What Web3 and the Metaverse Have to Do With One Another

[Kathleen Martin]

In math, they say that “Things equal to the same thing are equal to each other. We’re hearing that Web3 is really blockchain, and that the metaverse is blockchain too. Therefore, Web3 is the metaverse. Is any of that true? And if it is then what could the failure of one of these hot concepts mean for the others? Some relationship-exploring is in order. Web3 is a sprawling concept aimed at “decentralizing” the Internet by creating a peer-to-peer model of authentication of people and things and verification of the elements of and rights to transactions. It’s grounded in the notion that blockchain can host an absolutely secure form of identity proof and also create a chain of validations for any activity by maintaining a forgery-proof ledger. Blockchain is absolutely fundamental to Web3, and if there’s a flaw in it, that flaw either has to be corrected, or Web3 falls. At first glance, the metaverse is a totally different thing. It’s a virtual or artificial reality populated by digital twins of people and objects, and some objects and people that are products of the software itself. In a sense it’s the use of gaming technology to create an immersive alternate world that you actually live in. However, the fact that people are represented by avatars means that there has to be some mechanism to verify the identities underlying those avatars and preventing impersonations that could be awkward at best and downright dangerous at worst. There also has to be a mechanism to pay for things, including virtual things, and convey ownership authoritatively. Blockchain is a leading technology option for both these things. Blockchain is, of course, also the basis for cryptocurrency. The financial incentives to break or steal cryptocurrencies are obviously high, and we’ve seen major hacks of crypto exchanges seemingly monthly dollars. That hasn’t seemed to taint either Web3 or the metaverse so far, but we’re not hearing much about how either Web3 or the metaverse would avoid cryptocurrency’s problems with theft, loss of your assets by misplacing your wallet, etc. These hacks are probably the greatest risk to both Web3 and the metaverse, one that I’m sure is keeping some venture capitalists (VCs) up at night. The problem with blockchain security is the classic “emperor’s new clothes” problem. Few people understand blockchain security, and an even smaller number would have any skill to assess it. It’s supported by acclamation, just like the emperor’s new clothes. If there was a major credibility threat to blockchain, it might be only a matter of refinement to fix it, but would the people who didn’t understand how it worked to start with now understand and accept the fix?
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