What is Metaverse?
The metaverse encompasses an online, 3D, virtual space. It connects users in all aspects of their lives. Additionally, it links multiple platforms, similar to the internet. Different websites are accessible through a single browser.
Moreover, augmented reality (AR) will drive the metaverse. It enables users to control their characters or avatars. For example, users can actively participate in mixed reality meetings. They can do so in virtual offices using Oculus VR headsets. Additionally, they can relax and engage in blockchain-based games. They can also effectively manage their crypto portfolios and finances within the metaverse.
It is worth mentioning that existing virtual video game worlds exhibit certain aspects resembling the metaverse. Notably, games like Second Life and Fortnite bring together various elements of users’ lives. They do so in immersive online worlds. Similarly, work socialization tools like Gather.town offer similar experiences. However, it is important to note that while these applications share similarities with the metaverse, the metaverse itself does not yet exist.
In addition to supporting gaming and social media, the metaverse will integrate economies, digital identity systems, decentralized governance, and other applications. Presently, users play a vital role in creating and owning valuable items and currencies. Their active participation significantly contributes to the development of a unified metaverse. Consequently, the potential of blockchain technology to power this future technology is evident.
History & Evolution of Metaverse
1991 – The Internet
Tim Berners-Lee’s groundbreaking invitation for collaboration led to the birth of the Internet. It set the stage for a global network of connectivity and information sharing. This pivotal moment in 1991 paved the way for revolutionary technological advancements. It also facilitated digital transformation that would shape the future.
1992 – Snow Crash
Neal Stephenson’s science fiction novel “Snow Crash” introduced the concept of the “metaverse.” In this virtual space, avatars interact with software agents. It foreshadowed the immersive virtual worlds we see today. Published in 1992, “Snow Crash” played a significant role in shaping the collective imagination. It also influenced the development of virtual reality technologies.
1993 – Proof of Work
The term “proof of work” emerged in 1993 as a computer security mechanism. Its purpose was to combat email spamming. Eventually, it became a fundamental concept in validating transactions on blockchain networks. The introduction of proof of work in 1993 laid the groundwork for the emergence of cryptocurrencies. It also established the decentralized nature of cyber currency mining.
1998 – b-Money
Computer engineer Wei Dei’s concept of “b-money” in 1998 proposed a decentralized cryptocurrency. It incorporated elements such as proof of stake. These elements anticipated concepts later realized in Bitcoin. Although b-money itself did not materialize, its influence on the development of decentralized currencies cannot be overlooked.
2002 – Digital Twins
In 2002, Michael Grieves introduced the concept of “digital twins.” He envisioned a digital counterpart to physical objects. This counterpart would revolutionize product lifecycle management and industrial processes. The conceptual model of digital twins, presented at a manufacturing conference in 2002, laid the foundation for advanced simulations. It also led to virtual representations in various industries.
2003 – Second Life
Philip Rosedale’s virtual world “Second Life,” launched in 2003, provided users with an early glimpse of the possibilities of a metaverse. Despite technical limitations such as bandwidth constraints, it captured people’s imagination. Even today, Second Life boasts a thriving user base. This demonstrates the enduring appeal of virtual worlds and their impact on social interaction.
2006 – Roblox
The introduction of Roblox in 2006 revolutionized online gaming. It allowed users to create and play games developed by others. This fostered a community-driven ecosystem of interactive experiences. During the COVID-19 pandemic, Roblox experienced a surge in popularity. It became a vital platform for social interaction and entertainment for young people.
2009 – Bitcoin
On January 3, 2009, Bitcoin was born. The mysterious Satoshi Nakamoto mined the genesis block, ushering in a new era of decentralized digital currency. Bitcoin’s emergence in 2009 set the stage for the rapid growth of cryptocurrencies. It also had a significant impact on financial systems and global transactions.
2009 – Blockchain
Alongside the launch of Bitcoin, blockchain technology was born in 2009. It served as the public transaction ledger that underpins Bitcoin. Later, it found applications across various industries. On the same day Bitcoin was launched, a usable form of blockchain emerged. This revolutionized trust, transparency, and security in digital transactions.
2010 – Play-to-Earn Technology
The rise of play-to-earn technology began in the early 2010s. It was influenced by Gacha games and the concept of earning in-game currency through participation and collection of virtual items. By leveraging the play-to-earn model, gaming platforms offered players the opportunity to obtain valuable rewards. This paved the way for the integration of cryptocurrencies in gaming ecosystems.
2011 – Ready Player One
Ernest Cline’s novel, Ready Player One, introduced the concept of a virtual reality world to many young people. The Steven Spielberg adaptation in 2018 made the idea even more vivid and sparked widespread interest.
2012 – NFTs
NFTs, also known as “Nifties,” represent unique items rather than interchangeable tokens like cryptocurrencies. They were first introduced in December 2012 when “Colored Coins” incorporated additional information onto a bitcoin, making it unique. Interestingly, a young Vitalik Buterin spearheaded this project while working on improving the Bitcoin blockchain.
2014 – Vitalik Buterin
In 2014, 20-year-old Vitalik Buterin, who co-created Ethereum, received a grant of $100,000 from the Thiel Fellowship. The Thiel Fellowship, announced by Peter Thiel in 2010, aimed to support students under 22 to pursue work outside of school.
2015 – Ethereum
In July 2015, Vitalik Buterin and Gavin Wood launched the Ethereum Network along with the Ethereum blockchain.
2015 – Decentraland
The creators introduced the first iteration of Decentraland, a virtual reality platform, in 2015. They allocated “land” through a proof-of-work algorithm. Notably, during the 2021 NFT boom, some of the game’s real estate plots sold for over $100,000.
2015 – Smart Contracts
Nick Szabo coined the term “smart contracts” in the early 1990s. He described them as a set of promises specified in digital form, including the protocols for parties to fulfill these promises. Since the launch of the Ethereum blockchain in 2015, the term “smart contract” specifically refers to general-purpose computation on a blockchain or distributed ledger.
2016 – Pokémon GO
Pokémon GO, the first game to overlay a virtual world onto the real world, used mobile devices with GPS. Players could locate, capture, train, and battle virtual creatures called Pokémon, providing an immersive experience.
2016 – The DAOs (Decentralized Autonomous Organizations)
The DAOs, launched through a crowdfunded token sale in May 2016, set a record as the largest crowdfunding campaign at that time. It aimed to be an alternative venture capital fund created on Ethereum’s blockchain, operating as a decentralized funding model. However, in June 2016, users exploited a vulnerability in The DAO code, leading to the siphoning of one-third of its funds into a subsidiary account. This incident resulted in the demise of The DAO as a company but contributed to the evolution and improvement of decentralized autonomous organizations (DAOs). DAOs, governed collectively by participants, with rules and financial transactions recorded on the blockchain, will serve as essential components for future metaverse companies. They have been formed around joint ownership of NFTs, for example.
2017 – Fortnite
Fortnite, a multiplayer video game, gained tremendous success upon its release, introducing many people to the metaverse and cryptocurrency experience. The game currently has a user base of 350 million.
2018 – Dai Stablecoin
The introduction of the Dai Stablecoin added a less volatile and more reliable element to the crypto universe. Unlike cryptocurrencies not anchored to any fiat currency or only anchored to other cryptocurrencies, the centralized Dai Stablecoin is pegged to the U.S. dollar. This stability makes it a reliable cryptocurrency for decentralized finance (DeFi). Today, various platforms also offer blockchain-based banking services for cryptocurrency borrowing, lending, and investing, operating largely outside the traditional financial institutions.
2018 – Decentralized Exchanges (DEX)
Despite suffering a major PR hit when hackers stole $13.5 million, Bancor, decentralized exchanges (DEXes) continue to serve as an alternative to centralized exchanges. DEXes allow people to sell and trade cyber currency assets person-to-person through smart contracts. However, the legal/regulatory foundation of DEXes remains uncertain.
2018 – Axie Infinity
Introduced in the same year, Axie Infinity quickly became a popular NFT virtual reality game. Based on a mythical world of animal husbandry, it gained the highest combined value of NFTs among all play-to-earn game platforms by mid-2021.
2020 – Decentralized Apps (Dapps)
Surpassing $2 billion in total token value on the six major blockchain platforms, the movement to eliminate intermediaries continues. Open-source, transparent applications are continuously emerging, enabling gaming, DEXes, DeFi, and other acronymized uses. While many consider dapps an emerging trend, it’s worth noting that the first dapp, the Bitcoin app, appeared over a decade ago.
2020 – First Concert in the Metaverse
In April 2020, Travis Scott and Marshmello captivated an audience of just under 30 million people as they performed in the video game Fortnite.
2020 – Solana
Also in April, the Solana blockchain dapp made its debut. Setting itself apart from Ethereum, Solana mines its cryptocurrency, SOL, using an alternate proof-of-stake (POS) algorithm. Moreover, Solana simplifies block ownership through a consensus tool known as “proof of history,” which inserts timestamps into its blockchain.
2020 – Alien Worlds
Alien Worlds, a wildly popular dapp, introduced a multi-metaverse interplanetary scenario. Within this decentralized autonomous organization, NFT characters mine tokens and perform tasks. By 2021, Alien Worlds boasted more than 2.5 million users. However, its significance goes beyond user numbers, as it serves as a platform for teaching the principles of cryptocurrency and crypto-mining.
2021- Facebook
In 2021, the metaverse hype entered its next phase with Facebook’s rebranding as “Meta” and the launch of Microsoft’s “Mesh” platform. Both Facebook (Meta) Worlds and Microsoft “Mesh” aim to persuade businesses to embrace VR and virtual worlds for various purposes such as meetings and workshops.
This trend has persisted, with new hardware and software being introduced annually. These advancements have led to lighter VR headsets, improved resolution, faster hardware, and, notably, reduced costs. However, despite these developments, mass adoption of the metaverse is still pending.
Future of Metaverse
The Metaverse is both exciting and uncertain. As advancements in technology unfold, it has the potential to revolutionize various industries. Furthermore, the utilization of digital twins in replicating cities or buildings will play a significant role. Remarkably, even real estate companies are employing virtual worlds to sell high-value properties globally, providing customers with a firsthand impression without the need for physical travel. Consequently, the application of digital twins extends to traffic planning, data analytics, smart city planning, and other Virtual Reality-based use cases.
Importantly, the future of the Metaverse relies on the proactive involvement of governments. They must proactively manage this technology, given its potential implications on legislation, taxation, citizenship, and social impacts. Thus, governments have a crucial responsibility to ensure that the Metaverse fosters positive change rather than becoming a source of harm. Facebook stands out as one of the leading proponents of a unified Metaverse. This becomes particularly intriguing in the context of a crypto-powered Metaverse, given Facebook’s Diem stablecoin project. Mark Zuckerberg has explicitly expressed his plans to leverage the Metaverse to support remote work and enhance financial opportunities for individuals in developing countries. Leveraging their ownership of social media, communication, and crypto platforms, Facebook is well-positioned to unify these realms.
Regarding the crypto-powered Metaverse, the next step entails deeper integration between NFT marketplaces and 3D virtual universes. Presently, NFT holders can sell their assets across multiple platforms like OpenSea and BakerySwap. However, there remains a lack of a widely popular 3D platform for this purpose. On a larger scale, blockchain developers may develop Metaverse-like applications with more organic user bases than those of large tech companies.
To learn about the use cases of metaverse, click here.