What is Web3?
Web3 is the latest evolution of the internet, based on decentralisation and user control.
Web2 saw the internet become centralised around major providers. These web corporations on-boarded billions of people, but also exercised complete control over their platforms and users, who unwittingly or deliberately gave up ownership of their data to be used in whatever way the service providers deemed fit.
Web3 sees a return to a more decentralised, open, and permissionless web. It’s known as the ‘read-write-own’ web, because key services are run by users themselves. Web3 gives users full sovereignty over their data, and ensures that no one has control over the platforms we all use.
Blockchain and cryptocurrencies, which are based on decentralised networks scattered around the world, rather than on centralised corporations, are the best example of this trend. One of the core elements of Web3 is an open financial system, without borders or barriers to entry, in which fungible and non-fungible tokens can be used to represent, store, transfer, and trade almost any asset of value.
What is the metaverse?
As the technologies that underpin the internet have evolved, so have the ways of interacting with them. The metaverse is the name given to the new generation of interfaces for the internet, and particularly Web3, which take many forms but that seek to integrate online services within life-like environments of various kinds, populated by digital identities and representations of individual users (avatars).
The concept of the metaverse was first introduced by speculative fiction writer Neal Stephenson in the novel Snow Crash. People interacted as much online via the metaverse, using virtual reality glasses and other technologies, as they did offline. More recently, the movie Ready Player One explored a similar idea in the virtual reality world, OASIS.
Today’s metaverse (or strictly speaking metaverses – there are many) are occasionally accessed through VR headsets and other 3D visualisation technologies, but mainly through conventional desktop and mobile apps. Second Life was one of the earliest metaverse-like applications, although it was simple by the standards of later iterations.
While the metaverse has not yet reached the level of sophistication depicted in science fiction, it does offer a new way to access both Web3 and conventional online services. The combination of Web3 and the metaverse gives users the ability to use these new services in new ways, adding layers of visualisation and gamification to decentralised financial services of all kinds. With that paradigm shift comes opportunities for forward-thinking businesses.
Why businesses are taking an interest in the metaverse?
The metaverse offers more life-like, intuitive, and fun ways to engage with online services. Since users are finding this an exciting way to use the web, it makes sense for businesses to set up a presence there too. Research by Statista suggests that the global metaverse market is worth around $47 billion in 2022, but is set to increase exponentially to $679 billion by 2030.
Everyday online activities that we take for granted are ideally suited to these new, life-like digital environments. The metaverse is where people play games and establish an online identity – perhaps one they carry with them around other applications. In the crypto world, for example, it’s common for users to display a favourite NFT as a profile picture (PFP) across multiple applications, such as Twitter, Discords, Telegram, personal websites, OpenSea and other marketplaces.
The metaverse is somewhere to ‘meet’ and talk with friends, interacting in real-time with other 3D avatars in a digital environment. It’s also a place to experiment with decentralised financial services, such as staking, which can be integrated within play-to-earn (P2E) games. You can browse stores and purchase goods to be delivered to your real-life location. It’s even possible to attend music events in the metaverse, organised by famous artists. While this may lack some of the atmosphere of attending an event in person, it also avoids much of the cost of the entry ticket, the expense and inconvenience of travel, the time away from work and family, and the risk of infection. As the coronavirus pandemic shut down much of the economy in 2020 and 2021, the metaverse offered ways to enjoy your favourite musicians – and musicians a way to keep earning when in-person events were impossible.
The changing face of work
These examples alone indicate that there are significant opportunities for businesses in the metaverse. At the very least, the volume of users flocking to the metaverse means that advertisers would be wise to follow. But there is much more to the metaverse than that, not just in terms of the opportunities for businesses, but for what ‘work’ might actually look like in the future.
In April 2022 the Harvard Business Review published an article detailing some of the ways that businesses were starting to use the metaverse to organise their activities and increase productivity. These developments were again prompted by the pandemic, and the pressures it placed on companies when their staff were no longer able to work together in the same office. The author identified four key ways in which the metaverse was set to change work:
Collaborating in the metaverse
The metaverse offers new options for better, more life-like meetings, while retaining the benefits of working remotely.
During the pandemic, employees became used to working online, communicating by chat apps and participating in video calls on Zoom and other platforms. These offer significant benefits over older technologies, but are still a poor second to in-person meetings. Collaborating this way is awkward; only one person can talk at a time, and it’s hard engaging with someone who may be off-screen.
In the metaverse, people can interact in a 3D world, enabling employees to move around and engage with each other 1:1 or in groups on an ad hoc basis. It’s visually easier to gain a sense of who is present, and where; some virtual workplaces even have quiet rooms that serve as a ‘busy’ flag, for when people need not to be disturbed. It’s far more like life in a physical office, but without the downsides of constant background noise and interruptions – the best of both worlds. Additionally, it’s much easier to demarcate the boundary between time spent in the office and at home when your avatar can simply leave the work space when you’re done – helping to solve a serious problem for those who found their work-life balance impacted by remote work.
Meeting with your teammates in a virtual space with a visual representation has benefits that go beyond improving collaboration. For example, architects can not only show their teammates and clients how a building will look: they can understand how it feels to walk around it. Landscape designers can offer 3D interactive experiences of what they are proposing to clients. Manufacturers can provide a sense of how products will look and operate in real life, without creating and shipping prototypes. Some retail companies have started offering virtual trials, before applicants take up a job.
Improving AI and voice recognition bring the possibility of ‘smart’ assistants, who inhabit the metaverse workplace alongside their human colleagues and help with routine tasks – leaving more time for employees to do what really matters. Chatbots are already sufficiently advanced to handle a significant percentage of customer service requests. The time is not far off when, for example, a member of staff might meet with your AI counterpart and provide key information, which the virtual assistant then uses to generate a proposal.
Training and education
Integration of gamification techniques and tokens of value – two key metaverse technologies – offer some very exciting opportunities for training and education. Apps such as Duolingo and Memrise make learning language fun and competitive, more akin to solving puzzles or playing games than work. Adding financial rewards – even small ones – to each stage is a powerful means of further accelerating learning and engagement.
This principle has already been proven in the field of P2E gaming, and could be extended to other forms of training and education. This is also a promising way to crowdsource human resources, gamifying repetitive or time-consuming tasks that cannot be completed by a computer.
New economic models
Lastly, the metaverse enables the creation of new digital economies, and even allows businesses to operate on completely new economic models that were previously impossible. P2E gaming again provides examples, with gaming economies worth tens or hundreds of millions of dollars, and that offer users and businesses diverse opportunities for monetising their participation. Since these are open and decentralised platforms, the companies that launch them must find new ways to generate revenues from the platform itself. For example, they may sell NFTs representing land, items and characters to raise funds; they may also hardcode a trading fee into these assets, so that every sale brings them a commission.
NFTs, though, have a much larger role to play for businesses active in the metaverse.
The ‘NFTification’ of work
NFTs rose to prominence as a way of trading digital art. Their popularity has grown to the point where certain series of NFTs are seen as luxury items or celebrity status symbols. But, as one-of-a-kind digital assets, NFTs have a far more important role to play within the metaverse, and for businesses with a Web3 presence.
Because NFTs are unique tokens, they can be tied to a single user or organisation, and used to represent and manage identity for that person. This opens the way to new rights management systems. An NFT could become a passcard to a job, to specific services, or to restricted information.
It’s not hard to imagine a world, for example, in which a new employee receives an NFT that allows them entry to one area of a company’s building in the metaverse, and access to all the people and information that are held there. Upon promotion, their identity NFT is upgraded to provide access to another tier of the company. This could involve access to specific people – for example, to ensure a proper chain of command is followed and the organisation remains efficient, employees might only have access to other people of their own level, or one level above or below.
Using NFTs as rights management can also be extended to customers. For example, a free-to-use service might offer premium features that can be accessed with an NFT, purchased from the company or renewed on a monthly or annual basis.
None of these use cases would have been possible a decade ago, and would have seemed unlikely just three years ago. But the pandemic has changed much, speeding the development of decentralised services and new models for work. While the metaverse is still in its relative infancy, it is growing fast, and forward-thinking businesses are taking their first and significant steps into the space. All of the use cases described above are already a reality, pioneered by companies as well-established as Ford and Bosch, as well as countless startups. And, if there’s one bellwether for the metaverse, it must surely be Facebook’s decision to rebrand as Meta – essentially staking its existence on this future of the internet.