In today’s Exponential Investor:

  • The concept defined
  • What do Snoop Dogg, Zara and the Barbadian government have in common?
  • How to enter the metaverse

As financial editors of online-based publications, a lot of time is spent researching online.

Hours on end, sifting through various sources, staying on top of developments across a massive range of industry and opportunity.

We do of course get out in person to major events wherever possible. These include my recent ventures to the Token2049 conference in London, the Cannabis Europa conference, also in London, or traditionally bigger conferences like CES (consumer tech), SIBOS (banking and finance) which take place all over the globe.

But that’s all been a bit harder than normal over the last two years. Which also means we have a lot of interaction with the online information gatekeeper of the internet: Alphabet Inc. (Google) (NASDAQ: GOOG).

We’re confident in assuming you know how to search using Google.

But have you ever played the “what is the…” game?

You see Google’s search algorithms are complex, mysterious beasts. And they’re designed to guide you towards things you may want to see, or things you didn’t know you might want to see but Google thinks you do.

It also picks up on some of the more eye-catching trends that are getting a lot of attention from everyone that’s using Google search.

When you type “what is the…” into Google, you get a list of “auto-filled” questions.

At the top (and a quite common one when playing the “what is the…” game) was “what is the time”.

As we worked our way down the list, a fascinating auto-fill question appeared, “what is the metaverse”.

What a great question, Google!

Now you might hear this term bandied about quite a lot. It’s certainly something on the minds of investors around the world and for good reason.

But what really is the metaverse?

Perhaps two even more pertinent questions, how do you invest in it and should you invest in it?

The metaverse(s) described

The “metaverse” is a digital, virtual reality world in which people can connect and interact with each other online.

One misconception is there is just one metaverse. This is incorrect. There are already many different metaverses. Some you can exist in a metaverse as an avatar, or a digital representation of a person, some you can be anything you want, animals, machinery, robots, whatever.

The key point is that a metaverse is an environment in the digital world that allows people to exist, connect, transact, socialise, do whatever they like with the freedom the digital world presents… at least freedom depending on what metaverse you’re existing in.

Nonetheless, anything we do in our physical lives can be replicated in a metaverse, including buying land, exchanging goods and services, playing games, and socially interacting with friends… perhaps even finding love.

It’s fast emerging as one of the hottest trends of the twenty-first century and “metaverse” is clearly the buzzword of 2021 and most likely 2022.

For example, the metaverse market is expected to be worth $783 billion by 2024, up from 2020’s $478.7 billion valuation.

In fact, different metaverse iterations are already attracting attention from some of the world’s biggest conglomerates, showing the viability behind the phenomenon.

The first of these was Meta Platforms (previously Facebook) (NASDAQ: FB), who invested $50 million into developing its own metaverse, with the view to evolve its platform into a comprehensive, global metaverse. As noted, it has also changed its name to “Meta Platforms”, indicating this is something it sees as the future of the company.

Another is Spanish clothing retailer Zara. On 7 December 2021, the company announced its Ader Error collection is being deployed to a different metaverse, through social media platform Zepeto and its metaverse platform.

Here, users can view the clothing range virtually, and purchase clothes and make-up from it. It seems as if shopping will never be the same again.

Adidas, the global apparel giant, has also recently bought some virtual land in The Sandbox metaverse. The Sandbox is a blockchain-based cryptocurrency metaverse which is fast growing and attracting other fascinating names to it, including Snoop Dogg, Atari, South China Morning Post, Shaun the Sheep, Smurfs, The Walking Dead and crypto names like Gemini, Binance, CoinMarketCap…

Incredibly, the idea of existing in a digital metaverse is also catching the attention of sovereign governments, which shows the credibility behind it.

Virtual embassy

On 17 November 2021, Barbados announced plans to establish a virtual embassy in the metaverse, becoming the first country to do so.

The virtual embassy is set to open in January 2022, in the Decentraland metaverse.

Decentraland is another blockchain-based, cryptocurrency-focused metaverse.

The idea behind the Barbados embassy is to provide seamless and efficient virtual interaction between diplomats, which eradicates the need for long-distance travel.

It could, in practice, prompt other governments (and societies for that matter) to move into the metaverse, accelerating mainstream adoption.

However, like many of the world’s fast-growing trends, it has its critics.

For example, Dr. David Reid, a professor of AI and spatial computing at Liverpool Hope University, noted that it runs the risk of exacerbating existing problems to do with social media and the internet such as data privacy concerns and cyber bullying.

In addition, John Carmack, a key developer of metaverse worlds at virtual reality company Oculus, has outlined concerns regarding deployment of the metaverse. He suggests the only viable way it can be rolled out is through one universal app, but admits this will be near impossible to achieve as metaverse architects looks to capitalise on the metaverse opportunity in their own way.

It means we might be left with hundreds or thousands of different metaverses, all running separately and independently of each other. That is a problem, but also leaves wide open the kinds of opportunities that smart investors who see what’s coming can profit from.

What you’ll note above is that some of the bigger more promising metaverses are blockchain and crypto based. That’s not a coincidence. Decentralised metaverses are going to be big business.

There’s one particular crypto that is at the very heartbeat of this development. In 2022 there are three key changes that could set alight the crypto market for a sub-set of crypto intertwined and interlinked with the metaverse boom, the non-fungible token (NFT) explosion and the decentralised finance (DeFi) takeover of global finance.

But you need an informational advantage to know how these cryptos work. You need to know what they do and how you can own a part of the very infrastructure behind them all.

Tomorrow you’ll have access to a special briefing that outlines how this all comes together. To make sure you get a viewing pass for the new briefing, get your name down here.

Nonetheless, there are questions still to be answered as to how our metaverse worlds looks in two, five, ten years’ time. But if you’re curious about it all, well in our view, there’s only one thing to do…

If in doubt dive right in

Like the Barbadian government, you can take your first steps in the decentraland metaverse. Or like Snoop Dogg you can go have a look around The Sandbox.

Furthermore, if you’re really keen on getting deeper into it, they both have crypto tokens that can be bought, sold and traded.

Of course, there’s a lot more to it than what we’re looked at today. In fact, we’ve barely scratched the surface. And it’s critical you understand the real factors driving this market and delivering opportunity to investors.

If you’re curious just head to:

sandbox.game/en

decentraland.org

Or, if crypto metaverses aren’t your thing, why not strap on a virtual reality (VR) headset, and immerse yourself into this new world.

In particular, Meta Platforms has released its own VR headset, called Oculus Quest 2, which is available for around $399. It doesn’t require a PC, and runs apps and games natively.

However, bear in mind that the availability of VR headsets is currently limited, making them pretty expensive.

And there are only a few limited ways in which you can interact in a metaverse on these more closed off platforms like Meta. The real growth and expansion could take… decades. According to Meta Platforms’ CEO Mark Zuckerberg, it may take up to ten years before the (or at least their) metaverse becomes mainstream.

Nevertheless, the metaverses is/are here. It might be a smart move to level up your game when it comes to testing them out, learning more and understanding how you can get a slice of the action.

Until next time,

Sam Volkering
Editor, Exponential Investor

Elliott Playle
Junior Analyst, Exponential Investor