‘NFT’ may have been the Collins Dictionary word of the year, but another concept has made its way into the mainstream consciousness in 2021 – the metaverse.
Pantera Capital investor Paul Veradittakit explained why he thinks the subject is worth a deeper dive.
What is the metaverse?
Veradittakit said he thinks it might be too early to predict what the metaverse will exactly morph into and eventually mean to people, “similar to how predicting Snapchat immediately after the release of the iPhone would have been miraculous”.
Some people think ‘metaverses‘ as a plural is more appropriate since there will be multiple virtual experiences that will be accessed by various interfaces.
Some don’t like to use the term at all because of how much of a buzzword it has become – the ‘metaverse’ has come to encompass almost any happening within the virtual world.
“Maybe ‘metaverse’ itself will eventually be retired for another term, who knows,” Veradittakit said.
For now, he added, it’s useful to at least try to arrive at a precise definition for the concept.
Veradittakit explained further that maybe the best definition came from Matthew Ball, an investor whose write-ups on the metaverse are “must-reads”.
While he acknowledges that a perfect description is impossible, he defines the metaverse as “a massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments”.
“There’s a lot to unpack there, but some of the elements that stick out are: it’s 3D, open to near-infinite numbers of people, and has some element of continuity, similar to real life,” he added.
So far, the builders of the metaverse, claimed Veradittakit, have fallen into two camps – non-crypto and crypto metaverses.
Until recently, he said, they’ve been building more or less in parallel to one another.
Non-crypto: Big Tech’s metaverse
Due to the metaverse’s longstanding association with virtual reality, what we would consider ‘the metaverse’ has been in development for several years by a number of VR companies. VRChat and AltspaceVR, for example, have been two of the most prominent platforms for working and socialising in virtual reality.
This year, two Big Tech companies – Facebook (now Meta) and Microsoft – made big bets on the future of the metaverse, incorporating it directly into their immediate roadmap.
Crypto: a community-owned metaverse
In the crypto industry, Veradittakit claims, the approach has been different.
“The core principles of decentralisation, trustlessness, pseudonymity, and community ownership have been ingrained from the start,” he said.
“Some of the earliest virtual worlds to be created with blockchain technology include The Sandbox, Decentraland, and Cryptovoxels.
“While they each have different elements and in-world economics, the power of blockchain and NFTs allows for true digital land ownership, which opens up entirely new types of activities from leasing your plot to custom-building a home for someone else.”
Where do we go from here?
Veradittakit claims we’re still a long way from the metaverse going mainstream.
“Frankly, we’re not even close,” he stressed.
However, he explained it will all start with the enterprise (Microsoft and Meta, for example) and gaming and will slowly branch out from there.
“I personally think that the open, decentralised, and community-owned metaverse will beat the closed, rent-extracting systems, for many of the same reasons why I think Web3 will disrupt Web2,” he concluded.
“But this future is by no means predestined; it needs to be built!”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.