The metaverse, explained: Everything you need to know about the (rapidly expanding) new world

As tech trends go, there are the obviously skippable ideas (Quibi), the ones you finally admit it’s time to pay attention to (we see you, TikTok), and, finally, the small basket of once-in-a-generation changes that are so powerful that they start to exert a gravitational pull on multiple aspects of our lives.

The metaverse is officially a game-changer. Though in its infancy, it’s clear that the metaverse will radically change how we’re able to interact online, how brands advertise, how fast crypto is adopted, and any number of other facets of life. Here’s an explainer to help understand what changes are underway—and what’s to come.

What is the metaverse?

As Fortune‘s Marco Quiroz-Gutierrez explains, “The metaverse refers to a handful of platforms on the internet that have built interactive worlds complete with virtual entertainment and businesses. There are only a limited number of plots of “land” in the two biggest metaverse platforms, the Sandbox and Decentraland, and both companies have said that they will never create more.”

The launch of these new platforms is underpinned by some powerful changes.

According to The Information, after a 15-year run we are nearing the end of Web 2.0 and entering the dawn of Web 3.0., aka the metaverse. This is being driven by three powerful forces: the rise of crypto, the “the seeming imminence of the experiential web via augmented and virtual reality,” and a cultural revolution accelerated by COVID which spurred people to meet and interact in virtual spaces.

Where does the term metaverse come from?

As Fortune‘s Jonathan Vanian writes, “The concept of the metaverse was popularized in the science-fiction novel Snow Crash by Neal Stephenson to refer to a digital universe that can be accessed through virtual reality. It’s a frequently used plot point in many recent works of science fiction, such as the Matrix films and the novel and movie Ready Player One.

What’s Facebook’s role in the metaverse?

The company is just one player that wants to dominate the metaverse, but it has huge ambitions. And it doubled down on its bets earlier this year when it officially changed its name to Meta. As Fortune wrote: “Zuckerberg says the metaverse is the next evolution for social networking, moving past static user profiles that let people merely post comments and photos. To reach it, people would need to wear VR headsets or augmented reality glasses that superimpose the digital realm onto the physical world. There could also be lifelike holograms beamed into the real world from cutting-edge projection systems.”

How can I enter the metaverse?

This is one of those questions that is best answered by a 20-something. Luckily Fortune has a terrific one on staff, Felicia Hou. In her piece “A 22-year-old breaks down how to join the metaverse,” she breaks down step by step how she entered the metaverse and started exploring. (Spoiler: On her travels she found a jazz club to hang out in, but couldn’t figure out how to sit her avatar down on a couch… These things takes practice, apparently.)

What can I do in the metaverse?

The possibilities of what a person can do are expanding every day. Right now some of the most popular things to do are explore the world, design a virtual avatar, and view digital art. In some digital worlds such as the Sandbox and Decentraland you can also play games or design them yourself. If you own land in Decentraland, you can build games hosted on your land for you and other users to play. Users with an alpha pass, or ticket to a test version of the Sandbox, can also play games until the test version ends on Dec. 20. You can also attend events such as virtual casino nights or digital concerts.

If virtual consumption is your thing, check out Fortune’s guide to shopping in the metaverse. Oh, and if you work at a tech-forward company, as Fortune reported this week, your company may already be rolling out return-to-work plan—in the metaverse, of course.

Can you buy real estate in the metaverse?

Oh yes, there is a land grab going on.

Quiroz-Gutierrez writes that, “On most platforms, plots of “land” are represented by X and Y coordinates on a map that makes up the entirety of a metaverse world. Each plot is turned into an NFT, which is sold either directly by the platform to a consumer, or by a secondary marketplace, the most popular of which is OpenSea. Once you buy a plot through an NFT, your sale is recorded on the blockchain of the given platform, and you become the sole owner of that piece of land within the metaverse.”

How much does metaverse land cost?

“The minimum price for land in Decentraland, as of Wednesday, was about 3.087 Ether, or the equivalent of $13,675, according to OpenSea. The cheapest piece of land in the Sandbox on Wednesday morning was worth about 2.968 Ether, according to OpenSea, or about $13,135,” writes Quiroz-Gutierrez. But prices are expected to fluctuate with demand, just like in the real world. One out-there example: Snoop Dogg, who is building out the Snoopverse on the Sandbox, just sold the rights to be his virtual next door neighbor for $450,000.

How do you pay for land inside the metaverse?

You’ve got to get comfortable with crypto if you want to be a landowner.

Writing in Fortune, Quiroz-Guiterrez breaks down how to buy digital real estate in the metaverse: “Before you buy land, you have to set up a crypto wallet. One wallet commonly used to buy land is called MetaMask, and it’s accepted by the Sandbox, Decentraland, and OpenSea. To set up a MetaMask wallet, you will need to download the app on your phone or via the Google Chrome browser extension. After you download MetaMask (or another kind of crypto wallet), you will be asked to create a password and will likely be given a secret phrase which you’ll use to verify your identity later on. Once you’ve created a crypto wallet you can use that wallet to open an account on the Sandbox or Decentraland. And remember, it’s important to explore a given metaverse platform before you invest in it.”

“Once you get a wallet, you will need to exchange U.S. dollars (or whatever currency you’re using) for a cryptocurrency. You can easily buy Ether, the most commonly used crypto for land purchases, in the MetaMask Google Chrome extension using your debit or credit card. MetaMask will direct you to the crypto exchanges Wyre or Transak to complete the purchase. Keep in mind that both Wyre and Transak charge a processing fee for converting U.S. dollars to Ether (or other types of cryptocurrencies).”

If you need help figuring out where to buy land, a crop of brokers and specialists have popped up to help you with your search, including NFT Property GroupMetaMetric Solutions, and Metaverse Group. WeMeta is another site that will let you scout properties.

What do you do with metaverse land?

Fortune recently wrote about an architecture firm that is helping clients build out their new land parcels: “Along with those real estate sales, a new question has emerged: What do you do with a piece of digital land after you buy it? One company, Voxel Architects, turned that question into a business and has designed about 40 digital buildings this year, working with clients like Sotheby’s auction house and ConsenSys Software, the creator of the popular crypto wallet MetaMask.”

And business is booming. “While before the company got about 10 requests for design quotes per week as recently as four months ago, that number has jumped to nearly 30 per week, said George Bileca, chief design officer at Voxel Architects. The price of a project can range from $10,000 to $300,000, said Leandro Bellone, CEO of Voxel Architects’ parent company NFT Studios, depending on the scale, the number of functionalities included, and the time needed to build it.”

You can also build in most of these digital worlds yourself by using each platform’s native build application. On the Sandbox you can build using its gamemaker and Decentraland you can use the in-game builder to create structures on lands you own.

How can you protect your metaverse purchase?

If you own a home in the real world you probably have insurance and maybe a security system. For now, the best you can do to protect your metaverse holdings is use a hardware wallet. “A hardware wallet is a physical USB drive that you can use to protect your land from phishing attempts by adding two-step verification for whenever funds or NFTs are transferred out of your wallet. You can also use the drive to access the land to sell it securely from any computer in the world with an extra layer of protection,” writes Quiroz-Guiterrez.

How are brands using the metaverse?

There’s already a shopping spree happening. As Bloomberg reports, brands like Gucci, Balenciaga, and Burberry are building out virtual worlds where customers can browse, shop, and hang out: “Already, big names are staking a claim in the metaverse. The Gucci Garden, for example, a pop-up on Roblox that sold the brand’s designs, saw one bag fetch $4,000 in real-world cash. Nike Inc., too, announced an in-depth partnership with the platform to create Nikeland, a virtual world modeled after the company’s headquarters in Oregon that offers exclusive goods for sale. In September, Balenciaga brought out a collection of clothes in Fortnite. These “skins,” or outfits for game characters, are purchased using V‑Bucks, the currency of the Fortnite world. (V‑Bucks cost real money to obtain.)”

How big can the metaverse get?

Some of us are old enough to remember Second Life, the SIMS-like world that briefly captured imaginations in the 2000s. Though it never went mainstream, it still has some devoted followers. But the forces at work two decades later—not to mention the huge technological leaps in the intervening years—promise to make the metaverse much more than a niche offering. “Tim Sweeney, CEO of Epic Games Inc., which makes Fortnite, said in November that the metaverse has the potential to become a multitrillion-dollar part of the world economy,” according to Bloomberg.

Fortune’s upcoming Brainstorm Design conference is going to dive into how businesses are building experiences in the metaverse. Apply to attend the event on May 23-24 in New York.

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