Metaverse: The next digital-physical ecosystem slated to replace the Internet

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  Quantumrun Foresight
• November 18, 2021

The metaverse, a blend of human interfaces and complex online systems, is more than just virtual reality or cloud gaming - it's a fully developed, always-on digital economy. This new digital living space, which relies heavily on the interoperability of systems and data, is being heavily invested in by companies worldwide. Potential impacts include redefining the entertainment industry, empowering individuals and small businesses, and requiring new data privacy regulations and sustainable practices.

Metaverse context

The metaverse, as described by Matthew Ball, is a comprehensive blend of human interfaces and intricate online systems. It's not just a virtual reality (VR) or a cloud gaming platform, but a digital ecosystem that integrates these elements and more. This digital ecosystem is expected to be a fully developed economy that is always "on," meaning it cannot be simply turned off by a server. It's a new type of digital living space that combines various emerging technologies, providing an immersive experience based on VR technology and protecting users' digital content and assets through blockchain technology. 

The metaverse's functionality heavily relies on the interoperability of systems and data. This interoperability allows for the exchange of skins and avatars and the assignment of units of measurement for digital assets. Cross-chain technology is essential to realize the scalability and interoperability of blockchain. However, the current cross-chain technologies all have their own merits and demerits, and there is no cross-chain solution that can be fully applied to any scenario. 

Companies are investing heavily in developing the metaverse. In 2021, Facebook officially renamed itself to Meta, marking its strategic shift toward building the metaverse and related devices like VR headsets. Other companies are building their virtual worlds to test out the economic potential of the metaverse, including offering digital assets like clothes, skins, avatars, and even real estate.

Disruptive impact

The metaverse offers a layered value chain that presents numerous opportunities for private industries. The first layer, dematerialization of online experiences, could redefine the entertainment industry. Imagine attending a concert by your favorite artist from the comfort of your home, with no seating capacity limits and everyone having front-row seats. This feature could democratize access to high-demand events and also open up new revenue streams for artists and event organizers, who could sell unlimited virtual tickets and offer unique digital merchandise.

The second and third layers, discovery and the creator economy, could empower individuals and small businesses. With digital channels for discovery, businesses could reach potential customers worldwide, leveling the playing field for small enterprises. The creator economy, where anyone could produce content without needing to code, could democratize content creation, leading to an explosion of diverse content as more people are able to share their unique perspectives and talents. For example, an aspiring fashion designer could create and sell virtual clothing for avatars in the metaverse or a digital artist could create unique virtual environments for others to explore.

The remaining layers, spatial computing, decentralization, human interfaces, and infrastructure, could have profound impacts on how we interact with the digital world. Spatial computing could blur the lines between our online and offline lives. Decentralization of data and processes could give individuals more control over their digital identities and assets. Human interfaces, such as virtual and augmented reality glasses, could make our interactions with the digital world more immersive and intuitive.

Implications of the metaverse

Wider implications of the metaverse may include:

• Most work and social interactions being replicated in a virtual online medium. 


• Increasing hybridization between online and offline activities, such as concerts and sports events having both online and physical spectators.


• An increasing percentage of the global workers finding gainful employment creating digital products or providing digital services that are relevant/useful primarily within people’s lives and interactions within the metaverse. 


• Hardware and software companies reorienting their companies to produce offerings that serve the various market that the metaverse requires to function and grow.


• Western governments creating legislation around how people use the metaverse, while authoritarian governments limit access to the global metaverse or try to create walled-off, heavily surveilled, domestic versions of it.


• An increased demand for professionals skilled in virtual reality, augmented reality, and blockchain technologies.


• A new digital divide, with those lacking access to the necessary technology or internet connectivity being left out of these virtual spaces.


• Governments creating new regulations and policies to manage the metaverse, balancing the need for innovation with the protection of users' rights and privacy.


• The increased demand for energy to power servers and devices leading to increased carbon emissions, requiring more sustainable technologies and practices 

Questions to consider

• Would you be willing to participate in the metaverse? In what ways?


• How do you imagine metaverse materializing over the coming two decades?