"Metaverse" has sparked the interest and curiosity of many people. So, what is the metaverse? What makes this technology stand out? Let us explore together through the article below with AZC.News.
Since Mark Zuckerberg announced that Facebook would transform from a "social networking company" to a "metaverse company," coupled with the famous game (Fortnite) developer Epic Games raising $1 billion in funding aimed at turning the game into part of the metaverse, the concept of the "metaverse" has become a hot keyword and attracted much attention.
In this article, let's explore what the metaverse is and understand the investment opportunities in the metaverse in the cryptocurrency market!
What is the Metaverse?
The metaverse is a virtual world created using internet and augmented reality tools (such as VR, AR, or other technologies) designed to provide users with the most authentic experience.
The metaverse is a world that exists in parallel with the real world. Here, through the tools and functions provided by developers, the barriers to creativity are almost eliminated.
If you are still unclear about this abstract concept, the movie (Ready Player One) is a typical example of the metaverse.
Origins of the metaverse
Having understood the basic concept of the metaverse, let's explore the origins of this concept.
Is the metaverse a new term that has emerged in today's era of advanced information technology?
This is not the case. The term "Metaverse" first appeared in writer Neal Stephenson's 1992 science fiction novel (Snow Crash). In this work, the Metaverse is described as a place where people can interact with each other through deep cyberpunk spaces.
Therefore, the concept of the metaverse had already formed before the internet era. The term "metaverse" itself is composed of two words:
Meta: Meaning "beyond" or "transcend."
Poetic verse: The term "Universe" means "universe."
Therefore, the concept of the metaverse implies a world that "transcends the existing universe," or in other words, a world parallel to reality.
The origins of the metaverse can be traced back over 30 years, when the internet had not yet developed to what it is today. It is not a new concept but rather one that has long been formed in the imagination of science fiction writers.
What are the characteristics of the metaverse?
Some of the main features of the Metaverse include:
Sustainability: The ability to maintain continuous operation and ongoing improvement.
Immersion: The degree of authenticity of the metaverse experience, reflecting the ratio between virtual experience and reality.
Openness: Allowing participants to connect or disconnect at any time. This is also an open space that is not limited by creativity.
Economic system: The virtual world has an economic system parallel to reality, allowing for easy transfer of assets between the virtual and real worlds, enabling users to accumulate assets through creation in the virtual world.
These features indicate that the metaverse brings multidimensional, vivid, and highly interactive experiences, as well as an independent economic system parallel to the real world.
Various layers in the Metaverse ecosystem
The metaverse is built on four main components:
Base layer: This is the connecting platform layer, i.e., the internet network.
Infrastructure layer: The infrastructure of the metaverse includes hardware components that provide users with real experiences. In addition, key technologies such as blockchain, AI, and big data are also in this layer.
Content layer: This layer includes games and applications that immerse users in different virtual worlds, creating the most vivid experiences.
Real metaverse layer: This is the final layer; when the underlying layer develops to sufficient maturity, a complete and real metaverse will be created.
The development history of the metaverse is as follows:
The internet platform layer is being upgraded to be faster and more convenient.
The infrastructure layer is also being continuously invested in and improved by tech giants.
The content layer is gradually forming games similar in style to the metaverse, waiting for the infrastructure layer to be perfected.
When these platform layers are fully developed, the real metaverse will soon become a reality.
Some famous metaverse games
Although current technology cannot yet provide a perfect metaverse experience like (Ready Player One), there are already many products and applications built on the concept of the metaverse.
Some typical examples:
Minecraft: An open-world game that allows players to mine resources, build structures, create their own worlds, and interact with other players.
GTA V: In multiplayer mode, players can interact, trade, and communicate in an open world.
Roblox: Allows players to create content and provides VR support and an economic incentive system.
In the cryptocurrency market, there are also many Metaverse-style games, such as Decentraland and The Sandbox. These games allow players to create their own worlds, own assets in the form of NFTs, and trade them in the market.
However, current metaverse applications still have many limitations:
Due to the limitations of augmented reality technology, the experience is not authentic.
Interaction between products is still very limited, especially for non-blockchain-based games.
The creative space for users is still limited.
Therefore, the true metaverse has not yet been realized as in (Ready Player One), but current applications have already shown significant progress and great potential for the future development of the metaverse.
Why has the metaverse become popular?
Throughout history, humanity has always had the desire to explore and conquer: crossing vast oceans, conquering towering mountains, exploring the mysteries of the universe... However, due to various obstacles such as technology, funding, or limited resources, we have not been able to quickly meet all these demands.
Currently, with the explosive development of the internet and technology, we seem to have found new solutions to address these challenges, which is to leverage the metaverse.
For the true metaverse, we can fully enjoy unlimited experiences and explorations while waiting for technology to develop to achieve real experiences.
A clear example is humanity's desire to explore the universe: traveling around the world has become easier and more common today. However, gradually, exploring the Earth is no longer as appealing as it once was, and our next goal is the universe.
However, currently developing rockets and infrastructure for space exploration is costly and time-consuming, with resource barriers failing to meet demands.
Therefore, we can experience experimental space exploration through the Metaverse, and augmented reality technology will provide humanity with the most intimate and authentic feelings.
Therefore, with the metaverse, we can experience exploring the universe closest to reality at a lower cost while waiting to overcome obstacles.
Moreover, with the unlimited creative capabilities in the metaverse, humanity will gain more inspiration for inventions that transcend reality.
In the current context of the COVID-19 pandemic, as countries implement social distancing policies, the metaverse has become an ideal place for us to communicate with each other in the most authentic way.
The potential of the metaverse
How large is the scale of the metaverse?
With the grand vision of building a parallel world alongside reality, we can imagine how large this market will develop.
Currently, statistics show that as of the end of 2020, the total global assets have reached $418.3 trillion, which can be said to be a massive market with significant room for future development.
However, this is just a distant future, so what about the recent situation? According to LD Capital (a leading blockchain technology investment fund in China), the metaverse industry will consist of two main parts:
Hardware infrastructure: This includes industries that produce chips, electronic components, augmented reality devices, etc., which are key infrastructures that enhance the metaverse experience. According to research by The Business Research Company, this industry's global value reached approximately $862 billion in 2020, with an annual growth rate of 9.4%.
Metaverse content: This encompasses all platforms that allow users to engage and immerse themselves in the metaverse (mainly games). This category also includes social networks or sharing platforms, such as YouTube, TikTok, etc., but for the true metaverse, these platforms will be directly integrated with games. Currently, the estimated value of the industry is about $170 billion.
Therefore, although the Metaverse has not ultimately developed as expected, the current situation already possesses a value of several trillion dollars. Not to mention, with the popularity of augmented reality products, they will become a stronger foundation for the growth of the Metaverse gaming market.
Moreover, with the vision of the metaverse "transcending the universe," it may bring all non-physical assets into the metaverse, forming a truly parallel world (even potentially surpassing the real world), with the industry's scale possibly reaching trillions of dollars.
Applications of the metaverse
The metaverse not only provides entertainment experiences but also opens up many applications in various fields such as healthcare, education, manufacturing, and military.
For example, in the healthcare field, the metaverse can create a virtual environment to help doctors research and develop new treatments without requiring too many resources or posing risks to patients.
In the field of education, interactive virtual worlds can help students learn from masters, combining real case learning to make understanding easier and more vivid.
How do tech giants view the virtual universe Metaverse?
The metaverse's attention from resource-rich large companies is no coincidence; the goal of the metaverse is not just to meet daily needs but also a significant step towards creating a digital world parallel to the real world.
One of the earliest individuals to be interested in the metaverse was Facebook founder and CEO Mark Zuckerberg.
He shared the concept of the metaverse: "The mobile internet can now meet the various needs of many people from waking up to going to bed. So I think the main purpose of the metaverse is not to make people engage more in the internet, but to allow people to engage in the internet more naturally."
In line with this statement, Facebook invested in VR equipment by acquiring Oculus and even renamed the company to Meta, focusing on developing hardware infrastructure for the Metaverse.
In addition to Facebook, other large tech companies such as Google, Microsoft, and Sony have also entered the metaverse by establishing the XR Association, which aims to develop "experiential reality."
(Fortnite) game developer Epic Games CEO Tim Sweeney also shared his views on the Metaverse. He believes this is a very promising market and explained why Epic Games wants to develop (Fortnite) as part of the Metaverse.
Additionally, Tim Sweeney emphasized that the metaverse will not be a world created by just one company; it will encompass many applications and the possibilities for interaction between different worlds.
In the cryptocurrency market, Decentraland — a metaverse application, represented by Dave Carr. He emphasized the decentralized nature of the metaverse and believes that decentralization is essential for users to have ownership and creative freedom in the metaverse.
Why is blockchain the ideal place for developing the metaverse?
In fact, the metaverse can be built on various types of technologies, but in a world like the metaverse that values infinite creativity, interactivity, and decentralized freedom, blockchain seems to become one of the key technologies of this world.
I will explain the reasons below!
Blockchain - An important platform for the development of the metaverse
When we study the theory of the metaverse, we can see that blockchain technology will play a key role in building a truly metaverse.
As shown in Jon Radoff's infographic, the metaverse industry is attracting the participation of many leading tech companies, including hardware, software, blockchain, gaming, etc. Among them, the content layer — content and experiences — is viewed as the closest concept to the metaverse. However, current platforms like Google, Facebook, Fortnite, and Roblox still have some limitations:
Limited interaction between platforms: Users cannot move or exchange digital assets between different virtual worlds.
Digital assets do not truly belong to users: Virtual items in games may be lost due to policy changes or regulations.
Lack of personalization and ownership: Users do not have true ownership of their digital assets.
Here, blockchain technology has the following prominent characteristics:
Scalability: Modern blockchains such as Avalanche, Polkadot, and Cosmos have solved speed and scalability issues.
Interoperability: Through cross-chain technology, assets can be exchanged across different blockchains.
Ownership and privacy: Digital assets in the form of NFTs (non-fungible tokens) can help users have ownership and control over their assets.
Security: Blockchain technology provides high security for users' digital assets.
Moreover, the strong development of DeFi (Decentralized Finance) also serves as a simple and flexible digital economic system, supporting economic activities such as commodity trading, asset transfer, lending, and payments in the metaverse.
With the outstanding advantages of scalability, interactivity, ownership, and security, along with the development of the DeFi ecosystem, blockchain technology can indeed become a key platform for constructing a truly metaverse (a more creative, interactive, and personalized virtual world).
Key factors driving the development of the metaverse in the cryptocurrency field
To build a truly comprehensive metaverse in the field of encryption, three main components need to be combined:
Optimized blockchain platforms: These are the foundational layers. Blockchains with good scalability are needed, such as Polkadot, Avalanche, Cosmos, Solana, NEAR, Mina, etc. These blockchains will meet the performance and storage demands of the Metaverse.
Dapps serving the Metaverse: On top of blockchain platforms, decentralized applications (Dapps) serving various purposes of the Metaverse are needed:
Pure metaverse gaming platforms, such as Decentraland and The Sandbox.
DeFi applications for developing the metaverse economy, such as exchanges, lending services, payments, etc.
NFT applications build a digital asset system within the metaverse.
Cross-chain bridges: These are important factors for establishing connections and interactions between virtual worlds and the metaverse economy. Cross-chain technology will enable the exchange and conversion of digital assets across different blockchains.
Currently, despite significant progress, the above factors have not yet fully developed:
New blockchain platforms only partially address speed and scalability issues.
Dapps serving the Metaverse have not yet created experiences as engaging as traditional games.
Cross-chain technology still has many vulnerabilities, leading to frequent related hacking incidents.
Therefore, to develop the metaverse in the field of encryption, companies and developers need to continuously improve and refine these core elements. When these three elements are effectively combined, the metaverse will be able to break through and achieve significant growth.
Trends in the development of the metaverse
The metaverse - still a concept of the future
Although information technology is advancing rapidly, the metaverse is still just a future concept and has not yet reached the point of explosion.
The reasons for this assessment are as follows:
VR technology is still limited: Currently, the price of VR devices on the market is still relatively high, and their popularity is not sufficient; VR-related experiences are also not attractive enough, making developers hesitant about investing in this field.
The VR market size is still relatively small: According to estimates by Grand View Research, the size of the virtual reality market reached only about $22 billion in 2021 — a small number compared to future growth potential. However, the growth rate of this industry is expected to reach about 18% per year, with a projected size of $70 billion by 2028.
Preparing for the metaverse: Although VR hardware is a key factor for the metaverse, content development will also proceed simultaneously without waiting for VR to improve. Tech giants like Facebook, Epic Games, and Roblox have already begun to invest and prepare for the future of the metaverse.
In summary, the metaverse is still just a theoretical concept for the future and has not yet reached the point of explosion. However, with the participation of many large tech companies and advancements in VR technology, the metaverse is expected to become a highly promising industry in the future.
Investment opportunities in the metaverse ecosystem
With the development of blockchain technology, the metaverse is expected to become a vast and diverse virtual space in the future, so where are the investment opportunities in the metaverse?
Blockchain infrastructure platforms: The blockchain platform for the metaverse needs to have the following characteristics:
High scalability to meet a wide range of usage demands.
Low transaction costs, fast speeds, and high security.
Large storage capacity and unlimited creativity. For example: Solana, Mina, Avalanche, Polygon, Cosmos, NEAR, Flow, Theta, etc.
Dapps serving the metaverse
Platforms like Decentraland, and sandbox games of the Metaverse.
Open-world gaming platforms that allow for unlimited creativity.
NFT markets.
DeFi platforms, especially those that facilitate asset transfers between the real world and cryptocurrencies.
Cross-chain and interoperability applications: These are important platforms for connecting the metaverse ecosystem, such as:
Liquidity cross-chain applications.
Cross-chain NFT conversion and exchange.
However, it should be noted that the metaverse is still just a future concept and has not yet reached a strong explosive point. Current metaverse platforms like Sandbox and Decentraland are still not attractive enough.
Therefore, investors do not need to directly invest in metaverse projects but can look for opportunities in "small waves" when major tech giants release information about the metaverse. Only when the infrastructure and content of the metaverse become more complete will we witness the true explosion of the "blockchain metaverse."
Conclusion
Through this article, I have provided basic information about the metaverse and the potential development space of this industry worth trillions of dollars.
With the advancement of technology and the impact of the pandemic, the concept of the metaverse, which has existed for nearly thirty years, has recently become a hot topic. With the participation of major tech giants, we have reason to believe in the metaverse's tremendous potential.
It is worth noting that blockchain technology is expected to play a key role in the development of the metaverse. However, the metaverse is still a relatively new concept, and it will take more time and infrastructure to truly explode.
