Major breakthroughs in the economy come with the great boom of innovation and technologies such as steam machines, automatics or the Internet and Mobile Phone which can solve issues of the society. Those innovations pave the way for the rise of new businesses creating solutions for the society, while fostering the capital flows and investments. Mobile phones and the Internet fosters activity in the production, e-commerce and global economy by allowing more connectivity, and giving buyers and sellers access to bigger trading markets and databases. And recently, the promise of new technology, metaverse & Web3 has been rising and driven, to a considerable extent, by the potential benefits of decentralization of blockchain over the past few years.
The concept of the metaverse has recently gained traction in the realm of information technology. Several corporations have been working hard on expanding their virtual reality (or “metaverse”) systems. Countless backers such as Meta, Microsoft, Nike, Adidas, Apple, Roblox have contributed to metaverse initiatives. Many people are curious about it now. That begs the question: “Why is the metaverse getting so much attention?, What economic opportunities can the metaverse open to businesses?” We’ll discuss what it is and what it can do.
Definition of Metaverse
First, what is metaverse? There is no agreed-upon definition of “metaverse”, but Binance Academy defines it as “a concept of an online, 3D, virtual space connecting users in all aspects of their lives. Like the web connects disparate sites that can all be accessed from the same browser, this would link together multiple platforms. It may or may not necessitate the use of VR (virtual reality) or AR (augmented reality). It can serve as a portal to the wide world of digital entertainment, a virtual shopping experience, a learning resource, an advertising platform, or a classroom. Metaverse, indeed, should satisfy the collision of experience in both the digital and physical worlds. Items and services in virtual worlds must behave like those in the real-verse so users can enjoy the same or better benefits from metaverse.
Advocates believe that Metaverse is a place where people can use their one unique & authentic identities, backed by real identity to connect all immersive platforms to participate in, socialize through and become a part of. This, in turn, removes the barrier of economic distance and enhances trust in transactions. As stated in the article of Meta: “A digital ID can open up new economic opportunities for people by allowing them to demonstrate eligibility for services in a privacy-preserving manner by indicating to third parties that the holder has undergone identity verification without sharing their actual personal information”.
Why does Metaverse matter?
Then, what is the stimulus for the rise of Metaverse right now? This is an especially pivotal time for the metaverse due to a confluence of technical, social, and economic factors. According to Deloitte, these include the confluence of several maturing technologies (extended reality, edge computing, AI, 5G, etc.), incumbents’ pursuit of growth, heightened behavioral changes due to Covid-19, the growth and evolution of the digital economy, and significant capital investment.
Multiple sectors stand to benefit the most from the metaverse over the next decade. In light of the substantial investment from leading technology companies, VC firms, corporations, and brands, as well as the vast array of potential applications and uses, industries are already implementing metaverse initiatives. Most current ones are focused on marketing, education, employee learning and development, virtual meetings, events, or conferences, and product design or digital twinning. Metaverse enables businesses to engage users in novel ways, host virtual events, test out experimental forms of advertising, enhance process development and teamwork, and facilitate transactions with e-wallets and cryptocurrency.
Services are likely to benefit most from the rise of Metaverse, including tourism, entertainment, education, training, art etc. Imagine that you can travel to foreign countries at lower costs and during a shorter period of time, and even can experience a similar experience. Concerts tickets may be sold out due to limitations of physical stadium but you can access it via metaverse portal. Metaverse provides mid and low-income people access to luxurious service such as skydiving, bungee jumping etc
With blockchain technology integrated into Metaverse, transparency and immutability of personal data can facilitate trustless transactions between users and automatic verification without human intervention. Without intermediaries, individuals can access a variety of financial services options that fits with their personal purposes at lower costs, and consequently grow the aggregate capital inflows to the economy. Consequently, the speed of transactions and money flows can be boosted, leading to higher productivity and cost reduction. In the nutshell, decentralized finance (Defi) and Metaverse can be interoperable.
Data aggregation can become more rich in nature thanks to the interactivity and real-time data capturing across various activities of all entities in the Metaverse, from individual to businesses. This may change the way marketing works in the near future. Data ownership can be captured by personnel easily and users have permission to monetize their own data. Thus, data portability will become the next trend. You can find many Web3 platforms that already allow users to monetize their personal data for crypto currencies such as Galxe, Lens Protocol, etc.
Furthermore, the participation of major players, including several dominant companies from different industries, is further evidence of the metaverse’s rapid expansion. Companies like Meta, Microsoft, Nvidia, Apple, and Alphabet are just a few of the many large tech corporations actively shaping the metaverse. Facebook’s decision to rebrand as Meta shows the company’s dedication to competing at the highest levels of the industry. Other examples include Sony’s PlayStation VR2 headset, which arrives on Feb 22, and Apple’s rumored entry into the augmented reality market in 2023. One more is Microsoft’s proposed purchase of Activision Blizzard.
Some use cases of Metaverse
Marketing in the metaverse is predicted to increase significantly as more and more brands adopt purpose-built virtual campaigns. Nikeland, for instance, lets users play games while organically exploring Nike’s range of products in VR; Gucci launched Gucci Garden on Roblox, and Coca-Cola released a digital jacket to be worn in Decentraland.
VR and AR innovations are already paving the way for useful metaverse applications that can improve people’s lives on a global scale. Some examples are Deloitte University for employee onboarding, The Havas Group’s village within The Sandbox that hosts recruitment services for improved candidate and onboarding experiences, HSBC’s partnership with The Sandbox to take sports engagement to a new level in gaming metaverse, Ariva Digital’s Wonderland platform that allows users to travel to imagined or recreated destinations, BMW experimenting with creating digital twins of entire factories, and designing products using Nvidia’s Omniverse technology, Seoul’s plan to become the first city to host a metaverse platform for public services by 2023, and more.
How might things develop in the future?
Deloitte suggests three different futures for the metaverse. Low Orbit is the first one. The metaverse is good at what it does well, but it never becomes a platform that can be used for anything. And then there’s Double Star, the second. There isn’t just one metaverse, but rather several competing for a piece of a fluid industry. Big Bang is the final one. As time goes on, we increasingly rely on an open, interoperable metaverse as the primary interface through which we go about our daily lives.
Moving at speed, we also expect a set of design principles that can evolve alongside the opportunities and challenges of the metaverse to guide the development of experiences that put people first. In a recent report, McKinsey stressed the importance of emphasizing the human element when designing for the metaverse. Brands, businesses, and governments can maximize the metaverse’s potential by providing satisfying experiences to the metaverse’s end users.
In conclusion, the possibilities of the metaverse have the power to propel us into a very different kind of world. Just like in the real world, you can find almost anything in the metaverse. It, thus, will have far-reaching effects on our economies and society as a whole.
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