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Why is the Metaverse so significant?

Outside of all the current hype, It is important to be clear why the Metaverse is such a significant development for society. An in-depth examination of the 7 mains reasons and the implications.

Metaverse |
Why is the Metaverse so significant?

If you are new to the Metaverse, please see my introductory primer on the topic

A New Playing Field

In the last two decades, the internet has undeniably caused widespread disruption on a global scale.  The Metaverse represents the next evolution of human connectedness and its implications for society are even more significant. At its core, the Metaverse is a new playing field for humans to find purpose and expression.

For all the media attention around the topic, it is easy to get lost in the noise. However, it is vital to keep in mind the reasons why it's so significant, as the current design considerations being made will have lasting consequences as the space matures.

1. Identity & Bias

The metaverse raises many interesting questions about identity and how we choose to be represented visually via an Avatar (a graphical representation of a users character or persona).

No longer are we bound by our own physical bodies influencing others perceptions and biases towards us.

By deciding how to represent ourselves to others, we are free of the constraints of being judged by our gender, age, physical ability or race. Therefore this leaves only our actions and reputation to influence others decisions about us.  

In the current online world, it is predominantly only our voice that is left to infer something about their physical characteristics. Technology already presents ways to alter this, and is likely to only become easier in the future.

2. Emotionally Real  

One of the defining characteristics of the Metaverse is its persistent nature, which means that participants are playing an 'infinite game'. Just like in the real world, actions cannot be unwound.

Humans will naturally continue to care about the same factors that we do in the real world (social standing, community, reputation, status, wealth etc). As a result, our decisions create emotional responses given their lasting implications on our digital lives.  

Further to this, we already have an initial blurring of lines between the digital and physical world. This trend is only likely to accelerate in the future. It is not hard to envision a scenario where your digital reputation and assets grants you access to physical spaces and services in the future.

Non-Fungible Tokens (NFTs) are already being used to represent physical items, houses, and community membership.

As we are all aware. one of the most emotional inducing factors we have in modern society is wealth (money and assets), or lack of.

In the history of the internet, proving ownership of digital assets has always been a challenging task. Many platforms also adopt a closed model, making it impossible to transfer digital assets, or at best make it a friction-filled process. This clear limitation created a natural barrier to valuing digital assets as highly.

NFT's have created a mechanism to fundamentally change this. While I believe there are still some shortcomings in their current design and implementation, (more to follow on this topic), it is undeniable that we are witnessing a seismic shift in people's attitudes around ownership of digital assets. As this space matures, we will see the proportion of an individuals wealth held in digital assets grow (this is already obvious in the generation that was born in the digitally native world).

3. Social Presence & Emotional Communication

Humans have a basic need for connection and community. It is a factor that has shaped how we organise as a society, and research has shown that it is essential to every aspect of our mental and physical health.

The internet facilitated people to find and build communities, unrestricted by geographic limitations.  This had a profound impact on those with niche interests and in remote locations, by enabling people to find their tribe.

However, while this fostered community and some sense of belonging, one thing that was missing from this iteration, was the feeling of social presence. The era of mass remote work (accelerated by Covid-19) has made this problem very real.  Zoom, Slack etc, do not provide the feeling of presence with co-workers, resulting in a feeling of human isolation.

Alongside this issue, the majority of platforms that utilise avatars do not have any form of face and eye tracking. Humans are wired to pick up on subtle changes in expression and body movement to signal emotion and context.  This is a limitation of the majority of current communication technology, although we are starting to see early signs of this being integrated into VR headsets.

Face and Eye Tracking in Virtual Reality with HTC and Neo's VR

The Metaverse (via its enabling technology) provides a spatially aware environment, fulfilling the need to feel the presence of others around us and pick up on subtle emotional cues.

The implications of these combined points are profound.

We are no longer bound by physical constraints and a necessity to be in a specific geolocation.

The internet today has only facilitated a limited subset of roles that can be done fully remote. The Metaverse will naturally extend this significantly further.

Urban cities historically offered the most access to economic benefits and relevant networks.  As a result, labour and talent gravitated towards these environments. Scarce geographic resources led to urban crowding and rising living costs, which in turn became exclusionary to many.

If we truly removed the need to be in a certain geographic location it enables society to make decisions on where to live for the best quality of life (we are starting to see early signs of this). Thus, increasing overall living standards and reduced strain on urban resources.

4. Safety & Access

Public figures (celebrities, politicians etc) and those who are vulnerable (elderly, disabled etc) have to be cautious of putting themselves into situations that arise concern on personal safety. At best this creates friction for access, or at worst, creates a desire to avoid situations altogether.

The Metaverse enables a forum where these issues can be removed, while still enabling social presence. This will enable more personal freedoms and increase individuals access.

5. Globally Accessible Digital Economy

The internet enabled a new level of global commerce. Yet despite this transformation, its commercial benefits were primarily only bestowed on those with a particular skill set.  The place you are born still remains a limitation on your ability to fully interact and find economic opportunities.  

The Metaverse is a further step in eroding these geographic limitations (conditional on you having the technological means to access the Metaverse) and enables greater opportunity for anyone in the world to be engaged in employment.

At its core, the Metaverse is a new playing field for humans to find purpose and expression.

On a macro level, this is an important development.  Technical innovation has repeatedly created fear of human redundancy (ATM machines, Personal computers etc), yet what we observe through history is a positive repurposing of human labour to more productive tasks.

Yet the pace of technology innovation that is currently taking place in automation does present a large and potentially painful adjustment period ahead for the many employed in manual labour.

This is most glaringly obvious in the example of self-driving vehicles which continues to edge closer to reality. The transport industry alone accounts for 9.1% of US employment.  

This is before even touching on the subject of robotics & AGI and their future impact on manufacturing, logistics and customer service.

Boston Robotics - Parkour demonstration of humanlike capabilities of machines

The scale of the number of jobs involved in manual labour roles involved in this transition will likely present many social challenges and coincide with significant political questions around the organisation of society in the years ahead.

While it is impossible to know the exact outlet for the repurposing of this labour, the Metaverse does offer a clear new frontier for human purpose and expression.

It is logical to assume that many new forms of employment will arise in the Metaverse that we currently cannot imagine.  We are already seeing early signs of paying jobs emerge in virtual worlds, let alone the numerous employment opportunities currently offered by Decentralised Autonomous Organisations (DAOs).  

Employment in the Metaverse - Decentraland's Casino

6. Creativity Free of Constraints

In real life, we are bound by endless constraints. Most notably the laws of physics and scarce commodity resources (which impact price) impose natural limits on the bounds of creativity and expression.  

The early iterations of many parts of the Metaverse will likely bare some resemblance to parts of our current reality (see Daniel Gross essay).

Over time though, our collective thinking will adapt to embrace the freeing of these constraints and foster new forms of creativity and expression.
Museum of Other Realities - Creativity in Virtual Spaces

We are all acutely aware of the scarcity of physical space in real life. It restricts access (via cost or lack of availability), maximum capacity, and the time an experience can be on offer. In a virtual world, these issues are no longer relevant.

Virtual space is abundant; The only constraint being storage and compute costs, which are minimal. Even these costs can be removed by design if desired (read more here). Virtual experiences can be accessed long after an event took place. Virtual spaces can be designed for the optimum experience, not the physical confines of what is available.

7. Environmental Benefits

Our current economic model places large demands on commodity resources. The world is starting to wake up to the pressing environmental challenges it faces.

As society shifts to spending more time in the Metaverse, the demands placed on some scarce physical resources should naturally ease.

This potential is most readily visualised with transport which currently consumes a large amount of energy (plus creates unwanted emissions) and human time. The Metaverse will naturally reduce the necessity for travel for meetings and experiences.  

Another great example is the digital fashion movement. As its adoption grows it will reduce the industry's environmental impact, offer consumers quicker production times and generate greater forms of creativity that are freed from the laws of physics.

The world's first digital dress on the blockchain, designed by The Fabricant x DapperLabs

Metaverse - Long Term Design Implications

While there will always be dystopian visions of the Metaverse that occupy popular culture and feed the natural human fear of change, it should hopefully be obvious that there are substantial benefits on offer for the future.

The truth is, it is impossible to know with any certainty what the future of the Metaverse will look like, and how it will operate. The end creation will likely not resemble the visions many see today.

However, it is imperative that any person or company, who are contributing to making this future a reality, should clearly keep in their mind the potential implications of their design choices on future society.

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Matthew Scott Jones

Matthew Scott Jones

Founder & Macro Investor. Focused on the emergence of the Open Metaverse, XR: VR AR, digital asset innovation and global investment trends

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