Navigating the Metaverse

A Guide to Limitless Possibilities in a Web 3.0 World

Cathy Hackl, Dirk Lueth, Tommaso Di Bartolo, John Arkontaky, John Arkontaky

• Publisher: Wiley
• Year: 2022
• ISBN:
  9781119899013
• Edition: 1
• Topic: Business
• Subtopic: Trading
• Index: Business

Jump into the metaverse to connect with consumers and explore endless opportunities

Like the Internet before it, the metaverse is a virtual space bringing people, companies, and products together in both digital and real environments to create new economic opportunities. The groundwork is already laid. People and organizations jumping in are gaining invaluable experience, meeting customers, developing revenue streams, and even shaping metaverse culture.

In Navigating the Metaverse: A Guide to Limitless Business Possibilities in a Web 3.0 World, a team of Silicon Valley thought leaders delivers a groundbreaking discussion of how to find the right opportunities in this fast-moving universe. You'll explore everything from the metaverse basics, to strategy, to launching your first metaverse project. In the book, you'll find:

• Data and market analysis to erase any doubt that the metaverse is the next big thing.
• Foundational knowledge about the metaverse, metaverse economy, Web3 technology, and more.
• The essential connection between metaverse environments, businesses, community, and digital products that make the metaverse economy so powerful.
• A deep dive on non-fungible tokens (NFTs) and how to make the most of these assets.
• Frameworks to help find, nurture, measure, and capitalize on innovation in the metaverse.

An essential breakdown of the next stage in online business, Navigating the Metaverse belongs in the libraries of entrepreneurs, executives, and innovators looking to lead in the new age of online business and commerce.

PART I
Getting to Know the Metaverse and Metaverse Economy

Chapter 1
A Primer on the Metaverse

Whether for a new board game, a phone, or other goodies, nobody looks forward to reading instructions. There's an urge to jump in and go. But the sticklers who crack open the manual “get it” faster. The same thing goes for the metaverse economy. Taking a little time to familiarize yourself with the metaverse, including the terminology and basic concepts, will get you past the learning curve and onto exploring the possibilities of the metaverse economy more quickly.

If you feel like you're already past this “metaverse 101” material, feel free to jump past our terminology section. Head over to the next sections for our take on what the metaverse and metaverse economy are, for crucial context you'll need to understand the rest of the book.

We don't want to turn this into a textbook, so we're keeping this section lean. Keep in mind that the space is rapidly changing and terminology may shift with it. The metaverse is being built today and will take some time to reach its final form (if that even exists). It's also important to recognize that different experts have different definitions and may use a slightly different lexicon. This primer will get your feet underneath you to understand our viewpoints and insights, which are a part of the broader conversations happening in metaverse circles. Also, because the metaverse is evolving, we encourage you to look beyond our book to refresh your knowledge and keep up.

Terminology

• 5G: This refers to the fifth generation of cellular wireless technology, the wireless standard thought to be a critical leap forward in cellular communications. The data transference is said to be strong enough for technology companies to deliver more data with less latency or quality degradation. Here, peak speeds can reach up to 20 Gbps and a 1-millisecond latency. In short, 5G is crazy fast, and these speeds will give metaverse travelers smoother connectivity.
• Artificial Intelligence (AI): Artificial intelligence is the ability of a computer or robot to “think” or perform comprehension similar to how humans process information, learn, and solve problems.
• Augmented Reality (AR): Augmented reality uses technology to enhance the real world by placing data, interactive digital objects, or other digital media “on top” of the physical world. Pokémon Go is a perfect example, where players use a mobile device to find and capture Pokémon creatures in real towns and cities.
• Blockchain: The blockchain stores data and includes smart contracts in a way that enables people to have true ownership of digital assets in the metaverse. Smart contracts created for every transaction are stored in decentralized, peer-to-peer networks designed to offer transparent, traceable, and immutable records. Ethereum, EOS, and Solana are examples of public blockchains. This is in contrast to other data systems that are centrally controlled and can be changed by the operators.
• Blockchain is the keystone of the metaverse economy because true ownership of assets is decentralized, which makes it publicly available and reliable. Because of blockchain, people can own authentic digital assets such as non-fungible tokens. Because they are authentic, “one-of-one” items, there is scarcity. Where there is scarcity, hence desirability, there is (market) value.
• Blockchain Gaming: Just as we described blockchain above, games that use blockchain technology have an immutable, traceable data-storage network behind in-game transactions. This is crucial in ensuring players are purchasing and earning authentic digital items (e.g., fungible and non-fungible tokens). The actual in-app or in-game experience covers anything from traditional video game genres to newer “play-to-earn” and “play-to-own” models.
• Cryptocurrency: A cryptocurrency, or crypto coin, is a digital currency that runs on its own blockchain. It functions much like fiat currency, with the key differences being that they are 100% digital and managed in decentralized computer networks (versus fiat's central banking system). The biggest cryptocurrencies are Bitcoin and Ethereum. However, there are many cryptocurrencies on crypto exchanges. Currently, there is minimal utility for many cryptocurrencies. However, this may change as the metaverse evolves and cryptocurrency becomes a more dominant form of payment.
• Crypto Exchanges: These are (mainly centralized) marketplaces to buy, sell, and trade cryptocurrency and some crypto tokens. Examples include Crypto.com, Coinbase, Binance, and Kraken.
• Crypto Token: A token is a fungible currency created within a specific application. When these tokens have utility, they're earned inside applications and used to purchase items or services inside their respective applications. A good example is Axie Infinity's Smooth Love Potion (SLP) tokens, which are earned by winning in-game events and then used by players to breed new Axie creatures.
• Crypto Wallet: These wallets are secured software platforms that store a person's crypto assets.
• dApp: A decentralized application, or dApp, looks and performs just like any other app from video games to productivity software. The key is the decentralized network behind the user experience that uses blockchain to store data and smart contracts. We break dApps into two major categories: platforms and single-functionality apps. A platform allows other dApps to function inside its ecosystem (think Salesforce's AppExchange), while dApps with singular functionality don't.
• Decentralized autonomous organization (DAO): A DAO is represented by transparent rules via computer code on the blockchain that have been defined and are controlled by the organization members. DAOs use blockchain-based smart contracts to record governance rules and voting results. It's “by the people, for the people” governance inside an application.
• DeFi: Coinbase defines DeFi, or decentralized finance, as an umbrella term for financial services on public blockchains. You can do most things a centralized bank system supports, such as borrowing, lending, trading, and so on. However, DeFi is a peer-to-peer system that doesn't require an intermediary third party such as a bank.
• Edge Computing: IBM defines this as a distributed computing framework that brings applications closer to data sources. Internet of Things (IoT) is a good example: A smart refrigerator is capable of connecting back to a data source (from the manufacturer) while processing user input.
• Fungible Token: Fungible tokens are interchangeable assets with 1:1 value. A good example is Bitcoin; one person's Bitcoin is equal to another's Bitcoin. In-game utility tokens are also good examples.
• Minting: Minting “certifies” a digital asset on the blockchain to turn it into a non-fungible token.
• Non-Fungible Token (NFT): An NFT is a digital asset that is unique and singular, backed by blockchain technology to ensure authenticity and ownership. An NFT can be bought, sold, traded, or collected. Virtually anything can be an NFT: art, sports highlight clips, game items, even information.
• Play-to-Earn Games: This is a relatively new game genre where people play to eventually extract monetary value.
• Smart Contracts: Ethereum defines a smart contract as simply a program that runs on the (Ethereum) blockchain. It's a collection of code and data capable of sending transactions over the network. These contracts are not controlled by users. Instead they are deployed to the network and run as they are programmed. Smart contracts have defined rules, like any other contract, and automatically execute them via their coding.
• Virtual Reality (VR): With VR, a compute...