The term “metaverse” sounds like something out of a science fiction novel. There’s a good reason for that – it is.
The term was coined in Neal Stephenson’s 1992 novel Snow Crash.
Like the similar term “cyberspace”, it describes a three-dimensional, immersive version of the internet in which human beings do business, play games, and socialise, represented by digital avatars.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
And just as the term cyberspace did, the metaverse has made the leap from comics and sci-fi films to the boardroom and the business sections.
In July, Facebook founder Mark Zuckerberg said that within the next five years, he expects it to be described not as a social network, but as a metaverse company.
Meanwhile video game platform Roblox, whose users can sell their creations to each other for Robux – exchangeable for real world currency – became a multibillion-dollar company when it listed in the US this year.
This is not a new vision by any means. Virtual worlds such as Second Life, where individuals can establish businesses and buy digital property for real money, have been around for a few decades. But usage has largely been limited to enthusiasts.
The key difference today – according to proponents of the metaverse – is that not only has technology advanced considerably, but the pandemic has driven new demand for remote interaction.
For example, Facebook has unveiled technology enabling workers to meet and interact in a virtual office by donning virtual reality headsets.
Some dismiss this as little more than a 3D Zoom call – others argue that it offers a more natural way to interact in the working-from-home era.
Either way, it represents a big opportunity for a company like Facebook to collect even more data on its users.
But there are plenty of competing visions for the metaverse.
Many entrepreneurs in the crypto world favour the idea of an open, decentralised metaverse built on the blockchain, as opposed to one dominated by a single company.
As with its previous incarnations, the metaverse may turn out to be more hype than reality.
But with technology advancing all the time, it’s likely that at least some aspects of it will become everyday parts of our lives.
See you in the matrix!
To learn more about emerging technology and investment, subscribe to MoneyWeek magazine.
-
8 of the best houses for sale for around £1 millionThis week: the best houses for sale for around £1 million – from a wing of a Grade II-listed Victorian manor house in Sunderland, to a brick-and-flint cottage in Cley next the Sea, Norfolk
-
Starling Bank to scrap 3.25% interest rate from popular current account within daysStarling is to remove the generous 3.25% it pays on current accounts from next week – what does this mean for customers and should you move?
-
What is a dividend yield?Videos Learn what a dividend yield is and what it can tell investors about a company's plans to return profits to its investors.
-
High earners to pay nearly £2000 more in tax due to fiscal dragVideos The government froze tax thresholds, which will drag employees into higher tax bands as wages rise with inflation. We explain what fiscal drag is, and how to avoid it.
-
What is a deficit?Videos When we talk about government spending and the public finances, we often hear the word ‘deficit’ being used. But what is a deficit, and why does it matter?
-
Too embarrassed to ask: what is moral hazard?Videos The term “moral hazard” comes from the insurance industry in the 18th century. But what does it mean today?
-
Too embarrassed to ask: what is contagion?Videos Most of us probably know what “contagion” is in a biological sense. But it also crops up in financial markets. Here's what it means.
-
Too embarrassed to ask: what is a marginal tax rate?Videos Your marginal tax rate is simply the tax rate you pay on each extra pound of income you earn. Here's how that works.
-
Too embarrassed to ask: what is stagflation?Videos Traditionally, economists and central bankers worry about inflation or recession. But there is one thing worse than both: stagflation. Here's what it is
-
Too embarrassed to ask: what is the gold standard?Videos These days, most currencies are "fiat" currencies backed by the economies of the countries that issue them. But in days gone by currencies were on the "gold standard". Here's what that means.
