How emerging technology will affect freedom, industry and money in the metaverse?
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This article was contributed by Brad Yasar, founder and CEO of EQIFI.
Innovation related to the metaverse has brought some expected criticism and skepticism. Like any fast-growing, emerging technology, the parameters for its operation are yet to be fully established. Essentially, this means that those hoping to get financial returns from interacting with the metaverse don’t know what an investment looks like. Is it VR headsets, digital land or a pair? Gucci sneakers only wearable with AR? Some might argue that the metaverse is a dystopian fantasy conjured up by gaming fanatics and tech titans. Facebook’s transformation into a metaverse-focused social media company only heightens this dominant fear.
With Facebook’s Meta rebrand costing the company an estimated $60 million, it seems Mark Zuckerberg is onto something. Considering Instagram brags one billion monthly users, it would be wise to assume that the metaverse could significantly affect our lives in the near future, just as social media does. As in the early days of social media, the impact of the metavers is limited by the rate of progression. However, soon these advancements will lead to a transformative era of the industry influenced by a variety of decentralized tools such as DeFi, cryptocurrencies, NFTs and Web3. Once the power of these technologies is fully realized, life as we know it will be changed forever.
What is a metaverse?
The 2nd Annual GamesBeat and Facebook Gaming Summit and GamesBeat: Into the Metaverse 2
The word “metaverse” was coined snow crash, a 1992 novel by Neal Stephenson. In his performance, users were able to immerse themselves in a digital world through the use of headphones and specially designed glasses. This digital world created a space for users to interact with each other, exchange goods and essentially live a double life through VR. Predictions about the metaverse of the 21st century detail absolute similarities to Stephenson’s imagined reality. The main difference is that the many infrastructural shortcomings associated with the metaverse in the fictional world have been addressed by using blockchain technology as a means of participating and communicating in this new virtual world.
Since the release of Snow Crash more than 30 years ago, the world’s largest technology providers, such as Facebook, have dominated the technology industry insurmountably. Google’s recent acquisition of Canadian company North a more modern approach to AR hardware and software could hint at the company’s plans for metaverse engagement. Likewise, Apple, the most valuable company in the world valued at over $2.5 trillion, it produces a currently unconfirmed and unnamed headset designed to act as a gateway into the digital realm of the metaverse. Organizations like these are not used to putting money into projects without a future.
The advent of NFTs provides a secure method of transferring digital assets from one party to another in a secure manner. Web3 provides decentralized interaction and connectivity between individual entities, supporting decentralization of the metaverse. Cryptocurrencies and stablecoins provide the financial infrastructure befitting a decentralized market. DeFi possesses the ability to bring fully realized financial decentralization to the process of transferring funds and assets in the metaverse. This would complete the infrastructure of the network and enable an expansive digital universe, unimpeded by centralized intermediaries.
It is clear to see that the variety of companies, individuals and entities that could potentially operate in the metaverse is enormous. The widespread use and adoption of decentralization through the growth of crypto, NFTs, and DeFi point to a fully realized future operating outside the parameters of today’s established markets.
So it’s clear that the metaverse is not a sci-fi fantasy conjured up in a dystopian novel, but a more tangible and natural progression for the current structuring of the Internet. The fundamentals of the metaverse have already been introduced in many ways. Now the development centers are on blockchain technology and DeFi to propel it from the conceptual stage to the implementation stage. This development will enable us to realize the true magnitude that the metaverse will affect our lives.
The game industry is one such sector that benefits greatly from developments in the metaverse. Gaming skins, which are in-game avatar outfits, are expected to trade at the $40 billion level each year. Eighty-one percent of players who know these skins want to trade them for real money, according to a report from DMarket. Currently there is no method to transfer skins between game universes or exchange them for currency. In the metaverse, however, this would be possible as each individual gaming universe is connected through a decentralized economy. The use of metaverse-based banks would also enable such transactions.
As in the gaming industry, many sectors and industries will benefit from metaverse-related financing and asset transfers. Just like the bankless barter system that excludes our current financial structure, the metaverse represents maximum potential alongside fully operational and functioning digital banks. This is now possible due to the arrival and expansion of decentralized finance (DeFi). As today’s banking infrastructure increasingly separates from cash and brick-and-mortar branches, DeFi will be the financial model that facilitates financing across the metaverse.
To operate effectively in the metaverse and provide a standard practice for the transfer of digital assets, banks need to be decentralized. As continuous innovations are made and more industries shift operations to the metaverse, the opportunity for DeFi-enabled banks becomes a compelling growth trend. Centralized banking systems simply cannot operate on the metaverse, meaning the expansion and increased sophistication of industries such as gaming will fuel the drive for DeFi-enabled banking, which will support the financial fabric of the metaverse.
This will bring a myriad of benefits to industries, technologists and digital enthusiasts as innovation is driven through the metaverse. In gaming, for example, playing to earn is becoming a viable and attractive prospect for users and gambling companies alike. The introduction of the metaverse creates a concentrated arena where altcoins can be exchanged for playtime. NFTs can be used to exchange in-game assets, enabling a whole new era of gaming and working efficiently with DeFi-enabled banks. This again works to illustrate how blockchain-based emerging technologies will be used to facilitate user interactions across industries.
Dystopia or Utopia?
It’s not just gaming and entertainment that is about to transform and expand with the onset of the metaverse. Synchronization, a fully functioning economy and the interoperability of digital assets, information and consumers means that industries such as supply chain management, real estate sales and even office workflows can benefit from developments related to the metaverse. As a concept and technological innovation fueled by the decentralization of blockchain technology, the future is in the hands of these industries, without the strict parameters of centralized control.
Given the problems that have arisen from unregulated innovations such as social media, there is a good chance that targeted and coherent regulation will influence the future of the metaverse. The OASIS Consortium, for example, brings together leaders from industries such as gaming, dating apps and immersive technology platforms to address security and privacy in Web3. Such developments are beneficial as the regulatory parameters of the metavers are developed by those who have invested in its growth and expansion in a positive light for the end user.
Obviously, the correlated growth of cryptocurrency, NFTs, DeFi, VR and AR will eventually collide to create the metaverse. Will this look exactly like the picture in Snow Crash, a dystopian online universe where reality is no longer the central connector for civilization? Or could the metaverse serve to take away the dominant financial structures of the current economy and draw power from the middlemen who have created multiple financial crises? Nobody really knows. However, one thing is certain: the metaverse is coming and will forever change the way we view money, entertainment and society.
Brad Yasar is the founder and CEO of EQIFI.
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