The Metaverse is going to create an unparalleled economic expansion

October 31, 2021

Meta, the Facebook rebranding, presented their new focus for the future: the metaverse.

I have read a lot about what people think this means, however, few articles have grasped the size of Meta’s presentation and choose to make fun of this, remind me of similar coverages about e-commerce, email, smartphones and so on. I’m for one excited, It’s been so long since the last time I hear a big tech company propose a vision of the future (only Tesla and SpaceX come to mind), not a vision of their hardware or services, but a vision of how society and our way to communicate will look like in the years to come. I found the version presented by Meta compelling, they talked about virtual worlds, the future of gaming, communication, presence, and how NFTs and cryptocurrencies will play their role here. Coming from Facebook, especially in October 2021, this fired all kinds of justified alarms about privacy, data security, and mental safety of their users but I’ll forget here about the controversy addressed already so much, and remember that Facebook is still the best company in creating communication and connection tools and this is almost a surviving task for them, a chance to change their profile by reinventing the way they make money.

Also lets remember that the Metaverse is bigger than Meta, it’s a concept that was boiling long before they started to talk more about it and here I’ll like to start by exploring the economic impact of it.

Creating a new economy

I think the economy will expand as never before with the metaverse, there is almost nothing new on the smartphone horizon and Apple and Google with their grow-at-all-cost mentality are covering more and more space, how unfair is it for any company to have to compete with the rail owners right now in either the software or hardware space?

The metaverse is bigger than what the smartphone can hold, it’s a second world living along with our physical world and the possibilities that are going to come with this are almost limitless because it’s easier to move bytes instead of atoms. And these possibilities will have one central actor: the creator. Let’s take one topic, just one, and expand the idea of how the metaverse will enable new ways of profit, lets talk about music.

Composable creations

Currently, there’s Spotify, Apple Music, and YouTube as the main actors here, they have in general three pillars: Artists, Personalized playlists, and Podcasts. The low-hanging fruit the metaverse will allow is to be able to go to a concert as a ghost, as a digital presence, or to be there next to your favorite podcaster. But this is kind of the same as we have now, just one space more, let’s dream bigger.

Imagine a creator designing a new virtual instrument able to create new sounds, now an artist discovers this and wants to use it, she buys the instrument and gets a digital copy to create the sounds together with a signature of it which will instantly tell the instrument creator of that transaction, the instrument creator can now see all the creations that are using her instrument. Now imagine the artist has a way to open their music to creators as well and a video enthusiast grabs the track and composes it with their own content using software tools that are also in the metaverse with their own signatures. Let’s keep going and imagine now yet another creator who owns a virtual club where she rents this video and plays it on the walls. A person in the club loves the video and buys it and can see exactly who created the video, who created the video software, who created the song, and who created the instrument and choose to follow or learn more about any of these creators. 

In the book Blitzcalling, Hoffman talks about innovation as part engineering part business model so let’s step aside for a second and imagine the innovation in the business model. When creating their virtual item the creator can choose to rent the item for x amount of money, to sell it, or to give it for free unless the new virtual good makes money out of it in which case both creators can choose to negotiate how much percentage each will get from the profit, maybe it's already part of the deal when buying that creation. In each step of the composition chain, each creator involved in the product will get a piece of the profit.

All of this is extremely difficult to control in the physical world and feeds thousands of lawyers who add no other value to the chain than trying to patch a broken system, but with Blockchain technology, we could achieve this utopia. The difference of doing this in the internet vs the metaverse is that the internet doesn’t have the concept of byte ownership, in the metaverse we could enable this by default to have a more fair system of creator’s recognition and profit.

The metaverse can expand the economy like nothing else in history by creating a system to compose creations thanks to blockchain and the simplicity of creating experiences in top of each other, of creating new spaces, new worlds, new ways of sense things. This could spark something incredible accelerating the time to create new experiences and sharing profit fairly. Worth mentioning that the instrument, the music, the video, and the software could all have been done by people of different continents, not limited by local currency or trade rules among nations, opening a truly global collaboration, the main reason the internet was created.

If you are reading this and thinking this is a crazy model, you’re probably reading this in a software system that is most likely done composing creations exactly like this but without a good system to pay to those software creators, this time around we need to do this right and create a whole new accountable system that fuels a new economy based on reusable pieces of creativity, but no one can deny that software has taken over the world at a breathtaking pace by using this model.

Excited? I’m certainly overhyped and I’ll explore more parts of what I think the metaverse can contribute and change about society in the next blog posts, stay tuned!