“The metaverse is not a future, it is already here. It is a conversation about becoming, not simply being.”
For the majority, gaming is viewed as a key Metaverse use case for the next several years due to the immersive and multi-player experience of the space currently and the pivotal role that the games have played in its evolution.
But, if you are to believe us, the Metaverse will eventually help us find new enhanced ways to do all of our current activities, including commerce, entertainment and media, education and training, manufacturing and enterprise in general. For instance: enterprise use cases of the Metaverse in the coming years will likely include internal collaboration, client contact, sales and marketing, advertising, events and conferences, engineering and design, and workforce training.
Rev Lebaredian, Vice President, Simulation Technology at NVIDIA2 commented, “Just like in 1993 we couldn’t tell how big (the internet) was and what it was exactly, this thing we are calling the Metaverse is a continuation of that…it is going to be bigger than anything we have ever known.” —
To substantiate his comment, Citibank has predicted that the Metaverse is potentially an $8 trillion to $13 trillion opportunity. To be able to understand the image given below, let us first understand some other definitions of the Metaverse.
- The Narrow Metaverse constitutes the layers of the Metaverse that have authentic 1:1 relationships with the real world. In these layers, digital twins are critical, and singular digital identities are required.
- The Broad Metaverse comprises the layers of the Metaverse that have a flexible relationship with the real world. It might make use of elements like geolocation or mixed/augmented reality to create experiences or be entirely virtual.
People usually confuse the Narrow and Broad Metaverse with Offline and Online Metaverse, but they are not mutually exclusive. It is imperative to understand that the Metaverse can have narrow and broad layers, and each of those layers can be AR/offline based or virtual.
Sizing the Metaverse Economy in 2030
Can Metaverse Become The Next Big Thing?
Not only us but the world believes that the Metaverse can be the next generation of the internet — bringing together the physical and digital world in a persistent and immersive manner — and not purely a Virtual Reality world. A device-agnostic Metaverse accessible via PCs, game consoles, and smartphones could definitely become a very large ecosystem.
If reading all of this tickles your brain and makes you ponder as to why we are talking so high and mighty about the metaverse, then you must check out some important facts here.
Components of the Metaverse
Despite big shots entering the metaverse, it does not yet have an industry-wide set definition. We can understand it as one conceptual next iteration of the internet supporting a collection of real-time applications and experiences across devices.
Before immersing into the characteristics of metaverse that make it unique, let’s discuss a simplified vision of the Metaverse components.
Components of the Metaverse
The Space: Consisting of rich multi-layered interactions, it is a shared, open, virtual world environment which people can access via the internet. This requires persistent, real- time connections, high bandwidth networks, and exchange centres, among other items, that create an immersive digital experience.
The Interface: This consists of the hardware that helps users access the Metaverse and includes Virtual Reality (VR) and Augmented Reality (AR) headsets, mobile devices, PC and game consoles, smart glasses, and other sensory tools.
The Monetary Infrastructure: As the name suggests, it supports digital payment processes, allowing users to purchase/sell digital assets in the Metaverse. A case in point: fiat on-ramps or pure-play digital currencies, including cryptocurrencies.
The Compute: This covers end-to-end enablement and supply of computing power to support the Metaverse structure. This is the software that puts objects into 3D and enables users to interact with them. In real terms, the Metaverse could resemble a combination of existing technologies and ones still in development, all combined together to create a tangible, digital layer on top of reality, which could either be centralized, decentralized, or hybrid.
Characteristics of the Metaverse
The metaverse has six characteristics that play a pivotal role in making it a buzz across the globe. Metaverse in its true sense, revolves around these characteristics which swing on the hinges of each other.
Characteristic 1: Realistic Immersive Experience
Realistic immersive experiences lay the foundation for verisimilitude of the senses, objects, and environment, and have driven Metaverse excitement. The Metaverse is hailed to create sensory verisimilitude by upgrading 2D internet experiences to 3D, sensory ones. The senses here are mainly visual and auditory.
For instance: the majority of video games have 2D pictures and sound effects. Very few games have added senses including pressure and shock, but these sensory experiences are too far from actual physical and tangible experiences.
Well, the list doesn’t end here as there are quite a few more games that can give you the feeling of playing on the edge with the much needed adrenaline rush of immersive experience.
The development of new technologies like somatosensory devices, digital smell, digital taste, and brain-computer interfaces, have enabled the Metaverse to integrate vision, hearing, touch, smell, taste and ideas to bring players infinitely closer to real sensory experiences.
Before we go ahead, let us just decode ‘object verisimilitude’ for your easy understanding. It is the use of digital twin technology to make digital virtual objects, forming a mapping relationship that is very similar to real objects in shape, texture, and use.
Akin to the real world, the virtual world is always online, real time, and includes innumerable people who connect and communicate with each other. Simply put, it is sustainable, real-time, with no access restrictions and possesses connectivity and creativity, as described by Matthew Ball.
By doing so, the virtual world allows users to feel that the surrounding environment, people, and things are real. Read on to understand the immersive experience of the Metaverse that stimulates the production process. By using digital twins as its core technology, the Production Metaverse simulates the production environment, processes, and objects.
The Complete World Structure of the Virtual World
Aspect 1 of the production Metaverse
- Integrated virtual-real symbiosis at the R&D stage
- R&D personnel from different places can enter the virtual world together for product planning, design, and testing in 3D form
- Solving problems including long test periods and unstable manufacturing processes.
Aspect 2 of the production Metaverse
- Real-virtual symbiosis in manufacturing
- Highly immersive, real- time data simulation
- Manufacturing management is realised through Internet-of-Things and digital twin systems
- Employees wear AR devices for manufacturing and production monitoring in a real or virtual factory, which greatly improves the operational efficiency of field personnel
The Production Metaverse
Aspect 3 of the production Metaverse
- Real-virtual symbiosis during sales, split into three scenarios: during sales, in use, and after- sales maintenance.
- Supports interactions between employees and customers in the virtual world looking at the same digital twins products.
Aspect 4 of the production Metaverse
- Real-virtual symbiosis in the internal operations and management of enterprises.
- Enables employees to create and customize virtual offices, and have a friendly avatar that can freely communicate and solve management problems in the virtual realm.
However, an important thing to note here is that there is a great degree of overlap in the underlying technical architecture of the immersive experiences of the production-oriented Metaverse and human sensory experience.
Characteristics 2: A complete world structure
A complete world structure would lie in the wake of the metaverse, unlike the internet world. The virtual world of the Metaverse will comprise of all 10 elements of the real world.
The present spectrum of the internet world represented by media, social networking, e-commerce, and industrial internet is quite a narrow world, simulating only part of the whole social, business, and production systems in the real world. The existing internet world misses out on elements such as real estate development, government and governance, and social civilization.
But, to everyone’s benefit, the Metaverse will be a complete replica of the real world simulating all of its 10 elements. The following 10 virtual elements of the Metaverse will correspond to those in the real world:
- The natural environment
- People(identity recognition), institutions (government, community, schools,enterprises)
- Social systems (social interaction, social rules)
- The economy (transaction rules, virtual currency)
- Enterprise production (production rules)
- Personal production (personal creations including NFT artwork)
- Civilization (language, customs, culture)
- Governance (decentralized governance).
Characteristics 3: Huge Potential Economic Value
By now, you are quite well versed with the value creation that Metaverse brings to the table. Based on that, its value arises from five elements as mentioned below:
• Social economy: The Metaverse provides various social scenarios with immersive experiences for people to interact and engage, hence leading to the advent of a comprehensive social economy for all the stakeholders.
• Land economy: Just like the real-world property industry, there is “land” in the Metaverse too. Mind boggling and too hard to believe right? Well, it is true as people need to pay real money to buy it before building virtual companies, homes, or communities.
Just to demystify it for you, virtual land is not cheap, although it is just a piece of coding. Metaverse platforms will create limited space to match the natural scarcity of space in the real world, and charge people based on that scarcity rather than length of code.
• Identity economy: The aspect of identity is primal to the metaverse as this experience revolves around avatars. Everyone will have their own avatar in the virtual world and will pay for this personalized version of themselves.
• Digital art economy: This is based on the value of various forms of NFT digital artworks, including audio, video, pictures, and even virtual shoes.
• Finance economy: The value of financial investments or speculation opportunities in the digital economy. As a result of this facet of Metaverse, more and more P2E and Web3 games are becoming the boiling pot for more jobs and generating huge revenue.
In its true sense, the value of the Metaverse comes from its equivalent sources of value in the real world, such as exclusivity, competition, and the spatial and temporal scarcity of things.
If you are also a believer that the Metaverse, as a digital virtual space like the internet – inexhaustible and easily copied, pasted, and used for their own use. Let us get your facts right as the Metaverse does not work like this.
The creators of Metaverse platforms will empower the Metaverse with scarcity through path-breaking technologies like information anti-proliferation, homomorphic encryption, code and chain non-homogenization certificates, and manage digital asset rights through these technologies so data becomes tamper-proof.
Another astounding fact about Metaverse is that it has less scarcity than the real world, which will make it possible to surpass the real world’s economic value. Not to miss, creation and trading is more flexible in the Metaverse, supporting smooth and free transactions within a single virtual world, between two virtual worlds, or between the virtual and real world.
Characteristics 4: User Generated Content
You might have come across the term ‘UGC’ for quite a while now. It is a new creative arena in which Metaverse residents create content and applications in their own virtual worlds. This concept works quite differently from that in the internet platforms. In the metaverse, owners create most of the content and establish the rules, users will create their own content and rules in the Metaverse, with platforms providing the technical tools they need.
For example, in Roblox, people can use some simple tools embedded in the platform to design a game, and launch this game for other users to play. In the context of the virtual world mirroring the real world, UGC is closer to how the real world works, with people finding new land, building homes, and developing their own rules.
Characteristics 5: New Regulations
While the virtual world is a complete simulation of the real world,
Metaverse creators are hoping and trying to differ the operating rules of the virtual world from the centralized structures of the real world. They want the virtual world to be based on decentralization.
Wondering what led to the emergence of virtual worlds? To avoid certain limitations in the real world. For example, virtual social networking obviates the limitation of having to travel long distances to meet friends.
The creators in the Metaverse ecosystem have developed regulations and rules through DAOs. No country, company, or individual controls these, and new members who want to join a virtual world can automatically do so by following the DAO’s rules. DAOs allow people in the Metaverse who create more value to attain more in the virtual world. DAOs record the relationship between a creator and their creations, and others need to pay to obtain the right to use or own all or part of these virtual creations.
In contrast, the real, centralized world allows any game prop to be copied at almost zero cost.
Characteristics 6: Big uncertainty
When it comes to governance structure in the Metaverse, it is quite an impediment to decide who will be on top of its future governance structure.
The governance structure in the Metaverse is interconnected. There are two scenarios in regards to it:
- In the first scenario, virtual worlds are managed by real people. Most of the early Metaverse worlds had this governance structure where real people write code to create virtual worlds and manage avatars in them.
- The second scenario ensures that the real people are constrained and managed by the virtual world, with groups of virtual world managers who manage people in the real world. This small group is responsible for establishing the rules, controlling the virtual world and its citizens, with virtual individuals managing a large group of real people.
But, the lingering question. “Who will top the Metaverse governance structure in future?” still prevails.
The root cause of this problem is AI—will human beings rule robots or will we eventually create robots that will take over human beings? The latter might come true as the AI self-learning could make robots eventually surpass human intelligence, giving them the ability to rule the world.
Governance Structure of the Metaverse
This governance issue is very critical as the virtual world of the Metaverse carries enormous economic and political power. Some prototypes of the Metaverse, such as online game purchases of virtual props, community purchases of real estate, and virtual currency transactions have already shown the economic power of the virtual world, and this power will only grow.
At the same time, the number of users of the products of the global internet giants has already exceeded the number of residents of any single country. When designing the Metaverse, all creators will have to unanimously decide about who has the final say in the virtual world and who owns its economic benefits.
On a deep dive into the virtual universe, one could claim that the buzz can partially be attributed to attention- grabbing headlines. But, the convergence of emerging trends and combining a number of new technologies enable this vision of the metaverse, is an undeniable fact.
This democratic ownership economy of the Metaverse coupled with the possibility of interoperability, could unlock immense economic opportunities, whereby digital goods and services are no longer subject to a singular gaming platform or brand.
Sankalp Shangari, the Co-founder of Rising Capital has been spearheading several businesses that harness the true potential of Metaverse. With extensive experience in driving result-oriented strategy, his vision of bringing Metaverse and Web3 focused ventures to the forefront has been quite a rage.