Does Metaverse Need Blockchains?

Web3 is what we call the blockchain-powered internet, and it has welcomed radical changes. From the rebranding of large companies, to completely new sub-economies. Coupled with all of this is the idea of ​​the “metaverse,” a term that everyone seems to use but no one can quite define.

In marketing parlance, “metaverse” has come to mean one of two broad categories. It is either an alternate reality (virtual reality style, or accessible as a computer game using a screen), or literally any digital experience that connects people together in some way that embodies community.

As cryptocurrencies and non-fungible tokens (NFTs) took off in 2020/21, entire worlds were built around them. Decentralized countryMANA
, Sandbox and Upland to name a few. Each where you can use the world’s own cryptocurrency to buy items or experiences, own digital land or just gamble. To each his own example of the metaverse.

In most metaverse experiences when you buy an item (like sunglasses for the character you’re experiencing the metaverse as) you receive that item as an NFT. Owning this is separate from the game and the items you buy are linked specifically to your wallet (the account on the blockchain you used to buy NFT). If you’re not familiar with NFTs, think of them as digital collectibles.

So money, items, land and experiences are all on the blockchain. But do they need to be?

In October 2000, Cartoon Network launched Cartoon Orbit. A website where users (primarily children) could collect limited edition and numbered digital collectibles, and display them on canvas to show to their friends.¹

In November 2004, the gaming phenomenon known as World of Warcraft came out, popularizing a digital fantasy world complete with its own social structures and eventually over 10 million users.²

Today, almost 3 billion users are active on Facebook every month. ³

Each of these demonstrates the viability of digital collectibles, virtual worlds, and online communities, but none of the three require blockchain technology to function.

The promise of weaving the blockchain into the metaverse is that it will allow for decentralization.

Items purchased in one location may move with you to another experience, or be sold on a third-party marketplace. What you own would be yours, and not trapped inside the walled garden created by a specific company or brand. But is that what consumers want?

AmazonAMZN
has a piece of almost every item for sale, and has become ubiquitous with online shopping in the US. The ease of going to a simple website and not worrying about the details is what keeps users coming back. Instead of searching the web for which detergent to buy, you get top rated items in one place, that site has all your information and you are one click away from buying.

Web3 is still in the phase of a small town that has yet to get its first grocery store. People go to the butcher for meat, and buy vegetables from the local farmer. It’s an experience that works well for enthusiastic early adopters, or those who really care about where the ingredients are sourced, but the mass market wants to get their food and go. Maybe even pre-cooked.

As we see large metaverses come to market, like the one being developed by Meta (formerly Facebook), it will appear that users care little about the technology behind the experiences they take part in. What matters is the value that is derived. by them. If a major tech player created a virtual or social experience that was autonomous in terms of purchases or transactions, it wouldn’t matter if it was powered by a blockchain, a database, or a GoogleGOOG
spreadsheet.

Blockchains offer a huge opportunity for technical progress, such as redefining money, facilitating regulation, driving digital art, and more, but blockchains are truly a separate concept from the metaverse. Although they can live and be used together, it is questionable whether the success of one is really dependent on the other.