Separate Blockchain Hype from Reality
Q: How long will it take for the metaverse to become a reality, and what should companies do to prepare?
ONE: First, it is important to clarify how Gartner defines a metaverse: a collective virtual shared 3D space, created by the convergence of virtually augmented physical and digital reality. A metaverse is persistent, providing enhanced immersive experiences. A complete metaverse will be device independent, and will not be owned by a single vendor. It will have a virtual economy of its own, enabled by digital currencies and NFTs.
Metaverse will enable businesses to expand and improve their businesses in unprecedented ways. However, current use of metaverse technologies is nascent and fragmented. Gartner expects it will take at least a decade for metaverse to reach mainstream adoption – the “Productivity Plateau” of the hype cycle.
This is a time of learning and preparation for a limited implementation metaverse. Companies can explore opportunities where metaverse technologies can optimize digital operations or create new products and services, but it is still too early to determine which metaverse investments will be viable in the long term.
Q: What exactly is Web3 and how does it relate to the metaverse?
ONE: Web3 is a new stack of technologies built on blockchain protocols that support the development of decentralized web applications and enable users to control their own identity, content and data. These technologies include privacy-preserving protocols, decentralized governance, and decentralized application platforms. These innovations will eventually support a decentralized web that will integrate with the current Web 2.0 we use every day.
Web3 enables new business and social models. For example, smart contracts run applications that eliminate intermediaries and administrative overhead for controlling centralized entities. Tokens, including cryptocurrencies, drive the business models and economics of Web3, and are embedded in blockchain protocols. Web3 supports new business opportunities, such as programmability and monetization of creator-owned and managed content in the form of NFTs.
The metaverse will require many functions that Web3 enables. For example, the metaverse can take advantage of Web3’s tokenization to store and exchange value in a purely virtual context. The Metaverse and Web3 will not merge into one entity, but they are complementary visions of a future Internet.
Q: Will cryptocurrency reach widespread use? With increased use, what potential value do cryptocurrencies offer for businesses and consumers?
ONE: After years of fragmented adoption, cryptocurrencies are gaining increased attention from businesses, especially in financial services. Gartner has placed cryptocurrencies on the cusp of enlightenment in this year’s hype cycle, expected to reach mainstream adoption in less than two years. The potential benefits can be transformative.
Cryptocurrencies create opportunities for different ways of doing business and new types of products and services. Without relying on a central authority, cryptocurrencies generate new ways to transact financial value across a shared network. They also provide mechanisms to accelerate and finance business transactions and thereby enable growth.
The future use of cryptocurrencies will likely depend on how well they can meet users’ needs compared to other electronic money transfer systems, such as credit card payments or existing electronic bank transfer systems. It will also depend on their ability to improve financial management, their safety and reliability, and existence within a compliant regulatory framework. The extent to which cryptocurrencies are adopted more widely will depend on costs, incentives and convenience for users, including impacts from regulation. For any cryptocurrency payment or financial system to be successful, it must be secure, convenient, accessible and stable for both consumers and businesses. It must be noticeably improved in relation to the current financial infrastructure and processes.
If you are a member of the media who would like to speak further on this topic with Avivah Litan, please contact Meghan Rimol at [email protected]. Members of the media may refer to this material in their articles with proper attribution to Gartner.
