The Metaverse has exploded in popularity recently and is full of speculations, ranging from it being just another virtual world like Fortnite, to a parallel world alongside our current one with a different economy, culture and laws.
The term ‘Metaverse’ first appeared in Neal Stephenson’s 1992 science-fiction novel “Snow Crash,” which envisions a virtual reality-based evolution of the internet. In the novel, people use digital avatars of themselves to explore the online world to escape the harsh reality of their existence.
The biggest hype and publicity for the Metaverse came after Facebook changed their name to Meta and released this video describing its vision of the Metaverse. The move reflects the company’s push towards such technology.
Today we’re seen as a social media company, but in our DNA, we are a company that builds technology to connect people. And the metaverse is the next frontier just like social networking was when we got started.Mark Zuckerberg, Founder of Facebook
With information coming from all different sources, each with a particular agenda, there is a need for understanding the metaverse and its underlying technologies.
What is the Metaverse?
It can be difficult to describe the Metaverse. Imagine describing the internet and what it could turn out to be in the late 80s. The technology is in its earliest stages and it is difficult to have a description for it that can withstand the test of time. Nonetheless, we can try to describe a rough estimate of what the current trends are and how the Metaverse is currently seen by its proponents.
One way to understand the Metaverse is an immersive virtual world that simulates and emulates the physical world. People can communicate, collaborate, interact with, and change the elements inside it.
The Metaverse is often mistakenly seen as a place accessible and interacted with solely by sensory technologies like Virtual Reality (VR) or Augmented Reality (AR), but it is much more than that. Established platforms like PC, gaming consoles and mobile devices also allow access and interaction with the Metaverse.
One Avatar to Rule Them All
The Metaverse is not just one platform; it comprises many worlds and platforms made by different companies, each with different styles, designs and goals.
Naturally with tech giants like Meta, Microsoft, Epic Games, and Roblox, combined with crypto-based games like Decentraland and The Sandbox pushing towards the technology, each one is creating its own ecosystem. From avatars, items, and properties that are more or less isolated from each other and only operate in their respective environment
Avatars and goods in the metaverse are Non-Fungible tokens (NFTs) minted on the same blockchain used by the platform. Enabling interoperability of such NFTs is the goal of many proponents of the Metaverse.
Imagine your digital identity manifested in an avatar unique to you and used to represent your existence in the Metaverse and digital sphere. You would be able to own a piece of land, property, and possessions, enabling a new kind of wealth and status transferable to any virtual world you choose.
Economics of the Metaverse
The Metaverse has a similar economic model to the physical world controlled by the economic principles of supply and demand. Goods and services are traded and transactions are made with the token currency of the platform.
NFT technology is the backbone of the Metaverse economic model, with items minted to NFTs like avatars, virtual clothing, art, property etc. These assets are traded in the community marketplace for Cryptocurrencies or exchanged to other asset classes.
Like real-world assets, Metaverse assets can be developed and improved. They can also appreciate in value according to their desirability and market sentiment.
Decentraland, one of the biggest games in the Metaverse, has real estate as the biggest factor in its economy where parcels of land are sold for millions of dollars. Companies like Samsung are buying and developing their virtual land to a Samsung store where people can visit and buy NFTs.
Services and trade is another leg in this economy. Millions of NFTs are being traded in the marketplace regulating the price of virtual commodities due to a lack of centralized authority.
The most popular tokens in the metaverse are:
- Decentraland (MANA): Decentraland defines itself as a virtual reality platform powered by the Ethereum blockchain. It allows users to create, experience, and monetise content and applications. In this virtual world, users purchase plots of land that they can later navigate, build upon and monetise.
- Axie Infinity (AXS): Axie Infinity is a play-to-earn game built on the Ethereum network. Users earn Axie Infinity Shard tokens (AXS) and Smooth Love Potion (SLP) by breeding, raising, and battling Axies.
- Sandbox (SAND): Launched in 2011 by Pixowl. The Sandbox is a blockchain-based virtual world allowing users to create, build, buy and sell digital assets in the form of a game. By combining the powers of Decentralised Autonomous Organisations (DAO) and NFTs, the Sandbox creates a decentralised platform for a thriving gaming community. The platform has high-profile partnerships with OpenSea, Snoop Dogg, and The Walking Dead, along with $93 million in funding.
- Enjin Coin (ENJ): Enjin Coin is a project of Enjin, a company that provides an ecosystem of interconnected, blockchain-based gaming products. Enjin’s flagship offering is the Enjin Network, a social gaming platform through which users can create websites and clans, chat, and host a virtual item store
In the real world, economical growth is limited by finite resources. To scale up the economy you need more iron, copper, gold, oil, and water to use in your industries. Some economists believe in degrowth as they propose scaling down economic activities and shrinking down Gross Domestic Product to help resource recovery and limit damage to the environment.
This issue is not as severe in the Metaverse economy, with resource generation taking but a few computational processes from servers. It enables a new way for wealth generation to use in your digital life.
A car in the Metaverse will serve the same utility it does in the real world; the same goes for other utilities giving us the ability to scale down resource consumption in the real world.
That doesn’t mean the Metaverse economy is infinitely scalable; there are still limits to how many chips we can manufacture, how many servers we can put, and the infrastructure to achieve such a global connection to get billions of people into the Metaverse.
Reports and data indicate that the Metaverse economy could grow to $872 billion by 2028, an incredible 44.1 percent annual compound growth.
Sound Familiar? You’re Not Alone
Despite all the hype about the Metaverse, critics point out that nothing has changed and that the idea is just a renaming for what we already have.
Games like Fortnite already offer immersive worlds focused on community, with concerts and activities taking place. Just like the Metaverse, players can buy and sell virtual assets. So what is new?
To illustrate this point, mentally replace the phrase “the Metaverse” in a sentence with “cyberspace”. Ninety percent of the time, the meaning won’t substantially change.
That criticism is not without its merits; indeed, we already have an experience that resembles the promises of the Metaverse but it will be like looking at Google and saying it’s the internet. Yes, you can spend your time there and get a good experience, but it’s not the whole story.
There is a bigger push towards creating an aggregation of interconnected virtual worlds that individuals travel to and enjoy with the same virtual identity.
Many companies are joining in to create the infrastructure of the Metaverse and developing new VR, AR and other sensory technologies to give people a more immersive experience. It remains to be seen how much this will rival real-world experiences and create a digital counterpart to our world.
Iraq and The Metaverse
Iraq is yet to experience the Metaverse craze with the Iraqi community showing little interest in the subject. This is mainly due to the lack of proper educational material about the subject in Arabic and the high digital illiteracy in the country that makes NFT’s and the Metaverse alien concepts.
Regardless, Metaverse technology is bound to make changes to the Iraqi tech scene as many other technologies have in the past. There will be an initial difficulty being accepted in the market. but then it will be an inseparable part of it.
The Metaverse can bring economic prosperity and greater reach to Iraqis with its capability to provide job opportunities, trading portions, and networking.
At the same time if Meta’s vision for the Metaverse is to be believed, the Metaverse will prove a valuable tool to Iraqi companies and Digital Nomads to facilitate remote working and bring a cultural change in the workplace.
The Metaverse is the Future
It’s difficult to predict the future trajectory of the Metaverse. Speculations range from the normal to the extraordinary. However, we can build upon trends and listen to the opinions and thoughts of the leaders of the space.
Imagine a future where you can disconnect your virtual life from the physical. A future where you will be able to work, earn income, purchase goods, and property, and have human relationships all in the Metaverse. New technologies may be able to include your senses where you can make eye contact with people, smell the environment, and touch objects in the same way you would in real life.
Platforms will become more immersive and the technology needed to be part of the Metaverse will become cheaper and more affordable.
Government intervention may also become another evolution of the Metaverse with the revenue and wealth generated, it will be tempting for governments around the world to get involved and introduce taxes on digital assets.
The Metaverse is exciting and we highly recommend learning more about it, especially as it might change the way we interact with the internet.