What is the metaverse?

22.38, Thursday 2 Dec 2021

Trends in tech come along every so often, co-opting and organising markets and sub-technologies around them like iron filings around a magnet. “Metaverse” is the latest, big enough that Facebook has renamed itself Meta to symbolise its enlarged focus. So I wanted to organise some of my own thoughts about what it is.

A trend is a fuzzy-edged phenomenon, a hyperobject touching on: products, protocols for inter-op, technology stacks, typical business models, and so on. So any definition is incomplete. The sharp end is the product experience, which is where adoption happens, and that drives everything else.

So what is the product experience of the metaverse? Loosely I see it as having three essentials:

  • Immersive
  • Multiplayer
  • Economy

Is it immersive?

I think about immersion on a spectrum. At one end you’ve got VR:

  • Full embodiment is 3D virtual reality, headsets, and sensors that detect muscle movement
  • Slightly below that there are video games like Fortnite or Roblox, or 3D environments like Arium (the pseudo-VR browser-based art gallery platform)

But “immersion” doesn’t have to mean entering cyberspace. You can get lo-fi immersion if these qualities get across:

  • a persistent world – this exists even when you aren’t there.
  • place – a sense that I am somewhere other than the chair I’m sitting in right now.
  • shared objects – everyone here is seeing and interacting with the same things.

And you know what? You don’t need VR for that. Sure it’s easier with 3D graphics and avatars, but those aren’t essential. You can have persistent worlds with a strong sense of place (and moving between places!) with text-based games (MUDs and MOOs, to go way back) – 2D graphics on the web can work just as well.

Is it multiplayer?

Today our apps, docs, webpages and computing environments, by default, are personal – the P in the PC. It takes work to make them social. In the metaverse, it’s social by default, and it takes effort to have a non-shared experience.

This is something different than the social of “social media,” or the comments and ratings you get with (ugh) UGC, “user generated content.”

To differentiate from the old social of the existing web, the term of art is multiplayer.

And that connotes liveness. You need a sense of presence. The ability to collaborate on shared objects in the shared world, whether for work or fun. Faces, emotion, video – all of these contribute to a transporting sense that you are surrounded by other people.

Yes that’s easier with video games and virtual reality. Immersive features such as place and proximity (and distance) make it possible for crowds to co-exist.

But again it can be lo-fi. I was previously tracking how the web is going multiplayer and I recently ran across another great example: tldraw is a tiny web-based drawing app. It’s elegant and playful. You scribble on the page, that’s all.

…then look in the menu. There’s an option named Create a Multiplayer Room. Select it. Grab the address from the address bar and share it with a friend. Now you can see each other’s cursors and you’re drawing on the same canvas. No bother no fuss. A little glimpse of the metaverse, right there.

Does it have an economy?

So we’ve got a shared, persistent world with shared, persistent objects. And it’s multiplayer. The last ingredient is economics.

By “economics” I don’t just mean buying objects (perhaps digital assets like costumes or upgrades) or even virtual land (such as in Decentraland, a land-based economy on the blockchain). What’s important is that these objects are assets. You must be able to sell them; they and their “ownership” must exist in a marketplace that transcends the platform in which they manifest.

So that implies a concept of identity, money, and rights that exists outside any given immersive, social platform or another.

Web3 is one obvious stack for this – or at least the collection of technologies. The stack hasn’t energy yet. By Web3 I mean the crypto (cryptocurrency, rather than cryptography) world of: identity; payments; contracts; ownership; currency; and the entire pile of derivatives that can be created. Yes NFTs are a big part of that. A powerful enabler.

But I don’t see that crypto is intrinsic to having an on-platform economy. It could happen with the dollar (or fiat currency generally).


So the metaverse is a product experience that is immersive and multiplayer with built-in economics.

And a metaverse company is a company that provides that or is somehow part of the stack. Maybe they provide an enabling technology, like easy-to-integrate presence or treasury, or maybe there’s a yet-to-be-identified marketing/distribution mechanism that has a particular requirement on analytics, or maybe they provide an interface like smart glasses. It’s hard to know at this point what the dynamics will be, or where value will be extracted in the value chain.


The history of the metaverse

It’s been a while since I’ve read Snow Crash, Neal Stephenson’s 1992 sci-fi novel in which he invented the concept, so I’ll just grab this from the Wikipedia page on Metaverse instead:

Neal Stephenson’s metaverse appears to its users as an urban environment developed along a 100-meter-wide road, called the Street, which spans the entire 65536 km (216 km) circumference of a featureless, black, perfectly spherical planet. The virtual real estate is owned by the Global Multimedia Protocol Group, a fictional part of the real Association for Computing Machinery, and is available to be bought and buildings developed thereupon.

Users of the metaverse access it through personal terminals that project a high-quality virtual reality display onto goggles worn by the user, or from grainy black and white public terminals in booths. The users experience it from a first-person perspective. …

Within the metaverse, individual users appear as avatars of any form, with the sole restriction of height, “to prevent people from walking around a mile high”. Transport within the metaverse is limited to analogs of reality by foot or vehicle, such as the monorail that runs the entire length of the Street.

So we’ve already got these three qualities: it’s a persistent world, social, with a built-in economy. It’s dogmatically physical and uses VR, which creates this sense of immersion, which I guess is why Meta nee Facebook is working on haptic gloves.

And the economics is kinda ugly. Ruthlessly commercial, and no room for the open source ethos that was the foundation of Web 2.0, the current generation of the web.

But the lineage is clear.

The biggest difference, for me, is that Stephenson’s capital-M Metaverse is singular. There’s one of it. That’s evidently what The Corporation Formally Known As Facebook imagines too, and they’ll own it. It’s possible that TCFKAF is right, and they’ll be the ones that win big.

The web - or rather the application and protocol WorldWideWeb - was a blip. I think that’s clear now. It was agnostic to document type, happy to link to email, gopher, image, and hypertext. It was frivolously free with assets: when you look at a webpage, the images are downloaded to your computer first and then assembled into a document! You can even “view source” to see the code behind a page. Websites are like applications that wear their source code on the outside.

The web isn’t how systems are typically architected. So we can’t take it for granted that we’ll end up with a small-m metaverse – a distributed network of interconnected metaverses, sharing identity and an economy but otherwise independently immersive. If that’s what we want, we’ll have to work for it.


Web 2.0

I think the last major technology trend like this was probably apps and the smartphone, but actually it’s hard to distinguish that from Web 2.0 that came just before. And it’s interesting to look back at O’Reilly Media’s catalysing 2005 essay: What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software.

What you’ve got in the “meme map” (on page 1 of the five page essay) is an approach is totally born of the new open, networked, social, apps-not-docs web. It’s a set of approaches that implies a set of technologies and commercial models.

Cited are ideas like:

  • Software that gets better the more people use it
  • Services, not packaged software
  • Architecture of Participation
  • Data as the ‘Intel Inside’
  • Granular Accessibility of content
  • Play

And in the years since, we’ve seen these formalised into social media, software as a service (SaaS), tools like git, and ways of working like agile – all applicable to this fast moving, fast growing world. Cloud platforms starting with Amazon Web Services and pioneering tech like Ruby on Rails grew up with Web 2.0. The economics (and economies of scale) of cloud platforms prescribe a cost model for companies, and that prescribes a revenue model: subscription for B2B, and the attention economy to B2C.

Web 2.0 even included its own aesthetic, so participants in the trend could recognise one another versus older, “enemy” approaches like Enterprise. We still have the warm, bold colours, the chatty brands, the rounded-off corners, and the cutesy illustrations of 2005.

Web3 is the re-platforming of Web 2.0 to be crypto-native: new identity, new payments, and new modes of collaboration.

Web3 has its own aesthetic and characteristic visual style. Even its own art movement with NFTs – see the new Outland magazine for art criticism in this domain. And it has its own shibboleth words to identify in-group and out-group. (gm.)

But Web3 isn’t a comparable trend. It’s the metaverse which rivals Web 2.0. The technology stack, the aesthetics, the community, and the products all grow up together. Web3 is part of the puzzle; the metaverse is the whole shebang.

What happened with Web 2.0 is that it became true but too much.

“Software that gets better the more people use it” is another way of saying that there aren’t any limits on network effects. Platform capitalism (Nick Srnicek’s term, mentioned in my Thingscon talk last year) is rapacious. We have one Facebook, not ten thousand. Whoops.

“Architecture of Participation” led to the sharing economy… which was co-opted and led to the gig economy, and to so-called “sharing” marketplaces like Airbnb and Uber mining the under-specified edges of the social contract.

The metaverse also contains as-yet unknown failure modes. It would be worth puzzling them out now.


Does the metaverse matter?

We can decompose the question of whether the metaverse trend matters into two parts:

  • Is the metaverse significantly different? Yes: it introduces the concept of scarcity (with space, time, and ownership) into the digital realm, which since its inception has been built on the idea of approx. zero marginal cost of duplicating assets, or communicating with +1 person. Just as Web 2.0 led to new community structures, new business models (and the attention economy), new ways of working, and even new expectations for government (witness GOV.UK in the UK), the metaverse will have its own long-term cultural effects.
  • Will the metaverse come about? Well now that’s a matter of opinion.

I will say that the metaverse trend has two qualities in common with two other large scale trends that I saw up close, or maybe let’s call them movements: Web 2.0 (described above) and Tech City, London’s transformation into a global startup hub (I was part of the inception).

Both had multiple constituencies that pushed for the movement for often barely overlapping reasons. With Web 2.0: corporations, individuals, investors, and customers up and down the technology stack. In the case of Tech City: Large corporations and government; founders and real estate owners; lawyers and journalists. Everyone felt they could immediately get more for their particular ship by working to rise this particular tide, and they did this without being instructed what to do.

With the metaverse we have crypto-libertarians tech nerds from Web3 somehow aligned with platform monopolist VR-maximalists from Facebook. Their values couldn’t be more opposed yet they are boosters for the same trend.

When a movement creates alignment without coordination, that’s a powerful force.


Thanks to Ed Cooke, Thomas O’Duffy, and others at Sparkle for knowledge and conversations. Blind spots and misconceptions all my own. As always this is a snapshot: thinking out loud rather than a final view.

If you enjoyed this post, please consider sharing it by email or on social media. Here’s the link. Thanks, —Matt.

😴