NFTs have played a key role in building mainstream consumer awareness of web3. NFTs of digital artworks such as Beeple’s Everydays — The First 5000 Days, collectibles such as Bored Ape Yacht Club avatars, and parcels of virtual land have sold for millions of dollars, both through traditional auction houses and on web3 marketplaces like OpenSea.
Like cryptocurrencies, NFTs are held in wallets. Technically, an NFT is not the digital file itself, but a database entry on the blockchain that attributes ownership to a particular wallet.
The provable scarcity of individual NFTs means they can function as digital status symbols, helping to explain why they are sometimes compared to Rolex watches and Lamborghini sports cars. Various consumer brands, including Coca Cola, Nike, and McDonalds, have sought to capitalise on the craze by issuing (or dropping) their own NFT ranges, as have football clubs such as Manchester City and Glasgow Rangers.
Celebrity endorsements are a common means of promoting high-profile NFT projects. Some wealthy celebrities like Reese Witherspoon and John Terry appear to be enthusiastic collectors, while others including Paris Hilton and Floyd Mayweather seem to engage with them in a more straightforwardly transactional way.
However, not all NFT drops are extravagantly priced or associated with a well-known brand or celebrity (see, for example, The Pluto People or the case study on Les Éléfants Terribles). NFTs are said to offer digital artists a new way of selling their work directly to the public, without having to pay commission to agents or galleries, as well as the potential to earn ongoing royalties from future sales of their work in the secondary market. The same benefits are said to be available to musicians and creators of video content, whose products (respectively audio and video files) can also be represented by NFTs.
NFT marketplaces as DAOs:
Meanwhile, establishing NFT marketplaces as DAOs (see Blockchain article) has been proposed as a means of pre-empting the emergence of a new generation of dominant intermediaries – the web3 successors to Spotify, Youtube, TikTok et al. The idea is that creators would have the opportunity to co-own the platforms through which their work is traded, and to determine their decision-making via governance tokens.
As with cryptocurrencies, NFT prices can be volatile, while trade in NFTs is prone to fraud and market manipulation. When NFTs are initially issued (or minted), the underpinning smart contract may be designed to siphon cryptocurrencies and other tokens from buyers’ wallets.
Meanwhile, prices in the secondary market can be artificially inflated by wash-trading – that is, the trading of an NFT between wallets controlled by the same individual or group. The pseudonymity offered by the web3 facilitates both practices.
Key Components of AR (Augmented reality) / VR System (Virtual Reality)
Key Components of AR System:
Key components of any AR device are processor, display, input devices and sensors. Today’s Smartphone fulfil all these hardware requirements of AR. Besides above, Microsoft Holo lens is a head-mounted display and focusses on MR. Google’s AR headmounted device known as ‘Google Glass 2.0’ is being used by enterprises with a focus on workforce productivity.
Special 3D Augmented reality programmes are used in AR based applications. Virtual images used for overlapping over the real live image, can be generated using 3D software. Software can be Auto Cad 3D, Cinema 4D. To experience AR, end user has to download a software application.
Apart from the hardware and software, a web cloud server plays an important role in storing the database of virtual images.
In the VR space major player is oculus VR brought by the makers of the Oculus Rift headsets. It is VR head mounted display and hand controllers focussed on Gaming.
HTC vive is VR head-mounted display and hand controllers.
Many other companies are developing virtual reality headsets and other peripherals. To name a few are Sony’s Morphens, Samsung Gear VR, Google Cardboard and Magic leap. Neura link is an early stage of brain machine interface to connect humans to computers.
Until recently, Augmented Reality (AR) and Virtual Reality (VR) technologies have served primarily as inspiration for fiction writers and special effects teams.
The term Augmented Reality was coined by Thomas Caudell while making attempts to apply VR technology to Boeing’s manufacturing & engineering processes. The verb ‘augment’ refers to the action of adding to something in order to make it more substantial. It derives from the Latin ‘augere’ meaning ‘to increase’.
Morton Heilig is known as the ”father of virtual reality” for his research and inventions in the ‘50s and 60s’. However, actual inventor of VR is Ivan Sutherland who created the first Head Mounted Display (HMD). It was attached to a computer system and closely resembled a portable television and could not be comfortably worn by a person.
Both AR & VR are finding more and more practical applications in the enterprise and have a huge disruptive potential in the business processes. Their impact is already being felt across consumer technologies as dozens of new products enter the market. AR and VR are introducing new opportunities to transform the enterprise, particularly in the areas of Gaming, Media & Entertainment, training & simulation in education, defence, real estate, financial services, health and retail sector and reinvention of employee and customer experiences.
2. What are AR & VR Technologies:
AR and VR (AUGMENTED REALITY AND VIRTUAL REALITY) are two sides of the same coin. While AR stimulates artificial objects in the real environment, the VR creates an artificial environment to inhabit.
AR is a direct or indirect live view of a physical, real world environment whose elements are augmented by computer – generated perceptual information, ideally across multiple sensory modalities including Visual, Auditory, Haptic, Somatosensory and Olfactory. In laymen terms it refers to a simple combination of real and virtual (computer generated) worlds. Mixed reality (MR) is a subset of Augmented Reality, which overlays 3D holographs into the real environment.
VR is the use of computer technology to create a simulated environment. Unlike the traditional user interfaces, VR places the user inside an experience. Instead of viewing a screen in front of them, users are immersed and able to interact with 3D worlds like Metaverse. Neuro Reality (NR) is a subset of VR which involves technologies that interface directly with the human brain to create a deeper sensory experience. However, it is in a very nascent stage of development.
AR & VR have one big thing in common. They both have the remarkable ability to alter our perception of the world. Where they differ is the perception of our presence. Putting a VR headset over your eyes will leave you blind to the current world, but will expand your senses with experiences within.
Augmented reality however, takes our current reality and adds something to it. It does not move us elsewhere. It simply ‘augments’ our current state of presence after with clear visors.
In VR You can swim with sharks while with AR you can watch a shark pop out of your business card. While VR is more immersive, AR provides more freedom for the user and more possibilities for marketers because it does not need to be a head mounted display.
It contains a spherical mirror/combiner (part-mirror) and a beam splitter. The method works like a birdbath in which it projects light from the OLED into the beam splitter, at a 45-degree angle with the OLED light source plane. Lenovo Mirage AR and ODG R9 were two examples adopting this method, but it has two major downsides being light loss and double image. Curved mirror (adopted by DreamWorld and Leap Motion) is the cheapest see-through display technology. It is based on semi-reflective curved mirrors placed in front of the eye. The major advantage was the low cost because it works with LCD, but suffers from a high degree of distortion, low image resolution and less comfort.
Waveguide and micro-LED solutions are at the early stage; it is very difficult for this solution to be mass produced at a low cost, but companies such as Glo, VueReal, BOE, and AUO are investing heavily in micro-LED technology. With the advancement of mirco-LED technology, we expect the solution will be adopted by most of the AR makers in the future. For AR glasses, Meta has Project Nazare, its first AR glasses that allow augmented reality overlays on the real world.
AR requires integration of hologram displays, projectors, batteries, radios, custom silicon, cameras, speakers and sensors to map the world into glasses that are 5mm thick. It also introduced its Ray Ban Stories—which allows taking pictures or phone calls, listening to music, and watching videos—at US$299.
Meta also has a Project Cambria for new high-end glasses. With Project Cambria, Meta would integrate “high-resolution coloured mixed-reality pass-through” glasses, which combine an array of sensors with reconstruction algorithms to represent the physical world in the headset, with a sense of depth and perspective. The representation on the display with these innovations is finally getting closer to representing what the eyes see in the physical world. For optics, the company is developing pancake optics by folding light to achieve a slimmer profile than current lenses.
Vuzix, an AR headset company founded in 1997, recently unveiled its Vuzix Shield which contains battery, computer, cameras and display projector in the temples of the glasses but can be worn all day.
Mark Zuckerberg called AR glasses “one of the hardest technical challenges of the decade.” Due to the complexity of the architecture, the price of AR glass is still high, which hinders penetration. For example, one of the products from a leading industry player sells for US$3,500 and the majority of the users are enterprises. Unlike VR, in which most components are becoming mainstream specs, AR makers are still exploring different architectures:
Display: DLP, LCOS, Si-OLED are mainstream and MicroLED would likely be the ultimate solution
AR glasses require compact and power-efficient displays with very high contrast and brightness. We had a leap in AR display technology achieving these objectives, yet there is still room to improve on the yield rate and costs. Organic light emitting diodes on silicon (OLEDoS), digital light processing (DLP), and liquid crystal on silicon (LCOS) are the three main pathways:
(1) OLEDoS is fabricated on silicon wafers instead of glass substrates and polyimide substrates.
(2) DLP is a popular solution for projectors, using micro mirrors (DMDs) which are positioned in a semiconductor chip to reflect light, and directs red, green, blue light to the imagers.
(3) LCOS technology is a variation of LCD technology, separating light into red, green and blue components and reflecting the light off the chip surface to LCD cells. A CMOS chip is under the chip surface to control voltage on square reflective aluminium electrodes.
Initially, LCOS was the major technology for AR, for the high brightness, but it was not energy- or cost-efficient. OLED has limitations with brightness; however, breakthroughs in OLED material such as silicon substrate bridged the gap.
Therefore OLEDoS (OLED on silicon) is now becoming the most popular technology due to its merits of higher contrast, power efficiency, thickness, wider temperature range, and faster response time. Although there are still many hurdles to achieving mass production, we believe micro-LED would be the ultimate solution for AR glasses due to its super-high brightness and contrast, excellent temperature endurance, fast response time, and low energy consumption.
Optics: Waveguide becomes the major architecture
The industry is developing two different approaches in waveguide technology:
(1) Diffractive waveguides are considered the most mature technology, used in HoloLens 2, Magic Leap 1 and Vuzix M4000. A diffractive optical element (DOE) or holographic optical element (HOE) are used to inject the light over a small area into the waveguide and extract it to the user’s eyes. The diffractive method disperses wavelengths, so separate waveguides are used. Mainstream products are leaning towards the use of two layers of waveguides for thinner glasses.
(2) Reflective waveguide designed by the Israeli AR company, Lumus, does not require nano photonics. This methods employs a 1D or 2D semitransparent mirror along the optical path to guide the light to users’ eyes.
Common complaints against VR (Virtual Reality) were on the motion sickness caused by:
(1) the screen door effect (SDE) (visible gaps between pixels); (2) mura (colour inconsistency of each pixel); (3) aliasing (series of square blocks instead of curved lines); (4) latency (low chipset processing and transmission speed); and (5) the weight of headsets.
To mitigate these issues, headset makers are advancing the chipset, optics, display, and tracking solution to improve the user experience.
Chipset: Qualcomm XR series
Qualcomm launched its XR platform Snapdragon Extend Reality (XR) series in 2018 as its first SoC for AR/VR devices. The XR2 5G platform was announced in Dec2019, which is a derivative of the Snapdragon 865 (7nm). Oculus Quest 2 was the first to deploy the chipset, with a process speed doubling that of Snapdragon 835 in Quest 1. The XR2 enables 2x more video bandwidth, 6x higher resolution, and 11x AI improvement.
The strong performance has attracted most of the major headsets makers including HTC, PICO, DPVR, Lenovo, and Microsoft Hololens.
Display: Fast-LCD is becoming mainstream
The display in the HMD (head-mounted device) for VR is usually one or two pieces of LCD (liquid crystal display) or OLED (organic light-emitting diode) panel, depending on the design of the device, although a dual display system is preferred as human beings have two eyes. Although LCD and OLED are both applicable for VR displays, the majority of recently announced VR models have adopted LCD due to its cost advantage. OLED display was first used on VR devices by Sony’s PSVR, Oculus Rift, and HTC Vive due to its fast response time, which reduces motion image blur significantly.
However, OLED is limited by its inadequate lifetime and higher cost/lower yield for higher resolution. Normal LCD has the characteristic of high resolution, high brightness, long lifetime and low cost, but its response time is ~100x slower than that of OLED. As a result, LCD usually displays much more severe image blurs than OLED.
Optics: Fresnel lenses to replace aspherical lenses
Fresnel lenses are advocated by more VR makers due to their lighter weight and thinner centre. HTC was the first to use Fresnel lenses in its high-end product, Vive, followed by Oculus. To reduce the weight of VR devices and enhance the user experience, Fresnel lenses are more likely to be adopted by the majority.
Tracking solution: 6DoF and inside-out tracking solution will be the basic feature
6 degrees of freedom (6DoF) is an upgrade of 3DoF which adds rotational axes for rolling, yawing and pitching. 3DoF is enough for basic applications such as VR movies, but for a complete immersive experience 0like gaming, healthcare and training, 6DoF is required.
Most of the newly released VR headsets in 2021 employed 6DoF, and we expect the 6DoF function to be a basic feature for VR in the future.
In inside-out positional tracking, the camera or sensors are located on the headset being tracked (e.g. Oculus); while sensors in the outside-in scenario are placed in a stationary location (e.g. PSVR). We believe inside-out will be used for most VR devices for its mobility and flexibility, whilst outside-in will likely be used in specific scenarios such as healthcare VR and console-powered VR for its accuracy.
Metaverse would impact gaming, entertainment, work collaboration, social media, virtual worlds, education and fitness in the near term, and will see additional use cases over time.
By moving to a more 3D and immersive form of the internet, the metaverse has the potential to expand opportunities for the current internet.
We highlight the use cases and current developments around some of the major areas the metaverse would impact including gaming, entertainment, work collaboration, social media, virtual worlds, education and fitness. While these are some of the current prominent use cases, given that the metaverse is an adaptation and evolution of the internet, use cases are, frankly, endless although we list some additional use cases, notably in the commercial space at the end of this section.
Gaming: Platforms to further leverage 3D immersion
Video games are expected to play a central role in the metaverse as they already build on immersive experiences with 3D graphics, VR-enabled titles, and platforms for user creativity and built-out digital goods for use in gaming. The overall market is exponential and is now at 3 bn users and projected by industry players to reach 4.5 bn by 2030.
Gaming platforms can be further unleashed with the metaverse by allowing a gamer to be embodied and moving around in the game or building out further upgrades available to other users. As compute power rises, deeper multi-player gaming can be fully enabled and eventually, a user could turn into a hologram to show up visually with someone in another location.
Entertainment: 3D virtual option opens up for film, television, and music content
The metaverse is stimulating new forms of entertainment, with a likelihood that technology eventually would allow a user to be viewed as a hologram in another place and teleport into a remote concert or party.
During the pandemic, a number of platforms developed the major use case of virtual concerts that took the place of live performances. The advantage of these concerts is they could reach far more users globally than a live venue and could also transform the singer into an avatar or the stage into a virtual environment, with special effects and opportunities for fan interaction. The concerts also formed a good platform to promote merchandising for the event.
Social: Leveraging AR/VR for connectivity and presence in the metaverse
Social media is embracing the metaverse as a way to expand connectivity with the use of AR/VR. We highlight the efforts of social media platforms as well as some of the early work by dating sites to introduce virtual engagements before meeting in the real world.
Industrial: A solution for collaborative work amid hybrid office evolution
Work in the metaverse would allow a better sense of presence, shared physical spaces, and a productive work setup in a work-from-home set-up. The work setting can allow collaboration to view a 3D design with others.
Companies are investing resources towards various products, including customisable workrooms for meetings, an office space to customise home workspace, and 2D progressive web apps to view applications and social media through VR.
Commerce: Virtual communities opening up new forms of commerce
The metaverse is also opening up a platform for commerce, with creators making digital objects, offering services and experiences, building worlds, and a place to sell both physical and digital products. The metaverse platform goal is for content that is purchased on one platform to be available on other platforms. For purchases, NFTs can be securely purchased and sold with the data stored on the blockchain.
A number of communities are setting up public spaces that can be accessed through digital means. Most of these networks use avatars to represent the users, though they vary in the digital ownership, centralisation of the platform, rules of engagement with others, ability to build and take ownership on the ecosystem vs being on a platform from one of the major social media companies and the ability to create commerce activities. Some gaming platforms have centralised environments, but several new communities are developing around decentralisation—which places ownership of goods on the blockchain and is opening up ownership and control of the rules toward decentralised policymaking.
Metaverse Other use cases
The above paragraphs detail use cases across various endmarkets and with examples of companies/applications operating within that area. Given that ‘metaverse’, in some ways, is just an adaptation/evolution of the ‘internet’, use cases are, frankly, endless.
Metaverse can help the manufacturing process significantly, particularly in the areas of design and product development, by facilitating an improved relationship and interaction between business owners, suppliers (including design companies) and customers. Such a platform can result in a rapid production process design, increase the number of product designs, lead to more collaborative product development, and potentially reduce the risk to quality control.
In addition, customers in the metaverse could have improved visibility into the supply chain process with 3D representations for how products are built, distributed, and sold. There could also be additional opportunities for manufacturers to have add-on digital-products (clothes/fashion, homes, cars) in the metaverse that resemble and mimic the real-world products.
VR also gives the chance to transform the living room, similar to how virtual sports gaming products got many off the couch to play their motion-controlled sports games. Fitness games through VR will allow more immersion and interactive training by allowing a user to work out in new worlds, playing against other users or against the machine AI.
Education took a 2D step through online learning during the pandemic but still struggled with student engagement. An upgrade to use 3D features and VR has potential to enhance the experience and engagement by allowing teachers to teleport their students to a different place or time, or into a virtual classroom, library or gymnasium with their fellow students. A headset or glasses could enable much more active exploration of history, biology, a visit to a museum in another location, or an interactive class with fellow students.
Other online VR educational applications and programmes are now cropping up. One of the companies is offering these experiences by allowing customisation of a virtual classroom and simulation of presence with virtual avatars for more interactive remote learning. The school features presentations and documents, customisable whiteboards, notifications and moveable Post-its, and live video and text.
Spatial I/O’s collaborative VR platform features iTeacher, which is architecting virtual worlds for high school education to connect on academic topics with its metaverse now having 14 different spaces to simulate different lessons.
We do see significant potential from the latest wave of investments to upgrade to a more immersive internet but also see some limitations and risks in the latest cycle which pose obstacles and may limit its success.
A truly immersive internet would benefit from a 360-degree field of VR or with AR glasses versus access through traditional smartphones, tablets and PCs. VR saw a first wave of hype in 2016 with the launch of VR headsets by many companies and many smartphone-based VR platforms, with every major trade show seeing long lines to experience the concept.
The first wave failed to live up to the hype with only 2 mn units shipped. A combination of early hardware limitations included tethering to a PC, causing vertigo and discomfort with extended use, a lack of AAA gaming titles and content, and isolation from others while wearing it.
The VR technology is improving with better processing and sensors, faster refresh rates, higher resolution and high-speed WiFi eliminating the tethering plus content should improve with the new wave of metaverse funding. Nevertheless, VR would still lead to some discomfort from wearing for an extended time and isolating the user from their surroundings.
Mainstream interest in virtual worlds.
The hurdle for virtual worlds is higher as earlier communities faced difficulty keeping up activity 24-7 and it also needs to change user behaviour from still seeking out real-world experiences. The virtual worlds are improving in terms of audio/visual but still fall short on three of the five senses (smell, taste and touch) to be fully immersed in the experience. Some advocates are more aggressively investing in AR technologies which bring elements of the digital world into the real world.
Policing the communities.
Social media platforms have continuously faced issues over which content and authors to allow and censure, and also their ability to use AI and human monitors to take down abusive content. A decentralised metaverse, without the scale of the resources major internet providers have, may also struggle to keep up with monitoring abuse on the platform.
NFT speculation, fakes, and metaverse asset inflation.
NFTs (non-fungible tokens) represent a unique piece of data on the blockchain that claims to offer a certificate of authenticity or proof of ownership though they do not restrict sharing or copying the digital file or prevent the creation of NFTs with identical associated files. NFTs have been associated with transfers of artwork, in-game assets, music and sports cards, and can be a way to pay a creator for their work.
The NFT market, though, is introducing stolen goods, bubbles and the risk of over-saturation as more are created. The metaverse is also drawing headlines for rising real estate prices in some of the digital communities and the high-priced resale of luxury bags carrying no right to carry it into the physical world.
Niantic, developer of Pokemon Go, which was originally spun out of Google, published a blog in August 2021 building its vision for the metaverse around AR rather than VR.
It views the world in science fiction novels such as Snow Crash and Ready Player One as a dystopian future of technology gone wrong where users need to escape a terrible real world with VR glasses to go into the virtual world. The company views VR as a sedentary process slipping into a virtual world and being cut off from everyone around you with an avatar as a poor substitute for the real human-to-human interaction. The company believes VR glasses remove the realistic interactions from the presence that you can sense being with people that are difficult to replicate staring into OLED display goggles.
Niantic is leaning into AR in order to be able to be outside and connect with the physical world with AR as an overlay to enhance those experiences and interactions, and get people back outside and active by learning about their city and community.
The company’s view of the metaverse is a world infused with “reality channels”, where data, information, services and interactive creations can be overlaid on the real world. The company incorporated these into its products Field Trip, Ingress and Pokemon Go as games that can make the world more interesting. The capability, though, can stretch beyond games and entertainment, as the AR can allow education, guidance, and assistance anywhere from work sites to knowledge work.
Niantic is also developing a visual positioning system (VPS) that can place virtual objects in a specific location so those objects can persist to be discovered by other people using the same application. With a live production code it has mapped thousands of locations. Niantic is attempting to build a much more in-depth digital map beyond Google Maps which can recognise location and orientation anywhere in the world leveraging on computer vision and deep-learning algorithms, and the leverage of the millions of users playing its games such as Pokemon Go.
The company’s vision follows Alan Kay’s 1972 Dynabook paper that discussed the trend of continuing to shrink compute (from mainframes now down to smartphones/ wearables) and eventually to compute devices disappearing into the world. Niantic views shifting the primary compute surface from the smartphone to AR glass to remove the demands on hands to make it easier to access data and services, and view overlays on the real world. Niantic has partnered with Qualcomm to invest in a reference design for outdoor-capable AR glasses that can orient themselves using Niantic’s map, and render information and virtual worlds on top of the physical world with open platforms allowing many partners to distribute compatible glasses.
Nvidia: Omniverse to create and connect worlds within the metaverse
Nvidia defined the metaverse in its August 2021 blog as a shared virtual 3D world, or worlds, that are interactive, immersive and collaborative and as rich as the real world.
It views it as going beyond the gaming platformsand video conferencing tools aimed at collaboration.
The metaverse would become a platform that is not tied to any one app or any single digital or real place. The virtual places would be persistent, and the objects and identities moving through them can move from one virtual world to another or into the real world with AR.