Blockchain technology will play a key role in the Metaverse, along with other emerging technologies such as artificial intelligence (AI) and virtual reality (VR). In futurism and science fiction, the metaverse is a hypothetical iteration of the Internet as a single, universal and immersive virtual world that is facilitated by the use of virtual reality (VR) and augmented reality (AR) headsets. In colloquial use, a metaverse is a network of 3D virtual worlds focused on social connection.
Metaverse development is often linked to advancing virtual reality technology due to increasing demands for immersion. Recent interest in metaverse development is influenced by Web3, a concept for a decentralized iteration of the internet.
Information privacy, user addiction, and user safety are concerns within the metaverse, stemming from challenges facing the social media and video game industries as a whole. Web3 and The Metaverse have been used as buzzwords to exaggerate development progress of various related technologies and projects for public relations purposes.
Meta in the term means “beyond” and verse refers to the “universe.” Moreover, some people also use the term metaverse to refer to virtual worlds in which players can roam around and interact with other players; for instance, a world where developers can build buildings, parks, signs and things that do not exist in reality.
It includes vast hovering overhead light shows and notable neighborhoods (where the rules of three-dimensional spacetime are ignored, and free-combat zones where people can go hunting and kill each other).
Metaverse development may magnify the social impacts of online echo chambers and digitally alienating spaces or abuse common social media engagement strategies to manipulate users with biased content.
Metaverse is an elusive term — various parties define it differently
Most agree, though, that it involves immersive three-dimensional virtual worlds with lots of games and role-playing. Bailenson, for his part, finds it useful to break the Metaverse down into people, places and things. In each of these areas, he sees a potential role for blockchain technology.
Peopleare avatars, the bodies we wear while immersed in the digital world. Here, blockchain technology can provide the “crypto DNA” that “ensures a one-to-one mapping of person to avatar.
For example, it could be used to guarantee that an individual can’t inhabit ten avatars simultaneously or enable someone else to “take my own avatar for a joy ride.”
While an obvious application of blockchain will be to verify clothes and jewelry for an avatar, I have always thought the killer app here is documenting and verifying human animations.
Blockchain technology can be used to verify transactions without a centralized body overseeing the transaction and also ensure that items have unique value based on the supply — one can’t just make thousands of copies to counterfeit an asset.
Places are set areas in a grid of a virtual world. For the Metaverse to work, a world needs to be persistent: it is there, even when you aren’t, and consistent: if you buy a plot of land one kilometer from Snoop Dog, it can’t move farther away based on an arbitrary remapping of the world. Some platforms are already using blockchain technology to document these maps, he noted.
The most obvious application of blockchain technology is in Bailenson’s realm of things, which includes three-dimensional models, two-dimensional images, sound files or any digital asset that can be housed within a virtual world.
What is metaverse in blockchain?
The Metaverse’s goal is to provide people with an augmented reality experience that, in many ways, may surpass physical reality in terms of experiences and opportunities.
Let’s take a look at why the metaverse needs encryption to function correctly. The unhackability and immutability of blockchain are critical properties for any virtual reality technology to gain broad adoption.
Hacks and data breaches are common, but if people are supposed to operate in an entirely online and virtual environment, the underlying platform on which they will be operating must be secure.
Not only does blockchain allow for fast confirmation of information, but it also allows for cryptographically secure and protected transactions. Blockchain and crypto assets are a fundamental and integral aspect of how virtual reality will be deployed.
Building on the previous point, the Metaverse will want and require transactions to be completed on demand, which blockchain and crypto assets can help to enable. There will need to be transactions for an actual virtual reality environment to work and perform as stated.
These transactions must be secure and virtually fast. Individuals in this ecosystem, in particular, will need to be able to:
- transact and engage as readily as if they were in person
- have trust that these transactions will be completed.
Individuals and institutions can conduct transactions in a virtual, traceable and real-time manner via crypto transactions, which are feasible and proven methods.
However, even without the continued use of blockchain and crypto-asset technology, the trend toward virtual and online payments has been growing. Transacting and engaging in commerce in an online environment has become a mainstream evolution that has become even more commonplace with the adoption of crypto payments by Visa, Mastercard and PayPal.
How does the Metaverse work?
The metaverse can be divided into two sorts of platforms in general. According to NFT Market Review, the first involves leveraging non-fungible tokens (NFTs) and cryptocurrencies to create blockchain-based metaverse startups. People can buy virtual land and create their own settings on Decentraland and The Sandbox platforms.
The second group uses the metaverse to describe virtual worlds in general, where people might meet for business or enjoyment.
Many GameFi platforms are part of a metaverse to ensure user retention.
The relationship between the metaverse and GameFi must be well established for the GameFi economic model to work. GameFi draws in the gaming crowd for the experience, and the metaverse makes them spend using the gaming/ecosystem tokens.
The union of NFTs, metaverse and blockchain is a turning point and has the potential to transform the future. The combination of digital world, real and virtual assets and the new meaning they give to the economy and social experiences will be the key to the future of our interactions
People who buy or trade virtual assets on blockchain-based platforms must use cryptocurrencies, despite many metaverse services offering free accounts. Several blockchain-based platforms, such as Decentraland’s MANA and The Sandbox’s SAND, require Ethereum-based crypto tokens to purchase and sell virtual assets.
Users can trade NFT tokens artworks or charge for admission to a virtual show or concert in Decentraland. They can also make money by trading land, which has seen a significant increase in value in recent years. Users can earn money on Roblox by charging other users for access to their games.
Metaverse`s Target audience
The first reason, which is strategic in nature, is the target audience. Generation Alpha is fundamentally different from the previous two generations (millennials and generation Z). It is the biggest generation in the history of mankind and it will form a significant market in the future. And companies need to fight for a share of this market today. Generation Alpha is maturing very quickly, so the moment should not be missed.
Members of this generation start playing video games at an early age, it affects the way they think and perceive the world. Alphas consume as much information as neither millennials or generation Z have ever consumed.
This explains the Alphas’ ability to make fast decisions and this is why they are often called decision-makers.
Every week, 3 million Alphas are born. These people are already interested in completely different brands that are unusual for us. They live in a different reality, they have different devices. Compared to Generation Alpha, Generation Z is more visually oriented. They belong to the creative class and prefer to participate in the creation of something new.
This goes well with the idea of the metaverse, because it has a lot of attractive visual elements, and there is the idea that a person interacts and creates something, and not just consumes the products of other people’s activities.
Another important distinguishing feature of the Alpha generation is how they perceive information — they take it mainly from the virtual space. An important trend is that the marketing that affects them is real-time marketing.
So, the first reason why e-commerce should go into the metaverse is the struggle for a market of consumers who need to be nurtured in terms of brand loyalty. These people are consuming massive amounts of content, so there’s no time to waste.
What can you do in the Metaverse?
One can take a virtual trip, buy digital clothing, go to a virtual concert in the crypto metaverse projects. Amid the COVID-19 pandemic, the Metaverse could be a game-changer for the work from the home shift. Horizon Workrooms, a free open beta from Facebook, is now available for download on Oculus Quest 2 in regions where Quest 2 is supported.
Workrooms is a virtual meeting space that allows you and your coworkers to collaborate more effectively from any location. You can join a conference in VR as an avatar or make a video call from your laptop or PC to the virtual room.
You can collaborate on ideas using a sizable virtual whiteboard, bring your computer and keyboard into VR to collaborate with others, or have expressive discussions that feel more like you’re in person.
However, tech firms must yet figure out how to connect their various web channels. To make it work, competing technological platforms will need to agree on a set of standards to avoid switching between the Facebook metaverse, Microsoft metaverse, or others.
Metaverse as a new shopping experience
The second reason is the ability of the metaverses to offer a new shopping experience — and they already know how to do this. Examples are the purchase of hiking equipment in a metaverse-created national park and the purchase of comics with Batman as a consultant for a virtual comic book store.
High competition forces many brands to look for ways of deeper engagement with the customers and as a result they create promotions in the metaverse. Now is the time for the experience economy that creates a closer communication with consumers by engaging them into game-like interactions.
This makes it possible to increase brand loyalty. It is already clear that brands that ignore this important trend are depriving themselves of a significant competitive advantage.
Large and small companies place their showrooms not only in the metaverses, but also on sites where they experiment with augmented reality. Brands create showrooms, enriching them with 3D elements that can be viewed in more detail, zoomed in, rotated, twisted. This is something the viewer easily understands, it is easy to perceive and it creates a wow effect.
This 3D visualization gives the customer a completely new buying experience. This trend is already present in the market and cannot be denied. The more brands switch to this format, the more dull and outdated 2D will start to look.
We are talking about ordinary clothing items that are easy to sell because they are not high-tech products. This also applies to everyday items. Entire virtual shopping districts are being created — for example, a Japanese shopping district has been recreated in Decentraland.
Features of Digital-commerce
The difference between Digital-commerce and classic E-commerce is the fact that Digital-commerce is customer-oriented (customer-centric). It takes into account the fact that the customer likes relative autonomy and independence in the process of making purchases — this has become especially evident during the coronavirus pandemic. That’s why touchpoints (interaction points) are so important — an intuitive website, chatbot and a mobile application.
These tools help the customer make purchases independently and quickly, without waiting for a consultation over the phone. Research shows that companies that use at least three touchpoints sell 287% more products than single-channel companies.
Currently, there is a strong trend of selling during streaming in China. A striking example of this is the case of a blogger girl who sold goods (cosmetics) worth $2 billion to 43 million of her viewers during a stream last fall.
The Metaverse is the platform where a blogger can stream, demonstrate goods and sell them at the same time. This allows the consumer, without disconnecting from the blogger to view and study products, interact with them and buy them right here and right now.
A need for interoperability?
As things stand now, major Metaverse players and/or contenders — including Sandbox, Decentraland and the FAMGA companies — offer very little interchange between their web platforms and other platforms. This lack of interoperability, characteristic of Web2, is a shortcoming that needs to be addressed if the Metaverse is to reach its full potential.
This includes, at a minimum, the following elements:
- Anyone should be able to build a virtual world that can link to the rest of the Metaverse;
- Any device or browser should be able to access the Metaverse provided it meets with certain predetermined specifications;
- Ownership of digital assets should be recorded and preserved across multiple servers and clients;
- A single avatar should be able to communicate with avatars on other servers;
- People should have the ability to produce, show, buy and sell their digital assets within the Metaverse.
In light of the growing number of metaverse initiatives that are incompatible with one another, it is more important than ever to build standardizing organisms.
All in all, a Metaverse without blockchain is both thinkable and doable. But, if the goal is the democratization of the Internet, not to mention accessibility, transparency, composability and platform interoperability, then the Metaverse must include blockchain.
Interoperability may not come easily, however. Meta, Google and others will fight hard not to lose their dominance. It may also take time for the public to understand just what is entailed in a user-owned internet, but when they do, consumers will demand to be more in control. FAMGA companies will have no choice at that point but to yield, at least somewhat, on interoperability.
AUTHOR: Anton Elston – IT-entrepreneur. Blockchain expert. CTO in OTON Technology. CEO in the DEXART Metaverse