are yet to be addressed.
What is real, and what is simulated? And what happens if we cannot answer that question anymore? This philosophical question accompanies us not only since The Matrix, where intelligent machines have trapped humans inside of a simulated reality to use their bodies as energy sources but also in the Metaverse.
The Metaverse: Escape From Or Cause For A Dystopian World?
Advanced computers and VR technology can make it possible to transfer humans into a dreamlike state whenever they want. Science fiction novels and movies, like Snow Crash, Ready Player One, and The Matrix, usually present dystopian wolds where climate change destroyed the planet, the economy is broken, and society has reached a chaotic and anarchistic state. Those are good reasons to escape into a simulated reality where people live their much happier, second lives.
People will care less about the real world when huge parts of their lives happen in a simulated metaverse. The energy consumption will explode. Obesity and addiction to the simulated world will follow. Relationships from the real world will suffer. Between 2019 and 2020 the usage of social media and video games among adolescents between 12 and 17 increased by at least 60%, according to a German study. How much time will we spend in the metaverse when it doesn't feel like sitting in front of a screen anymore? And who takes care of the physical world? About environmental and social issues?
The real world might be left behind, together with the elderly who don't know how to use the new technologies. And with those whose countries ban the metaverse, may it be by banning centralized companies like Meta or by banning crypto and with it a decentralized metaverse. Countries like China might have the capabilities to build their own centralized metaverse. But they will lose connection to the rest of the world.
Data Security And Safety
Zuckerberg says that “privacy and safety need to be built into the metaverse from day one.” Information privacy will be the biggest issue for the metaverse, as wearable VR devices will deliver personal data to the web. Advertisement in the metaverse emphasizes issues of manipulation and misinformation. Second Life, as the first metaverse-like open-world game, faced legal issues of child pornography. Questions of age-restricted content might be a difficult question especially for a decentralized metaverse, where content cannot be deleted from the blockchain and decision processes about policies are slow. Hacks might increase and bring new problems like virtual identity theft.
Human Interaction And Body-Perception
What effects could living in the metaverse have on diversity? How will emotions and social interactions evolve? We know that social media, especially Instagram, harm young girls’ self-esteem and cause anorexia and other health issues. What body image will evolve when people choose avatars? Metaverse and transhumanism There are many open questions about how society will develop in a second world. There will be not only one world to care about but another, virtual world that one day might even surpass the importance of the world as we know it now.
09. People to Follow About The Metaverse
Some prominent personalities have emerged as major voices to preach, teach, counsel, build, and construct the next generation of the internet.
Below are ten influential individuals who can help you learn more about the Metaverse.
Matthew Ball: Managing partner and investor of VC firm EpyllionCo. He’s an expert on metaverse matters.
Philip Rosedale: Philip Rosedale is the founder of Linden Lab, an initiative that hosts and develops Second Life, a virtual world.
Jensen Huang: Jensen Huang is the Nvidia chief exec on the Fusion of Physical and Virtual Worlds.
David Baszucki: David Baszucki is the founder and chief exec of Roblox.
Cathy Hackl: Cathy Hackl is a world-renowned web 3.0/metaverse strategist and tech futurist.
Krista Kim: Krista Kim is a sought-after artist and initiator of the Techism craze.
Avery: Avery was Senior Partner Manager, Platforms at DoubleClick, and Business Development Manager, Agency at Google.
Ryan Gill: Ryan Gill is the chief exec and co-founder of Crucible, a company that aims to produce Blueprints for the Open Metaverse initiative.
Tim Sweeney: Tim Sweeney is the chief executive and founder of Epic Games, the creator of Fortnite.
Jamie Burke: Jamie Burke is the chief executive and founder of Outlier Ventures, a company dedicated to Web 3 and blockchain technology.
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