The Metaverse 2021: A CyberSpace Odyssey
The metaverse is a term that first appeared in 1992 in Neil Stevenson's novel Avalanche. In the novel, there is a VR space that resembles the real world. Everyone communicates and interacts the same way they would in person. The most important part is that both the digital and real worlds influence each other.
In Stevenson's fiction, the real world is chaotic, controlled by corporations, and the mafia. At the same time, the metaverse is a digital 3D reality that is fair to everyone. But what does all this have to do with 2021, the pandemic, cryptocurrencies, and political crises?
The last decade's social and economic changes have accelerated technological progress, especially in web and software development. Web 2.0 has been widely adopted by just about everyone on different continents, bringing to life:
- The emergence of social networks
- Self-published blogging
- "Tagging," linking, and embedding content into other content
- "Liking" features and social bookmarking
While Web 2.0 continues to blossom, we will see the rise of Web 3.0 — the trend that is mainly emerging from the fintech industry. It brought us Bitcoin, Ethereum, Solana and raised the social consciousness by introducing NFTs and metaverses.
Social networks, online gaming, and crypto economy phenomena like NFT and the rapid development of underlying technologies, triggered new ideas about the future of the internet. Recent experiments in finance, social networks, and communications brought the metaverse idea to the fore.
The rise of the metaverse concept
Mark Zuckerberg was not the first high-profile entrepreneur who spoke about the internet and virtual metaverses. Venture investor Matthew Ball has already created the most detailed definition of what a metaverse could be:
- Continuous existence. Almost nothing changes, pauses, or ends, so you can always expect a consistent experience
- It works in real-time but is independent of the real world and other external factors, like geopolitics, climate change, etc. However, developers and users can create their environmental aspects and schedule events in the metaverse
- Be synchronous - the life inside must take place autonomously and be a living experience in real-time for all participants
- Anyone can connect to the metaverse at any time and participate in its life on equal footing. The system has no restrictions on the number of users
- Have a full-fledged economy in which one can earn money, own, produce, and sell things. People and companies can receive some reward (analog of money) for "work" that delivers "value" recognized by others
- The metaverse connects the physical and digital worlds, open and closed platforms, private and public networks. It is a complete digital entity.
- Ensure data and digital assets are easily transferred between people and entities inside the system. For example, it should be possible to transfer your World of Warcraft gold to Bitcoin or use it to order pizza from Dominos.
Not only are Zuckerberg and Ball promoting the idea, the head of Microsoft, Satya Nadella, said that Microsoft Azure could already be considered a corporate metaverse. Azure already has a set of services that allow for mixing the digital and real worlds. It is possible to create digital copies of any objects, use the Internet of Things, and organize real-time remote work online.
Gaming companies such as Roblox or Epic Games are trying to build their own metaverses too. Gaming platforms, by default, act as a digital space where users can not only play but also communicate, work, socialize, and spend money online.
In April 2020, Epic Games brought rapper Travis Scott to Fortnite. The concert was simultaneously watched by 12 million gamers worldwide. A year later, EpicGames raised $1 billion to develop its metaverse.
There are also significantly smaller players, such as Bitski, who raised tens of millions of dollars for their NFT and metaverse projects.
The critical requirements for building a metaverse
Five critical principles allow online community platforms to become a metaverse:
- Community-first. Metaverse has to integrate the needs and requirements of its community
- High level of customization/flexibility. Metaverse makes every aspect of the experience unique for each community
- Multiplatform. Metaverse has to be available on multiple platforms
- Accessibility. Metaverse has to work, even on a weak internet connection and average hardware
- Property rights. Metaverse has to recognize and protect the rights of users on its property via both technical and legal means.
The first four requirements are pretty obvious and familiar to the internet. The last is more interesting. Let's examine it in greater detail.
Decentralized or user-friendly: what metaverse should you build?
While decentralization is highly desirable, the technology is not quite there yet.
Current solutions like IPFS or Arweave are still in their infancy. Yes, you can host your JPEG or text information there. But decentralized hosting has yet to grow to the point of allowing for a smooth user experience that would allow game-like environments to compete with modern games.
When it comes to property rights and the metaverse economy, blockchain is the best solution. Even 2-3 years ago, blockchain was still very slow. Still, with new kids now on the block, like Solana and L2 solutions, we can be sure to get smooth experience and operation. Also, metaverses should have an open economy and a secondary market. This way it is impossible to skip blockchain as it is the best way to handle transactions and resolve disputes.
Decentralization comes in stages, and while the community is still developing scalable decentralized hosting solutions, we need to focus on the user experience if we want to see something more than cute but simple Axie Infinity mechanics (despite the fact that it recently sold NFTs for $2 billion).
At Party.Space, we are sure that fully decentralized systems that are user-friendly, resilient, and self-sufficient are at least a few more years away. And they will emerge not around the technology that is available, but the use-cases for metaverses and the needs of the online communities.
In the end, we see the future of metaverses as semi-decentralized. And although the mechanics of the worlds would remain under centralized control, the blockchain-powered economy would be completely decentralized.
Social flex and NFTs
Most known NFT collections like Crypto Punks, Bored Ape Yacht Club, and Pudgy Penguins represent a collection of unique virtual collectibles – avatars. After they are purchased, they become the virtual identity of the owner.
Digital identities require a digital playground, a virtual world to be utilized. There are two approaches: build the world first and then integrate communities there, or start with the community and then bring it to the metaverse.
Humans are social creatures, and our existential need is to look for our "true identity." We are driven by stories and are inspired by them. We love to identify ourselves with the character of a book, movie, or novel.
Current social hype around NFTs is, on one level, a definitively speculative game. But for many ProFile Picture Non-Fungible Tokens (pfp), NFTs become a new digital identity that projects personal values and work as social signals. People want to create fictional characters and worlds and then flex with their pfp characters.
We see a pronounced tendency towards gamification of the most boring industries like finance and medicine. But these mechanics work both ways. While finance is gamified, games are getting financized. Add our intrinsic need to build social hierarchies, and you’ve arrived at the NFT phenomenon.
It's also clear that the pfp NFT reveals a new approach to the creation of metaverses. While the first metaverses like Decentraland built a world first and then anticipated users to fill in this world, the NFT community approached the process differently. Why not develop characters and a basic narrative first and then build the world and infrastructure around it?
Empty world problem and why we shouldn't ignore human dynamics
It's incredibly arrogant to ignore the natural dynamics of human behavior and try to create artificial habitats, hoping people will "buy it."
Remember decenralend.org? Exactly. It was an old blockchain project, one of the first metaverses. Decentraland built a gigantic world where they sold virtual land. In short, there is a lot of space and objects, but the world is almost empty. There is virtually no one inside. This problem is called the empty world problem.
The same happened in the real world in China. The government built multiple cities from scratch in the middle of nowhere. Now, these cities are empty without people and are called China ghost towns. While there are some signs of progress with China's ghost cities, this social experiment is considered a failure.
We propose a metaverse model, where a community of people should be formed first, and then the metaverse is constructed for it. If you have multiple communities and multiple metaverses, you can easily connect them in a single space.
Open-source software is an excellent example of a community that is built based on shared creation and contribution. The trend is clear: open-source software is growing and not slowing down any time soon. We cannot ignore the power of community.
But there's another trend in company management emerging right now — the decentralized autonomous organization (DAO). Most active members in the online community are involved with the company’s management and its crucial solutions on the product roadmap. The DAO makes it possible for an online group with members from anywhere in the world to pool capital and hard-code rules — entirely via software — for how that capital will be managed and deployed. The underlying blockchain then enforces those rules. Andreessen Horowitz recently invested in such a project called Syndicate.
As the market continues to shift from closed systems to open-sourced and from the individual level to the community level, when it comes to the metaverse, it's pretty clear that it has to be developed by the community for the community.
By definition, a metaverse consists of communities and is dead without them. So, do you really think one could artificially create a space that will form a community? We believe community spaces are built by communities, not the other way around.
Is it possible to build a community? And if so, how?
The most common online communities with built-in economies exist around crypto. NFTs show that people want to express themselves and define their social identity. While today's central place for these identities is social networks, we see how community-based art creates its own mediums.
For example, the Crypto Punks movie is on the way. Now it's time to create a space where that narrative can be expressed and develop this world.
There are six essential freedoms any online community has to offer to be successful:
- Share a common good or value
- Fight against a common enemy
- Play
- Trade
- Create (build a house, cook a meal, Minecraft)
- Destruct (riot, revolt)
The current trend shows that the gaming model would be one of the core functions in metaverses. That's if you add trading in there, of course.
While there is now a spike of interest in play-to-earn modeled games like Axie Infinity, it is obvious that the same model will be integrated with metaverses in the nearest future.
Then there’s the open-market strategy (where you can trade game items outside of game ecosystems at market places like OpenSea or Rarible) alongside the play-to-earn model.
Join metaverse worlds with Party.Space
Metaverse space is still new and the Party.Space R&D team is going to release its metaverse model soon. It will be built around mature online communities with a focus on retention and gaming mechanics.
We're building what's next in the metaverse by following the very same philosophy outlined in this article. We’ve learned a lot by creating virtual 3D spaces for enterprises and professional communities over the last two years. We believe we can disrupt how Web 3.0 operates and contribute to the development of the metaverse business model.
Stay tuned for more details in the following articles.
