Hi. I'm here to talk to you about economic trends and opportunities in the metaverse. As you already heard, the potential economic impact is immense, in the trillions of dollars. While there's a lot we don't know about how the metaverse will play out, in this video, we're going to discuss some strong economic predictions. Let's get to it. Earlier, we touched on the fact that the economy of the metaverse will be decentralized. That is, no one company or group of people will be in charge of making decisions about commerce in the metaverse. Let's think about this through the lens of the internet as we know it today, which is often referred to as Web 2.0. Web 1.0 was the internet of the 1990s, when we could consume content online. In Web 2.0, social media made us all content creators. There isn't one entity that owns the internet today, and no one person or group of people who controls it or who can turn it off for everyone. While there are big tech companies through which we do a lot of stuff on Web 2.0, like Google, Amazon, Apple, and Meta, the internet of today is one giant, decentralized communication system. Similarly, there isn't just one financial institution allowing us to buy and sell things online. There are hundreds of online banks and e-commerce platforms available to help us make digital purchases. But at the end of the day, each one of those purchases still relies on a centralized solution. That is to say, that no matter which financial institution we use, we are required to rely on it to generate a receipt, validate the transaction occurred, and confirm our ownership. As we talked about at the beginning of this module, blockchain is the technology that will truly decentralize commerce in the metaverse. When transactions are completed through blockchain, they're transparent, secure, and easily tracked. The two-party verification enabled by blockchain means that if I were to resell an object to you, the transaction record would show you proof that I owned it and that it was a legitimate item. Here's an example of how this works. JOYWORLD offers unique digital art for sale and clearly shows how much each piece is currently worth (in Ethereum, a blockchain currency, and based on the last transaction), who owns it (an ID number, not a person), and how many times that piece has been traded. To buy art from JOYWORLD, you need an OpenSea digital wallet that you've added money to, fiat currency that has been converted to Ethereum. Coming up later, you'll explore additional tools and technologies that are helping to ensure the metaverse is economically equitable, accessible, and diverse. Now, one of the biggest opportunities we see for commerce in the metaverse involves the use of XR, or extended reality. As you learned, this includes virtual reality, augmented reality, and mixed reality. In fact, using XR to sell things in the metaverse is a trend that's already happening. My friend Ashley Crowder is the CEO and cofounder of VNTANA, a 3D and augmented reality infrastructure platform. She explains that having 3D versions of products is critical for companies hoping to better engage consumers in the metaverse. She shares that "realistic 3D objects can be used on an e-commerce site, on Facebook and Instagram, and can also be dropped into virtual world and sold as digital goods." The other day, I was in the market for a new chair for my living room. I have this nook in the corner where I wanted to put something comfy for when I want to curl up with a good book. I can open up the IKEA Place app on my smartphone and use it to see what different styles would look like in my room. It can even calculate how much space I have, and recommend chairs that would fit best. As you can see from my reading corner example, AR shopping is already part of our lives. You can try on makeup before you buy through Sephora's Virtual Artist app, use Nike Fit to calculate your correct size before buying some new shoes, and pop on a dozen eyeglass frames without leaving your house using the AR feature in the Warby Parker app. Studies have shown that tens of millions of people shop with AR. When we experience products through augmented reality, the conversion rate, — which you'll remember is the rate at which we take a desired action, in this case, buying something — was 94 percent higher. It's clear that when we can see how a product will fit into our personal physical space, we're much more likely to buy it than when we're just looking at images and videos online. Add to that the estimation that about three-quarters of the population, just about every single smartphone user will frequently use AR by 2025. You can see the enormous incentive for companies and creators to integrate augmented reality into their business plans. When it comes to virtual reality, retailers are using the technology to create unique experiences. At the flagship brick-and-mortar TOMS store in Los Angeles, California, a VR headset allows customers to experience a virtual "giving trip," the company's community development program that donates shoes to children around the world. Stop by McDonald's in Sweden to pick up a Happy Meal box that converts to a pair of cardboard VR goggles and try out an educational skiing game endorsed by the Swedish alpine ski team. Furniture shopping steps into the future with Virtual Room Designer at some Macy's stores, which is also available for home use through an AR app. While we are seeing more and more applications for XR when it comes to shopping, as I mentioned at the beginning of the video, there's a lot we still don't know about what the future holds for economic activity and opportunities in the metaverse. Whether it truly meets expectations — Citi issued a report in March 2022 estimating that the metaverse could be worth between $8 and $13 trillion by 2030, topping an estimate we heard earlier in this module — depends on the infrastructure to support it. As you'll learn about later in the course, the hardware and software needed to operate the fully realized metaverse, not to mention the power consumption it will work higher, must be carefully considered and planned. How big the metaverse economy will grow is still to be determined. As economic opportunities grow in the metaverse, we need to ensure we're fortifying commerce experiences — for both buyers and sellers — from the frustrations we find ourselves dealing with today, such as theft, fraud, and safety concerns. That leads us right into the next topic. It's time to explore how we can ensure that no matter how big it gets, the metaverse is economically diverse, accessible, and equitable. Let's go.
