By Christos Makridis
The metaverse economy could represent a total addressable market of $8-13 trillion by 2030 with a wide range of use cases across all industries, according to a 2020 report from Citibank. Most applications of metaverse experiences have been largely entertainment-oriented, such as parties or virtual concerts, but several leading academic institutions have also experimented, including Arizona State University’s Dreamscape Immersive and the Open Metaverse Initiative. University of Nicosia.
But experts and institutions vary in their definition of the metaverse. “The Metaverse is the next evolution of social connection and the successor to the mobile internet,” marked by the ability to move “seamlessly” between spaces, according to Meta. Apple, on the other hand, views the Metaverse as an extension of physical reality using augmented and virtual reality (AR/VR) products.
Others see it even more. “The metaverse is a virtual world of universes all connected to the web3 value layer around economics, interoperability, security, but it should also have a connection to the physical world…it’s not a group of 2D avatars walking around in a virtual space,” said Caleb Applegate, CEO of Passage.
Other leading web3 consulting firms share a similar view. “While the vast majority of attention and investment in the metaverse has been on ‘ready player one’ type experiences (e.g. virtual reality, 3D worlds), Vayner3 believes there is a much clearer and scalable opportunity with real and augmented reality based technologies on everyday mobile devices,” said Allen Hena, Director of Web3 Operations at Vayner3.There will be a nexus between physical and digital assets.
While the expansion and prominence of Sandbox and Decentraland have allowed people to see the metaverse solely as a virtual game, blockchain is fundamentally about enabling sovereign identity and ownership, not new virtual spaces for games. “If studios are simply trying to make money or differentiate themselves from other studios by using blockchain, I advise them to strongly reconsider…the end user wants ease of access, games that are quick to learn and hard to play. master, instant purchase capability if they want to spend money in-game, and an engaging experience. If they are unable to execute these fundamental game design elements with blockchain, they are using a losing formula,” said Corey Wilton, co-founder of Mirai Labs.
Web3 is about ownership. “Everyone knows with web2 that you are the product…web3 is about owning your digital identity,” Applegate continued. Transactions are validated and uploaded to the blockchain based on a decentralized consensus process, allowing users to own their own data and even digital assets. A potentially substantial part of the value the metaverse can bring is the connectivity between digital and physical assets that are all represented and protected by a permissionless and immutable, censorship-resistant and anonymized digital ledger.
This contrasts with the Web2 ecosystem where tech giants own the mode of communication and search channels with customers, rather than the brands. “Most brands have come to increasingly rely on these platforms to authenticate an individual’s online identity…a system purposely created to keep companies disintermediated from their customers. But now, with web3, businesses can now reliably verify a person’s identity through their blockchain-based wallets and engage directly with their customers,” said Brian Wallace, Chief Marketing Officer at Vatom.
“Companies, especially large enterprises, need to understand the big difference between the vision of tomorrow’s metaverse, the facts and realities of what can be done today, and how we combine as technology and behaviors are digitally evolving,” Hena continued. For example, NFTs will serve as a major mechanism by which brands reward and incentivize users to engage with them on an ongoing basis, and brands will learn to work together in an interoperable ecosystem.
A recent example is the partnership between Starbucks and Polygon. “Major brands are beginning to recognize the importance of how they digitally interact with their community in a more immersive way. With Polygon, users can own their digital assets and data, enabling unique digital innovation that we haven’t we’ve never been able to accomplish before. The Starbucks partnership elevates and advances what rewards programs can do to empower users in new ways,” said Ryan Wyatt, CEO of Polygon.
A single, unambiguous definition is unlikely to emerge. On the contrary, brands are likely to adopt different interpretations depending on the needs perceived by their consumers.
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