Too often augmented reality (AR) and virtual reality (VR) are lumped into the same category together, which speaks to the fundamental lack of understanding about what exactly AR is and what it’s aiming to accomplish. At its most basic, AR is a technology that uses a camera to take pictures videos and then alter them to change how we view reality.

Today, we typically see AR at its most basic in marketing and social media. Something as simple as a Snapchat filter that distorts a face can be considered AR. In the recently popular Pokémon Go app, an image of a Pokémon overlays the smartphone’s camera to make it look like it is a part of the image.  With such simplistic applications of the technology, why then is the technology worth investing millions of dollars into for mega corporations such as Microsoft, Google, and Alibaba?

The difference in the potential applications of AR versus VR is quite stark. Virtual reality technology provides escapism from the world for users, while augmented reality simply changes or ‘augments’ the real world for users. The best way that I personally have heard the two distinguished is this:

Virtual reality has the potential to take the place of our game consoles, our TVs, and our live entertainment while augmented reality has the potential to take the place of our smartphones

The value of AR lies in the ability of the technology to make sense of the world around a user and then supplement and enrich that view of the world using data: literally a heads-up display for everyday life. AR will eventually be able to see what you are looking at and then give you the option to find more information on it. The technology won’t be largely restricted to the entertainment space like VR might.

Companies investing in augmented reality are betting that the technology can be used to augment commerce, business, advertising, marketing, construction, 3D architecture, and much more. Technologies such as Microsoft’s Hololens and Magic Leap’s AR headsets are the first steps towards unlocking AR’s full potential. Whether AR gains and retains enough traction to get that far remains to be seen, but while VR is making waves right now, in the near future, AR most likely has more potential to change how we live our lives going forward.