The Metaverse: And How It Will Revolutionize Everything

by Matthew Ball

A “corporate internet” is the current expectation for the Metaverse. The internet’s nonprofit nature and early history stem from the fact that government research labs and universities were effectively the only institutions with the computational talent, resources, and ambitions to build a “network of networks,” and few in the for-profit sector understood its commercial potential. None of this is true when it comes to the Metaverse. Instead, it is being pioneered and built by private businesses, for the explicit purpose of commerce, data collection, advertising, and the sale of virtual products.

Here, then, is what I mean when I write and speak about the Metaverse: “A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”

Even if new standards are agreed upon and improved, developers will need code that can properly interpret, modify, and approve third-party virtual goods. If Call of Duty wants to import an avatar from Fortnite, it will likely want to restyle the avatar to fit Call of Duty’s gritty realism. To this end, it might want to reject those that cannot make sense in its virtual world, such as Fortnite’s famous Peely skin, a giant anthropomorphic banana (which probably can’t fit inside Call of Duty’s cars or doorframes).

The process of standardization is complicated, messy, and long. It is really a business and human problem masquerading as a technological one. Standards, unlike the laws of physics, are established through consensus, not discovery. Forming consensus often requires concessions that leave no party happy, which can then result in “forks” as different factions break off. Still, the process is never over. New standards are constantly emerging, with old ones updated and sometimes deprecated (we are slowly moving away from GIF). That the 3D standardization process is beginning decades after virtual worlds first emerged, and with trillions of dollars at stake, will make this even harder.

Accordingly, the driving force behind interoperability is unlikely to be a given visionary voice or newly introduced technology, but instead will be economics. And the means of leveraging economics to the greatest degree will be common standards that will enhance the Metaverse economy by attracting more users and more developers, which will lead to better experiences, which in turn will be cheaper to make and more profitable to operate, thereby driving greater investment. It isn’t necessary for all parties to embrace common standards, so long as economic gravity is allowed to do its work. Those who do will grow and those who don’t will face constraints.

In combination, the “meta” and “verse” is intended to be a unifying layer that sits above and across all individual, computer generated “universes,” as well as the real world, just as the universe contains, by some estimates, 70 quintillion planets.

The Metaverse will only become “the Metaverse” if it can support a large number of users experiencing the same event, at the same time, and in the same place, without making substantial concessions in user functionality, world interactivity, persistence, rendering quality, and so on.

So now we understand my definition of the Metaverse: “A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”

Some envision smart contracts as the Metaverse-era version of the LLC (limited liability corporation) or 501(c)(3) (nonprofit organization). A smart contract can be written and instantaneously funded, with no need for participants to sign documents, perform credit checks, confirm payments or assign bank account access, hire lawyers, or even know the identities of the other participants. What’s more, the smart contract “trustlessly” manages much of the administrative work for the organization on an ongoing basis, including the assignment of ownership rights, calculation of votes on bylaws, distribution of payments, and so on. These organizations are typically called “Decentralized Autonomous Organizations,” or “DAOs.”

There are still numerous obstacles facing a potential blockchain revolution. Most notably, blockchain remains too expensive and slow. For this reason the majority of “blockchain games” and “blockchain experiences” are still running mostly on non-blockchain databases. As a result, they are not truly decentralized.

In most countries and US states, DAOs and smart contracts are not legally recognized. This is beginning to change, but legal recognition is not a complete solution.

How much of the blockchain remains hype versus how much is (potential) reality remains uncertain—not unlike the current state of the Metaverse. However, one of the central lessons of the computing era is that the platforms that best serve developers and users will win. Blockchains have a long way to go, but many see their immutability and transparency as the best way to ensure the interests of these two constituencies remain prioritized as the Metaverse economy grows.

The expansion into industry will be slow. The technical requirements for simulation fidelity and flexibility are much higher than in games or film, while success ultimately depends on reeducating employees who have been trained around now-legacy software solutions and business processes. And to start, most “Metaverse investments” will be premised upon hypotheses, rather than best practices—meaning investments will be constrained and the profits often disappointing. But eventually, and with the current internet, much of the Metaverse and its revenues will exist and occur out of sight from the average consumer.

If the Metaverse is, say, 10% of digital by 2032, and digital’s share of the world economy grows from 20% to 25% over that time, and the world economy continues to grow at an average of 2.5%, then in a decade, the Metaverse economy would be worth $3.65 trillion annually. This figure would also indicate that the Metaverse constituted a quarter of the growth in the digital economy since 2022, and nearly 10% of real GDP growth over that same time (much of the rest would stem from population increases and shifting consumer habits, such as buying more cars, consuming more water, and so on). At 15% of the digital economy, the Metaverse would be $5.45 trillion annually, a third of digital’s growth, and 13% of the world economy’s growth. At 20%, it would be $7.25 trillion, half, and one-sixth. Some imagine the Metaverse might be as much as 30% of the digital economy of 2032.

The Metaverse will further redefine the nature of work and labor markets. Right now, the majority of offshored jobs are menial and audio-only, such as technical support and bill collection. The gig economy, meanwhile, often takes place in person, but is not altogether dissimilar: ridesharing, housecleaning, dog walking. This will change as virtual worlds, volumetric displays, live-motion capture, and haptic sensors improve. A blackjack dealer need not live anywhere near Las Vegas, or even in the United States, to work at a casino’s virtual twin. The world’s best tutors (and sex workers) will program and then participate in hourly experiences. A retail store employee might “call in” from thousands of miles away—and be better off for it. Rather than wander the store waiting for a customer, they’ll come when a customer consultation is needed and, through tracking and projection cameras, they will be able to counsel on where, say, alternative sizes or tailoring might help.