The metaverse has been little more than a buzzword for a while now. However, over the past couple of years, theory has slowly given way to reality.
While the concept is becoming more familiar, it’s still hard to wrap one’s head around what the metaverse is. Here’s a quick, insightful breakdown of what the metaverse is, how it could grow in the future and how that growth could ultimately impact your personal finances.
What Is the Metaverse? A Brief Definition
Neal Stephenson coined the term “metaverse” in his 1992 novel “Snow Crash,” where a digital world figures prominently in a dystopian future. Since then, the term has come to represent a growing virtual reality that humans can access using VR interfaces.
Much like Stephenson’s novel, the real-world metaverse also hinges on key concepts, such as personal avatars and the ability to spend digital money with real value to purchase digital real estate — also with real value. Beyond the commercial aspect, Polygon defines the metaverse broadly as, “a graphically rich virtual space, with some degree of verisimilitude, where people can work, play, shop, socialize — in short, do the things humans like to do together in real life (or, perhaps more to the point, on the internet).”
Jeff Wong goes further than the mere functionality of the metaverse. The global chief innovation officer at EY sees the online world as, “an inevitable next step for our world after the trauma of the COVID-19 pandemic.” Wong believes the metaverse has the potential to bridge the physical and virtual worlds.
The executive extrapolates that “the transformative impact of the metaverse will ripple through most sectors beyond media and entertainment.” He adds that this impact could extend from trying on clothes to training for a job to going to the doctor.
While the metaverse has plenty of potential, it remains in an early stage of evolution. The earliest iterations of a metaverse — or more accurately, a proto-metaverse — were visible over a decade ago in the rise of MMORPGs (massively multiplayer online role-playing games). These have set the tone by creating vast virtual worlds with immersive, accommodating experiences.
Since then, platforms like Decentraland and The Sandbox have led the way in the development of a digital reality that goes beyond gaming. Major companies, like Meta (previously Facebook), have caught on to the potential of the metaverse as well, and are riding the wave right into virtual reality.
Live events, like concerts and auctions, are already taking place. Businesses have been following as well, such as when Prager Metis opened the first-ever CPA firm in the metaverse for $35,000.
While the metaverse remains full of potential, it appears that individuals may feel its impact sooner than was once thought. With that in mind, here are a few ways that the metaverse could impact your own personal finances if it continues to gain momentum.
The most obvious impact that the metaverse could have on personal finances is the cost of, well, using it.
There is a tremendous amount of capital that has to go into creating and maintaining a digital infrastructure like The Sandbox. This isn’t a philanthropic activity, of course. As a matter of business, metaverse companies will naturally pass the expenses along to those who use the platforms to build their own digital lives and experiences.
There will be an ever-growing number of ways to spend money in the metaverse. Even so, it also opens up endless opportunities to make money, too.
Already, many people are scooping up real estate — digital “properties” that they legally own and which have the potential to increase in value. They also can invest in metaverse cryptocurrencies, like Decentraland’s native MANA token.
In addition, the metaverse has added fuel to the already growing NFT industry, as it provides a platform to showcase the ever-growing global collection of digital art. This could inflate the value of that virtual art, making it a good long-term investment in the process.
Regardless of whether consumers see the metaverse as an opportunity or something to avoid, chances are they’ll be funneling their personal finances in that direction one way or another in the future.
Why? Because businesses are already flocking to the metaverse. Even if they haven’t taken the leap like Prager Metis, companies across the globe are sitting up, paying attention and preparing for whatever the metaverse-driven future could hold for their enterprises.
If businesses end up moving toward the metaverse as a new normal, there’s a good chance that consumers will need to accommodate the shift if they want to continue patronizing them.
There are many ways that the metaverse could impact life as we know it — and personal finance is high on that list. From spending money to investing it to conducting basic financial interactions, like making a purchase, the metaverse could play a much bigger role in the future of personal finance than many individuals currently understand.
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