What is a Metaverse?

What is a Metaverse?　A detailed explanation of the basics and future prospects that beginners need to know.

A metaverse is a virtual space on the Internet. In it, participants act as avatars and engage in a variety of activities, including economic activities such as buying and selling land and items.

In this issue, we will introduce you to the Metaverse, which is promising and has a high affinity with blockchain.

Metaverse is a virtual space on the Internet

A metaverse is a virtual space constructed on the Internet. In most cases, the space is represented by 3DCG, and participants act in the virtual space as characters that are their alter egos (avatars).

The first boom in the Metaverse was Second Life

Metaverses are not a particularly new concept. The 2003 game Second Life was a pioneer of metaverse experiences for the general public.

In Second Life, which is still in service as of 2023, participants act as avatars in a virtual space where they can not only talk with other participants but also virtually carry out real-world activities, such as making buildings and holding events. Economic activities are also actively carried out, such as receiving rewards for helping someone else's work, or earning income by renting buildings built on your own land. The currency used in the game can also be exchanged for real-world US dollars.

Metaverse was ahead of its time in the gaming field

Metaverses have been widely used mainly in the world of video games. Familiar games such as Second Life, Tomodachi Collection, and Animal Crossing: New Horizons are all metaverses in that avatars can act in the game world. In a broader sense, games such as Final Fantasy XIV and Fortnite can also be considered games in which you can enjoy a Metaverse.

Thus, there are many games that take advantage of a Metaverse. MMORPGs (Massively Multiplayer Online Role-Playing Games), which have a time lapse similar to that of the real world, are a prime example.

Differences between Metaverse and VR

Although often confused, a Metaverse and virtual reality (VR) are two different things. VR is a technology that makes you experience things that are not supposed to be there as if they exist in reality. Using specialized headsets and controllers, it allows us to experience tourist attractions and outer space around the world. Furthermore, in VR games, you can also enjoy realistic worlds that are not possible in reality.

A Metaverse, on the other hand, is a virtual space for communication, such as conversation and collaboration with other participants. It does not necessarily have to be real.

Of course, there are also Metaverses that utilize VR to achieve a sense of realism.

Components of the Metaverse

Now that we have introduced Metaverses in a nutshell, let's look at the elements that make up a Metaverse. If all of these elements are present, then we can consider it a Metaverse.

Virtual space to interact with others

Although a Metaverse is a virtual space on the Internet, it is important to be able to interact with other participants. The essential significance of a Metaverse is the ability to communicate in the same way as in the real world, such as small talk, exchanging opinions, gathering information, and holding meetings with multiple participants.

Against the social backdrop of the COVID-19 pandemic, which has led to the rapid spread of telework, some companies are creating virtual offices in a Metaverse space. In these offices, avatars, which are one's alter ego, do their work and are surrounded by co-workers, whom one can casually talk to and consult with. Communication is more realistic and comfortable than communicating by phone or email.

A world that has no time constraints and will exist forever.

In a typical RPG, time in the game stands still while the game is not being played. Therefore, the player can start playing again from the scene where the game was last interrupted.

However, a Metaverse has a concept of time, and time passes just as it does in the real world. At the same time, there is no end to the game, and time continues endlessly, just as in reality.

In addition, there is essentially no limit to the number of participants. This may be due in large part to the size and performance of the system, but in a large MMORPG, more than a million players can participate and enjoy the game world at the same time.

A world where the economy is fully viable.

In the worlds of Metaverses, participants can communicate with each other as well as engage in activities such as collaborating, organizing events, and trading items, which can be traded with currencies.

In other words, if the blockchain technology used in crypto assets (virtual currency) is used as a base, items can be bought and sold using crypto assets in the Metavers world, which can then be converted into real world currency. The ability to create a world in which an economy is possible is a key feature of the metaverse.

What can you do in a Metaverse?

Each Metaverse has great potential for the future, and giant tech companies are accelerating their entry into the field. While the business community's reaction to Metaverses has been mixed, the economic consulting firm Analysis Group has released a report, “The Potential Global Economic Impact of the Metaverse.” It states that "the metaverse could contribute as much as $3 trillion to the world's GDP.”

Let's look again at what can be achieved in the metaverse and what is expected of it.

Experience events in a virtual space.

With Metaverses, you can attend live concerts and events online. Since there is no need to travel to the site, you can save time and money. In addition to actual events by artists, a variety of events have already been held, including fan exchange meetings for games and idols, exhibitions for creators, and more.

This kind of use can be done with a video conferencing system, but with a Metaverse, you can create a more realistic experience. You can pay attention to the speakers, look to the left and right to see what is posted, and so on. You can experience the conference as if you were right there in the room.

Can be used for business

Metaverses can be used not only in the game world but also in business. Typical examples include virtual offices, where the office itself is converted into a metaverse, and virtual stores, which are an evolution of today's EC stores.

Virtual Offices

A virtual office is an office in a Metaverse. The COVID-19 pandemic has led to the introduction and implementation of telework in many companies. This system can be taken a step further by using a virtual office system set in a virtual space to create a more realistic environment.

Staff members are displayed with their own avatars, and their status, such as "in discussion" can be displayed so that their status can be seen at a glance.

They feel as if they are working in the same office as their colleagues.

Virtual Shop

A virtual store is a store created in a virtual space. The shelves in the store are lined with a variety of products, which can be zoomed in on to check details, dimensions, and materials as if you were holding the product in your hand. As an avatar, you can freely walk around the store and ask questions to the store staff.

The main feature of this store is that it has a more realistic feel than an online store, and allows shoppers to enjoy shopping as if they were in a physical store.

Create space freely

Spaces within a Metaverse can be constructed as department stores, concert halls, etc. Some of the buildings are not merely set up to resemble real buildings, but actually function.

For example, the sports brand Nike has created Nike Land in a virtual space. Using acceleration sensors in smartphones, users can play tag, dodgeball, and other physical activities, and can even dress their avatars in Nike clothing. Since such an original space can be created in a Metaverse at a much lower cost and in a much shorter period of time than in reality, many companies are experimenting with various approaches.

Why are Metaverses attracting so much attention?

Metaverses have rapidly gained attention since around 2021. There are various factors behind this, but the aspect of infection prevention measures against the global pandemic has undoubtedly played a strong role.

Here are a few other reasons why Metaverses are getting attention.

Digital communication has taken root.

Face-to-face contact was reduced as a measure to prevent infection, and on the other hand, the digitalization of communication evolved with the spread of remote work. Videoconferencing and chat conversations have become routine, and as people have become accustomed to such communication, their resistance to the metaverse has diminished.

And the Metaverse system, which is more convenient and easier to use than videoconferencing with chat tools, has gained a lot of attention.

Evolution of VR Technology

Metaverses increase realism when fused with VR, and technological evolution in the VR field has a great deal to do with the spread of the metaverse.

In the past, VR equipment was large and heavy, and the representation of 3D space was hardly realistic. In recent years, however, both the hardware and software have evolved significantly, with lightweight headsets and high-speed rendering of beautiful graphics. This is another reason why Metaverse are in the limelight.

Impact of the NFT Boom

NFTs are digital data known as "non-fungible tokens". Since NFTs, like crypto assets, use blockchain technology, it is expected that NFT transactions using cryptographic assets will become more active in stores and other locations in Metaverses. It is expected that NFT transactions using crypto assets will become more active in Metaverse stores.

For more information about NFT, please see this article.

What are NFTs? A thorough explanation for beginners of how they work, how to buy, and their future prospects.

Economic sphere created by Metaverse and blockchain

As mentioned briefly in the previous section, digital data has value as an asset when it is converted to an NFT. In fact, land, buildings, costumes worn by avatars, and items in a Metaverse are made into NFTs and managed on a blockchain. In other words, an economic sphere of digital and cryptographic assets has already been created in Metaverses.

While there is some uncertainty as to how this economic sphere in Metaverses will expand in the future, there is great potential for existing services to become more sophisticated and for new, enhanced services to emerge because of the extreme affinity between Metaverses and blockchain.

Metaverse-like blockchain projects

There are a number of blockchain projects with a Metaverse-like worldview. Decentraland, which has been in operation since 2015, is truly a well-established one, but many other projects are being developed daily.

Here are a few of them.

・The Sandbox

The Sandbox is an NFT game using the Ethereum (ETH) blockchain. You can buy lands in the Metaverse and create your own dioramas to invite other players and hold events. You can also create your own 3D games on the land.

・Cryptovoxels

Cryptovoxels is another metaverse using the Ethereum (ETH)-based blockchain. A large number of users are active in the space, displaying and selling artwork and items they have created. These items and the land within the space can be purchased with Ethereum (ETH).

・Somnium Space

Somnium Space is an Ethereum (ETH) based metaverse project. It is accessible from any device, but what makes it unique is its strong focus on VR. Using VR goggles or headsets allows for a highly immersive experience in the Metaverse.

・PolkaFantasy

PolkaFantasy is an NFT game and NFT marketplace dedicated to Japanese anime culture. The system allows players to earn money through gameplay and creators to earn money by exhibiting their works. The game has attracted attention because of the involvement of a team of producers who have led the Japanese anime and game industry.

If you want to start using Metaverses, open an account with bitFlyer first!

Metaverses are a blockchain-based service, within which transactions are made with existing crypto assets. The first step in experiencing a Metaverse is to purchase crypto assets.

bitFlyer has been ranked No. 1 in customer satisfaction* as a crypto asset exchanger and a Type 1 Financial Instruments Firm. We continue to expand and improve our services, aiming to become a highly liquid crypto asset exchange that satisfies as many customers as possible. If you are planning to acquire crypto assets, please consider bitFlyer, where you can deposit your assets with peace of mind.

*Survey Summary: Market Research on Crypto Asset Exchange Services for the Year Ending November 2022

Research organization: Japan Marketing Research Organization

Survey period: November 11, 2022 - November 25, 2022