Are The Metaverse And Web3 Still Relevant?
Generative AI, ChatGPT, Dall-E – it seems everyone’s so excited about AI at the moment that they’ve forgotten all about the hot technology trends of just a short while back.
This is the nature of the “hype cycle” that those of us who follow the latest developments in technology have become very accustomed to. New ideas get a lot of attention – not always of the right sort – then the excitement dies off when something even newer emerges. But does that mean that they’re dead and forgotten?
It's certainly true that fewer people are talking about the metaverse and web3 these days. Meta (formerly Facebook) has found its virtual reality and 3D world products have been a harder sell than they might have first anticipated. The value of cryptocurrency and NFT markets have crashed. And big players like IBM are said to be scaling back investment in enterprise blockchain projects that were originally expected to bring big changes across many industries.
On the other hand, none of this means that those ideas are any less relevant and potentially valuable than when we first started talking about them several years back. People have short attention spans and crave immediate satisfaction, so we often get bored and move on once it becomes apparent that it may take some time for the truly valuable use cases to emerge. At the same time, new technologies promising big change always attract conmen, scammers, and get-rich-quick artists, who often see early adopters as easy marks. This can lead to us becoming jaded and feeling that new technologies may be more trouble than they are worth.
Before we jump into the question of whether these factors have brought the dreams of the metaverse and web3 to an end, let’s start with a quick refresher:
What are metaverse and web3?
These are two closely related but, in many ways, distinct concepts that promise to bring big changes to the way we use technology.
Metaverse is most usually used to refer to virtual, online, persistent environments where users can communicate and collaborate, play, socialize, work, shop, and create – anything we can do online now but in a more immersive, feature-rich environment.
Hundreds of global brands and businesses have already taken the leap into the metaverse, with companies like Nike, HSBC, and many other global names building their presence in existing virtual world platforms like Horizons (Meta) or Decentraland. A year or two back, a Google search for the term "metaverse" would bring up pages of stories about companies making a move into virtual worlds. Today – not so much!
Crucially, the concept of merging the real and virtual worlds is central to the metaverse. It isn’t just about games where users assume virtual identities and avatars to play games that have little or no impact on real life. Visiting a virtual bank branch in the metaverse would let you interact with real financial products, a metaverse retail outlet allows you to browse and try on real products, and users of a collaborative metaverse creative platform such as Nvidia’s Omniverse work together to bring real projects to life.
The term web3, meanwhile, refers to the whole ecosystem of the “distributed internet” – digital technologies that operate across networks of locations rather than being centralized on one server or within the control of one organization. Usually, this operates via blockchain – a distributed ledger technology that uses cryptographic keys to securely synchronize data across many different machines and servers.
This concept encompasses cryptocurrencies like Bitcoin, distributed computing platforms like Ethereum and the Smart Contracts that run on them, blockchain games like Axie Infinity, concepts such as non-fungible tokens (NFTS), the decentralized autonomous organization (DAO), and decentralized financial products and services (DeFi). It also includes virtual world platforms that are built on distributed technology – hence the crossover with the metaverse, and the many projects, such as Decentraland and Somnium Space, that span both tech trends.
So are they out-of-date now?
Both technologies certainly aren’t getting the attention they were a few years back. But this isn’t necessarily a sign that they are dead. In fact, it isn’t even necessarily a bad thing.
When technology trends are at a peak in the hype cycle, they inevitably attract the attention of those who are just interested in moving in on the current Big Thing in order to make money. This leads to bubbles (where projects or companies become vastly over-valued by comparison to the actual value they create), scams, and other unfortunate activities!
In the web3 world, the current most visible example of this is the recent collapse of FTX, one of the biggest cryptocurrency exchanges, and the owner’s indictment on a number of fraud charges.
Before that, we could point to the collapse of the NFT market, where thousands of blockchain-based tokens representing works of art and other digital assets sold for millions before crashing in price and becoming virtually worthless.
However, from the point of view of someone interested in implementing these technologies in order to generate real growth and change, this isn't necessarily a bad thing – although, of course, it's unfortunate and sad that people lose money.
Those who really believe in the potential of the technology can see it as burning away the bad, get-rich-quick use cases in order to ensure focus moves to the truly useful and valuable use cases.
It’s also likely to lead to greater regulation and oversight. Regardless of whatever libertarian principles are involved at the conceptual stage of many new technologies, this is often necessary in order for them to make the leap to becoming a viable part of mainstream society.
This is a belief that is shared by Chris Duffey, author of Decoding The Metaverse. He told me that he believes the first truly valuable use cases for the metaverse will emerge as the hype dies down, and most likely in fields such as healthcare or education.
Joining me on my webinar recently, he told me, "In healthcare, they are already wearing protective glasses … they might be wearing a headset for communicating during complex surgery … there’s already this affinity for hardware, and that’s where we can augment the current hardware or protective wear with more intelligent gear or headsets – that’s an example of how the metaverse will amplify current experiences in a more intelligent, immersive way, going forward.”
When the education sector gets its teeth into this technology, too, I believe we will start to see the potential of the metaverse concept extending beyond avatar-driven 3D novelty worlds. As well as bringing more immersive educational experiences - such as walking through ancient Rome or exploring what a future colony on Mars – it can make education more accessible to those living in parts of the world where traveling to school every day is difficult.
It's this concept of connection and immersion that's central to what the metaverse can deliver and why I, like Duffey, believe it's a trend that still has the potential to be truly transformative.
Another thing we agree on is that although we believe in the technology itself, neither of us particularly like the term "metaverse."
To me, it already means too many things to too many people, having been used to refer to everything from the next generation of social media to dystopian science fiction.
“We might call it something else – but the core characteristics are already being enacted, and they're not going to go away any time soon,” he tells me.
So when it does eventually get to the point that collaborative, immersive virtual environments that link to the real world are reshaping the way we live, work, and play, we might not necessarily refer to it as “the metaverse” anymore, and that wouldn’t be a bad thing. But it certainly doesn't mean that the concept of the metaverse is dead.
What about Web3?
As we’ve discussed already, web3 is different, although closely linked and related. There are some that believe that the negative baggage associated with it is just too heavy to ever shake off – the high environmental cost of many first-generation, proof-of-work blockchains, for example.
Another obstacle is the fact that the governments and international tech giants that currently hold ownership and custody of centralized technology platforms might resist the move to a decentralized utopia where individuals have true ownership of their online environments.
But nevertheless, I feel that the concept of decentralization will eventually lead to benefits. Healthcare, again, provides another example where it would be great if we finally had a secure way to take charge of our own patient and medical data, with cryptographic methods for granting and denying access to our personal data as and when we feel it necessary to do so.
So wrapping up the question I asked at the start of this article – are the metaverse and web3 still relevant? I feel that they certainly should be. Although other, more immediately gratifying technologies might be stealing the limelight right now, both of the concepts we’re discussing here still have a huge amount of potential to drive growth and transformation.
With the hype dying down and attention diverted, I think it’s a safe bet that we will see innovators building on the advances we have seen so far and the true value of these technologies becoming apparent over the course of the next few years. Just let’s stop calling them “metaverse” and “web3”!