In its new article, the GetBlock team is going to explain the basics of metaverses and answer whether this concept deserves such an enormous hype.
TL; DR
In 2024, the term ‘metaverse’ is used here and there to promote various products somehow related to an immersive experience with AR- and VR instruments. As such, the hype around metaverse should largely be attributed to the activity of marketers, shillers, and ‘influencers’.
At the same time, some metaverse-themed projects managed to build sustainable tokenomics. Also, the euphoria around metaverses has already attracted a new portion of ‘big names’ to crypto and blockchain businesses.
What is metaverse?
Simply put, a metaverse is a sphere of advanced digital simulation, ‘Second Life’ on steroids.
How can the metaverse be defined?
In July 2021, we admitted that there was no clear definition for the GameFi segment. Now this observation looks 100% true for the term ‘metaverse’ that made headlines after Facebook’s re-branding to Meta and Mark Zuckerberg’s announcement of ‘metaverse mission’.
What are the key components of the metaverse?
In general, ‘metaverse’ is utilized to cover a wide array of services, platforms, instruments designed to simulate real-world experiences in a digital environment. For instance, a virtual exhibition hall where all paintings are represented as NFTs is the element of the metaverse.
Online MMORPG where gamers can buy and boost the equipment of their characters should also be referred to as ‘Metaverse’. Some projects even tokenized Earth, Moon, and Mars to allow their clients to buy land plots on virtual planets.
How does the metaverse work?
Cryptocurrencies and blockchain are always associated with metaverses. However, sophisticated VR- and AR-based products can exist even without Web3 services integrated. So, why is crypto always associated with metaverses?
First, it's about NFTs. As we briefly covered two months ago, the non-fungible tokens craze took crypto by storm. To ensure 100% authenticity and ‘peg’ to real-world objects, many virtual elements in metaverses will actually be NFTs. It is the most reliable and easy-to-understand way to monetize something virtual right now.
Then, it’s GameFi (or Play-to-Earn). The vast majority of projects that are aggressively promoting themselves as metaverses are actually low-end blockchain-based games. They look like 2000s simulators, but explore tokenization and accept crypto as payment instruments. That’s why, ideologically, Play-to-Earn is a predecessor of Metaverse.
Last but not least, it’s all about the audience. Metaverse-themed initiatives of big tech (like Facebook’s rebranding) or real-world business majors (like Adidas and Nike’s metaverse forays) are targeting the crypto natives with their excitement about new technologies and gains from the ongoing bull run.
Why is the metaverse gaining so much attention?
Largely, Metaverses gained much attention because of price rallies demonstrated by NFTs sales in some projects (e.g. land plots in the Sandbox) and by native tokens of metaverse-focused products Axie Infinity, Sandbox, Decentraland.
Also, every brand that started exploring metaverses, surrounded its foray with massive advertising campaigns. In a nutshell, the ongoing interest in metaverses for retail clients is mostly FOMO-driven.
What are the potential applications of the metaverse?
At this stage, let’s take a glimpse into the diverse possibilities of the metaverse.
- Next-level social interactions: individuals can interact in virtual environments that resemble real-world communication or create entirely new and imaginative spaces. This goes beyond the social media platforms we witness today;
- Immersive gaming experience: metaverse gaming environments can become lifelike and expansive, allowing users to explore virtual worlds integrated with tokenized assets and digital currencies;
- Work and entertainment: creating virtual workspaces may allow teams to collaborate, conduct meetings, and share information under realistic conditions. Add hosting virtual events in the new space, where attendees can use blockchain-based tokens for access.
These applications only hint at a future where digital experiences would blend with real-world use cases.
How can the metaverse impact various industries?
The technology can bring about a significant transformation in many areas not typically affected by blockchain. For example, the metaverse introduces innovative approaches in real estate, offering a more accessible and engaging way for individuals to explore properties.
Besides, this new tech facilitates immersive visualization, allowing various professionals – architects or artists – to showcase designs in a more interactive and three-dimensional manner.
Additionally, the metaverse may provide realistic simulations for training across various fields. Think of healthcare professionals using the virtual space to practice medical procedures, or pilots and astronauts who can undergo training exercises in the metaverse.
Overall, as technology continues to advance, new and innovative uses are likely to emerge.
In what ways can individuals engage with the metaverse?
Since 2022, the metaverse concept has garnered considerable attention, with various platforms and technologies actively contributing to its development. However, it's important to note that at its current stage, the possibilities to experience it are limited. So how to join the metaverse movement in 2024?
For crypto enthusiasts, it is already possible to participate in so-called metaverse games revolving around NFTs that represent avatars, in-game assets, or even playable characters. Not as immersive as expected yet, however, it gives a taste of how this sphere may function and seems to be the modest start of a new area.
Moreover, technology supporters often explore investment opportunities in metaverse project stocks. This allows them to align with the evolving landscape and contribute to the growth of this innovative realm.
What challenges are associated with building the metaverse?
The complexity of creating immersive virtual environments is closely tied to the limits of technology existing today. Besides, integrating diverse technologies like blockchain, VR, AR, and AI harmoniously requires the expertise of professionals from various spheres.
Secondly, projects building towards the metaverse should carefully consider the blockchain platform to rely on, which will be able to maintain performance and responsiveness to cater to a growing user base. While cryptocurrency networks are advancing in capabilities, scalability is still a burning issue in the space.
Instead of an epilog: Is it all about hype?
At this stage – it is.
By 2024, the sphere of metaverse hasn’t introduced something previously unseen in gaming, social media, digital collectibles, or DeFi. At best, it introduced several viable financial concepts with virtual assets.
