The Metaverse Explained

There is so much talk about the Metaverse but generally very little understanding about what it is, how it works, and most importantly, how it may impact our industry. Here’s my take on it…..

How Many Metaverses Are There?

Well, that depends on what you read on The Internet, and, as Douglas Adams said in The Hitchhikers Guide to The Galaxy, much of it is highly apocryphal or, at least, highly inaccurate. According to Gartner, who really does know its stuff, there is only one Metaverse, and that is a collection of virtual worlds. Many people refer to these virtual worlds as Metaverses, but they are just plain wrong! So, now we know that, just like The Universe, there is just one Metaverse (please don’t mention The Multiverse as it makes my head hurt), and so what we are really looking at here are the individual virtual worlds that make up the Metaverse.

What Does Metaverse Mean?

The word 'Metaverse' is a combination of the Greek word 'meta' and the English word 'verse'. Together, the literal meaning of this is 'Beyond the Universe', which is quite a grand title! What are these Virtual Worlds, and are they new? Virtual Worlds have actually been around for decades, but there was no standardization in any way of how they operated.

The first one was probably 'Second Life', which was huge at the time. It was launched in 2003 and was entirely different to anything that had ever existed before. It was fully multi-player and attracted huge numbers of participants. It incorporated many facets of real life and even had its own currency, the Linden Dollar. Second Life still exists, and, with the emergence of the Metaverse, is being re-born.

Second Life was just too early, and no standards for virtual worlds existed at the time, making it uber-nerdy. The real interest in the Metaverse started when Facebook re-named themselves 'Meta', and many people thought that they were The Metaverse, rather than just part of the Metaverse. I am sure that this was by design rather than just by luck. It is rather ironic that the leading virtual worlds in today’s Metaverse do not even feature Facebook/Meta.

This is a long game that Facebook/Meta is playing and with all their resources they will make a big splash if they can resist overly monetizing their virtual world. For example, when they tried to dominate the crypto market with the Libra Libra Libra is a yet-to-be-released cryptocurrency proposed by Facebook, Inc., that will aim to serve as a global payment system and a stable financial infrastructure that people across the world can use. The projected release date of the libra cryptocurrency is currently slated for 2020, while the project is currently being managed by the Libra Association.Headquartered from Geneva, Switzerland, the Libra Association main purpose is founded on three pillars.This includes the provision of a framework Libra is a yet-to-be-released cryptocurrency proposed by Facebook, Inc., that will aim to serve as a global payment system and a stable financial infrastructure that people across the world can use. The projected release date of the libra cryptocurrency is currently slated for 2020, while the project is currently being managed by the Libra Association.Headquartered from Geneva, Switzerland, the Libra Association main purpose is founded on three pillars.This includes the provision of a framework Read this Term project, it failed, as nobody trusted them to play fairly.

Who Are the Big Players Today?

That does depend on how strict you are with being a Metaverse virtual world, as you could consider Roblox and Minecraft as part of the Metaverse, but I consider those just to be multiplayer games, so not truly Metaversal (is that even a word?) The top 3, as I write today in March 2022 are Decentraland, The Sandbox and Somnium Space. To be truly Metaversal (I am getting to like this word!) there are certain things a virtual world needs to have, and these now seem to be universal.

What makes it all tick? As virtual worlds are for actual people to 'live' in, there needs to be a currency so that they can trade with each other. There needs to be a standard way of identifying what you own, can sell and how you can sell it, and there needs to be a way to store all of this information about the virtual world, what each person owns, and how much money they have at any one time.

The most effective way to achieve this is with an advanced blockchain, like Ethereum or Cardano. Simple blockchains, like Bitcoin, can only store one thing; bitcoins! Advanced blockchains can actually store anything. You simply define a "token' and then that can be traded. A token can be anything from money to a hat, or a piece of virtual space in the virtual world.

So, What Is This 'NFT' Thing Everyone Is Getting All Excited About?

You will all have heard of NFTs (unless you live under a rock), but what are these magic things, and why do they matter so much? Well, NFT stands for Non-Fungible Token, which is a very technical term. To be precise, something that is 'fungible Fungible Fungibility is a term that describes how interchangeable a certain asset is with other assets of the same kind.If an asset is fungible, one unit of that asset is interchangeable with another unit of that asset. Of note, fungibility differs from liquidity. A good is said to be liquid if it can be easily exchanged for money or another good. However, a good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place Fungibility is a term that describes how interchangeable a certain asset is with other assets of the same kind.If an asset is fungible, one unit of that asset is interchangeable with another unit of that asset. Of note, fungibility differs from liquidity. A good is said to be liquid if it can be easily exchanged for money or another good. However, a good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place Read this Term' can be exchanged for an identical item which is mutually interchangeable, an example of which is money. One GBP or USD is as good as any other GBP or USD. When something is non-fungible, then it is unique and is not mutually interchangeable, an example of which is art, or music, or movies.

They are all completely unique. So now you are saying, I understand what is and isn’t fungible, and what that means, but how on earth does that apply to a virtual world and how does a non-fungible token help matters? Inside a virtual world, The way to learn about a virtual world in The Metaverse is to go and have a look, as they are generally free to wander around. If you take Decentraland, for example, you can go to https://decentraland.org/ and get stuck in. You will notice that all virtual worlds are divided up into areas, like plots of land. In Decentraland the plots of land are called … land! People own land (or rent it) and build virtual games, shops, or in fact, anything you can render on a screen.

The currency of Decentraland is called 'MANA'. Just like Bitcoin, you can buy and sell MANA on regular crypto exchanges like Binance or Coinbase. You send the MANA to the wallet that Decentraland knows about and, voila, you can buy and sell stuff, and plots of land. Decentraland has its own marketplace to buy and sell things as well as land, and all of these are stored in an NFT (which you are already an expert in!).

So, What Else Can You Store in an NFT and Trade in a Virtual World?

It can actually be anything but is typically art, music, or something that your avatar in the virtual world may wear or carry (like a hat or sword). It sounds a bit funny, but the NFT is not the thing you have bought, but a reference to it, as an NFT cannot actually store much information.

Where Next?

The virtual worlds in today’s Metaverse are just the beginning, and are very basic, with few users. Do not be put off, as this is just the start of a very exciting adventure! There are already casinos and art shops in the Metaverse. There’s no reason why you can’t have a virtual broker there too. This would be a great way to reach a whole new audience.