COVER STORY THE FINTECH TIMES
Into the metaverse The Fintech Times looks at how financial technology will help drive the growth of communities within immersive virtual worlds Claire Woffenden, Editor, The Fintech Times
2021
was a big year for the metaverse. From Facebook to Microsoft, Disney to Ralph Lauren, big-name brands took the concept of the metaverse centre stage with their various announcements of digital transformation and rebranding plans, immersive retail experiences and virtual working environments all billed as driving the ‘future of the internet’. But what even is the metaverse and what role does fintech play?
INTRODUCING THE ‘METAVERSE’
Way back in 1992, author Neal Stephenson coined the term metaverse – a portmanteau of meta, meaning transcendent, and verse (from universe) – in his science-fiction novel Snow Crash. The book envisions a virtual reality-based successor to the internet with Stephenson’s metaverse populated by people using digital avatars of themselves to explore the online world. While opinions now vary on what the metaverse means today, the overall consensus is that it’s a blending of the physical and digital worlds where people can interact virtually. In these interconnected, virtual worlds people can socialise in real time to form a persistent, user-owned, internet economy. 4
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BIG TECH AND THE METAVERSE
At the end of October, Facebook, the company that owns platforms including Facebook, Instagram and WhatsApp, grabbed the wider public and media’s attention of its version of the metaverse when it rebranded as Meta. It describes the metaverse as ‘the next evolution of social connection’. Mark Zuckerberg, the founder, chairman and CEO of Meta, explained: “The defining quality of the metaverse will be a feeling of presence – like you are right there with another person or in another place. In the metaverse, you’ll be able to do almost anything you can imagine – get together with friends and family, work, learn, play, shop, create – as well as completely new experiences that don’t really fit how we think about computers or phones today. “The metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy than the one constrained by today’s platforms and their policies.” “Our hope is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.”
Just days later, Microsoft also revealed its plans to make collaboration in the metaverse ‘personal and fun’ through the upcoming launch of Mesh for Microsoft Teams. The feature combines the mixed-reality capabilities of Microsoft Mesh, which allows people in different physical locations to join collaborative and shared holographic experiences, with the productivity tools of Microsoft Teams, where people can join virtual meetings, send chats, collaborate on shared documents and more. According to Microsoft, Mesh for Teams is a ‘gateway to the metaverse’ which should be thought of as ‘a new vision of the internet, one where people gather to communicate, collaborate and share with personal virtual presence on any device’.
AN OPEN METAVERSE
For blockchain venture capital firm Outlier Ventures, there are at least two versions of the metaverse emerging: one dominated by closed platforms and Big Tech, such as Facebook, and the other built on open protocols leveraging blockchains, such as decentralised gaming platform The Sandbox and online social world Decentraland. Outlier Ventures has been developing a thesis for the metaverse over several years, which argues that while there is
currently a momentous opportunity to architect a world where individuals and brands alike can create and connect more meaningfully with their communities and benefit from new models for value generation, it must be built on decentralised, open infrastructure. ‘’The metaverse will eventually connect every platform, virtual world and game into a single permissionless peer-to-peer economy native to the internet, most importantly underpinned by crypto and Web3 technology,” says Jamie Burke, the founder and CEO of Outlier Ventures. “We should absolutely consider crypto and the metaverse as one and the same thing. In the same way that crypto is increasingly experienced through immersive experiences that bridge the real world with virtual assets, the metaverse makes our physical and digital spaces indistinguishable. And long term, crypto will subordinate every fiat-based economy on the planet.”
THE METAVERSE ECONOMY
Crucial to the metaverse is the ability to manage finances and transactions. In the metaverse, the economy depends on authentication of digital properties, such as homes, books, artwork, clothing and even furniture. As venture capital firm Index Ventures puts it, as time spent in
