This is the first of a six-part series exploring the concept of the Metaverse.

The metaverse is a hypothetical virtual world envisioned by Neal Stephenson in his 1992 sci-fi novel Snow Crash. The idea is to have people interact with each other in a completely simulated environment that is completely separate from the physical world around them. Today’s virtual reality systems like the Oculus Rift and HTC Vive are often referred to as “metaverses” because they bring people into the simulated world wirelessly through computers or mobile devices. The concept of the metaverse has been around for a long time. It’s taken a while for technology to catch up with it, but it will eventually arrive. Once it does, it will change the world.

In this article, we interviewed Patrick Lao, PDAX’s Head of Metaverse. PDAX is deeply involved in building regulated plug-and-play solutions for metaverse applications, fintech, and digital banking apps. We spoke with Patrick to find out what the metaverse is and why it’s important.

What is the metaverse and more importantly what isn’t the metaverse?

In my mind there are currently at least 2 versions of the “metaverse” that people believe in. The first, more popular notion of the metaverse is one that is avatar-centric, perhaps focused on AR/VR, and emphasizing some type of virtual world. This is the more common concept of the metaverse, mostly because of the etymology of the word “metaverse” itself, which is a combination of “meta” (which means “after”, or “beyond”), and “universe”, which implies some sort of world.

The second, and I believe more correct definition of metaverse is for simply, any digital experience that enables property rights on the internet via blockchain technology and NFTs. This might seem a mouthful, but is actually very simple. The metaverse is simply any platform or experience on the Internet that is filled up and powered by NFTs, which represent, essentially, ownership rights to various digital items or goods. From this definition, you can also include the more avatar-centric, virtual world type of metaverse described above. However, it’s important to note that the key element here is blockchain and NFTs. Take this away, and you won’t have a metaverse to begin with.

How do you differentiate between a metaverse or just a game or virtual world?

The metaverse, given the above definition, can now encompass various things: a play-to-earn game like Axie, an NFT project that is supported by a community living in Discord, or maybe even an actual virtual world like Decentraland that’s filled with digital assets verifiably owned as NFTs by various users.

Now you may ask, but what makes these things different from say a game, or a virtual world?

The key differentiator is ownership rights on the internet, which is made possible by blockchain technology. Most traditional games and virtual worlds may seem convincing enough in its efforts to immerse you into their world, but as long as its own world is filled with digital items stored and controlled in a centralized database, then this is not the metaverse.

What are the present and future uses of the metaverse?

Currently, the use cases of the metaverse is still in its infancy: the true metaverses are mostly confined to play-to-earn games and blockchain-powered virtual worlds like Decentraland, Cryptovoxels, and Sandbox.

However, given that this is a new and exciting technology, I expect that future use cases that we’ve never dreamed of will arise. One idea on a future metaverse is: A metaverse where everyone’s social graphs, consumer profile, personal information, health information, is tokenized on the blockchain and incorporated into a user’s identity. By then, we would have mastered technologies like zero-knowledge proofs that enable on-chain privacy. The user can then choose to disclose selected data from his/her information, perhaps in exchange for tokens from large pharmaceuticals, advertisers, and other interested parties.

What laws will be applied in the metaverse? 

The interesting thing about the metaverse is that it is all just software, including the blockchain component. And because it’s all just software, the design space is extremely wide. I expect that people will continually test the limits on what social structures and laws can be implemented in the metaverse. The only “law” that will remain constant is that of the blockchain: a deterministic system that enables decentralized, immutable ownership on the internet.

Are regulators ready for the metaverse?

If history is any indication, regulators will most probably take some time to understand and observe the implications of the metaverse to society in general. In my opinion, extremely nascent technologies like the metaverse should be able to benefit from a more open, relaxed stance from regulators that seek to protect rather than restrict.

How will the metaverse reframe human experiences?

I view the metaverse as simply the natural progression of humanity as we continue to evolve as a species. The metaverse will completely change how people view the world, from having an internet where people are mostly observers and consumers, to a web3 world where the users own and control part of their identities and other intangible assets.

How will implementations of the metaverse develop around the world?

The definition of the metaverse is extremely broad, and there are multiple different implementations of it. I think that in the future, most projects will continue to diverge as they begin to create metaverse products specific to their target market / country.

What are the components of the modern metaverse environments?

Modern metaverse environments should definitely be persistent (one continuous experience, rather than a reset every time a user leaves and reenters), and there should be a very simple and streamlined way for users to infuse fiat currency, convert to crypto, and begin to purchase digital goods.