The convergence of these technologies is gradually transforming the way we interact, work, socialize, entertain, and transact with each other (and machines).
Much chatter around the metaverse focuses on immersive VR, but AR also has a big part to play
The metaverse space is booming with activity. Talk around technologies such as virtual reality (VR), augmented reality (AR), blockchain, 5G networks, artificial intelligence (AI), cloud computing, and 3D content creation has been going on for a while, but the vision of where things are headed is becoming clearer now. The convergence of these technologies is gradually transforming the way we interact, work, socialize, entertain, and transact with each other (and machines).
Much chatter around the metaverse focuses on immersive VR, but AR also has a big part to play. AR overlays digital objects on to the real world, accessed via smartphones and smart glasses. Many experts believe AR has a much greater potential compared to VR because humans sooner or later get tired of completely virtual environments and rather prefer staying in real surroundings.
While AR applications (e.g., Pokemon Go and Google Maps’ direction-finding functions) have been available for long, wider uptake has been slow thanks to privacy concerns, cost of devices required, and lack of profitable applications. However, this may change soon with recent developments in the blockchain ecosystem. AR applications could be underpinned by AR clouds, unique ownership of digital assets through non-fungible tokens (NFTs), and open-source content creation.
AR clouds could drive numerous applications
AR clouds are 3D digital twins of the real-world environments, which are supplemented with virtual objects and information. These are akin to websites and apps and use data streaming and geolocation features to remotely deliver AR content in real environments.
With AR, organisations can deliver better experiences to users by delivering information in an immersive manner rather than making them search for it on an app or internet browser. For example, AR start-up Arround helps businesses create blockchain-based social networks (such as communication platforms, metaverses, and educational portals) for their community. Unlike centralised social networks, companies maintain complete control over the content in their networks and can also monetize it through advertisements.
NFTs could help grow the AR economy
NFTs have already gained prominence in the metaverse. Major brands including Nike, Adidas, and Walmart are experimenting with them and developing new business models for their digital play. While most of these may be currently aimed at VR worlds, NFTs in AR are gaining traction. Geolocated virtualised assets from real-world environments, including land and property, billboards, and other objects can be acquired, used, rented, and traded in AR clouds using smart contracts. Creating these assets as NFTs on blockchain allows each item to possess unique identifiable properties with indisputable ownership verification.
However, NFTs and the crypto ecosystem come with concerns. First, some blockchains are intensely power-hungry. Marathon, a bitcoin mining company, has bought and re-opened a coal-fired power station in Montana, emitting 187,000 tons of carbon dioxide from the plant in the second quarter of 2021. Companies can consider using proof-of-stake blockchains rather than proof-of-work blockchains, as the former are faster and less energy-intensive. Second, the NFT and crypto spaces are unregulated, raising questions about how appropriate digital tokens and assets are for mainstream use by consumers. Regulators will inevitably increase oversight on these instruments, and the ecosystem will evolve accordingly.
Open-source content creation will help expand the ecosystem
Decentralization is the core premise of metaverse. Already, several platforms offer software development kits (SDKs) for AR content creation. As low code/no code platforms take over, almost anyone will be able to create digital assets for both VR and AR worlds. This should fuel growth in the metaverse ecosystem, creating a virtual economy that might soon be larger than the real one.
However, adding open-source software to any stack brings challenges. Allowing the public to develop content on proprietary platforms can, deliberately or otherwise, create security vulnerabilities: OSS can be dependent on third parties maintaining their code and libraries, for example. Any software built using third-party code needs to be regularly scrutinized for potential downstream vulnerabilities. This is an area where zero-trust security frameworks can help contain potential issues.
But open-source content creation could unfold multiple new revenue streams. Companies like OVR are creating open-source AR worlds by overlaying billions of hexagonal areas on to the surface of the planet, each of which can be bought and used by owners to create more digital assets on top, such as digital art and furniture, which can then be licensed for use in the real, the AR and the VR worlds.
With rising concern around people spending too much time on their devices, businesses must also be alert to the risk of a negative backlash. While solid evidence for actual harm to mental health is thin, there is nonetheless a perception that spending too much time online can be damaging to wellbeing, and the potential for harm – and thus the risk to corporate reputations – will only grow as metaverse experiences are more widely adopted.
Finally, the buzz around NFTs selling for thousands or even millions of dollars shouldn’t steer businesses away from actual problem-solving applications. Most of the current experiences in VR and AR economies are yet to be validated for wider adoption among consumers as well as enterprises. That said, major technological revolutions have happened before, and will happen in future. Those who can find and deliver true value from their creations will succeed, while others might simply fade away – much like businesses in the real world.