UPDATED! EDITORIAL: Minecraft Bans NFT Servers and In-Game Items, Catching NFT Worlds Off Guard

In the wake of the ongoing cryptocrash, and the falling dominoes of crypto firms, I have been spending a bit of time lately learning more about the blockchain space, hanging out in various Reddit communities where such matters are discussed. As I commented on one post:

Crypto culture is kinda fascinating in a train wreck kind of way.

Yesterday, Mojang Studios (the makers of the phenomenally successful voxel-based building game/metaverse Minecraft, which is owned by Microsoft), posted the following announcement on their official blog:

Hello everyone! Recently, we’ve received some feedback from members of the community asking for clarification and transparency regarding Mojang Studios and Minecraft’s position on NFTs (non-fungible tokens) and blockchain. 

While we are in the process of updating our Minecraft Usage Guidelines to offer more precise guidance on new technologies, we wanted to take the opportunity to share our view that integrations of NFTs with Minecraft are generally not something we will support or allow.

This news appears to have come as a most unwelcome surprise to the blockchain gaming company NFT Worlds, which posted the following message to their Discord announcements channel* and to Twitter:

First and foremost – this out-of-nowhere announcement by Microsoft/Minecraft to outright ban all possible uses of NFTs & blockchain tech within Minecraft feels like a step backwards in innovation, and may even have painful downstream effects for them in the long run—we’ll see how that plays out.

Regardless, we’re working through this internally and have all hands on deck brainstorming solutions around the Minecraft EULA changes, as well as outright pivots for the NFT Worlds ecosystem and team if necessary.

Our order of operations in figuring this out is as follows.

We’re working to get in contact with the right decision makers within the Minecraft policy enforcement team as well as the general Minecraft studio to understand the details of this policy change, what the true internal motivators may have been, and how if at all we can find an alternative outcome that’s beneficial to the Minecraft player base as well as Microsoft’s vested interest in Blockchain / NFT technology and GameFi.

In the event after the above conversations we come to the conclusion we can continue to operate, the show goes on as it’s been.

However, if we’re truly banned because of the risk of C&D/DMCA/Lawsuit by Minecraft/Microsoft from innovating on top of the Minecraft ecosystem, we move forward, we pivot.

The first option from here is we transition into our own Minecraft-like game engine & games platform. There’s been dozens of minecraft-like game engines developed over the last decade by various 3rd party teams – These were people wanting to innovate beyond the idea of Minecraft and add their own spin on it. This option means acquiring one of these engines & development teams to join us, and developing on top of it to bring the same vision for NFT Worlds to fruition but with Minecraft & Microsoft entirely out of the picture with no ability to stop us.

The second option is a pivot to a GameFi platform as a service for any game developer or games studio to effortlessly implement the same proven, patent pending, friction removing tech for GameFi we’ve developed over the last year and have intentionally generalized the last 9 months in the event we decided to or needed to branch out into a GameFi platform. All the systems that we’ve already built would be extremely quick and easy for us to pivot to an implementation for anyone to use. The other interesting piece here is as soon as the Minecraft news was announced, we’ve had multiple other metaverse / gamefi projects immediately reaching out to us wanting to use this tech we’ve already proven, strongly kickstarting possible adoption of such a platform. If we go this route, existing NFT Worlds, $WRLD and Genesis Avatar holders would have an equivalent stake via token and/or NFT(s) related to this platform based on their NFT Worlds related holdings once launched.

Like always, we’d love to hear our community’s opinion on everything presented above.

Bottom line, we’re not leaving. We have the community, we have the war chest, and we know we can build.

Here’s more details on that “war chest” they’re talking about (this article is dated February 24th, 2022, well before the crypto crash):

Clearly, people are into it — NFT Worlds has already generated $90 million in trading [on Opensea], even though it gave the 10,000 worlds away for free and only makes money from “royalties and secondary sales.” Worlds are currently going for a minimum of $45,000.

Yes, that’s right—NFT Worlds created 10,000 “fully decentralized, fully customizable, community-driven, play-to-earn” Minecraft worlds, which people have been buying and selling on the NFT marketplace Opensea. Gee, I wonder what those US$45,000-apiece worlds are worth right now, because without Minecraft’s cooperation, they’re pretty much worthless.

Needless to say, over on the blockchain/crypto/NFT snark subReddit community called r/Buttcoin†, people are having an absolute field day discussing this! Honestly, you need to go over there and read through the discussion, it’s quite entertaining. One commenter, after reading NFT Worlds’ announcement above, summarized it hilariously:

TL;DR: We want Microsoft to know they are wrong, and we are innovators. If they don’t allow the project, we will make our own, better Minecraft with blackjack and hookers.

Another Redditor responded:

Wow, imagine running a business totally dependent on someone else, yet being caught unaware on major business decision of this entity on whom you completely dependent upon.

Sounds like just the way people in crypto do business…with zero awareness of whats going on around them.

Seriously…how on earth do you build a company whose business model goes out the window with a single decision by the corporation who RUNS THE PLATFORM THEY’RE DEPENDENT UPON?!?? This is a prime example of a harebrained, half-baked cryptoscheme that somebody hatched up and was able to earn a tidy profit from, selling highly volatile, speculative blockchain-based assets to ignorant customers, who perhaps thought that they would be able to sell them for a profit to the next fool who comes along. It’s maddening.

Minecraft goes on to explain its decision:

In our Minecraft Usage Guidelines, we outline how a server owner can charge for access, and that all players should have access to the same functionality. We have these rules to ensure that Minecraft remains a community where everyone has access to the same content. NFTs, however, can create models of scarcity and exclusion that conflict with our Guidelines and the spirit of Minecraft.

To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies are not permitted to be integrated inside our client and server applications, nor may Minecraft in-game content such as worlds, skins, persona items, or other mods, be utilized by blockchain technology to create a scarce digital asset. Our reasons follow.

Some companies have recently launched NFT implementations that are associated with Minecraft world files and skin packs. Other examples of how NFTs and blockchain could be utilized with Minecraft include creating Minecraft collectible NFTs, allowing players to earn NFTs through activities performed on a server, or earning Minecraft NFT rewards for activities outside the game. 

Each of these uses of NFTs and other blockchain technologies creates digital ownership based on scarcity and exclusion, which does not align with Minecraft values of creative inclusion and playing together. NFTs are not inclusive of all our community and create a scenario of the haves and the have-nots. The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering, which we think is inconsistent with the long-term joy and success of our players.

Amen. 100%! CRYPTO ADDS NOTHING TO MINECRAFT! (I can’t believe I am cheering for Microsoft here…)

It is honestly refreshing to see yet another major corporation draw a line in the sand, and explain so clearly why they are drawing that line! Minecraft is a game, and games are supposed to be fun, people. (By the way, it would appear that Axie Infinity and all the other “play-to-earn” NFT games are bleeding users during this cryptocrash, as they can no longer earn enough to make it profitable. And it’s not just play-to-earm, it’s all the X-to-earn NFT schemes, like the NFT-based running app StepN, whose payouts to users have cratered in just two months.)

As I have editorialized before, a harsh, long, bitter crypto winter is going to shake out a lot of sketchy companies with poorly-thought-out plans, like NFT Worlds.

I suspect that NFT Worlds is going to go through a rough patch…

*To see this message, you will have to join the NFT Worlds Discord, which requires you to jump through a few hoops to verify that you’re a human being. I joined just to get a copy of the announcement, but I might stick around as a lurker, just to see how the company and its users attempt to spin this disaster 😉

†Seriously, if you haven’t checked out r/Buttcoin yet, please do so, along with Molly White excellent website, Web3 Is Going Just Great (the title is meant to be sarcastic), which outlines the latest crises, hoaxes, scams, and fiascoes in the blockchain space, keeping a running total of money lost to date in a ticker in the bottom right-hand corner.

UPDATE July 27th, 2022: Ars Technica has an update on the saga here. Apparently, the NFT Worlds token’s value has plummeted over 60 percent in a week following Mojang’s announcement.

UPDATED! How the Crypto Crash Is Affecting Blockchain-Based Metaverse Platforms: Will a Crypto Winter Kill Off Some Projects?

I have been waiting a while to write this editorial, but I think the right time has come.

(Somebody posted this to the r/buttcoin Reddit, and I had to laugh!)

I have been avidly following every twist and turn of the current crypto crash, following various Reddit communities and scouring Google and Apple News for the reports of the latest crypto companies to fail, taking their investors’ money with them. The chain of dominos continues to fall, and nobody can predict where or when this “crypto winter” will end.

In talking about all this, there’s lot of jargon being thrown around which can sometimes be difficult to understand: smart contracts, DeFi, NFTs, DAOs, etc. The following 7-minute YouTube video explains all these and other terms, and I can recommend it highly (and it can serve as a refresher for the rest of you):

From the moment I first began writing about the blockchain-based virtual worlds and social VR platforms (starting with Decentraland, years before they actually opened their doors to the general public), I have been fascinated by the new crop of metaverse projects boasting some blockchain component. These projects seem to split into two kinds:

1. Projects with Non-Fungible Token (NFT)-based virtual real estate (e.g. Decentraland, Cryptovoxels, Somnium Space, The Sandbox). All such projects tend to have their own cryptocurrency (or use Ether, ETH), and offer a marketplace where you can buy and sell other blockchain-based goods, such as avatar wearables.

2. Projects without NFT land, but with an associated cryptocurrency (e.g. Sensorium Galaxy and NeosVR).

While examples of the second category are few in number, there has been an explosion of projects announced in the first category over the past couple of years. Many of these projects had hoped to duplicate the success of Decentraland, which had the great good fortune to do an Initial Coin Offering at the absolute perfect time, in 2017 raising US$24 million dollars before ever building a platform.

Decentraland’s successful subsequent virtual land auctions (with their frenzied bidding wars for NFT-based virtual pieces of land called, naturally enough, LAND) also attracted a lot of attention and favourable press. This no doubt encouraged other companies to set up similar schemes in an effort to duplicate that success. Among those that have actually delivered a viable product to date are Cryptovoxels, Somnium Space, and the still-in-alpha/beta-testing-but-soon-to-launch platform The Sandbox. Each of these projects inspired similar bidding frenzies for artificially-scarce NFT-based parcels of virtual real estate, in some cases setting records.

The following charts show just how much the value of the cryptocurrencies associated with just these six projects has tumbled over the past three months (all charts are via the CoinMarketCap website):

Decentraland MANA to USD chart (past three months)
Somnium Space CUBE to USD chrt (past 3 months)
ETH (used in Cryptovoxels/Voxels) to USD chart (past three months)
The Sandbox’s SAND to USD chart (past three months)
Sensorium Galaxy’s SENSO to USD chart (past three months)

And here’s one that really hurts: the surge and plunge in value of Neos Credits (NCR) over the past year. At the moment, project development has come to a near-standstill as the CEO fights against the CTO and the rest of the dev team about the role crypto will play in the NeosVR platform (and the matter will likely land up in court for the lawyers to battle over).

It’s still not clear if NeosVR can recover from this fiasco, which breaks my heart because it has such great technology! I do consider this to be the textbook example of how crypto speculation and greed can cause problems with an otherwise stellar platform; without being hooked to NCR, a cryptocurrency which has as yet has no practical use on the platform, NeosVR would still be doing very well! Instead, it is bleeding investors.

In addition, you can see the clear downward trend in both sales volume and average sale price for the following NFT-based properties over time (all taken from the NFT Stats website). Some seem to be doing a bit better than others, but all are down:

Decentraland LAND sales volume and average sale price (past three months)
Somnium Space Land NFTs sales volumes and average sales price (past three months)
Voxels—foremerly called Cryptovoxels—sales volumes and average dale prices (past three months)
The Sandbox’s LAND sales volumes and average sale prices (past three months)

The overall situation is grim, particularly for those who bought cryptocurrencies and NFTs at the height of the market, perhaps expecting to flip them for a quick profit. But, for the countless blockchain-based metaverse projects who hopped on the bandwagon after Decentraland and the other market early movers, the situation is even worse. In many cases, the newer companies expected to raise funds by minting and selling NFTs to investors, often well before anything concrete was built! Examples of such projects include two I have written about earlier this year, Wilder World and VictoriaVR, but there are literally dozens and dozens more such projects, more than I could ever hope to cover in my blog. The prognosis for these newer projects is not looking especially promising, as potential investors head for the hills.

And, sadly, the bullish crypto market also brought out all the scammers who wanted to take advantage of the hothouse atmosphere of crypto investment, accepting money up front for what was essentially vapourware, and then pulling the rug out from under those who had not done their proper due diligence. Greed and FOMO (fear of missing out) drove a lot of ignorant cryptobros to pour money into a lot of projects which, to date, have had little to show for them but a slick website and an active Discord (or Telegram) server where everybody was pumping everybody else up to buy and HODL (hold on for dear life to) their associated crypto and NFT assets.

Some non-financially-savvy people, believing that they were truly on to a sure thing, gambled money they could not afford to lose—their life savings, their retirement funds, even their childrens’ college funds—and have lost everything, or next to everything, in the current bear market, holding near-worthless assets they cannot find anyone to sell to. I keep reading heartbreaking stories in the various subReddits of investors who have lost everything. Many have spoken of suicide, and many Reddit communities have posted resources to support those who are struggling with their mental health as a result of their poor financial decisions.

In the current environment, I believe that any blockchain-based metaverse (or a metaverse platform with an associated cryptocurrency), is going to be in for a very rough ride over the next few months, as governments around the world raise interest rates, and the easy, low-interest credit dries up, and a global recession looms. People are going to retreat to safer investments, fleeing the demonstrably high volatility of crypto and blockchain assets like NFTs. We can expect to see a mass stampede to the exits in some projects, and frankly, not all the blockchain-based metaverse platforms out there will survive.

UPDATE July 14th, 2022: In yet another sign of growing trouble in the NFT space, which has seen sales nosedive in recent months, the major NFT marketplace OpenSea has announced today that it is laying off 20% of its staff.

Blockchain-Based Metaverse Platforms: A New List

HOUSEKEEPING NOTE: The RyanSchultz.com blog will be on an indefinite hiatus, as I am working on a brand new project: writing up a proposal for a VR lab for my university library system! More details here. I’ll be back as soon as I can, folks!

Photo by Shubham Dhage on Unsplash

As a first step in reorganizing and recategorizing my perennially popular list of social VR, virtual worlds, and metaverse platforms, I have separated out a sub-list of those platforms which incorporate blockchain in some way: cryptocurrencies and/or Non-Fungible Tokens (NFTs).

You can check it out here (I put it at the tail end of my original listing).

I did this in response to reader comments and feedback, and I hope you will forgive me if I have forgetten to move a particular metaverse from one list to the other! As I said before, I do plan to continue to write about blockchain-based metaverse projects on the RyanSchultz.com blog, so expect this list to expand significantly this year!

Also, a small housekeeping note: from now on, I also will no longer be writing about any of the “buy a virtual piece of Earth” blockchain projects (e.g. SuperWorld)—here’s what I think about all of those projects. I don’t find these sorts of projects interesting in the slightest, and I believe that all such projects are, at best, ill-advised investments, and at worst, outright scams to part people from their hard-earned cryptocurrency.

Victoria VR: A Brief Introduction

Looking back over the past five years of writing this increasingly popular blog about social VR, virtual worlds, and the metaverse, one decision stands out as among the smartest I have ever made: creating the RyanSchultz.com Discord server.

My Discord now boasts over 650 people; they are fans representing every possible metaverse platform, who endlessly discuss, debate, and argue about all the virtual worlds out there, and the companies building them! Pound per pound, they form the best army of metaverse bullshit detectors on the planet.

And, let me tell you, my crowdsourced metaverse bullshit detectors are having an absolute field day picking apart a new NFT metaverse platform, called Victoria VR, by a Czech company of the same name, located in Prague.

Victoria VR describes itself as “a world of entertainment, discovery, and learning”, which will be based on the Unreal game engine, and expects to first launch on the Meta Quest 2 headset (although they say they have plans to support other headsets in the future). According to their white paper:

Welcome to Victoria VR, the World’s first realistic Metaverse in VR built on the Blockchain, welcome to a world without limitations. Free for everyone to visit and explore, Victoria VR will replace our current experiences of TV, cinema, business communications, education, entertainment, shopping, commerce services, even search and much more.

Most of the white paper speaks in very general, glowing terms about the profitable potential of a blockchain-based metaverse platform, and what an opportunity Victoria VR is, which is, of course. their prerogative, but the white paper is suspiciously skimpy on the actual technical details of the Victoria VR platform itself. This is a red flag.

The “avatars” for Victoria VR pictured appear to be taken from the Unreal MetaHuman system, which is a very clear red flag to me; there is absolutely no way that such data-heavy, ultra-realistic avatars ever would work to scale in any currently-available social VR platform! Using MetaHuman avatars in promotional images and videos is one thing; using them on an actual metaverse platform is quite another. Even a small crowd of them at a virtual concert (for example) would quickly bog down any platform that attempted to implement its avatars using this technology. In the mid-to-distant future, once the tech improves? Sure. Now, or in the near future? No way. As I said, this is another red flag.

(taken from the Victoria VR white paper)

The Victoria VR website and white paper also feature what has got to be one of the sloppiest-put-together comparison charts of social VR platforms which I have ever encountered:

Among the specious categories listed along the left-hand side of this comparison chart is “Algorithmization”, which is defined as the process of converting an informal description of a process or a procedure into a computer algorithm. I’m sorry, but this is hardly a unique feature of Victoria VR! Every metaverse platform (and frankly, every computer program) has algorithmization of processes! It’s just one example of how poor a job whoever was tasked with slapping this table together did.

It’s also riddled with factual errors. For example, VRChat has a blockchain? News to me. When one of the members of the RyanSchultz.com Discord, Enverex, asked about this glaringly obvious mistake on the official Victoria VR Discord server, he was told that he was wrong, and referred to the following Wikipedia article about VRChat:

Enverex points out that, while it looks like VRChat supports blockchain, this is a case where, if you actually open and read the page the Google snippet is referring to, it is very clearly is talking about the old High Fidelity social VR platform in the See Also section of the Wikipedia article, which appears at the very bottom of the entry:

High Fidelity—virtual reality platform featuring low latency, spatialized 3D audio, high-end environments, realistic avatars, and a working economy on the blockchain.

Frankly, this is inexcusably sloppy research by whoever threw this table together, obviously without even bothering to read his source materials!

Enverex also points out:

On other words, Victoria VR just lazily slapped their logo all over a stolen image (I doubt they even bothered to purchase this asset kit!). Here’s a close-up look at both pictures, so you can see the evidence for yourself:

Image used to illustrate the Victoria VR platform (taken from their website)
Art used to illustrate the Neo Shanghai world kit the Kitbash website

The Victoria VR website, white paper, and the Discord server are focused heavily on (pre)selling NFTs for virtual land, etc., and on something which they refer to as Virtual Revolution Staking:

According to the VR Staking FAQ:

Virtual Revolution Staking is our way to generously reward our committed Victoria VR Supporters who want to be part of the Virtual Revolution!

VR Stakers will be rewarded in multiple ways:

• Monthly Rewards
• Dynamic APY
• VR Land whitelisting (VR Lands Tickets)
• Mystery Airdrops
• DAO participation
• Virtual Revolution Staking will fairly redistribute rewards to those users who trust and support our project.

So you’re staking your hard-earned crypto up front, to win an opportunity to be whitelisted for some NFT-based virtual land. Hmmm….nope, sorry, this is insane.

Here’s a video which was recently shown by the company at the Virtuality Paris VR event. which clearly uses pre-rendered footage:

This was confirmed on Twitter and in the official Discord server:

Victoria VR confirms the video is pre-rendered footage (link to the tweet)
(taken from the official Victoria VR Discord server; link)

Enverex: Do you have a video of actual gameplay at all?

oxezoVR [Victoria VR]: I don’t.

Not too long ago, on this blog, I wrote about the battle of the various MetaWorld projects, talking about what appears to be the standard five-step process for so many of these NFT metaverse projects lately:

At this point, based on all three MetaWorlds, plus innumerable other NFT/crypto metaverse projects to which I’ve been giving some serious side-eye, the modus operandi for these sorts of projects seems to be:

Step 1: Buy a bunch of pre-made Unity (or Unreal) assets, the more realistic-looking the better.

Step 2: Create a slick promo video using those assets (or even better, reuse existing video and images used to promote these assets!).

Step 3: Mint a cryptocurrency and some NFTs for assets like virtual land, virtual vehicles, avatar wearables, etc.—whatever you think you can sell to people who don’t know much about the metaverse. (Sneakers, even though you don’t have avatars or even a platform yet where you can wear them? No problem!)

Step 4: Create a slick website with a lot of jargon, and lots of images and videos of the assets you bought in Step 1, to promote your new platform and sell your associated cryptocurrency and NFTs. Appeal to users’ FOMO and use lots of buzzwords like “blockchain” and as many “meta” terms as you can coin!

Step 5: PROFIT! (It doesn’t matter if you can actually deliver a product; you already collected your money in Step 4.)

And based on what I have seen—and what my army of metaverse bullshit detectors has told me—this is exactly the strategy the company building Victoria VR is following.

I’m going to give Enverex the last word here, as he’s the one who has spent the most time looking at this project:

The project seems to be powered entirely by FOMO at this point, as, unlike Decentraland and Somnium, they have no actual product that users can try out. If anyone asked them for any form of demo, they’d point users to an old product they released on the Oculus store which was just a prefab of a tiny gallery room as proof of concept, but it wasn’t proof of anything they claimed. The oddest part though is how no-one really seems to question any of this, users (mostly non-native English speakers oddly enough) are just throwing huge amounts of money at their very long winded whitelisting and lottery system for purchasing land. Land for a platform that literally doesn’t exist yet…

It’s entirely possible that it’s not a rug pull and will actually turn out to be a real project, but the majority of their claims cannot be true so even if they do eventually make something, it can’t be what their site has claimed. It’s funny because if you bring up that it can’t visually be what they keep claiming, their random users keep saying that “they’ll upgrade to UE5” as though that will make their hardware target (the Quest 2) suddenly able to run more detailed VR environments than even a current top-end PC, which obviously makes no sense. But again they appear to be selling to the ignorant masses that aren’t technically literate, so none of them question it. You can’t even take part in their land “presale” if you’re in the US as what they’re trying to do is illegal, so they don’t allow US users to take part.

If, after reading all of this, you are still somehow interested in this NFT metaverse project, you can peruse their website, join their Discord server or Telegram community, or follow them on Twitter. I have duly added Victoria VR to my ever-expanding list of social VR, virtual worlds, and metaverse platforms.

I leave you with my standard warning: do EVERY. SINGLE. SCRAP. of your own research before investing a penny in any blockchain, crypto, or NFT project! Caveat emptor!

A big thank you to Enverex and the other members of the RyanSchultz.com Discord!