Metaverse

The term “Metaverse” was coined by Neal Stephenson, in the novel Snow Crash (1992), to represent the fictional version of a video game populated by real players and software called Demons.

A technological Metaverse is an online digital platform in which users, through avatars, take part in shared experiences immersed in a virtual environment. This definition is only a starting point: the dynamic nature of this new and ever-changing technology means that an exhaustive definition is difficult to determine. Fully defining now what a Metaverse is would be like trying to explain what the Internet was in the 1990s, an early and inevitably incomplete attempt. Like all new things, the Metaverse is a concept about which we still know little with respect to its future potential. However, it already has a history of use cases. From the “life simulations” of The Sims and SecondLife, we have moved on to metaverses built on the blockchain and powered by a crypto economy. With this in mind, it is still possible to build a detailed profile of metaverse trends.  

When the topic of conversation involves the Metaverse, we often hear about augmented reality glasses, digital economies, virtual lands, NFTs, customizable avatars or 3D graphics. The Metaverse indeed has to do with all these things, however, they do not exhaust its meaning. A Metaverse is not a set of fixed attributes; it is a digital world connected to our lives that can have different configurations. A key concept that can be traced in any Metaverse, however, is sentience, or the perception by users that they are in contact with an environment and other people, and being able to interact with them through all senses. The Metaverse seeks to eliminate the mediation of the screen: people should not have the feeling of looking out of a window, but should be able to participate in the virtual world firsthand. Often the Metaverse is reduced to a simple evolution of the video game. As much as the concept does indeed originate from video games, its sentience is one of the reasons why it’s hard to speak of an overlap between the two concepts. A Metaverse, unlike a video game, is constant. It cannot be paused, ended, or reset. The activities that take place in the Metaverse are in sync and in real time, which is why it exists in one version, the same and current for all users, like a reflection of the physical reality of life. Several Metaverses exist, characterised by a high degree of interoperability. Data, products and content from one can be transported and used in another. This is possible by leveraging the composability of blockchain solutions, especially in the DeFi domain. In fact, a Metaverse is distinguished from a video game primarily by the community of creators who make and sell non-fungible items (NFTs), which then characterise user experiences. Every item in the Metaverse is tokenized into an NFT so that it can be used and traded in a traceable way on one or more blockchains. Avatars and customizations are NFTs. So too are the very building blocks of which a metaverse is made from, through which you can build experiences to share with others. Thus, video games are virtual worlds, but not Metaverses because they do not exist outside the game itself. The reality of the metaverse is guaranteed by the blockchain, which is valid everywhere. On the other hand, a Metaverse does not fit the classic definition of a video game because it does not require users to complete objectives or follow a storyline, but allows users to express themselves freely and creatively, giving rise to a growing variety of experiences: playful, commercial, social and educational.  A Metaverse also has its own virtual economy, often based on the tokenomics of the crypto project from which it originates. The economy of a metaverse is the meeting point between the real economy and the “end in itself” economy of classic video games. The tokens on which it is based can often be used outside of the metaverse and thus have an impact on the crypto sector, yet the mechanics closely resemble those of video games: rewards, shops, paraphernalia. On the other hand, a metaverse is not just a virtual reality: so-called VR is a way to experience a digital world, but that does not make it any less real. 

Let us look, however, for key points on which to fix the concept of the Metaverse: crypto journalist Matthew Ball has identified 8 levels and components through which the development of the Metaverse can be described.  A fundamental one is the hardware layer, which is the technological support and devices for interacting, developing and entering the Metaverse. Another important layer is the network, which is the possibility of connection between devices, whether users or services. Then, there is computing, which is the provision of computing power to support the Metaverse and all its different functions, from rendering to graphics and artificial intelligence. The Metaverse also requires virtual platforms on which to build digital environments, as well as living off the work of the content creators and developers who set them up. Indeed, community creativity must be based on shared standards and rules so that the objects and experiences created can be compatible and interoperable. The consequent layer for this is content and services: from design to the creation and sale of virtual goods. Finally, the Metaverse is complemented by a purely human factor, namely user behaviours: the value they bring to the system, the time they spend on it, and the activities they perform. 

The Metaverse is not to be confused with the Multiverse, a term often found in science fiction stories or superhero comic books. The technological Multiverse is a collection of digital worlds, all independent of each other: it embraces social networks, online shopping platforms, websites and video games. Web 2.0 already allows us to experience the Multiverse: we interact with various apps, sites and games with autonomous internal rules that distinguish and separate them. In the Metaverse, on the other hand, all users interact within the same world that offers many different activities, accessible through a single identity. Metaverse and Multiverse are brought together in the Omniverse, from the Latin omnis, the sum total of everything you can do with your digital identity. 

The popularity of the Metaverse at this time is dictated by the enthusiasm of large companies and the curiosity it generates. Beyond this perspective, one can see the Metaverse as a disruptive technology. It is capable of opening up new horizons of possibilities, as the Web or blockchain did in its time. Right now it would not be correct to say that the Metaverse is a branch of the Internet; rather, it is a tool that facilitates its newest phase, Web3. Precisely because it relates to the Internet, the Metaverse will have to deal with all its usual problems; scams, catfishing, and hate speech. Alongside these is the ever-increasing amount of data that online activity generates as well as its collection, management, and security. If in Web 2.0 there was a distinction between having Internet access or not having it, the Metaverse implies constant connection. The Metaverse will change the way people interact with each other online, as well as with brands and other intellectual property. In all of this, as a cross-cutting technology, blockchain fulfils the concept of the Metaverse at all levels. This is why it is also decentralised: unlike centralised solutions, blockchain provides a shared basis on which to build content and certify exchanges and interactions. 

Correlated words

Delegated Proof-of-Stake

A variant of Proof-of-Stake in which the stake is transferred to delegates who act as validators. 

Pure Proof-of-Stake

It is a type of Proof-of-Stake in which validators are chosen randomly and anonymously thanks to the VRF function.

Liquid Proof-of-Stake

Proof-of-Stake variant in which tokens are not staked but liquid.

Stake

Total amount of cryptocurrency being staked

Staking Pool

The joint staking of several people's cryptocurrencies with the aim to increase the rewards

Cold Staking

Type of staking that requires the use of a cold wallet

Blockchain

A technology based on cryptography that enables decentralised and uncensored execution of any type of transaction.

Proof-of-Stake

A consensus mechanism based on putting cryptocurrencies at stake in order to contribute to the blockchain.

Genesis Block

This is the first block of a blockchain, sometimes referred to as block 0.

Block Height

The number of blocks in a blockchain starting from the genesis block.

Network

The set of interconnected computers, called nodes, on which the blockchain of a given cryptocurrency is based.

Transactions per second (TPS)

Literally 'transactions per second', it is a measure of the speed of a blockchain.

Transaction

Exchange of value, property or data between two parties.

Shard

Fragments' of blockchain operating in parallel.

Proof-of-Work

A consensus mechanism based on computational power to contribute to the blockchain.

Node

Device connected to a blockchain and participating in its network.

Off-chain

Transaction that is not performed on the blockchain.

On-chain

Any process performed on the blockchain.

Mining Pool

A company that bases its business on mining, by collecting a large number of powerful mining devices.

Mining

The process of adding new blocks to the blockchain and creating new bitcoins by miners.

Consensus Mechanism

A decentralised way to validate transactions on blockchain.

Hash

A cryptographic function that serves to identify each block of the blockchain.

Governance

In the cryptocurrency sector, it indicates the way and rules by which projects and blockchains are governed.

Fee

Commission paid for the execution of transactions.

Double Spending

The possibility for an attacker to spend the same amount twice if the payment system does not have a mechanism to prevent this.

DoS

A Denial of Service is a computer attack that aims to make a network or service inaccessible.

DLT

Distributed Ledger Technologies are technologies based on an immutable ledger of transactions, the control of which is distributed.

Decentralised

It is said of a system governed by the consensus of its participants and without a central authority or hierarchy.

Cold Wallet

Wallets that are not connected to the internet.

Bridge

In blockchain technology, it is a connection that allows interaction between different blockchains.

Financial Bubble

Increase in the value of an asset, in an excessive way, given its intrinsic value.

Block Explorer

It allows you to consult any transaction made on a blockchain online

Block

The set of encrypted transactions that, connected to other blocks, makes up a blockchain.

ASIC

Devices dedicated to mining certain cryptocurrencies.

Interoperability

The ability to exchange data with other platforms, including those based on different types of blockchain, as well as with the off-chain world.

51% Attack

When a node or group of nodes attempts to take control of the blockchain.

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