The Metaverse as a concept is an attempt to merge physical reality, augmented reality (AR) and virtual reality (VR) into one seamless and immersive experience.
The term “Metaverse” was first used in Neil Stephenson’s 1982 cyberpunk novel Snow Crash. Stephenson’s Metaverse was a virtual place where characters could escape from a dreary totalitarian reality. Some of the key attributes of the metaverse are:
Even before the Metaverse became a phenomenon amid the non-fungible token (NFT) craze and crypto market boom, the concept was already in the focus of Facebook – now Meta – Apple, Microsoft, Samsung and several other leading companies heavily involved in AR Technology investing since the early 2010s.
In 2014, Meta acquired Oculus VR in a $2 billion deal focused on developing augmented and virtual reality based games. That same year, Sony and Samsung announced they were developing their own VR headsets, and Google released Google Glass AR glasses.
In 2020, Apple introduced lidar (light detection and ranging) for iPhones and iPods, which offered better deep scanning for photos and introduced AR capabilities. The technology also paves the way for future mixed reality headsets. In 2021, Facebook rebranded itself to Meta to move from pure social media to leading the Metaverse race.
With a downturn in the crypto markets, both NFTs and the Metaverse saw interest rates and capital flow fall rapidly. Data from Google Trends suggests the Metaverse has garnered interest through January 2022. However, as the bear market progressed and wiped out almost 70% of the market’s valuation, interest in Metaverse and NFTs waned.
Google Trends data for the search term “metaverse” as of August 9, 2021. Source: Google Trends
There has been a drastic change in the approach of brands that were just around the Metaverse and NFTs earlier in the year. Recently, Tinder, the popular dating app, cut its Metaverse plans after disappointing Q2 results.
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Efforts to create a futuristic AR-based virtual world are currently in a very young stage, and some experts believe that current technological barriers, both hardware and software, are partly to blame. Lili Zhao, director of ecosystem growth at Neo Blockchain, told Cointelegraph:
“The Metaverse is still in its infancy, so existing projects are industry firsts, which means trial and error before it gets to product maturity. Currently, neither the hardware nor the software infrastructure is sufficient to realize the full potential of Metaverse. This is an area of technological innovation with fundamental growth opportunities for years to come, regardless of market conditions, which are more cyclical and mood driven.”
Sandra Helou, Head of Metaverse and NFT at Zilliqa, said people see the Metaverse as a new concept. However, she believes the Metaverse is just an enhanced iteration of the internet and the more we embrace it as a new form of interaction, the less threatening it will seem. She told Cointelegraph:
“The keyboard has never replaced the pen and the pen has never replaced the pencil. Web3 should not be viewed as a replacement for Web2, but rather as an amplifier focused on increased engagement and connectivity. The future of the Metaverse should aim to combine elements of the physical and digital worlds through seamless integration and interactivity accessible to everyone regardless of industry.”
The Criticism of the Metaverse
The metaverse as a concept has split the world in half where on one side companies like Meta, Microsoft, Sony and Samsung are all betting on the technology and calling it the future of the internet. On the other hand, the likes of Elon Musk and Ethereum co-founder Vitalik Buterin believe that the current forms of the metaverse are nothing more than corporate fantasy.
Buterin recently said that existing corporate attempts to create a metaverse are “going nowhere,” stating that meta will “fail.” Buterin’s comments came in the wake of Meta’s $2 billion quarterly loss at its Metaverse division.
Marius Ciubotariu, co-founder of the decentralized finance stablecoin issuer Hubble Protocol, told Cointelegraph that the involvement of companies like Meta has given the industry a poor outlook of late, stating, “Companies like Meta are very heavily into the Metaverse. Unfortunately, this has led to many having negative or conflicting ideas about what the metaverse is.”
“Meta, like some of its competitors who have publicly embraced the Metaverse, sells it as nothing more than an extension of social media data mining, where individuals have no control over their personal information and data. These centralized metaverses contradict principles of decentralization such as immutability, censorship resistance, and permissionless access.”
He added that the Metaverse has a bright future, but established projects like The Sandbox and Decentraland will likely take the bulk of the market share, and smaller, underfunded projects may not be able to deliver on their huge promise due to a lack of resources, time, experience, funding, and the difficulty of development. He further predicted that “similar to the Initial Coin Offering phase of 2017, most of these projects will either not see the light of day or will not reach the necessary user base to maintain a healthy funding margin.”
Other critics believe that centralized metaverse, as proposed by Meta and Microsoft, could disrupt decentralized ownership of goods and services within these ecosystems.
Ben Advia, founder and CEO of crypto collection and metaverse platform Dissrup, explained the current skepticism about metaverse and how it could potentially change. He told Cointelegraph that while there have been many attempts to exploit the excitement around Web3 and the Metaverse for business and personal gain, it would be cynical to dismiss the efforts of many to build something truly revolutionary:
“It’s important to remember that the Metaverse in its ‘true’ form would never be perfectly polished and executed flawlessly, just as it took time for us to realize the potential of the internet. The Metaverse will take time to evolve into the idealized web-centric utopia that we’ve all been discussing and envisioning for the past few years.”
“Until such a point, the concept will continue to face criticism and skepticism, forever being associated with the ridiculous graphics and clunky interfaces of proto-metaverse spaces, while we continue to overlook how it might change the way how we function and exist in emerging hybrid digital/physical space,” he added.
Kirk Allen, CEO of Metaverse aggregator Kaloscope, told Cointelegraph that the hype around the market and the involvement of corporate giants like Meta and Microsoft have hampered the vision surrounding the concept. He explained:
“There is ‘hype’ in several sectors, excited and believing that the next big thing for Web3 is the Metaverse. Without fully understanding what “metaverse” means, most people just follow suit when Facebook was rebranded to meta. Among skeptics, the term “metaverse” sounds overly optimistic and is often questioned for lack of definition. However, the metaverse is not a poorly executed idea or a dream. If you want to think of it that way, it’s actually in the cocooning phase and will soon be out in the public sphere in businesses and communities in many more ways.”
Look beyond the hype
Growing interest in the Metaverse from tech giants has raised concerns about centralization and monopoly, but it’s important to note that their billion-dollar investments created a knock-on effect for the industry. Your involvement will draw more attention to the sector, along with more investments and more tools will reach the market. Such development tools save entrepreneurs the time it takes to develop new technologies and allow them to focus on their innovations.
While interest in the Metaverse has waned, it hasn’t entirely disappeared, particularly in the United Arab Emirates. Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum announced on July 20 that Dubai will host a global event in September 2023 to bring together experts on the metaverse. The country plans to step up its efforts and create 40,000 new jobs around the metaverse, showing some governments are beginning to understand how valuable this sector can become.
Metaverse developers like Decentraland and The Sandbox have partnered with several Web3 projects to form the Open Metaverse Alliance, focused on building more transparent, inclusive, decentralized, and democratized Metaverse. Sean Kelly, founder of the Chibi Dinos NFT collection, told Cointelegraph:
“There hasn’t been a clear winner yet as to which company will have the largest Metaverse, but there’s no doubt that virtual experiences will be a part of our future and the Metaverse will play a big part in the future of our children.”
As the Metaverse brings the online and offline worlds closer together, it offers new opportunities for businesses to scale and individuals to connect. For example, interacting with a virtual 3D avatar customer service representative instead of a corporate representative in a chat window can result in a more immersive and memorable customer experience.
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For an avid video gamer, a metaverse may be the utopia they are hoping for, as it allows them to conveniently switch between online gaming and virtual socializing. With digital identities, there is also an opportunity for people to explore alternate characters for themselves.
Sports leagues could integrate VR/metaverse capabilities to increase viewership, as well as an NFT component to reward viewers. Malls and stores have already created virtual stores where people can shop at home and try on wearables virtually.
The future of the Metaverse will depend on the stakeholders and how they shape the future of Web3. The current form may seem unpromising due to a lack of technological innovation, but industry leaders are confident that the metaverse concept will be at the heart of the next iteration of the internet.
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