Thursday, October 7, 2021

Michael's Metaverse for Dummies

(Updated November 2022)

A year ago I posted a Value Chain for the metaverse. It was a crazy year, both with work and with working through corporate politicking, so I never really clarified what this value chain means. Well, I did but you only would have heard it if you had the pleasure of talking to me directly about it. So in adding to this older post I hope to add some meat to this awesome graphic guide I created. 

First, let me start by saying today the ideas of "metaverse" and "Web3" have been conflated to mean just about anything. PE and the like are pushing a bunch of ideas that drive this market size to stratospheric scale. That's not my bandwagon, and it's really disappointing to see credible VCs launch "metaverse podcasts" just to host mostly philosophical discussions by wealthy founders with expensive websites for companies that don't really do anything. 

Innovation requires a velocity, in other words there must be a clear direction and force driving it in that direction. For me, the direction for metaverse is clear and can be summed up into one word: 

Presence

Without presence, there is no difference between a metaverse use case and any number of things that have come before. Just because a service has a UGC business model, looks like a version of The Sims and is hosted on a blockchain, doesn't make it part of the metaverse. 

Services like Fornite, Roblox, and Minecraft could arguably be placed on an evolution of the metaverse because "Presence 1.0" could be summarized to mean a service that includes a personal, customizable identity in the form of an Avatar. However, the metaverse has always been more immersive than that. 

A true metaverse experience should be built with presence in mind. The most immersive, presence-providing technology today is Virtual Reality. However, Augmented Reality is coming and will also makes its mark on the metaverse. One day, probably (for real, and finally!) when 6G rolls around. Other interesting use cases are emerging already as well, like remote piloting drones. 

My value chain therefore focuses on technologies that enable presence. They are, from top-to-bottom: 

1) The Use Case - Borrowing from definitions of "spatial web" and older mental models for "metaverse" they must include a Virtual World, Avatars, and NPC (which can be any kind of agent, including plants or animals. A use case could, using this definition, include a Web or Mobile use case like World of Warcraft, or even Quake for that matter. However, there must be a guideline -- for which one day some persons savvier than me shall, I pray, create protocols to allow for cross-integration like a "metaverse middleware" -- that includes the Mechanics, Aesthetics, and Dynamics of the use case. While they could be anything, again I stress that anything without presence (even Presence 1.0 aka just an open world game (or even a gameless world in theory but... boring!) wouldn't really be metaverse material. 

I would break down what I consider valid categories of metaverse use cases to be: 

Virtual Reality (VR) - bring my consciousness to a virtual environment; 

Augmented Reality (AR) - bring a virtual environment to my consciousness; 

or, Advanced Peripherals (AP) - bring my consciousness to a real world with a virtual body.   

2) Interfaces - These enable an end user to Access the metaverse. Today, devices like notebook computers and especially smart phones are ubiquitous. However, HMDs like Quest 2 are proving that the time for Virtual Reality has arrived. The adoption curve is working in favor of new Virtual Reality headgear, we will start to see them taking marketshare from consoles, notebook computers, and tablets in the coming years. Some credible sources predict that by 2027-2030 (thereabout) we'll start to see smartphone-like scale in the 1-2B device range. This will depend on the use cases that emerge for the devices in the meantime, it's a bold prediction but I wouldn't bet against it. 

The three types of interfaces that exist today and correlate to the categories I use for use cases are: 

Head Mounted Displays (VR), people wear them to experience VR;

Augmented Reality Glasses (AR), people wear them to experience AR;

and, Drones (AP); people use them in combination with an HMD to pilot in first-person.  

3) IoT - Another victim of overly-hyped PR fueled arguably by too much liquidity, IoT is actually alive and well. You just don't hear about it anymore. In fact, some would argue the most exciting thing about 5G, and why you could consider it a transitionary technology, is the LTE capacity it frees up for Narrowband IoT and CAT-M1 mobile use cases (less data, more data respectively). The meta data that is enabled for use by IoT is enabling the "meta"verse. Much of the sensory information used in VR or AR today is on the local hardware, but more will be moved to the edge and those edge data sets will be move to the metaverse as well. IoT will enable RT modifications to virtual environments and provide allow for accurate depictions of real world places virtually. 

4) Blockchain - So much hype around blockchain, what to believe? The fact remains that it is a great technology for attribution, and no other system for attribution allows for so much flexibility and resilience. We are still at the nascent phase of this technology, but the ability to interact in a hyper-realistic way while using VR, AR, or AP will require new ways to verify identity, ownership, and potentially enable entire worlds to "fork" from a primary platform on a foundational blockchain like Etherium to generate its own economy while borrowing from the rules and protocols of the main blockchain. 

5) Multi-access Edge Computing or MEC - This darling of the telecom industry has been around for probably twenty years, and it's finally seeing daylight with the advent of 5G. If you had to pick one technology that if you removed from 5G the whole telecom community would be yelling "jenga" it would be probably be MEC. This moves some of compute from the core network closer to the end user which makes for the low-latency so hailed by the industry. Today the technology is solid, but the search for a use case that is truly mobile and economical has still turned up no major victors. Most experts see presence-drive use cases for the metaverse as the likely candidate. Who pays, and how, is still anybody's guess. 

6) The Cloud i.e. Data Centers - Believe it or not, the cloud isn't mature at all. It's growing fast, and the data center race is on especially as companies eye the metaverse - again, meaning presence-driven use cases like VR, AR or AP - as a rapidly approaching reality. Virtual Reality is the fastest growing form of digital media, and as soon as AR is mature you can rest assure every telecom will dump billions into adoption of those use cases. Metaverse will boost traffic on high-throughput / low-latency networks like none other. Cloud technologies, working in coordination with MEC (which is a derivative of cloud) will move that content off the end user device making them lighter and far more portable.

7) Connectivity - I know, everyone hates the their mobile carrier. They're boring utilities that barely deserve the right to be called "Tech", right? Wrong, so so so wrong. I would encourage people unacquainted with how Youtube gets from the cloud to their smartphone to take a few hours to dive into what makes these technologies so amazing. Telecom is pretty amazing, period. Everyone thinks rocket sciences is amazing. Everyone thinks the Pyramids of Giza are amazing. Well, telecom is way more amazing in my opinion. 

Finding a way to divvy-up incomprehensibly small wave-lengths moving at unfathomable speeds then somehow send a Netflix movie over-the-air, through the ground and under the ocean -- or via outer-space -- back through the air to find it's intended target... you. Anyway, no-one would argue it's important. Maybe just take a moment to appreciate it more. 

8) A.I. - Another victim of the hypecycle, AI is advancing rapidly. The point of AI is to optimize things, not find new business models necessarily (although that happens too) but to make existing things work a lot better. Think about electricity, it didn't make the industrial revolution happen, coal did. But it made factories exponentially more efficient at making goods once we found the best way to optimize production using it. Same thing with AI. 

For the meteverse it's tempting to jump to the alluring General AI, and sure that is pretty cool and fun to imagine. But the applications of AI to the metaverse are happening all the time already, just good old fashion AI. For example, the physics in a virtual world, or rendering in real-time while predicting where the eye will be focusing in the next oh, 2 milliseconds. Generative Adversarial Networks are also really fascinating, as they could hold the key to creating data for building models for worlds we imagine rather than relying on collecting training data from real world sources. They are also the technology used for things like AI's writing essays or music, and paintings about cats and other things. 

In conclusion...   

The convergence of these technologies is what has gotten me excited about the metaverse since, well at least since before it was the latest tech trend or buzz word. This value chain of converging technologies will generate an enormous amount of creativity in the coming decade. Even by 2025, five years from when Epic founder Tim Sweeney announced he was earmarking more than $1B to build a "metaverse" -- the moment which first initiated this new buzz around an old idea -- if you take a moment to reflect on how much has changed between that future date and 2020, it will be much like looking back at 2005 from 2010. Take a guess when Netlix started streaming movies? (Answer: 2007)