Have you ever thought that is was cool when Tony Stark used holograms that he could manipulate? Today, we can make holograms, but we have to use a computer to interact with them. Utility Fog is an invention underway that would take this application to a new extreme. It would create "intelligent matter" that can process reality, and act accordingly. If you told each particle is was soft matter, it would be easy to manipulate. Each dodecahedron particle has a sensor, able to see movements in the real world and show an effect. Similarly, we could use the same type of nanotechnology for medical and recreational purposes. It is being researched to somehow analyze the brain and somewhat "upload" your brain to the internet. Although I, personally, don't see this as a practical application, I do think that sensors and transmitters could make a virtual reality very similar to the real world, making a better experience.
Source:
http://www.thenanoage.com/virtual-reality.htm
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