Could Web 3.0, Cryptocurrencies, and Metaverses Really Be the Future?

You only need go back a few decades to find a world where virtual reality technology was purely the stuff of science fiction and fantasy. However, we now live in a world where these technologies are more available and affordable than ever.

This has led many in tech circles – most notably Facebook founder, Mark Zuckerberg – to plant their flag and claim that the future of the internet will be in expansive virtual worlds called metaverses. In fact, many companies have already started work on creating these worlds including Meta’s Horizon Worlds, along with competitors such as Decentraland.

Along with blockchain powered digital currencies [cryptocurrency], some have speculated that these technologies will replace the internet as we know it today and that brands should be prepared to evolve and find new ways of doing business in these environments.

However, we are here to cut through the hype and buzzwords and find out if there is any substance behind the claims.

Metaverses

The first question we need to ask is whether virtual metaverses will actually provide the next evolution of internet use.

According to Fortune Business Insights, the global metaverse market size was valued at USD 100.27 billion in 2022 and is projected to grow USD 1,527.55 billion by 2029, at a CAGR of 47.6%. However, when you look at survey data from the presumed end users of these environments, it paints quite a different picture.

Research suggests that most Americans don’t even know what a metaverse is and that only 36% of those which do are interested in participating. Then there’s the fact that Meta’s value has been driving off a cliff ever since it committed itself to metaverse projects with latest reports stating an $89 billion drop and that the fledgling release of Horizon Worlds is struggling to retain users for longer than a month.

Then there’s competitor Decentraland which hit the headlines with news that it only manages around 38 active daily users and peaked at 650. The company did respond to these claims by saying those figures only related to people who had linked their crypto wallets with the service and the real number of users was closer to 8,000 – still a paltry figure when talking about internet numbers.

Then there’s the technology to consider. As of the start of this decade, only 6% of US households had access to a virtual reality system. While this proportion has been climbing, it is not reaching the level of market penetration it would need for metaverses to become the new normal for the internet. Convenience is also an issue, as strapping yourself into a VR setup to browse the internet will never be as simple as taking out a smartphone and doing the same with a few swipes of your thumb.

Metaverses simply do not fulfil the first basic requirement of a new technology – to solve a problem. They will almost certainly find niche appeal among gaming and technology enthusiasts, and therefore provide some advertising and sales opportunity for companies, but it seems unlikely at this stage that they’ll become the dominant method of using the internet anytime soon.

Cryptocurrency

First hitting the headlines when Bitcoin accelerated in value and kicked off a whole new industry of investment in digital currency, cryptocurrency has had a bit of a bumpy ride ever since. Still, there are those who claim these currencies are the future of finance and the days of the traditional bank are numbered.

Is this likely to be the case though?

Cryptocurrency has a serious cult problem. Many of its biggest proponents immerse themselves in echo chambers in online communities and disregard any criticism of cryptocurrency as simply spreading FUD [fear, uncertainty, and doubt] by people who just don’t get it.

However, while cryptocurrencies have shown some promise as investment opportunities, the industry is rife with frauds and bad actors who use the passion of the cryptocurrency community to hype up new coins, drive the value up, before dumping all their stock and leaving investors holding the bag [known as a pump and dump scheme]. And, due to the fact cryptocurrencies aren’t backed by any central authority – like a bank – and operate in a largely deregulated market, there is no real recompense for those swindled in this method.

Everyone loves decentralization until they realize there’s no customer service.

Then there’s the issue of cryptocurrency as a serious alternative to FIAT currency. There was a famous example of a man in the early days of Bitcoin who used the currency to buy some pizza only for the value of those coins to skyrocket soon after and significantly increase the price he had paid for the meal. Cryptocurrency value is incredibly unstable which is why almost every mainstream company which has experimented with accepting it has ceased doing so – you simply cannot rely on the currency maintaining its vale post-purchase.

And then, to put the final nail in it, there’s the fact cryptocurrency has no inherent value and must be converted into FIAT to unlock any investment gains. A dollar is worth a dollar, but a crypto coin isn’t worth a crypto coin, it’s worth a dollar value.

Final Thoughts

Metaverse and cryptocurrency technologies are very much an unknown quantity right now. While they may find a foothold in mainstream society in years to come, the evidence right now points to them being niche concerns which only appeal to specific but highly engaged audiences.

If these audiences are demographics you wish to target with marketing efforts, then investing in these spaces may be a promising idea but suggesting these are the future of the internet would seem to be a bit of a reach.

Web 3.0 is sure to be part of the conversation at Digital Insurance Summit 2023, being held in May at the Hyatt Regency Austin, TX.

Download the agenda today for more information and insights.