BLOCK 1: What is the Metaverse?

pic: Zara Hadid

The metaverse is coming – but in a different way than expected

The main idea of the Metaverse is still in the mist. We shall be humble and patient, that´s what history tells us. Even the internet was hard to predict decades ago, and now it exists as an organism, independent, with new properties, possibilities. One could it even call a new form of life! Same with the metaverse. It will connect the real world with the virtual one. We will live and work in both spaces, the real world will be more fluid, some of our activities will be done by ourselves, some by our twin avatars, by twin algorithms, in twin offices, factories, in twin teams. This permeability is the new quality of the metaverse. In the contrary we have to deal with data silos at the moment, static text and pic-based websites and apps, which will be seen as VERY old fashioned in 100 years when we can travel within seconds to different worlds, different universes…which we call METAVERSES

If you’re looking for the metaverse, you won’t find it so much on Facebook or in rock star video games or fashion shows – but in business. There, the physical world has long been virtually enriched, the virtual world infused with physical things.

The physical world has long been virtually enriched, the virtual world infused with physical things.


A self-reinforcing cycle of increased computer power, available data, and more intelligent software are getting underway. Germany tech giants Bosch and Siemens are building digital twins for machines, large thermal plants. The idea: the products are built digitally before they are created. This shortens development time, and improvements can be made to existing things faster and more productively.

The measurement of the world is in full swing. Companies, research institutes, or governments are creating digital twins of factories, road traffic, or entire cities. The European Space Agency is even working on a “Digital Twin Earth“, generated by satellite data, to better predict climate changes and weather.

In the next revolutionary step, these newly created avatars will link up, an ecosystem will form, a library of the world, just as the writer Jorge Luis Borges dreamed of in his story “The Library of Babel” almost 80 years ago.

Both the software company Microsoft and semiconductor giant Nvidia presented technological foundations, concepts and products for “enterprise metaverse” or (“Omniverse” as Nvidia calls it) at their annual customer conferences a few weeks ago. For example, Microsoft wants to introduce an avatar in its Teams platform in the next few months: Each of us can appear there in conferences with a digital double.

The next few years will see a competition for the emerging platforms between big tech and industry groups. Who has the data? And who can use it and to what extent? Will open or proprietary software be used? One thing is clear: providers like Microsoft or Nvidia will be ever more closely intertwined with companies. In extreme cases, so much so that the tech companies could demand a revenue share instead of a license fee.

New business fields and applications are tempting in the metaverse. For example, the French start-up Cosmo Tech is developing software with the help of Microsoft that allows companies to create digital twins and simulate their progress. The car company Renault uses it to monitor 20,000 plants in 40 factories. Industry made the start.

Now digital twins are being designed in more and more areas. For example, of organs and the human body, with which new medicines or interventions can be played through and examined more quickly. The British start-up CN Bio recently presented an “organ-on-a-chip”. It mirrors the biological reaction of humans so well that doctors from John Hopkins University are using it to study autoimmune diseases.

Holograms of homes or 3D telephone calls are becoming a matter of course. Google is currently testing a telephone booth of the future in Project Starline, in which people can talk in 3D – without VR glasses. At its developer conference a few months ago, Google’s head of augmented reality, Clay Bavor, presented a prototype that was convincing.

In Bavor’s experience, a 3D phone call conveys a sense of encounter: “The crazy thing is that I wake up the next morning and have the memory, ‘Oh, I saw Steve yesterday.’ Not like, ‘I had a video call with Steve yesterday’.”

The idea of the Metaverse derives mostly from science fiction. The Metaverse is typically portrayed as a sort of digital “jacked-in” internet – a manifestation of actual reality, but one based in a virtual (often theme park-like) world, such as those portrayed in Ready Player One and the dystopian cinema blockbuster The Matrix of 1999.

Even Elon Musk referred to “The Matrix” science fiction movie when mentioning taking the “Red Pill”.

The terms “red pill” and “blue pill” refer to a choice between the willingness to learn a potentially unsettling or life-changing truth by taking the red pill or remaining in contented ignorance with the blue pill. The terms refer to a scene in The Matrix.

While these sorts of experiences are likely to be an aspect of the Metaverse, this conception is limited in the same way movies like Tron portrayed the Internet as a literal digital “information superhighway” of bits.

Just as it was hard to envision in 1982 what the Internet of 2020 would be — and harder still to communicate it to those who had never even “logged” onto it at that time — we don’t really know how to describe the Metaverse. However, we can identify core attributes.

Be synchronous and live – even though pre-scheduled and self-contained events will happen, just as they do in “real life”, the Metaverse will be a living experience that exists consistently for everyone and in real-time

Be without any cap to concurrent users, while also providing each user with an individual sense of “presence” – everyone can be a part of the Metaverse and participate in a specific event/place/activity together, at the same time and with individual agency

Be a fully functioning economy – individuals and businesses will be able to create, own, invest, sell, and be rewarded for an incredibly wide range of “work” that produces “value” that is recognized by others

Be an experience that spans both the digital and physical worlds, private and public networks/experiences, and open and closed platforms

Offer unprecedented interoperability of data, digital items/assets, content, and so on across each of these experiences – your Counter-Strike gun skin, for example, could also be used to decorate a gun in Fortnite, or be gifted to a friend on/through Facebook. Similarly, a car designed for Rocket League (or even for Porsche’s website) could be brought over to work in Roblox. Today, the digital world basically acts as though it were a mall where every store used its own currency, required proprietary ID cards, had proprietary units of measurement for things like shoes or calories, and different dress codes, etc.

Be populated by “content” and “experiences” created and operated by an incredibly wide range of contributors, some of whom are independent individuals, while others might be informally organized groups or commercially-focused enterprises

There are a few other ideas that may be core to the Metaverse, but are not widely agreed upon. One of these concerns is whether participants will have a single consistent digital identity (or “avatar”) that they will use across all experiences. This would have practical value but is probably unlikely as each of the leaders in the “Metaverse era” will still want their own identity systems. Today, for example, there are a few dominant account systems – but none have exhaustive coverage of the web and they often stack atop one another with only limited data sharing/access (e.g. your iPhone is based around an iOS account, then you might log into an app using your Facebook ID, which itself is your Gmail account).

There is also disagreement on how much interoperability is required for the Metaverse to really be “the Metaverse”, rather than just an evolution of today’s Internet. Many also debate whether a true Metaverse can have a single operator (as is the case in Ready Player One). Some believe the definition (and success) of a Metaverse requires it to be a heavily decentralized platform built mostly upon community-based standards and protocols (like the open web) and an “open source” Metaverse OS or platform (this doesn’t mean there won’t be dominant closed platforms in the Metaverse).

Another idea relates to the fundamental communications architecture of the Metaverse. This is described in more detail later in the piece, but while today’s Internet is structured around individual servers “talking” to one another on an as-needed basis, some believe the Metaverse needs be “wired” and “operated” around persistent many-to-many connections. But even here, there’s no consensus around exactly how this would work, nor the degree of decentralization required.

It’s also helpful to consider what the Metaverse is often, but incorrectly, likened to. While each of these analogies is likely to be a part of the Metaverse, they aren’t actually the Metaverse.


A “virtual world” – Virtual worlds and games with AI-driven characters have existed for decades, as have those populated with “real” humans in real-time. This isn’t a “meta” (Greek for “beyond”) universe, just a synthetic and fictional one designed for a single purpose (a game).

A “virtual space” – Digital content experiences like Second Life are often seen as “proto-Metaverses” because they (A) lack game-like goals or skill systems; (B) are virtual hangouts that persist; (C) offer nearly synchronous content updates; and (D) have real humans represented by digital avatars. However, these are not sufficient attributes for the Metaverse.

“Virtual reality” – VR is a way to experience a virtual world or space. Sense of presence in a digital world doesn’t make a Metaverse. It is like saying you have a thriving city because you can see and walk around it.

A “digital and virtual economy” – These, too, already exist. Individual games such as World of Warcraft have long had functioning economies where real people trade virtual goods for real money, or perform virtual tasks in exchange for real money. In addition, platforms such as Amazon’s Mechanical Turk, as well as technologies such as Bitcoin, are based around the hiring of individuals/businesses/computational power to perform virtual and digital tasks. We are already transacting at scale for purely digital items for purely digital activities via purely digital marketplaces.

A “game” – Fortnite has many elements of the Metaverse. It (A) mashes up IP; (B) has a consistent identity that spans multiple closed platforms; (C) is a gateway to a myriad of experiences, some of which are purely social; (D) compensates creators for creating content, etc. However, as is the case with Ready Player One, it remains too narrow in what it does, how far it extends, and what “work” can occur (at least for now). While the Metaverse may have some game-like goals, include games, and involve gamification, it is not itself a game, nor is it oriented around specific objectives.

A “virtual theme park or Disneyland” – Not only will the “attractions” be infinite, they will not be centrally “designed” or programmed like Disneyland, nor will they all be about fun or entertainment. In addition, the distribution of engagement will have a very long tail

A “new app store” – No one needs another way to open apps, nor would doing so “in VR” (as an example) unlock/enable the sorts of value supposed by a successor Internet. The Metaverse is substantively different from today’s Internet/mobile models, architecture, and priorities.

A “new UGC platform” – The Metaverse is not just another YouTube or Facebook-like platform in which countless individuals can “create”, “share”, and “monetize” content, and where the most popular content represents only the tiniest share of overall consumption. The Metaverse will be a place in which proper empires are invested in and built, and where these richly capitalized businesses can fully own a customer, control APIs/data, unit economics, etc. In addition, it’s likely that, as with the web, a dozen or so platforms hold significant shares of user time, experiences, content, etc.

(If you want a simpler way to think about the Metaverse, you can imagine it as the Nightmare Before Christmas – you can walk into any experience or activity, and potentially address almost any of your needs, from a single starting point or world that’s also populated by everyone else you know. This is why hypertext is such a key example. But what’s important is to recognize the Metaverse isn’t a game, a piece of hardware, or an online experience. This is like saying is World of Warcraft, the iPhone, or Google is the Internet. They are digital worlds, devices, services, websites, etc.

Source: Handelsblatt, diginomica, Matthew Ball (visionary Venture Capitalist), ESA digital twin earth, Bosch, NVIDIA

Author: CryptoRobby

Robby Schwertner [CryptoRobby] CEO INNOMAGIC GmbH

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