The metaverse has a Mark Zuckerberg problem. The metaverse is largely misunderstood because Mark Zuckerberg started a hype/speculation cycle when renaming Facebook as Meta Platforms. After an informal survey, we found that most people thought the metaverse was Meta and virtual reality (VR). An actual study has shown that “fewer than one in five (16%) of Americans can define the term” metaverse.
Great news for anyone who doesn’t love the idea of VR or still gets motion sickness from the tech despite the significant improvements from early iterations of virtual reality headsets - the metaverse is not VR gaming first. Giant sigh of relief, right? Big misconception and some worry straight out the window. Another concern? Big corporations and all the insidious things they could do with all our data within the next iteration of the internet - but guess what, Meta is not the only option. We’ll get to the reason to believe in the open metaverse that the strategic genius behind Centrality is building with Futureverse. Perhaps one of the bigger questions we got in response to the informal survey - why is this different from earlier versions and why should I care? Timing and technological innovation is what really makes it different in addition to this transformational place we’re at with the economy and how people feel about the current tech corporations.
No matter what you want to call it, this new paradigm is coming and there’s a whole lot of money behind it. Don’t be the investor that can only see physical media when streaming was coming to market. What is the metaverse, why is it important, and what is the difference between the tech giant strategy and the open metaverse?
Before we get to a framework for understanding the metaverse, why are we talking about future tech when no one knows exactly what the future looks like? It’s important to appreciate how innovation can seemingly come from nowhere and has the ability to completely disrupt very established large corporations. Let’s look at an example of a company where the mix of not liking the way the dominant player in a space does business, along with technological innovation leads to the dethroning of a well-known brand.
Netflix has a new show coming to their streaming platform soon about video-rental behemoth Blockbuster. Brick and mortar Blockbuster was extremely popular and at its peak was a $6 billion dollar business with over 9000 stores.1 The company filed for bankruptcy in 20102 with operations ceasing in 2014. There is one location remaining in Bend Oregon operated nostalgically and independently. No one saw a mail-at-home DVD company turned streaming content provider coming. The idea for Netflix came to Reed Hastings because he didn’t want to pay Blockbuster late fees3 - showing the power innovation can play when it comes from dissatisfaction with corporate policies. The shift from physical media to a streaming service disrupted the old version of mass media consumption thanks to technological innovation. This same shift in tech innovation is occurring today with the new iteration of the internet powered by blockchain technology.
We are transitioning to a stage where it is possible that giant tech corporations of today will no longer be in charge and people will own their own data and identity. Our data will be our identity. Meta, Google and other large corporations have a lot of our data and continue to collect it as we use their products. Our data is gathered with our online presence. Every click, like and search is parsed and collected into an algorithmic method to sell our data so that we can be targeted and fed content and advertising. Cache servers installed in telecom data centers have a distinct feature unknown to most (although telcom pros turned tech futurists like MoneyGCC and aaronmcdnz are definitely versed), they collect user information without them knowing. This information is then used to run analytics for a variety of purposes including, but not limited to, population profiles, targeted marketing and mapping. Social media products we engage with are also constantly collecting our data to only turn around and be used without our explicit approval. In some cases, the same entity, such as Google, could be collecting both cache server data and online activity. This type of data mining comes with an uneasiness in the sense we have no say in what is done with it (even if we think we do). We’ve learned from catalysts like the Cambridge Analytica scandal that corporations shouldn’t be trusted with our data.
Centrality is enabling the Open Metaverse (referred to as The Metaverse) through multiple entities - which come together in what is known as Futureverse. When Aaron McDonald, the visionary at the head of Centrality and Futureverse, recently gave an interview which provides a lot of insight around their approach.
“Like if we assume that the metaverse is just the evolution of our society and economy, and that eventually everything we value exists inside of that, well, not everything, but like a good portion of what we value and how we interact with what we value exists inside of that. That’s really important that consumers are in charge, that end users are in charge and that the technology is democratized because otherwise someone else controls what’s important in our world. And that’s not a thing that society needs or wants. And so, the answer to your question is tied up in that which is, it forces people who are building things, to think first about community and share value with the community. Because if you don’t do that, as an application developer, then your users can take currency, data, assets, social graphs, writing somewhere else”4
We as individuals should have control over our own identity and data. All these innovations of modern society should not be concentrated into the hands of a few tech giants. The metaverse gives us an opportunity to change this paradigm. Not only can we now be the gatekeepers of our own data but it will also allow us to have a self-sovereign identity that we can port in and out of experiences as we choose. The value of doing this is we can also choose to take our community with us wherever we go. The engagement we get no longer becomes censored or algorithmically neutered by corporate overlords. These become our connection to others and migrate to being data and content we own and not necessarily the platform we are in. If this new iteration of the internet, the metaverse Web 35 experience, becomes about content we own as individuals then the shift in the digital economy changes significantly.
One of the biggest problems with the metaverse is there is no consensus on the definition.
So how does Futureverse define the metaverse?
“The thing that makes anything part of a metaverse is if it’s open and the content is transportable, and the user metadata is transportable, and all of the context is transportable. That’s what makes it the metaverse. That is when all of these things can interact with each other. And the third thing, probably the most important thing is that the metaverse exists at the data layer, and not the application layer, and it only exists if the content is built on user owned infrastructure. Because otherwise, it’s just a game. The thing that makes the metaverse different is that users can move their data identity context, currency between applications, the only way they can do that is if it’s on community run infrastructure. Because if it sits on someone else’s server, you never actually own it”6
If we are to take the view of Aaron McDonald and apply them to a true definition of the metaverse then we need to clearly emphasize that data ownership, identity and portability are key to classification as part of the metaverse. In an ideal world, community run infrastructure is more beneficial, however we are not so sure that an example that isn’t completely community run would fail as there could be a solution where portability and trust could be achieved based on an incentivized corporate run network.
“If the same players who have consolidated media, commerce and communications continue to do so, we know how this ends. We have seen it already: when diversity is lost, society doesn't thrive. We can’t go down this path because The Metaverse isn’t just a VR game… it’s the destination where everything we create, value and love will reside. The keys to our society and economy exist inside this future”7
Don’t Zuck it Up.
The amount of articles on the metaverse in the last year has been staggering and many of them come from a place of not understanding it at all due to the Zuckerberg problem we discussed earlier. But with most things in life, time reveals all.
Time to discuss Meta - and oh did we spend so much time debating on what exactly to include about Meta in this installment of our series.
[MoneyGCC] Meta is trying to manipulate the conversation around the metaverse by actively portraying it as VR (eventually AR with Project Nazare). Meta has an operating model and operating philosophy of acquisition and not innovation. The problem with this modus operandi, even for a cash rich company like Meta, is that if an innovator is not at the head of a corporation with vision and strategy in mind, they tend not to innovate and attract new users through inherent growth. The new users that they do gain are usually already part of the acquisition partner which is still in a growth stage. By purchasing the new platform you manage to onboard millions of users onto the mother companies user base and grow by only the cost of acquisition. This type of growth model is not sustainable as a long term strategy because the real innovators in the space will see it and create a defense from threat of acquisition, similar to what Futureverse has done by partnering and receiving investment from multiple large corporate entities that would make their acquisition from the likes of Meta nearly impossible. The alternative path of having an innovator with vision at the head of an organization, the way Steve Jobs was at the head of Apple, allows companies to go through huge natural growth phases and have society following them through that expansion cycle. They create a community around their array of products and have customers advertising to their friends and families for free creating decades long customer loyalty and repurchasing with sustained growth. Mark Zuckerberg has never been an innovator, even the birth of Facebook was plagued with controversy around this subject. Meta users are far from loyal. Instagram was an acquisition that had brought back users that had already left Facebook. And let's be honest, Facebook is really not a platform for the newer generation who have now found Chinese owned TikTok. The threat to Meta is real and Zuckerberg sees it and is looking for an out by corrupting the conversation around the metaverse because he sees a huge growth opportunity. How can we as a society expect Meta to lead us into an innovation cycle around the metaverse if the one at the helm has never actually been an innovator and is actively trying to convince us that the Metaverse is AR?
[lillybelilly] Good research and insight (or at least the standard I like to hold myself to) includes challenging biases as well as acknowledging and understanding risk. Many people have their feelings on Meta (and rightfully so) but still we must recognize that they contribute to the mainstream conversation right now for better or worse. Mark Zuckerberg may be considered a chess player, but has made many missteps. Anyone remember the Facebook phone? You might not remember the phone but you definitely know Facebook. There also gets to be a point where companies mature and don't disruptively innovate on the same scale. When was the last time Apple really wowed everyone like in the days of Steve Jobs? Earlier we acknowledged the role Meta has taken on the individual level around perception of the metaverse, but that confusion also exists at the corporate executive level. Recently CEOs are starting to turn away from the hype that Meta created around the term metaverse and simply referring to augmented reality (AR) as the next big ubiquitous technology of the future.8 There are a lot of tech companies working on their own versions of a metaverse. The Metaverse Standards Forum, with a goal of eventual interoperability has had many large corporations sign on, however there are no published defined technical standards as of yet.
The World Economic Forum includes some of the same large corporate players on their list of partners building towards an “open and inclusive Metaverse” - which let me be crystal clear is not the same thing as THE open metaverse and the standards being shaped by the Open Metaverse Alliance. Futureverse not only mentions the Open Metaverse Alliance in their whitepaper, but also has created a metaverse manifesto.
Interactive Metaverse via WEF (click to explore the static graphic below)
Metaverse, meet the current economic vibe.
An economic shift is forming, accelerated by the pandemic and Ukraine-Russia manifesting in global unfavorable economic conditions. The hard times we are walking into will further push the innovation cycle that has already begun and within that cycle new paradigms will form to escape the mistakes of the past. The previous cycles brought us the internet, email, streaming video, social media, VoIP etc. This new cycle, however hard to predict, has already brought us blockchain and is on the road to bring us self sovereign identity, self custody of assets, the metaverse and anything else developers can come up with to hopefully put power back in the hands of the people and not corporations. In a world in which economies are depressed, similar to the time of the French Revolution, people rise up and take power back. If we are to translate this into modern times it would be similar to taking power back from corporations profiting off of our identity and not injecting that profit back into the system to help society.
New systems of value and commerce will need to form for the next generation to live, survive and gain wealth. It is clear that the current status quo will not suffice. The last three decades have raised gamers, content creators, musical performers and social media stars. There is a public narrative building slowly in which these groups are discussing owning their own content and are being easily facilitated by more and more self custody and permissioned access patents based on blockchain technology, including the Doughnut patent by Centrality. The Doughnut is the tech that enables you to be your own Facebook. My digital footprint is mine and mine alone. You cannot profit off of it unless I tell you it's ok. It allows for permissioned and sometimes limited access to your assets.
With these types of new technologies, we gain new user experiences. In the same way M-Pesa brought banking to much of rural East Africa and Axie Infinity brought play to earn (P2E) gaming, providing income to people in the Philippines to live off during Covid-19.9 The open metaverse will bring in thousands of new user cases limited only by the imagination and energy of the community and developers behind it.
Almost done.
One of the most realistic things about the Futureverse vision is that they admit they don’t know what it will look like in the end. While no one knows exactly what the metaverse will look like, there are things we do know. The metaverse is not just a VR gaming fad (even the most amazing titles don’t stay popular forever), but it’s an evolution of today’s internet that’s coming due to the innovation cycle we’re in. The metaverse is so misunderstood (more to add to your legacy Mark), but it is coming, no matter what name you want to call it. The evolution of the internet makes so much sense when you think about how we already interact between the physical and digital worlds and those lines are blurring even more.
[lillybelilly] With the mention of physical and digital (hey there phygital), I so want to talk about omnichannel and psychological frameworks like the parasocial self - but I’ll save my nerd out for another time.
This is a totally different write-up than what we originally had planned for our second installment. It was just too important to establish a baseline understanding of the metaverse. The majority of people we spoke with thought it was all VR and corporate overlords. We felt many people had very strong opinions but concluded they didn't have any idea about the technological innovation taking place such as self-sovereign identity or permissioned access.
We’re excited for a deeper dive into Futureverse next time. As always, we appreciate you joining us for this journey.
Bunnies Up.
https://www.investopedia.com/news/blockbuster-video-lives-alaska/
https://www.nytimes.com/2010/09/24/business/24blockbuster.html
https://www.businessinsider.com/rise-and-fall-of-blockbuster#but-trouble-was-on-the-horizon-in-1997-as-blockbusters-future-competitor-netflix-was-founded-7
https://adamlevy.io/2022/08/30/fluf-world-founder-aaron-mcdonald-on-the-vision-for-a-crypto-first-metaverse/
Web3 is a total BS marketing term but it refers to a basket of actual important technologies. https://www.forbes.com/sites/forbestechcouncil/2020/01/06/what-is-web-3-0/?sh=1394ea6458df
https://adamlevy.io/2022/08/30/fluf-world-founder-aaron-mcdonald-on-the-vision-for-a-crypto-first-metaverse/
https://www.futureverse.com/whitepaper
https://www.cnbc.com/2022/10/03/apple-ceo-tim-cook-doesnt-like-metaverse-prefers-augmented-reality.html
https://www.cnbc.com/2021/05/14/people-in-philippines-earn-cryptocurrency-playing-nft-video-game-axie-infinity.html