Is the Metaverse the next big thing or a billion-dollar bust?

The Dutch were obsessed with tulips in the early 1600s for reasons that nobody understands today. In fact, demand for the blossom grew so irrationally exuberant, flower merchants began trading them at outrageously inflated prices, triggering the world’s first speculative bubble. At Tulip Mania’sHeight was the most important factor in determining how valuable a bulb is.

The market crashed in 1637. Fortunes were lost. Lives were lost. Some tulip investors even committed suicide, throwing themselves into Amsterdam’s canals.

Of course, there’s no comparison between what happened in Holland nearly 400 years ago and the current mania over the metaverse. The other involves mob hysteria causing speculators crazy amounts of money to invest on something with no discernible economic worth. The other was about tulips.

“Nobody knows what the metaverse is,”One tech executive confessed that he did. “But nobody wants to be the person who admits that they don’t know.”

Nobody Could know. Because the metaverse hasn’t been invented yet. Right now, it’s mostly a mix of marketing hype and wishful thinking, not so much a thing as an idea — or, rather, a haze of ideas floating in a cloud of aspirations. Nobody even knows if it will even end up getting built, at least in the way it’s being advertised.

Hollywood and Silicon Valley have been trying to get in on this brave new Internet, or Web3, for short. There are many companies like Disney, Microsoft and Snap, as well as moguls such as Bob Iger, who earlier this year Joined the Board of Genies, a virtual avatar startupIt is being developed by tens to millions of dollars of money from other companies, such as. Facebook is so gung-ho on the metaverse, it changed its name to Meta last year and is pumping more than $10 billion into building the infrastructure for what it’s claiming will be the next evolutionary leap for the internet.

Wall Street is saddling up for the gold rush, too, with one financial analysis group — Citi Global Insights, affiliated with Citibank — projecting that the metaverse could be worth By 2030, it could be as high as $13 trillion. “Gaming and social media companies are at the vanguard of metaverse development, but enterprises will lead the charge in the next three years,” the bullish report predicts, offering only the vaguest definition — “a convergence of several tech themes” — of what the darn thing might actually be.

The most anticipated tech book of the summer also promises a transformed world when it all comes in. Venture capitalist and metaverse champion Matthew Ball’s new tome, “The Metaverse: And How it Will Revolutionize Everything,” promises “trillions of dollars in new value―and the radical reshaping of society,”According to his Amazon Page.

We’d like to believe him. We would. But a tulip is a tulip is a tulip, even when it’s virtual.

“A digital twin of the real world”

“I’ll ask 75 people what the metaverse is, and I’ll get 75 different answers,”Kim Renard Nazel was a hip-hop pioneer and N.W.A. Kim Renard Nazel, the hip-hop pioneer and N.W.A. member, said that he has recently ventured into internet technology. He’s currently building a medical platform he hopes will someday connect doctors and patients in Web3. However, his 76th answer seems to have more to do metaphysics than the metaverse.

“The metaverse is everything,”He spoke cryptically. “It’s a digital twin of the real world.”

There are, however, other more practical and less obscure definitions.

Bill Gates is the founder of Microsoft. He believes the metaverse would allow workers from the near future to communicate. This kind of 3D Zoom meeting allows officemates to mix in virtual reality conference rooms.

“Within the next two or three years, I predict most virtual meetings will move from 2D camera image grids — which I call the ‘Hollywood Squares’ model, although I know that probably dates me — to the metaverse, a 3D space with digital avatars,” Gates posted a blog post in December last year. “The idea is that you will eventually use your avatar to meet with people in a virtual space that replicates the feeling of being in an actual room with them.”

Gates doesn’t elaborate on what the possible advantages of virtual offices might be, possibly because it’s hard to think of any. Zoom meetings are awkward enough without coworkers being portrayed as Jar-Jar Binks avatars.

Facebook founder Mark Zuckerberg has a similar, even more expansive — some would say fantastical — vision for the metaverse. “The next platform and medium will be even more immersive, an embodied internet where you’re in the experience, not just looking at it,” He said during his company’s rebranding presentation last October. “You’re going to be able to do almost anything you can imagine, get together with friends and family, work, learn, play, shop, create, as well as entirely new categories that don’t really fit how we think about computers or phones today.”

Of course, all of the above will require lots of futuristic tech — VR goggles, motion-capture gloves, massive processing power — some of which either already exists in primitive form (like Oculus headsets) or is in the process of being created (Meta is spending that $10 billion on constructing its own virtual-reality platform and equipment), or still remains firmly in the realm of fantasy land (that hologram in the promotional video that Zuckerberg played at Meta’s unveiling is still likely decades away).

However, Zuckerberg may not be able to create the “Ready Player One”-style online alternate universe he’s proposing, it’s still an open question whether people would actually visit it — let alone spend significant time there. One thing is for certain, who would want to wear virtual headsets for long periods of time? It is even possible to do it safely. Anybody who’s slipped into a pair of Oculus’ goggles for more than a few minutes can tell you that the technology still hasn’t licked the nausea problem. Then there’s the Wall Street Journal Recently, there was a spate of Oculus related medical issues that were more severe. Early adapters found themselves in emergency rooms with dislocated shoulders. Sore necks. Falling injuries. “gorilla arm syndrome,”This is caused by holding your arms up for long periods.

“Sure, you can put a TV on your nose [but] I’m not sure that makes you ‘in the metaverse,’”Elon Musk is skeptical Interview a few months after Zuckerberg announced Facebook’s Meta pivot. To be fair, Tesla mogul, who is averse to the idea of people, did not announce the Meta pivot. “strapping a frigging screen to their face all day and not wanting to ever leave,”He is not impartial observer. He’s working on his own sort of metaverse, through his brain-computer interface startup Neuralink. It’s not clear, however, whether people will be more inclined to have a chip implanted in their heads to surf the net.

What does this all mean for the internet’s evolutionary leap forward? Much of what Gates & Zuckerberg envision exists online, though in a less sophisticated, 2D format. “Roblox,” “Minecraft” “Fortnite”All offer virtual worlds that you can explore with no special equipment other than an iPad or laptop. These games are very popular and almost everyone plays them.

“I think everyone’s got a short-term memory, because this has already been done with Second Life,” said crypto marketing entrepreneur Mark Fidelman, referring to the internet’s very first virtual world, launched way back in 2003, in which players whiled away hours mingling together as avatars in what was then called cyberspace. “I haven’t seen anything that makes me feel like anything that’s coming out — including from Facebook — isn’t just a better Second Life. And maybe not even a better Second life. I have yet to see something I think is going to stick.”

Crypto, Blockchain, and Parcels – Oh my!

It’s easy to see how Zuckerberg got sucked into the metaverse. TikTok and other younger sites have been decreasing Facebook’s time. Apple’s privacy policies made it difficult for Facebook users to be tracked online. The company’s revenues have fallen and its stock prices tumbled since then. In a single day, $230 billion was lost in its value by Apple last February.

Zuckerberg desperately needs new revenue sources and sees the potential for gold in the metaverse. After all, all those future 3D avatars running around Horizon World — as he’s named Meta’s in-the-works virtual platform — are going to need a change of digital clothing and other upgrades, all of which Zuckerberg will be peddling at Horizon World’s virtual marketplace. You can think of in-app purchases as a cosmic scale.

Of course, Zuckerberg isn’t the only one who sees bitcoin in them thar hills. Many companies, large and small, are creating their own virtual world platforms that allow vendors to sell digital goods or set up digital outposts. Planet Hollywood recently announced that it has a Sandbox in partnershipOne of the metaverse startups is to create Meta Hollywood, which will allow users to access a virtual world called Meta Hollywood. “first-of-its-kind Hollywood backlot experience where they can interact and own assets in a dynamic virtual environment made possible by Web3 technology,”Its press release is full of praises. There’s been talk that Disney is considering buying up “parcels” — as virtual real estate in the metaverse is called — on one of the new platforms, presumably to build digital versions of theme parks where Disney can sell tickets for virtual rides.

In a perfect virtual world — the kind that so far only exists in the minds of metaverse boosters — people would “own”Their avatars can glide effortlessly through the air, jumping from one platform onto another. “decentralized”internet without corporate middlemen or boundaries. In the current online universe, most traffic flows through just six giant companies — Google, Amazon, Meta, Netflix, Microsoft and Apple — but metaverse evangelicals believe Web3 would blow up that model, shepherding in a new open-sourced era in which “communities”It would be the small tech that would manage the net and the walls would fall around it.

“We are very early in this transition,”Last year, Ball was noted CNBC interview. “Late in the 1990s and mid-2000s, many of the companies in the forefront of industry came from the last generation but very quickly they were turned out. We expect a similar transformation.”

It may be difficult to use Windows programs on a Mac, so the kumbaya vision for an interoperable, community-run metaverse might take some time. Also, it’s hard to fathom what sort of economic incentive even the most utopian Web3 platform — let alone ones run by last generation corporate behemoths like Meta — would have in allowing alien avatars into their proprietary realms.

For a moment, let’s forget about such questions. The real issue is the entire idea of “ownership”In the virtual world.

All these digital goods and services that people will supposedly be purchasing at Horizon’s marketplace and other digital dealerships will be made out of ones and zeroes. They won’t actually exist. Even more problematic, unless the evangelicals really are able to tear down the internet’s walls, these digital assets would be locked within the platform that generated them. Your property would be unrecognized by anyone outside of that platform. A digital dress could be purchased for your avatar in Horizon World, but you would end up naked once Meta Hollywood is opened.

For the metaverse to work the way its true believers are pitching it — as a borderless, decentralized, interoperable marketplace where anything that can be imagined can be rendered and sold — it would need a universally recognized and fully transparent system that kept track of who owns what throughout the virtual world, no matter where they bought it from. This is basically a gigantic ledger in the clouds.

It turns out that something similar is already in existence: Blockchain, a system that records transactions made with cryptocurrency. Blockchain could theoretically provide you with a receipt for that dress you purchased in Horizon World that would be recognized by all other competing virtual universes, allowing you to lug your digital belongings — as well as your singular avatar — with you as you ventured from platform to platform.

Blockchain is already being used to record proof of ownership for NFTs — non-fungible tokens — when collectors buy stuff like digital artworks. It is hard to believe that anyone would spend so much money. “own” a digital asset when an exact duplicate could be made by pressing a button is anybody’s guess. Bragging rights, perhaps? Too much money in their bank accounts? It is a common practice. Vignesh Sundaresan (also known as MetaKovan), a crypto investor based in Singapore, bought a digital art called “The First 5000 Days” A staggering $69.3 million. He can prove he’s the owner of it with his blockchain “key” — a sort of digital bill of sale — but here, you can have a copy, too. This one is absolutely free.

Experts remain positive about the prospects for widespread adoption of blockchain technology among consumers. “In five years, everyone will own some form of digital goods,”Jeff Hood, co-founder Metacrurio, is a creative studio that specializes in Web3 design. “This will become a reality much faster than most people imagine. Brands will all offer some type of digital good. Digital currency will start to replace physical currency in many governments. These are just realities.”

Okay, but another reality is emerging here on Earth. And in this one, using cryptocurrency as the foundation for the metaverse’s entire economic system makes about as much sense as building a house out of tulips. Because crypto is just as stable as flowers. Crypto is not supported by paper dollars, yens, francs, or rubles like other currencies. Instead, it is supported only by a non-human, decentralized algorithm that is completely unreliable.

Bitcoin, one the most popular digital dollars, saw its value rise to $1,099 last month. The record highs of 70% were nearly erased by the drop in the stock market.. The cryptocurrency Terra, also called a “stablecoin”Because it was directly connected to the U.S. dollars, it collapsed entirelyWhile Celsius was last month’s cryptocurrency lender in May, it was not there in May. All customer withdrawals were stopped. And that was just the latest in a series of dramatic downturns — or “crypto winters,” as aficionados call them — that have been wreaking havoc on cryptocurrency since it first started appearing on the scene in 2009.

“Bitcoin has no unique value at all,”No less a financial wizard Warren Buffett stated this not too long ago, using words like “mirage” “rat poison” and, yes, “tulips”To express his skepticism. “It’s a delusion, basically,”He stated. “It attracts charlatans.”

Bill Gates feels exactly the sameThe declaration of the currency as “unchangeable” was made just last month. “100% based on greater fool theory,”Refers to an original economic hypothesis proposed by P.T. Barnum used slightly blunter terms in Barnum’s 1800s speech: “There’s a sucker born every minute.”

On the other hand…

Newsweek published an article headlined “The dawn of the digital age” 27 years ago. “Why the Web Won’t Be Nirvana.” “The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works,”The magazine assured its readers. “How about electronic publishing? Try reading a book on a disc.”

Seventeen years later in 2012 Newsweek stopped publishing its magazine and became a digital-only publication.

The point here is, there’s a long history of journalists being terrible at prognosticating about the internet, so it’s entirely possible that the metaverse will prove its skeptics wrong. It was unimaginable that the web would be the transformative (and destructive) force that it is today that BBS message boards and search engines such as Mosaic were conceived three decades ago. Just because nobody today has a clue what the metaverse may grow up to become doesn’t necessarily mean it won’t turn out to be something fabulous.

Musk hedges his bets. “I don’t get it,”He spoke that in the interview last year following the unveiling of Meta by Zuckerberg. “But I don’t get it yet, let’s put it that way.”

This is Part 1 of a WrapPRO Special Series: The Metaverse UnWrapped.

Monday: How to Lose One Billion Dollars in Metaverse, and Other Mysteries of Web3 Gold Rush
Tuesday: Why are so many film producers excited about the metaverse? ‘Everybody’s Dream Can Come True’
Wednesday: Why VFX Companies Want To Create Your Metaverse-Realized Avatar
Thursday: Why businesses are grabbing real estate in the Metaverse
Friday: What You Need to Know about Buying and Renting Real Estate In the Metaverse

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