Analyzing the New Demands of the Metaverse from the Perspective of Internet Development

The history of human development often repeats itself with new needs, and the Metaverse is the realm where new needs emerge. The internet as we know it has been synchronized over the course of decades thanks to the success of four key areas of infrastructure, identity security, wallet accounts, and social networking. Now, we’re in the phase of building the foundations of a Metaverse, similar to the internet creators of the early 1990s. So, as we look at the Metaverse and its potential, we can also analyze this new realm through the lens of the same plate.

Metaverse strives to combine the existing technologies of the Internet and mobile networks with virtual and augmented reality to connect the human physical and digital worlds. This emerging field has enormous potential. By the end of 2021, some $10.4 billion in venture capital flowed into the Metaverse world of games, augmented reality and virtual worlds. Analysts at Citigroup predict that the Metaverse will eventually reach $8 trillion to $13 trillion.

There are many similarities between the Internet and the Metaverse. First, both are defined as a decentralized network where companies and platforms connect to create communities. Second, both require specific hardware to access the platform (physical computers to access the Internet and VR devices to access virtual worlds). In the end, both early adopters are tech-savvy, intellectually curious, and fascinated by the technology’s potential. Both require early adopters to purchase the technology needed to access their respective platforms, even though early adopter technology is expensive and often not very user-friendly.

As the Internet became mainstream in the late 1990s, the winning companies developed strategies to continually target key market trends, such as Microsoft’s Internet browser. At the same time, a large number of internet players such as Google and Amazon have emerged to address unmet problems. Soon after, social companies such as Facebook, YouTube, and Twitter that really built the Internet appeared. These platforms build on the work developed during the first Internet wave, driving rapid user adoption and growth.

But not all internet startups are successful. Startups quickly exited the market without proper product development or profit margins, and the dot-com bubble caught many entrepreneurs and investors off guard. Now, winning internet companies like Google and Amazon are acting as bridges. These ecosystems position themselves at the forefront of Metaverse innovation. However, similar to the Internet in the late 1990s, the current Metaverse players are temporarily unable to cope with the exponential growth of use cases.

Next, we’ll use the first four key areas of the internet as reference points to understand what the key components of the Metaverse will be in the coming years.

[Infrastructure] Internet: Apple, Microsoft; MetUniverse: Ethereum, Solana, Avalance

[Identity security] Internet: McAfee, Symantec, Palo Alto Network; MetUniverse: stealth startups

[Wallet account] Internet: Paypal, Stripe, Venmo; Metaverse: Metamask, Ronin

[Social Network] Internet: Twitter, Meta, Instagram, TikTok; MetUniverse: Steemit, Status

Profit Opportunities in the Metaverse

Investors will need to understand changing business and consumer demands as people transition to a more accessible and vibrant virtual world. According to relevant research, the requirements in several key areas are as follows:

[infrastructure]

Infrastructure platforms that connect the real and virtual worlds: Decentraland and Genesis World are examples of virtual worlds where users can create, experiment, and earn money from their content or applications. Meanwhile, the wave of new platforms continues, with more companies developing cross-platform integrations over the next few years to provide users with a seamless way to experience the Metaverse. The Metaverse will be the connector that connects different virtual worlds, rather than virtual worlds supported by a single platform. Metaverse Application Development Platform: As Metacom adoption increases, IT infrastructure continues to evolve, and so does the need for a connected virtual world. Similar to cloud-native technologies, programming engines are also used to create ecosystem-native tools such as Roblox, Minecraft, and Mozilla Hubs. As the new infrastructure develops, more companies will be able to integrate all of these functions smoothly and quickly, and there will be a plethora of “ETL tools” that flow data around an individual’s unique identity.

【Maintenance and prevention】

Metaverse Security Data Privacy Products: Security and privacy risks in the Metaverse are similar to those of the Internet. Since the Metaverse relies on hardware to experience the platform, securing the device and firmware is critical. Just as traditional internet security has evolved from cybersecurity to data security protecting all devices, infrastructure and endpoints, the security of Metaverse corporate players will be one thing. A key pain point for the Metaverse is the lack of governing bodies. For example, if someone steals a user’s identity in the metaverse, there is no obvious recourse. Security and privacy in the metaverse are largely governed by corporations, and there will be more “autonomy” movements in this area. That is, consumers will be increasingly interested in using their own tools and resources to manage their own data and identities. This trend in managing data by businesses and individuals will create plenty of opportunities for a new generation of startups in the field.

[Wallet Account]

Financial Infrastructure for Metaverse Transactions: According to data, NFT sales will total about $25 billion in 2021, in the early stages of a virtual buying experience. Given the ever-increasing volume of transactions in the virtual world and the smooth integration of virtual worlds with traditional financial payments, the single wallet experience will become even more important, whether buying virtual land, clothing, or other items. Professional marketplace for virtual goods purchases: As the line between digital and real identities blurs further, users are buying art, real estate, and clothing in virtual marketplaces. SuperRare is an example of an NFT platform. If we consider web derivatives of the previous internet, we can expect specialized marketplaces similar to Lootex, focusing on specific verticals or product types to better serve customer needs.

[Social network]

Event planning and entertainment: In the post-pandemic era, as businesses adopt new lifestyles, we will see increased demand for virtual event planning, hosting and execution to minimize physical distancing and capacity constraints. Companies like Party.Space and AllSeated have most recently innovated in this area. Digital bodies: As people begin to move from a participatory economy to an ownership economy, digital bodies that can move and speak are critical to building a better user experience in the virtual world. These avatars fall into two key avenues: through research into motion capture and touch (e.g. TeslaSuit), and through the use of images and videos (e.g. AVP portfolio company D-ID builds photorealistic avatars based on images and videos). Now, the company’s marketing and customer service departments and social media groups use these digital agencies to attract users.

Brief summary

Maintaining close contact with end users is critical to the success of the solution, and for all of the above, paying close attention to consumer preferences to differentiate corporate hype from reality. Furthermore, it is vital to create products that are easy to use and understand. The Internet is set up as a tool for delivering information. When social media came along, it brought more human-computer interaction components to digital communication. Brands quickly understood the value of social media and began to develop strategies to reach target customers and their behavior. Now, people have moved from economic actors to ownership and an immersive economy. As the Metaverse continues to grow, companies need to adjust their strategies again to reach customers with new needs on new levels and gain new insights to lay the groundwork for future trends.

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SuperChain Capital

SuperChain Capital

SuperChain Capital is a venture capital and investment banking service organization oriented towards ecology and value in the crypto sector.