Tech giants like Facebook and Microsoft have already grabbed the metaverse concept to build their autonomous metaverses. But will their centralized nature of branded metaverses stand against the concept of the decentralized, utopian world of freedom? What does a metaverse that is decentralized offer compared to the centralized one? Is one type better than the other? Read ahead to know more about the decentralized metaverse and its contrast against the centralized metaverse.

What exactly is a Decentralized Metaverse?

A decentralized metaverse is a virtual world that no individual or organization controls. It is a collective network supported by blockchain at the heart of decentralization. A virtual world is a 3D immersive reality in which users can interact with their surroundings and with each other using their digital personalities called Avatars. To understand the autonomy of the metaverse, let’s look at the developments that lead to it.

The world has witnessed the power of blockchain and its ability to transform traditional finance since 2008. Cryptocurrencies emerged as a representation of a future world with alternatives to government-controlled money and trade. Countless blockchain applications emerged across all industries, giving rise to a decentralized database with no central authority.

Virtual worlds inside computers have crossed people’s minds, regardless of whether they are decentralized or centralized. Some writers have even brought it to life creatively, for instance, in The Matrix or Snow Crash. The direct solution to building a decentralized world was to go by the route of blockchain and cryptocurrency. A professor at City University New York and a blockchain enthusiast, Sean Stein Smith, stated, “To realize the true potential of this space, there will need to be a transparent and traceable method to 1) conduct transactions and 2) interact with each other; blockchain and crypto assets provide a potential answer to this need”.  

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Long before crypto disrupted the world, Vitalik Buterin, one of the co-founders of Ethereum, realized the flop side of centralized services. He said, “Blizzard removed the damage component from my beloved warlock’s Siphon Life spell. I cried myself to sleep, and on that day, I realized what horrors centralized services can bring.” Later, this avid World of Warcraft player built one of the largest decentralized crypto networks. 

Through time, the metaverse manifested with a larger focus on open standards, interoperability, crypto, and NFT.  

Decentralized Vs. Centralized Metaverse

Now that we have looked at what a decentralized metaverse is, let’s look at how it differs from a centralized metaverse, for example, Facebook’s Meta and Microsoft’s Mesh.

Decentralized Metaverse Vs. Centralized Metaverse

Central control 

A centralized metaverse is a virtual environment controlled and governed by a single entity. Internal servers and regulatory policies dictate how things function inside those virtual worlds. It is still interactive and has a marketplace, but everything is under set parameters. It is also referred to as Core Control. There is also a fear of privacy and data protection being eventually compromised in a centralized metaverse. Some examples of a centralized metaverse are Fortnite and Roblox. 

Developer freedom

Facebook’s Meta is one of the biggest centralized metaverses and the most critiqued. The difference between Meta, and open metaverse projects, is that the latter functions on an open, permissionless blockchain system. There is no restriction for developers to build a metaverse application on an open blockchain; anyone can buy and sell virtual infrastructure, real estate, and assets. On the contrary, it is not specific how Facebook will make its metaverse interoperable and if Meta assets will be fungible with non-Facebook assets.

Interoperability

Users can enter and move between different metaverses in a decentralized platform without a barrier. These interoperability protocols allow for frictionless trade of assets, including cryptocurrencies, stablecoins, utility tokens, NFTs, loyalty points, or anything across blockchains and virtual worlds. The users can also govern the functioning of the metaverse.

Decentralized metaverse governance 

The metaverse is controlled by individual users who vote to decide how the world will function, and they constitute a Decentralized Autonomous Organization (DAO). One of the most prominent representatives of an open metaverse is Decentraland, a virtual world built on the Ethereum blockchain with its own cryptocurrency MANA. MANA can be freely exchanged for other cryptos on exchanges.

The Sandbox and Somnium Space are a few other examples of the same. These virtual worlds have tokenized in-game assets. The players enjoy ultimate control over their assets just as they would real-world possessions.

How does a Decentralized Metaverse work?

Metaverse, when a decentralized world, generally works based on the following factors.

Open-source: All metaverses, when decentralized, allow anyone and everyone to visit and switch between metaverses and trade a wide range of assets. Open Source is a freely available, multi-participant platform for building decentralized, distributed, and interoperable metaverses.

Open standards: A open metaverse also works based on open standards of the web, such as the web-based VR/XR and other web-based binary applications such as OpenXR and WebAssembly. 

Permissionless OS: Open metaverses work without the need for permission to ship a product in and out of an OS. Operating systems such as Linux, Windows, and Mac OS remain the main options for building permissionless projects like the metaverse. Android also cooperates to a limited extent. 

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Interoperability: Metaverses that are decentralized work intending to make virtual worlds and underlying blockchains compatible with each other. They also care about the compatibility of external output and input devices across metaverses. Most gaming metaverses are compatible with popular devices such as Playstation, Nintendo Switch, and Oculus. Software like Unity or Unreal helps builders target multiple platforms. 

Cloud computing: Cloud storages are the main unit for working metaverses. Building and hosting a 3D virtual environment requires significant storage and computing. Some popular cloud platforms for the metaverse include AWS, Microsoft Azure, and Google Cloud Platform (GCP). 

P2P: Decentralized platforms work without a common server. They depend on users of the platform to enable consensus-based systems. For example, real-time strategy (RTS), Multiplayer Online Battle Arenas (MOBA), and tower defense games coordinate without servers. 

Smart contracts: Enable decentralization in metaverses with the automated protocol for transactions on the underlying blockchain. NFTs, crypto assets, and DAO in the metaverse mainly function based on smart contracts. 

Benefits of a Decentralized Metaverse

An open metaverse serves a user all the independent creative freedom required to make the best out of the platform, whether for gaming or e-commerce.

Permissionless

Metaverse encourages Open Source participation. Open-source codes can be incorporated into projects to modify and build into the metaverse as long as you comply with the licensing structure. So, no one has to pay tax to host a metaverse platform, and neither are they under any control. 

Enhanced gaming experience 

We all know that the residence of the metaverse is mainly in online games. It has already transformed the gaming experience not just through external devices like VR but also by establishing an economy with digital currencies. In the metaverse, trading in games has taken the next step also to include newer concepts like F-NFTs. 

Branding in the decentralized metaverse

In a metaverse, big or small brands can set their footprint, advertise seamlessly, and interact with a global audience from a single place. Nike, Wendy’s, Samsung, Hyundai, Coca-Cola, and Sentosa have all leaped into the new branding game through a metaverse. 

Enhanced blockchain uses

Blockchain is at the foundation of a metaverse that is decentralized. Given the footprint of the blockchain across various industries, metaverse also has the potential to expand at a larger scale with the help of blockchain. Metaverse can incorporate blockchain-enabled products like cryptocurrencies, record-keeping with distributed ledgers, peer-to-peer transactions, NFTs, and decentralized exchanges. 

Use of NFTs in the decentralized metaverse

New and realistic NFT marketplaces with more interactive elements are a common sight in the present metaverses. Another blockchain-based use could be in blockchain games inside the metaverse. It facilitates next-generation use cases for in-game assets and NFTs by encouraging trade and embedding utilities. 

Virtual tourism 

The metaverse environment is filled with sophisticated 3D visuals. With Augmented Reality (AR), digital twins of real-world landscapes can be created along with creative fantasy lands to encourage a whole new sector of virtual tourism. With external output devices like VR, the tours are made as close to real as possible. YouTube has adopted a snippet of virtual tourism through its recorded 360-degree video content. However, in an open metaverse, there is more freedom. Users, as their digital avatars, can walk around a landscape and explore as they would in real life. 

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Real-time interaction 

Metaverse facilitates real-time communication and interaction like never before. Transforming conventional face timing and video conferencing, the metaverse introduces interactive virtual reality where people can communicate with each other’s avatars at a location of their choice inside the metaverse and even include some gestures. There are no intermediary servers relaying messages. Interactive meetings in the metaverse make remote team collaboration and management easier. 

Virtual offices and classrooms 

Fueled by the global pandemic, remote working and learning took over the world, and Skype, Teams, and Zoom became staples. Realistic virtual offices, classrooms, and campuses can be set up with the metaverse. For example, KuCoin has released a metaverse office based on the Blocktopia space. There are different functionalities like event hosting, conferences, virtual training, trade shows, etc. Platforms like Minecraft and Second Life have similar initiatives in the education sector for improving the learning experience. 

New marketing opportunities 

Metaverse opens numerous doors along with leisure, learning, and shopping. Brands have been utilizing exclusive opportunities in the metaverse. For example, Anzu deployed a tracking system for real-time views of ads in metaverse gaming environments. Speaking of ads, metaverses can also make ad revenues by displaying billboards, posters, etc., for companies without paying a rental fee, like a centralized metaverse.

Future of metaverse

The future of the metaverse will benefit considerably from Web3 standards. User-generated content will have more freedom and more tools for creation. The interoperability and openness of the metaverse will stay, if not, even more, imposed. Industry professionals like Ryan Gill from Crucible have created modern collectives such as Blueprints for the Open Metaverse to establish interoperable standards. As giant companies invest in the metaverse, it will open more talent opportunities worldwide, leading to another IT revolution.

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