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Web3 and the metaverse are garnering enthusiasm from consumers, investors, and corporations. Users are excited about the prospect of novel ways of interacting with one another online, and companies are excited to use new technologies to explore better, faster, and cheaper processes. Meanwhile, brands aim to leverage the new technologies to further engage Gen Z consumers who are accustomed to interacting with friends in immersive virtual games.
Web3 and the metaverse are quite different concepts, with some overlap.
Web3 is the next generation of the Internet and it is powered by technologies such as blockchains, smart contract applications, tokens, and digital wallets. The technologies enable applications to be interoperable and for consumers to own more of their digital assets.
Metaverses are virtual and immersive environments that allow users to interact with one another in real time. Today, most of these virtual environments are not interoperable. The digital goods (for instance, virtual clothing) and identity that users acquire in one world or game do not port over to other virtual environments.
Web3 has the potential to connect virtual worlds and metaverses. In the coming years, for example, people could have a wallet in which they store their avatars and other digital assets. They would then use that wallet to engage with varying applications and virtual environments. As they move from application to application, they will carry their digital assets with them so that they can enjoy the digital items they own. Beyond that, web3 could make digital economies more interoperable as fully functioning economies will be linked across applications.
Web3 also enables a long list of other applications that do not overlap with the metaverse. Financial institutions are tokenizing real-world assets such as real estate and private debt. Payments companies and insurers are experimenting with leveraging blockchain rails to transfer and expedite payments and securely share customer data. Sports leagues and teams are piloting non-fungible token ticketing with the aim of improving fan engagement.
First published in August 2022