Explainer: What is the metaverse and why is everyone talking about it?

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Facebook, under fire from regulators and lawmakers over its business practices, is planning to rebrand itself with a new name that focuses on the metaverse, the Verge reported on Tuesday. The concept of the metaverse is quickly becoming a buzzword in technology and business. But what does it mean? Image Credit: Reuters

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WHAT IS THE METAVERSE? Metaverse is a broad term. It generally refers to shared virtual world environments which people can access via the internet. The term can refer to digital spaces which are made more lifelike by the use of virtual reality (VR) or augmented reality (AR). Some people also use the word metaverse to describe gaming worlds, in which users have a character that can walk around and interact with other players. There is also a specific type of metaverse which uses blockchain technology. In these, users can buy virtual land and other digital assets using cryptocurrencies. Many science fiction books and films are set in fully-fledged metaverses - alternative digital worlds which are indistinguishable from the real physical world. But this is still the stuff of fiction. Currently, most virtual spaces look more like the inside of a video game than real life. Image Credit: AFP

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WHY IS IT TAKING OFF? Fans of the metaverse see it as the next stage in the development of the internet. At the moment, people interact with each other online by going to websites such as social media platforms or using messaging applications. The idea of the metaverse is that it will create new online spaces in which people's interactions can be more multi-dimensional, where users are able to immerse themselves in digital content rather than simply viewing it. The accelerated interest in the metaverse can be seen as a result of the COVID-19 pandemic. As more people have started working and going to school remotely, there has been increased demand for ways to make online interaction more lifelike. Image Credit: Reuters

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WHO IS GETTING INVOLVED? The idea of the metaverse is attracting a lot of interest from investors and companies who are keen to be part of the next big thing. Facebook CEO Mark Zuckerberg said in July that the company will try to transition from being a social media company to a metaverse company in the next five years or so. Image Credit: AP

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The term is popular in Silicon Valley, with Microsoft also having mentioned converging the digital and physical worlds. The popular children's game Roblox, which had its New York Stock Exchange debut in March, describes itself as a metaverse company. Epic Games' Fortnite is also considered to be part of the metaverse. Musicians can do virtual concerts within these platforms. For example, in September millions of people watched the singer Ariana Grande virtually perform in Fortnite, Epic Games said. The world's biggest fashion companies have also experimented with making virtual clothing, which people's avatars can wear in metaverse environments. Image Credit: AP

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WHAT IS BLOCKCHAIN? A blockchain is a database that is shared across a network of computers. Once a record has been added to the chain it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks. Blockchain has been used to underpin cyber-currencies like bitcoin, but many other possible uses are emerging. Image Credit: Shutterstock

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WHAT ARE NON-FUNGIBLE TOKENS (NFTS)? Non-fungible tokens (NFTs) are a new type of virtual asset that have fuelled much of the growth in the metaverse. An NFT represents an intangible digital item such as an image, video, or in-game item. Owners of NFTs are recorded on blockchain, allowing an NFT to be traded as a stand-in for the digital asset it represents. The NFT market has surged during the pandemic with $2.5 billion in sales for the first half of 2021, compared with just $13.7 million a year ago. Some NFT enthusiasts see them as collectibles with intrinsic value because of their cultural significance, while others treat them as an investment, speculating on rising prices. A digital-only artwork "Everydays - The First 5000 Days" by American artist Mike Winkelmann, known as Beeple, was sold for nearly $70 million at Christie's in March in the first ever such sale by a major auction house. Image Credit: Reuters

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WHO ARE THE BIG PLAYERS? The metaverse can be broadly broken down into two distinct types of platforms. The first centres around building a blockchain-based metaverse, using NFTs and cryptocurrencies. Platforms like Decentraland and The Sandbox allow people to purchase virtual parcels of land and build their own environments. The second group uses the metaverse to refer to virtual worlds more generally, where people can meet up for business or recreation. Facebook announced in July it was creating a product team to work on the metaverse. Roblox, Fortnite and Minecraft, gaming platforms where users can compete and collaborate in games as well as create their own, fall into this category. Image Credit: Reuters

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BUYING INTO AND MAKING MONEY IN THE METAVERSE: While many metaverse platforms provide free accounts for people to join, people buying or trading virtual assets on blockchain-based platforms need to use cryptocurrencies. Several blockchain-based platforms require Ethereum-based crypto tokens, such as MANA for Decentraland and SAND for The Sandbox, to purchase and trade virtual assets. In Decentraland, users can trade NFT artworks or charge entry to a virtual exhibition or concert. They can also make money by trading land, prices of which have surged over the past few years. On Roblox, users can make money by charging other users for access to games they create. Image Credit: Shutterstock

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THE FUTURE OF THE METAVERSE: It is unclear to what extent a true metaverse, which fully replicates real life, is possible or how long it would take to develop. Many platforms in the blockchain-based metaverse are still developing Augmented Reality (AR) and Virtual Reality (VR) technology that will allow users to fully interact in the space. Accounting and advisory giant PwC forecasts VR and AR technologies to deliver a $1.5 trillion boost to the global economy by 2030, compared with $46.5 billion in 2019. Big tech firms are jumping into the space, with Facebook, Alphabet Inc-owned Google and Microsoft Corp investing in cloud computing and VR companies in anticipation of its growth. Image Credit: Reuters

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