It was Neal Stephenson’s science fiction novel Snow Crash in 1992 that introduced the term “metaverse”. The book portrays a three-dimensional world where people interact with software agents, such as avatars, representing the real world. Stephenson may have coined the term, but virtual reality became a subject of discussion among Internet pioneers as early as the late 1970s and early 1980s who envisioned the future internet as a shared virtual space. We are increasingly blending our physical world with our virtual one, creating new digitized spaces somewhere in between.
In these in-between spaces the rules are less rigid and so people are often able to temporarily transform themselves into a new way of being, often one vastly different from how they are in their everyday lives. The metaverse enables a whole new way to express one’s inner self, as digital avatars are not constrained by the laws of physics or genetics, the with boundaries of what is possible being instead defines by the limits of people’s imaginations. With recent moves by Facebook to rebrand as “Meta” and focus on building out the “Metaverse”, public awareness of this term has grown into the mainstream, leading more and more people to venture into conceptualizing the metaverse.
A popular conception of the Metaverse was fleshed out in Ernest Cline’s popular novel Ready Player One which tells the story of Earth in 2045 when the planet is on the brink of chaos and collapse, but people find salvation in the OASIS: an expansive virtual reality universe. The book was so popular that it was turned into a feature film directed by Steven Spielberg.
But, despite some early and confident examples of what the Metaverse could look like, defining the metaverse is still somewhat of a gamble. Just as in the early days of the internet many had no notion of what it would become (lets face it no one knew that business models like Uber, Amazon and Netflix would become some of the biggest brands in the world), it’s likely that it’s far too early to be able to predict just what the Metaverse will actually become, or how entwined it will end up being in our everyday lives. Could it become something we interact with everyday, much like our mobile phones?
Metaverse and Web 3.0
Two trends that will shape the world in the next 10-15 years are the Metaverse and its proliferation in all aspects of society and Web 3.0 and the democratization of the internet.
Some people are starting to believe that the Metaverse and Web 3.0 are just different names for the same thing, but just as there is still no concrete definition for Metaverse, there is also no concept for what Web 3.0 is. Both are still maturing so again it’s to early to say whether they will converge to mean one thing or remain separate as two.
It is already possible, however, to see some of the new characteristics of Web 3.0 compared to its predecessor Web2.0, such as the focus on the decentralized user as opposed to large centralized companies, the massive use of artificial intelligence (as a powerful tool to provide the best analysis and the best result to people), as well as distributed networks (we will no longer depend on the gigantic centralized data servers). Moreover, Web 3.0 content will be more graphical with more videos and 3D images. Also, in Web 3.0, augmented reality (AR) and virtual reality (VR) will be commonplace, bringing more realistic graphics to applications and games.
Taking this into consideration, we can say that the Metaverse, still incipient, is being built in several spheres with the Web 3.0 being the biggest one. We also know that the Metaverse will support both games and social spaces like Second Life, and we can expect an explosion of new dApps and platforms to expand into this new environment.
Metaverse and NFTs
As we saw in the previous paragraphs, members of the tech community were already predicting an Exponential Age where the “internet of the future” would lead us to the Metaverse.
Well, the future is already knocking on the door, but until recently, it was not known how this space with several virtual worlds would reach its full potential. Can Web3.0 fundamentally transform not only how people interact with the digital world, but also impact how they make decisions and prioritise their resources (time and money) in the real world?
It is the integration of NFTs into the Metaverse that has initiated the transformation of our interactions in virtual worlds, impacting part of the real world. Gucci has sought to reach new consumers in the Metaverse in the game Roblox. The strategy used is to sell NFTs for avatars of the limited edition “Gucci Collection” in the Roblox game which includes bags, glasses and hats.
In July this year, Coca-Cola launched branded virtual clothing as nonfungible tokens, including a “wearable” jacket to be worn on avatars within the virtual world of Decentraland, even hosting a Rooftop Party on the platform to celebrate the launch. Now in November, NASCAR will launch a digital car on the Jailbreak breakout game platform Roblox and sell clothing for players’ avatars. Players will also be able to create their own NASCAR uniforms as part of a fan contest with the game’s developers acting as influencers to promote them on social media.
NFTs are the gateway to many parties in the Metaverse
Last quarter, several global brands created their own NFTs and launched their nonfungible tokens into virtual worlds. The reason?
There are so many eyeballs and interactive opportunities. At Roblox, more than 200 million monthly active users, with about half who are under 13, play hundreds of thousands of virtual games, many of which now incorporate brand activations. WarnerMedia’s Wonder Woman: The Themyscira Experience has been visited nearly 30 million times on the platform. And, what’s interesting about this initiative is that it reflects the trend of companies meeting their consumers where they are.
As Coca-Cola and Gucci show us, regardless of the product or the company’s mission statement, all companies should be thinking about betting on this new sphere. Although now, the metaverse is still very nascent, and brands are still at the beginning of their own digital transformation, NFTs are proving to be a great gateway for various brands to experience many parts of the Metaverse such as how digital ownership works, the impacts of migrating part of the economy to the Metaverse and user behavior, among others. In fact, NFTs are proving that people are more than willing to trade their real money for digital assets.
The new face of NFTs with blockchain technology
The idea of NFTs emerged from what is called a “colored coin”, initially issued on the Bitcoin blockchain in 2012-2013. These colored coins symbolize real-world assets on the blockchain, and can also be used as proof of ownership of any real-world asset, from precious metals to cars to real estate, even equities and bonds. The original idea behind this project was to create a blockchain-based system for digital collectibles, coupons, properties, company shares, and more. The advancements were described as new technology and as having potential for future applications.
So NFTs are basically just the representation of a nonfungible asset in digital media. In a more technical definition, an NFT is a piece of software code that verifies that you hold ownership of a nonfungible digital asset, or the digital representation of the nonfungible physical asset in digital media.
Hence, if registered on a blockchain, an NFT becomes truly a “unique” asset that cannot be counterfeited, tampered with, or defrauded. Blockchain technology has brought standardization to basic attributes of NFTs such as ownership, transfer and access control, and to additional attributes such as specifications on how to claim an NFT, for example. Standardization of NFTs via blockchain technology has also enabled interoperability, allowing NFTs to move more easily between various ecosystems.
Since 2017 and thanks to the open standards enabled by blockchain technology, a clear, consistent and trusted API with permission to read and write data, NFTs can be instantly viewed across dozens of different wallet providers, traded across multiple markets and displayed in multiple virtual worlds.
Interoperability, on the other hand, has extended the tradability of NTFs by allowing them to be traded outside their original environments and in any currency — from established stablecoins to new or emerging cryptocurrencies, this advantage of negotiability has changed an initially closed NFT economy into a currently-booming free market economy. There are entire blockchains and online exchanges being developed to facilitate the trading of NFTs and trading volumes are frequently reaching as high as $250M per week.
While many still believe NFTs are no more than a passing fad, corporations and industry leaders are jumping on the opportunity and embracing the new technology as an opportunity to grown within an entirely new marketing platform and in front of a brand new audience. Mainstream adoption appears to be growing though it may still be too early to tell whether this is because there is an NFT bubble which is due to pop.
Looking at where we were in the early days of the internet compared to where we are now, it certainly seems like these trends are unlikely to just disappear overnight. The residents of the metaverse are commonly Gen Z and since they are the ones likely to shape the future, it seems likely that the Metaverse will play a significant part in that future. But how commercial will it become? How much will it meld with “real world” experience? And how it will reshape both our public and private lives? These are questions still yet to be answered and will only be answered with the unfolding of time.