Future of the Metaverse: Interoperability and Business Models

Nikolas Badminton – Futurist Speaker – hosted a virtual panel discussion on the future of the metaverse at the Vancouver International Privacy & Security Summit (VIPSS) called ‘The Metaverse:  The Emperor’s New Clothes?’

The Metaverse – a super-platform weaving social media, online gaming, utilitarian data provision, and ease-of-life apps, all accessible through the same digital and physical space and bound together with economic and content mechanisms. 

The global market for this new world is projected to be an $82B market by 2025 and many companies are lining up to be a part of creating this new world resulting in complexity and shiny visions of our new future.

The big promise is for this to be interoperable with connecting services so they can collect our data, track us, and demand our attention. It could be transcendent and empowering, or a broken web of complex data brokerages, incompatibility and uncoordinated experiences that drive us into a privacy and surveillance nightmare due to walled garden systems and mechanisms of monetization and control?

Nikolas Badminton, Chief Futurist at the Futurist Think Tank  moderated the discussion with 3 experts in the future of the metaverse –  James Hursthouse (CEO & Founder, Departure Lounge), Kharis O’Connell (Principal at Amazon), Heather Vescent (President/Futurist at The Purple Tornado).

You can watch the full discussion here:

The entire discussion has been transcribed – and only edited for flow and clarity – and is offered in three parts

• Future of the Metaverse: Interoperability and Business Models – read more here
• Future of the Metaverse: Digital Transformation – read more here
• Future of the Metaverse: Surveillance and DAOs – read more here

What is the Metaverse?

Nikolas Badminton

So, what’s the metaverse? Well, it’s this big promise. It’s a network of 3d virtual worlds focused on social connection. It creates persistence between the online and offline worlds. Decentralization, and token-based economics using cryptocurrencies like Etherium. 

Recently, it’s been thrust into the mainstream with Facebook rebranding itself to be called Meta. They publicly showcased some sort of trickery and sort of made-up video in a way to say, Hey, this is what the metaverse could be – this connected, immersive world – come join the party! You can see the full presentation here.

We’ve seen a huge amount of activity with regards to the idea of this, this whole new online off world, online offline world. Meta has reportedly invested about 500 billion in that pivot. JP Morgan thinks that this is going to be a trillion dollar a year opportunity. There’s a lot of hyperbole. 

Today, we’ve over 18,000 plus developers in Web3 technologies submitting code and working on that. But what we found is we’ve got a world where the metaverse and web three has kind of been trivialized a little bit, something accessible and easy for all, whereas it’s kind of the most complex state of the Internet that will likely to be the buzz about community is one thing and NFT’s and cryptocurrencies and Web3 technologies is great. But really, it’s about how we can make this new, you know, technically immersive world. 

However we’re not really talking about really important parts of this, like interoperability, and infrastructure and hardware, the investment investments needed versus like the cash that’s been raised so far – the CapEx and OpEx. 

The panelists are going to discuss the opportunities and challenges that we’re going to find with this new world in regards to infrastructure identity, privacy and security. So if you follow the metaverse and seen lots of spots on TV, and whatever, they’re not really talking about this. So it’s great to be here. So I’m joined by three incredible speakers from all over North America that have been involved in the foundations of thinking about regulations and hardware and software, interoperability in gaming, and the search like, and we’re going to talk about what the metaverse promises to be and what it takes to get there. I’ll let the panelists introduce themselves.

Heather Vescent

I am a longtime futurist and my first interaction with the metaverse was back in 1996, where I worked for a 3D VML company called Intervista. We tried to put the metaverse on the emerging web at that point. More recently, I’ve done some work for the US Army looking at the future of military learning and specifically using AR and VR to improve learning experiences. With that I had the opportunity to work with Brenda Laurel who’s done a lot of research in that space. And then some of my other background that I work on is decentralized identity, decentralized storage, the future of money payments, transactions and alternate economic models. 

I’m really excited about what is emerging with the metaverse, but I’m also concerned that we learn from the past so that we can create the best immersion and Metaverse that we possibly can.

James Hursthouse

I’m currently Chief Strategy Officer at a company called AMPD based in Vancouver, BC focused on delivering high performance cloud and compute solutions. Really, to cater to the requirements of low latency applications like those that we’re going to need to bring the metaverse into reality. And I’m also actually CEO of an AMPD subsidiary, called departure lounge, which we incorporated to focus on tools and technologies and Creative Services. Specifically with the metaverse view.

I’ve been in digital media, infrastructure and content for about 22 years now. I got my start in Asia, in the very early days of massively multiplayer online gaming. So I was fortunate enough to have a front row seat, they’re sort of in the Jurassic period of MMOs and lived through the transition from subscription MMO to free to play. And I think a lot of you know, the tools and technologies that we’re seeing now underpinning, the metaverse really got their sort of start, they’re not quite as early as Heather there in 1996. But I did contribute to a white paper in 2007, called the metaverse roadmap. And my interest stems further back than that all the way back to my university courses, which were sort of philosophy and computational model of the mind and concepts around sentience, avatars and things like that.

The Metaverse has really been a driving force for me for a couple of decades. And obviously, it’s quite exciting to be living in, you know, what might be described as this golden age of interest in all things. metaverse. So yeah, that interest is really culminating in the departure lounge now. So we have a range of tools and technologies available on the High Performance cloud and compute platform. And so really, the departure lounge is called departure lounge because it’s where you go for your journey into the metaverse. And that means everything from sort of 4d human scanning through to object scanning, and then the creative services that people would need to utilize those assets. And then obviously, any sort of copy, you know, conversation around creative in 2022 is going to involve NF T’s and web three and interoperability and all those things. So yeah, so that’s why we’re here and obviously looking forward to a very interesting and engaging conversation this morning.

Kharis O’Connell

I’m currently an Amazon Principal of Futures Design. What that really means is looking at like the forthcoming sort of technologies that the company is interested in right now one of those, of course, being Metaverse and AR / VR, and all that sort of side of things. The reason why I’m there is because I’ve spent the last, I guess, around 15 years, working in the intersection between the kind of hardware endpoints of this sort of technology, and the software that will support that. Before working at Amazon, I went to Google in a unit designing AR hardware, which you might see in some time. I’ve also spent time running the design operations of matter, not the matter that we know and love right now. But the original Meta, which was an AR company, here in Silicon Valley.

My approach has always been looking at all of this from the kind of endpoint which is the facial interface and looking backwards. And it all the kinds of sensors that are used and the data that comes from those sensors, and the need the deep need for security around those kind of capabilities, let’s say so I’m really excited to dig in a little bit into what the metaverse is going to be in the next hour.

Interoperability and Business Models

Nikolas Badminton

Okay, let’s kick in and start off by talking about foundations and business models. I mean, there’s a notion of decentralization and equity. However, the foundations of the metaverse are grounded in hardware. We’re using the headsets, mobile devices for access, low latency and cloud infrastructure, 5G and the platforms that will host the experiences. The latter players are aiming to grow their subscriber and user base. To create a walled garden for users somewhere. 

The first question that I have is – are we heading into a shiny new world with monetization and closed ecosystems? You can join one or many metaverses, but they’ll never work across and you won’t be able to travel in between them seamlessly and we will we be sort of ushering in a whole new way that the internet is working.

James Hursthouse

Obviously, that’s sort of the core of the issue in some ways now. I have noticed there is a question in the in the interface here, which says, well, what’s the difference between the metaverse and existing sort of massively multiplayer online games like Second Life or World of Warcraft, or whatever you’ve got?

I think that’s also an interesting component. The answer, for me, is around interoperability. If you look at, for example, the difference between Roblox and then something more modern, like the sandbox, which are sort of similar in many ways, they look similar. They’ve got that same kind of user generated content approach. The difference is we did have a game engine, we had community, we had the ability to host massively multiplayer online games, and we got a second life? The key difference is being able to create these worlds and the things that are in them –  components on smart contracts on the blockchain. The promise that provides interoperability could be something that we can adopt right now. There’s an example of if we don’t adopt interoperability every time you walk into a different store or walk down the high street in the metaverse, you’re going to have to sort of reshow your ID recheck and potentially change your clothes in order to go and have all these experiences. So from the user’s perspective, it’s pretty clear that interoperability and the idea of having sort of separate multiverses that you have to move across and have that friction is not the ideal scenario.

I’m hoping we’re moving into a golden age of interoperability. And I think there’s a lot of skepticism as to how that actually works right now. But, when you look at some of the sort of better examples of what’s going on with blockchain and, and the in the opportunity to actually have users move around these different worlds, that actually is part of the key definition of Metaverse, for me rather than having all of these individual metaverses, as it were.

Nikolas Badminton

Heather, you’ve done a lot of work in standards, and are we actually having a different conversation than we then we’ve had before around interoperability?

Heather Vescent

I’m glad you brought up the standards, because that was one of the things I was thinking about here. I definitely feel like the work I’ve done with standards is important in creating a set of interoperable rails that anyone who uses the standard could use. That is really good for the market. That is really good for businesses and that’s really good for consumers. Because if you have everyone kind of using the same technological technology language, then there is necessarily some interoperability between metaverses or even between a single Metaverse, different blockchains, or outside the metaverse, or the 2D web. 

The challenge was to create standards and protocols in a consensus environment. And when you try to have people from a bunch of different companies, with different goals, objectives, and you know, profit reasons, then it takes a long time for there to be consensus in even just deciding the tiniest little protocol. Standards take time. Businesses exist to make money. That’s the bias and the goal of the private sector. I’m not anti profit but it’s faster for an organization to just double down and create a stack, or use technology that’s proprietary that they own and that’s easier for them to monetize in certain ways. It does kind of create silos. In some ways, this decentralization of the internet is something that we’ve had since the beginning. But, one of the challenges we had is that with the internet, we haven’t really had an identity layer so a lot of the identity protocols that we’ve used have kind of been put together in silos and kind of maybe like some standards that people use. 

One of the things I’d really like to see happen as we recreate the web through the metaverse is to do some of that heavy work to really try to come up with at least a plan for some standards so there is interoperability and the possibility of interoperability. Unfortunately, in order to do that, it does take time, money, and a lot of conversations. I think in the end, it’s worth it. 

Ultimately it provides a more rich, robust marketplace, where companies and products can compete on the features and the offerings, versus like having someone get locked into Facebook, because you can’t get out of it, or the only set of features that you might have one place or not the other way. 

James Hursthouse

I just want to jump in really quick to highlight one of the other observations. I think that it’s important to have the ability to have decentralized contracts. There’s a sense that we’re moving in this direction, which is in some ways better than centralized systems, because you can share revenue with multiple people. That idea of needing to necessarily only use your own siloed piece of technology, for you to be able to make money is part of that paradigm shift, where a number of people could use the same thing. 

For example, if you look at some of these programs that are coming out at the moment to be interoperable avatar based where you can take that avatar and use it across multiple environments. What’s going to happen is the ones that start to win, take the lead, invest the most, and they’re going to become dominant. But, that isn’t to say that you couldn’t then adopt that platform and still share revenue with three or four different parties in that transaction. That’s where the blockchain and that sense of identity will, where that sense of ownership will change. And, in some ways, the dominant platforms will become dominant, but also at the same time, we’ll be the ones that are most open because they will be the ones that most people have adopted, right. So in some ways, it’s a natural outcome. 

Kharis O’Connell

I have a slightly different angle on this. It’s actually come from a lot of my early experiences. We (the original AR company Meta)  had a matter when we were looking at interoperability. We worked with a lot of brands and partners that time – companies like Adobe and various other names in the computing space that are interested in this kind of forthcoming interoperable Metaverse and one of the conundrums that sort of became apparent quite quickly was that if you think about the common idea of this Metaverse – people wandering around living in it working in it’s doing things in it – the issue we have is that we realize that you can’t really have interoperability and have competition. 

A use case that we used to discuss was if you’re in this Metaverse, and gone to some online store in the Metaverse and bought a piece of paper, and I’ve also bought Adobe, because I like Adobe for its pens and paint brushes. How does that pen talk to that piece of paper? How does the pen talk to the paper as it’s built in different technologies? They can’t. Which means that you can’t have a dynamic interpretation of – I have a pen when I touch the paper it becomes this kind of stroke. 

What we quickly realized was that the only way to do that is everybody’s building on this lens, which means that you need to have just like IDs, standardize, a pen shall do this set upstrokes. Even if it’s from Adobe, or Hallmark or whoever it is rotating, it will always be the same. 

We quickly realized that the brands did to that they can’t actually compete and differentiate, because none of the code coming from the different places can just like in the natural world, which is where the confusion comes from for users because they assume just like in the real world, I take a real pen, real piece of paper. It should just work. I don’t want to be thinking like why is it not looking like the way It is. But of course, in this future world, there’s like nothing is potentially going to work in the way that users will expect, they won’t know why these physicalities don’t look and behave like the real world. So, there’s a lot of concern around this idea of interoperability. There’s been no technical explanation of how these kinds of use cases will actually work. Everybody is building on different types of technologies.

James Hursthouse

I think there is an explanation of how it’s going to work in the vision of actually writing those components, you know, it’s a pen, it’s a blue ink pen, it’s an expensive pen, this pen can write on certain types of surfaces. Those are the components that actually get written into the (smart) contract, or the existence of that pen is an NFT. So then, depending on the platform that you’re in the platform goes and looks at the contracts and goes – oh, I see this pen writes on certain types of surfaces, it has blue ink, right? So, then it’s up to the platform to say that I actually want to make my platform available to read the components of the contract, which allow me to understand what that element needs to be in my world. So now, in a medieval fantasy video game, would you allow somebody to walk around with a blue collared pen? Probably not. 

But in an environment where that was available, each of the platforms should be able to theoretically look at the look at the contract and say ‘I understand’. If you had an eight bit blocky looking Roblox type environment, then the manifestation of that pen will be a bit blocky, but it will still have the fundamental essence of being a pen that can write blue ink on certain surfaces. That’s the theory, at least right in terms of how it’s supposed to work. In practice, you still can’t take an avatar out of one platform, like the Sandbox and bring it over and stick it into Decentraland. But I think over time the wave of support for certain components will start to tip to the point where if you want to be a land – a Metaverse provider – where there will be certain initiatives that you will have to take, you know, acknowledge that they exist and bring them into your world if you want consumers and users to come with them. 

Kharis O’Connell

I guess the devil in the details is things like the interaction model, you know, every single Decentraland, Sandbox, Facebook, whatever it ends up being, has to have exactly the same standardized interaction model and rendering model. Because for an end user, they won’t understand nor should they, why things look different. When I bounce between these worlds. There’s no reason why that shouldn’t make sense.

Heather Vescent

I also think that there is a lot of pressure on the smart contract. You’re basically outsourcing a lot of standards type stuff into options within a smart contract. And, I’m not really sure how I feel about that. We’re already putting so much pressure on these smart contracts, and they’re a pretty new technology. Even when they first came out, there were a lot of security and privacy issues that were hacked. I want to be realistic about what kind of heavy lifting they might have to do. There’s other ways that we can work to get some of the same benefit.

Nikolas Badminton

I was gonna come back to you on the role of governance and government as well. We’re getting more complex. Smart contracts, interoperability, platforms, hardware, and now governance and government intervention. 

A lot of people that are listening to us discussing these points in this session are working for the government and wondering – how do we play a part in this? Maybe that’s on an agreed commons for the Metaverse? Maybe it’s because of relations with and between these companies?

Heather Vescent

In my research with new economic models, I hit upon this interaction between commons and capitalism. I am not anti capitalist, but I do you think there is a balance and what it seemed to me was that for the mechanisms of capitalism to work there needs to be a commons (shared across all players in the Metaverse) to exploit from. In order for that commons to continue to exist and provide a rich pool of raw ideas and things, there needs to be a feedback loop back into the commons from a capitalist area. Whether it’s the creation of new common pools of knowledge and information, like a standard, or it could even be like an in physical environment situation. 

Governments generally are the entity that creates the mechanism for a capitalist entity to contribute back to the commons. That could be through taxes or through boxing in the limitations of the impact of the capitalist entity through regulation. As much as I would love to believe that capitalist entities and for profit entities would self police. I just haven’t seen that at scale. 

That’s not necessarily a bad thing, because like the bias and the motivation of a capitalist entity is one to hack raw ideas, refine it and offer it to the market. Then there’s a loop that’s continuing to be done that has profit whereas that doesn’t always take into consideration what we consider market externalities. So, that’s where the role of the government comes in, and unfortunately because regulation does consider market externalities, it is able to weigh the potential positive or negative impact of market externalities and protect commons, so that they are not completely depleted. I think there’s a really good role where the private sector, capitalist entities, and the government can work together. 

One other point I’d like to make is regarding the private sector. These companies have the luxury of having a target market that you can build your products for. Someone that could afford a $900, iPhone or an expensive VR rig. Whereas governments don’t have that luxury, they have to provide services for all of their citizens. This is another way that I think, private sector, and public sector can work together to both enable a rich, vibrant marketplace where companies can make money, but then also manage this gap, whether it’s like the technology gap, or the wealth gap, so that people aren’t left behind.

About Nikolas Badminton

Nikolas Badminton is the Chief Futurist at futurist.com and a world-renowned futurist speaker, consultant, researcher, and media producer. He helps trillion-dollar companies, progressive governments and the media shift their mindset from “what is” to “WHAT IF…” The result is empowered employees, new innovative products and incredible growth that leads to more revenues and a more resilient future.

Nikolas advised Robert Downey Jr.’s team for the ‘Age of A.I.’ documentary series, starred in ‘SMART DRUGS – a Futurist’s journey into biohacking’, and features on CTV, Global News, Sirius XM regularly. His mind-expanding research and opinion can be found on BBC, VICE, The Atlantic, Fast Company, Techcrunch, Business Insider, Huffington Post, Forbes, Sputnik and Venturebeat. 

Nikolas provides the opening chapter – ‘Start with Dystopia’ in a new book – ‘The Future Starts Now: Expert Insights into the Future of Business, Technology and Society’ on Bloomsbury. His new book ‘Facing Our Futures’ is due out in 2022 on Bloomsbury and equips executives and world leaders with insights and foresight tools to imagine disruption, strengthen strategic planning, and see unforeseen risks.

Nikolas is a Fellow of The Royal Society for Arts, Manufactures and Commerce – The RSA. The organization has been at the forefront of significant social impact for over 260 years with notable past fellows including Charles Dickens, Benjamin Franklin, Stephen Hawking, Nelson Mandela, and Tim Berners-Lee.