Building the Metaverse but which one?

The number of internet users in the world grew by 4% and was close to 5 billion in 2021. After the remarkable levels of growth we saw during 2020 we might think that 2021 would show a slowdown as the coronavirus restrictions were lifted, however, the number of internet and social network users continues to grow at a faster rate than before the pandemic, as shown by the indicators of Digital 2022, report by We Are Social and Hootsuite. 

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Source: Digital 2022 report (We Are Social and Hootsuite).

According to the report, the two regions with the highest current Internet penetration are Northern Europe (98%) and Western Europe (94%), followed by North America (92%). On the other hand, the regions with the lowest Internet penetration are Central Africa (24%) and East Africa (26%).

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Source: Digital 2022 report (We Are Social and Hootsuite).

One of the interesting points is the detailed graph about the main reasons for using the Internet in the world. Finding information is the main reason with 61% of the total, followed by keeping in touch with friends and family (55.2%), and keeping up to date with events and news (53.1%). Other reasons for using the Internet in 2022 include watching videos, shows and movies (51.5%), researching how to do things (51.3%) and finding inspiration or new ideas (47.5%).

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Source: Digital 2022 report (We Are Social and Hootsuite).

This data is interesting to understand to see what are the current needs for people, why they use internet and currently they are: Information and Human Interaction.

So when a company promises to build its next evolution, that is the Metaverse, there are always some vital questions to be asked.

How will this new Internet experience called the Metaverse change our lives? Will it influence businesses and the way we work? And, above all, who is building this new Internet that will connect more than a billion users by 2031?

The answers to these questions are interesting and multi-faceted.

Building the Metaverse

But what exactly does it mean to build the metaverse? Unlike most virtual reality applications, the metaverse is not a single software platform that can be built with the usual agile development model.

Rather, it is a complex digital environment that relies on seven distinct layers (suggested by Jon Radoff, author of the Building the Metaverse blog):

  1. Infrastructure – Connectivity technologies such as 5G, Wi-Fi, cloud, and high-tech materials such as GPUs.
  2. Human interface – Virtual reality headsets, augmented reality goggles, haptics and other technologies that users will take advantage of to join the metaverse.
  3. Decentralization – Blockchain, artificial intelligence, edge computing and other democratization tools.
  4. Spatial computing – 3D modeling and visualization frameworks.
  5. Maker economy – An assortment of design tools, digital assets and e-commerce establishments.
  6. Discovery – The content engine that drives engagement, including ads, social media, ratings, reviews, etc.
  7. Experiences – VR equivalents of digital apps for games, events, work, shopping, etc.

How can ownership of what is essentially a decentralized and democratized concept be determined? As Neil Rimer, co-founder of Index Ventures and Roblox board member made clear: “No company can build a metaverse. It has to be a community. The metaverse will exist when it mirrors the world in some way, when there is so much variety that on any given day you can decide to do whatever you want, just like in the real world.”

In other words, multiple organizations, independent developers and grassroots creators-along with the final piece of the puzzle will build the metaverse.

And here’s the fun part: there are currently more than 160 companies operating in these seven verticals and they are building the metaverse together.

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Metaverse Ecosystem. Source: Metaverse 2021 Intro report (Newzoo)

If during the growth of the Internet, what we know as Web 2.0, the builders were Web programmers, Web 3.0 and the metaverse will be built by video game developers in my opinion.

Types of Metaverse

But before we continue, let’s say that we can find two types of metaverse. The “traditional” metaverse, which has been known for a long time, whose great acquaintances are The Second Life, Habbo Hotel, Fortnite or Minecraft. And the Blockchain metaverse that thanks to different applications of this technology, such as NFTs or DAOs have taken them to another dimension.

Traditional metaverse

The Metaverse without blockchain refers to all kinds of virtual worlds, where glimpses began to be seen in video games such as The SIMS (2000, Electronics Arts), an endless series derived from an original social simulator, or the prolific Grand Theft Auto saga (1997, Rockstar Games ) where the story of different antiheroes who roam around an open world is told, interacting with other characters, initially bots, but which led to online multiplayer in recent years. These types are very centralized and closed to how many opportunities the user creates. I must confess that I have invested part of my youth in these virtual worlds.

An example of a “traditional advanced” and more decentralized metaverse is Roblox, since it allows creators to generate an economy within it. It is a platform where users can explore, collect resources, create and buy items, build buildings, create mini-games and fight. But over time it has also become a place where you can go to events such as concerts or art exhibitions, some of them for a fee, and hold work meetings and there are even some that have created party clubs. The Roblox platform also has this functionality of generating economic income, people can develop video games within the Roblox game. It is estimated that approximately 2 million people develop games within Roblox and of these people, 20% are dedicated to this activity full time. In other words, it can be said that 200 thousand people have their workplace within this game. As additional information, it is said that within the world of Roblox there are more than 50 million games, many of them being very popular.

Blockchain Metaverse

Blockchain allows transforming the concept of Metaverses, multiplying its possibilities by connecting the real world with the virtual one. The Blockchain Metaverses are places where an economy parallel to the real one is developed, only totally digital. Users can monetize their talent in these metaverses, buy land, pizza, art, clothes, cars, etc. As with the Internet, it is likely that every company will soon open a headquarters in the metaverse.

Thanks to Non-Fungible Tokens (NFT), smart contracts and Decentralized Autonomous Organizations (DAO) it is possible to develop an economy parallel to the real one, fully digital with reliability and empowering content creators and users. NFTs are unique assets used to digitally represent physical or digital assets (buy land, pizza, art, clothes, cars, etc.) thanks to their main characteristic of being unique and having digitally verifiable ownership. Smart contracts control a decentralized autonomous organization (DAO), are transparent and immutable and are in charge of establishing the rules of the metaverse. As a result all members of the Metaverse know in advance the rules of the community, recorded on the Blockchain. Metaverse token holders have the opportunity to vote on the future Metaverse, just like they would in an election.

Although it seems rather contradictory, within the Blockchain metaverses there are also centralized ones. In this case, companies are in full control of centralized blockchain metaverses, such as Earth2. As in the “traditional” metaverses, the control of the future and all user data belongs to the company. So how do they differ? Basically these centralized metaverses integrate crypto payments, and the virtual elements are in the form of NFTs. Therefore, they do have a virtual economy of their own. But control of this economy is not in the hands of the community.

Lastly, there are the decentralized metaverses of blockchain. These metaverses operate through a DAO and have a fully autonomous virtual economy controlled by users. This is the case of Decentraland, The Sandbox, or Cryptovoxels. All of them intend to become Decentralized Autonomous Organizations, although initially they were founded by a single organization in charge of building the virtual world. In other words, all of these metaverses will be fully controlled by users in the future.

This last type of metaverse is the one that will probably have the most potential in the future. Although these metaverses are currently in a very early stage of development, they have already attracted the attention of numerous companies such as Adidas, Shotebys, Coca-Cola or Gucci.

The central part of the puzzle of the metaverse is you

The main point to take into account in the construction of the metaverse is the adoption by users and content generated by them.

The meteoric rise of Facebook is closely related to the growth in the number of users, and the same goes for Microsoft, Decentraland and others. And this is probably the biggest hurdle of all.

Nearly three decades have passed since the birth of the Internet and 100% penetration of Web 2.0 has not yet been reached.

As the metaverse is built, stakeholders need to focus on minimizing barriers to adoption and resolving user concerns to make it a success. That is, to put the users (players and content creators) at the centre of the equation. If companies stop focusing on themselves and put to work the machinery of implementing the “Voice of the customer” they will have many more options to be part of the success of the Metaverse.

I hope you liked it. See you in the Blockchain Metaverse.