Bitcoin, Ethereum, and the rest of the cryptocurrency market have been on a downward spiral ever since the hype around the metaverse took hold in 2021, driving prices to astronomical heights. Despite recent interest from Wall Street, the prices of these digital assets have plummeted. The Covid-era momentum that propelled Bitcoin to new heights in 2022 has been shattered, thanks in part to technology companies abandoning their metaverse plans and a tightening of global monetary policies led by the Federal Reserve. However, China might just be the wild card that could turn things around.
Now, as the CEO of Binance, a major cryptocurrency exchange, hints at the timing of the next bull run, a leaked document from the European Union (EU) reveals a shocking plan for “global governance” aimed at managing the so-called “unprecedented opportunities” presented by virtual worlds.
According to the leaked document obtained by Coindesk, the EU wants to establish a system of global governance to harness the potential of virtual worlds, touting benefits in healthcare, education, and culture. The document suggests that this technological shift necessitates new forms of governance, including decentralized autonomous organizations (DAOs) based on cryptocurrencies.
When the paper is published, the EU is expected to call for international collaboration on various topics, such as technological standards, identity management, censorship, and surveillance. Their aim is to shape the next generation of the internet as an open and secure space that adheres to EU values and regulations.
In early 2024, the European Commission plans to create “regulatory sandboxes” to test out projects, while also highlighting the risks posed by dominant companies acting as gatekeepers, stifling competition from smaller players.
The document suggests that the European Commission will facilitate the development of a technical multi-stakeholder governance process to address crucial aspects of virtual worlds and the evolving web4, which goes beyond the scope of existing internet governance institutions. It is speculated that this could involve the likes of the Internet Corporation for Assigned Names and Numbers (ICANN), which supports the current internet infrastructure and protocols.
Web4 represents the next evolution of the internet. It began with the email-based web 1.0 and grew into the dominant web 2.0, driven by social media and Silicon Valley giants. However, the emergence of decentralized blockchain and crypto technology in web3 has challenged the status quo. Web4 envisions the seamless integration of the physical and virtual worlds.
Meta, the company behind Facebook, Instagram, and WhatsApp, has dabbled in web3 and cryptocurrencies. However, it has now shifted its focus to web4 development, with CEO Mark Zuckerberg betting big on the company’s virtual reality headset.
Apple, which disrupted the internet landscape with the launch of the iPhone 15 years ago, recently unveiled its own augmented reality headset, set to hit the market next year.
Cryptocurrencies, including Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Solana, Tron, and Litecoin, have become entwined with the metaverse narrative. Traders and investors speculate on which cryptocurrencies will dominate the digital economy or create artificial scarcity within virtual worlds.
Barry Downes, managing partner at Sure Valley Ventures, delivered a mix of bad news and good news at SEC Newgate’s Understanding The Metaverse event in London last month. He highlighted the decline in venture capital funding for start-ups in the sector since 2020, with the crypto sector experiencing an 80% drop in the first quarter of this year compared to the same period last year.
However, Downes noted that crypto venture capital investments have rebounded over the past two months, rising by 34% since April, despite the uncertain economic climate. He believes that this positive momentum will continue and sees it as an opportune time to invest and build companies in this space, citing examples of successful companies that emerged during downturns.
Downes also expressed optimism about the future, suggesting that many of the challenges faced by the metaverse today will be resolved within the next seven years. He believes that hardware advancements, such as the Apple Vision Pro and competing products like the Meta Quest Pro, will pave the way for the widespread adoption of metaverse applications.
