Web3 is what we call the blockchain-powered Internet, and it has welcomed a sea change. From the rebranding of major companies to completely new sub-economies. Tied into all of this is the idea of the “metaverse,” a term that everyone seems to use, but no one can quite define.
In marketing jargon, “metaverse” has come to mean one of two broad categories. It’s an alternate reality (virtual reality style, or accessed like a computer game using a screen) or literally any digital experience that connects people to each other in some way that represents a community.
As cryptocurrencies and non-fungible tokens (NFTs) took off in 2020/21, entire worlds were built around them. Decentraland
In most metaverse experiences, when you purchase an item (such as sunglasses for the character you’re experiencing the metaverse with), you receive that item as an NFT. Owning this is separate from the game, and the items you buy are tied specifically to your wallet (the account on the blockchain you used to purchase the NFT). If you’re not familiar with NFTs, think of them as digital-only collectibles.
So money, items, land, and experiences are all on the blockchain. But do they have to be?
In October 2000, Cartoon Network launched Cartoon Orbit. A website where users (mainly kids) can collect numbered and limited edition digital collectibles and display them on canvas to show their friends.1
In November 2004, the gaming phenomenon known as World of Warcraft appeared, popularizing a digital fantasy world complete with its own social structures and eventually more than 10 million users.two
Today, nearly 3 billion users are active on Facebook each month. 3
Each of these shows the viability of digital collectibles, virtual worlds, and online communities, but none of the three require blockchain technology to function.
The promise of weaving the blockchain into the metaverse is that it would enable decentralization.
Items purchased in one location may be moved with you to another experience or sold on a third-party marketplace. What you own would be yours, and not trapped inside the walled garden created by a specific company or brand. But is that what consumers want?
Web3 is still in the phase of a small town that does not yet have its first grocery store. People go to the butcher for meat and buy vegetables from the local farmer. It’s an experience that works well for enthusiastic early adopters, or those who really care about where their ingredients come from, but the mass market wants to get their food and go. Maybe even precooked.
As we see major metaverses come to market, like the one being developed by Meta (formerly Facebook), what will become apparent is that users care little for the technology behind the experiences they engage in. What matters is the value that is derived. from them. If a major tech player were to create a virtual or social experience that was independent in terms of purchases or transactions, it wouldn’t matter if it was powered by a blockchain, a database, or Google.
Blockchains offer a great opportunity for technical advancement, as redefining money, facilitate regulation, powering digital art, and more, but blockchain is really a separate concept from the metaverse. While they can live and be used together, it is doubtful that the success of either really depends on the other.