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October 26, 2022

Metaverse, much ado about nothing.

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The decline of the metaverse – Pedro Trillo

A year ago, I wrote the shortest article in the history of this blog and the one that has generated the most controversy for me; I titled it Metaverse, and it said the following (in Spanish):
I do not see it! End

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I would tell you that this short article was the result of a detailed analysis through 1000 different data sources, with complex financial calculations, but no, to write that article, I only needed to watch 10 minutes of the famous video of Zuckerberg and a post on LinkedIn of a company called Miro (a remote collaborative whiteboard for teams) that had already released its product in the Metaverse, and that generated a very visceral and negative reaction from its users, I tried to recover that content, but they have deleted it.

Throughout all the articles this year, I have also been very critical of referencing this circus media spectacle rather than the technology itself or the social implications.

Let’s start from the beginning; from the base, the Metaverse should have been born as a protocol within the open source community of the Internet, not as a product launch of private companies; let’s not throw in the towel so fast; at least what we know today as the Internet was born this way, as a decentralized p2p exchange.

The four metaverses today, Horizon World, AltspaceVR, Decentraland, and Sandbox, are privately operated products, born directly with the capital of the web2 monopolies and charging astronomical commissions of between 15% to 40% per transaction in the medium.

We cannot make this mistake right from the start. The stakes are too high.

The Metaverse that we technologists want has nothing to do with Meta; you will find great CEOs of this country from various industries and advised by large technology expert strategy consultants, who charge between 600-800 euros per hour, claiming that the Metaverse is what is coming.

The new version of the Internet but in 3 dimensions; in theory, according to them, this is the next step of the Internet, then it means that all of us who form the new Internet would have to participate in the reconstruction process, but this is not happening.

In the process of creating this new Internet, web 3, we have to solve the major problems that have emerged in web 2, the concentration and centralization of services (monopolistic activity), the privacy of the individual, and the organizational structure of incentives, and none of the proposals to date of the current metaverses solve any of these problems, on the contrary, they amplify and aggravate them.

Remember how the Internet began before Amazon, Google, or Facebook appeared? It was a space of unlimited creativity; everything was to be done, and everything surprised us; in one session on the Internet, you could visit 30 or 40 different pages of all kinds; it was innovation in its purest form; it was to enter and say, let’s see what I find today, it was a very fun experience and there were no tacky avatars.

Now you spend more than 4 hours a day scrolling infinitely on social networks with unoriginal content, full of misinformation and trafficking with your private information.

This fact affects us, tiny Internet creators who need time from our users; if you are 8 hours working and 4 hours frying your brain with 6-second videos on TikTok, it will be impossible to use the Internet to discover new companies, or new creators, or something very basic to develop as a person, to deploy your critical thinking and own criteria.

We are competing in time; social networks annihilate innovation, and large Internet monopolies steal the time we need from our users to reach our products and services; when I launched my product a few years ago, the average session on my website was 2 minutes long, now it is 1:30, in the era of distraction and zero focus on what you are doing, social networks dust us small Internet creators.

These concentrations in large monopolies killed the creativity that was produced in the medium; for the nostalgic, I recommend you to enter the deep web and surf a good time; it’s like going back to the 90s, the design layer disappears, but there is an incredible degree of creativity, that innate essence that the Internet had in its early years, you can find a pdf of How to hack a Coca Cola vending machine? Even a page for sending monthly random gifts at $10.

The data on the table about the privacy misdeeds that have been committed with our data, changing governments, influencing elections, polarizing society, or prioritizing hate content to generate more advertising revenue.

Imagine what we would give Marc if you buy RayBan AR glasses; you would be showing him everything you see and everything you hear; it is terrifying to think about this scenario; what could they do with that data, other than everything they already have and how they could use, manipulate, interpret and misjudge it against you?

The Metaverse that we technologists dream of is a private, anonymous, and decentralized medium, it’s back to the Internet of the 90’s, but with the technologies of 2022, it’s a fusion of the Internet with a transactional decentralized Blockchain with very low or non-existent fees, organized in DAOs and powered by a brain called Artificial Intelligence.

It’s not buying a Nike sneaker NFT by tripping over your living room table while pointing a joystick that is impossible for it to sit still.

The raw data.

In the case of Meta, the others have similar data, but let’s focus on Meta. 16 Billion dollars in losses since the launch, practically 1 Billion per month, investors’ flight, flight of the former top management, 70% drop in the stock market, and in total counting the initial investment and the side effects to the rest of the platforms Facebook, or Instagram, they are already 70 Billion in losses.

Regarding traffic, the number of users, or transactions, I need help finding good data; some twitterers publish that Decentraland has 38 daily users based on Coindesk data.

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But they deny it, saying that number refers to the number of smart contract transactions, not the number of concurrent users.

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In any case, visiting their official analytics page, the data does not match the published figures of 56,697 monthly users, over 1800 daily users, producing 38 transactions; we are talking about technological projects worth billions of dollars and unprecedented media coverage. Judge yourselves, but let’s say the numbers could be better.

I’ve had good months of traffic in my startup, we’ve hit those monthly traffic numbers, and I have yet to spend a billion, either with a b or a v.

They are selling it to us as the next Internet, an Internet with three dimensions, but this is not to be taken for granted by my friend’s readers. The Internet has 5.4 Billion users. For this version of the Metaverse to work minimally in its first 18 months, it should have migrated at least 1% of active Internet users; about 54 million users should be using these metaverses daily, but the statistics do not point to these figures far from it.

Maybe they are in the valley of death zone that all startups have after the launch and initial hype, rebounding in a few years, but this does not look very good for the future. Facebook did not have a valley of death; Facebook was born as a rocket from its first day, you can not afford at a Facebook level to have the valleys that we have the micro startups, nor can you wait for the market to start in the next 5 or 10 years when you have more than 70 Billion in losses, and you are listed on the stock exchange, they are extraordinarily complex products and no pocket can withstand, and Mark’s is big.

In the last 10 years, there have been many attempts with technologies related to VR and AR; remember Google Glass, and Microsoft’s Hololens, which have not just started, I love it, and it has not worked either, except in cases of particular uses in industry.

My personal experience with VR, I did it 6 years ago; I played the Resident Evil game for about 20 minutes, and when I took off the glasses, I had the feeling of having done the New York marathon; I was exhausted, and it is creating a market that they say of trillions of dollars, on a UX and UI that causes fatigue; You want that not, killing zombies tires, but I do not see that you can spend eight hours of your workday in an immersive experience, in which to hit the click to open a PowerPoint can take you about 30 seconds.

As an experiential product, it is exceptional; in an entertainment environment, the average sessions are between 15 to 30 minutes, and the current Internet model is based between 2 to 4 hours, which is what we spend on social networks and entertainment products, they monetize our time through our data, to think of trillion dollar markets as they are saying, with 20-minute sessions, does not make much sense.

What Zuckerberg and his friends are trying; Is to artificially force a change in the market based on injecting money, money, and more money, but this does not work like that; there is simply no momentum, we are not ready users or the market for this jump, we will be in 10 years, I do not know. Indeed, much money is being invested for that to happen, and it is being forced unnaturally.

Let them wait for me to sit down to enter that kind of Metaverse; I will contribute to a Metaverse, which I believe, was born as a protocol, not to a Facebook product with a thousand bugs and privacy flaws.

Metaverse Vs. Gaming.

Everything I have read in recent months has always compared the Metaverse Vs. Internet, here is another misconception, the natural competitor of the Metaverse is not the Internet but the pretty girl of the technology industry; its competitor is Gaming.

I am far from being an expert in Gaming, but there is no doubt it is an extraordinary technological vertical in revenue; in audiences, they move more volume than streaming video and audio together; their natural competitors would be Fortnite, Minecraft, Roblox, which already have their metaverse proposals, and are getting outstanding results with the Alpha Generation.

The natural early adopters of the Metaverse should have been the lifelong gamers, not the ordinary Internet user, but then again, in the graph below, you can see that it will be extraordinarily difficult to get a hardcore gamer, the lifelong Counter-Strike gamer, to visit the Nike store in the Metaverse.

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Moreover, they are the ones who have been more critical; this user profile knows what they want and are usually technology experts; they are not going to use technology with renders and graphics from 10 years ago in a gaming environment that keeps growing and growing.

Fear of missing out (FOMO).

Recovering the entry of the article, my opinion is that much more has been written than what is moving in this market, artificially or paid, so I wrote an article of a microphase; it could have been a tweet, but I have no social networks except LinkedIn and for work, my influence I have at home, in my blog.

The media is creating an unjustified hype, and the media noise has generated an expectation that does not correspond to the reality of the medium. Therefore, you cannot base your business or digital strategies on FOMO (fear of missing out) or an attempt to be the first, just in case.

The fact that all the big clothing and footwear brands have created their store in the Metaverse is not a good indicator; brands are everywhere, they have substantial advertising budgets, and for them, it is a way to be fashionable; they are not technology companies.

To close, you must choose well what you are digital; there is a digital classification that labels companies into four categories, you can be conservative, beginner, fashionista, or digirati.

The conservatives are an endangered species; there are very few left; ten years ago, the vast majority of Spanish companies were conservatives; now they are all fashionistas; they skipped the step of beginners to become digiratis. The typical company systematically fails the log in to access its website, which offers an abysmal digital service. Still, they talk about their latest project with Artificial Intelligence in a use case that makes no sense at events.

They implemented their strategic vision being carried away by technological fashions, threw everything, and had some big disruptive scare in the first decade of the 2000s. Those facts alert them to everything that happens; then, they go for everything; they want to be protagonists; you will find this pattern very accentuated in three main sectors, telecommunications, banking, and insurance.

Recognizing a fashionista in the digital savannah is very easy; when they speak in public, there is always a moment of exhalation in which they come up, and then they let you know the mix of technological trends without periods, commas or contemplations, all at once. They usually finish the sentence with quantum computing.

Blah, blah, blah; BitcoinIoTCloudComputingIAMetaverseBiotechnology5GBlockchain … Quantum Computing.

Digiratis create their strategies based on their vision and criteria, not on fads; here is the difference, if you want to be digirati, first build the vision of your company, do not improvise by trends, if you do not have a vision; get very good advice, but not in the press, not in social networks, not in McKinsey with their extraordinary power points calculating quadrillion trillion markets.

Read the technologists, the experts in technology, who do not commit to any media, nor any business or commercial interest of any kind, those who for years and years have shown you that they know what they do, that they understand what they are talking about, that project the security and confidence you need in your business strategy, everything else is much ado about nothing.

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