Join Our Communities
IN
IN
JPN
EN
The future is here. It’s just not evenly distributed, said visionary science fiction author William Gibson in 1999. Although Gibson’s quote can be interpreted in many ways, it applies to any new technology, including existing ones. Look at the internet. Some places on earth have high-speed fiber; others languish.
But where his statement is prescient is when it comes to describing the metaverse, a collection of augmented reality (AR), virtual reality (VR), and ‘in real life’ (IRL) technologies that are coming together to create new ways of working, playing, and doing business.
Underpinning the metaverse is blockchain, which can be thought of as a trust technology. A blockchain is made up of blocks containing data and a chain that connects them. The network uses consensus across its nodes to ensure that the block is unique and can’t be copied.
There’s a lot more technology (and math) underpinning blockchains, which is outside the scope of this article; the question is, how will blockchains, like Tezos, enable the development (or ‘evolution’?) of the metaverse?
A visitor to the metaverse will probably represent themselves using an avatar or a virtual character with features that distinguish it from other avatars and make it uniquely ‘you’.
It’s not that avatars are anything new. Most online games and worlds – think Second Life, as an early example, or if you had kids during the early 2000s, Club Penguin – used avatars to digitally represent players and their interactions online. The problem with these in-world characters is that they’re not transferable across properties, worlds, or games.
The character you make in one digital world is restricted to that world and can’t – for want of a better term – ‘travel’ to, or exist in a different one. So those early worlds aren’t really metaverses. They’re just online environments and an extension of the existing internet.
The metaverse comes into play because it will be an all-encompassing, interconnected online environment mixing what we think of as VR with augmented reality. The virtual will bleed into the real, and using our avatars, we will be able to work, shop, and play in the metaverse.
Blockchain has a decisive role to play in making sure that our avatars are uniquely us and that they’re able to travel across virtual environments. The way that blockchain will enable this is that our characters, and their characteristics, will be stored on the blockchain.
By storing our avatar data on the blockchain, we will have metaverse avatars that represent us, and can travel through VR, AR, and IRL worlds,and potentially every other aspect of our lives. Arguably, it represents a seismic shift in the very idea of identity in the context of interactions online.
Non-fungible tokens, or NFTs, are digital goods whose authenticity and uniqueness are verified by the blockchain. There have been a bunch of headlines recently about NFTs selling for hundreds of thousands or even millions of dollars, but the real action will come from not headline-gathering million-dollar sales but when millions of low-priced NFTs are sold to inhabitants of the metaverse.
That means a million pieces of armor in a role-playing game will still equal a million dollars, and the economy underpinning NFTs, and by extension, the metaverse, will grow.
It’s possible to make an NFT from just about any virtual good. With art and other collectibles, not only is the owner getting something unique (and possibly valuable), but they’re also being admitted to a community of like-minded people who also own valuable or unique NFTs. This creates a sense of belonging, and the NFT owner becomes a member of a group of people who own similar goods.
For gamers, owning an NFT can also help them stand out. Whether it’s treasure, a piece of armour or a skin, owning an NFT gives them something no-one else has, and helps them differentiate themselves from the crowd.
This is entirely different from the situation facing gamers in existing web 2.0 worlds, where their goods and online income are confined to that gaming environment. They aren’t transferable outside that world. If the game or world ceases to exist, so do those goods and media of exchange. The metaverse will see these goods able to travel with the user and be a source of expression and value, regardless of where the user happens to find themselves in their travels.
The opportunities for business and individuals are mind-blowing. Metaverse goods will be transferable across worlds, all thanks to the blockchain. Virtual goods – and they could be anything – will become the new status symbols.
In April this year Yuga Labs’ Bored Apes Yacht Club launched 10,000 iterations of cartoon apes sporting sailor hats, 3D glasses, eye-patches and other cultural kitsch. Why? At first gasp, for fun (and revenue). While the initial sale of the Bored Apes NFTs sold for around USD 200 in Ethereum equivalent, in September 2021 a single ‘ape’ sold for 740 Ethereum, or about USD 2.9 million.
One early example of using VR and blockchain to create a virtual world is Decentraland, which created the concept of real estate in the metaverse. It has its own cryptocurrency, MANA, and users can buy land and then create structures on the land they own.
What’s unique about Decentraland is that metaverse inhabitants can then earn income from their landholdings. This could be through erecting advertising hoardings on their buildings, offering virtual goods (again, verified through blockchain as NFTs), or even hosting gatherings and ticketed concerts. The MANA they earn can then be used to buy goods and services, both in VR and IRL.
Another example of a blockchain-focused world is Sandbox. Sandbox is a user-generated world where players can build, own and monetise their virtual experiences using blockchain and NFTs. All the assets of the game are generated as NFTs, meaning they can appreciate in value and be resold.
Sandbox represents the first time that players can monetize their assets in-world. It utilises $SAND as its primary token, which allows users to buy and sell land and assets within its metaverse. It is currently in open beta.
However, we are still some ways from the blockchain becoming a reality in the metaverse on a broader scale. Minting NFTs on the blockchain requires time and processing power, and in a world where we expect to see things appear instantly on our screens, waiting for an extended period isn’t going to cut it.
Today’s internet barely resembles that long-lost internet of 1996, and the same will happen with the metaverse as processing technology, latency, and bandwidth catch up with our vision for tomorrow.
Simply put, it is only a matter of time.
According to writer Neal Stephenson, who coined the term ‘metaverse’ in his prescient 1992 novel Snowcrash, the existing purposes of VR and AR are almost completely unrelated. In an interview with the magazine Vanity Fair, Stephenson said that “the purpose of VR is to take you to a completely made-up place, and the purpose of AR is to change your experience of the place you’re in.”
“That pervades everything in terms of how you think about content, how you think about stories, and what you can actually do with these devices.”
But as he accurately predicted three decades ago, the metaverse both supersedes and subsumes VR and AR, creating a new, collective consciousness that we can all participate in. And businesses, including Apple, Google, and Facebook, have sniffed an opportunity. The metaverse could be the next trillion-dollar business.
On a recent earnings call, Facebook founder and CEO Mark Zuckerberg said that it’s his goal to transform his company into a metaverse company. He described this ambition as “one of the most exciting projects that we’re going to get to work on in our lifetime.”
That’s because the metaverse pulls together all of Facebook’s various properties across social, gaming, and commerce into one all-pervasive environment. His idea is that a metaverse Facebook will facilitate everything we do today but in a virtual environment.
“The defining quality of the metaverse is presence, which is this feeling that you’re really there with another person or in another place,” he said on the earnings call.
Virtual real estate is one place where you will definitely feel you are present with other people in the metaverse. Land in the metaverse is being zoned, sold and developed as people settle into their virtual lives.
Snoop Dogg himself is building his real-life mansion on the virtual land he owns on Sandbox, where players will be able to create games using virtual “Doggfather” items, get exclusive VIP access to concerts, events, Q&As, and dedicated NFT drops. In engaging with players on the metaverse, Snoop Dogg has created a new kind of fan experience that extends beyond the digital environment. It further demonstrates the almost infinite ways the metaverse will allow people to engage in this digital realm, from a community level right through to brand engagement and marketing.
As we saw with the rise of the web and then mobile, new businesses, including property, will emerge, and some old players will wither away. The metaverse represents the single biggest business opportunity for tech companies – and others – over the next two decades, and it’s all built on a system of trust: blockchain.
