Ether Cryptocurrency Creator Predicts Metaverse’s Failure

Vitalik Buterin, the creator of the Ethereum network and the Ether cryptocurrency, does not believe in the future of Meta’s metaverse. On his Twitter account, the Russian-Canadian developer estimated that “none of the current attempts by companies to intentionally create the metaverse will lead nowhere”. It is not known if the computer scientist is of the same opinion regarding the decentralized metaverses deployed on the blockchain, such as Decentraland or The Sandbox.

The “metaverse” is going to happen but I don’t think any of the existing corporate attempts to intentionally create the metaverse are going anywhere. https://t.co/tVUfq4CWmP

— vitalik.eth (@VitalikButerin) July 30, 2022

The metaverse, a still very vague concept

In another tweet, Buterin specifies that in his eyes the metaverse as imagined by Meta (ex-Facebook) is doomed to fail. On the other hand, he is convinced that the concept of metaverse, or metaverse in English, is on the right track to be realized. But, for the time being, this concept is still too vague for companies to be able to embark on it successfully.

“We don’t really know the definition of ‘metaverse’ yet, it’s way too early to know what people actually want. So everything Facebook creates now will fail,” prophesies Vitalik Buterin.

According to Buterin, companies are building the metaverse before user needs have been clearly defined. As shown a study by the Censuswide firm, there is a huge gap between consumer expectations and the solutions developed by companies. While most Internet users surveyed want to save time by shopping in virtual or augmented reality, brands are developing experiences that are modeled on reality.

Furthermore, a Sortlist poll reveals that half of Europeans distrust the metaverse as it is currently presented. While “many companies invest 10 to 20% of their marketing or innovation budget” in the metaverse, more than half of users say they don’t trust this concept, points out Sortlist, the matchmaking specialist of advertisers and marketing agencies.

Reggie Fils-Aimé, former director of the American branch of Nintendo, agrees with Vitalik Buterin. Asked by Bloomberg last March, he believes that Meta’s “current definition” of the metaverse will not be successful. Fils-Aimé points to the lack of innovation inherent in Mark Zuckerberg’s group.

Note that Meta defines the metaverse as “3D spaces that allow you to socialize, learn, collaborate, and play in ways that go beyond what we can imagine.” As Vitalik Buterin points out, this definition is indeed very vague.

Related: Meta sees Apple as its rival in creating the metaverse

The metaverse of Meta in turmoil

In the wake of its name change, Mark Zuckerberg’s group has established itself as one of the figureheads of the metaverse. Meta has multiplied investments in the field. Several accessory projects related to augmented and virtual reality have emerged from the firm’s laboratories. In parallel, Meta has also launched software solutions aimed at the future metaverse, such as Meta Pay, a digital clothing store to dress up avatars and Meta Horizons Workroom, a VR conference room.

Unfortunately, Reality Labs, Meta’s dedicated metaverse division, quickly racked up the financial losses. In the space of a quarter, the branch has caused the Californian giant to lose $2.81 billion. In 2022, Reality Labs accumulates $5.77 billion in losses. To reduce the deficit and reassure investors, Mark Zuckerberg canceled several projects, including the connected watch dedicated to the metaverse, and postponed the launch of the first glasses for augmented reality to 2024.

In this context, Meta’s stock market contracted around $160, down more than 50% in one year. Despite the losses, Mark Zuckerberg continues to defend his vision of the metaverse before shareholders. The CEO says he is “convinced that the development of the metaverse will unlock hundreds of billions of dollars, even trillions of dollars, over time”.

Despite Meta’s setback, most analysts expect Metaverse to be a huge market in the coming years. According to Technoplanea consulting and research company, the market for digital worlds will reach $50.37 billion by 2026. Even more optimistic, the American consulting firm Grand View Research (GVR) expects a market of 678 billion dollars by 2030. According to a study by Gartner25% of people will spend at least an hour in the metaverse in 2026. Will Meta be able to ride the wave?