Rome wasn’t build in a day. The metaverse will not be constructed overnight. That said, we are on an accelerated timeline. Previous civilizations took centuries to emerge. A nascent Metaverse will take decades.
After discussing the macro-reasons why the UAE should lean into the virtual economy, this article is about near-term challenges in building a global metaverse. Part II, next week, will look at the opportunities.
*A note on the elephant in the room: I’ve taken several steps to contain Mr. Nakamoto from communicating over this channel. So far efforts to contain my avatar appear to have been successful. My only concern is that Hiro’s AI appears to have discovered twitter.
Computing Power:
Games like Fortnite are able to host 10.7 million players simultaneously, by distributing the compute into 10,000 separate player sessions (source). A year ago I predicted that low-fidelity worlds would be able to host between 700-4000 simultaneous players in the future. Improbable studios in the UK achieved that benchmark recently.
Right now, the compute doesn’t exist to host anywhere close to 1 million citizens in a simultaneous low-fidelity metaverse.
The dream of 1 billion people in a high-fidelity Virtual Reality enabled meta-reality is likely decades away.
No Memory in the Metaverse:
When you destroy a building or cut down a tree in almost all gaming worlds, it “re-spawns” and grows back within a couple of minutes.
From MMPORG gaming to the metaverse, the memory requirements of creating a ‘dynamic’ and ever changing map are simply too great.
It’s unclear how computers would render “time” in a shared reality for millions of players. On the one hand, temporality can be coded into NFTs (see my writing on a perishable blockchain based “virtual energy drink”).
Yet time also introduces jeopardy. A metaverse with history, is also one where your avatar can get hurt, and a virtual building can get torn down. Here there is no re-spawn, no chance to replay the battle; no option to reset time, or virtual assets you have just sacrificed.
Because of this, I believe “time” will become the key asset in the metaverse. Not land.
The idea of the metaverse as a civilizational space and not simply a digital market, is not possible without a rendering of time, and a recording of in-world history. Because of this, “Time” and “History” are among the critical compounds that distinguish the metaverse from a video game.
Big Tech Commission Rates:
Big tech platforms intend to charge up to 47.5% commission on every trade in metaverse worlds, with platforms like Roblux already charging creators a 72% commission.
Once these domains reach sufficient scale, nation-states will feel entitled to levy a digital tax.
Such economics are identical to the efforts of the old telecoms unions - the ITU and others - to charge metered access to the Internet in the early 1990s. I’ll cover this for GenZ and millennial readers in future, but many 1980s brats will remember how close we came to not having a functioning cyberspace.
Exploitative economic practices, geo-fencing and the a lack of trust in western corporations all provide an opportunity for independent blockchain based worlds.
Old World Streaming Infrastructure:
Most contemporary cloud streaming infrastructure belongs to the old world. This does not bode well. A global metaverse is hardly possible if the underlying architecture, infrastructure and protocol is all hosted on Amazon Web Services (AWS).
Blockchain based cloud streaming services are emerging. Yet even then, the technical challenges are enormous.
The bandwidth requirements between peak and off-peak hours, the geographical location of servers and the cost of electricity have implications for equal access and the north-south divide.
The current trajectory of metaverse economics is one where the rich world goes to play, and the poor in Taiwan, India and Philippines go to work. Networks that can ameliorate these trends or offset them will prove the most disruptive.
Beyond this, in-game physics, haptic feedback, immersive audio, or realtime face-tracked avatar emotions will all rely on massive amounts of data streamed into the metaverse for every single avatar. Streaming these data requirements seems almost impossible.
Old World Economics vs. Metaverse Markets:
He who controls the metaverse, controls the future. Don’t believe it? Check the numbers.
Fornite has 300 million users. Roblux has 43.2 million users. Around 3.56 billion people use META/Facebook. Now imagine citizens across these early-stage platforms are transacting in virtual currencies, and trading virtual assets oblivious to physical borders.
At this point, the nation-state is a relic.
Whoever controls the infrastructure, protocol and payment layer of emerging virtual asset markets, controls the global financial system of tomorrow.
How Real is Virtual Property Ownership?
Yes, your virtual asset is immutably registered on the blockchain. This “timestamp” may include the geo co-ordinates to your land on any given metamap.
But what if an administrator chooses to alter the in-world user-interface? In the physical world, having your name on a property register doesn’t stop the government building a road over your house. Laws, courts and constitutions do.
Equally, a blockchain record of metaverse land will not protect citizens from de-platforming, re-allocation or substantive alteration on the graphical front-end.
Imagine paying $300,000 for metaverse land, only to wake up a week later and realize a sky-hotel has been activated above your plot. Talk about first world problems. Here DAO governance will likely play an important role.
Interoperability
Right now there are dozens of metaverse worlds, running across various blockchains, with a myriad of coin and tokenisation incentives.
It is the Wild West, with opportunity in abundance for the scrappy few. At some point a consolidation and convergence will take place. Cross-chain interoperability will increase the addressable market, and the depth of the user experiences on offer. One Dubai based techie is already working on this.
An epic battle looms between closed and proprietary/quasi-proprietary architecture vs. a decentralized and open metaverse.
I hope you enjoyed this non-exhaustive and cursory breakdown of challenges in the metaverse. Opportunities to follow next week.
Metarider was created by Hiro Nakamoto, my tool of an avatar. Please do not subscribe (add me on LinkedIN instead).