Blockchain, Web3, virtual reality/ metaverse and augmented reality. Do you know what they are?

metaverse

Note: You can find the italian version here

Blockchain, the Web3, virtual reality/ metaverse, and augmented reality.

These words are often used out of context or by assuming that the reader knows what they mean. The reality is that for so many they are either completely unfamiliar or associated with partially or totally wrong concepts. Here at EXM, technology is our bread and butter, and every day we try to act as “translators” for the most difficult topics, trying to explain them in a way that is accessible to everyone.

Blockchain, so many people talk about it but then you find out they think it’s that thing that makes Bitcoins, that fake money used by criminals.
Web3, wait, why is there an Internet sequel like Hollywood movies?
Then there’s a certain Zuckerberg trying, in vain, to sell his virtual reality visor in the metaverse that looks like an old version of the video game Zelda where the characters don’t have legs, though. So the metaverse is a slightly lame retro video game?

Don’t be scared, wait, read on…

It may sound like a very technical and futuristic topic but blockchain, Web3 and virtual reality/ metaverse or augmented reality, for better or worse are likely to be the technological foundation of the coming decades and if you want to survive in the world to come, even if your dream is to make chocolate cakes, you will need to be aware of them and at least know what they are and how they work in broad strokes. I promise we will keep the technicalities to a minimum to follow.

The three words are often used together because each has points in common with the others but they are not the same thing, that is the first point to remember. The fact is that lately it is very “cool” for a company to use them regardless of whether they are then really doing something in this field or just blowing smoke.

The second point is that these technologies are still in an early stage of development (even though blockchain and virtual and augmented reality have been around for many years) and no one really knows how they will be used in 5, 10, or 20 years. As has always been the case, in the beginning every innovation uses solutions that build on the existing, but over time absolutely new uses emerge that are totally unrelated to the past.

Now let’s look at the meaning of each term and then how each interacts with the others starting with the difference between centralization and decentralization of data and transactions.

 

What is centralization?

Today, most of the things we do on our smartphone or computer rely on Internet services provided by large technology companies such as Google, Apple, and Amazon. These companies have total control over the services we use and our data that are stored only on their computers. This can be a problem because in order to access our data we necessarily have to go through intermediaries and because these services can fail and stop working. You know when WhatsApp fails? That’s the one. The same thing happens with money, this is issued by the central banks of each country (or European Union) that have precisely, centralized control of it and this gives them the power to decide (up to a point) the exchange rate, bank interest and many other even more complicated things. Even when you pay by credit card you use a centralized system, Mastercard/Visa check if you have funds on the card and authorize the payment. The transaction depends on their technological system. In all cases we now need their consent for any transaction.

Decentralization

Decentralization, on the other hand, does not need anyone’s consent and the large infrastructure of multinational technology and financial corporations because it is based on a network of computers talking to each other distributing tasks and storing data automatically, without central control. These are the public networks used for example with cryptocurrencies. These computers can be activated by anyone (so to speak because you need powerful computers and a lot of electricity to run them) by activating what is called a “node.” So even if one node stops working, the others will continue to work smoothly.

You may be wondering why someone would spend money to create a node. Simple, because you get rewarded and therefore you can earn money from it, obviously not with classic money but with cryptocurrencies that are the most obvious and well-known aspect of blockchain that is the technological basis on which this kind of decentralization is based (we will explain it better in a moment).

There are also other configurations of private blockchain networks that can be used by a specific community/organization to confidentially manage their transactions by being able to benefit from a form of de-centralization limited to their own business perimeter without having to show their content and transactions in the clear for all to see.

The advantage of this approach is that it is a system that theoretically cannot be controlled by large corporations and governments and allows you to have ownership of your data. To be realistic this is the initial utopia of those who invented Bitcoins and the one that even now is being peddled as a promise but in the future it is likely that this decentralization will be much less pronounced because history teaches that where there is money, big corporations and governments step in to take back control. For example, in China, cryptocurrencies are already illegal. If you can’t control it, you ban it or change it to work in your favor.

What is blockchain

The blockchain owes its name to the way it stores transaction data, which can be of different types, for example: sales, purchases, contracts, authentication, data storage. Each “block” contains a variable number of transactions and is connected with the previous and next one forming a chain, hence the name block > block – chain > chain. As the number of blocks grows, so does the blockchain in memory.

Each block is like the numbered page of a notarized ledger that sits in a well-defined location between two adjacent blocks and contains, like all other blocks, a certain set of transactions each digitally signed with its author’s private key. The relationship between transactions and blocks is many-to-one. The blocks then form the famous “chain.” And the whole chain is replicated at every node in the network realizing de-centralization. Updating the “blockchain” is done by a cooperative process involving all nodes in the network.

Each block contains a hash (a fingerprint or unique identifier, which is a seemingly random sequence of numbers and letters), the date and time of the most recent valid transactions, and the hash of the previous block. The hash of the previous block links the blocks together and prevents a block from being altered or a block from being inserted between two existing blocks. In theory, this method makes the blockchain tamper-proof, then all you have to do is look back and everything that was considered “unsinkable” in the past eventually sank, like the Titanic.

What can be done with blockchain

A great many services are already based on the blockchain, and in the coming years it promises to become the most widely used technological basis for transaction management and data storage, assuming it is not opposed or banned at the government level. For example, if it were banned in the future to create a node, the base of the blockchain would be at risk because without nodes, the blockchain would shut down.

Blockchain for payment processing and money transfers. Transactions processed on a blockchain can reduce (or eliminate) bank transfer fees.

Blockchain for buying and selling NFTs. Non-fungible tokens (NFTs) are digital files (usually images but can also be audio files, video files, and more) with unique identification codes and metadata that distinguish them from one another that can be bought and sold with the certainty of tracking the original owners and creators.

Blockchain for supply chain monitoring. Using blockchain, companies can quickly identify inefficiencies within their supply chains, as well as locate items in real time and see how products perform from a quality control perspective as they travel from manufacturers to retailers.

Blockchain for digital IDs. People can control their digital identities, while also giving users control over who accesses that data.

Blockchain for data sharing. Blockchain acts as an intermediary to securely store and move data.

Blockchain for copyright and copyright protection. The blockchain can be used to create a decentralized database to ensure that artists retain music rights and provide musicians with transparent, real-time distribution of royalties. The same can apply to software developers.

Blockchain for Internet of Things network management. Blockchain can become a regulator of networks of home devices (e.g., TV, heating, digital assistants) to monitor activity and determine the reliability of those that are added to the network.

Blockchain for healthcare. Blockchain can also play an important role in health care. Healthcare providers are using blockchain to manage clinical trial data and electronic health records while maintaining regulatory compliance.

Blockchain for freedom of opinion and information retention. Blockchain is already being used now by activists to leave their testimonies and ideas that cannot be censored by authoritarian governments or changed in the future. For example, the government of Estonia has written its history on Blockchain so that it cannot be changed and deleted in case Russia invades it again.

How to use blockchain

Don’t worry you generally don’t have to know any technical stuff, even now you probably don’t know what’s behind it when you pay by credit card. With blockchain for you almost nothing changes in everyday use, you will click “Buy,” “Sell,” “Register,” and what happens next for you will be invisible.

We wrote “almost” because there is a difference from now: the need to have a wallet. Don’t imagine it as a traditional wallet that holds your bills. Actually this “wallet” is just a pair of cryptographic keys (private/public) assigned to you and used to sign your own transactions and thus make them verifiable by all other users (through the public key). Okay, here things got a bit complicated, let’s try to simplify: imagine two keys of the traditional ones, to open your safe deposit box in the bank usually you have your key and the bank has its key, they have to be used together otherwise you cannot open it. Here it is the same but in a digital environment and not a physical one. Is this a little better?

To create your own “wallet” you can do it yourself but it is complicated, or rely on companies that give this service and store our private keys on our behalf. We always remain the “masters” of the transactions (things we have purchased or registered) that we entrust to the “notarized ledger” of the blockchain and therefore out of the control of a single organization.

There are attempts to eliminate, at least in the view of the user, this wallet step that is for many a no small obstacle, you know when you want to buy something and they make you fill in 10 different pages of data and it makes you impatient?

Now that we have talked about blockchain-based decentralization of transactions and data storage we can add a layer, that of Web3.

What is Web3?

We have already talked about Web3 and Web 3.0 being conceptually two different things (article on the Ex Machina Blog) where we pointed out that there is no unified view of the third version of the Web, even among those in the industry. So anything we can write here now, could be different in 1-5-10 years. Actually Web3 already exists and is currently somewhat mixed with Web2 which is what we know and use now, let’s say Web3 is an evolution of Web 2, not a totally different thing. To define a Web3 site this must be based on at least one technology component such as Blockchain, artificial intelligence or virtual reality/ metaverse and augmented reality. Basically Web3, simplifying to the maximum, is a container as it already happens with Web2 where inside it “runs” technologies like social networks that use the web but with their own specific protocols. In “version 3” instead of centralized sites and payments there are the same things but decentralized with blockchain and the current social will gradually migrate into virtual reality/ metaverse and augmented reality with many other uses now unimaginable.

For example if you go to a site that sells those digital images that are called NFT or where you buy and sell cryptocurrencies you are already on the Web3. This is because NFTs and cryptocurrencies are based on the blockchain.

There are many applications that currently “run” on the cloud (e.g., Google Docs), that is, they are based on a program that is not installed on your computer but runs over the Web because they actually run on an Amazon or Google computer. Even for apps there is now the possibility of decentralizing them with the Blockchain. In this case they are called “dApps” or “dapps” (decentralized apps) and run on a network of computers instead of on a single computer. They are free from the control and interference of a single authority.

Artificial intelligence

Many of these dApps are based on artificial intelligence, which is another component of Web3. AI (short for Artificial Intelligence) can span a huge variety of functions, from correcting spelling as you type (as it is doing as we are writing these lines), doing translations into different languages, generating text based on a topic, verifying the veracity of articles or reviews to creating images and music.

Finally within the Web3 container we also find Apps or dApps to enter virtual reality/ metaverse or augmented reality.

What is virtual reality / metaverse

The word “metaverse” was first used in Neal Stephenson’s 1992 Cyberpunk novel “Snow Crash” which was later appropriated by Facebook, which even changed its name to Meta specifically to push its virtual reality project.

Meta would like to become the basic standard for the protocols that are used to then make the various virtual “worlds” interact. It goes without saying, given the premise, that virtual reality is the apotheosis of centralization since hardware and software must talk to each other very closely but within virtual environments there can also be blockchain-based services. So the two coexist, for example if you have to buy something.

Virtual reality is basically similar in concept to the current web but in 3 dimensions. Instead of having a screen between you and the web, you are totally immersed in the artificial environment thanks to a visor that you have to wear on your face. You thus access a 3-dimensional world that allows you to go from one environment to another as you do now when you navigate between sites. You don’t just move with your mouse or fingers but you have your own physical representation (which can be the same as you or totally made up) that moves, in the truest sense of the word, in three-dimensional environments. For example, if you want to buy a pair of shoes you go into a store and choose them from a display, try them on (because you can get the exact measurements of your foot) and then buy them. Or you can visit a museum or art gallery just by walking through the virtual aisles.

In the Meta video we posted above, you will notice that the word “in the future” is repeated often simply because it is not yet possible to do everything they show now. The biggest problem is that this is still an immature technology that currently does not really allow you to switch between environments. For now there are just disconnected islands between them, somewhat as was also the case in the beginning with Web1. There is a consortium, driven by Meta, as we said earlier, which includes all the big multinational technology companies (with the absence of Apple) that is working precisely to create common protocols and technologies as happened with the Word Wide Web. Having overcome the “language in common” hurdle there will be that of the quality of the environment and virtual characters, which, as we jokingly said at the beginning, is currently at least 20 years behind what people are used to with the Playstation 5. This is because the viewers still struggle to handle a large amount of data; this is a limitation of today’s technology.

It’s not a video game

But be careful not to confuse the metaverse with a video game, it is not, it can be (like now you can play some video games online) but at the same time it can also be much more by being able to reproduce the whole human experience but in an artificial environment. And yes, even sex. So you can well imagine at the beginning what its main use will be as it happened already with video recorders first and with the traditional web later 🙂 🙂

Okay, now you may think this is kind of silly stuff, why should I reproduce an environment artificially when I can open the door, go outside and enjoy the real thing?

You are not the only one who thinks so but for better or worse we are moving in this direction despite the big missteps so far. Virtual reality/ metaverse will have applications that we probably don’t even imagine now. When the Internet first came so many people thought it was a passing thing, then that no one would ever buy a pair of shoes on the web or post pictures of their children on social media. Instead, we know how it was.

If the metaverse is still being “built,” augmented reality has been around for years but on smartphones and tablets. These devices will be replaced in the near future with others more suitable for augmented reality, let’s see how.

What is augmented reality

AR (Augmented Reality) at the moment has already been around for several years but we are still at the tip of the iceberg because of the enormous potential still untapped. Here again the concept of decentralization does not apply and as mentioned for this technology the major sponsor is Apple but many other companies are also moving fast. Basically AR superimposes on the environment around you, a virtual layer that you can only view on the screen of your phone or tablet (for now) but that is absolutely consistent in perspective and proportions because a three-dimensional map of where you are is created.

You’ve probably seen some apps that add elements to the reality around you, such as the one from Ikea that, through the camera on your phone or tablet, places sofas, beds and closets in your room providing a very faithful idea of what it would look like in reality as a style and footprint. There are also video games that allow you to play by placing characters on your table who then descend to the floor and climb onto your bookshelf. Other applications are in the architectural and medical world, the possible uses are really many. But the leap will happen starting in 2023 with relatively inexpensive glasses that will gradually get the phone out of the way as an intermediary to show the virtual layer in front of us superimposed directly on our sight. Large-scale deployment of this technology is expected between 2025 and 2026 when even Apple and other large companies will have cheaper products that can be purchased by more people.

The final destination will probably be contact lenses that will allow this level in front of the eyes by eliminating any physical element on the face; they have already been working on this for years but there is no product for sale yet. The challenges are many and many still require a lot of research, it will be a few more years before we can use this type of contact lens.

Between a visor that totally covers your face isolating you from your surroundings and a pair of glasses or even contact lenses, which would you choose?

Many of you at this point will answer, “nothing, these things make no sense.” Legitimate point of view but for many others, especially digital natives, their appeal will be irresistible and these devices will run rampant as they do now with smartphones.

Smartphones within a few years will be a thing of the past although for a while they will still serve as a “bridge” with wearable devices to process data. That is why even if you are not a techie type blockchain, web3 and virtual/augmented reality will soon be part of your life because they will be like the phone in your pocket now. Remember when you or a friend of yours were reluctant to have a smartphone? what do I do with it? I only need to make phone calls… now what happens to you if you leave the house and forget your smartphone? 🙂 🙂

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