Discovering the Metaverse Economy: 6 Virtual Realities
As the world dances and weaves to figure out the mysterious metaverse, most high school students – self-proclaimed digital natives and gamers for life – have already been there and back many times. Fortnite, Unity, Roblox, Pokemon Go, the list goes on of metaverse experiences that mimic lifestyles and environments inside the digital domain.
The Stevens Center for Innovation in Finance at the Wharton School of the University of Pennsylvania, describes the metaverse as “a unified and interoperable virtual space where users can interact with each other and the 3D digital environment through technology.” Rather than a flat-screen, two-dimensional experience, the metaverse is three-dimensional and multisensory, and therefore more immersive.
$13 Trillion by 2030
These days, the metaverse is evolving into an entire economy, a new digital age of business that is giving life to startups and driving opportunities for companies to create immersive experiences for customers, employees and other stakeholders. Citi analysts estimate that the metaverse will have a total market of up to $13 trillion by 2030, with 5 billion users.
“Building the metaverse using blockchain technology is a chance to get right what the internet got wrong, such as user privacy, data protection, trustless transactions, and unchangeable record keeping.” – Rhett Rumery, Blockchains, Inc.
In 2022, the Wharton School of the University of Pennsylvania launched “Business in the Metaverse,” the Ivy League’s first executive certification program in the metaverse (Wharton uses its own metaverse for the program, with help from Metaverse Enterprise Research Association).
Kevin Werbach, chair of Wharton’s Department of Legal Studies and Business Ethics and an expert in blockchain technology, is the program’s academic director. He describes the metaverse as a broad concept that is unfolding in many different ways, telling Penn Today, “Manufacturers are already using augmented reality (AR) to improve process efficiency; remote workers are using virtual reality (VR) to conduct meetings and collaborate; brands are using virtual worlds and non-fungible tokens (NFTs) to reach consumers and build communities. These use cases represent the tip of the iceberg for what metaverse technologies could enable over the coming years.”
‘Everything We Know About Life Is About to Change’
Wharton Global Youth is continually exploring this brave new world of business, like how established companies can use the metaverse to enhance their brand and reach new audiences. Meanwhile, we sought out the practitioner perspective, connecting with Wharton alumnus Scott “Art” Bobrow (W’86), co-founder at FutureTechLive!, a metaverse platform that was acquired in March by Blockchains, Inc., to kick off our conversation about the metaverse economy.
Bobrow put us in touch with his new colleague Rhett Rumery, senior vice president of business strategy for Blockchains, Inc., which helps companies make safe and secure entry into Web3. Rumery says, “Everything we know about life is about to change: how we work, shop, game, and socialize, because instead of being “on” the internet, we begin to be “in” the internet.” He shared 6 important truths about life inside the metaverse economy:
1️⃣ The metaverse represents the next iteration of the internet (Web3!) where participants will engage and interact online in entirely different and immersive ways, says Rumery. He describes it as “an expansive network of digital spaces and marketplaces comprised of users who utilize augmented reality, virtual reality, and other screens to interact with other participants — a network that supports the continuity of identity, objects, reputations, payments, and entitlements and can be experienced synchronously by an unlimited number of users, each with an individual sense of presence and experience.”
2️⃣ COVID-19 accelerated the move to metaverse. “We were forced to find new ways to interact socially, professionally, and personally, which [amplified] the physical convergence with the digital world,” observes Rumery. “We placed more value on what we saw digitally and found in-game economies to earn money while being on lockdown. The metaverse acts as an additional layer on top of where we are today, with no limitations of the real world.”
3️⃣ The metaverse is very young, and the economic activity inside this space will take it to the next level. “The metaverse economy could be defined as the economic activities resulting from connections, interactions, transactions, and data generated within these virtual world experiences between people, entities, and devices,” notes Rumery. “The metaverse remains in its infancy; however, the metaverse economy will make it easier to quickly move value, even at a small scale, and enable new methods of generating value based on better use of the data and assets its participants create and control.” In other words, the metaverse economy will grow to bridge virtual and real-life data and drive innovation that can generate value in new and unexpected ways.
4️⃣ Blockchain will likely form the foundation of the metaverse, supported by a culture of openness and computers and systems exchanging and making use of information. Many see the growing economic landscape as a decentralized metaverse. “A blockchain-based metaverse fundamentally builds on the values blockchain technology was founded on, including permissionless access, censorship resistance, security and decentralization,” says Rumery.
5️⃣ Tech giants are pouring billions of dollars into the metaverse as they position themselves for double-digit growth and profits in the next three-to-five years. “Whether we like it or not, major corporations will play a significant role in how the metaverse will evolve,” suggests Rumery. “Companies like Meta want to provide the ‘building blocks’ to enter the metaverse to maintain centralized control and monetization over their users’ identities and data.”
6️⃣ Prepare for a more personalized internet. “Building the metaverse using blockchain technology is a chance to get right what the internet got wrong, such as user privacy, data protection, trustless transactions, and unchangeable record keeping,” notes Rumery. “If digital identity is designed in such a way that it’s owned by the individual, and all the layers built around it are interoperable, that identity can move and be trusted in each of these new platforms that are being created on top of that identity. The individual can create their own world within the metaverse, and they can customize the experience others have with it and with them because they are in control of their information, assets and data.”
Conversation Starters
What is the metaverse economy? Use examples from the article to explain how it is changing the way people do business.
Do you believe that the metaverse will ultimately become decentralized, giving you, the individual, more control over your information, assets and data? What are the opportunities? The challenges?
How do you interact with the metaverse economy? Give some examples of your experience in Web3 and how you see this as revolutionary. Share your story in the comment section of this article.
In the article “Discovering the Metaverse Economy: 6 Virtual Realities” a quote caught my attention: “Everything we know about life is about to change: how we work, shop, game, and socialize, because instead of being “on” the internet, we begin to be “in” the internet.” The quote suggests that our lives are on the verge of a major shift, where the internet will not only be something we connect to but will become an integral part of our daily existence.
Simultaneously, this quote reminds me of a bigger idea behind it, whereas the only thing that is constant is that things keep changing. This demonstrates that change is an essential characteristic of the natural world and human society. Even from the tiniest subatomic particles to galaxies in the vast universe, they’re all subjected to continuous transformation. As the internet envelops and changes various aspects of our daily life, people are expected to change with it. We are expected to embrace the internet, and even more, live on it. But I sometimes wonder, what about the people that are left behind?
Change goes quickly and thoroughly. We’re celebrating its swiftness, but at the same time, there are portions of people who didn’t catch the evolution. According to TechCrunch, one-third of adults ages 65 and older say they’ve never used the internet.(Woah) This phenomenon reminds me of a quote by Stewart Brand, “Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road.” Whereas if you fail to catch up with the development of technology, you’re meant to be rolled over.
From my personal experience, my grandparents were the people being left out. They’ve no experience with technology. Moreover, they live in China, where mostly all the purchases are to be completed online instead of cash. Fortunately, my parents helped them and eventually taught them how to use technology. However, there are a great number of older adults who are being ‘steamrolled’ and taken advantage of. Through the process of people gradually increasing their connection with the internet, we also have to help the older generation to catch up with this trend.
However, despite some of the downsides of the development of being “in” the internet, the benefits seem to outweigh them. The internet makes our lives way more convenient and efficient in various ways. Therefore, people can get their work done at a faster speed than they were traditionally. Whereas for me, it provides me with access to a lot of information: the newest topic, physics diagrams, updates of video games, product discounts, virtual tours on Google Earth and so on. Additionally, information is not the only thing I get from the internet. The internet also benefits me in other ways. It makes communication easier for me. For example, if I ever miss my grandparents, I can always just give them a video call. Not only that, I myself like to play video games a lot; I have noticed that the quality and realness of the games are developing at an astonishing speed. A lot of games nowadays are so real you can even see the pores of the skin, like Resident Evil Village, Detroit: Become Human, and Cyberpunk 2077 all provide unique experiences for gamers to enjoy the visual feast.
I think the whole concept of developing to be “in” the internet is similar to the classic idea of ‘Frog in the Pot of Water.’ Which conveys the premise that if you put a frog into boiling water, it will jump out immediately. But if you put a frog into a pot of mild water while slowly increasing the temperature, it will not perceive the danger and get cooked to death eventually. Although the older generation were there before the internet began to develop, they did not notice the water (internet) heating up. Therefore, they’re now getting cooked in boiling water (also getting ‘steamrolled’). Ironically, we Gen Z are similar to the frogs that are born in boiling water. Instead of getting ‘rolled over’ by the internet, we embrace it. In the meantime, we notice the boiling temperature of the water, but instead of escaping from it, we use it to cook other things.
First of all, I chose the Discovering the Metaverse Economy: 6 Virtual Realities topic for this Round 4 because I was very inspired by this article, and there was a lot to say and a lot to know about AR and VR, and I got a lot of inspiration from the movie, and I related a lot to what Rumiri was saying and it was cool. Everything we know about life is about to change: how we work, shop, game, and socialize, because instead of being “on” the internet, we begin to be “in” the internet.”I was impressed by the article ‘Everything We Know About Life Is About to Change’ and it stuck with me, because what we see in movies and texts is becoming more and more real these days, and he shared 6 important truths about life inside the Metaverse economy, among which I liked one the most and it makes sense. The metaverse is very young, and the economic activity inside this space will take it to the next level. “The metaverse economy can be defined as the economic activity resulting from connections, interactions, transactions, and data generated within virtual world experiences between people, entities, and devices,” Rumery points out. According to Tommy”While the metaverse remains in its infancy, the metaverse economy will make it easier to move value quickly, even on a small scale, and will enable new ways to create value based on better use of the data and assets that participants create and control.” In other words, the metaverse economy will grow to drive innovation that can connect virtual and real data and create value in new and unexpected ways.
The metaverse economy allows people to surpass the physical limitations of space. Going through COVID-19, people started to interact with each other online and carry out important tasks without directly meeting others in person. The so-called “Untact” era opened thanks to Metaverse. Instead of considering the metaverse as a “cyber” world, people start to take things dealt with online as seriously as those that occur in reality and in person. These immersive and 3D experiences are operated by the blockchain marking the era of Web 3.
For the customers stepping into the evolving metaverse businesses, employers are committed to offering new experiences. The possibility of increased user numbers is estimating the profits that are getting reported. Estimated by the global metaverse market size value, it will be around USD 2,369,70 billion by 2033, with a participation growth rate of 38.31%. Furthermore, workers are likely to use virtual reality(VR) based on virtual reality compared to augmented reality(AR) because of the altered aspects we could try.
As I have attempted various metaverse games, I think society is approaching the technology we could easily learn by various age groups. These 3D spaces have common aspects: communicating and experiencing the converging world. Metaverse, which differentiates from the previous 2 dimensional Internet experiences, permits people to interact with each other in the three-dimensional world and supports socialization with physical identities through Web3 technology.
How safe is Metaverse in terms of the protection of personal data? Blockchain technology can potentially protect user privacy from AI-induced data collection through features like decentralized identity, encryption, and zero-knowledge proofs. Users can have more control over their data and identities and only share specific information when needed. Sensitive information can be encrypted so that only authorized parties can access it. Information can be validated without revealing private details. Blockchain’s decentralized and immutable data storage can also increase the security and privacy of AI systems.
However, it’s important to remember that no technology is completely safe from vulnerabilities and attacks. Instead of relying just on technology, the world has to agree on regulations because we are dealing with a borderless world in which people can join in with access of the Internet. It seems that many Southeast Asian countries are taking a lenient approach to cyber security and data collection whereas the US and EU enacted Executive Order on AI, GDPR (General Data Protection Regulation), and the AI Act. The whole world must keep up with similar levels of regulations in order to take a fair share of responsibilities in operating Metaverse and AI-led technology. Currently, Metaverse lacks privacy regulation, intrusive data collection, and users’ data rights. Meta desires to create the building block to hold control and monitor their users’ data and information that was shared inside the metaverse. The metaverse identities that people concealed will be maintained among the computer networks, later exposed from the codes. The issues of privacy arose more when it comes down to the blockchain which stores a list of information by users in the metaverse. Due to the sensitive data leaking, blockchains are still in early development requiring the addition of extra protections and permissions.
Indeed, the future lies in Metaverse in that it not only provides new innovations in the current Internet stage but also generates new revenues for people to take economic chances. With the merits of blockchain, Metaverse is expected to enrich people’s life experiences. Considering the fact that many of the youth population have already immersed themselves in the world of Metaverse, I am sure that it will be further utilized to extend our lives into a deeper area of the cyber world that has already been blended with the real world, adding more convenience and meaning to every activity that people are engaged in.