Enter the Metaverse

The metaverse. You’ve probably heard the term bandied about in tech/future-related conversations. Maybe come across an article or two mentioning it. It’s been touted as the next big thing, promising to take us to a rich, immersive digital world where the possibilities are endless.

By Medb Kiely-Cuddy · Author at Blockmate.io

Bill Gates predicts that the majority of meetings will take place in the metaverse within the next two to three years.

It seems like we’re on the verge of a major shift in the way we live our lives.

However, despite the existence of some early prototypes, the metaverse has yet to fully capture the public imagination. The recent crisis in confidence, sparked by price collapses and high-profile scandals, has probably pushed it down the list of Web3 priorities.

On the bright side, this gives forward-thinking actors more time to prepare and position themselves accordingly. Big brands such as Nike, Disney, Coca-Cola, and other major brands are creating their own metaverse experiences, giving users a glimpse of what the future might hold.

What is the metaverse, anyway?

Well, according to McKinsey, we don’t really have a definition yet. It’s impossible to really know how this convergence of our physical and digital lives will play out. Futurist Cathy Hackl gives the following explanation:

“It’s our digital lifestyles, which we’ve been living on phones or computers, slowly catching up to our physical lives in some way, so that full convergence. It is enabled by many different technologies, like AR [augmented reality] and VR [virtual reality], which are the ones that most people tend to think about. But they’re not the only entry points. There’s also blockchain, which is a big component, there’s 5G, there’s edge computing, and many, many other technologies.”

If this sounds vague and all-encompassing, you’re not alone. It’s part of the reason why concepts such as “Sims”-esque digital shopping experiences, NFT-based games, and VR-driven social platforms are all receiving the “metaverse” label despite having relatively little in common.

However, if we went back 30 years ago and try to define the internet, we’d run into the same problems. With only email, a basic browser, and some idea of interconnection across the “world wide web,” we couldn’t have imagined what it would eventually look like or be used for. This is the stage we are at now with the metaverse.

All we can say for certain is that a radical transformation in the way we interact with technology is imminent. Powered by blockchain protocols, immersive 3D animations, and virtual and augmented reality, we’ll see a blurring of the boundaries between the physical world and its digital counterpart.

So why should I care?

The metaverse is gradually taking shape, although it remains difficult to define precisely. Industry giants like Microsoft and Meta (previously Facebook) are developing hardware and software that enables interaction with virtual worlds. Meanwhile, companies such as Nvidia, Unity, and Roblox are creating intricate and immersive virtual realms that augment or simulate our physical lives.

And with the technology beginning to catch up with the vision, investment is flowing into the metaverse.

According to McKinsey, over $120 billion was invested in metaverse development and infrastructure in 2022. Brands are creating unique and branded digital worlds, immersive online stores, and interactive customer experiences, opening up a new market for capturing value and establishing themselves at the forefront of people’s digital lives.

And users have responded positively so far, with 79% of those active in various metaverses making a purchase. With Web3 wallets integrated, allowing for easy payments in cryptocurrencies, consumers feel at ease purchasing digital assets within the metaverse.

Whether it’s virtual clothing items, gaming add-ons, NFTs, or other products and services, there is already proven value to be captured in this nascent marketplace. In fact, senior executives expect up to 15% of corporate revenue to originate from the metaverse within the next five years.

OK, it all sounds pretty exciting. What should I do now?

The upcoming metaverse era presents a unique opportunity for fintech companies to capitalize on its features. The metaverse is intricately linked to Web3 protocols, where user identity is connected to a Web3 wallet, access is governed by NFTs, and purchases are made with cryptocurrencies, among others.

If you’re already connected to Web3 and offering your services to users, these can be expanded to include the metaverse.

For instance, you can offer Web3 analytics to metaverse-affiliated businesses to help them identify high-value users when they enter a particular virtual world or store. You can also help them personalize marketing efforts based on users’ previous metaverse behavior and transaction history. Or fintech companies can develop metaverse-ready management tools that help users manage their crypto finances and NFTs.

The possibilities to create value in the metaverse are endless, and the earlier you prepare, the more you’ll benefit from its growing significance in our everyday lives.

Priorities for metaverse builders

Developers and metaverse-affiliated companies are currently focused on creating a more immersive 3D internet. Meta (formerly Facebook) and Microsoft are leading the way, building VR and AR-enabled hardware that seamlessly combines the physical with the digital.

The aim is to create a “phygital” metaverse that incorporates sensors, mobile devices, extended reality (XR), and social networks. This will allow users to interact with virtual worlds in more natural and intuitive ways, using touch, movement, and speech to communicate with people, places, and objects.

In the metaverse, vast virtual economies are being built, powered by blockchain technology. Cryptocurrencies and NFTs serve as the primary forms of exchange, with Web3 wallets at the heart of the user experience. Users require wallets to access various metaverse platforms, conduct transactions, and verify their identities. For instance, they can enter a virtual store, select a product, and instantly pay with their preferred cryptocurrency.

This presents a thrilling opportunity for businesses that establish their virtual worlds, connecting with their audience in novel and imaginative ways.

Finding yourself in the metaverse

The metaverse is proving to be most lucrative to companies in the fashion and gaming industries. Fashion brands can showcase their designs on new platforms and create value with profitable digital fashion concepts, while game companies can utilize the social aspects of the metaverse and use its digital economy to offer players cryptocurrency tokens with real value.

Fintechs who want to take advantage of the metaverse should focus on these two sectors. Companies involved in metaverse gaming require comprehensive analytics of their users to identify value. Offer them services that show active users, bot numbers, user wallet balances, purchase behavior, and other metrics. As metaverse gaming grows in popularity, demand for Web3-enabled analytics tools will soar.

Fashion brands, particularly those that offer digital wearables as NFTs, will need tools that can organize and tastefully display user purchases. Metaverse-ready NFT portfolio apps, particularly those targeting digital fashion enthusiasts, will be popular. While digital fashion is still in its infancy, its potential for growth is vast as the metaverse continues to develop.

Although there is still a long way to go before the metaverse realizes its full potential, as evidenced by Meta’s ongoing challenges, there are already opportunities for innovative fintechs. The sooner you familiarize yourself with the technology and the various use cases of the metaverse, the better positioned you’ll be to take advantage of its benefits in the future.