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Metaverse vs. Web3: What's the Difference?
While Web3 and the metaverse share certain technologies and aspirations in common, they are ultimately pursuing different goals. Web3 focuses on creating a more decentralized and transparent internet through blockchain, while the metaverse describes universal and immersive spaces created with virtual and augmented reality. Let’s unpack that further.
What Is Web3?
“Web3” is the next generation of the internet, one in which individuals have permissionless access to use and own parts of the digital economy. In contrast to Web2 (the internet as we know it today), which is owned and controlled by Big Tech, Web3 runs on a decentralized network of nodes spread all over the world—it isn’t owned or controlled by a single entity, but by the broader community. Web3 applications enable users to engage in peer-to-peer (P2P) activities without going through corporations or any other middlemen.
What Is the Metaverse?
The “metaverse” is a term that describes immersive digital spaces, created using a combination of virtual reality (VR) and augmented reality (AR) technologies. What exactly that translates to in practice is still being defined, and many companies are exploring what shape a metaverse can and should take or whether there will be multiple metaverses.
Three Areas of Differentiation Between Web3 and the Metaverse
Let’s take a closer look at some of the key differences between Web3 and the metaverse, including their fundamental concepts, ownership models, and underlying technology.
Fundamental Concept
The fundamental concept of Web3 is one of removing middlemen: what if you could create digital money without a government? What if you could create a financial product without a bank? What if you could create a B2B company without using tools owned by other big companies that could terminate your service without warning? The concept of Web3 is about removing gatekeepers and creating durable, community-owned systems that can be accessed by anyone around the world.
If Web3 is about changing the power dynamics and ownership of the existing internet, the metaverse is about reimagining how we might interact with digital spaces in the first place. What that means specifically is still evolving—is it interactive digital spaces (like those found in science-fiction works like The Matrix or Ready Player One)? Is the metaverse instead a hybrid space between the digital and the real that leverages AR tech to create more rich and information-dense environments? At a high level, the metaverse is about immersion: how do we bridge the digital to the real and make digital spaces more immersive to users?
Ownership
Web3 facilitates user-owned economies and applications. Web enthusiasts believe that people who contribute to or use Web3 apps should get a share of the economic value that such apps generate. Web3 aims to remove the excessive influence Big Tech has on the internet and put that power back in the hands of users.
The metaverse has no such egalitarian ideals. The goal of metaverse projects is to create immersive digital experiences, but there is less concern about who owns and controls those experiences. For example, private companies like Microsoft and Meta are at the forefront of building the metaverse and setting new industry standards for metaverse interoperability.
Underlying Technology
Web3 is built with blockchains and smart contracts.
- Blockchains are distributed digital ledgers for storing information securely and transparently—anyone can look at a blockchain and verify information on it, and anyone can write new information to it. Public blockchains like Ethereum and Stacks are permissionless; there is no company or controlling entity determining who can access them. Blockchains are the foundation of Web3; you couldn’t make trustless apps if you don’t have a trustless way to store information.
- Smart contracts are self-executing programs that take predefined actions based on predefined triggers. You can create them using Web3 programming languages like Solidity, Clarity, or Rust. Since blockchains do not have central authorities to determine outcomes, smart contracts enforce the rules of user behavior (for example, a smart contract would be used in a DeFi application to force users to abide by a specific loan’s terms). If a blockchain provides a transparent data layer for Web3, you can think of smart contracts as a transparent logic layer, where users can also verify a smart contract’s code and ensure the contract does what it claims to do.
In contrast, metaverse projects are powered by a very different tech stack, namely virtual reality (VR), augmented reality (AR), and gaming engines.
- Virtual reality: VR tech allows you to create or simulate three-dimensional environments that users can experience and navigate through as if they were physically there. For example, a user puts on a VR headset and suddenly they are looking around the surface of Saturn. VR platforms include the open-source A-Frame, Meta's Quest, and Alphabet's Cardboard.
- Augmented reality: AR tech overlays digital information onto the real world to create mixed reality experiences. For example, a user puts on an AR headset, and they can suddenly see a digital person standing in the room next to them. Examples of AR platforms include Apple's ARKit, Alphabet's ARCore, and Unity AR from the Unity AR Foundation.
- Gaming engines: These software development platforms provide developers with tools and resources to create video games. A game engine typically includes a graphics engine, audio engine, scripting tools, and other components. In the metaverse industry, game engines can help teams build metaverse experiences more quickly by handling low-level programming tasks. Examples of popular gaming engines include Unreal Engine, CRYENGINE, and Godot.
Use Cases of Web3 and the Metaverse
These two different tech stacks have very different use cases for individual consumers. Here’s what Web3 and metaverse can mean in practice (including but not limited to!):
Web3 Use Cases
- Decentralized finance (DeFi): DeFi is a fast-growing sector of Web3 that is creating a more open and transparent financial system. DeFi applications enable peer-to-peer networks without traditional financial intermediaries that operate 24/7/365. Some examples of DeFi applications include decentralized exchanges like SushiSwap, lending platforms like Compound, and investment platforms like Syndicate.
- Content sharing and ownership: In Web3 content platforms, creators can be better rewarded for their work and have more control over its use. For example, content platforms like Mirror and Sigle empower writers to build new revenue streams around their content. Platforms like OpenSea, Rarible, and Gamma enable creators to sell digital artwork and other collectibles as NFTs (non-fungible tokens).
- Decentralized social networks: Web3-powered social networks could reduce the influence of centralized social media platforms (like Meta, Twitter, and others) and give users more control over their data and content. Some examples of decentralized social networks include Mastodon, DeSo, and Scuttlebutt.
Metaverse Use Cases
- Gaming: The most prominent use cases of the metaverse today are in the gaming industry. Metaverse projects like Roblox, Sandbox, and Meta Horizon Worlds are pioneering new immersive gaming experiences shared between players in virtual environments.
- Virtual events: The metaverse is also being used to create virtual events and conferences that are more immersive and interactive than traditional online events. Travis Scott's Fortnite concert and VanMoof's e-bike launch are examples of how the metaverse could enhance the experience of event attendees.
- Virtual commerce: The metaverse can be used to create virtual stores and design shopping experiences that are more engaging than traditional e-commerce. The fashion industry already experiments with virtual shopping through projects like the Gucci Garden Experience, Balenciaga's Fit Sets, and Selfridges' Electric/City.
How the Metaverse and Web3 Will Impact Each Other
It is possible to have a Web3 platform without any elements of the metaverse and vice versa. However, in some cases, Web3 and the metaverse are intertwined, and both industries will likely continue to influence each other as they go mainstream and enable new forms of digital economies.
Over time, some metaverse projects may rely on the underlying technology of Web3 to power their concept of the metaverse. For example, you can imagine how data transparency and digital scarcity may bring value to certain features of an interoperable metaverse, such as virtual real estate or clothing. Similarly, Web3 may embrace the metaverse’s immersive environments. It’s like the early days of the internet: it’s unclear how exactly these technologies will evolve, but it is easy to envision worlds in which they are compatible.
Should You Build on Web3 or the Metaverse?
If it's not already clear based on what you've read, the answer depends on what you want to build. Both Web3 and the metaverse have captured the public's eye, and both will play foundational roles in the digital world in the future.
If you care about a decentralized future, we recently wrote a free comprehensive guide to help people start their Web3 development journey. It covers everything you need to know about Web3 ecosystems, programming languages, infrastructure, and more.
