My latest column on the metaverse attracted a lot of attention on social media. Especially, I was asked by several readers, how can anyone look at the metaverse as a business opportunity. First and foremost, the usual disclaimer: this column is in no way advocating any sort of investment. It is meant to be an informative piece on current business development around this very new technology.
Recently you might have heard the news that Facebook has changed its name to Meta and you might be wondering why they are doing this. Maybe you are confused on what “meta” is or how it works. The name change due to Facebook creating their own metaverse: a digital world where users can do all sorts of things. For example: you can attend online digital concerts, like those held by Travis Scott, Post Malone, and coming up soon Justin Bieber.
The metaverse offers opportunities both to builders, and consumers. At the moment there are a handful of existing metaverses like Sandbox, and Decentraland. Inside the metaverses you can be whoever you want to be. If in your 9 to 5 job you work in an office, nothing stops you from be the entrepreneur managing a golf court in the metaverse in the evening. These metaverses accept token and cryptocurrencies as means of exchange. As such, they have their own currency that is traded on crypto exchanges. Right now their market performance overall negative, so probably it is not the best time to explore that.
There are also portfolio managers that have developed entire trading indexes around companies involved in the metaverse. Slightly counter-intuitively, hardware developers producing highly efficient graphic cards are benefiting from this new technology. The metaverse is the newer and faster version of early attempts - like Second Life - to build an alternative virtual reality. Back then, the hardware available to consumers was not allowing for smooth performances, but nowadays, most commercial gamer computers are perfectly suitable of immersive experience.
Another opportunity in the metaverse is linked to land and property ownership. The “architects” behind these digital words want to maximise the profitability of each virtual square foot. There are many projects on the web that allow for blockchain ownership of digital land. Projects like earth2.io have been pioneers. At the cost of sounding nostalgic, I bought some land in Oman on earth2.io
Lastly, there is the whole part related to digital assets. Although nothing prohibits users from walking around in plain clothes, generally participants in these metaverses tend to showcase some of the most bizarre outfits. Such a luxury comes at a cost. Or investment, rather. In fact, each piece of garment is linked to a blockchain contract (an NFT) which allows to resell it if the demand is high. So clothes, gadgets, and even vehicles, are all available in the metaverse. Recently I came across a metaverse that allows for the purchase of spaceships. Which I found quite expensive given that none of them can actually fly.
For the time being, metaverses are quite cartoonish, and often come across as video games. But as technology improves, we are promised a more immersive and realistic experience. Which with all of my hope in humanity, I am still hesitant to fully welcome as being the substitute to reality. (The writer is a member of the International Press Association)