Metaverse: Better understand its great potential

In a report on the metaverse sector, Coinshare delivers insightful insights into how the metaverse can transform society through breakthrough blockchain technology.

As with many web3 concepts, the meanings and interpretations of some language elements can remain ambiguous. Metaverse is one of those terms. It can mean many things. And users don’t always agree on the exact definition.

First of all, if we analyze the etymology of the word, metaverse is the reduction of goalwhich comes from the Greek and means “after, beyond”, and shed for the English universe. We understand this term to mean beyond the universes, something wider. It is in “The virtual samurai” by Neal Stephenson that we find this concept of the metaverse for the first time, in 1992, long before the creation of Bitcoin.

To give a general sense, the report tells us: Overall, we think it’s okay to try to create a global, user-owned, interoperable 3D virtual world built on top of the existing internet. To avoid confusion, Metaverse is not a game, nor an application, nor a store. It’s not just virtual reality. Nor is it a digital world or space. It won’t replace the internet and (probably) won’t completely consume our lives. »

This ambiguity around the idea of ​​the metaverse therefore affects the perception of investors and users of its possible uses and how it works.

There are more and more investors but with different views

The numbers transmitted by Coinshare are particularly impressive, the number of companies in the metaverse sector has increased by 20%, according to the compound annual growth rate (CAGR) since 2001 and recorded a rate of 293% per year in 2021 because of his explosion in popularity. ” This is likely due to the excitement around the opportunities and value that the metaverse can create. This led to larger funding rounds, an increase in the number of funds and the notional value of the capital deployed. There will be more than 455 companies in the metaverse in 2021, only 50 in 2018. Mark Zuckerberg continues to point to the metaverse as the opportunity of the century.

Regional Metaverse Fundraising Crunchbase
Source: Crunchbase, CoinShares, data available as of May 17, 2022 approx.

But this investment knows strong territorial differences. According to Coinshare, more than half of the companies in the metaverse sector are in North America, followed by 31% in Asia-Pacific, far behind we find the European Union with 14%, then 3% in the Gulf, despite the hard work. from Dubai seeking to change its place in Web3, and 2% in South America, the African continent is now off the radar.

Coinshare raised that this situation is very alarming and contrary to the mentality of web3, ” Global initiatives must balance metaverse development to avoid a landscape dominated by big technology. This will help reduce Web2-like behaviors, namely data mining and privacy issues. »

This geographical disparity is not the only problem around the expansion of metaverses.

Many problems for users and regulators

The first major obstacle to the development of the metaverse is the lack of cutting edge technology to exploit these digital worlds. The metaverse cannot be fully lived on a screen, therefore it is necessary to have virtual reality (VR) helmets, augmented reality (AR) glasses, as well as extended reality (XR) handheld devices. All of these tools are the future of the metaverse. But for now, they don’t offer an experience that’s intuitive and immersive enough to be widely adopted.

In addition, developments around the metaverse remain highly dependent on the cryptocurrency market. A big problem if you know the volatility of this market and the possible crashes it may suffer. It therefore affects the growth and continued development of metaverse projects.

A big concern in the US metaverse
Source: Morning Consult, CoinShares, data available as of May 18, 2022.
Disclaimer: Survey conducted from March 3 to 5, 2022 with sample
from a representative sample of 4,420 American adults.
unweighted margin of error of +/-1 percentage point. Due to rounding, the sum may not be
100% due to rounding.

At the heart of the metaverse is the ownership of NFTs. This market is also developing and it is still difficult to know what the real value of these digital items can be.

Although user ownership is an important feature, digital ownership is not guaranteed monetary value. Using blockchain technology, one can create a fixed number of NFTs that represent a virtual land. This is almost similar to the real world where you can increase the total physical supply of the land. But with a lot of trouble and money. Check out man-made land like the Palm Islands in Dubai. Scarcity does not always determine the value of a good. Necessity is what makes it. One can create a certain number of NFTs that represent a virtual land, using blockchain technology. Rarely has value in desirable areas – location, location, location. »

For regulators and users, the big challenge remains security and data management. Because, before arriving at a fully decentralized universe, the metaverse will go through several phases where web2 and centralization remain at all. In addition, hacks and bugs remain a danger to web3, with the example of 600 million stolen by Ronin Chain.

So we are at the beginning of the true metaverse. As when one wants to define a new world, a new concept, many questions arise. Despite the difficulties and obstacles ahead, the metaverse attracts many people. Thousands of stakeholders remain convinced that this new digital world with almost endless possibilities is changing our daily lives.. In the way we consume, work, live or socialize. The metaverse will be everywhere, so you can understand and master it quickly.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss anything important Cointribune!

Alexis Skate avatar

Alexis Patin

Observer of the monetary, economic and social revolution.

Leave a Reply

Your email address will not be published. Required fields are marked *