METAVERSE — A Futuristic Technology Or A Passing Fad?
If you work in technology or are interested in learning about emerging technological developments, you’ve probably heard of the term ‘metaverse.’ Since Facebook changed its parent corporation to Meta Platforms Inc., in 2021, the term ‘metaverse’ has become a worldwide buzzword. In actuality, this term was coined by science fiction author Neal Stephenson in 1992 and originally used in his novel Snow Crash to describe a massive virtual environment.
So what exactly is the ‘metaverse’?
For the time being, no one knows for certain what the ‘metaverse’ will look like because different companies are developing their own versions of this technology, and no one knows which version will triumph, but it can be loosely defined as a virtual 3D world powered by VR and AR technology in which users will be able to interact with each other and the environment in an immersive manner by creating their own avatars, allowing for interoperability between various platforms. Second Life is an online virtual world founded in 2003 by Linden Lab’s Philip Rosedale and his colleagues and can be considered as a predecessor to the Metaverse worlds that are being constructed today, and it is still a hugely popular game with over a million active participants.
The metaverse has unique characteristics such as persistence, which means that people can return to it whenever they want to build structures or do whatever they want, interoperability, which means that people can travel between different virtual spaces using the same virtual assets, and social interaction, which means that people will be able to join various virtual spaces and interact with one another.
Use Cases of Metaverse
Gaming
Gaming is one of the earliest and most visible uses of the metaverse. While virtual gaming is still feasible, the metaverse will introduce a whole new level of interoperability among different gaming systems, resulting in an immersive and engaging experience.
Marketing
Marketing is another obvious application of the metaverse. Because the metaverse is a virtual environment in which individuals engage in a wide range of activities ranging from leisure and amusement to educational and much more, firms have a clear opportunity to sell their products in different virtual worlds inside the metaverse. This is already occurring, since Roblox has collaborated with Gucci to develop a branded Gucci environment within Roblox.
Healthcare
One of the most useful applications of the metaverse is in healthcare. Metaverse will enable patients and clinicians to connect in virtual regions that transcend geographical borders, minimizing the need for in-person encounters. Along with this, surgeons may use augmented reality to do surgery. Virtual reality may also be used to teach doctors.
Training and education
According to a PWC research, people learn 4x quicker when instructed via VR. Furthermore, individuals trained using VR were 275 percent more confident in applying what they had learned. This definitely demonstrates the efficacy of employing VR and simulations in training and education. The Covid-19 pandemic has confined people to their homes and the metaverse can be an excellent medium for training and educating employees and children.
Technologies making the metaverse possible:
5G Technology
Because the metaverse is all about offering virtual experiences that are shared by several people at the same time, internet connectivity will be critical, and 5g technology will play a vital role in providing seamless virtual experiences in real time.
Blockchain Technology
The metaverse is being marketed as a vast decentralized virtual platform, and blockchain technology will be critical to its success. The blockchain will enable users to possess digital assets such as NFTs and will allow these assets to be interoperable across platforms. In the metaverse, for example, if you buy a gun skin in PUBG, you will be able to use it in other games such as Fortnite.
Artificial Intelligence
Behind the scenes, artificial intelligence technology will work its magic by studying the data and offering improved algorithms that may be deployed to further expand the metaverse area. AI will also aid in the production of avatars and the construction of other items in the metaverse realm.
Limitations of the metaverse
Every technology has both positive and bad aspects, and no debate can be complete without addressing both of them.
The purpose of the metaverse is to create a mixed reality arena that incorporates the digital and physical worlds, rather than just a virtual or augmented reality region. This poses a severe risk to users’ data and privacy since, while the metaverse is touted as a decentralized society in which no single entity would be in power, some key parties will collaborate to make this world a reality. For example, Meta is now building a system that will be able to read human minds using neural networks and artificial intelligence (AI) with the help of a wrist band which may possibly violate our privacy on a whole new level.
According to Meta, on November 26, 2021, a beta tester was allegedly groped by a stranger on Horizon Worlds. This was not the first incident, nor will it be the last, demonstrating that there are significant safety concerns that the companies developing this technology must address. Another important factor that can become a possible hindrance in the development of the metaverse is the hardware used in it as
The gear needed to join the virtual world is another crucial component that might hinder the growth of the metaverse. Facebook’s version of the metaverse employs AR/VR headsets, which might pose a problem because some individuals may not feel comfortable wearing bulky headsets all the time and may dismiss the metaverse entirely.
Metaverse as an investment opportunity
The total market size of metaverse is expected to grow to $596.47 billion by 2027 from $44.69 billion in 2020 at a CAGR of 44.87 % during the 2021–2027 period according to Brandessence Market Research. The question now arises how an individual can exploit this opportunity and make money.
The simplest way to make money in the metaverse space is to buy the stocks of companies that are involved in the development of the metaverse infrastructure like Meta Platforms Inc. ( FB), Nvidia Corp., Qualcomm Inc. and much more.
The second, and maybe most costly, alternative is to buy virtual land in any of the metaverses that you anticipate will explode in the future, such as Decentraland or Sandbox, and then swap it with someone for a greater price, rent it out or you can place an advertisement for a third-party company and charge for this service.
Metaverses each have their own crypto assets that are used to enable transactions in these virtual worlds, such as Mana in Decentraland or Sand in Sandbox. As a result, if you predict that one metaverse will be larger than another, you can trade in the crypto currencies of these metaverses.
Another way of making money in the metaverse is by playing Play to Earn games where the player is rewarded in the form of crypto coins, NFTs. These rewards can be traded on exchanges for stable coins.
The Bottom Line
Metaverse is presently touted as a technology on par with, if not superior to, AI, and is depicted as a unified, all-encompassing entity. Nobody knows for sure what it will look like because other firms are striving to sell their own version of this technology, and it is likely that there may be multiple metaverses. Another critical issue that must be addressed is the question of safety in the metaverse. As a result, only time will tell how much the metaverse as a future technology will grow and what it will look like.
— Written by Shantnu Sood (shantnu.sood@xumitcapital.com)
