Tag: Cryptocurrency

Editorial Rant: Yet Another Bullsh*t Article About the “Metaverse” by Canadian Business Magazine (And Why All Metaverse Companies Are in Danger of a Widespread Negative Backlash by Consumers)

Have you read? How the Crypto Crash—and Meta’s Missteps—Are Souring the General Public on the Metaverse

A billboard for the NFT “metaverse” Upland, in the New York City subway system;
I wrote about Upland and its ilk in this editorial
(image source: posted to the Buttcoin crypto snark subReddit)

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page itself is actually titled Buying Real Estate in the Metaverse Isn’t Cheap; if you should hit a paywall, here is an archived version).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.

UPDATED! Editorial: How the Crypto Crash—and Meta’s Missteps—Are Souring the General Public on the Metaverse

As somebody who writes about social VR and flatscreen virtual worlds on this blog, with a popular Discord server packed with metaverse fanatics and a front-row seat on pretty much everything that has been happening in this space, let me tell you, the past twelve months have been a wild ride. You can even see it in my blog statistics of the number of visitors and views the RyanSchultz.com blog has attracted over the past year:

See that surge from October through March? In October, Mark Zuckerberg announced in a Connect 2021 keynote that Facebook would rebrand as Meta, and would focus on realizing his vision of the metaverse. This also coincided with a crypto speculation boom, where people and companies were frantically bidding for artificially scarce NFT-based plots of land in various blockchain metaverse platforms.

Together, these events sparked a greater awareness among the general public of the metaverse (as indicated by a corresponding increase in traffic to my blog). However, it would appear that the ongoing crypto crash, combined with Meta’s recent woes and missteps, are causing people to sour on the concept. (And by “people”, I mean the general public, not the metaverse fanatics, content creators and world builders whom I tend to hang out with!)

As an illustration of this, I would like to focus on a recent announcement made by Mark Zuckerberg, about the expansion of their flagship consumer social VR platform, Horizon Worlds, from Canada, the U.S. and the U.K. into two new countries, France and Spain:

The first thing I think of when I look at this picture is: hoo boy, somebody working in Meta’s PR department is gonna get fired! You’re trying to sell people on Horizon Worlds with this unappealing, uninspiring, and frankly ugly image on Twitter?

The response to this on two different subreddit communities on Reddit, r/technology and r/Buttcoin, proves to be quite illuminating. (By the way, r/Buttcoin is the blockchain, crypto, and NFTs snark community, where we cryptoskeptics and critics love to discuss and dissect the latest shenanigans, antics, and scams in that world!)

Here are some of the better comments on the r/technology post, sparked by Paul Tessi’s biting August 17th, 2022 Fortune article, Does Mark Zuckerberg Not Understand How Bad His Metaverse Looks?

It looks like Mark Zuckerberg watched Ready Player One and thought he would be able to recreate that universe with MS Paint.

“Looking forward to seeing people explore and build immersive worlds!” :: “Work in my content mill, peasants.”

The more money they dump into this dumpster fire, the better chance Facebook finally collapses into the abyss. So keep doing it Zuck.

One much-upvoted comment reads as follows:

No one is building a $1500-2500 PC with [a] dedicated GPU to add a Facebook $600 VR headset to attend work meetings in a virtual space that looks like a kids CGI series from 2004 at a mass adoption level, where the majority of the public would use it daily for 8 hours at work then again for another 4-6 hours “for fun” at home, as the Meta dystopian dream suggests.

Meta has already been subsidizing the costs of their currently meh headset, which they just increased the prices of, as they were losing too much money.

For this to work, the hardware has to be good enough for grandma to be able to buy it on a pension, put it on out of the box and it just works, and it does not make her sick to her stomach in 5-20 minutes due to the low frame rates and quality.

That’s the barrier of entry to the space you need to be able to target… if that old guy at your office struggles with getting their mic to work on MS Teams for a video call every day, as the manager he is not going to order $100,000 worth of gear for your department that is hard to setup and use to meet in the metaverse.

This thing is dead on arrival, but Facebook is also dying/dead in it’s current form, so this Hail Mary [pass] is all they have.

In the August 17th Fortune article which spawned these responses, reporter Paul Tassi writes:

The thing is, this happens all the time with Zuckerberg and his metaverse because Horizon Worlds has looked terrible since its inception and has barely gotten any better over the years, where its avatars still look like Miis from 2012 and they still don’t have legs.

Granted, I understand that showing 2D screenshots of VR is difficult, and that VR generally lags behind traditional console and PC gaming in terms of graphics. And yet that doesn’t change the fact that even within VR, Horizon Worlds is one of the worst-looking offerings I have seen, and that Meta has spent something like $10 billion chasing its Horizon, VR-centric version of the metaverse, even embarrassingly changing their company name to reflect that. And…this is the result.

Meanwhile, here are some of the opinions of the cryptosnarkers over on r/Buttcoin:

If I was a Meta stockholder I would be selling the minute I saw that screenshot.

He (and many others) are hoping that nobody remembers Second Life ever existed, let alone that it still does. It has a dedicated audience of somewhere between half to one million users and that’s kinda it. I suspect the future for “the metaverse” is similar.

One r/Buttcoin member posted the following detailed comment:

This is the part I don’t understand. Any “meta” style environment will be incredibly limited in terms of graphics and gameplay due to the need to have a high number of players at once. So who is the target audience?

• Someone looking to play a game is going to go with something like Grand Theft Auto V (and continue to move on to the next biggest thing when they come out).
• The live concerts! aspect of the website seems equally absurd given the graphical limitations and that this would be less entertaining than watching a concert on TV.
• Your casual Farmville-style person isn’t shelling out hundreds of dollars for a VR headset.
• For their “practical” concepts like virtual stores, it seems to invalidate the concept of buying metaverse land as either the system will allow for fast travel style movement (making “premium” land a joke), or not allow for this travelling and completely turn off their customer base for this.

I just don’t see where the interest comes from.

And I chuckled at this wag’s opinion:

Second Life managed to survive because it fostered a community of weirdo people who fetishized the environment. I think the only person who fetishizes Facebook’s metaverse is Zuckerberg.

Absolutely SAVAGE! I live. Somebody else posted this gem to the r/Buttcoin subreddit:

Even worse, the cryptobros are starting to dunk on the metaverse, notably Shark Tank billionaire investor Mark Cuban. According to an August 8th, 2022 report in Fortune:

Mark Cuban, the billionaire Dallas Mavericks owner and avid crypto enthusiast, is not sold on the metaverse.

“The worst part is that people are buying real estate in these places. That’s just the dumbest shit ever,” he told the crypto-themed YouTube channel Altcoin Daily this past weekend.

I’m quite sure that the various blockchain-based metaverses like Voxels (formerly known as Cryptovoxels), Decentraland, Somnium Space, and The Sandbox, all of whom have seen the value and the trading volume of their NFT-based real estate decline during this crypto winter, were not expecting the ridicule and disdain of crypto influencers themselves! After all, the crypto crowd are main target audience of these platforms, not your average non-crypto user. You know things are getting weird when the cryptobros start to turn on each other!

So, what does all this mean? Well, it looks as though the concept of the metaverse, at least among the general public, is going to sustain some reputational damage, at least in the short term (12 to 24 months). Perhaps it was inevitable that there would be such a swing from irrational metaverse exuberance to equally irrational metaverse distaste, even disgust.

I am reminded of the Gartner technology consulting group’s well-known Hype Cycle, where we appear to be rapidly moving from the peak of inflated expectations, to the trough of disillusionment:

The five steps of the Gartner Hype Cycle (source: Wikipedia)

Also, this “trough of disillusionment” means that it’s going to be harder to sell consumers and businesses on the metaverse. This will apply both to behemoth corporations like Meta, Apple, and Alphabet (the parent company of Google), as well as to much smaller metaverse-building companies. As I have said before, not all platforms currently being worked on will survive this rough period.

It is possible, perhaps even likely, that only a handful will achieve dominance in this ever-evolving market, leaving the other firms to fight over the leftover scraps. Of course, some companies will be savvy enough to focus on a profitable niche market, such as the surgical training platform FundamentalVR, which recently received another venture capital infusion of US$20 million.

So, as Bette Davis once memorably said in the movie All About Eve: “Fasten your seatbelts…it’s going to be a bumpy night!”

UPDATE August 19th, 2022: As further evidence of the antipathy towards Mark Zuckerberg’s latest announcement, Zack Zwiezen wrote this scathing report for Kotaku, titled Mark Zuckerberg’s Soulless Metaverse Avatar Has Me Worried About Our Digital Future:

Earlier this week, the alien-wearing-a-human-skin-suit known to us as Mark Zuckerberg posted a VR selfie from inside his company’s metaverse project, Horizon Worlds. The selfie showed off the Eiffel Tower and was meant to announce that his metaverse is expanding to more countries. Instead, however, people immediately began dunking on the terrible picture, the ugly avatar, and how it all looked like it fell out of a 2005 edutainment game…

And that brings us to 2022, where Zuckerberg’s avatar is a legless knock-off of a Nintendo Mii with some really weird buttons and the eyes of a corpse. And this isn’t just how Zuckerberg looks, this is the way all avatars appear in Horizon Worlds. I’ve played enough Horizon Worlds to tell you that the missing legs quickly cease to matter. But the lack of style and the cold, dead aesthetic never goes away.

Sure, part of the reason these avatars and worlds look simple and ugly compared to modern video games comes down to the limited VR hardware in Quest 2 and Facebook’s desire to make VR content that can run on as many devices as possible.

On the other hand, I can find Nintendo DS and Sony PS Vita games with better, nicer-looking art and models than what we’ve been shown so far in Facebook’s metaverse. I also don’t think you can blame the people making this stuff, as I assume they are more than capable of doing better and more vibrant things. But more and more, it seems that isn’t what Meta and Zucklehead want. Instead, they are focused on making a product that can be consumed by the masses and which lacks any defining characteristics in an attempt to get more people to dive in.

This is the exact opposite approach we see in more community-driven VR metaverses like VR Chat, which looks better and feels warmer and more inviting. In comparison, Horizon Worlds looks like an animated video I’d walk by in some fancy hospital while I look for the bathroom.

And if this bland and ugly metaverse is the future Mark Zuckerberg wants and is investing billions of dollars into, I’m worried that it could end up winning out over other, better alternatives simply because he has the money and resources to squash or buy up competitors. Well, if it does win out, at least I’ll be able to skip it and not buy a new VR headset.

Yee-OUCH!!!

Also, as further evidence of the distress in the entire cryptosphere, Bloomberg reports that ad spending by the crypto firms has absolutely cratered:

Spending by major crypto firms, including the trading platforms Crypto.com, Coinbase Global Inc. and FTX, fell to $36,000 in July in the US, according to ISpot. That’s the lowest monthly total since January 2021 and is down from a high of $84.5 million in February, when the industry flooded the airwaves around the Super Bowl.

Again, Yeee-OUCH!!! And it looks like things are not going to get better anytime soon, as inflation roars and recession looms. People have more important things to worry about (like keeping food on the table and a roof over their heads) than buying virtual real estate on the blockchain!

In December 2021, Republic Realm spent approximately US$4.3 million worth of land in The Sandbox, setting a record for the most expensive land sale in the metaverse (more about Republic Realm here). It would appear to be highly unlikely that Republic Realm, or any of the other investors who bought NFT-based plots of virtual land at the height of the boom market, are going to be able to earn a profit anytime soon.

Has the bottom fallen out of the NFT-based metaverse market? And what does this mean for the concept of the metaverse in general? Stay tuned!

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.