Centralized vs. decentralized: Two models for the metaverse

Since the early days of the internet, much thought and imagination have gone into how this technology could change the ways people interact. As online interactions become more complex and interactive, the line between the virtual world and the real world could very well blur. Immersive environments that offer a shared online space with potentially meaningful interactions have begun to emerge, and these spaces are referred to as the metaverse.

As the concept of the metaverse continues to evolve, so does its potential importance. Understanding the different approaches to the metaverse can help you appreciate their applications and stay abreast of new technological advances.

The metaverse is in its infancy and its possibilities are still being explored. However, two models for the core framework of the metaverse have emerged, each with its own pros and cons: the centralized and decentralized metaverse.

Centralized model 

In the centralized model of the metaverse, experiences are hosted on a controlled platform. Though users may have a fair degree of freedom in what they do and create, the overall experience is curated by a central entity. This host acts as a governing body that has full control over its particular metaverse platform as a whole. As such, it can access all of the data that passes through its servers, as well as determine who is allowed to access its infrastructure.

The centralized model is currently the basis for many online persistent world video games, such as World of Warcraft and Roblox

Pros and cons of the centralized model

Metaverse experiences that use the centralized model are controlled by a governing entity, which has an incentive to offer a secure, stable experience to encourage users to participate. But because the governing entity controls access to its metaverse, questions as to who owns data, how such data is used, and the security of such data generally depend on the preferences and sophistication of the governing entity. 

Decentralized model

Another metaverse approach is the decentralized model. In this approach, rather than the experience being hosted from a central server, users share information between nodes, which is similar to how a blockchain operates using a peer-to-peer network. Communities that want to offer a more transparent platform than the centralized model typically use the decentralized model.

The decentralized model also offers a more customizable experience for those who use it, since the code is often open-source. This lets users see how the core program works and enables them to make their own content and engage with the virtual world on their own terms. Linux is a good example of a legacy decentralized platform. The original codebase is protected, but it can be freely modified by users to create entirely new operating systems.

Pros and cons of the decentralized model

Because users send encrypted information through a decentralized blockchain, all nodes in the network carry a consistent record of activity. Since this data is encrypted and distributed, information is relatively secure and difficult for hackers to access or modify. This also helps avoid data breaches through user error, because private info isn’t stored on a central server.

Still, users need to be vigilant of private information loss through social engineering attacks. Without a single governing entity, users may not have the security of an admin attempting to prevent this type of activity.

Who uses the centralized model?

Major businesses such as Meta, Epic Games, and VRChat employ a centralized model for their excursions into the metaverse. This gives them complete control of their platforms and ensures they can offer the services they want. This also offers advantages to the company running the metaverse platform since they can make money through additional services and advertisements.

Who uses the decentralized model?

Because of its openness and freedom, the decentralized model appeals more to certain communities. Developers who argue that the decentralized model is a more secure approach have set out to create standards that an ideal metaverse should meet.

Microsoft’s Minecraft represents an application of the decentralized metaverse model. Users are free to host their own servers and modify the game as they like, all while engaging with others in an interactive virtual world. Though Microsoft maintains and sells Minecraft, they don’t control what users do in the game.

Is one model better than the other?

The needs of a metaverse application vary quite a bit by what it aims to provide for customers. Since both approaches offer different attributes, the goals of the specific metaverse platform will dictate which model is the stronger choice.

Additionally, as the metaverse is still in its early stages with an uncertain future, many of the implications of these two approaches are still to be discovered. It’s possible that an even better alternative exists that is yet to be invented.

Do metaverse users favor one or the other?

Since each metaverse model presents distinct strengths and weaknesses, users often have their own opinions on which approach they prefer. Some users may find they enjoy the qualities of one model, while others may not have a strong opinion either way. 

Some users may not understand the differences enough to have a preference. Furthermore, the concerns of commercial users and personal users may be different due to their interests in the platform.

Commercial users

Since the centralized model offers more control for the host, a commercial user may find it more profitable to partner with a metaverse service that uses that approach. Additionally, the centralized experience makes it easier to reach a user base since the host has more control over how the space is used. This makes it easier for brands to hold promotions, such as virtual concerts in Fortnite.

However, the centralized model may face greater challenges in protecting user privacy, which commercial users may see as an unnecessary risk that the decentralized model could alleviate.

Personal users

Some personal users may prefer the increased freedom offered by a decentralized model. Tinkerers and creative types may enjoy the ability to customize their experiences and have more control. Other users, however, may find value in the centralized model, since it offers more security through increased host accountability and the potential for a less fractured user base.