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The Metaverse – Backgrounds of the Digital Over-World

For Facebook’s Mark Zuckerberg, the metaverse is the future of the Internet. Critics see the autonomy of users in the digital uber-world at risk. We explain what Web 3.0 is all about

“Metaverse” is a compound of “meta” – in the sense of “superior” – and “universe”. The term was coined 30 years ago by science fiction author Neal Stephenson. In his novel “Snow Crash,” people live as avatars in a gigantic virtual world. Since then, the idea of a digital parallel universe has excited the community in Silicon Valleys around the world, as well as in America and England. In the imagination, the metaverse is revolutionizing the digital infrastructure as Web 3.0: the network of the future combines virtual worlds, the classic Internet and elements of real life in a boundless, collective cyberspace.

Seven characteristics of the metaverse

At present, no one can say exactly what the metaverse will look like. Canadian digital media expert Matthew Ball has identified seven characteristics that distinguish the virtual uber-world:

  1. The metaverse never ends. There is neither “pause” nor “stop,” nor is there a “reset.”
  2. The metaverse is synchronous and live. The experience exists for everyone continuously and in real time.
  3. There is no user cap. Everyone can participate – acting together, simultaneously and individually.
  4. The metaverse is a fully functioning economic system. Individuals and companies create, own, invest, and can get paid for any kind of service that provides value to others.
  5. The metaverse spans the digital and physical worlds, private and public networks, open and closed platforms.
  6. The metaverse offers unprecedented compatibility. Digital objects no longer exist only within a particular virtual world – a computer game, for example. They are transferable.
  7. The metaverse is not owned by a single company. A very large number of participants create and operate it – from private users to commercial providers.

Web 3.0 as the successor to the mobile Internet

With mobile Web 2.0, we as users in America or England have access to online services via a screen. With Web 3.0, we don’t need a smartphone, tablet or computer to visit websites, stream movies, play to earn games and communicate with others. We interact in 3-D environments. VR and AR technology makes this possible. But what distinguishes the network of the future above all from its predecessor: It is borderless. Users own digital assets in the form of non-fungible tokens (NFTs) and transport them from A to B as naturally as goods in the analog world. The skin from Counterstrike is used in the Fortnite weapon and the owner can make it available to a friend via Whatsapp.

Game manufacturers are the driving force

A metaverse that is thought through to its logical conclusion is still a distant dream of the future. However, computer game manufacturers are working at full speed to implement it. Some things are already possible. With the new “Party Worlds,” the Fortnite developers have expanded the competitive game to include a “social” component – and are taking a big step toward the metaverse. On platforms like Decentraland and in the blockchain game The Sandbox, community members buy virtual land in the form of NFTs and build a metaverse existence with their property.

Portrait Douglas Rushkoff, Professor of Media Studies at the City University of New York's Queens College.

The metaverse doesn’t make technology compatible with people; it makes people compatible with technology.

Douglas Rushkoff, professor of media studies at the City University of New York’s Queens College

Facebook on its way to the metaverse

The big technology companies have also discovered the metaverse as their latest macro target. Facebook just changed its corporate name for it. “Meta” sets the new direction: From the social media present to a future that links virtual space with physical. Meta CEO Mark Zuckerberg wants to connect a wide variety of digital services. When the time comes, users will be able to put on their virtual reality headsets and AR glasses and meet in the Metaverse from their home space to network, play games, and work – even with real eye contact during meetings. Back in 2014, Facebook bought VR glasses manufacturer Oculus for this purpose. In the summer, the company presented its first AR glasses – the new tool for social networking.

Growth market Metaverse

Market volume in $ billion
Source: Statista 2021 / Token Info Port
Man with cyber glasses in metaverse
Locomotion in virtual worlds: Metaverse helps determine the future.

The metaverse is a growth market

Experts expect the metaverse to trigger a revolution in the World Wide Web in the coming years – with far-reaching economic consequences. To implement their vision of the overworld, companies need money: for AI, for powerful hardware, software, VR and AR equipment, and haptic equipment that also lets users feel the virtual world. Game producer Epic Games led an additional round of funding in April, securing $1 billion to expand its metaverse. Statista expects the global market for augmented reality (AR), virtual reality (VR) and mixed reality (MR) to grow from $30.7 billion to nearly $300 billion over the next three years.

Metaverse shares spark investor fantasies

The potential of the Metaverse vision is also evident in the financial markets. Investors’ fantasies have been aroused – as evidenced, among other things, by the Roblox IPO: the market capitalization of the online games platform was almost 40 billion U.S. dollars on the first day of trading – with sales of not even one billion dollars in 2020. Those who want to buy Metaverse shares can choose from a broad spectrum: from platform developers to software companies to hardware manufacturers. 15 stocks have been compiled into a Metaverse basket by Swiss investment house Vontabel. Metaverse stocks are promising, but because of the high volatility, they are only suitable for investors who are willing to take risks. They can make significant gains in some cases: The prices of Sandbox (see our instruction manual) and Decentraland rose by more than 263 and 275 percent, respectively, in seven days in early November.

Is the metaverse a danger?

Mark Zuckerberg’s recent keynote, which takes us on a tour of his brave new meta-world, has set off a debate about the sociocultural consequences. Douglas Rushkoff, a professor of media studies at the City University of New York’s Queens College says: “The metaverse doesn’t make technology compatible with people, it makes people compatible with technology.” Experts warn that a single company could control the Metaverse, giving it control over virtual space. Many see the solution in a decentralized blockchain-based infrastructure.

Less risk through aggressive regulation

U.S. computer scientist and CEO of Unanimous AI Louis Rosenberg is certain that the Metaverse, with its potential applications, will enrich our lives and our humanity. But he also sees the risks. The vulnerabilities of social media platforms – the risk of manipulation and the lack of data security – are even more pronounced in a metaverse built on biometric information from its users. Regulation is therefore essential for him: “The best way to make the magic possible and avoid the risks is to aggressively regulate the space.” In doing so, he sees an acute need for action: “We need to start now, before the problems are so deeply rooted in infrastructure and business models that we can’t get them fixed.”

FAQ – Frequently asked questions

What distinguishes Web 3.0 from Web 2.0?

We access the mobile Web 2.0 via a screen. In Web 3.0, we move around with virtual reality headsets and AR glasses and can act as avatars. We own digital goods in the form of non-fungible tokens (NFTs) that we can use anywhere in the metaverse.

Does the Metaverse already exist?

So far, the metaverse exists mainly in the imagination of Mark Zuckerberg and Co. Computer game manufacturers and technology companies are working at full speed to implement it. We don’t know exactly what it will look like. Experts assume that it will still take years, but that the metaverse will come.

What are the dangers of the metaverse?

In a centrally organized Metaverse, a single company would have control over the virtual space. The risk of manipulation and data misuse exists in every social network. It is even greater in the metaverse because it additionally processes biometric data.

Sabine Melichar

Editor | MBA University of Cologne / San Diego State University.
Main focus: Tokenization | Enterprise Digitization | Vocational Education | Society

Sabine Melichar

Redakteurin | MBA Universität Köln / San Diego State University
Schwerpunkte: Tokenisierung | Digitalisierung von Unternehmen | Berufsbildung | Gesellschaft