Metaverse. This word has become increasingly more prominent in the internet culture. But what does it even mean? What is metaverse and why should you worry about it? This article will try to help you find out the answers to all of these questions and more.
What even is metaverse?
Before anything, we have to set up the base premise. So, what is metaverse? Well, imagine a virtual world where milions, maybe even bilions of people work, shop, learn and interact. And all of that from the comfort of their own home.
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The name itself was coined by Mark Zuckerberg, after his company Facebook renamed and rebranded itself as “Meta”. According to him, the metaverse should offer all of the benefits of our real world, without any of its negatives. Several people, especially big bussinesses, took great interest in this project (as they usually do). This means, that even though the metaverse doesn’t really exist yet, it’s already techically earned billions of dollars.
Why is it important?
The metaverse is increasingly resonating in the technology sphere as the logical successor to the current “verse”. How will this world be transformed by banks and why are we already seeing land purchases by big banks? Are we missing the clear trend of virtual worlds?
A new world means new opportunities. And where there are new opportunities, there can be no shortage of banks. For example, JP Morgan, as a proper financial institution, calculated the potential of the new world in terms of money and came up with a figure of one trillion dollars. And that’s worth a bit of attention.
No wonder that the aforementioned bank was one of the first to buy space in a department store in the virtual world of Decentraland. Similar to the Spanish bank Caixa, which built a café in the same space. With these bussinesses spearheading the metaverse land aquisition, we can only wonder about what happens next.
As it goes, if one bussiness does something good, others will try to replicate it. London’s HSBC, for example, has bet on another metaverse: The Sandbox. HSBC bought its first plot of land here. If the Sandbox works out and becomes a real metaverse, having the title of “first purchased land” will grand the HSBC an incredible amount of prestige.
Why are banks so interested in it?
The question of the day seems to be why banks are doing this in the first place. The first and probably most sensible reason is simply to explore and learn. Allowing employees to go through articles about metaverse in their work hours is different from setting aside budget and time for serious trend capture. That is, including the eventual purchase of land.
Clearly, there is little to lose by judicious research in practice. On the contrary, the knowledge gained is crucial for the eventual production of products or just a mere meaningful commercial existence in that world.
You want to be the first one there
Another possible reason is the ambition to be among the first there. To catch a trend and establish an unshakeable position in the viral world. For example, buying lucrative land or a good branch location can be a theoretical advantage in the future. As was said before, just being the first there can mean a lot when possible customers decide between your brand and a competing one.
Banks know all this well, of course. That’s why they create a space that means very little in terms of their budgets for innovation. On the other hand, it must be acknowledged that a mere “buy and wait” strategy in the virtual world will certainly not be enough. If all you do is buy what amounts to some cloud space, there’s not much you can do with that. You can’t just buy space mindlessly, you have to set a goal and know what you do with the space, even before you buy it. Similar to real property.
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It just looks good on your resume
Last but not least, it is also about self-image. For banks, joining the metaverse is now a great opportunity to translate their presence into PR content. In theory, much of the cost can be recouped simply by presenting their successes in alternative worlds, thereby gaining media space that they would otherwise have to pay for. Who would’ve guessed that a bank’s success in something might improve their public image.
Why should I care?
From a client perspective, the fundamental question is why they should visit their bankers and financial advisors in a virtual branch. One of the most commonly cited reasons is the assumption that virtual worlds will be our next screen. Just as we look into a computer monitor or tablet or mobile phone screen, we will be looking into the metaverse through virtual reality headsets.
One of the biggest questions people ask is: “Is it even worth it?” And it’s true, it might seem a weird idea to go through this whole metaverse thing just to do something you can already do online at first. But what’s important is that it won’t actually be the same. When you visit the bank in the metaverse, you’re not just speaking with a machine, you will be interacting with a real person, it’s just that that person will not be directly *in* the bank.
Benefits of meta-banks
So we established the difference between the metaverse banks and on-line websites but that’s not all. In addition, virtual reality offers completely new possibilities by combining the virtual world with “face-to-face” interaction, for example when it comes to presenting more complicated products such as investments or mortgages. This can be a clear benefit from the client’s perspective.
Other possibilities remain at the theoretical level, namely the creation of completely new financial products, because here too clients will certainly welcome someone to protect their digital assets, for example in the form of digital cash. The biggest thing in this department will probably different versions of cyber-security. Since your money will technically be stored online, the biggest thing you should worry about is how easy is it to lose it.
There is even the possibility of real-life banks to completely give way to their meta counterparts. It could also be possible that we will get a strange compromise, where affairs in the metaverse will be resolved in the “realverse”. But who knows, we may even see the first mortgage for a plot of land or a house in a virtual world from a real bank in a few years.
Is the metaverse the future?
Despite the apparent potential of virtual worlds, on which, among other things, Meta has bet as the operator of the world’s largest social network Facebook, it does not look like a bright future for metaverse according to the available data.
The market capitalization of both The Sandbox and Decentraland has seen virtually only one direction in the last year, and that is down. And in both cases, it’s been a fall to about a tenth of their peak values, which both worlds reached last November.
The whole situation hasn’t been helped by reports that Decentraland is pretty empty, with 38 users a day roaming around. The Sandbox is better off in this respect, as you can come across up to 522 avatars there.
While these numbers are derived from user wallet activity, and thus not confirmed by the metaverse itself, it doesn’t give the whole industry an ideal calling card. Especially considering the fact that the current valuation of the projects amounts to $1.3 billion in both cases.
So the metaverse might not be all it was cracked up to be. But don’t worry, because this won’t be the last time we hear about some sort of virtual landscape. There are several factors that are influencing the metaverse popularity.
Firstly, virtual reality is still in its earliest stages, and since the technology is new and still developing, it can get quite expensive. The low numbers in both worlds don’t mention the fact that frankly, not everyone can afford the entire virtual reality headset, with a computer powerful enough to run it.
Secondly, people are still getting hang of not only the technology itself, but also of all the thing you can do inside of it. You can’t really hope to create a realistic, Earth-like landscape from scratch. In this, virtual reality is really close to video game development. Just like you can’t create a AAA game with no coding knowledge, you also can’t create an entire virtual universe without any experience.
And lastly, some people just don’t want it. As was mentioned earlier in this article, some people just don’t see any worth in going throught this whole metaverse thing to do something they can simply do online. Why should you buy an expensive headset, when a cheap notebook might do the jobs just as well.
In conclusion, no, you don’t have to worry about missing out on some insane new invention, but I wouldn’t completely discard it. Who knows, maybe 10 years from now, everyone will have their own VR setup and the metaverse migh change from a simple idea into our new reality.