Sifting through the Metaverse to find reality amid hype
While retail traders are watching their crypto portfolios dimmish, the metaverse world is full steam ahead. And that means opportunity knocks for those who are willing to take the time to sift through what’s hype and what’s reality in the virtual world.
Have we defined the metaverse yet?
That’s a good place to start, because the definition of what exactly the metaverse is seems to vary. But after reading dozens of descriptions, here’s one that’s a good place to start: “The metaverse is not one single place,” CNBC explains. “From virtual reality headsets to digital worlds that you can explore as an avatar, the term “metaverse” refers to a series of virtual reality platforms that immerse users in an interactive online experience.”
For the record, there is no one metaverse, but many metaverses. Mark Zuckerberg was just smart enough and fast enough to grab onto the term Meta and brand it. But there are many other metaverses out in the digital world. While that may be confusing, the idea of virtual worlds and investment in them is being acknowledged by the mainstream fiscal world.
Experian, one of the largest credit reporting agencies in the U.S., takes a stoic approach to the idea of a metaverse.
“Metaverse skeptics believe that the metaverse is a buzzword, gimmick or passing marketing and branding trend. Whether you believe the metaverse is here to stay or a passing fad will play a large part in your desire to put your money into one or more of these stocks.”
What powers a metaverse? Technology, and of course, tokens.
“In the 2020s, crypto games like The Sandbox and Decentraland are tilting the videogame economy on its head by adding digital assets to the mix. Not only can you import your own non-fungible tokens (NFT) into the games and buy virtual land, but you can also use the games’ fungible governance to alter the parameters of the virtual world you’ll inhabit, explore and build,” CoinDesk says.
Building a metaverse requires assets and technology, with assets being the primary driver of technology, as witnessed this week when Zuckerberg’s Meta reported a meta loss due to building its virtual universe.
“The problem is, the metaverse can’t be manifested with just wishful Silicon Valley thinking,” one New York Times contributor noted earlier this year. “While much of our lives have already shifted online during the pandemic, making those experiences truly immersive at scale is a knotty challenge. The metaverse is currently stalled by a lack of infrastructure (the hardware and software aren’t ready yet), a monopolistic approach to platform development (the metaverse is likely to require more openness and collaboration), and a lack of clear governance standards (some experts want to avoid reinscribing the pitfalls of social media).”
As crypto slides into bear market territory, metaverse lifts the conversation.
Traditional and crypto markets continue to be volatile in the wake of worldwide uncertainties and a looming recession in the U.S. But digital currency enthusiasts are not easy to dissuade from the idea that their path is that of the future. Witness the Davos conference that closed Friday — not only were traditional financial gurus talking about the role crypto will play in the future, the metaverse was front and center as well.
In a panel discussion at Davos, world financial leaders discussed the role metaverse(s) will play in people’s daily lives. A panel discussion included survey results from the World Economic Forum on the concept of metaverse. “More than two-thirds of respondents from China, India and Peru were bullish, while only a third of those surveyed from Great Britain, Canada, Japan, Belgium, France and Germany were keen on a hyper-connected metaverse,” Blockworks reported.
Regulation of metaverses is part of the worldwide conversation.
Keep in mind that even though Meta (Zuckerberg’s world) is one metaverse, there are many, many more. And at this point, they are walled gardens, though there are some blockchains working on connecting metaverses through shared networks. And each metaverse currently operates with its own set of rules which is the premise of decentralized autonomous organizations (DAO).
Of course, as with crypto, metaverse regulation is a hot topic of discussion.
“But there must also be some rules governing our metaverse experiences,” said Minister of State for Artificial Intelligence in the United Arab Emirates (UAE) Omar Al Olama, according to Blockworks. “The UAE has been an early adopter of the nation-state-driven metaverse, facilitating its first virtual wedding in Decentraland last week.
“There are different kinds of risks we must pay attention to,” he said. “Financial transactions which happen in the real world for goods bought in the metaverse such as Bored Apes — if you actually pay money for that but you don’t get it in the metaverse, someone has to pay for that with an agreement on how that’s enforced.”
Like gold rush speculators and early pioneers of any land, retail traders have an opportunity to be a part of something that could be even bigger than the last next best thing. Understanding what a metaverse is could be the first step in the process.
Joyce Pavia Hanson