Are we at the edge of an internet revolution?! We are, and it has a name: “the metaverse”!
Although there are many obstacles to overcome, there are huge opportunities for society and the internet to change the way we live. Let’s have a closer look and understand the state of affairs of the metaverse and one of its underlying technologies: Web 3.0.
Why Web3.0? Web3.0 is not central to our understanding of the metaverse. However, it is a powerful technology that can accelerate the uptake of the developer and user ecosystems as we will see in the blog. Web 3.0 is built upon blockchains that are immutable, have no central ownership structure, and are impenetrable. Blockchains can be used to host tokens of economic value, application data, and applications.
Metaverse Blockchain Use-cases and Use-Places
Let’s examine the user experience in a new metaverse based Web 3.0 to understand why it is such a compelling technology proposition. Sandbox, a community-driven metaverse platform, is a good example. It shares many things with Roblox and Minecraft. Sandbox is able to natively monetize assets as well as gaming experiences. This is a huge difference!
This is possible because the transactional SAND token is based on an ERC-20 Ethereum Utility token, of which there are a finite amount of 3 billion SANDs. The Ethereum blockchain is the basis of Sandbox’s entire platform. This means that all asset generation, game moves and market places in Sandbox generate value because they are based on the SAND underlying value token.
The metaverse is therefore able to see the economic value of blockchain-based platforms, while traditional platforms are added through payment portals (e.g. PayPal).
This innovative approach opens up the possibility of creating assets and experiences that can be monetized and become tradable. It is the birth of new economic models that place creators at center and make it possible to monetize any foreground intellectual property (IP).
As long as they are all based on the same blockchain (e.g. Ethereum), monetary tokens can be traded across platforms. The generated assets can be traded across multiple platforms if they are based on Ethereum. Web 3.0 thus enables a form of “digital aura” with immutable content provenance across many different applications, as long as they are based on the same blockchain. A creator could list a digital garment on Opensea, an Ethereum-based non-fungible token site (NFT), and trade assets into Sandbox and any other metaverse that is based on Ethereum.
The value proposition can directly impact our real-world experience. AMC, the world’s largest movie theater chain, offers NFTs for movies that people have purchased tickets to. This is an example of how AMC is driving foot traffic into its theaters. This new hybrid digital-physical approach is becoming a popular one that is being noticed in other sectors, such as gaming and retail. We believe that the first days of the metaverse won’t be about use-cases, but about physical use-places.
Asset authenticity, ownership, and interoperability
Blockchains allow for immutability, without central ownership. This is a powerful driver for new experiences and other forms of economic activity. It allows for trusted and scalable ways to prove authenticity, as well as interoperability. Let’s examine this in more detail.
Everything in the Web-3.0-based metaverse is assigned a unique, immutable identifier. This is a long digital adress which is stored on the underlying Blockchain. Each asset, e.g. This includes each asset (e.g., a specific NFT), each token, and each wallet where the tokens are stored. These assets can be consumed in many forms. An NFT can be displayed in an art gallery, but can also be used to play a game using a 2D mobile phone.
These unique identifies are protected by the protocols behind blockchains. This ensures authenticity and true ownership. If validation is performed on a public blockchain, such as Ethereum, then transparency is possible as every transaction can be verified publicly if necessary. Private blockchains, which are based on a small number of known parties, have gained popularity recently. This allows for greater privacy but also provides universal transparency.
You can envision a combination of public and private blockchains being used to facilitate future metaverse experiences. Assets could be traded publicly, while others could be kept private. One can also imagine physical assets to be validated onto a blockchain, which – to date – poses problems in terms of authenticity and uniqueness of physical assets. This can however be solved with advanced technologies like IoT (to measure physical assets), 5G (5G to transmit data in a secure fashion), AI (to verify properties), and digital twins (to create realistic replicas).
An asset that is registered on a Blockchain is immediately interoperable as long the same ledger technology used. Although there are limited options available, assets can be interoperable between different public and private blockchains by using appropriate exchanges. It is important to have interoperability standards for blockchain, asset, and metaverse. They should emphasize interoperability among public blockchain platforms, private and mixed-public blockchain platforms.
Massive efforts are under way to this end, such as the Open Metaverse Alliance or Nvidia’s Universal Scene Description as the Language of the Metaverse. An important design factor here will be to ensure scalability, performance and energy consumption. Security is also important. This means that assets cannot be compromised within a ledger, or across ledgers. 5G may play a central role in underpinning such security efforts whilst ensuring interoperability – indeed a strength of the global telecommunications ecosystem.
The power of the new economy creator
A functioning payment system is essential for any economy to survive. The Web 3.0 creator economy is no exception! While mechanisms exist that can attribute asset value non-fungible or immutable tokens have been in place for some time, they are still very limited. One can create an NFT, trade it against certain blockchain tokens, or be paid in tokens to win a metaverse.
There are still many issues to resolve, including the UX experience that democratizes access for end-users who aren’t necessarily experts in digital wallets. The inability to trade tokens against tokens, the limitations of some metaverse applications to only accept one token, and the difficulty of converting real world (fiat), currencies into digital coins (and vice-versa).
Because long-term value can’t be guaranteed, high volatility is a problem. Based on one tweet from a well-known influencer, tokens can double or even triple in value. Many (more traditional) institutions see value in blockchain-based currencies but are spooked by the high volatility, thus forcing them to use more centralized control mechanisms which – in fact – go against the decentralized nature of public blockchains. These mechanisms include converting the digital currency into a central fiat currency or using private ledgers that have a greater central control.
These issues will be solved and the ensuring economy of creators will become strong. The following figure shows this. It’s divided into three sections.
- The underlying traditional technology ecosystem in the lower IaaS section of the figure
- Traditional examples of the metaverse on the right-handside
- Web 3.0-based Metaverse Examples on the Left-hand Side
The traditional technology enabler segment is composed of device and component vendors, connectivity providers and platform players – the examples shown are non-exhaustive. Fortnite and Roblox show the traditional method of creating a metaverse. They are considered traditional because they have been built using payment opportunities that were added to the economy later (and handled by centralized payment/ownership gateways).
Blockchains are the new way forward: A new set of interdependent layers has emerged made up of:
- blockchain layer
- value layer
- The application layer
The blockchain layer is made up of the blockchain infrastructure. Examples include Ethereum, Cardano and EOS. The value layer consists of specific tokens which run on these blockchains. It also includes payment wallets and token/currency exchanges. The actual metaverse applications such as Decentraland and Sandbox are hosted in the application layer.
You will also notice the order of layers. The application layer can’t exist without the value.
For example, the Sandbox metaverse cannot exist without the SAND token which – in turn – cannot exist without the underlying Ethereum blockchain. Any economic activity in Sandbox metaverse will result in economic gain. This is quite different from the traditional approach, where services or applications may exist (and sometimes only emerge as market leaders) without paying any payment.
This could be the solution to generating value natively in our emerging 5G and 6G networks. It is a challenge in telecommunications to add economic value to the infrastructure. Web 3.0 and underlying Blockchains may be the solution.
5G and the role it plays in the new metaverse
As mentioned in a previous blog post, the primary role of 5G is to deliver seamless outdoor and indoor XR experiences using reliable and latency bound networks. Another emerging area is corporate finance. As we’ve seen in this blog, 5G has many other applications. This is illustrated in this figure.
First, a 5G-connected Metaverse can dramatically improve churn rates for communications service providers (CSP). Operators can offer bundled metaverse experiences that allow them to build strong communities. Ifland, the metaverse that South Korean CSP SKT launched in 2021 and which is now enjoyed by millions of people in its home market as well as around the globe, is a good example.
There are not only consumer opportunities: business-to-business (B2B) and even business-to-government (B2G) are possible too where e.g. Training is available in a VR-powered large scale metaverse.
Last but not the least, CSPs can now offer services in the metaverse that they used to sell in high-street retail stores. Imagine a future in which a sales booth opens on demand in the metaverse, and new data plans are sold.
But 5G can do even more! Indeed, 5G networks and handsets are the world’s largest distributed system: could it be the native go-to infrastructure to enable Web 3.0 services on a global scale, such as the metaverse? Could distributed counterparts of some of the centralized protocols and architectures that are so common be used? Could the 5G community’s strong security credentials be used to enhance security for Web 3.0 metaverse apps? We think so. 3GPP has already begun to explore blockchain-based applications for future 5G/6G releases.
We mainly discussed the possibilities of a 5G powered metaverse in this blog. However, there are still huge challenges to overcome. This blog will focus on the challenges as well as the technological opportunities.
You can join us in creating an ethical, safe and secure metaverse. Blockchain and 5G are two technologies that will allow us to achieve this!
Explore the metaverse in depth
Ericsson’s Imagine Possible event will gather leading innovators and thought leaders from technology frontrunners and enterprises as they share their vision for the future. You can find out more about the event in Santa Clara, and online.
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