Is the Metaverse Era Here? Seven Major Challenges Must Be Overcome

Source: 01 Blockchain

Original Title: "In-depth Analysis | The Era of the 'Metaverse' Has Arrived, but There Are Still Many Challenges to Overcome"

Author: Chenglin Pua

With the concept stock of the metaverse, Roblox, going public in the United States on March 10, 2021, the metaverse has begun to accelerate into people's view. Some are very optimistic about the metaverse, calling it the "next generation of the internet." Many giants are also laying out their plans for the metaverse, eager to be the first to take the plunge.

Social media giant Facebook is transforming into a metaverse company over the next five years, continuously investing $5 billion annually in the development of the metaverse. After Roblox went public, Tencent's investment has now reached a market value of $43.4 billion; in April, Nvidia announced it would launch a real-time simulation and collaboration platform for enterprises called Omniverse, a virtual workspace referred to as the "engineer's metaverse." The giants are making significant moves in the metaverse space, and competition is gradually heating up.

Google Trends for the Metaverse

New things bring opportunities, but challenges also accompany them. However, the reality is that people are not yet prepared to overcome the challenges that the metaverse will bring. These include disputes over intellectual property, data protection and privacy issues, legal problems, currency and payment system issues, technological limitations, and low public acceptance, among others. In addition to the above, high capital investment and whether the metaverse will become a highly monopolistic industry are also challenges.

1. Disputes Over Intellectual Property

Whenever a community or virtual world is created, questions arise, such as who owns the copyright for works created in that environment? If you have a protected brand in the real world, can you claim compensation if someone uses it in the virtual world?

When users in the virtual world create or generate content based on existing properties in the real world, things become murky. Although legally, the position is still very clear that users in the virtual world must obtain permission to use others' intellectual property, the arrival of the metaverse will inevitably lead to many related intellectual property disputes.

This poses a challenge for businesses or creators in today's world, as they need strategies or methods to protect their intellectual property in both the real and virtual worlds. These content or product providers need to collaborate with metaverse-related companies to regularly monitor for infringements of their brands or trademarks. Additionally, providers face the question of how much users in the metaverse can use the content or property they create.

When we talk about a virtual world, you can interact with the world and other individuals within it. This can generate valuable content, which raises the question of who owns the intellectual property. The rules of joint copyright and joint ownership in the real world are already complex, and in the intricate scenarios of the virtual world, the interests become even more tangled.

Moreover, is the content generated in the metaverse recognized in the real world? What procedures need to be followed for content generated in the metaverse to be recognized in the real world? These involve complex issues of ownership certification and integrity verification.

2. Data Protection and Privacy

Privacy data protection has always been one of the most concerning issues in the real world, attracting attention from all sectors of society. The internet we use today involves a significant amount of data and privacy protection issues, let alone the metaverse. The data and privacy involved in the metaverse will inevitably be greater than that of the internet. The metaverse is likely to be a virtual space built by multiple companies in the future. For consumers or users, how various companies coordinate to protect data and ensure the security of privacy data will undoubtedly be a major concern.

The amount and richness of personal data collected by the metaverse will be unprecedented, including personal physiological responses, movements, and possibly even brainwave data. Will these data require specialized security companies to ensure their safety? If users' personal data are stolen or misused in the metaverse, who will be responsible, and what impact will it have on users in the real world? In the construction of the metaverse, companies should strictly consider privacy issues related to such personal information and establish good mechanisms to prevent personal data leakage.

Research institutions Centre for International Governance Innovation and Ipsos found in a survey that about 57% of global consumers expressed extreme (31%) or significant (26%) concern about online privacy security. This survey interviewed over 24,000 internet users aged 16-64 across 24 countries. In fact, at least half of internet users in every region expressed concerns about privacy.

Global Users' Concerns About Online Privacy Security, Source: Centre for International Governance Innovation and Ipsos Survey Report

The success of the metaverse relies on a massive flow of users. With traffic, the metaverse has the vitality for sustainable development. However, many global users have expressed concerns about data security and privacy, indicating that how to enhance data privacy security and reduce public concerns about data security and privacy is a problem that needs to be addressed on the fast track of metaverse development.

3. Legal Challenges

The birth of the internet forced countries to change their laws to better and more effectively regulate illegal activities. Today, big data and artificial intelligence are also gradually coming under legal regulation. As the metaverse continues to develop, it will challenge existing laws, and countries will inevitably need to formulate corresponding laws for better regulation of the metaverse.

With the continuous development of the metaverse, the number of virtual spaces accessible to global users is constantly increasing. The metaverse can gather a large number of users together, making it a major platform for connection and communication, but it also makes users vulnerable to attacks or scams without legal boundaries. Determining jurisdiction and establishing a legal system to ensure that virtual spaces are safe for users is a challenge that the world needs to face.

Are existing laws applicable in the metaverse? If applicable, under what circumstances should the laws of which country be used? If inappropriate speech or illegal activities occur in the metaverse, is there a way for people in the real world to use it as evidence to ensure that offenders receive appropriate legal punishment? These all require continuous revision of existing laws to keep pace with the development of the metaverse.

There are also views that since it is a virtual world, the laws of the real world should not apply in the virtual world. These will pose certain challenges to governments in the real world.

4. Currency and Payment Systems

Since the metaverse is a world, it naturally needs a currency system to maintain the operation of this world or to serve as a medium for the exchange of goods. So the question arises: what payment system or currency should the metaverse use?

The US dollar is the currency recognized by most people in the world. If the metaverse uses the US dollar, non-American individuals may not agree. However, using currencies from other countries is less likely to gain widespread acceptance compared to the US dollar.

Bitcoin supporters argue that Bitcoin has high security and reliability, making it suitable as the currency of the metaverse. However, recent events have raised doubts about its security and reliability. In June 2021, the largest fuel supplier in the US, Colonial Pipeline, was hacked, leading to a shutdown of oil delivery. Colonial Pipeline paid the hackers 75 bitcoins, worth $4.4 million at the time, to restore normal operations. Later, under the intervention of the FBI, 63.7 bitcoins were recovered. The advantage of Bitcoin lies in its security and irreversibility of transactions. However, the FBI's recovery of 63.7 bitcoins afterward has led people to question these attributes of Bitcoin.

A secure and reliable payment system, along with a widely accepted currency, is another significant challenge that the metaverse must face to achieve mass adoption.

5. Technological Challenges

In the future, people will connect to the metaverse through VR/AR, which can to some extent solve the problem of "presenting" the virtual world to us. However, this technology currently only provides visual and auditory information, while other sensory capabilities, such as touch, smell, and taste, cannot be provided. A realistic virtual world can allow us to experience other sensory capabilities, thereby increasing the sense of reality. How to enable people to experience other senses is a technological problem that needs to be solved.

Additionally, we need to input parameters into the virtual world, such as voice, gestures, and actions. Currently, VR/AR mainly relies on handheld sensors (or wearable gloves) to input parameters into the virtual world. This reduces the sense of reality, as we do not need to hold sensors in the real world. Although some gesture and posture recognition technologies based on machine vision have begun to be applied, they still face many practical issues, such as field of view and occlusion problems.

Handheld Sensor VR/AR Devices

Tactile feedback is also a technological issue. How to allow our hands and bodies to feel objects in the virtual world seems to be a problem that current technology cannot solve. In the movie "Ready Player One," players primarily rely on full-body haptic suits to perceive objects and sensations in the virtual world. Even if people are willing to wear full-body gear to experience the metaverse, achieving full-body sensory experience with such gear remains a technical challenge. Whether people in the real world are willing to purchase such gear to experience the metaverse is also a question.

Costumes from the movie "Ready Player One"

The high computational requirements of the metaverse also pose a technological challenge. Computers need to run simulations of the physical world, render scenes, and interact with other characters (including real people and virtual AI characters), all of which require substantial computational power. Developing computational power that matches the operational needs of the metaverse is a significant challenge. Additionally, high computational power comes with energy consumption issues; higher computational power means higher energy consumption, and the high energy costs will ultimately be passed on to users, raising the barriers to entry for people into the metaverse.

6. Public Acceptance

Whether people’s acceptance of the metaverse can keep pace with its development speed is also a challenge. For this reason, Forrester Research (an American consulting firm) conducted a survey. The sample included 1,263 respondents, with 572 from the United States and 691 from the United Kingdom.

People's Reactions to the Metaverse, Source: Forrester Research

The survey results showed that 27% of Americans and 36% of Britons feel that the metaverse is a dispensable thing, having no impact on either the real world or their personal virtual experiences. Meanwhile, 29% of Americans and 33% of Britons do not know what the metaverse is.

Only 13% of Britons and 19% of Americans believe that companies should vigorously expand the metaverse and enhance the metaverse experience. About 23% of Americans and 17% of Britons are willing to spend time experiencing the metaverse.

Loup Fund (a fund tracking the development of cutting-edge technologies, including AI, fintech, robotics, autonomous driving, electric vehicles, and VR/AR) conducted a survey to study people's opinions on the metaverse.

69% of people are willing to spend more time in the virtual world (provided the virtual world offers a better experience), Source: Loup Fund

Among them, 69% of people said they would be willing to spend more time in the virtual world if the experience there is better than in the real world.

People believe spending time in the real world is more meaningful, Source: Loup Fund

52.4% of people believe that spending time in the real world is more meaningful than in the virtual world.

It is evident that even if technological advancements elevate the experience of the metaverse to a level comparable to or even surpassing the real world, people still feel that spending time in the real world is more meaningful. Just as in the past, people felt that spending time scrolling on their phones was a waste of time, but nowadays, many people spend a lot of time on their phones. How the metaverse can provide value that encourages people to spend time in it without feeling it is a waste of time is a challenge.

7. High Investment and Commercial Monopoly

Building the metaverse is a high-investment project. At the GTC conference held on April 12, 2021, Nvidia founder and CEO Jensen Huang, wearing his signature leather jacket, delivered a keynote speech in his kitchen, introducing the new products launched by his company.

Jensen Huang at the GTC Conference

At the SIGGRAPH 2021 conference in August, Nvidia revealed that a few seconds of the GTC conference featured a "fake" Jensen Huang and background. More than 30 staff members first used RTX ray tracing technology to scan Jensen Huang, taking thousands of photos of him and his kitchen from various angles, modeling the "kitchen" in Nvidia's developed virtual collaboration platform Omniverse, and finally combining it with AI to create a lifelike effect.

Just creating a video requires a significant amount of manpower and resources, let alone building a world, which makes the metaverse a high-investment industry. Wealthy Facebook has announced that it will invest a large amount of money to build the metaverse, but other small and medium-sized enterprises may not have the capital to compete with large companies. This makes it likely for the metaverse to become an industry that only large enterprises can afford to participate in, which will inevitably exacerbate the commercial monopoly of the metaverse.

Tencent is also one of the shareholders of Roblox, the "first metaverse stock." After a series of competitions with Tencent, ByteDance acquired VR hardware manufacturer Pico for over 9 billion yuan to lay out its metaverse strategy. Nvidia's Omniverse, touted as the engineer's metaverse, has seen collaborations with groups like BMW, Volvo, and Ericsson to design and test products or production lines on that platform.

Facebook has announced that it will continue to invest $5 billion annually in the development of the metaverse. The construction of the metaverse has become a "capital game" for large enterprises, making it difficult for small and medium-sized enterprises to survive in the metaverse industry under such high-investment competition.