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Facebook CEO Mark Zuckerberg is betting his company’s future on the metaverse.

“I believe that metaverse is the next chapter for the internet,” he said on October 28 during Facebook’s annual Connect conference, where he announced that Facebook had changed its name to Meta to reflect its commitment to all things metaverse. “And it’s the next chapter for our company, too.”

If you have no idea what the word “metaverse” means, you’re not alone. Until now it’s been a term mostly used by futurists to describe the next frontier of computing and the web, following the advent of personal computers and smartphones.

Here’s what you need to know about it.

What is the metaverse?

The concept of the metaverse was popularized in the science-fiction novel Snow Crash by Neal Stephenson to refer to a digital universe that can be accessed through virtual reality. It’s a frequently used plot point in many recent works of science fiction, such as the Matrix films and the novel and movie Ready Player One.

The metaverse is portrayed in popular media as a fully immersive online realm that looks similar to the real world but is computer generated. People can flip back and forth between the physical and virtual world through VR headsets or, as in the Star Trek: The Next Generation television series, via custom rooms in which real people can interact with lifelike holograms.

What is the state of today’s metaverse?

Today’s technology is still isn’t good enough to create lifelike virtual worlds. Although people can immerse themselves in digital environments through VR headsets, such as Facebook’s family of Meta (formerly branded Oculus) devices, these environments are more akin to video games.

Some current video games such as Fortnite have metaverse-style attributes—users can direct customizable digital characters who can chat with other players. But they must still play Fortnite using conventional computing devices like PCs, smartphones, and game consoles.

In the early 2000s, startup Linden Lab debuted Second Life, a sort of game that provided a persistent, online world accessible through computers. Users could create digital homes, play games, and chat with one another, and even buy and sell virtual clothing. But its popularity declined over the years with the rise of smartphones, though it still has a small and loyal fan base.

What is Facebook’s vision of the metaverse?

Zuckerberg says the metaverse is the next evolution for social networking, moving past static user profiles that let people merely post comments and photos. To reach it, people would need to wear VR headsets or augmented reality glasses that superimpose the digital realm onto the physical world. There could also be lifelike holograms beamed into the real world from cutting-edge projection systems.

“When you play a game with your friends, you’ll feel like you’re right there together in a different world, not just on your computer by yourself,” Zuckerberg said. “And when you’re in a meeting in the metaverse, it will feel like you’re right in the room together making eye contact, having a shared sense of space, and not just looking at a grid of faces on a screen.”

Architects would be able to display digital building designs in their physical offices. Friends would be able to use the metaverse to attend concerts without actually having to be at the physical location.

People could use several digital avatars to represent themselves: a more serious avatar for work, a laid-back and cartoonish one for hanging out with friends, and a fantastical one like a robot when playing video games.

New economic systems, based on cryptocurrencies and the digital collectibles known as NFTs, would let people buy and sell goods and services.

The metaverse would also change how people interact with smartphones or AR glasses, Zuckerberg said. People would be able to use hand gestures to “say a few words or even just make things happen by thinking about them.”

Are there profits to be found in the metaverse?

Facebook’s idea for the metaverse is far from realized. It will take years, if not decades, to be fully realized—if it ever is.

Zuckerberg didn’t indicate when his company would be able to turn a profit from its metaverse business. He would only say that “within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.”

Earlier last week, Facebook said that its spending on the metaverse would erase $10 billion from its overall profits in 2021.

Zuckerberg said nothing about the future of Facebook’s core online ad business in the metaverse. Presumably, the company could make billions of dollars showing people ads in the metaverse that are targeted to them based on what they do in the virtual world.

Zuckerberg pitched the need for outside developers to build products for Facebook’s metaverse, such as games, concerts, and other activities to make it akin to the real world. Theoretically, Facebook could take a cut of any money that developers make, just as Apple and Google charge developers fees for selling apps in their app stores.

The metaverse is Facebook’s opportunity to dominate the next frontier of computing, perhaps even establishing the metaverse equivalent of an app store before its rivals can. The results could be profoundly lucrative, or it could be like Second Life, where the reality fails to live up to the hype.