Interest in Blockchain-based virtual worlds is reaching unprecedented heights, prompting many to wonder what exactly is a “metaverse”? Let’s take a look at what it is, why it’s important, and some trends to look out for in 2021.
The Fantastic World of Blockchain
The term “metaverse” can mean different things to different people. However, the general ingredients remain the same. These include blockchains, cryptocurrencies, non-financial tokens (NFT), and three realities:
- Augmented Reality (AR)
AR takes a real environment and overlays it with virtual objects.
- Mixed Reality (MR)
MR goes beyond AR and binds virtual objects to real environments.
- Virtual Reality (VR)
VR allows users to immerse themselves in a completely artificial digital environment.
We should also mention augmented reality( XR), a general term covering all three of the above alternative realities.
The main components of the Metaverse
Now that you are familiar with the typical components, you can think of the metaverse as a collection of interconnected virtual environments. And for those who are engaged in cryptocurrency, the most exciting events are the new worlds based on the blockchain, on Ethereum.
In short, the metaverse is a digital world in which anything can exist. However, for the metaverse to thrive, it is necessary that several parts work in full compatibility:
- The Internet
Global computer network.
- Media standards
Standards are necessary to ensure compatibility across platforms of audio, video, images, text, 3D scenes, vectors, etc.
- Programming language standards
The Qualcomm team (along with others) envisions a future in which items such as a smartphone, AR glasses, and VR mobile headsets will be combined into a single XR wearable device. Some think that one day the XR may even replace all other screens, including the TV.
There is nothing better than blockchains for obtaining transparent and censorship-resistant transactions without permission.
In general, the components listed above will be necessary for the development of the metaverse.
The metaverse in science fiction and games
Throughout history, science fiction writers have demonstrated an uncanny ability to predict the future. Writer Neil Stevenson wrote “Snow Crash” in 1992, in which he introduced a virtual world called the “metaverse”. It was a world where users could interact with each other in digital representations, and were called “avatars”. What foresight!
In the movie “First Player Get Ready”, Oasis, a centralized metaverse, hosted customizable avatars. Oasis players could buy game assets that had real value. Moreover, just like in real life, gamers had to work hard to get in-game rewards. Thus, no one liked to see them confiscated or devalued by the central government.
World of Warcraft and Second Life
Back in the early 2000s, games like World of Warcraft and Second Life laid the foundation for the modern metaverse. However, as Ethereum co-founder Vitalik Buterin noted, everything went to a centralized service. An exaggerated version of the story is that Vitalik was so dissatisfied with the gameplay that he created a decentralized blockchain.
As for the Fortnite game, it has already sold more than $1 billion worth of digital assets. This is impressive, but the problem is that these assets only work in Fortnite. And if the central authority ever decides to close it, the value of the items could drop to zero overnight.
In addition, Epic Games, the creator of Fortnite, recently sued Apple over in-game purchase fees. Facebook agreed to Epic Games ‘lawsuit because they had similar problems with in-app purchases in the Apple store.
Metaverse and NFT
Compare the traditional world, with the world of non-interchangeable tokens (NFT). NFT is a new type of digital asset through which the blockchain verifies ownership and authenticity. Individual users can issue, sell, and buy NFTs on the open market. This means that the user owns and controls the NFT.
So, the difference between traditional gaming assets on gaming platforms like Fortnite and NFT is that NFTs allow for actual ownership.
One of the great things about NFT is that owners don’t have to worry about the company making them useless by freezing their account. In addition, for digital items to have a sustainable material value, they must remain independent of centralized control. Otherwise, the powers that be can take possession of any owner of a digital asset.
NFT Art and more
Most people have already heard of the outrageous NFT pricing created by digital artists like @Beeple. But art is only one part of the new economy of the metaverse. Virtual lands, buildings, names, and avatars can be bought and sold as NFT. In these worlds, people can also travel and attend concerts.
At the moment, speculators seem to be looking to absorb as much NFT as possible. But this is just the beginning. The real excitement will happen when people can perceive NFT as an immersive experience. Buying virtual land is good, but being able to experience walking on it will change the rules of the game dramatically.
Some even predicted that virtual worlds on NFT would outpace the economic growth of the natural world by decades.
The NFT frenzy has attracted more interest in virtual blockchain environments. Some of the most popular decentralized platforms are: Cryptovoxels, Decentraland, Somnium Space, and The Sandbox, which brings us to the next topic; decentralization.
Why the metaverse needs decentralization
A decentralized economy is the best way to ensure an efficient, fair, and sustainable metaverse. Decentralization is crucial, because if one organization takes the lion’s share of control over the metaverse, it will most likely become another Apple, and will receive a huge fee for any transactions. This situation can stifle efficiency and innovation.
Therefore, for the metaverse to thrive, it must be open and decentralized. We don’t need another entity controlling the assets.
Why does the metaverse have to be one whole
Currently, the metaverse does not represent a single whole. Instead, we have multiple platforms that compete for users. This situation is similar to how the Internet works. There are many different sites and apps, but they have little in common. It’s the same with game engines. You can’t take the Unreal Engine and open a game built on Unity.
To bring digital worlds together in the metaverse, researchers need to be able to navigate across different platforms. New platforms are emerging, but more needs to be done to make the assets compatible with each other, and users need the power to move their game assets to different game worlds.
Whereas, if we take Omniverse as an example, we will find that it allows creators to interact in real time in various applications, similar to working together in three-dimensional worlds using Google Docs. Omniverse uses Pixar’s open-source universal scene description technology. This means that developers can integrate technology into their applications.
Metaverse and general data
It would be great if everyone who creates metaverse projects would work on shared technologies and assets. The data must be open and accessible. However, sharing information is only part of the story. You also need to add the total bandwidth and calculations. Leveraging the best aspects of the Omniverse and decentralizing it would be a great start.
The Ethereum Blockchain Metaverse
The difference between blockchain projects and non-blockchain projects is that blockchain offers an infrastructure that is interconnected and immutable with common economic standards. All thanks to Ethereum and NFT. Such an infrastructure has no precedent in the history of the metaverse.
In the Ethereum metaverse, there are systems with irrevocable property rights and their own social, economic, and entertainment values. It’s not that unique, but Ethereum brings substantial economic value to the metaverse. This is because the metaverses created by Ethereum have a free market and digital ownership.
Free markets create an environment for value and creativity, while digital property rights allow creators to reap the benefits of their work. These two properties are absent on traditional gaming platforms.
So, Ethereum has solved the problem of the economic system in its corner of the metaverse. New groups and new opportunities will help virtual communities grow and thrive within its infrastructure, leading to a new rebirth of the metaverse. Indeed, this part of the metaverse will evolve in an unpredictable, unprecedented way.
The Metaverse and the Virtual Land Boom
Along with digital art, the prices associated with virtual real estate are skyrocketing. Decentraland earned more than $ 50 million from sales of virtual lands, usernames, avatars, and wearables. But as for virtual land, one whale set a record selling price by buying a plot of land for $572,000 earlier this month. Somnium Space also sold the site, having enriched itself by half a million back in March.
It is reported that even the powerful company Atari is launching a virtual blockchain world, having signed a deal with Decentraland to open a casino. So it’s no surprise that fans of the metaverse are drawing comparisons between the virtual land fever, and the dot com domain name fever back in the early days of the Internet.
This action attracted the attention of speculators. Investors believe that due to the increase in the number of people gathering in such conditions, virtual land in places with high attendance will become very popular. Some are so passionate that they have stopped investing in real estate in the real world, preferring the permanent acquisition of virtual real estate.
Decentraland — More than a virtual land
We’ve written about Decentraland before. This is a three-dimensional space where users can play games and build worlds on virtual real estate. Users can sell virtual art in virtual galleries, attend live, virtual concerts, and use conference rooms. In addition, with MetaMask enabled, users can access NFT features and cryptocurrencies.
Moreover, Decentraland has its own cryptocurrency, the MANA token, which has grown by 3,500% over the past year. The platform also attracts musicians to performances where they can sell tickets and merchandise as NFT.
You’ve probably heard the saying “the first person to climb over a wall washes his face in blood” (or a variation of it). But that’s the way things are going, and it’s typical for first-time investors and first-time investors. The metaverse is a sparsely populated area with speculators located on the digital fringes of society. But the potential is largely untapped.
Most people may never need a virtual world, but optimistic speculators believe that such platforms will be the next achievement, and that the value of NFT real estate will grow to colossal profits. However, NFT is an extremely volatile asset class. Also, since NFTs may turn out to be a bubble, they are likely to experience a kind of crypto winter before they start moving further forward.
Artificial Intelligence (AI) and the metaverse
AI can also play a huge role in the metaverse with its many use cases. It is possible that it can create and validate smart contracts. One day, AI will be able to use input data such as graphical images and create fully immersive virtual worlds. This can certainly improve the processes that developers use to build the metaverse.
With the development of virtual reality, we will definitely see the metaverse continue to evolve and mature.
Metaverse’s sales in 2020 were about $20 million. Sales in the first quarter of 2021 quickly surpassed last year’s volume, which was already about $30 million. Some even predict that one day the metaverse will become its own economy, and a huge one at that. The most rosy forecasts are that it will surpass the modern world economy by 10 times.
In a future metaverse, our five senses can blend in with the digital world, and we can immerse ourselves in a three-dimensional environment whenever we want. Hopefully, if such worlds are where we spend a lot of time, they won’t be controlled by centralized organizations or individuals.
Can you imagine being immersed in a virtual world run by Mark Zuckerberg?