The Metaverse is one of the hottest topics in business, but for something causing so much excitement and anticipation, it has had a dubious presence in our zeitgeist. Despite the sci-fi warning predictions from Neal Stephenson’s 1992 book, Snow Crash, Ernest Cline’s 2011 novel, Ready Player One, and The Matrix film franchise, nearly everyone agrees the metaverse is going to be big.
Morgan Stanley predicts the metaverse will be worth $8 trillion by 2030. Citibank believes that number will be closer to $13 trillion. Citi also believes the metaverse will have five billion users in less than a decade.
Different definitions exist, but the metaverse is commonly understood as an immersive alternate reality experienced by individuals and businesses using technology tools like virtual reality (VR) and augmented reality (AR) that open a third “dimension” for how humans connect online. Apple’s announcement of its Vision Pro headset was only the latest example of corporate adoption of these new tools. So far most of the major investments into VR and other immersive online experiences are happening inside big companies such as Facebook and Microsoft. However, to fulfill the promise of the metaverse, we need to look beyond the research and development labs of big-tech conglomerates and embrace a new digital tool kit being pioneered on technology’s next frontier: Web3.
Web3, the “read-write-own web,” is a decentralized Internet where individuals own their own identities and can securely trade assets like money, securities, intellectual property, art and data peer to peer. If the desktop computer was our gateway to Web1 and the smartphone our portal to Web2, virtual reality and augmented reality may be how we experience Web3.
In my new book, Web3: Charting the Internet’s Next Economic and Cultural Frontier, I explain how Web3 tools of digital property rights and self-sovereign identities are critical to building a metaverse where individuals come before platforms, and where people are endowed with many of the same rights online as offline: the right to property, privacy, autonomy and expression. Otherwise, the metaverse could end up dominated by the likes of Facebook, which see the metaverse as simply a new frontier for existing users, harvesting their data and perpetuating the same ad-based model that made them successful in the smartphone age.
“If we don’t have digital property rights, none of it matters,” says Yat Siu, a technologist and cofounder of Animoca Brands on the metaverse. Siu thinks of Meta and other corporate virtual worlds more as theme parks than real economies or societies. “Disneyland is fun, but you don’t have ownership. It’s meaningless except for those who own it. It means something for the people at Facebook. It means something for shareholders of Facebook. But it doesn’t mean anything to users. They’re just consuming it while it extracts their data.” So, what does a Web3 metaverse look like?
First: The economics of the metaverse must be accessible to everyone, rather than a model where all economic value accrues to a platform such as Meta.
Second: Users must have the ability to control their digital goods and identities, and facilitate private and efficient transactions within the metaverse.
Third: Through full ownership and control over their virtual assets, users can build wealth in some environments, like inside a video game, and take it somewhere else. This can also help to create a more sustainable metaverse, as users can invest in and maintain their digital assets for all time, rather than over the lifetime of a game release or software update from a big company.
Fourth: The Web3 metaverse must have sovereign identity where users control their own personal data and online identity (or identities, if they like). They can decide who gets to see what, when and where in the metaverse.
It is time to give the metaverse a second life—we can do that with Web3.
Alex Tapscott is an advisor focused on the impact of emerging technologies on business, society and government. His book, Web3: Charting the Internet’s Next Economic and Cultural Frontier, is available this month.