In October 2021, when Mark Zuckerberg announced that Facebook would now be called Meta and its business interests would be pivoting to the metaverse, there was almost universal confusion: most observers had no idea what he was talking about, and for good reason. The metaverse does not exist. Born of science fiction and blending virtual reality into everyday activities, the idea is one that some tech executives like Zuckerberg believe will be the future of the Internet. In his case, it is a belief so resolute that he is willing to wager something like $10 billion a year and the fate of his company on it.

So far his bet is not quite working out. Earnings for Facebook, Meta’s flagship platform, are down for the first time since it went public in 2012, as are daily active users, and Zuckerberg has been carping publicly about the commitment of his once vaunted workforce. But these are early days. As the venture capitalist Matthew Ball—whom Zuckerberg called upon to explain the concept to a head-scratching public—has pointed out, whatever this newfangled Internet turns out to be, it will not arrive for years, and its creation will be incremental.

Ball’s comprehensive new book, The Metaverse: And How It Will Revolutionize Everything, expands on conversations he had with Zuckerberg around the time of Facebook’s name change, as well as the essays he’s published over the years on his eponymous website. There is no better guide to where the Internet may—or may not—be heading because, as an investor, Ball has an intimate understanding of the work necessary to bring the metaverse to fruition, and what might derail it. Still, he is not a dispassionate observer. His exchange-traded fund, METV, was the first investment security solely devoted to companies that are building the hardware and software necessary to convert the two-dimensional Internet into a three-dimensional experience. (There are now at least five others.) And it is money—the money to create the metaverse and the money to be made from its creation—that is largely driving this push to transform how we interact with the Internet and, more crucially, with one another.

A metaverse—or something like it—was first conceived by Neal Stephenson in his 1992 novel, Snow Crash. It was a virtual world whose defining feature was its all-encompassing “persistence,” such that it would seem to surround and envelop one’s physical, embodied, “real” self. Three decades later, that is still the dream of entrepreneurs like Zuckerberg, only now that computing resources are more robust and people are already living much of their lives online, the idea of the metaverse has moved off the novelist’s page and into the corporate labs that are vying to build it. As Ball imagines it, the metaverse will be

a massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity history, entitlements, objects, communications, and payments.

In other words, as envisioned by boosters like Ball and Zuckerberg, a metaverse is a computer-generated environment inhabited and shared by lots of people at the same time. Three-dimensionality will enable it to be immersive the way a flight simulator enables a pilot in training to “enter” the cockpit of a plane, have all the controls near at hand, and see the landscape below and the horizon ahead with verisimilitude. Immersive 3D will distinguish this new Internet from the one we use today, as will the capacity to share experiences in these virtually rendered environments with any number of other users as if they are physically proximate.

In theory, the metaverse will allow people across the globe to enter a computer-generated arena and feel, for example, as though they are gathered together at an actual soccer match. It will allow them to don virtual body armor, sharpen their weapons, and fend off marauding hordes alongside thousands of other combatants. It will give them the opportunity to work collaboratively in real time with colleagues all over the world in the hunt for novel compounds to treat pernicious diseases. (It’s not clear, however, how the metaverse will deal with differences in time zones.)

While many of these activities are available now in the offline, physical world, as well as online, the difference will be access and scale: for instance, in the metaverse you won’t have to travel to Spain to stand shoulder to shoulder with other Real Madrid fans—you will be “there,” in a space teeming with other soccer devotees. Online concerts already draw millions of fans, but these listeners are not hearing the music at the same time; on this new Internet, they will be able to do so. “The Metaverse will only become ‘the Metaverse’ if it can support a large number of users experiencing the same event, at the same time, and in the same place,” Ball writes. “Just imagine how different—and limited—society would be today if only 50 to 150 people could attend any given sporting match, concert, political rally, museum, school, or mall.”


As an added benefit, you can do all of this while never leaving home or getting dressed. No one has to know that you’ve spilled coffee on your pajamas or need a shave, because you will be represented in the metaverse by an avatar that you have constructed. This takes the idea of the curated self, which has become prevalent thanks to social media and Photoshop, to a whole new level. Everyone can look attractive, fashionable, and the epitome of cool. Anyone can be gender-fluid. Racial identity will be a choice. We can all be, or at least look like—to paraphrase a popular bumper sticker—the person our dog thinks we are.

Avatars are an essential element of the metaverse. They are both one’s proxy in the virtual world and a canvas for self-expression. That expression, though, is likely to come at a price once people desire to move beyond the basic gender, hairstyle, and wardrobe options on offer to choices that might better project one’s individuality. Would you like your avatar to sport a designer purse or wear limited-edition sneakers? No problem if you have the (real) cash or the cryptocurrency (bought with fiat money) to purchase them.

Internet gamers are already spending around $100 billion a year on such virtual goods. Gucci is now designing apparel and accessories for video game avatars; Nike recently bought a company that makes sneakers that can only be “worn”—which is to say displayed on the Internet. These items do not come cheap. Not long ago a pair of virtual sneakers was sold for $2,400 and a digital dress for $9,500. As a Gucci executive told a reporter for Fast Company, people are willing to shell out such enormous sums not only to flaunt their purchases in the virtual world but because they also consider virtual goods to be a new asset class. “Virtual items have value because of their own scarcity, and because they can be sold and shared,” he said.

No doubt, if you dress your avatar in expensive designer clothes, you will want to be able to show off those clothes wherever you travel in the metaverse. Conversely, you will not want to be required to buy new stuff and create separate avatars for each virtual world you enter. Rather, the thinking goes, avatars should be able to take whatever digital goods they’ve acquired in one virtual world into another. The technical term for this kind of consistency is interoperability. For Ball, Zuckerberg, and many others building this new Internet, interoperability will be crucial. But achieving it will be one of the biggest technological challenges. (By way of analogy, consider what the current Internet would be like if you could only check your e-mail using a browser built by a single company—Apple, say—instead of by logging into any browser, or what your experience would be if Google’s search engine was only available via the company’s Chrome browser.)

Interoperability would not be an issue if only one company were building the metaverse, but that is not the case. Legacy Internet corporations such as Microsoft, Apple, and Meta are working on their versions, as are well-established gaming companies like Epic Games and unaffiliated groups of developers. These architects are creating not the same virtual world but rather their own virtual worlds, each with unique functions and possibilities. Together, they could form a kind of ecosystem, but only if users can traverse them seamlessly, the way we do now on the Web. This is the “meta” in metaverse.

But what we take for granted in the physical world may not easily translate to the virtual one. As an example of this programming challenge, Ball observes that while in the real world there is no impediment to walking into an Adidas store wearing a pair of Nike sneakers, this can only happen in the virtual world by intent and design. As he explains it:

For virtual goods from a virtual Nike store to be understood in a virtual Adidas outlet, the latter would need to admit information on these shoes from Nike, operate a system that understood this information, and then run code to operate the shoes accordingly.

And, he adds, “almost all virtual worlds and software systems are incapable of understanding what each considers a ‘shoe’ (data), let alone being able to use that understanding (code).” In June thirty-five companies, universities, and nonprofit organizations—including Meta, Microsoft, Epic Games, and even Ikea—formed the Metaverse Standards Forum to foster interoperability. (Notably, Apple and Google are not participating.) According to a press release announcing the new group, “Multiple industry leaders have stated that the potential of the metaverse will be best realized if it is built on a foundation of open standards.”


Much of The Metaverse is devoted to the video game industry. While this can be tedious for readers who are not gamers, it is crucial for understanding the genesis of a new Internet. Game developers already have had to confront and overcome the Internet’s networking constraints in order to enable large numbers of users to play simultaneously, which is a requirement of the metaverse. Online multiplayer games like Minecraft, which allows users to create their own avatars and send them out into a 3D world to build structures, design tools, fight, and extract resources, among other things, and platforms like Roblox, which enables users to design their own games and create and sell virtual items, hint at what a nascent metaverse might look like. These programs accommodate lots of players and enable users to access many different virtual environments and ways to play. They are neither static (like a Web page) nor fixed (like a board game). They continue to evolve as users and developers invent new games and add new features.

These platforms also provide a glimpse of how popular and lucrative the metaverse could be. Roblox has more than 43 million daily users and more than 9 million developers who have created more than 40 million games. (Because Roblox pays them at a lower rate than traditional gaming platforms, it has also been accused of exploiting underage developers.) Minecraft has around 600 million registered users (400 million of whom are in China). In 2020 Minecraft, which Microsoft bought for $2.5 billion six years earlier, made $415 million. (To play, users first have to buy the game.) In the second quarter of 2021 alone, Roblox generated revenues of $454 million.

These platforms are enriching creators as well. In that same quarter, Roblox developers pulled in $129 million and were on track to best the $328 million made the year before. Minecraft “modders” made around $175 million in the third quarter last year selling add-ons to the game. Not only does this put money in their pockets; it helps the company extend the relevance and longevity of its product.

Companies building the hardware to support these gaming environments are crucial to making the metaverse possible. Chief among these is Nvidia, the most valuable American computer chip company, which makes the high-end graphics processing units (GPUs) necessary to render a 3D world. The company’s Omniverse 3D design platform is bringing together a host of tools made by corporations such as Pixar, Blender, and Adobe that will let designers build virtual worlds. It is also partnering with Siemens to enable users to create “digital twins” of real-world phenomena. This industrial metaverse will let companies, governments, and organizations test, virtually, new ideas and tweak functions before investing in and deploying them.

This is already being done to an extent. A functioning, virtual, 3D replica of the Hong Kong airport was constructed using Unity, a popular gaming engine, to simulate foot traffic inside the terminal and traffic flow on the runways. Ball also notes that city planners are connecting real-time data to virtual models of their municipalities in order to monitor, and adjust as needed, actual phenomena such as police and fire response times, vehicular traffic patterns, land use, and anything else that might inform policies and decision-making. So far, none of these virtual worlds, whether they are for entertainment, civic improvement, or industrial design, deliver on interoperability—nor are they meant to. Each is an individual chapter in what may become the origin story of the metaverse, if the metaverse is ever realized.

Not surprisingly, commerce appears to be a major driver behind the creation of the metaverse. Digital commerce is already a pretty big business: in 2020 it accounted for a fifth of all retail sales. But no matter if those sales occurred in a big box store or on Amazon, they are still trading in tangible goods and wares. Now, as Gucci and Nike demonstrate, selling virtual goods opens up a whole new income stream, one that does not require supply chains, retail establishments, or other sizable financial outlays. It’s like real money dropping from an imagined, pixelated tree. Similarly, Facebook’s pivot to the metaverse—and Zuckerberg’s commitment to interoperability—appear to be a way to shore up Meta’s bottom line, especially now that Apple’s new privacy controls, which allow iPhone users to opt out of having third parties track and serve them with ads, have put a significant—which is to say in the billions—dent in Facebook’s ad revenue.

The metaverse opens up a new and seemingly infinite opportunity to extract data and sell ads. Following users across the metaverse through their avatars will give Meta unfettered access to what users like, whom they comport with, who they would like to be, and who they are. The company has applied for a number of patents for sensors that will track a user’s real-life body movements when playing a game, working out, or moving through the virtual world that, while making that experience more realistic, will also collect reams of user data to sell to advertisers. As Zuckerberg told employees in July:

Our north star is, Can we get a billion people into the metaverse doing hundreds of dollars apiece in digital commerce by the end of the decade? If we do that, we’ll build a business that is as big as our current ad business within this decade. I think that’s a really exciting thing. I think a big part of how you do that is by pushing the open metaverse forward, which is what we’re going to do.

Digital ads and virtual goods are not the only things that will be for sale in the metaverse. Not long ago, a Toronto company paid $2.4 million for a “prime” tract of virtual real estate in the “fashion district” of a metaverse-ish Internet site called Decentraland. Andrew Kiguel, the CEO of the company that bought those pixels, expects to rent out retail space to apparel companies and host events that will appeal to the sorts of tony users who are attractive to advertisers. Kiguel told CNBC that he’s been in talks with accounting firms, investment banks, podcasts, and mutual funds to build a presence in the metaverse: “We’re even talking to companies about putting up digital billboards in virtual conference rooms where people can meet.” Last year, virtual real estate sales climbed to more than 500 million nonvirtual dollars, and are estimated to be around $1 billion this year. Another group that snapped up real estate on Decentraland operates an online casino that recently generated $7.5 million in three months and currently accounts for 30 percent of Decentraland’s daily users.

The porn industry is also poised to profit from the metaverse. A company called PornVerse claims to be “the first adult-content ecosystem that will include a metaverse accessible to a large adult audience.” By buying its branded cryptocurrency, $Pverse, users can watch porn and interact with content creators in public and in private. Metapunk, a UK consulting firm I came across on the Web, observed that “if you consider the sextech trend as an integral and complimentary [sic] part of the metaverse, then some experts predict the sexual wellness market to grow as high as $122 billion by 2026.” Ball cautions that trying to predict the size of the metaverse economy “is a fun, albeit frustrating, exercise,” though he breaks out his calculator and gives it a try, coming up with $3.65 trillion annually by 2032. Nvidia CEO Jensen Huang, meanwhile, suggests that it will eventually “exceed that” of the physical world.

There will be impediments. On the human side, the biggest will be adoption: Will people really want to sink themselves into an always-on, artificial world? For young people who have grown up playing with Roblox, most of whom are sixteen or younger, and Minecraft, whose average user’s age is twenty-four, immersive, 3D computing may seem evolutionary rather than revolutionary, and thus they may easily transition to the metaverse. Nondigital natives may find it less welcoming.

Still, if entry to the metaverse requires wearing virtual-reality goggles, it may be a hard sell no matter a potential user’s age or history. Meta’s $399 Oculus 2 headset, for example, besides being expensive, is heavy, clunky, and disorienting; because it prevents users from knowing where they are in the physical world, it requires them to construct a virtual corral from which they cannot stray. Elon Musk’s answer to clunky face hardware is a neural implant—a chip embedded in the brain.

Augmented-reality glasses, which allow wearers to interact with the real and virtual worlds simultaneously, may be more acceptable than either of these. In 2020 neurosurgeons at Johns Hopkins used an AR headset with a see-through display to do spinal surgery. The headset let the surgeons superimpose the patients’ scans over the actual affected area, allowing them to target it with more precision than if they had to consult those images on a nearby computer. (To be clear, this had nothing to do with the metaverse.)

The other significant hurdles will be capacity and infrastructure: Will there be enough bandwidth, enough computing power, enough servers, enough electricity? Latency—the delay between a user’s action and an application’s response—will have to become imperceptible, a challenge that will be exacerbated by millions of people inhabiting immersive, computationally demanding environments. Ball suggests that as the metaverse grows, it will spur investment in the infrastructure needed to lower latency. Still, he points out, even piles of money cannot overcome the laws of physics. As Raja Kadori, a senior vice president at Intel, has written:

Consider what is required to put two individuals in a social setting in an entirely virtual environment: convincing and detailed avatars with realistic clothing, hair and skin tones—all rendered in real time and based on sensor data capturing real world 3D objects, gestures, audio and much more; data transfer at super high bandwidths and extremely low latencies; and a persistent model of the environment, which may contain both real and simulated elements. Now, imagine solving this problem at scale—for hundreds of millions of users simultaneously—and you will quickly realize that our computing, storage and networking infrastructure today is simply not enough to enable this vision.

How this enormous demand for computing resources will affect the climate seems not to figure into anyone’s calculations.

There are many questions yet to be answered if the metaverse is to become the next iteration of the Internet—questions of structure, of governance, and of content moderation, to name a few. (Women have already reported being sexually harassed and verbally abused inside Horizon, Meta’s virtual-reality environment, which is accessed through its Oculus goggles. Last year, a memo from the executive who is now Meta’s chief technology officer stated that it will be “practically impossible” to moderate content in the metaverse “at any meaningful scale.”) But in the rush to claim a stake in this new world, the most critical question has been ignored: Is the metaverse a good and socially beneficial idea? Certainly many things could be enhanced by a shared, immersive, virtual environment: prototyping, education, concerts, and Broadway shows for those without other means to attend in person come to mind. But the prospect of constant, ambient Internet connectivity, especially when it is driven by commerce, raises the specter of an inescapable surveillance economy that is orders of magnitude more intrusive than the one we have now.

If we are all meant to live in virtual worlds, what then of the natural, sensory world that surrounds us? How lovely it might be to swim with the sea turtles along the Great Barrier Reef in a 3D-rendered world that has not been devastated by climate change. How easy to be lulled into not knowing that the actual reef is dying or, worse, knowing and deciding that its “preservation” in the metaverse is sufficient.

Children spend a lot of time and money on Roblox and other gaming platforms engaged in competitive make-believe farming, “growing” crops while moving further and further away from an understanding of the real economics of putting food on the table. “Farming is a pivotal part of almost every Roblox player’s life,” I read recently on the Internet. “Through farming, players can make a living, create their own farm, and get ahead in society.” This is only true in a fantasy world, where farming does not have one of the highest rates of suicide and an increasing number of farmers aren’t declaring bankruptcy despite government subsidies. Maybe sex work can be made safer in the metaverse—but just as likely, sex itself will become disembodied and, literally, senseless. After all, Ball tells us, the metaverse will “revolutionize everything.”