Metaverse - What and Why

As we step into 2022, its an apt time to take a pause and observe the changes happening around us. One thing, which has caught my eyes and excitement in recent times is this thing called METAVERSE, touted to be ‘The Future of Internet’.

So I have been doing some readings, some interactions and even spending some odd hours of the day listening to experts from across the globe talking about Metaverse. In this first article of 2022, I would like to put together my learnings about Metaverse and why it need to be talked about and explored even more.

So, what really is Metaverse ?

The “metaverse” is a convergence of our physical and digital lives with combination of technologies like Internet, AR/VR and blockchain. The term is basically an idea of a virtual reality where users can create their own avatars, buy assets and build their virtual universe. Within the metaverse, people can roam around, meet their friends, visit buildings, attend events and even buy goods and services using cryptocurrency. In metaverse, you can do things, through your avatar, that you always wanted to do but never got an opportunity to do.

Why is the term suddenly so much in news ?

You would have noticed that Facebook changed its name to Meta and you were wondering where the name came from. Well, with name change, Mark Zuckerberg?recently announced?that Facebook “will effectively transition from being a social media company to being a?metaverse company.” He laid out the vision that “Facebook plans to create ‘an embodied internet’ and this would be ‘the next evolution’ of social connection. He adds that, “it’s a collective project created by people all over the world and open to everyone”

So, is this Metaverse a new thing ?

The term metaverse is nearly 40 years old. Coined by sci-fi author Neal Stephenson in his 1992 novel?Snow Crash, the metaverse was his name for the convergence of physical reality and virtual space. However, the idea of virtual simulation existed from even before that. Over the years, as the related technologies progressed over time, the realism and capabilities of virtual experiences have improved dramatically drawing more users to connect in the virtual world.

Increasingly larger number of people, especially youngsters, are spending more and more time being their virtual avatar and acquiring virtual assets for their avatar.

Why spend money on things which are not material?

Before getting into some standard industry answer, let me share a story I read somewhere and it remained imprinted in my memory. A father asked his daughter who just turned 13, as to what gift she wants on her birthday and she asked for a bitcoin account, using which she wanted to buy a new dress for her avatar in the online game that she plays. The father was taken aback with the request and he asked again to reconfirm – if she doesn’t want any gadget or Jewellery piece or a dress and yet the daughter confirmed what she asked for. Once, she got the ‘online dress’ as the father called it – the daughter was super happy and she shared the details of the same with all her ‘online’ friends. Congratulatory messages poured in and the father was bewildered about the same. Later that day, he decided to have a conversation about this with his daughter. The daughter has been sensing the unease through the day and post dinner, she was the first one to speak. She asked the father, “Why did you buy the car that you bought and paid a decent sum of money for getting the model which had features like 0-60 kmph in record time even though you know, you are never going to use that feature in busy city traffic.” Father said, “That car is my pride, I love it when my friends praise about it and I spend my 2 hours in the car every day for office commute”. Daughter smiled and said, “it’s the same for me when I buy dress for my online avatar on the game where I spend at least an hour a day”.

The answer was clear as water for the father now. In the physical world, trust is the basis of relationships between individuals and institutions (backed by legal tenders as required). As more and more people are adopting ‘virtual’ - — with online friends, virtual items and crypto assets, smart contracts, and live online experiences, it will increase the scalability of the metaverse and the industries that support it.

What’s the Metaverse economy like?

The reason why big tech companies are going behind metaverse is that there is not one or two but multiple layers of this economy. The rise of Metaverse is a whole new economic space getting created out of nothing. Various studies and theories have put together several models at which metaverse economy and economic actors can play. I have tried to put together a simple and easy to understand ‘Six Layers of Metaverse Economy’

First layer is that of Telecom service providers as sustaining the metaverse needs high speed (5G and beyond) connectivity at all times and at all places. Second layer is that of devices and industry players who have been traditionally into computers and mobile phone manufacturing would have to adapt fast into the smart wearable category.

The third layer, which is already well-established mode of transparency, is Blockchain, which can help bring decentralization. Fourth is the Creator economy, which requires imaginative creators delving into realistic Virtual reality creation and geospatial mapping.

Fifth layer is how people will discover metaverse, which is through social media and also agencies around it providing services like digital marketing, content marketplace etc. This space is already well matured in most markets for real world but would need to adopt fast for the metaverse as well. Sixth and the final layer is that of Experience creation which is what will keep the users in the metaverse. This is where the virtual showrooms, immersive classrooms, gamified fitness, social shopping etc. comes and sits and where transactions can happen using NFTs

What are NFTs ?

Non Fungible Tokens or NFTs, as they are popularly called, are digital products that can be bought in the virtual world. It could be anything from a dress, to a shoe, or a piece of Jewellery or even frame-art for your room in the virtual world and the ‘value’ of these comes from the same basic principle that one uses in physical world – how many people are able to see it and admire your possession. It gets you a stature.

Technically speaking, NFTs are digital assets that exist on a public blockchain that serves as a record of ownership. While anyone can view the item, only the buyer of an NFT has the status of being its owner.

Why should anyone be interested in Metaverse and NFTs?

If you are in business, take note that global market for NFTs hit $22bn in 2021, according to DappRadar. Recently, Christie’s auctioned off a piece of digital art by Beeple (Mike Winkelmann) via NFT that sold for more than $69 million.

The NFT space is definitely heating up as more and more brands join the bandwagon. Gucci and Burberry and Nike recently decided to dabble in NFTs. WazirX NFT marketplace in India did a tieup with Lakme Fashion week and Manish Malhotra, a famous designer from India was the first one to put out 5 NFTs and these were sold out in seconds. Other designers have followed since. Digital fashion, thus, is in for a big leap with NFTs in 2022 and beyond. The year promises to be exciting for a cross-interaction between technology players and fashion brands.

Daren Tsui, CEO of Together Labs, which innovates technologies that empower people worldwide to connect, create and earn in virtual worlds - when asked in an interview, as to when our physical reality will converge with the metaverse to create something even bigger, better, and more unforgettable than what’s out there now, he put it simply,

It’s not if, but when”

What’s Next?

While there are many layers of this onion, which still needs to be peeled, for now, I want to leave the readers with one question to ponder upon – what if there are multiple metaverses ?

Do let me know your views on what you think about the same. Also, please comment with your feedback on the article and if you found it informative.

Wishing you a great year 2022 ahead. See you in the Metaverse !

Disclaimer: This article does not endorse any particular cryptocurrency platform or other metaverse players. The names of companies quoted in the article are purely based on secondary research and publicly available information.