Metaverse. Metaverse. Metaverse.
It is all we hear about today. Scroll through YouTube and you will see any number of videos touting "The Top 5 Metaverse Stocks To Buy." This is truly baffling.
In this article we will breakdown some of what is taking place and how outrageous things are getting.
Hype Cycle
We have to remember that there are many pieces to what will eventually be the Metaverse. This is also going to be a drawn out process centered around development. There are a number of technological challenges before we arrive to anything that resembles a working model. In other words, do not expect the Ready Player One experience anytime soon.
What we are witnessing is not uncommon with technology. In fact, it is usually part of the process. Technologies go through hype cycles that follow a predicable path.
The Metaverse concept is on that right now.
Garnter developed a model detailing how this works. We can break down the basics to this.
Here is the Gartner Hype Cycle:
As we can see, the attention that Metaverse received is easy to pinpoint. We are progressing up the first slope, heading towards the Peak of Inflated Expectations.
Of course, Metaverse isn't really a technology but, rather, a number of different innovations compiled together. Nevertheless, we can apply this concept to what will take place.
The excitement around the Metaverse is going to die out. The reason why expectations crash and push things towards the Trough of Disillusionment is because they get ahead of technological capabilities. A new innovation is introduced and everyone gets excited about it. Articles are written causing people to purchase or utilize what is created.
What ends up happening? It sucks. The first generation of any new technology is slow, clunky, expensive, and full of bugs. This causes a major crash in what people think about it. Of course over time, things get better with upgrades and further development.
The challenge with Metaverse is trying to find it.
What Is The Metaverse?
We are to the point right now where there is not an agreed upon definition of what the Metaverse is. Here we have the problem of how do we size up something we cannot even define.
This makes no difference to those who are actively promoting it.
What we know is that it is going to be a future evolution of the Internet. Unlike some are proclaiming, it is not likely the next generation. Instead, it will be something much bigger. It makes sense that our next iteration will be Web 3.0, another component of the much larger Metaverse.
Either way, this is not tempering the expectations whatsoever. Grayscale even got into the action. They published “The Metaverse, Web 3.0 Virtual Cloud Economies”.
In this report, two things stand out. To start, they believe the Metaverse is already here with users. While that is not technically wrong, it is truly not in keeping with how things are unfolding. That is akin to saying that television watchers from decades ago were satellite users. Certainly the broadcasts were beamed via satellite, most people simply turned on their television to watch the signal that was received via an antenna on the roof. Yet, would anyone say that those watching television in the 1960s were satellite users?
The second piece to this is the fact they believe it will be a $1 trillion opportunity. Here is where things make no sense. What the heck are their criteria?
Obviously, the lack of definition and hype is clouding things. If one is taking the Metaverse to mean virtual, then that encompasses the entire Internet. Obviously, future iterations will move this from 2-D to 3-D. However, even in a world of screens, this is virtual.
They also seem to want to have it pertain to cryptocurrencies. If that is the case, the $1 trillion opportunity was far exceeded since the market cap is near $3 trillion.
We also have people who want to focus upon the mixed reality (AR/VR) experiences. To them, this is the Metaverse. While that certainly is going to bring on a new iteration of things, this only captures a small portion of what is going to take place.
As we can see, there is a lot of confusion surrounding the Metaverse, something the mainstream media is not delving into. They found a buzzword to hook people.
How Big Will The Metaverse Be?
This is going to top Grayscale's prediction albeit in a much longer timeframe.
The Metaverse is going to be worth many quadrillions of dollars. It is also going to take decades to unfold. This is not something that is a near term innovation.
Essentially, it is the ongoing progression of the Internet. Looking at what took place, the Internet of the 1990s is not the same as today. This version is far more encompassing. We also see a great deal of development went into generating our experiences that we presently have. One of the biggest advancements was the evolution of our communication systems. The infrastructure of the Internet is a great deal more robust than it was 3 decades ago.
At the same time, we are now in a mobile world. That was not the case back then. Here we have an innovation that changed society a great deal.
Asking what is the opportunity in the Metaverse is like trying to apply to that the Internet. How much is the Internet worth today?
Cisco famously put a price tag on it in 2014 of $19 trillion. Another attempt was made by an individual a couple years ago, and the value was around $30 trillion. In reading the analysis, it is easy to see this person took the bare components. Obviously, the Internet's value is a great deal more than just its "organs".
Ultimately, it is impossible to truly value something like this. The same holds true for the Metaverse and what it will do for humanity. Eventually, the Metaverse will encompass everything. We are in the process of seeing much of our physical world digitized. There is a layer being constructed on top due to 3-D mapping and the "trillion sensor economy". We also are going to see digital twins of many physical items such as factories, automobiles, and wind turbines. Almost everything that is in the physical will have a digital representation.
Then we have our multiple avatars which will enable us to increase our experiences by a couple orders of magnitudes. As software capability advances, we are going to see this coupled with digital representations that allow for us to operate in different multiverses simultaneously. Think if it as bots but on steroids.
For all of this to occur, we are going to require latency levels that are not seen today. This means enhancing our communication systems even further, ultimately getting edge computing to the point where most processing is done away from the cloud. Localizing all of this necessitates overcoming a host of technical challenges. It will be done, just not in the next few months.
In Conclusion
None of this is written to be a Debbie-Downer. It is an exciting time to be witnessing all that is unfolding. We are literally watching the future being developed on a daily basis.
However, that does not mean that things are not getting ahead of themselves. Our evolution towards the Metaverse is going to be incredible. Over the next couple decade, most aspects of life will change. While progress will be rapid, it will also be very lethargic.
Development takes time; large scale development takes a long time.
Therefore, pay attention to what is taking place while also not buying into the hype. Have no fear about missing the "early days of the Metaverse". It is going to be a long process. At the same time, when the crash in hype occurs, do not believe the Metaverse to be a misplaced idea that did not work out. The development is going to keep on even after the attention fades away.
Presently, we just have to deal with the Metaverse Madness.
Other articles about the Metaverse:
- The Confusion Around The Metaverse
- Cryptocurrency and Blockchain: The Foundation for the Metaverse
- Metaverse: Interoperability and Portability
- Splinterlands: Welcome to the Metaverse
- Metaverse: The Replacement for the Nation-State
- Metaverse: The End of Hollywood
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