What Is the Metaverse and Web 3.0?

COVID-19 and remote working have turned up the digital disruption dial, and these changes have transformed our lives – both personally and professionally. Such digital shifts have driven a radical growth in key technologies such as blockchain, cloud computing, virtual reality (VR), augmented reality (AR), and artificial intelligence (AI). These are the building blocks of the next evolution of our internet. Web 3.0 is the third iteration of the internet that interconnects data in a decentralized way to deliver a faster, safer, and more personalized user experience.¹ Web 3.0 is also the foundation of the metaverse: the virtual world in which we’re all predicted to interact with in the future.²

The metaverse is a set of interconnected, interoperable virtual spaces with digital economies where you can create and explore with other people who aren’t in the same physical space.³

The metaverse was first mentioned in a science fiction novel, Snow Crash, written by Neal Stephenson in 1992, but it was brought into mainstream use by Mark Zuckerberg and his rebranding of Facebook into Meta in late 2021. The term has become a nebulous, catch-all phrase: there is no universally accepted definition. This is due to the metaverse not existing (yet) and because companies are shaping definitions to suit their commercial ambitions.⁴ To add to the confusion, there are existing digital experiences, especially within gaming, that are already being described as metaversal.

Feeling out of your depth – digitally? To succeed in this new world, you need to cut through the hype and misinformation to understand the underlying technologies and how they integrate. The business opportunities here are endless, and if these key technologies haven’t affected your industry yet, they will soon. Before the metaverse launches, it’d be wise to start developing a digital disruption mindset. By familiarizing yourself with the technologies set to change our (digital) worlds, you’ll be one step closer to understanding and capitalizing on the virtual spaces many people will escape to.

Digital disruption is accelerating Web 3.0

The drive towards this future is fueled by the increase in consumers’ online activity. It has accelerated process digitization by three years and the share of digital products by seven years.⁵

Digital adoption has taken a quantum leap, and it has created an accelerated incubation for key technologies – the building blocks of Web 3.0 and the metaverse.

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The metaverse is built on Web 3.0

The best way to understand the metaverse is to take a few steps back. Web 1.0 was the information superhighway of connected computers and servers that you could search, explore and inhabit, usually through a centralized company’s platform, like AOL, Yahoo, or Google.⁶ Web 2.0 arrived at the turn of the millennium and it’s the current online system; it’s defined by social networking sites, blogging, and the monetization of user data for advertising.

The next step is Web 3.0, and it’s characterized by decentralization, transparency, fragmented ownership, and greater user control. These four pillars are empowered by one key technology: blockchain.

Blockchain is leading digital evolution

Blockchain is a shared, immutable ledger that permanently records transactions, tracks assets, and builds trust.⁷ The ledger is a decentralized, public database that can’t be manipulated, and it offers cheaper and faster payment and value creation options. Businesses run on information, and the faster it’s received and the more accurate it is, the better. Blockchain is ideal for delivering that information because it provides immediate, shared, and completely transparent information.⁸ It’s used in various ways, but the most common is in cryptocurrencies.

Blockchain is ideal for delivering that information because it provides immediate, shared, and completely transparent information.

Bitcoin is a blockchain-based cryptocurrency that launched in 2009. If you buy some bitcoin, the transaction is recorded to the bitcoin blockchain, and that record is openly distributed to thousands of computers globally.⁹ Outside of the higher levels of safety and transparency, it has also rewritten the rules of ownership: it allows for fractional ownership and has made crowdfunding and value sharing much easier.

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Web 3.0 consists of blockchain-enabled decentralized applications that support an economy of user-owned assets and data.¹⁰

Translation: blockchain has empowered Web 3.0 to become a digital marketplace where the user decides the value of their product and is in charge of transactions and their data.

Blockchain is the birthplace of non-fungible tokens

 

Blockchain technology is used to verify the ownership of this new class of digital assets (currencies, securities, artwork), which are called crypto assets.¹⁵ At a very high level, most NFTs are part of the Ethereum blockchain.¹⁶ Ethereum is a cryptocurrency, like bitcoin, but its blockchain also supports these NFTs as it stores extra information that defines them as NFTs through software routines called smart contracts.

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NFTs open a whole new world of digital commerce, as individual users can create digital assets out of almost anything in pixels and then place the value they want on them. NFTs are crucial for the metaverse, as they’re potentially the key to offering interoperability – the ability to buy and use digital products to use across all the future virtual worlds.

NFTs are crucial for the metaverse, as they’re potentially the key to offering interoperability – the ability to buy and use digital products to use across all the future virtual worlds.

It empowers your ‘crypto wallet’, which you use to carry cryptocurrencies and your metaverse-only digital goods, such as your avatars, avatar clothing, avatar animations, virtual decorations, and weapons.¹⁷

One of the most exciting new marketplaces in this world is GameFi, which combines decentralized applications (‘dapps’) with economic incentives in play-to-earn gaming.¹⁸ This allows players to trade, lend, or rent out their winnings or even borrow against them. The winnings are earned from carrying out game-related tasks such as winning battles, mining resources, growing crops, or ‘renting’ out virtual land. The name GameFi merges gaming and DeFi, which is decentralized finance – the fast-growing field in which token-based transactions like lending and borrowing take place on blockchains.

Businesses require hybrid strategies

Companies that want to thrive in both Web 3.0 and the metaverse need to rethink their products for both physical worlds and the new virtual ones. Case in point: Nike bought the company RTFKT to help them leverage the latest in-game engines, NFTs, blockchain authentication, and AR to create one of a kind virtual products and experiences.¹⁹ One of these is CryptoKicks, which allows Nike to tokenize shoe ownership on Ethereum.²⁰ This is part of the future where you’ll buy a physical world item from a company, but you’ll also gain ownership of a linked NFT in the metaverse.²¹

Nike is just one of many companies investing heavily in these emerging technologies. The race to the metaverse is a tightly contested one. Even though no one can own the metaverse, there are several heavyweight companies like Meta, Microsoft, Apple, Epic Games, Roblox, and more pouring vast amounts of money into its development.

Five real-world case studies of metaversal technologies

1. Elevating educational experiences: Stanford University Virtual People Course
   Technology: VR
   This is the first course that lets students learn about VR while fully immersed in VR environments.²²

2. Tracking goods and combating counterfeiting: LVMH and De Beers
   Technology: Blockchain
   The luxury goods company, LVMH, has registered more than 10 million products on a blockchain platform created in conjunction with Prada and Cartier.²³ Another example is De Beers, which mines, trades, and markets more than 30 percent of the world’s supply of diamonds. The company uses a blockchain ledger to trace diamonds from the mine to the customer purchase and helps confirm diamonds are free from conflict.²⁴

3. Creating virtual marketplaces with real benefits: Decentraland
   Technologies: Blockchain, NFTs, cryptocurrency
   It’s a fully decentralized, user-owned marketplace that lets you create digital goods, explore virtual worlds, and trade using Ethereum.

4. Upgrading healthcare sharing: MedicalChain
   Technologies: Blockchain, cloud computing
   Offers a blockchain solution to create a user-centric digital health record that can easily be shared with doctors. This is recorded in an auditable, secure, and transparent format.²⁵

5. Driving remote work engagement: Meta Horizon Workrooms and Microsoft Mesh
   Technology: VR and AR
   Meta Horizon Workrooms is an open beta app that creates a VR experience for people to work together.²⁶ It’s like the souped-up, higher-dimension Zoom work call and has a growing list of interactivity features. Not to be outdone, Microsoft’s Mesh uses mixed reality and HoloLens to create 3D animated avatars of users that can be used in 2D or 3D meetings.²⁷ The benefit for people: both will reduce the cognitive overload of being on screens all day long.

The metaverse is still being defined

Even though there’s been a rapid increase in the development of these digital technologies, the creation of a true metaverse is still far off. While games such as Fortnite and Roblox offer massive virtual worlds and include their own digital economies (which are hallmarks of the metaverse), they don’t have what’s needed to be defined as a true metaverse. It needs to harness both VR and AR, and offer interoperability with other virtual worlds.

Saying that Fortnite is “the metaverse” is like saying Google is “the internet.” Even if you spent time in Fortnite socializing, buying things, learning, and playing games, it doesn’t encompass the entire scope of the metaverse.²⁸

While the metaverse is still a distant goal, Web 3.0 and the ground-breaking technologies that underpin it are revolutionizing the way we work, live, and play right now. To help you navigate these new digital worlds, we have a large portfolio of online executive education courses focused on disruptive technologies and digital transformation.

By upskilling in areas such as blockchain and AI, you can future-proof your value in your workplace today in order to leverage the metaverse in the future.

Prepare your career for Web 3.0 and the metaverse