Metaverse: The next iteration of the internet

Nothing has changed our lives more over the past two decades than the internet. But now, the internet itself is about to face one of its biggest transformations so far: the metaverse. Widely seen as the next iteration of the internet, it’s expected to usher in the rise of a unified and persistent environment that provides users access to virtual reality (VR) and augmented reality (AR) experiences. In other words, the 2D internet we know today may one day evolve to become an immersive 3D world online1.
People will be able to access the metaverse through various devices, such as PCs, smartphones, augmented reality glasses, virtual reality headsets and other extended reality (XR) devices. According to a recent report, the metaverse will experience tremendous growth: its market size could potentially reach US$13 trillion by 2030. And that’s one reason it’s attracting big-ticket investment from many established players today2.
Virtual worlds, real opportunities
If you’re confused about the metaverse hype, don’t worry – you’re not alone. A recent survey showed that 31% of US adults had never even heard of the term before3. Meanwhile, some are wondering whether the metaverse is just another video game. A virtual world isn’t exactly a new idea: two decades ago, there were people who became virtual real estate moguls in the video game Second Life, while others resigned from their jobs and made a good living selling virtual goods to others.
Much has changed between now and then. Better internet connectivity and more powerful graphics cards are already providing us with more immersive virtual experiences that are used beyond video games, while blockchain technology could provide us with the backbone of the metaverse. Arguably, COVID-19 has also changed people’s perception about connecting with others online, which has sped up the adoption and further development of metaverse technologies.
Last year, Facebook made a somewhat unsubtle announcement that it was changing its focus from social media to the metaverse by rebranding itself to ‘Meta’. But it isn’t just tech companies that are seeing the opportunities the metaverse can unlock. From building the infrastructure required to support the metaverse to creating virtual merchandise with value both in the virtual and the physical world – even traditional industries are finding their place in the metaverse.
BMW, for example, has used Nvidia’s Omniverse platform to build a ‘digital twin’ of an entire factory floor that includes not only the robots and machinery but also the people working on the factory floor. This virtual replica helps them optimize production time and cost.
Other companies have built digital offices. And while this may sound farfetched to some, what we need to remember is that a few decades ago, few companies had internet presence. Today, even small companies do, which allows them to attract and interact with customers. Should the metaverse really represent the next stage of the internet, then companies will need to build a presence in the virtual world, too.
Blockchain beyond crypto
Meta is just one of many tech companies seeking to win the metaverse crown. People with Oculus headsets can access Meta’s current version of the metaverse via three social VR apps under the Horizon name.
There’s Horizon Worlds (where people can hang out and enjoy experiences other users have built), Horizon Venues (where people can watch sports, concerts and more together) and Horizon Workrooms (where people can collaborate and meet).
Meta hopes to merge these apps together to create a more cohesive virtual world. Users could spend their entire day never leaving Horizon, seamlessly transitioning from work to play. But this would also mean they’d spend most of their waking hours under Meta’s watch, with the latter being able to gather and monetize even more data from its users than it already does today.
Concerns are rising that a handful of companies will rule the metaverse. However, some tech visionaries believe there’s another way. They’re demanding for the metaverse to be open – a place that isn’t owned by Big Tech firms, and where users own their personal data.
And this is where blockchain technology comes in. Mostly known for its role in cryptocurrency, blockchain technology permanently records transactions in a ‘decentralized’ public ledger that exists across a network. This essentially means that there’s no central authority that has all the control, while decisions are made via consensus.
Several blockchain metaverse projects, such as Decentraland, have emerged over the past few years. Within those virtual worlds, users can can use crypto to buy digital land, or even make use of decentralized finance (DeFi) to get mortgages that allows them to do so. They can build on the land and monetize it, but still keep ownership of their personal data. This has led to a virtual land grab, with sales of virtual real estate topping US$500 million in 2021.
One interesting aspect of these blockchain metaverse projects is that they’re governed by a decentralized autonomous organization (DAO). You typically become a member of the DAO by owning ‘tokens’, such as digital land. The community votes on decisions that need to be made, which are then automatically executed whenever a set of criteria is met. It’s democracy, but without the government as we know it.
The endgame
It remains to be seen what the metaverse will truly look like. Industry experts typically agree that we’re still about 5-10 years away from the vision of the metaverse many tech companies are painting.
We can’t tell whether Big Tech will continue to reign over our growing digital lives or whether blockchain technology will set us free. But we believe one thing is for sure: the metaverse itself isn’t going away anytime soon.
We humans have evolved to adapt to our environment. We’ve embraced the web in all its previous forms. The metaverse may well sound strange to us today, but give it a decade or so, and people may see it the way we view Google now.
Footnotes
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1
Source: Invesco as at 2022.
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2
Source: Citi GPS: Global Perspectives & Solutions as at March 2022.
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3
Source: Ipsos as at January 2022.