Editor's note: As part of CoinDesk’s “Metaverse Week,” we asked a number of engineers, executives and experts to weigh in on the substantial issues raised by the crypto industry. In this roundtable discussion, they answer the question of how the metaverse will be integrated into the internet as we know it, and how that changes its economic incentives.
Answers touch on discussing the new business models that may emerge as well as how to make classic internet advertising more “tasteful.” Also, considering the time we already spend online, how might the metaverse change how we socialize, and what are the technical issues we may have to bear in mind?
This article is part of "Metaverse Week."
An open metaverse preempts bad business models
Here's a simple truth: The decentralized web, or Web 3, will exponentially grow during this decade – but it won't be until the next one that it will have an actual impact. Web 3 can genuinely change the identity, utility and equitable monetization models of the internet as we know it. When that day comes, the internet will mainly run through decentralized nodes and flex the potential of token economies.
In contrast, the archaic and centralized internet (Web 2) will remain controlled and manipulated by enterprises, tech billionaires and nation-states. Likely, the tech giants of today will integrate CBDCs [central bank digital currencies] and easily surveilled identity protocols over time.
See also: If Money Is Speech, CBDCs Should Be Tools for Freedom | Opinion
Only time will tell how tech will unfold, and Web 2 could also serve as a door for people and platforms to enter the open metaverse. In such a world, the historic manipulations and inequities of tech today – like business models based on exploiting free personal data of users – will be discredited and impossible to apply. Ultimately, the metaverse, and the promise of token economies, will fuel a plethora of different monetization approaches that haven't yet been possible. Let's continue learning and building.
– Irina Karagyaur, head of metaverse growth at Unique Network
Advertising done tastefully
Some traditional internet business models, like advertising, are likely to persist in the metaverse. However, with blockchain-adjacent technologies such as decentralized identity and zero-knowledge proofs (ZKP), one’s privacy can actually be preserved in the metaverse, if we construct the foundations just right. Nonetheless, leveraging these kinds of privacy and identity technologies, especially ZKPs, may come with the additional hurdle of poorer latency [because] the zero-knowledge proof itself can be computationally expensive to perform.
On the internet, recommendation engines are in real time, matching the viewer to the most relevant ad slot at a sub-second rate. Because ZKPs can add latency into the several seconds or minutes, companies will have to find clever solutions. In a decentralized metaverse, recommendation engines (which are not exclusively utilized for ads, I might point out, but also for pointing users towards new experiences, events or people) will actually compute recommendations while you’re out of view of the virtual banner in the geospatial environment or offline completely.
The result of this can be thoughtful recommendations for product, services or experiences that are catered to the individual, while preserving privacy rights and also, if ever requested, full transparency into why and how this recommendation engine decided to show me what it did. I believe these kinds of experiences are likely to emerge in the metaverse. While we may still rely on tried and tested business models of “yesteryear’s internet” to generate value for the infrastructure providers, we can do it with more class and taste.
– Joshua Tobkin, CEO of SupraOracles
Metaverse, meet DeFi
The metaverse is becoming one of the many places where people’s digital and IRL (in real life) identities are intersecting. As more social, gaming and financial organizations recognize the unique connection they can establish with their users via the metaverse, they will begin to shift into the metaverse, bringing their products and services there.
For decentralized finance, an industry that removes gatekeepers from economic tools, this will result in the creation of ways for users to transact with their crypto in the metaverse. This could potentially include sending tokens to friends, interacting with staking pools and more. Much of the excitement lies in what is possible, but hasn’t been done yet.
– Ryan Berkun, founder and CEO of Teller Finance
Finding your tribe
It’s human nature to long for community and connection. We form groups based on similar values, interests and experiences. The metaverse is just a new expression of our identity and will reflect the things people care about and want to associate with. There will be many metaverses that serve specific affinities.
Individuals will be able to transverse from one metaverse to another and bring with them their identity and assets (financial, data or otherwise). Sports lovers will be able to play games and share experiences with like-minded fans. Music aficionados will be able to discover and interact with emerging artists in a way not previously possible due to dispersed fan groups that made it hard to come together IRL. Fashion brands will be able to preview collections, gather feedback on new products and sell their wares in a personal way no longer limited by their geographic store footprint.
In many ways the internet has allowed each of us to “find our tribe” or the group of like-minded individuals who share the same values and interests. This creates a sense of belonging and feelings of being understood, which can be hugely beneficial to one's sense of self. It can also result in societal fractures and dangerous echo chambers if exposure to new ideas and ways of being is done away with entirely. We will need thoughtful innovation on how to solve for both connection and cross-pollination to ensure the health of our societies going forward.
– Tara Fung, co-founder of Co:Create and CEO of Gesso Labs
A public good
In a way, we have all already been living in the first iteration of the metaverse since the start of the [coronavirus] pandemic. Living on Zoom calls, establishing personal relationships with people that we have never met before and the normalization of being online exemplifies how embedded the “real” metaverse will be in our daily lives. Because the metaverse will act as a utility, in contrast to what’s being marketed by Facebook/Meta [FB], the metaverse will be categorized as a public good, just like access to the internet.
See also: Is 'Meta' Already Giving Up on the Metaverse? | Opinion
As is the case with using the internet, there will be vast benefits to be had but certain dangers that must be taken into consideration. This underscores the importance of having tools readily available that help users protect their privacy, improve security and resilience and remove the barriers of an antiquated username-password authentication process for a safe and user-friendly experience.
– John Jefferies, chief marketing officer of Blocknative
Interconnected, composable, collaborative
The term "metaverse" was coined by Neal Stephenson in his 1992 sci-fi novel, "Snow Crash." The book frames the metaverse as an immersive successor to the internet, one that’s not so different from the Oculus-connected version we know today. It explores anarcho-capitalist themes, where people eschew the U.S. dollar in favor of less regulated “electronic currencies,” and nation-states are “decentralized” and replaced by private agencies.
When Facebook rebranded to Meta last October, it was hard not to invoke some of Stephenson’s dystopian themes. Meta’s embrace of the metaverse is a clear indication of its future plans: to build an immersive, high-fidelity extension of the current web – i.e. a platform that’s shepherded and maintained by a few giant companies, fueled by ad-funded models for content and gaming and underpinned by Facebook’s existing social graph.
In contrast with Meta’s centrally-controlled metaverse, builders around the world are working together to develop the foundations of an alternative ecosystem: the hyperverse. Alternatively referred to as Web 3, the hyperverse is a progressively-decentralized web as well as an interconnected, composable, collaborative internet. It is a nonlinear digital space. It includes multimedia, community and financial protocols, and is underpinned by blockchain technology that acts as a permanent and permissionless shared infrastructure layer.
This movement represents a reconstruction of online power dynamics, one that redistributes ownership across a web of interconnected technology, media, and protocols. It has applications from audio, video, stories, art and games to tokenized incentive systems or programmable money.
New organizing models like DAOs (decentralized autonomous organizations) are emerging to support this evolution, realigning platform incentives toward building collective value. The goal is to re-open the internet using collaborative economics – through a mix of traditional entities paired with DAOs, through traditional incentives paired with tokenized models and through traditional technology paired with blockchain-enabled systems.
– Timshel, a core contributor to BitDAO
More from Metaverse Week:
Rather than letting players port weapons or powers between games, non-fungible tokens will more likely serve as building blocks for new games and virtual worlds.
Fundamentally, the "metaverse" is a game – but one with real consequences and opportunities.
The future possibilities of the metaverse are presumably limitless, but is there anything you can do in the metaverse right now?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.