Zhu Jiaming: Metaverse’s Business Prospects, Technology Path and Governance Rules

On January 19, 2022, Professor Zhu Jiaming, Chairman of the Academic and Technical Committee of the Hengqin Digital Finance Research Institute, accepted an exclusive interview with Qu Lili, a reporter from China Business News, and answered questions about Metaverse’s business prospects, technology paths, and governance rules. several questions.Professor Zhu proposed, “In any case, for the vast majority of people, it is still necessary to keep pace with the times and face up to the reconstruction of the real world by the Metaverse.”

Below is the full text of the interview:

The business prospects, technology paths and governance rules of the Metaverse

1. Historical status of the Metaverse

“China Business News”: How do you see the position of the Metaverse in the history of Internet development? What characteristics of the Metaverse determine its profound impact on the future world?

Zhu Jiaming: The history of the Internet can be traced back to the 1950s and has been around for sixty or seventy years.Even counting the milestone of the Internet, the birth of the World Wide Web, it is already 30 years old. In this process, people see the evolution of the Internet, that is, the Internet has gone through a process from Web 1.0 to Web 2.0 to Web 3.0. This is a consensus on the evolution and progress of the Internet.

For Web 3.0, it was proposed in 2006, and so far there has not been a very strong and distinct landing performance.People are talking more about Web 3.0 concepts and trends, and its best applications are focused on Ethereum-related applications.

In my opinion, it is in this context that the emergence of the Metaverse can be regarded as the most important outcome of the evolution of Web 3.0. We can understand the relationship between the Metaverse and the Internet in two sentences. First sentence: The Metaverse is a result of the evolution of the Internet from Web 1.0 to Web 3.0. The next more important sentence: the Metaverse itself is also a mutation – like a new species that evolves and mutates. Since it is the product of the combination of the Internet and a host of other new technologies, this new species causes the Metaverse to push the limits of the Internet.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

Internet history

Source: Chris Philpot; thereboot.com

That is, without the Internet, without the evolution of Web 3.0, there would be no Metaverse. The Metaverse is the result of the evolution of the Internet. At the same time, it is also a breakthrough in species – the Metaverse includes not only Internet technology, but also virtual reality technology, digital twin technology, etc. The Metaverse is the result of an evolution and mutation of the Internet. It is foreseeable that because of the Metaverse, Web3.0 will enter a period of rapid growth.

As for the characteristics of the Metaverse, there are many opinions and summaries. But these features of the Metaverse need to be combined with the historical significance that the Metaverse brings. In my opinion, there are three fundamental aspects of the Metaverse:

The first feature of the Metaverse: the integration of technology. The technology of the Metaverse, even going back to Turing and von Neumann, and the history of all the information revolutions since World War II. Turing machines and von Neumann architectures themselves contain the genes of the Metaverse. Because it is a master of technology, in this world, there is no new species that can surpass the Metaverse and can carry, absorb and accommodate all the technologies of the information revolution.

The second feature of the Metaverse: showing a new economic system. The Metaverse needs the support of an economic system, and this system is not a translation of the economic system on Earth. It is necessary to avoid and eliminate many drawbacks of the market economy influenced or dominated by the capitalist system, and to eliminate monopoly and the difference between the rich and the poor. In other words, the economic system of the Metaverse should also need to have strong genes of sharing and equality. The agents of the Metaverse can organize new types of economic activity in a new egalitarian way. This is a very remarkable potential of the Metaverse, and it seems a little too idealistic, but it is possible.

In the Metaverse, for example, there is little possibility that some people monopolize and control the labor, thoughts, and time of others. Because the Metaverse cannot be truly “closed”, there is no way to use the “dungeon as a prison” method of the global village. In any Metaverse, if someone is unhappy, they can “change schools” and run from one Metaverse to another.

Subjects in the Metaverse will accept the notion, “I don’t have to be here with you, because I can be in different places anytime, anywhere.” In the Metaverse, there will be no urban Metaverse, or a rural Metaverse; Nor will there be a Metaverse of developed countries, or a Metaverse of emerging market countries. Therefore, the Metaverse has the possibility to provide a free choice for human beings, and even their digital identities. It is difficult for the Metaverse to be bound by capital. There is no problem that you cannot work in another Metaverse in this Metaverse.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

Working population in cross-sea migration

Source: parisschoolofeconomics.eu

There is a word in development economics: “migration”. Because the Metaverse offers the possibility of free movement.

The third feature of the Metaverse: the change in the mode of human existence. There is an obvious “division of labor” between the Metaverse and the real world. Within the Metaverse, there is no need to address the physical and material needs of the human beings in the global village. For example, no one will think and discuss how to realize the “toilet revolution” in the Metaverse, because there is no human excretion problem in the Metaverse.

Therefore, in the new dimension of the Metaverse, the main body’s survival mode, survival pattern, and survival connotation will undergo very big changes. In the physical world, human time is filled with complicated procedures such as chai, rice, oil, salt, vinegar, tea, and childbearing, while the theme of the Metaverse will be liberated from a pile of trivial daily life.

There will naturally be a pattern of human existence in the Metaverse. A lot of people have tried to translate the mundane into the Metaverse, and it’s all going to fail. The Metaverse cannot take the weight of the real world. Humanity will have two homes because of the Metaverse: the place where tradition is left, and the place where beauty is brought to the future. For example, one can continue dreaming in the Metaverse during the day that is not finished at night, but not in the real world. The Metaverse is not a place to share disaster, pain, and tears.

For this goal, whether it can be achieved and to what extent are not the same thing. It is difficult for people to find a place where the sun shines.

It is particularly emphasized that human beings need such a new type of world, and the Metaverse provides such a possibility. The Metaverse is a big place: it is not a utopia, nor is it the bliss or mystical sanctuary of various religions. Since the post-industrial society, the greatest need of human beings is the psychological need, which even psychiatrists cannot satisfy in the real world. The Metaverse provides a side that improves human psychological needs and satisfies the happiness of people’s lost childhood and boyhood. The most important properties of the Metaverse are here, providing what people imagine. If people think they can play the same thing on Earth in the Metaverse again, they will be blown away. The Metaverse is essentially a public space, a “common container” derived from the culmination of human evolution and technological integration – it belongs to everyone.

It is precisely because the Metaverse has these characteristics that it will of course have a profound and comprehensive impact on the future world. From the in-depth development of technology, to the evolution of the human economic system, to the human life model, especially the new human psychological model.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

Human-computer interaction
source: army.mil

Also, in the Metaverse, people will rebuild the human-machine relationship, and the relationship between various artificial intelligences, and fully develop in the Metaverse. At present, in the real world, the relationship between man and machine has not been a particularly big breakthrough. “Human” is carbon-based, with physiological characteristics and biological characteristics; “machine” is physical and mechanical. There is interaction between them. In the Metaverse world, their physical carriers no longer exist, they interact in a virtual way, and it is easier for the two sides to produce a larger common divisor, and there will be no boundaries. This has important implications for the future.

Therefore, I have said many times last year that the Metaverse era is compatible with “post-human society”. The Metaverse will be a new existence. Although the Metaverse was founded by carbon-based humans, the main body of the future Metaverse will gradually be transferred to digital and virtual humans, which is the so-called “human being” in the sci-fi movie “Silver Wing 2049”. Because they are digital and virtual, they can participate in N Metaverses at the same time.Otherwise, a Metaverse will not be able to go up. The current carbon-based humans can only express their wishes and realize their desires through digital and virtual humans.

If we must explain the current relationship between carbon-based humans, digital humans, and virtual humans, then we can interpret it as follows: there is only one human being, because human beings must be born, old, sick, and die; but there can be N digital humans and virtual humans, the former cannot live forever, And the latter can live forever. That is to say, after any individual carbon-based human is born, old, sick, and dies, its digital image and virtual form can still remain in this world. This requires two technologies: one is how to store the data and information as a real person; the other is how to simulate a digital human being like a carbon-based human individual and extend his life. This should be a future without suspense.

2. The business prospects of the Metaverse

“China Business News”: In the foreseeable future, what commercial application prospects will Metaverse bring? What are the obvious opportunities for investors and industry players today? From a long-term strategic point of view, which industrial layouts will become increasingly important?

Zhu Jiaming: This way of thinking needs to be changed. What I want to emphasize is: the “business” that takes place in the Metaverse is not the “business” in the real world. Business in the Metaverse world is difficult to exist, evolve and develop like business in the real world. Taking a step back, even though the business of the Metaverse and the business of the real world are related by blood and genes, they are already different types of business, and belong to two different business models that have been completely “forked”.

In my opinion, the business of the Metaverse is a business that emphasizes more on immaterial states, more on temporal form, more on virtual business, and more on consumer-participatory business. These are not the same as real-world business. For example, Pepsi is a drink in the real world, and the result of this drink will eventually lead you to go to the toilet to urinate; and what Pepsi wants to show in the Metaverse is Pepsi’s non-fungible token (NFT), which is a concept.Therefore, Pepsi-Cola has two business models: one belongs to the material and physiological level, satisfying the appetite, and it is a beverage industry that competes with Coca-Cola; the other is a business model based on spirituality and aesthetics, and it enters the track based on imagination. In short, this “business” of the Metaverse is by no means the “business” of the physical form in the traditional real world.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

PepsiCo releases NFT

Source: nftplazas.com

So how can real-world businesses strive to build business prospects in the Metaverse? Or take Pepsi Cola as an example. Pepsi Cola is an economic entity, and it will have two forms of existence: the physical world and the Metaverse world.However, that doesn’t mean Pepsi can port real-world stuff into the Metaverse, and the Metaverse isn’t a place for Pepsi to advertise. Metaverse advertising will also be a new model based on high creativity and imagination. In addition, Nike and Adidas have also begun to enter the Metaverse, and they are also building a physical and virtual “dual” product model.

In the Metaverse, companies must create new products. An important direction for enterprises to lay out business opportunities in the Metaverse is to realize the integration of art, imagination, aesthetics and new digital financial tools.The aforementioned Pepsi, Nike, and Adidas have all tried to create the early business model of the Metaverse, which is worthy of recognition.

For the future-oriented layout, three industries are crucial: one is intelligent manufacturing, the other is education, and the third is culture and art.

3. The technical path of the Metaverse

“China Business News”: To truly open the door to the Metaverse, what core technologies need to be broken through?Will there be a technology roadmap for the Metaverse? How can SMEs find their own opportunities and positioning here?

Zhu Jiaming: There are three core technologies: first, new energy, second, new computing power, and third, artificial intelligence 3.0. Because the Metaverse is ultimately supported by energy, it requires a large amount of energy for the operation of the Metaverse, and the current traditional energy sources are not enough to support the development of the explosive Metaverse in the future. At the same time, the current computing power cannot keep up. Only the computing power of quantum computing can support the Metaverse. In the end, the main body running the Metaverse will not be human, but artificial intelligence. Therefore, the combination of new energy, new computing power and new artificial intelligence can finally fully activate the Metaverse and support the development and growth of the Metaverse.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

Fully activate the Metaverse

Source: Author’s drawing

In my opinion, the Metaverse should take at least 10 years to establish its goals, 30 years to develop and lay the foundation, and 50 years or so to make the Metaverse the desired space for a new human existence that is parallel to the real world. . The problem now is that people take a long time to develop the Metaverse, lack rational cognition, are too eager for success, too anxious, and too utilitarian. In this way, it will destroy the environment and ecology of the Metaverse development.

It should be noted that technology itself has vitality. The technologies of new energy, new computing power and new artificial intelligence have both differences and interactions. Each of them has its own roadmap, and the superposition of these three roadmaps is the Metaverse technology roadmap. For example, quantum technology should have a fundamental breakthrough in the next 3 to 5 years, realizing the parallel between quantum computers and classical computers, but it will take 10 to 15 years for its full popularization and large-scale use.

In the same way, AI 3.0 will also take about 10 years, and it has different development directions. For example, the development direction of artificial intelligence itself and the direction of artificial intelligence directly changing the mode of human existence, such as brain-computer integration technology. These all take time. In short, the roadmap of the Metaverse is the superposition of the three-decade development graphs of energy, computing power, and artificial intelligence, and finding the relationship that exists between them.

In the Metaverse wave, it is impossible or extremely difficult for small and medium-sized enterprises to become the leader of the Metaverse track. Because small and medium-sized enterprises have no way to adapt to the basic characteristics of the Metaverse track: the Metaverse needs combined high-tech investment, combined high-tech talent and combined capital investment. It is very difficult for SMEs to understand and accomplish these.

Therefore, if small and medium-sized companies want to obtain opportunities, the most important thing is to understand the Metaverse industry chain, and then recognize their possible positions in the Metaverse industry chain.

4. Governance Rules of the Metaverse

“China Business News”: In your opinion, what levels of governance rules need to be constructed in the Metaverse world?How do these governance rules affect the trajectory of the Metaverse world?

Zhu Jiaming: To answer this question, we must first understand an important premise, who will be the main body affecting the Metaverse world? The answer is that there are three main bodies: First, world-class companies. This includes game companies, including Blizzard, which Microsoft bought in yesterday’s news; secondly, players in the Metaverse, those young people surfing in the digital economy; lastly, the government.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

Metaverse Governance

Source: washington.edu

It is the government that makes the rules, but the government is not the originator and first driving force of the Metaverse. Now, the government needs to do four things: First, choose its exact position from being absent to being in place. Now there are different opinions about the Metaverse, and now it is necessary to learn, observe, analyze and discern in order to judge and make decisions on the Metaverse. The second is to establish a system of government collaboration and joint governance. The Metaverse is inherently trans-regional, or even trans-sovereign, and it is difficult to carry out traditional physical control. Unless all play universes are closed, otherwise A is solved, and everyone will go to B. The third is to create laws that conform to the characteristics of the Metaverse. Now in terms of laws and regulations, it is basically in a blank state. The fourth is to form the tax model of the Metaverse. The Metaverse will generate business, and the government should have its contribution and should be rewarded by taxation.

The trajectory of the development of the Metaverse world is a historical test of the human community, so the governance of the Metaverse involves some cognition of the basic values ​​of human beings and the basic rules of human beings. Only on this basis can the goals of the Metaverse and the human community be aligned.

“China Business News”: In the Metaverse world, how will financial rules and data rules be connected with the rules of the real world, and what are the similarities and differences?

Zhu Jiaming: This is the same as my view on the business mentioned above: the business of the Metaverse is one “business” and not another “business”; similarly, the currency and financial system of the Metaverse is not a translation on the earth. People cannot imagine the monetary and financial system of the Metaverse with their current understanding of the monetary and financial systems of the global village. It is common sense that there is no central bank and IMF in the Metaverse, otherwise there will be considerable confusion and misdirection. For example, in the Metaverse, it is difficult to open a certain private bank or a certain commercial bank; it is also very difficult to have such a situation that a certain kind of legal currency circulates in this Metaverse, while another kind of legal currency is in another yuan. Cosmic travel.Therefore, in the future, the Metaverse is likely to gradually evolve and evolve into a currency of the so-called Metaverse, which is related to the banking, legal, and financial systems in the real world. If there is such a concept, you will find that NFT still has huge potential.

5. Investment and layout of the Metaverse requires new concepts

“China Business News”: How will the arrival of the Metaverse world affect the company’s strategy, investment and industrial layout? How can entrepreneurs and policymakers prepare for the coming of the Metaverse?

Zhu Jiaming: Metaverse brings new territories, new market concepts and new economic entities. New frontiers, new markets, and new subjects, these are the three engines that support the Metaverse. Therefore, investing in and deploying the Metaverse requires new concepts, new methods, and new teams.

For entrepreneurs and policymakers, three aspects are important:

First, to learn. I’m an early researcher of the Metaverse, but I don’t think my understanding of it is in place, so I’m still thinking about it every day. Many people think they understand the Metaverse, but they don’t. The minds of the vast majority of people today cannot keep up with the speed at which the Metaverse itself is evolving. So, learn.

Second, business management embraces “literacy” to achieve digital transformation. Future corporate executives will not be able to participate in the Metaverse if they cannot understand and realize digital transformation—this is the ticket to the game.

Third, establish a new technical team that keeps pace with the times. In the future, companies must have a Metaverse team, including Metaverse engineers, framework engineers, and professionals in blockchain, artificial intelligence, and quantum technology. Why are the companies currently deployed are Internet giants or leaders in the IT industry? Because they have considerable technical accumulation. This is an era in which technological accumulation is more important than capital accumulation. Because it is not difficult to find capital if you have technology, but you may not be able to find technology if you have capital.

The last question is to free your mind and know what you don’t know. All people, in the face of the Metaverse, in the face of the digital revolution, are elementary school students – even if they succeed in leading now, they will be eliminated tomorrow.

The Metaverse offers a great school like never before; keeping up with the times of the Metaverse is keeping up with the times. Therefore, it is time to hold a Metaverse study class to popularize technology. All companies, I support and advocate, should set up two positions, one is “future strategy officer” and the other is “digital technology officer”.Otherwise, the so-called “digital divide” between developed and developing countries, and between digital and traditional enterprises, will be exacerbated by the speed of the transformation of the digital economy.

Zhu Jiaming: Metaverse's Business Prospects, Technology Path and Governance Rules

Metaverse Education

Source: mit.edu

In the future, the Metaverse is a choice for the global village, one of many choices in the future development of mankind.However, the Metaverse is likely to be the most promising option, representing a historical direction. However, this does not mean that humans can install all the real world into the Metaverse. The digital world and the virtual world embodied in the physical world and the Metaverse will coexist for a long time. Of course, there will still be many risks, challenges, and even crises in the future growth of the Metaverse. For example, in the Metaverse, there may also be terrorist attacks. For each individual in the global village, you can disapprove and reject the Metaverse. If you enter an industrial society and urbanization, you can still run to Shennongjia as a savage if you want and possible. In any case, for the vast majority of people, it is still necessary to keep pace with the times and face up to the reconstruction of the real world by the Metaverse.

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