This Explains the Metaverse

Like many things that seem suddenly to come into vogue, the concept of the metaverse has been around for years. The computer game Myst was released in 1993 and allowed users to explore an alternate world. Ten years later the game Second Life emerged, allowing users to have an identity as a character within a virtual world. This pushed the metaverse that much closer to feeling real.

Thanks to the innovation and growth of the blockchain and the dawn of crypto tokens, it is now possible to make real purchases in the virtual world of the metaverse, allowing people to buy and sell things to one another. More on this below, but suffice to say, this is a very big deal.

Contrary to what the name suggests, there isn’t one single metaverse but rather many meta universes. Some, such as decentraland.org, are open to all who simply visit a web address. Others, like Fortnite, require the download and installation of a special application. Getting to the metaverse isn’t really more difficult than opening any app or surfing any website. And while you can put on a virtual reality headset to create a more immersive experience, it’s not essential. (Image: Decentraland)

With global lockdowns in effect and venues closed on every continent during the first year of the pandemic, the idea of virtual spaces that could be designed and built to host events became highly appealing. Live concerts, art shows, and fashion shows took to the metaverses, which served as a meet-up location for those who could not meet up. As the world has re-opened, virtual experiences have continued, and now they are often cross-marketed with real-life events. A recent example was New York Fashion Week in February of this year, when designers staged shows in city venues as well as in the metaverse. To avoid confusion, the acronym “IRL” is used to distinguish between events that will take place in real life versus online.

Non-fungible tokens, or NFTs, add an essential new dimension to the metaverse and connect virtual life to reality. Recall from part one of this series that every NFT is unique; an NFT is like a collectible card and a concert ticket wrapped into one. In the metaverse, NFTs can be used to give permission to display a certain visual element. In the case of fashion this means that holding a particular NFT can allow an individual's metaverse persona — otherwise known as their avatar — to wear a specific piece of virtual clothing, like a fresh pair of Adidas sneakers. For their avatar to wear this sought-after design, that person must own the NFT that grants this permission. And such virtual permissions can be interwoven with purchases in the real world. For example, if you own those sneakers IRL, you can also wear them in the metaverse.

Recent sharp declines in crypto markets have highlighted that, like the real world, the metaverse is not without risk. NFTs purchased for use in the metaverse may not retain their value; experts recommend setting clear limits on how much real money you spend in the virtual world. What’s more, the people you meet in this virtual realm are often anonymous, which means it’s vital to proceed with caution before sharing personal information or exposing anything about your IRL self. The metaverse is a young and growing space and there are certain to be bad actors within it.

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Perhaps one of the most interesting elements of the current wave of metaverse innovation is that any individual can now participate in the building of virtual worlds. While games like the aforementioned Fortnite are developed by private companies and are used by those who purchase and download the software, other metaverses allow participants to help build the (virtual) world around them. Decentraland exists on the blockchain, meaning it isn’t controlled by a central entity. Anyone can buy and own space in that world.

As in the real world, there are maps to help you navigate the metaverse — for example, the Decentraland map gives you an immediate sense of the boundaries and districts within that world. Locations in the metaverse have addresses that are used for navigation and can be shared with would-be visitors. Also akin to the real world, an interested buyer can purchase a plot of land and erect a house, and this will determine what others see when they visit that location, just like people in a real-world community see the color of their neighbors’ homes and the flowers planted out front. In the virtual world as in the real world, owners of a given space also determine who else can access it. Access is often granted by NFT.

The general idea is that the more virtual space you own, the more events you can host. For businesses, more events means more commerce and more revenue. And just because real estate in the metaverse is virtual doesn’t mean it’s unlimited. Metaverses must be built and popularized in order to draw visitors; there is limited real estate in well-trafficked virtual corridors. The more exclusive the virtual neighborhood you are in, the more likely people are to go there. Snoop Dog has made investments in the metaverse Sandbox; holding real estate near Snoop’s properties would likely drive traffic to your location, making it more valuable than plots on the fringe. (Image: Sandbox)

From Snoop to Mark Zuckerberg, big names are placing big bets on the continued explosion of the metaverse. Here at OZY, we’re guessing that the next frontier is the rise of hybrid life: Events in real life will offer parallel experiences virtually, such as a concert that offers bonus content at a sister show in the metaverse. While the virtual world will never replace the real one, the metaverse does give ordinary people new opportunities to share their creativity, whether in fashion, music or art. In the next and final installment of this four-part series, we’ll explore how you can create your own NFT and make it available to avatars in the metaverse.

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