Born out of science fiction, having been coined by the writer Neal Stephenson in his 1992 novel Snow Crash, the term Metaverse is being brought to life faster than we could have ever imagined.
Referring to a virtual reality space that is compellingly more immersive than physical reality, the metaverse is where all the action could be in the future with humans increasingly interacting with each other in it.
Objects like digital screens will be replaced by holograms and virtual assets represented by non-fungible tokens (NFTs) will be most in demand as more of the world's population spend chunks of time building this alternate reality. While gaming fans can easily comprehend this vision, having already spent hours at the end with their VR headsets playing in the gaming universe, for others it isn't as simple to envisage why 2022 is being touted as the year of the metaverse gold rush.
Arijit Mukherjee, founder of NFT and metaverse platform Yunometa, says we are only just scratching the surface of what the metaverse has to offer but early signs point to an encouraging trend of how the new technology can be used to make money by each and every stakeholder.
"These range from the owners of virtual plots who have sold land at prices upwards of $2 million already to end-users who can play next-level interactive games, build things in a 3D environment, socialize with avatars, and even trade and earn crypto assets that can be traded for a higher price or used to participate in exclusive virtual events," he says.
Crypto giant Grayscale has already predicted the metaverse to be a $1 trillion annual revenue opportunity across sectors such as advertising, digital events, e-commerce, and hardware. It also predicts that revenue from virtual gaming itself will grow to $400 billion in 2025 from $180 billion in 2020, implying more than a 100% jump in five years in just one sector of the metaverse.
To understand the limitless potential offered by the metaverse, one needs to look at the crypto space as it is today and the key developments in it that are building the metaverse into a formidable self-sustaining industry of the future.
Powered by blockchain technology, digital assets such as cryptocurrencies, stablecoins, and NFTs are helping entrepreneurs and developers alike in creating a transactional framework that is capable of catering to the metaverse. These virtual assets have all the hallmarks of fiat currencies or other stores of value like gold but without any of the disadvantages associated with them.
They can be transacted across the internet from any mobile or computing device without the involvement of a central authority and offer a degree of security that is unheard of in the traditional world of finance. As a result, these virtual assets are being used to transact in virtual spaces like the metaverse and with increasing user adoption, have already developed into a multi-trillion-dollar asset class today. By providing asset holders with immutable proof of ownership and rewarding them with returns of investment in many multiples, virtual assets like Bitcoin (BTC) are bound to be the preferred currency in the metaverse for the foreseeable future.
Rahat Beri, founder & CEO of Acryptoverse, a crypto and blockchain advisory firm, says Metaverse in one word is - unlimited potential for the future, with people only starting out to understand, look and feel what this is all about.
"Hence the segments such as gaming, entertainment, virtual digital assets - especially crypto and NFTs are taking the centre stage. Think about the pace of life before the internet, and after that. Metaverse will accelerate it even further, there are predictions of it being a trillion-dollar industry with every possible business participating. The way Big Tech and 5th generation industrial revolution is moving it takes a bit of reading, understanding, and research to understand the true potential of it," she says.
Decentraland, a 3D virtual world built for users to engage socially, is a classic example of the value unlocking that is possible in the metaverse. Launched in 2017 and accessible from a regular computer as well, the site allows its users to build a virtual world by using digital assets modelled around real-world objects and interact with digital avatars of fellow community members.
Everything from a jacket, to automobiles and even real estate, is being created and transacted on this metaverse-like platform using the native digital token called MANA. The platform has captured the mind of thousands of users and its MANA token has seen a more than 20X rise in value only in the span of the last two years. In fact, just a few months ago in November 2021, a plot of digital land in Decentraland sold for a record US$2.43 million in cryptocurrency and serves to highlight the seemingly limitless potential offered by the metaverse in creating an alternate economy far bigger than even certain physical economies of the present.
Popular brands too are jumping onto the metaverse bandwagon in some form or the other, some by offering NFTs of their popular products while others investing billions of dollars in developing technologies that will power the metaverse in the future.
Cryptocurrencies will provide the financial framework for all transactions in the metaverse while NFTs will act as placeholders that represent virtual objects in these virtual landscapes. As investors and collectors alike lap up these digital assets, a new investment approach is taking over the world and generating wealth like no other space in an often imbalanced society.
Pratik Gauri, founder and CEO of 5ireChain, says as technology improves and people become more accustomed to it, metaverse adoption will likely become widespread, making it a completely normal way to communicate in the future.
He adds that the party that will take the cake will be the early adopters, that is why there is a gold rush both in terms of acquiring virtual real estate and familiarising themselves with features and facilities.
"It is almost like the cell phone where it was just an alternate way to make a call, but now it's an essential tool that everyone is stuck to be better informed and more productive. And, I think tremendous opportunities exist for early and significant investments to be made in the Metaverse realm. These are things that are adopted quickly and an area that is receiving a tremendous bulk of both investments and innovation," Gauri adds.
As the internet metamorphizes into Web 3.0 and more developers join hands to collaborate and expand the boundaries of the metaverse, it is turning out to be a playground where digital representations of the real world are turning into gold by the minute.