Facebook's recently announced metaverse and rebranding to Meta have had quite some impact on the social media, blockchain gaming, and GameFi spaces. As a result, while multiple tech giants announced their own metaverse projects, decentralized initiatives have gained quite some traction lately.
However, despite its ambitious plans, Facebook, along with other metaverse projects operated by tech giants, won't succeed in the long run due to one major caveat, which is centralization.
Wait, But What the Heck Is a Metaverse?
Created from the combination of the words "meta" and "universe," the metaverse is an immersive virtual world that users share with other players. Here, they can connect and interact with a digital community of real-world people as well as participate in a wide variety of activities, such as building something together, playing games, and creating unique experiences together. As they are connected in a digital space instead of being physically there, users in metaverses are connected via technology. This can be as simple as a video gaming console or a smartphone. Still, some cyberspace solutions may also require augmented reality (AR) or virtual reality (VR) devices to offer a more smooth and immersive experience.
Before Facebook joined the industry, metaverses were mostly associated with decentralization. While crypto projects weren't the ones who created the first metaverse – many consider the 2003 game Second Life as a pioneer in this field –, the decentralized approach is much closer to the concept than a centralized one.
This can be attributed mainly to the fact that, like in their real-world lives, people don't want their lives to be controlled, managed, and limited by the decisions and policies of a tech giant like in a dystopian future showcased in the popular Netflix show Black Mirror. Instead, they want to have the freedom to create, build, and interact with things in the way they want to. While this doesn't mean there aren't any rules in decentralized metaverses because they are definitely there. However, individual communities or users are the ones who decide on what to allow, encourage, restrict, or outright ban.
Furthermore, while metaverses were only used as a buzzword for PR and marketing in the past, the concept gained real traction with blockchain technology and decentralized projects, such as Decentraland, Bloktopia, and The Sandbox.
Why Facebook's Won't be able to Compete With Decentralized Metaverses
Now that we have explored what a metaverse is and why decentralization is a more suitable approach in creating one, let's discuss Facebook's initiative in this field. As I've mentioned earlier, Facebook's metaverse project is destined to lose the "war" – even before the first battle – against decentralized platforms. And the main reason behind my argument is simple.
Centralization has so many flaws in this field that it will hinder its success in the long run and instead give ground for decentralized metaverses to thrive.
Of course, we don't know the exact details of Facebook's metaverse project (the company only showed things like a
While a centralized architecture offers enhanced throughput and scalability as well as an easier way to manage a blockchain, it has more downsides than advantages in the case of a metaverse.
One of them is privacy concerns and the issue of data harvesting, which is something Facebook has been infamous for in the last few years (the company's
In a metaverse, Facebook would have access to a massive amount of information, such as how users interact with each other in a virtual world along with the many details collected by VR and AR devices, which could make the data collection from its billions of social media users a minor side gig.
In addition to a lack of privacy, users may also face higher risks of cybersecurity threats, such as potential hacker attacks or malicious activities due to the centralized architecture of the network.
Furthermore, just like with non-blockchain video games, Facebook's metaverse won't be interoperable with other virtual worlds created by other companies or projects. As a result, all the assets users have created, earned, or purchased will stay exclusively in Meta without the option to use them in other ecosystems outside the tech giant's.
The Power of Decentralized Metaverses
Unlike Facebook's upcoming virtual worlds, crypto and blockchain projects leverage the power of decentralization to create metaverses where the players are the ones who are responsible for maintaining and governing it, which allows them to set their own rules.
As a result, they enjoy many of the benefits Meta's users won't be able to. For example, by turning most (if not every) in-game items and lands into non-fungible tokens (NFTs), users can have full ownership over all their virtual possessions, which they are free to trade or move to an external wallet at any time. Also, with blockchain interoperability protocols, these assets can be transferred back and forth as well as used across multiple metaverses.
Full ownership also applies to data, which users can control whether it can be shared, with whom, and in which cases.
As a result, they can have a unique virtual world experience without tech giants harvesting their data or getting bombarded by advertisers' campaigns. Furthermore, the top permissionless blockchains utilized for blockchain gaming and metaverse solutions are known to be secure and resilient against both external and internal threats due to their decentralized architectures.
Also, as there is no centralized entity that exercises increased authority, users don't have to fear that their accounts will get banned or their speech censored due to a tech company's controversial and continuously-changing policy.
Decentralized Metaverses Will Dominate the Market in the Long Run
With a huge user base, massive budget, and a great talent pool, Facebook has a real advantage over decentralized metaverses. However, as crypto adoption is rising rapidly and tech giants' harmful practices are continuously exposed, consumers are increasingly valuing privacy, democracy, and freedom in the online world.
I believe this trend will accelerate further and become even more significant in the long term.
At the same time, Meta will likely face similar regulatory issues like Diem, which will significantly slow down the project's development. What's even worse for the tech giant is that it doesn't have access to acquisitions, one of the favorite and most effective tools of large enterprises to enter a new market by purchasing a promising startup within.
Since decentralized metaverses are governed by their communities instead of a single entity, Facebook won't be able to acquire them. And, even if it manages to do so somehow, users could easily fork the project and move there to avoid the company's control over the ecosystem (just like what happened in Steemit's and Hive's
As a result, even if Facebook's virtual world finds some success in the short-term, decentralized metaverses will dominate this market in the long run**.**