Have you read? How the Crypto Crash—and Meta’s Missteps—Are Souring the General Public on the Metaverse
I have been trying (dear Lord, how I try!) to stay away from what seems to be an unending litany of bad news lately, but last night I slipped up and opened the Apple News app on my trusty iPad, which promptly spit up the article which is the topic of today’s cranky editorial. (It’s a bit old now, but it’s the first time I read it.)
The piece, written by Katie Underwood on July 7th, 2022, for Canadian Business magazine, is the perfect example of metaverse bullshit that is currently circulating in the news and social media, and I have had it up to here with what passes for accurate reporting on the topic. Honestly, I swear, if this keeps up, I fear that the word metaverse itself will become so tainted that the general public will run the other way when it is mentioned! (And Mark Zuckerberg and his many missteps trying to pivot Meta into a metaverse company are not helping, either.)
The title of the article is Your Next Home May Be in the Metaverse (although the web page itself is actually titled Buying Real Estate in the Metaverse Isn’t Cheap; if you should hit a paywall, here is an archived version). The article starts with a profile of digital artist Krista Kim, who built the home of her dreams—and then apparently promptly minted an NFT of it and sold it:
“I imagined creating a house that would heal me,” she says. She also hoped she’d find a buyer. “The question was: Would anyone else understand what I was selling?”
As it turns out, someone did. Kim’s futuristic dreamscape sold for approximately US$512,000 in March of 2021. The metaverse is a loosely but increasingly understood shared virtual space, accessible via smartphone, goggles or headset—and it’s the newest frontier in the global real estate blitz. The sale of Mars House, a 3-D file rendered using the video game software Unreal Engine, marked the metaverse’s first-ever NFT-based residential transaction.
Already, at the very beginning of the article, I am ready to tear my hair out. First, THIS IS NOT THE METAVERSE! The artist built a home using Unreal engine, but it is simply a three-dimensional object, which needs to be imported into an actual metaverse platform (e.g. VRChat) in order to be used! A CNN article about this transaction correctly reported:
The new owner paid digital artist Krista Kim 288 Ether — a cryptocurrency that is equivalent to $514,557.79 — for the virtual property.
In exchange, the buyer will receive 3D files to upload to his or her “Metaverse.”
So yeah, the fool who paid half a million U.S. dollars for this house still has to find a place to park it before inviting his or her friends over for a virtual barbecue.
Second, it is far from “the first NFT-based residential transaction”, which Katie Underwood would have known if she had bothered to do a little research before writing this article. Blockchain-based metaverse platforms have been buying and selling NFT-based virtual land parcels for years now! Decentraland, for one, began selling land back in 2017, and yes, some people have built virtual homes on that land.
With my teeth firmly set on edge, I continued reading, to find yet another section of Katie’s article which raised my blood pressure a notch:
Like terrestrial homebuyers, users keen to buy or sell real estate in the metaverse will have to go through a rigmarole not unlike the one for bricks and mortar. Right now, land sales in the metaverse are typically concentrated within the “Big Four” platforms—Decentraland, The Sandbox, Somnium Space and Cryptovoxels—which are developed and owned by users. (To date, their combined total of virtual plots is just under 300,000.)
…aaand once again, here’s yet another blinkered reporter writing an article that completely overlooks the fact that metaverse platforms like Second Life and Sinespace have been doing brisk business in buying and selling virtual real estate for years, in some cases decades, without the use of blockchain, crypto, or NFTs! (I wrote about this at length in an earlier, similarly cranky editorial: Why Focusing Exclusively on Blockchain-Based Metaverse Platforms Ignores the Bigger Picture, and the Rich and Vibrant History of Social VR and Virtual Worlds.)
The article continues:
Even in the metaverse, location is everything. In Decentraland, neighbourhoods are designated for specific activities; for example, there’s Festival Land (for live music events), University (for education) and District X (for clandestine dating adventures and adult-themed e-stores). Its fashion district is of particular interest to the Metaverse Group, a Toronto-based virtual-real-estate company that scooped up more than 100 of the area’s 16-by-16-metre parcels for US$2.4 million last November.
Also, “last December, one of Snoop Dogg’s most ardent fans dropped US$450,000 for a plot next to the rapper’s mansion in The Sandbox, a popular gaming platform.” Again, these quotes make me want to tear my hair out! Listen to me, people: LOCATION IS NOT EVERYTHING. For example, in Decentraland you can click on a URL with the exact coordinates of the parcel of land that you want to visit, which will take you directly there. Any metaverse platform worth its salt offers you some form of teleporting from place to place.
And—as we have seen before with previous failed celebrity-endorsed metaverse projects like Staramba Spaces, which hooked its wagon to Paris Hilton—spending a fortune just to be “next to” a rapper’s virtual home is just plain fucking stupid. (Staramba Spaces was a complete and utter failure, but Paris Hilton has since moved on to other crypto projects, from what I understand. It’s never the celebrities who lose money on these harebrained schemes; they get paid in filthy but stable fiat currency, up front. Ask Matt Damon.)
The idea of one virtual piece of land being “worth” more than another due to its location is patently absurd, an idea first brought you by the NFT-based metaverse companies who were only too eager to incite FOMO-driven bidding wars during the crypto bull market which has now cratered so spectacularly!
I wonder how the Metaverse Group is feeling about that particular $2.4 million-dollar purchase, on the other side of a cataclysmic crash. Or another company called Republic Realm, which shelled out a cool $4.3 million for virtual property in The Sandbox. They are among the tens of thousands of corporate and personal investors whom I predict are going to be waiting a long, long time to see any profits from their expensive virtual land, no matter what they build there. And good luck trying to flip it to the next Greater Fool…Fortune reports that trading volume on the leading NFT marketplace OpenSea is down a staggering 99% since its peak, only a short four months ago.
I could go on, citing other parts of the Canadian Business article that drive me insane, but I’m done enough ranting for today, and you get my drift (you can go read the rest of the article yourself if you want). I need to go put my feet up and listen to some Enya to calm down. If I sound absolutely and completely fed up about all this, it’s because I am. THE METAVERSE BULLSHIT HAS GOT TO STOP, NOW.
Look, I have no problem with the idea of a blockchain-based metaverse, but the entire ecosystem and environment around it have now become a toxic cesspool of scams, frauds, and rugpulls. And all that negative attention is dragging down even the legitimate players in the metaverse space. Frankly, things are now getting to the point that whenever the general public hears the words crypto, NFT—even metaverse—they start gingerly backing towards the exit door, because so many scammers and other bad actors in the blockchain space have tainted the concepts themselves!
It doesn’t matter if there are actually working blockchain-based metaverse platforms out there, like Cryptovoxels, Decentraland, and Somnium Space (soon to be joined by The Sandbox)…the bad actors are like a pervasive rot that has set in, damaging their credibility merely by association, and potentially negatively impacting their future operations. (And God help those companies who are trying to set up new blockchain-based metaverse platforms during this crypto winter!)
For example, NeosVR is the perfect example of a truly wonderful, cutting-edge metaverse platform that has been effectively hamstrung by what happened to Neos credits (NCR), NeosVR’s associated cryptocurrency.† The resulting deluge of attention of the cryptobros earlier this year completely changed the tenor of the Neos community, causing great divisiveness and conflict, and finally, a cynical pump-and-dump by a cadre of investors (who were impatient for profits) eventually led to NCR becoming near-worthless. I had started what was intended to be a multi-part series of blogposts to cover the entire sad saga at length, but unfortunately I got too busy to complete it in a timely way.
However, the prolific VR YouTuber ThrillSeeker has done an excellent 20-minute overview video, which does a much better job than I could do to explain what befell Neos:
The Twitter user Coinfessions (with over 100,000 followers) reposts items submitted anonymously to a website form, and let me tell you, the reading is WILD, people. And at times heartbreaking. Here’s just one example from the Twitter feed:
See what I mean? I swear, between what’s been going on in the crypto crash, and companies like Meta stumbling around trying to build the metaverse and getting roundly criticized for not getting it, I’m afraid that the term metaverse is going to get an extremely negative connotation…and then all of us will be the poorer for it.
Think about it—what do you want the average person to think of when you talk to them about the metaverse? Because I can tell you, pieces like this article from Canadian Business are not helping matters out there, in the general public’s minds. More and more people are starting to ridicule the entire concept of the metaverse, either ignorantly equating it with Meta’s soulless Horizon Worlds platform, or else associating it only with the NFT metaverse platforms, many of which are now facing tougher times as greedy speculators (who thought they could make a quick buck) get burned and flee the market, never to come back.
And, ultimately, those people (Joe or Jane Average on the street) are the people we are going to need to the sell the metaverse to in order for it to eventually take root, and take off, in any way beyond existing uptake.
Feh, enough bullshit! Time for some Enya…
† UPDATE Sept. 7th, 2022: I had originally written that Neos credits had not even been implemented yet as an in-world currency in NeosVR, but I have been told that this is not strictly true. Apparently, Neos credits, while underused, had been implemented and usable for user-to-user transactions (e.g. tipping) for years, and a bit more recently Neos had added features like buying and gifting storage space using Neos credits. So I stand corrected! Thank you to the person who reached out to me to correct my mistake.