What is the metaverse?

Since 2021, we have come across the term 'metaverse' with increasing frequency in the media, among  tech experts and policymakers. The word originates from Neal Stephenson's 1992 science-fiction book Snowcrash, but 30 years later it is in the spotlight like never before. Several large technology companies are betting on the metaverse. For instance, Facebook changed its name to Meta, and Microsoft, Apple, and Epic announced major investments.

Despite this increased attention for the metaverse, there is not yet a clear picture of what the metaverse actually is, or what it could become. A public debate on the opportunities, risks and preferred direction of the metaverse is still in its infancy, although the development may have major implications for the future of our society.

Large private investments in the metaverse require public visions of the metaverse. Therefore, the Rathenau Instituut will enter into a dialogue with citizens, developers, public professionals, and governments to develop those public visions together. In this way, we want to follow up on our ten design requirements for tomorrow's digital society. What needs to be done to ensure that the metaverse enriches our world, instead of impoverishing it? How do we protect children from the risks of immersive technology in education? And is our democracy resilient enough to handle further blurring of the lines between fake and real?

Academics, tech companies, and journalists describe the metaverse in different ways. What these different descriptions have in common is that they all paint a picture of a (future) partly virtual environment in which people will come together. We, therefore, see the metaverse as a vision of the digital environment of the future, in which we interact, work and live. The interpretation of this vision varies, but one or more of the following aspects often recur:

1. It is a digital environment where you don't go 'on' but 'step in' using virtual reality (VR) technology, among other things.
    
2. It is an environment where the digital and physical worlds integrate more deeply through augmented reality (AR) technology, among other things.
    
3. The environment is characterised by a virtual economy, where people generate new forms of income.
    
4. In this environment, users have more control over their data than in today's large platform-dominated internet.

To give a more concrete picture of the different visions of the metaverse, we will briefly highlight these aspects.

Description 1: a new generation of the internet built on virtual reality

A common description of the metaverse is that it is a virtual world, based on virtual reality (VR).¹ VR immerses users in a fully computer-generated environment.² Users who put on a VR headset find themselves in a completely different world that can trigger a strong, physical sensation. In this way, it will be possible, for example, to attend events, shop, and work in different parts of this virtual world: the metaverse. These activities will be more instinctive and closer to our physical experiences than the experiences the current internet is offering us. VR is already widely used in the gaming world, but also, for example, in education, training, or trauma therapy. Moreover, VR headsets are already quite widely available on the consumer market, but often still very expensive and thus not accessible to everyone.

In this vision of the metaverse, it will be possible to move between different VR worlds, for example between a digital city and a gaming environment such as Fortnite. A key prerequisite is interoperability. This is the ability to transfer and render information and data across systems and applications.³ A high degree of interoperability entails that platforms are connected without technical constraints. This allows users to move from one virtual space to another virtual space with ease.

Description 2: a world in which digital and physical life are deeply integrated

A second aspect that recurs in many visions is the metaverse as a future digital world that is highly integrated with users' physical lives and bodies.⁴ The metaverse manifests itself in the physical world through augmented reality (AR).

AR systems create an environment where a virtual layer is superimposed on the physical environment. This creates a new type of hybrid environment, which is both physical and virtual.⁵ This makes it possible to see a virtual statue on the street, for example. Through AR, the metaverse can become part of our physical world.

Meaningful applications of AR are currently being explored. The most famous successful example of AR is the game Pokemon Go, where you see animated characters walking down the street via your mobile phone. AR is also being tested in, for example, the medical world. For instance, think, of visualising an operation in preparation for surgery. There are also attempts to use AR for educational purposes or city marketing. Several cities are experimenting with AR city tours, where you can see digital (historical) objects on the street with a smartphone, for example.

However, most of these applications were short-lived or are not very popular yet. This is, for instance, because the technology is still at an early stage, or because of high development and maintenance costs. There are currently no functioning AR glasses on the market, despite frantic efforts from large technology companies. An example is Google Glass, a pair of AR glasses produced by Google, which disappeared from the market rather quickly because it did not gain enough traction with consumers. At the same time, both Google, Apple, and Meta are investing quite heavily in developing new AR glasses in the near future. Hence, it is not farfetched that AR will be used on a larger scale in education or public spaces, for instance, in the foreseeable future.

In a society in which AR and VR are widely used in the metaverse, the digital and physical worlds may become even more intertwined. In an advanced form, the digital layer over physical reality becomes visible all around us using AR, and is connected to the virtual world, which is accessible through VR.

Description 3: the metaverse as the next step in the virtual economy

A third aspect of many descriptions of the metaverse is that the metaverse provides space for a new virtual economy.⁶ An example of a description of the metaverse as a virtual economy shows that it is a world full of technical terms:

‘In the proposed NFT-powered metaverse, you can own things like avatars, land, digital apparel, and other items, and migrate them across platforms via your crypto wallet.’⁷

It remains to be seen whether this digital virtual economy will be accessible to everyone, as many of its elements are difficult to understand if you do not have a technical background. Many people will not immediately know what to expect.  

Take the example of Non Fundible Tokens (NFTs). An NFT is a kind of certificate of ownership of a unique 'reference' to an underlying digital object. This could be anything, such as a piece of virtual land, a digital painting or digital shoes for the metaverse.⁸ You can buy and sell NFTs  with normal money, but also by using cryptocurrencies  such as ethereum or bitcoin. Transactions of these coins are recorded, verified and stored publicly via an online ‘ledger’ such as blockchain. It is also possible to register transactions of NFTs here. You can store your NFTs and crypto coins in your own crypto wallet, a digital 'personal safe'.

If you own an NFT, you do not automatically own the copyright of, say, a digital painting. In fact, the creator will remain the copyright-owner of the painting. Nor does it equate to a legally valid ownership certificate.⁹ With an NFT, you have a 'certificate of proof' with unique information such as transaction history, and a link to where the original version of the digital painting can be found.¹⁰ This allows you to distinguish your painting from all digital copies of the same painting.

For many people, none of this will be an immediate reason to start using NFTs, cryptocurrencies, or blockchain en masse. Nevertheless, collectors, crypto fanatics, and designers are already trading in virtual goods in abundance on the internet. It has great appeal for many businesses that were not previously engaged in a virtual economy. This includes well-known brands such as the sportswear company Nike. Nike recently bought online fashion company RTFKT, a company that focuses entirely on designing virtual collectibles, such as virtual shoes for the metaverse.¹¹ In August 2022, Nike even launched its first collection of virtual trainers.¹²

Since many elements of this virtual economy already exist (such as NFTs, cryptocurrencies, and games in which you can buy virtual objects), some say that the metaverse already exists as well. The best-known examples of this are Decentraland and the Sandbox. These are online worlds where you can already walk around as an avatar and buy and sell land and artwork.

Description 4: an online world with more power and control for users

Currently, there is much criticism on the way the internet is designed, and the way it is dominated by large technology companies such as Google and Apple. Some say the metaverse offers an opportunity to build a new digital world with more say and control for users.¹³ Here, the emphasis is often on interoperability. In this view, it should be possible to use virtual objects at any time, regardless the location of your avatar in the metaverse. An avatar is a digital alter ego, representing the user.

The description of the metaverse as a new digital environment isclosely related to the Web3 movement. Supporters of the Web3 movement seek a decentralised and inclusive internet.¹⁴ This internet should be organised through decentralised, autonomous organisations. Users should have more say in how, for instance, social media platforms are built, how data are stored and how content moderation for messages or videos should work. In this way, the Web3 ,movement wants to break with the current 'Web2' internet, where large technology companies are in charge.¹⁵ However, the samelarge technology companies that dominate the current internet  are also investing massively in their own vision of the metaverse. Hence, there is a battle going on over who will dominate the metaverse.

According to researchers at Loyola Marymount University, elements for success of a virtual world include its size, accessibility and how 'immersed' you become.¹⁶ In the extreme visions of the digital future, the metaverse is always accessible, independent of time and place. To achieve this, a digital infrastructure is needed that includes a lightning-fast communication system, comfortable VR or AR headsets, stable networks, smart artificial intelligence systems, and cloud servers. The current digital infrastructure cannot deliver this. It is, therefore, not yet certain whether the various visions of our society's digital future will be realised.

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