A New Dimension in Our Digital Lives
The idea of connecting virtual spaces into a shared universe was explored in the 1980s and 1990s with early virtual reality (VR) and online multiplayer games. Coined by science fiction author Neal Stephenson in his 1992 novel, “metaverse” implies a dimension beyond our physical reality.
Today, it refers to a digital realm where immersive social interactions take place in a variety of virtual spaces, facilitated by user-controlled avatars. But the fully immersive, richly detailed metaverse envisioned by companies like Facebook (now Meta) is a more recent development, fueled by advances in VR, AR, and other technologies. The metaverse also takes advantage of blockchain technology, allowing users to own and control their data, content, and experiences.
Blockchain: The Engine Power
Blockchain technology is at the heart of the metaverse, providing security, transparency, and the ability to manage digital assets. This decentralised technology is critical for creating unique digital assets, which can range from virtual land to unique avatars within the metaverse.
These assets can be securely transacted via the blockchain, with each action recorded in an immutable ledger, ensuring clear proof of ownership. This technology also enables smart contracts, autonomous transactions that can automate processes in the metaverse.
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Finally, blockchain decentralises control of the metaverse, allowing users to participate in decision-making and governance, fostering a more inclusive virtual universe. Thus, blockchain’s role in the metaverse is more than a feature; it is the foundational technology that is shaping this novel digital landscape.
The Metaverse and the Finance Industry: A Perfect Match
Banking in the metaverse means managing financial transactions in a virtual environment. This unique application offers enormous benefits for fintech, especially with blockchain transactions providing irrefutable ownership rights to crypto purchases and non-fungible tokens (NFTs), fostering a new era of digital ownership within the metaverse ecosystem. The metaverse is thus driving mass market adoption of cryptocurrencies and NFTs.
The Buzz: From Facebook’s Reinvention to the Revival of Virtual Worlds
The metaverse received a major boost when Facebook rebranded itself as Meta, signalling its future focus on the technology. In addition, Meta’s announcement that it will hire 10,000 new employees in the EU to further its metaverse development has further fueled interest. Despite initial scepticism due to the inability of platforms like Second Life to fully realise a similar concept in the early 2000s, the metaverse is back in the spotlight and gaining more optimism.
The Mass Market Verdict
According to a McKinsey study, nearly six in ten (59%) consumers prefer at least one metaverse experience over its physical alternative. The most attractive metaverse activities include shopping for physical or virtual goods (79%), attending virtual social events or playing social games (78%), and exercising in virtual reality (76%).
The Future: A Multitrillion-Dollar Opportunity
Major investment firms Goldman Sachs and Morgan Stanley project the metaverse to be a staggering $8 trillion opportunity. The company Morgan Stanley described how the metaverse’s expanding user base and advancing technology could fuel a sizable new economy in a report. The report compared the potential growth of the metaverse to the early days of the Internet, predicting that just as e-commerce grew into a multi-trillion-dollar industry, the metaverse could grow in tandem with the evolving digital economy.
The Dilemma: Who Polices the Digital Universe?
The issue of regulating the metaverse is a significant challenge. The metaverse transcends physical boundaries, in contrast to conventional legal and regulatory frameworks. This difference has raised numerous legal and ethical issues that have yet to be adequately addressed.
For example, the European Union’s General Data Protection Regulation (GDPR) governs how companies handle user data in the EU. However, its applicability in the metaverse, where users from around the world interact across physical borders, remains uncertain. In addition, other questions about consumer protection, intellectual property rights, and cybercrime in the metaverse need to be answered. Despite these uncertainties, there’s a general consensus that regulations should prioritise user safety and privacy.
The Green Side: A Potential Answer to Climate Change?
Interestingly, the metaverse could help combat climate change. A study by the World Economic Forum suggests that the metaverse could reduce carbon emissions by minimising the need for physical travel.
For example, business meetings, conferences, and even tourism could take place in the metaverse, reducing the carbon footprint associated with travel. While the technology itself will require energy, advances in renewable energy and more efficient computing could help offset its environmental impact.
It’s also worth noting that blockchain, a technology essential to the metaverse, is evolving to become more energy efficient. Therefore, the metaverse could not only reshape our social and economic interactions but also make a positive contribution to environmental sustainability.
Entertainment: From Mega Concerts to Fashion Shows
The entertainment industry has been quick to capitalise on the potential of the metaverse. Major music artists have held massive concerts on metaverse platforms. In Fortnite, a well-liked online video game created by Epic Games, American rapper Travis Scott performed virtually in April 2020. The concert, titled “Astronomical,” was a massive event, attracting more than 12.3 million concurrent players, according to Epic Games, making it the largest in-game gathering in Fortnite’s history at the time.
Pop superstar Ariana Grande, who organised the “Rift Tour” of concerts in Fortnite in August 2021, followed this success. These events allowed players to experience a surreal, interactive concert and were widely seen as a milestone in the intersection of music and gaming, demonstrating the potential of the metaverse for large-scale, live virtual events.
Earlier in the year, digital platform Decentraland hosted a revolutionary Metaverse Fashion Week. Top fashion labels, including Dolce & Gabbana, Tommy Hilfiger, and Elie Saab, jumped at the opportunity to captivate a virtual audience. As reported by voguebusiness.com, Decentraland’s Metaverse Fashion Week dwarfed any previous digital fashion event in terms of industry attention and engagement.
Personal Connection in the Metaverse: Can We Truly Connect?
Insead research suggests that humans can form meaningful connections in the metaverse. Although we’re hard-wired for face-to-face interactions, the evolution of human societies has expanded our ability to maintain connections beyond physical presence. Therefore, real-world and metaverse interactions can coexist and enrich our social experiences. The metaverse, it seems, is here to augment our reality, not replace it.
