Forget the hype. Forget the flashy avatars and virtual concerts. The actual metaverse gold rush lies below the surface, in the infrastructures that underlie these digital worlds. Get this one wrong, and your portfolio might disappear quicker than a 3D DJ’s NFT.
Centralized Servers: Digital Dictatorships?
Think of classic MMOs. Everything is hosted on a single central server, under the control of one company. This is the centralized metaverse architecture. Scalable? Absolutely. Secure? Relatively. Is it the future? I doubt it.
It’s a little like Singapore’s renowned chicken rice—the narrow culinary definition perfected by a single hawker stall. Only they have the secret sauce, the recipe, the ingredients and the experience. While delicious, yes—invariably, they shut down.
NVIDIA (NVDA) and its ultra-powerful GPUs are a key player here, providing the hardware backbone. Accenture (ACN) shovels federal money into business coffers and helps large companies scale up these privatizing, proprietary systems. Yet, they are like the princes of old who are raising castles on another man’s ground.
The problem? Control. There’s one company that sets all the rules, all the economics—and determines your digital destiny. This is not the open, empowering, creative, opportunity-providing metaverse that I would hope for. This is all merely a prettier iteration of Web 2.0, and it makes me deeply ill at ease – for a few reasons. What happens when they ban you? When they change the rules?
Decentralized Blockchains: Power to the People?
Picture this scenario occurring in a metaverse connected to a blockchain. Imagine NFTs, decentralized autonomous organizations (DAOs), and genuine digital ownership. This, in part, is the promise of a decentralized metaverse. Sounds amazing, right? It can be.
This is closer to a Rojak, that glorious mixture of flavors and ingredients that is so emblematic of Singapore’s multiculturalism. Each person plays an important role, and the finished product is something powerful, exciting and unlike anything out there.
Future FinTech Group (FTFT) and Xiao-I (AIXI), both based in China, are targeting the AI age. The true innovation is coming from the smaller, more nimble projects. These are the companies constructing the actual metaverse, the one where you possess your data and your assets.
The challenge? Scalability. Blockchains are fundamentally slower and more expensive than centralized servers for the purpose of storing data. And security, though in practice it might be even theoretically stronger, is only as good as the weakest link in the chain.
The potential is enormous. Envision a metaverse where you truly own your avatar, your NFTs and other works, and your virtual real estate. Where governance is transparent and democratic. Where no one person, corporation or government can dominate your experience. This is the world-changing potential of a true, decentralized metaverse.
Hybrid Approaches: The Best of Both Worlds?
Maybe the future lies somewhere in between. A hybrid architecture that utilizes the scalability and efficiency of centralized servers along with the security and decentralization of blockchains.
Imagine a Kopitiam, your classic Singaporean coffee shop. It's centralized in that it has an owner and structure, but it features many different stalls, each with their own flavor and offerings.
Both Globant (GLOB) and SK Telecom (SKM) are pursuing this avenue in earnest. They seek to connect the best of what’s been done in the old world with what’s new and works better. They’re smarter than that, and they’re creating platforms that combine what’s best about the centralized world with what’s best about the decentralized world.
This new approach creates the possibility of a more equitable and realworldfriendly metaverse. One that’s safe even with millions or billions of users, and truly empowers them through digital ownership.
Yet it is the most transformative, while being the hardest to carry out. That’s no small feat. It will take thoughtfulness around trade-offs and an informed understanding of the merits of centralized and decentralized technologies.
Each metaverse project’s goals and priorities will ultimately determine the architecture that will be chosen. One thing is clear: the future of the metaverse is not a foregone conclusion. Currently, it’s being constructed by private companies and the same individuals. They have a culture of taking risks and experiment with new technologies.
My wager on what wins out in the end? Decentralization—in the absolute sense, or at least in a strong hybrid model. At the end of the day though, the desire for true digital ownership and control is too strong to be dismissed. We must remember that efficient centralized systems, though convenient, are just too slippery a slope down into censorship, manipulation, and abuse.
Invest wisely. Do your research. And keep in mind, the metaverse is much more than VR and high-end graphics. No, it’s the architecture underneath that will ultimately decide who runs the future of the internet.
If not, prepare to feel deep sorrow and pity upon watching your hard-earned tax dollars go up in smoke.
If you don't, you might experience sadness and empathy when seeing your hard-earned money disappearing.
