The Metaverse – Key Features and Challenges

user, September 22, 2022

Metaverse is a three-dimensional virtual world on the Web offering users an immersive experience where they interact with each other through their virtual avatars on various levels to do business or meet socially akin to our real physical world.

The history of the metaverse reads like a classic tale of life imitating art. The term Metaverse first appeared in the Sci-fi novel ‘Snow Crash’ by author Neal Stephenson in 1992 as a blend of words “meta” and “universe”.

However, it became the center of attention in recent years after Facebook, now Meta, and Microsoft announced several projects around it.

The global Metaverse Market size is estimated to reach USD 426.9 billion by 2027 at a 47.2% Compound Annual Growth Rate (CAGR). The market for metaverse was valued at USD 61.8 billion in 2022.

Key features of Metaverse

So, what makes Metaverse a path-breaking technology? The answer lies in its capabilities and features.

Infinite world

The Metaverse is seen as an infinite world that keeps expanding and to enable this expansion, a high-speed, interface with low latency, and scalability, is required. This robust infrastructure is the mainstay for a seamless and rich user experience.

Immersive Experience

Immersiveness is the sense or the illusion that the user experiences, being present within the content rather than observing it from outside. Supporting this immersive experience are the Virtual Reality (VR), Augmented Reality (AR), and XR (Extended Reality) technologies.

Digital Avatars

Digital Avatars are key components of the Metaverse blueprint and digitally represent the users in the virtual world while gaming, shopping, working remotely, learning, and socializing. They significantly reinforce the interactive and immersive user experience in Metaverse.


Just like the real world, the Metaverse goes on and on and never rests. So, even if the user takes the VR headset off, this world persists.


Security is a vital feature in the metaverse, and ethical and privacy standards have been laid down to address cyber security concerns for the metaverse.

The Metaverse is still in its early stages, and the concern for security cannot be overstated as it needs high standards for user protection and user identities. Adherence to these standards will enhance user confidence and subsequently lead to more and more users adopting this world with robust user protection and hackproof user identities.

Virtual Economy

A thriving virtual economy drives the Metaverse and is largely built on cryptocurrencies like MANA, Sand, Ethereum, digital currencies like Robux, and digital goods and assets like nonfungible tokens (NFTs). Examples of NFTs include apparel, accessories, and works of art.

Key Technologies that drive the Metaverse

Underlying the rich and immersive Metaverse experience are cutting-edge technologies like Web 3; Blockchain; VR, AR, and XR; IoT; and AI/ML. Their specialties are:

  • Web3 is the underlying infrastructure in the metaverse. It is decentralized and no single entity has control and authority to abuse power. It uses cryptocurrency, blockchain, digital currencies, and NFTs through which businesses engage with users.
  • Blockchain offers decentralized solutions that authenticate digital identity and ownership, data storage, and value transfer.
  • VR technologies create a simulated and interactive virtual world that completely shuts out the physical world. Users can discover this virtual world using headsets, goggles, digital sensors, and devices using haptic technologies.
  • AR technologies create a combined real and virtual world where digital elements are augmented or overlaid on to the real world. Users can interact with the AR world using digital devices like smartphones enabled with smart cameras. Companies now offer systems and products that use Extended Reality (XR) which supports both VR and AR technologies.
  • IoT technologies along with AI and ML enhance the Metaverse environment by connecting real-world devices to the 3D virtual world and mapping real-time data to the digital world. AI and ML technologies can enable effective data integration, processing, and management.
  • AI technology can upgrade the Metaverse by rendering accurate avatars of the user with the analysis of 2D user images or 3D Scans. With its automatic translation capabilities, AI also helps in overcoming linguistic barriers allowing users from any part of the world to access the metaverse.

Common Challenges of a Metaverse World

The common challenges in a metaverse world include:

Cybersecurity issues

One of the main challenges is the vulnerability of data, as there is a huge amount of critical personal data that is transferred in the metaverse and could lead to its sale to interested parties by cybercriminals. The use of VR and AR headsets can cause privacy breaches where users’ personal data is compromised. The headsets come with camera capabilities and software that are vulnerable to hacking.

As of now, there are no universal guidelines for regulations in the Metaverse, and the privacy of the users depends on the metaverse platform and property owners. Cybercriminals in the Metaverse can easily impersonate a user by spoofing their identity and taking on their 3D avatar to commit fraud and cause damage to the user’s reputation.

The challenge of whether the person that the metaverse users are interacting with is genuine or not will always persist.

Choosing Virtual over Real

Metaverse may have an adverse effect on human relations with users choosing the virtual world over the real one. This results in fewer physical interactions in the real world and the virtual world becomes a haven for people who do not want to cope with the challenges of real life.

It can also lead to addiction issues, like gaming addiction. In fact, the issue may be compounded due to the immersive nature of the metaverse with kids and teenagers being most at risk. Users of this age group may also find it difficult to balance time between the real and the virtual world.

Lack of Interoperability

Interoperability is the ability to bring together various metaverse platforms, economies, and avatars under one umbrella.

With major players like Microsoft, Meta, and Apple investing massively, it is unlikely that we will see a unified Metaverse. The lack of interoperability might limit users’ access to the various metaverse platforms as different platforms might need different hardware for the users to enjoy an immersive experience. Moreover, questions arise about the possibility and ease of users traversing different metaverse platforms.

Just like HTML is the unifying protocol that allows users to access the internet from any browser, a similar protocol that enables movement and is compatible across devices is needed to traverse the metaverse.

Legal and Ethical issues

As it is still early days for the Metaverse, the question of digital assets, and their ownership is still unclear as is the use of avatars in representing users as their digital twins could give rise to legal and ethical issues.

For instance, when avatars representing users interact in the Metaverse resulting in an altercation or even worse, an assault then what are the criminal laws that need to be applied to such a situation? These kinds of issues need regulations and laws in place to protect the avatar’s rights in the metaverse. This implies assigning a legal persona to an avatar with rights that allow them to sue and be sued.

The more difficult and thought-provoking issues are establishing standards and criteria that differentiate a legal avatar from the real-life person who owns the avatar.


With the Metaverse being touted as the next iteration of the Internet, enterprises will need to plan and strategize for its multiple challenges.

The Metaverse still has a long way to go and what appear as challenges today might well be opportunities that companies and users could leverage to their advantage.

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