What is the Metaverse?
The Metaverse is a broad term that refers to the next iteration of computing where physical and digital spaces converge; as users of the Metaverse, peoples’ physical and digital personas will also converge, and these new spaces and identities will allow people to connect, create, play, learn, and earn in a more immersive and creative way.
It’s important to note that there isn’t just one Metaverse but rather many; this diversity of metaverses will allow for limitless possibilities in terms of creation and experiences. However, even though there are limitless possibilities, there are just two main types of Metaverses: centralized and decentralized.
What is the difference between centralized and decentralized platforms?
A centralized metaverse is one that is created and controlled by a single entity, such as Meta and Fortnite. Centralized platforms don’t allow people to own their digital assets, which means they cannot sell them and earn money; however, users will still be able to connect, create, play, and learn in centralized metaverses.
In a decentralized metaverse, no one owns the platform itself and everyone owns their own assets such as land, clothing, etc. It is crucial that the infrastructure of the Metaverse itself is decentralized and neutral, like the internet itself (the internet wouldn’t be nearly as robust or useful if it was controlled by a single company or person). Decentralized platforms include Decentraland, OpenSea, and The SandBox.
Why does the Metaverse and diversity within the Metaverse matter?
The Metaverse is being built by humans, and so it is a reflection of humanity. The Metaverse matters not only because people can use it to connect, create, play, learn, and earn, but because it is an opportunity for humanity to create a better version of both ourselves and our reality… the Metaverse will affect society as much as society affects the Metaverse.
The Metaverse is also an incredible economic opportunity… And not just for companies, but also for individuals and communities that have historically and systematically been deterred from participating in new developments and technologies that have made other groups incredibly wealth. Many believe that the Metaverse will be worth at least 1 trillion USD, with some predicting it could be worth up to 30 trillion USD in the next decade or so.
And so we are currently creating considerable economic opportunities by building these new metaverses, and society has a choice: we can create equitable, representative, diverse, and inclusive spaces with all people and economically empower diverse groups for that work… Or we can forfeit the creation (diversity) and wealth (power) to a ruling class of oligarchs.
Doug Stephens cautions “As we hurtle into the metaverse, brands will have new opportunity to choose the platforms and protocols they subscribe to and should do so thoughtfully.” This is also true for end users… Despite the many draws of the Metaverse, we must consider the platforms and their values before immersing ourselves in these new environments.
What are other social issues people and companies should consider?
Other issues that individuals and companies should consider are the environmental and social impacts of the Metaverse. VC and writer Matthew Ball defines the Metaverse as “massively-scaled, persistent, interactive, and interoperable real-time platform comprised of interconnected worlds…” which means that the energy required to operate such a system could become astronomical. Just because the Metaverse is primarily digital and seemingly intangible doesn’t mean that it doesn’t use resources. The potential energy use alone is staggering, and the environment must be considered.
In terms of social impacts, Stephens also observes “Today, experts not only note increased sleeplessness, loneliness, depression and suicide among teenagers, but are also able to draw correlations to increased use of social media, a virtual display-case for lifestyles that can result in heightened feelings of inadequacy and anxiety. Now consider that, in the metaverse, you are likely to be judged not just by how you look in the real world, but by how your avatar is adorned, by your virtual sneakers or virtual cosmetics. Your address on a platform like Decentraland may matter as much as your real-world address.” So despite the myriad benefits of the Metaverse, we should make sure that these new worlds we create don’t further exacerbate current mental health and social issues.
What are the opportunities for companies in the Metaverse?
The Internet is incredibly “sticky” and even addictive… As the Metaverse is a digital space that we can “enter” and exist within, it will be even more addictive than the Internet. Instead of digitizing information, we will be digitizing (and often gamifying) experiences, products, services, and even brands. And in a world still dealing with and reeling from COVID, we are all primed and even in need of digital experiences that are more engaging and lifelike, as much of our lives have moved even deeper into digital realms…
So the opportunity for brands is to connect with a global customer, understand fundamental aspects of their identity through how they present, and integrate products and services to be experienced within the Metaverse directly. Brands will no longer need to create traditional forms of advertising, as users within the Metaverse will be able to readily experience products and services in a seamless and boundless way.
For example, if you sell cars, you will no longer need to create digital advertisements for your cars to get someone to a POS… Your cars simply need to be rendered digitally and inserted directly into the Metaverse for customers to experience at their convenience. Potential customers won’t need to be annoyed with ads but rather can be enticed by the “real deal,” or a digital replication of a car of whatever product/service your company sells. And as the Metaverse can transcend physical limitations of the real world, a car company could render futuristic concept cars as ‘tangible’ experiences and further imbue the brand with abstract concepts such as innovation and creativity.
Brands will be able to control many aspects of how a product/service is perceived, but users will ultimately be able to integrate it directly into their digital lifestyle. This will have an impact on their “real” life offline, but the possibility to convert experiences into sales isn’t only from online to offline, but also offline to online. It is a true omnichannel opportunity to meet customers where they are and where they want to be.
Digital products also offer a unique opportunity for customers to buy into a brand at a more accessible price point, but collectible NFTs could offer brands the opportunity to create limited-edition objects, and many have already generated real income as well as marketing buzz for a range of brands and categories. Brand can now be omnipresent, and products will be able to span a range of prices to engage customers from all socioeconomic backgrounds from all around the world.