The idea of the "metaverse" originated as a fictional world explored in books like "Snow Crash" by Neal Stephenson and "Ready Player One" by Ernest Cline. However, as technology has advanced, the concept has moved beyond fiction and closer to reality, generating increasing interest as a potential digital space for social and economic interaction.
Let’s dive deeper into what a "metaverse" is!
Defining the Metaverse
The metaverse is a developing concept that has undergone several definitions over the years. Generally, it refers to a simulation of a real-world environment in a virtual space, providing an immersive environment that offers meaningful experiences and identities for individuals and communities. In the metaverse, people can work, socialize, play games, and gather together in 3D virtual worlds, without the constraints of the real world.
Over the years, virtual video game worlds have brought a real-world feel through its 3D virtual reality. However, these game worlds, although similar, do not truly represent what a metaverse is. A metaverse at its fullest potential should be driven by Blockchain technology for decentralisation and transparency, Artificial Intelligence (AI) for adaptability, UI/UX design for usability, Cloud technology for scalability, Virtual Reality(VR)/Augmented Reality(AR) for context creation, and IoT for connectivity.
A typical day in the metaverse could involve attending a meeting in a virtual office with an Oculus VR headset, enjoying a virtual concert, shopping for favorite shoes at a virtual store, playing a blockchain-based game, and managing crypto assets – all in the metaverse.
Importance of Blockchain in the Metaverse
Beyond the 3D virtual reality element that is heavily present in the metaverse, there are other key components that help incorporate our physical worlds in the digital space.
For example, having functionalities such as:
- Proving your identity just like in real world;
- Performing financial transactions;
- Owning assets in the virtual world.
A decentralized metaverse economy is created by implementing economies, digital identities, and decentralized governance in a transparent and immutable way. Blockchain technology enables this by providing various functionalities:
- Transfer of value through wallets
- Digital Possession using NFTs
- Proof of ownership using smart contracts
- Decentralized governance using DAOs
The blockchain provides several benefits for users in the metaverse. Firstly, it offers a secure and trustless way to transfer value without the need for a central financial institution. Digital currencies can be used as the primary mode of exchange and store of value for trading activities.
Secondly, ownership can be verified through non-fungible tokens (NFTs) which are unique digital assets that cannot be forged. NFTs can represent users' avatars, plots of land, and other objects in the metaverse and can also allow DeFi activities such as staking.
Thirdly, by owning a wallet with access to private keys, users can prove ownership of assets and create tamper-proof and verifiable transactions.
In addition, blockchain technology enables users to participate in decision-making activities and governance within the metaverse, just like they do in real life. As metaverse experiences expand across diverse platforms, users can also enjoy portability of their assets across various metaverses as blockchains become increasingly interoperable.
Metaverse use cases
- Virtual Offices: The pandemic has introduced the concept of work-from-home, leading to an increase in non-immersive Zoom meetings. The metaverse provides an immersive 3D virtual reality that increases user productivity and interactivity.
- Real Estates: NFTs power the buying and selling of properties in the metaverse. Individuals and enterprises can invest and buy real estate in the metaverse, with companies like Decentraland and The Sandbox leading the rise of popularity of virtual plots of land represented by NFTs.
- Virtual Event and Social Interaction: Real-world events can also easily take place in the metaverse, as seen with Travis Scott's virtual concert in Fortnite, which attracted over 12 million users.
- Virtual Shopping: 3D virtual worlds allow users to explore and shop for products without the need to physically travel. For example, Gucci hosted a virtual exhibition that included virtual products such as eyewear, perfume bottles, hats and handbags priced at around US$5, which later shot up to 5000 times in resale value.
- Education: In the metaverse, students can overcome geographical barriers and be in interactive learning environment.
Budding Metaverse Projects
The metaverse is still in its early stages of development, and the different components that may make up the metaverse are still emerging. Here are some examples of next-generation metaverse initiatives that you might want to explore: