News & Insights
5 Things Your Organization Needs to Know About the Metaverse … (from someone who’s lived there for the past year)
“The future is already here – it’s just not very evenly distributed.” – William Gibson, author.
Suddenly, the Metaverse is everywhere: From Facebook’s rebranding of its parent company as Meta to the recent Congressional hearing on the future of digital assets, the idea of the metaverse has grown – though few seem to be able to define just what the metaverse is.
Have no fear; it’s early. As current inhabitants of the metaverse would say, GM (Good Morning). We’re here to guide you through what you need to know about the metaverse and its relevance. In a series of blog posts over the coming months, we’ll explore how the metaverse is coming to life and forecast what may come. To start, here are five things you need to know about the metaverse.
- What is the metaverse? The term ‘metaverse’ isn’t new. In Neal Stephenson’s 1992 novel Snow Crash, the metaverse is described as a collection of virtual spaces where people gather. Today most people assume it’s virtual reality or a game. But virtual reality is just a view into a metaverse. For many, a proto-metaverse already exists in Twitter, Discord Groups, Forums, and Fortnight arenas; these are places where people show up as avatars to engage (Read: Try to shill each other JPEGs of toads for thousands of dollars). In truth, there is no all-encompassing definition of the metaverse. But just as the mobile Internet changed the dynamics of how we interact with the online world, so too will the metaverse be a dimension-altering advance of society, a place where people can work, play, and spend. As Meta puts it, it’s a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you. That is, Meta, Microsoft, and even Tinder are hoping that you’re not sick of online meetings yet – they’re about to get more immersive.
- So is the metaverse real or virtual? Think of the metaverse as the third generation of the internet – in other words, Web3. In Web1, we went online to read, chat, and wait for web pages to load. In Web2, the advent of social media, high-speed wireless, and advanced mobile devices untethered us and supported a world of content creators; companies connected us and gave us the tools to poke each other. They also profited from monetizing our attention through advertisements. Web3 is a new business model built on the dream of decentralization – the effort to remove centralized control from a system in which a king, government, or bank can control which transactions are allowed. Web3 aims to reclaim the margins owned by Web2 companies. An artist who sells a painting to a gallery, for example, makes money from that first sale. But an artist who sells an NFT of a painting – a Non-Fungible Token – can earn a royalty on secondary sales of that painting, automatically, forever, helping artists finally clap back at anyone who doubted them. We’ll come back to NFTs; they’re important in this story, and they’re not Beanie Babies.
- How are organizations using the metaverse so far? Companies are beginning to dip their toes into the metaverse, mainly by issuing NFTs that consumers can buy and own. NFTs are an evolution of cryptocurrencies like Bitcoin or Ethereum. Just as the blockchain – a secure, digital registry – tells the world you own some Ethereum, a contract can be stored on the blockchain that tells the world you own a piece of art, or a membership, or virtual real estate. Insiders, cautioning against centralization, warn each other that institutions are coming for their JPEGs. And in fact, they are. Adidas recently bought a Bored Ape Yacht Club NFT worth $156,000, changed its profile picture on Twitter to that Ape, and announced a metaverse merchandise partnership with a group of NFT pioneers (which launched December 17th). Not to be outdone, Nike bought digital fashion brand RTFKT Studios for an undisclosed sum, just after they had sold out an avatar project called CloneX featuring designs from Japanese artist Takashi Murakami that has amassed over $140 million in secondary sales. These are fledgling efforts to own a piece of the metaverse through its culture and assets.
- What are the challenges it presents? Many companies have leaped onto the metaverse bandwagon, not least of them the company formerly known as Facebook, which changed its name to Meta. The rebranding also comes as Meta is being scrutinized by government agencies and consumers over allegedly hiding the ill effects of its platform on teens, the unvaccinated, and voters. Which raises the question: Can we trust the current tech actors to build the metaverse, when they are the same companies that have fostered a lack of trust in the internet? Opinion leaders in the space argue that the preservation of an open metaverse is an essential battle in our lives. Traditional institutions are a challenge to the decentralization that advocates hope to see in evolving our financial system and upgrading the technology of contracts that secure all transactions, from ‘real’ real estate to ‘virtual’ real estate. In a larger context, for the metaverse to become widely adopted, it should ensure diversity and inclusion in ways that the internet has struggled to accomplish. Early avatar projects have shown that dominant racial narratives are already present in the metaverse, with lower sales and prices on female avatars and avatars of color. The metaverse must reconcile how we interact online with how we live as human beings.
- What other opportunities exist around the metaverse? The metaverse holds tremendous promise as a route by which groups of like-minded individuals can cooperate in a decentralized environment. This has implications for politics, campaigns, sporting events – anything built on community organizing. A group of crypto investors nearly bought a copy of the U.S. constitution this year, after fundraising for only 72 hours, but were outbid by a hedge fund billionaire. The group is currently voting on proposals to use the money to have an impact nonetheless. The money is stored in a shared wallet everyone can see, while no individual can remove funds without a dozen electronic signatures from others. That shows how the metaverse could be the next frontier for marketers, politicians, influencers, and even healthcare professionals who will urge us to remove the headset and take a walk outside. Already, tapping into the metaverse is an opportunity unlike any the world has seen. Eventually, it will be as essential to organizing and communications as having a website or a social channel. What’s more, it adds a new option that everyone from businesses to campaigns should consider, whether that means buying an NFT to support an artist, developing virtual real estate to give it utility for customers or fans, or using the tools of Web3 to empower passionate people to raise funds and enact reforms. We’ll explore those and other possibilities in future installments in this series.
If you’re interested in talking more about the NFTs, social tokens, the metaverse, virtual reality, or just want to buy some JPEGs yourself, meet us on our pavilion in Decentraland! Just kidding, we still use email; Precisionverse is coming in 2022.
Naimul Huq is a Senior Vice President and the leader of Precision’s data and analytics team. He owns some of the NFTs described in this article. NFTs are a volatile asset class. This article should not be considered financial advice.