Into the Metaverse
Bored of bricks and mortar? Go virtual.
You’ve probably heard of it, but can you explain it? The metaverse is a crossover between two worlds - one is physical and the other digital. Your physical being is represented in a virtual world as an avatar, where you can do almost anything from gaming to more practical things like education, sporting events or buying land (yes, buying land).
If you think this is a load of rubbish, be careful you aren’t left behind. Businesses are realising this is a growing trend and are rapidly expanding their presence in the metaverse. Buying virtual land with a plan to build out the digital version of a company HQ, building digital shops or hosting events are all happening now.
Blockchains
You were probably waiting for me to mention blockchains. OK, blockchains are behind the metaverse, they provide the infrastructure behind the scenes that creates fully secure and transparent economic ecosystem. You don’t know what a blockchain is - it’s a form of ledger (think database), where the all the transactions on it (think entries in the database) are stacked one on top of the other in blocks. Most blockchains are decentralised, which means (unlike a centralised database) they are confirmed and encrypted by a network, with no need for a middleman - why is this important… well now you don’t need to trust a central party.
Is there one metaverse? No. Well kind of. If you consider that the metaverse is just the description for this crossover of physical and digital, then the metaverse is a growing thing that we are creating right now. But within this definition, are various platforms that are essentially their own metaverse ecosystems, built on their own blockchain. Some key players are Decentraland, The Sandbox and Axie Infinity.
Fungible and Non-Fungible
Talk to me about fungibility, you say. Fungibility is a characteristic of something whereby the individual units of it are essentially interchangeable and each of whose parts is indistinguishable from another part. So think about money - a fungible thing is one that can be exchanged or replaced, for example a £50 note can easily be exchanged with two twenties and a tenner. So can you guess what the opposite of fungibility is?
That takes us onto Non-Fungible Tokens (NFTs). These are unique and non-interchangeable units of data, stored on a blockchain. They are a kind certificate of authenticity, but include the ability to adapt them and add rules (composability), which is pretty useful.
Is Bitcoin an NFT? No. Nor are Ethereum and other cryptocurrencies. These are fungible, just like the pounds in the earlier example, with many (notice I said many, not all) built using decentralised blockchains so they have no trusted central party or controller. In addition to the blockchain, some, like Etheruem, are designed to allow other things to be built on top of them, which could be another cryptocurrency or NFT.
NFTs essentially capture internet property rights that can be bought and sold, which makes them perfect for use in the metaverse, when you might want to buy some virtual land or perhaps a new item of virtual clothing. You may have also heard about NFTs being used for artwork, which was a bit of a craze in 2021, but definitely has potential. They are also big business when it comes to gaming, for in-game items, however when you start to think about their use in the future there are many, many applications. I personally think ticketing will all be on NFTs soon, and many are expecting the music industry to be shaken up by them too.
Why is this important?
The metaverse is going to change the way we live our lives and will undoubtedly affect current business models. If you don’t believe me, just pause and think about how we act today… we’re already in a version of the metaverse - hooked to our phones, sharing content through social media, purchasing goods online, meeting virtually, swiping right for dates. And you thought Facebook re-branding to Meta was a bit weird? Give it a few years and that could look like a masterstroke.
At the moment, if you buy some land in the metaverse you can develop productive assets or experiences on top of it, such as events/services and education. There are also some more innovative uses, for example digital twins of real things and medial research. There are going to be opportunities for property, real estate and services behind these things like FM.
But beware, this is still quite speculative and there is no guarantee that people continue to use these ecosystems and they flourish to become the next generation of things like Facebook or Instagram. True value is surely only realised when they have attracted a large enough community to them, creating a critical mass of engagement.
If you want to know more about this, get in touch (click here and hit ‘get in contact’) and I can share some more useful links and resources.