The Metaverse, Blockchain, and Social Impact
In May 2022, the University of Sao Paulo (also known as USP) announced that it will be the first public university in Brazil to conduct research on the metaverse. The University launched multiple partnerships to study the social, economic, and health, and legal dynamics of the metaverse. USP also plans to promote courses and events on the metaverse to increase public awareness while finding ways to utilize virtual spaces to research fields such as psychology, religion, and communication. Next up, classes that will be delivered fully on the metaverse? This may be just the beginning of universities engaging with the metaverse.
USP isn’t the only Brazilian institution pioneering engagement with the metaverse. In Rio de Janeiro, Brazil’s second largest city and tourism capital, a professional soccer team has partnered with MetaSoccer to launch a licensed team on the metaverse. Club de Regatas Vasco da Gama has launched a metaverse platform so that users can manage their clubs and generate income while they play games on the MetaSoccer metaverse. Users will earn MetaSoccer crypto after completing goals like winning a match or selling a player.
At this point you might be wondering why a university wants to research the metaverse and why a professional soccer team is creating a platform on the metaverse and what does it have to do with crypto? Let’s back up. You might want to figure out what the metaverse means in the first place.
I. What is the Metaverse?
The term meta means “relating to itself or to something of its own type,” while verse denotes a type of reality. Thus, the metaverse is a virtual reality that exists within our universe. In a more practical sense, it consists of artificial worlds that exist in cyberspace where we, the users, can explore and interact with different environments and other people. If you are thinking of movies like “Tron” and “The Matrix,” you’re on the right track.
The metaverse is an innovative concept because, unlike current digital experiences, metaverse worlds are immersive thanks to many new technologies, namely VR (virtual reality) and AR (augmented reality). The metaverse doesn’t consist of only a specific technology; instead it encompasses a wide array of technologies that allows users to engage with three dimensional experiences. These advancements enable physical and digital worlds to merge, allowing us to see, touch and manipulate virtual objects. We can do this by using hardware such as VR/AR glasses, gloves, and controllers. Metaverse users can experience historical events, virtually visit other countries, and even see subatomic particles right from their homes.
Another significant change brought on by the metaverse is ephemerality. In our physical world, we communicate ephemerally meaning that when we speak, someone can hear what we said but there is no long-term record of what we said. Emails or text messages over the internet, conversely, create records that can be reviewed and modified. The metaverse is more reflective of our real-life experience since conversations on the metaverse will be ephemeral and more similar to face to face conversation.
The metaverse will have provide a greater range of experiences. Our avatars can do yoga in the morning, go to a virtual office in the afternoon and skydive into an island for a battle-royale video game at night. Since metaverse environments do not require physical presence, users’ experiences will be more fast paced and dynamic, allowing them to pop in and out of different virtual worlds as they wish.
So, while it may seem daunting to hear the term “metaverse” at first, especially given how often the term is being used, it is essential to understand that the metaverse basically represents a new way of utilizing software and hardware technologies to engage with other people. Simply put, a metaverse is a virtual environment that emulates physical spaces, allowing for an even more immersive experience than the current internet and a greater variety of spaces to explore.
II. What is a Blockchain and how is it related to the Metaverse?
The metaverse will also interact with a set of new technologies powered by blockchain. Technology experts have identified blockchain as one of the most innovative phenomena since the advent of the internet. Blockchain uses technologies such as asymmetric cryptography, hash functions, and consensus mechanisms to secure transactions on a distributed, decentralized ledger. Blockchain powers fast, efficient transactions on a peer to peer network that does not depend on traditional intermediaries such as banks.
Before diving into how blockchain will interacts with the metaverse, it is important to understand the basics of blockchain technology. Blockchain powers a set of new technologies ranging from NFTs to cryptocurrencies to CBDCs. Check out our briefs, Introduction to Blockchain, Introduction to NFTs, and Introduction to Money/Cryptocurrency, to learn the fundamentals.
Blockchain technologies range from popular cryptocurrencies like Bitcoin to digital art such as NFTs. These new forms of digital payment and ownership will be a major part of digital worlds on the metaverse.
Shopping on the metaverse could be powered by blockchain based payments and NFT based digital ownership. For example, a user could try on a digital shirt in the metaverse via the user’s avatar. This avatar would be a digital representation of the physical user enabling the user to know the exact fit of a physical shirt via the digital avatar. This could enable the user to order a shirt in the physical world after seeing how well it fits on the user’s avatar in the metaverse. This user could have both a physical shirt via an online order a digital shirt powered by an NFT which assigns ownership of that specific shirt to the specific user. Moreover, a user could pay for the shirt using a cryptocurrency such as Bitcoin or a stablecoin such as BRZ or Tether.
III. The Metaverse & Social Impact
Although it is still in its initial stages, the metaverse could bring multiple advancements to social equity and promote greater accessibility. The metaverse has the potential to limit geographical and financial barriers because metaverse technologies allow users to explore a wide variety of environments with the help of virtual and/or augmented reality hardware.
Education is one of the biggest sectors the metaverse will impact. Through the metaverse, teachers can more easily visualize complex ideas and magnify microscopic such as human cells in an anatomy class or the basics of an atom in a physics class. This could enable greater interaction and deeper understanding. Students will also be able to virtually visit different times and places, from the Jurassic Period to Ancient Greece, and truly experience the historical moments they are studying. The metaverse could democratize education by helping students access world-class education from anywhere in the world.
Moreover, healthcare could also be significantly affected by the advances of the metaverse. Increased use of virtual environments will promote advancements in telemedicine and increased accessibility. Furthermore, people with motor disabilities may be able to engage with previously inaccessible experiences, while able bodied individuals may be able to use metaverse platforms to better understand how a motor disability impacts daily life. VR powered medical training could also become more affordable if medical technologies that teach on the metaverse become more present in schools and hospitals. For example, virtual operating rooms could allow students and surgeons to practice complex procedures and refine accuracy with limited risks. Augmented reality can improve doctors’ vision, provide easier access to information, and improve surgical precision in actual operations.
A growing area of social impact startups are also seeking to take advantage of the metaverse. For example, Andres Bilbao, the co-founder of Rappi, one of Latin America’s leading delivery applications, created Invert, a start-up focused on rainforest conservation in the Amazon rainforest. Using traditional finance mechanisms such as biodiversity and carbon credits, Invert seeks to buy land in the Amazon region to protect it. The Invert team is also studying how they can create a digital depiction of that land on the metaverse and assign NFTs to the land. They seek to eventually sell those NFTs to increase capital for rainforest conservation and to help people learn about the flora and fauna in the Amazon. Invert seeks to emulate the physical Amazon on the metaverse so that Invert’s NFT owners can digitally interact with and learn about the Amazon region and conservation efforts.
Overall, one of the greatest impacts the metaverse could have is promoting accessibility in the physical, geographical, and financial sense. Barriers in these areas could become smaller because digital environments can emulate, with high precision, almost any real-world scenario.
IV. Challenges Ahead
The metaverse has the potential to bring about many positive changes discussed above but the metaverse also has a large set of challenges and risks that need to be studied and addressed. Without adequate policy mechanisms and public awareness, the metaverse could have perverse impacts that limit its positive benefits. There are many challenges, but we will focus on health/safety, privacy, interoperability, and inclusion.
Health & Safety
Many of the health and safety concerns on the metaverse involve similar considerations for the internet, albeit with heightened risk due to the metaverse’s ability to emulate real world scenarios with enhanced precision. For example, digital addiction is a major health concern given increased individual use of phones, the internet, and potentially the metaverse. Digital engagement can stimulate dopamine, the “good feeling” chemical in our brain. This can happen when we see a positive message or get notifications on social media applications. If this happens often, the brain can get accustomed to and eventually addicted to relying on these stimulations of “good feelings” arising from digital applications. Social media notifications, video games, online purchases, and profitable investments all lead to these types of dopamine driven pleasure responses in our brain and the metaverse will involve a potential combination of all these digital engagements. With virtual interactions set to become more intense and realistic on the metaverse, there is a heightened risk of addiction. Additional health/safety challenges involve content moderation and user mental health, issues that are increasing complex on the metaverse due to its ability to replicate real world scenarios.
Concerns regarding privacy will need to be tailored for the metaverse since its related technologies will enable a wider array of data collection compared to the current internet. For example, companies on the metaverse may have access to eye movements on VR headsets. These movements can provide critical insights into consumer preferences and advertising. They can also predict intimate personal information and preferences that people may not want to share with third parties. Policy makers, private companies, advertisers, and users need to think carefully and creatively about how privacy will be protected on the metaverse given its greater potential for data collection and inference. Companies on the metaverse will need to help users understand how their data is being used and provide users with control over what is being shared.
Interoperability is the ability of different systems to communicate with each other, thereby allowing services from one platform to be accessed from others. The internet is an interoperable system because anyone can use web protocols to navigate web applications. Promoting interoperability throughout different virtual realities is essential to ensuring that everyone can access the metaverse and reap its benefits, no matter what equipment they use. The metaverse will be built by different companies who will have their digital worlds. Think of each company as a distinct island that is part of a larger country called the metaverse. Users will likely have to log into these distinct islands and most experts see the future of the metaverse as one big country with distinct islands that users can hop in and out of with their avatars or other digital personas. This type of interoperable future for the metaverse is very similar to how our current internet operates.
Without interoperability, users would be divided by the different VR operating systems and platforms, pushing back advancements to increase accessibility. Interoperability is also beneficial to the economies that operate inside the metaverse, as integrated systems could let users explore different metaverses with a single avatar, carrying over digital purchases made in one platform to others. This could simplify the process for entering different virtual realities and lead to open negotiation of digital items across multiple platforms.
The metaverse can provide an impressive degree of precision for users, but it requires strong internet connections and hardware such as headsets. Areas that suffer from limited internet access or are priced out of hardware like headsets will not be able to take advantage of the metaverse’s benefits. This scenario could further exacerbate the digital divide that is already a major concern in our current internet infrastructure. Governments need to work with technology companies to bring down the price of hardware and invest in the necessary connectivity infrastructure so users can engage with the metaverses benefits.
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*Mohammad is an International Fellow focusing on governance and financial inclusion in the blockchain, digital currency, and fintech sector. Mohammad completed his JD from Harvard Law School, his MPP from the Oxford University and his degree from the University of Maryland. Mohammad is passionate about technology-based solutions to economic and legal challenges in emerging markets. He speaks seven languages and has traveled to nearly fifty countries.
** Alumnus at Latin America Leadership Academy (LALA).