The foundation of the metaverse: centralization versus decentralization

When you ask someone what the Metaverse is, you can expect to hear something like, “It’s the Facebook project…I mean…Meta is working on.”

Indeed, when Facebook renamed Meta in October 2021, at the company’s annual Connect conference, the multibillion-dollar social giant cemented itself — at least in the minds of many casual observers — as the primary architect of the metaverse, the next version of the internet that enables users to immerse themselves in reality – 3D virtual worlds rendered in time.

Meta’s metaverse cost $10 billion this year alone in development. This corporate entity would likely sit on a different foundation than the metaverse that many other players in this space have been working on for years.

This clash of visions is another example of the difference between the interests of large corporations and the people who use their products and services.

New Internet, same centralized problems

Whatever specific form it takes, the concept of a metaverse will play an important role in the future. The entire Metaverse industry is expected to grow at a CAGR of
13.1% over the next few years, and its growth will accelerate as it becomes more accessible.

Epic Games CEO Tim Sweeney sees the metaverse as a potential “multi-trillion dollar part of the global economy”, which, like the internet as we know it today, not belong to a particular company.

Currently, the buzz around the metaverse is, to a large extent, generated by some of the biggest tech players entering the space:

  • Microsoft is launch tools to create immersive spaces with augmented and virtual reality.
  • Apple is prepare to launch its first virtual reality (VR) headset followed by its first augmented reality (AR) wearable.
  • Epic Games already manufactures billions of dollars with Fortnite, a popular protometaverse where millions of players around the world come together in a virtual world to play games, relax and attend concerts.
  • disney was issued the patent late December 2021 for technology that can track mobile devices to create custom 3D projected overlays on physical spaces. The patent would allow the media giant to overlay digital content onto real-world environments, bypassing the need for VR/AR glasses or headsets.

Large corporations will play a huge role in the evolution of the metaverse, which begs the question: Will they introduce the same privacy and data protection issues that plague the Internet today?

Take Meta, for example. The company’s business model revolves around user data. The company then uses the collected data to allow third parties to show Facebook users targeted advertisements, and it share data directly with other tech companies including Amazon, Apple, Microsoft, Netflix and Yandex.

A meta-controlled metaverse made up of virtual reality experiences like Horizon Worlds, locations, and work rooms accessible through Meta’s Oculus Quest headsets would provide endless opportunities to analyze all user activity, including what virtual content users are interacting with and for how long. Meta could then use the collected data to transform its metaverse for the benefit of advertisers and its business partners.

If user interaction data is stored centrally, it would be difficult for independent third parties, let alone regular end users, to verify exactly who has access to it and under what conditions. It’s not hard to imagine another Cambridge-Analytica data scandalwith a political party or nation-state analyzing metaverse users to influence their actions.

Discover the decentralized metaverse

Since 2008, the world has witnessed the enormous disruptive power of decentralization as blockchain-based cryptocurrencies like Bitcoin have become mainstream in financial news, providing alternatives to government-controlled fiat currencies.

Since then, countless applications of blockchain technology have emerged across industries, all leveraging blockchain’s ability to securely and verifiably store data in a time-stamped, immutable ledger within a database. decentralized data without the need for a “trusted” central authority.

Decentralized finance, or DeFi, is a system by which financial products become available on a decentralized public blockchain network. DeFi wallets like Metamask and Trust Wallet are open to everyone. Unlike when you go through intermediaries such as banks or brokerages, unique identifiers such as government-issued ID, social security number, or proof of address are not required to use a DeFi wallet, which increases its privacy and anonymity.

This revolutionary blockchain technology helps solve the privacy and data protection issues that a centralized metaverse would inevitably face. Sean Stein Smith, a professor at City University of New York, Lehman College, shares: “In order to realize the true potential of this space, it will require a transparent and traceable method to 1) transact and 2) interact with each other; blockchain and crypto-assets provide a potential answer to this need. The metaverse may, and deservedly, be in the headlines, but blockchain and crypto-assets are key elements for this technology to reach its full potential.”

Already, a host of decentralized metaverse projects are leveraging blockchain technology to deliver user-owned experiences that are censorship-resistant and interoperable with each other.

Perhaps the most prominent representative of the decentralized metaverse is Decentralized, a world built on the Ethereum blockchain, controlled by a Decentralized Autonomous Organization (DAO) made up of individual actors who can vote to change the policies that determine how the world behaves. Decentraland has its own cryptocurrency, MANA, and this cryptocurrency can be traded freely on cryptocurrency exchanges for other currencies.

Other representatives of the decentralized metaverse include The sandbox and Space Somnium. With Decentraland, these virtual reality universes symbolize in-game assets and plots of land to give players ultimate control over the world they inhabit and help create – the same control they enjoy over their real-world possessions.

The Sandbox map of land owned by individuals, collectives, and corporations or brands like CryptoPunks, Snoop Dogg, Atari, The Walking Dead, and Smurfs.

These decentralized collectives are already witnessing land grabbing by individuals and companies. Like an Airbnb for the metaverse, individuals, businesses, artists, and more can rent virtual places to hold events. Digital billboards exist in these unique experiences, as seen in the image below.

Digital billboard provided by NFTplazas at Decentraland around Crypto Valley.

Digital billboard provided by NFTplazas at Decentraland around Crypto Valley.

Land owned by Binance in Crypto Valley within Decentraland.

Land owned by Binance in Crypto Valley within Decentraland.

The future of the metaverse

Even though the concept of the metaverse has been with us ever since Neal Stephenson published his dystopian cyberpunk novel
Snowfall in 1992, we are still far from its realization.

The success of the first Internet was tied to the interoperable standards and open technologies that made possible what we enjoy today. Modern collectives like the Plans for the Open Metaverse, created by Ryan Gill of Crucible, are a fantastic example of industry professionals beginning to establish interoperable standards to ensure the metaverse remains open and decentralized. Web 1.0 established technologies and standards that are now taken for granted, such as URLs and HTTP. Web 2.0 has moved from a read-only Internet to the User Generated Content (UCG) Internet we know today with the democratization of content creation. Web3 or Web 3.0 will need to have similar standards and protocols established. Once these standards are established, Web 4.0 will be possible.

At this point, the metaverse can be built on two different foundations:

  • Centralized and controlled by large companies such as Meta
  • Decentralized and controlled by the people who inhabit the metaverse

The beginning of the next evolution of the internet, known as the metaverse, is already underway and will likely spawn the next generation of tech giants and start-ups that will disrupt established industries in ways no one else can. cannot currently predict.

Editor’s Note: This post originally appeared on the Allen Interactions blog.

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