What is the metaverse?

The metaverse is a collectively shared digital environment where individuals can replicate real-world experiences within an online world.

The term "metaverse" first appeared in an early 1990s sci-fi novel, Snow Crash, written by Neal Stephenson.

It spoke of a digital world where players interacted with each other through 3D avatars to escape the bleakness of their dystopian reality. This concept of virtual escapism has proved incredibly popular since the release of Snow Crash. Today, the term is a staple of futuristic fantasy and other forms of sci-fi media.

Unlike regular video games, Stephenson described the metaverse as a single shared space for all virtual experiences and interactions. People connected to this world using immersive headsets — a technology that's still synonymous with virtual reality today.

Thirty years after Stephenson wrote his novel, the metaverse has matured from a raw science fiction concept to a technological reality.

Multiple projects such as Decentraland (MANA) and The Sandbox (SAND) have already developed their own independent metaverse worlds.

Even big tech companies like Atari, Microsoft, and Meta (formerly Facebook) are heavily investing in this new frontier.

While some of these existing virtual worlds are interoperable, no single unifying metaverse exists as of yet.

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Benefits of metaverse experiences


Metaverse worlds offer many benefits for their users, such as new entertainment, education, socializing, and business opportunities.

Users can explore different metaverse environments while creating avatars, interacting with others, learning new skills, and collaborating across borders. Metaverse worlds can also help them access unique services like virtual art galleries, music gigs, or virtual shopping.

Non-fungible tokens (NFTs) have become an integral part of the metaverse. They help to represent ownership of the services, products, structures, and in-game characters these digital worlds are built upon.

As more companies step into this new space, it's possible we may see greater integration of real-world services across metaverse worlds. For example, it might become possible to buy real clothes from a 3D virtual shopping mall, or experience the latest theme park rides from your living room.

The history of the metaverse


Pre-internet development

Before the internet became widely accessible, there were some early attempts to create metaverse-like virtual worlds using VR arcade machines. One example of this was the Sega VR-1 motion simulator, which users enjoyed across many arcades during the early 1990s.

Sony started early experimentation with VR headsets in 1993 with the Visitron and Glasstron. According to one reviewer, these devices simulated "watching a 33-inch TV from four feet away."

However, due to hardware and software limitations at the time, none of these devices took off in any meaningful way.

The rise of the internet

The internet enabled more people to connect and communicate online, while also facilitating the development of various online platforms and communities.

Some examples of early internet-based virtual worlds include The Palace (1995), Active Worlds (1995), and Habbo Hotel (2000).

These worlds expanded into massively multiplayer games like World of Warcraft and then expansive games like Roblox, Fortnite, and PlayerUnknown's Battlegrounds (PUBG). These games have everything necessary to create a truly immersive world, with the exception of a 3D viewing system that puts the player in the middle of the action.

The emergence of virtual reality

Virtual reality technology advanced significantly in the late 2010s. Devices such as Oculus Rift, HTC Vive, and PlayStation VR have become increasingly more affordable and accessible.

As these VR devices evolved, they allowed users to experience more immersive and realistic virtual environments. These advancements also sparked more interest and investment in creating metaverse platforms.

While these devices are significantly more powerful than their arcade game predecessors, they still lack interoperability with each other.

This limiting factor forces players to choose between specific games and experiences supported by their chosen devices, much like choosing between the Xbox or PlayStation ecosystems.

Blockchain technology and NFTs

The advancement of blockchain technology over the past decade has created new opportunities for metaverse players to trade and verifiably own in-game assets.

Non-fungible tokens (NFTs), a type of cryptoasset stored on blockchains like Ethereum (ETH) and Solana (SOL), make this possible.

An NFT acts like a digital certificate of ownership. Rather than the need to trust a single person or company to verify this ownership, individuals can use NFTs  to independently verify this ownership for themselves. 

No one can corrupt, destroy, or censor NFTs — not even the person that made them. Thanks to NFTs, players can take ownership over their in-game accomplishments and expand the possibilities of the digital economies video games offer.

Adding NFTs to the metaverse essentially created an entirely new gaming economy.

This economy allows players to buy and own fashion, weapons, tools, and other in-game items without reliance on a third party to confirm ownership.

Early metaverse innovations


Virtual worlds evolved in parallel to VR hardware. Let's explore some of the first environments that laid the foundations for the metaverse.

Second Life

Many regard Second Life as one of the earliest and most influential metaverse platforms. Launched in 2003 by Linden Lab, the game was one of the first immersive social environments. It built a following thanks to its focus on interactions between players rather than action driven gameplay.

Second Life allowed players to replicate many aspects of real world life. They could create and customize their own avatars, which they could use to explore and build virtual worlds. Players could also socialize and trade with other users. Players could participate in different activities and events, and even rent or own any piece of land in the virtual world. Second Life was one of the first environments to popularize the idea of digital ownership.

World of Warcraft

World of Warcraft (WoW) is a massively multiplayer online role-playing game (MMORPG) released by Blizzard Entertainment in 2004. It's set in a fantasy world called Azeroth. Players can choose from different races and classes, complete quests, join factions, fight enemies, and interact with other players.

World of Warcraft spawned other massively multiplayer games including Elder Scrolls Online (ESO), an immersive fantasy game.

Other early platforms

  • IMVU: A 3D real-life simulator designed for social interaction. People chat and connect with one another using player-controlled avatars.
  • Roblox: A vast metaverse where players can meet others, as they create and engage with user-created experiences. By the end of 2022, Roblox clocked more than 56 million daily active users.
  • Minecraft: Minecraft is one of the world's best selling video games. Players interact with a fully customizable 3D block world, where they can build any type of structure they wish. The game also features a survival mode where players have to earn food and resources, build shelters, and fend off attackers.
  • Fortnite: Fortnite combines the creation mechanics of games like Roblox and Minecraft with a third-person style shooting game. There are several game modes that offer both single and cooperative quests and battles.

The future of the metaverse


The world is still waiting for a leading metaverse gaming experience.

Console-based video games continue to dominate the industry with millions of daily users, while many headset-based games have yet to gain the same notoriety. Many expect that could all change dramatically over the next decade.

The potential of the metaverse

First, the metaverse could become a social hub and enable new forms of interaction that transcend physical boundaries and limitations.

Just like the internet, people in the metaverse could meet, chat, collaborate, and create anything with anyone in the world. The immersive quality of metaverse worlds would also offer far more realistic modes of communication than what's available in the text only forums of much of today’s web.

The metaverse could also foster a sense of community and belonging among users who share common interests and values. The proliferation of NFT communities in the crypto industry is a great example of this. Huge online groups have amassed around iconic NFT collections, united by their mutual appreciation for digital artwork.

Education and entertainment

The metaverse could offer new opportunities for education and entertainment that are more engaging, interactive, and personalized than traditional methods.

Students can use the metaverse to learn from experts and peers in realistic simulations and environments. Many feel this enriched learning environment could enhance their understanding and retention of information in a way that standard classroom lectures could not.

Likewise, consumers could use the metaverse to access different forms of entertainment like games, concerts, movies, and art that cater to their preferences and tastes.

Business applications

The metaverse could transform various industries and sectors by providing new ways of working, marketing, selling, and innovating.

Businesses could leverage the metaverse to improve productivity, collaboration, communication, and creativity among their employees and partners.

They could also use the metaverse to reach new customers, showcase their products or services, and create unique brand experiences.

Challenges of the metaverse


Security

The metaverse poses significant security issues for users, including exposure to potential cyberattacks, hacking, fraud, identity theft, harassment, and manipulation by malicious actors.

Protecting user data, privacy, and safety in the metaverse requires robust encryption, authentication, and moderation systems as well as ethical standards and regulations. NFTs will allow users to maintain ownership of items throughout multiple metaverses, a prospect that gives new utility to these digital goods.

Regulation

The metaverse raises complex legal and regulatory issues that involve multiple jurisdictions and stakeholders.

For example, who owns and controls the content, assets, and intellectual property in the metaverse? How are disputes and conflicts resolved? What are the rights and responsibilities of users, platforms, and governments? How are taxes and fees collected and distributed?

These questions require clear and consistent rules and policies that balance innovation, competition, accessibility, accountability, and fairness.

Privacy

The metaverse could present significant user privacy issues, depending on how the metaverse is developed, and who develops it.

Private companies may opt to track their players' data without their consent or awareness, including biometric data, behavioral patterns, preferences, interests, relationships, and transactions.

This information could become accessible to third parties for targeted advertising, personalization, and analytics purposes.

Why is the metaverse important?


The concept of the metaverse continues to change regularly and dramatically.

As new technology enters the market, metaverse games and worlds expand to keep up with the latest innovations. With the rise of NFTs, the first wave of the “modern” metaverse has emerged.

The experiences the Metaverse aims to deliver has the potential to transfer how individuals connect and transact.

As these environments and the experiences they offer continue to evolve, the Metaverse will likely play an important role in the way we interact with others for decades to come.

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