What is the metaverse?

Explaining what is meant by the metaverse, how the metaverse will be accessed, and why it requires ambitious, agile regulation.

Explainer Updated 19 December 2022 7 minute READ

What is the metaverse?  

The metaverse is a vision of how the next generation of the internet will operate.

A metaverse will be an improved digital environment where it is possible to move seamlessly between work, play, shopping, socializing and creativity in one digital landscape.

What form that landscape will take is a subject of debate. Firms such as Meta (Facebook) are investing heavily in an immersive experience, where users with wearable hardware discard reality for a purely virtual world, interacting via avatars – the basis for the ‘Oasis’ depicted in Ernest Cline’s novel, Ready Player One.

The metaverse could fundamentally change not only how humans interact with technology but also how they interact with each other and the world around them.

Others see the metaverse as more like an integration of the physical environment with the digital, where the real world is overlaid with digital surfaces and objects. This augmented reality approach builds on experiences like the highly successful Pokemon Go phone game, which allows players to seek and discover digital creatures in real world locations.

At the moment the metaverse is mainly a commercial enterprise. The building blocks are being rapidly developed by big corporates including gaming and technology companies. Firms like Facebook, Apple, Google and Microsoft are in direct competition, drawing on their enormous technological resources to design their own metaverse offerings.

This situation has serious implications for society. Just as the internet transformed the world in unexpected ways, the next iteration of our digital world will have an impact far beyond delivering more exciting entertainment and efficient commerce.

The metaverse could fundamentally change not only how humans interact with technology but also how they interact with each other and the world around them. It also raises questions about the effect on national and individual identities in a society where people spend increasing amounts of time in a parallel world.

How does the metaverse work?

The way the metaverse will work is still being defined. But it will probably provide users with a single avatar or digital identity, which grants them access to an integrated digital ecosystem. The ecosystem would potentially have its own currency, property and possessions. This could be a digitally altered form of reality, a virtual world built from scratch, or some combination of the two.

Within this metaverse, users may ultimately be able to perform all the online tasks that are currently spread across separate digital properties like websites and apps, ideally without the need for the many passwords and user accounts that characterize current digital experiences. Chinese apps (or ‘super-apps’) such as WeChat already have significant interoperability, integrating a discussion platform, payments and a social credit system.

While the building blocks exist, they are not yet connected into a true metaverse.

Meanwhile the gaming community may argue a game such as Fortnite qualifies as a kind of prototype metaverse. The game boasts 350 million registered users globally (a population equal to the US) and includes in-game currency that can be earned and traded.

While the building blocks exist, they are not yet connected into a true metaverse. Our assumptions are based on existing knowledge and behaviour. Many predictions may come true, but other possible paths will fail or simply not be taken up by developers and users as technology grows and people adapt to and help shape its possibilities.

How do you access the metaverse?

It is not yet possible to access a complete metaverse. But how we access the metaverse in the future will be a crucial influence on its development. Will it become an open access tool of opportunity or a closed access, more commercial enterprise?

Currently users access the digital world via screens, whether mobile or desktop devices. A metaverse will be accessed via easily portable and immersive hardware like headsets, gloves, watches and contact lenses. These will allow users to view, hear and touch a digital landscape directly, as opposed to via a projection on a screen.

It will be increasingly easy for sophisticated algorithms to collect far more complex, dynamic data on users.

This hardware will, however, also allow the metaverse more direct access to its users. It will be increasingly easy for sophisticated algorithms to collect far more complex, dynamic data on users. This would include heart rate, pupil dilation, gestures and gaze direction.

Therefore, while users will be granted greater access to a digital world through a metaverse, providers of goods and services will have an even more intrusive insight into their users’ beliefs, fears and desires.

Existing information such as likes, clicks and shares are already used by platform providers to shape our experience online, sell us goods and services and share information about us with other companies. The temptation to put users under even more constant and detailed surveillance will be hard to resist in a metaverse founded on profit-driven motives .

Who owns the metaverse?

As no fully fledged metaverse currently exists, it is not possible to say that there are any ‘owners’ as such. However, major technology companies are positioning themselves to serve as portals (or gateways) to the metaverse. Each seeks to offer the preeminent, if not the only, point of entry.

Meta has invested $10 billion in its metaverse work already, after purchasing virtual reality firm Oculus Vision Tech in 2014. It and other major companies such as Walmart and Nike are busy filing trademark protection and copyright on virtual versions of their products in preparation for the metaverse.

It is likely these big companies will try to achieve dominance in the metaverse and guard their intellectual property. But their unchallenged monopoly would create serious problems.

Users of the metaverse would find themselves in environments entirely defined by big tech and other large corporates, with interactions taking place on their terms. Metaverses set up by authoritarian regimes may subject users to a different from of control, by deciding what they may say, see or access. 

There is also a threat of extreme concentration of wealth, as digital gatekeepers in the technology industry use their insider knowledge to establish an unfair ‘first mover’ advantage in the metaverse economy. 

If the process of shaping the metaverse is outsourced to commercial interests, it risks prioritizing profit and consumer experience at the expense of activities that greater benefit society.

To be equitable and stand a chance of making a positive contribution to human lives, the metaverse must be free and available to all. It must also be designed by a diversity of actors and regulated at its inception so that individual rights are safeguarded.

Regulation of the metaverse

Regulation of the metaverse presents a real challenge – not least because it is not yet clear exactly what form the metaverse will take.

But governments, the private sector, international organizations, and civil society need to anticipate rapid technological advances. These sectors should work together to provide a regulatory structure built on an informed, international, democratic consensus as opposed to corporate priorities alone.

Regulation needs to consider a range of human rights and legal issues, from the level of monitoring, data collection and oblique advertising permitted, to the protection of vulnerable people including children. There are also more technical issues such as contractual terms, intellectual property, content licensing and ownership and trading of digital assets.

Digital regulation must become more agile and predictive in order to prevent the metaverse magnifying existing internet dangers or creating new ones.

It requires governments to take a more directive approach than was adopted for the early stages of the internet and social media. The model should give users more control and move away from surveillance capitalism, which for too long has left companies largely self-regulating under their own ethical guidelines.

At the same time, regulation by governments needs to be proportionate and respect international human rights law, including freedom of expression. National regulators should also be independent of government to protect against abuse of power.

One problem is that the technology companies are far ahead of policymakers in their knowledge of both the technology underpinning the metaverse and its implications, commercial and otherwise.  

This knowledge imbalance contributed to the mistakes and gaps of the last twenty-five years. During this time, governments legislated retroactively as problems emerged, failing to anticipate emerging issues.

Regulators need better understanding of the technology basics, so that they are not operating in the dark. Policymakers need more proactive relationships with big technology firms and other businesses, to better understand big tech’s ambitions, the potential risks to society and where regulation will be needed.

Most of all digital regulation must become more agile and predictive in order to prevent the metaverse magnifying existing internet dangers or creating new ones.

The world needs to get better at creating laws that factor in rapid technological changes. Governments may choose to adapt existing legislation or create new laws. For example, the UK’s culture secretary  has stated that metaverse activities will fall within the scope of its Online Safety Bill.

But the metaverse will likely be transnational for citizens in most countries. International cooperation and coordination on standards are therefore crucial, as well as on issues such as competition and taxation.

Liberal democracies have an opportunity to be at the forefront of responsible metaverse regulation. This should involve working with technology giants to embed concepts like safety by design and privacy by design in their proposals for the metaverse.

Governments should also hold companies accountable for their responsibilities under international human rights law – including under the UN Guiding Principles on Business and Human Rights.

Other measures should include due diligence. Tech companies developing metaverse architecture should identify potential harms at the design stage. They should also be responsible for mitigating those harms as far as possible.

Companies should also be transparent about their metaverse activities (including data collection, transfer and use of algorithms) and be accountable when harmful events happen.

Such measures should be guided by developing regulation by the EU and UK including the EU’s draft Digital Services Act, the EU’s draft AI Regulation and the EU’s draft Directive on Corporate Sustainability Due Diligence.

Done properly, these measures could serve as an international baseline for democratic countries to follow.

How will the metaverse change the world?

Like the internet, the metaverse could deliver enormous benefits in some areas. But it could also dramatically amplify existing societal problems.

Internet surveillance by governments and corporations already infringes on civil liberties, human agency and privacy. Social media feeds polarization by spreading disinformation and sheltering users from alternate views.  

Under the surveillance capitalism model, platforms pass user data to other companies so that they can specifically target those users, whether with products or ideas.

Often users are unaware that their data is being gathered or sold on, or that they are being targeted with particular products or news as a result. This online manipulation interferes with our freedom of thought and encourages polarization of views, echo chambers, and greater distrust in sources of information.

The metaverse could intensify these issues and create entirely new ones. But there may also be benefits we do not yet fully appreciate.

What are the benefits of the metaverse?

The metaverse could bring new advances in all areas of society, beyond gaming to healthcare, education, commerce and creative industries.

For example, much like the internet, the metaverse offers the chance to facilitate the sharing of knowledge. Algorithms could be designed to learn from children’s behaviour, discovering how to create more effective learning spaces and teaching styles, both online and in reality. Children could also learn in a more interactive, less passive way.

The metaverse will also create exciting new possibilities for leisure and creative expression, allowing users to shape their own unique worlds, or to redesign the real one, decorating it with digital art and populating it with digital creatures.      

Are there any issues with the metaverse? 

Probably the greatest issue with the metaverse is that its development is being entirely led by commercial interests. There is very little public debate about how our future digital environment should look, who should design it, what its purpose should be and what standards should govern its operation.

In addition to the human rights risks flagged earlier, there will be other potential risks to society arising from a metaverse.The metaverse threatens to increase digital exclusion, if people around the world have unequal access to the technologies essential to metaverse participation.

There is very little public debate about how our future digital environment should look, who should design it, what its purpose should be and what standards should govern its operation.

The act of existing within the metaverse could itself likely become highly addictive, which might aggravate rather than alleviate mental health problems. It may be hard for some to maintain a happy life in the real world, beyond the comforts of a metaverse tailored existence.

Another risk is that this kind of intense, automated catering to user preference could drag users deeper into negative behaviours, from conspiracy theories and radical politics to trolling and gambling.

More than ever, users could withdraw into isolated communities of interest, particularly if we end up with a ‘splinternet’, whereby separate metaverses develop and are controlled along national lines. In this fragmented landscape, cultural outlooks could become increasingly tribal, with users sealed off from reality, and more hostile to contrary opinions.

The best ally the world has in preparing for the metaverse may be our current internet. Policymakers have learned important lessons from the emergence of technology giants, inadequate regulation of social media, and the corrosive effect online behaviour has had on democracy and public debate.

There is now a greater awareness of the problems created by big technology companies becoming too powerful, as with the backlashes against big oil, big pharmacology and big tobacco.

There is also an increased general understanding of the tremendous damage done to society by an unwillingness to constrain malicious online activity.

Metaverse technology may well remain opaque to some of today’s political leaders for some time to come. But one thing should be clear: like climate change and pandemic prevention, a lack of international preparedness and cooperation by governments is the greatest obstacle to meeting this imminent global challenge.