Our Guide

To the Metaverse

What is the Metaverse?

In essence, imagine a virtual world, where you log on, but instead of playing as a character, you are just yourself. You have an avatar (a virtual representation of you) and you can go about your life, meeting friends, taking business meetings, signing paperwork and attending music festivals. You use extended reality (XR) tools such as virtual reality (VR) headsets to influence the world around you in the metaverse. This is intended to make you feel like you’re really in another world, without physically leaving the room.

The metaverse is a shared virtual space. Unlike when you play a video game and you have to stay in the specific world of that game, the metaverse allows you to travel around the world with no constraint on where you go. This world is also ongoing, so it doesn’t pause when you leave, and it follows a set of key ideas that are designed to keep it consistent. No company owns the metaverse, but rather they create space and experiences that form this virtual world.

Whilst this all might sound a bit like a new version of The Sims, the key difference is that the ultimate aim of the metaverse is to have no distinction between reality and fantasy. You could ‘meet’ your friends for brunch and the people you’d be talking to are the same friends that you have in real life. You can ‘sit’ in a meeting room with other professionals and discuss business and that is just the same as if you sat in the office together.

Ultimately, this is a new technology and how exactly it will work and develop is still being established. As more companies get involved, it’s likely to expand past the game-style experience that is available currently. There is currently a race by several major tech players to create an experience that will lead the way.

Background

30 years ago, the idea of a virtual world would have been seen as something out of a science fiction novel. Carrying a mobile phone was common, but phones were used for making calls and sending messages, not social media. Facebook was yet to be founded and the idea of spending a chunk of your waking hours looking at a small screen seemed strange and expensive.

But smartphones have become part of our everyday routine and interactions. Not only do they allow us to connect with friends and family, but many of us rely on them for work, banking, directions and countless other functions that smooth out our day-to-day lives.

Transitioning to this online way of working and living means that we can connect with people all over the world, and access services as and when we need them. If a company wants to remain competitive, it’s no longer enough to have a simple website or just a contact phone number. Customers want to be able to get the information they need, at a time that suits them.

As a result, companies are jumping on this demand and pioneering clever new ways to expand our world far beyond what happens in real life. It’s only just getting started, but the metaverse is the newest addition to this ever-expanding technology portfolio – but what exactly is it? We take a look.

Where did the metaverse come from?

The term ‘metaverse’ was first coined in 1992. Whilst this seems incredibly early, at this point it was just an idea in a science fiction novel, not a reality. The World Wide Web had only been invented a few years before, so the author Neal Stephenson was inspired to write Snow Crash based on what possibilities this could open up.

The first virtual world came courtesy of the game Second Life in 2006, where players could create an avatar for themselves and go about an alternate life in the virtual world. But the idea of a metaverse has really only come into play in recent years, with the invention of Bitcoin and VR headsets, as well as the popularity of the Ernest Cline novel Ready Player One. The book is set in a parallel universe, accessed via virtual reality.

Some of the current buzz around the metaverse stems from Facebook changing its name to Meta, in order to reflect Mark Zuckerberg’s goal of facilitating social experiences in virtual reality, rather than just through social media.

How to access the metaverse

There are a few different options when it comes to actually accessing the metaverse, depending on what type of experience you’re after and how much you’re willing to spend. As the metaverse is still developing, new technologies may come in, and the existing ones may become obsolete, but currently there are few things you’ll need to access the metaverse.

• At an entry level, you’ll need a smartphone which will be able to run an app, or a computer where you can access sites like Decentraland. This allows you to access the metaverse at a more basic level, creating your own avatar, buying and selling items and land, and interacting with others.
• For the true metaverse experience, big tech companies are pushing for VR headsets, or at least a pair of augmented reality (AR) glasses. This allows you to have the immersive experience of truly feeling like you’re in another world, which is the whole point of the metaverse concept. These technologies make you feel like you’re actually sitting next to your friends, for example, rather than seeing your avatar sitting next to theirs on a screen.
• Whilst these headsets are expensive, they don’t need an external computer to run, so they’re portable and much smaller to carry around.

Whilst it’s unclear whether AR and VR will become compulsory requirements to enter the metaverse in the future, companies like Meta (formerly called Facebook) are certainly investing in their own VR headsets.

How to invest in the metaverse

The fun element of the metaverse is being able to purchase and own virtual items that you wouldn’t necessarily be able to afford in real life. From shoes to land, buying things in the metaverse is just another way to personalise your experience, in the same way that you have your own personal style or taste in your day to day life.

Whilst it might be easy to understand why you’d want your avatar to be wearing the latest trainers, purchasing real estate in the metaverse can feel a bit confusing. Why would you want to pay to build your house on a specific spot when you’re not constrained by office locations or school catchment areas like you are in real life?

But the benefit of buying land in the metaverse is that you don’t have to live there, or travel there in real life to rent it out and maintain it as a landlord. Buying plots around virtual cities that are desirable means that as the city grows in popularity, so does the value of the land that you’ve bought. Just like investing in up-and-coming real estate locations, investing in virtual plots can get you the same benefits.

What do I use to pay?

Firstly, you’ll need to have a cryptocurrency wallet. Everything is done digitally, so this ‘wallet’ will ideally be added to your browser, so that you can easily use the currency in the metaverse. Think of it like a holiday currency exchange: you use your home currency to purchase whichever cryptotokens your chosen metaverse platform accepts. Just as with other currencies, there may be a transaction fee for this.

You may have heard of cryptocurrencies like Bitcoin or Ether – some metaverse platforms allow you to use these directly, or otherwise you can exchange this for another type of crypto token in the same way. The difference between the term cryptocurrency and cryptoken in simple terms is that cryptocurrency refers to the whole currency, in the same way as pound sterling does, whereas a crypto token refers to the individual item, like a pound coin.

What about NFTs?

If you’ve read about the metaverse, it’s likely that you’ve also heard technology’s new favourite buzzword: NFT, which stands for nonfungible token. If you’re thinking about getting involved in the metaverse, then this is a concept you’ll need to wrap your head around.

To understand NFTs, you first need to understand blockchain. Put simply, blockchain is a publicly available ledger that records transactions. In the same way that when you buy a house the solicitor does the paperwork that changes the deeds of the property to your name, when you buy an NFT, the transfer between one person and another is recorded. In the digital world, when someone buys an NFT, this transaction is recorded on the blockchain and given a time stamp.

An NFT is a unique cryptographic token that someone purchases. They are all worth different amounts of money. Imagine buying a unique piece of art – instead of paying cash and hanging this on your wall as an investment piece, with an NFT you pay in cryptocurrency, and add it to your digital wallet. However, they’re only worth what someone will pay for them, rather than having an established market value. Some premium NFTs come with the benefit of giving the owner access to an exclusive community, including password-protected content and the opportunity for high net-worth networking.

It’s important to note that items like shoes or clothing are not NFTs, even though they’re a piece of digital property, as they’re not unique. For an item to be considered an NFT, it has to be unique on the blockchain. That means it needs to be the only copy of that cryptographic token to exist. For example in the real world, there is only one Mona Lisa, even though you can purchase prints of it.

Pros of the Metaverse

• Potentially, the metaverse could be helpful for collaborating and sharing ideas with people that you don’t meet in real life. This could be great for sectors like healthcare and education, which would particularly benefit from the 3D interactive element.
• We’ve already seen how digital communication helped connect people during the pandemic, so some companies see the metaverse as a natural extension of this. It could also allow people to attend virtual events like conferences and festivals, without needing to take the time out of their lives to physically go to them.
• The metaverse is also seen by some as a realm of new opportunities, including marketing and a virtual economy. This could potentially be a good thing, as it could create new jobs and trade opportunities in the virtual world as well as the physical one.

Cons of the metaverse

• One of the biggest risks when choosing to invest in the metaverse – whether that’s land, or purchasing VR technology – is that it could all get closed down or go out of fashion. A physical piece of land near a popular city will always have a value, whereas everyone could get bored of a digital city and you could struggle to sell the land for a profit.
• There are also concerns that spending even more time on the internet can be problematic for our mental health. Research by UK Addiction Treatment Centres found that half of the people surveyed admitted to an internet addiction, whilst Ofcom reported that many people are aware that their internet usage was negatively affecting their lives. With statistics like this flying around, companies like Meta are well aware that they’ll need to have some kind of solution in place to combat this.
• There’s also an environmental impact to all this technology. Whilst it’s true that attending a festival virtually means that you’re not flying, buying plenty of single-use products and walking all over fields, it’s hardly carbon neutral. The amount of power that servers require to spin up these virtual worlds is high, with some research suggesting that one Artificial Intelligence model could generate five times as much carbon dioxide as a car does in its lifetime. However, companies like Meta and Microsoft are aware of this, with both of them promising net-zero emissions.
• The other issue is the carbon footprint of producing all this new technology. If you could expect someone to keep a VR headset for many years this might be less concerning, but with technology constantly evolving, the lifespan of these products is likely to be short. There will need to be a good system in place for recycling old tech so that a side effect of the metaverse doesn’t become a huge amount of waste.

Looking to the future

• Ultimately, it’s hard to accurately predict where the metaverse will go. There are certainly obvious benefits, and society’s current interest in innovative technologies mean that there is likely to be interest in getting the metaverse up and running. It’s hard to know whether there will be an appetite for taking it past gaming and social events though, as this is still relatively uncharted territory.
• Whether the metaverse develops into the mega virtual world that the tech giants are describing remains to be seen, but there’s certainly a lot of potential for innovation.