Editorial: Fuelled by the NFT Boom, Blockchain-Based Virtual Worlds Are Having a Moment—But Will It Last? Is It a Bubble?

A Reuters news article posted today, titled The ‘metaverse’ bet: crypto-rich investors snap up virtual real estate, which first came to my admittedly-distracted attention as a trending news item in my Twitter news feed, starts off as follows:

What do you do with a $69 million artwork that doesn’t physically exist?

That’s the question faced by the Singapore-based investor calling himself Metakovan, who made headlines last month when he bought the digital artwork “Everydays: The First 5000 Days” by the American artist Beeple at Christie’s.

The work is a non-fungible token (NFT) – a new type of virtual asset that has its ownership status and authenticity verified by blockchain. NFTs have exploded in popularity in 2021, with prices skyrocketing.

Metakovan, real name Vignesh Sundaresan, plans to put the artwork on display in four virtual world environments. He is working with architects to design gallery complexes that the public can enter via web browsers or virtual reality technology.

Blockchain-based virtual worlds are definitely having a moment: the following trending news story showed up on my Twitter feed

It is clear to anybody that is paying attention that the NFT (Non-Fungible Token) boom is sparking intense interest and resulting speculation in the blockchain-based virtual worlds where such NFTs can be displayed: Cryptovoxels, Decentraland, Somnium Space (all already launched and seeing more and more business) and The Sandbox (which launched its first phase on March 31st, 2021). It seems like every second room on the hot new drop-in social audio app Clubhouse is about NFTs and how to get into the market.

Market speculation in the first three blockchain-based virtual worlds has only intensified recently, with previously unheard-of trading volumes and rapidly escalating prices as bidding wars break out over virtual properties. Here is a graphic linked to from the aforementioned Reuters article, showing just how suddenly land values have jumped in Decentraland (and I’m quite sure that early investors are rubbing their hands with glee!):

And some big-name companies are being attracted to the blockchain-based virtual world marketplace (quotes are from the Reuters article up top):

In what will be one of the biggest names to join the party, videogame maker Atari told Reuters it planned to launch its own blockchain-based virtual world and would soon announce details.

Online environments are going to be “very very big”, regardless of fluctuations in the price of bitcoin, said Frederic Chesnais, head of Atari’s blockchain division and the company’s former CEO. NFT real estate could one day fetch millions of dollars, he added.

Atari, ahead of its plans to open its own blockchain-based world, has licensed a retro arcade within Decentraland and is due to open a casino.

Among the people interviewed for the Reuters article was the creator of Cryptovoxels, Ben Nolan, who expresses caution in the current feverish NFT market:

“I expect that there’ll be a crypto winter in the next couple of months, the whole NFT boom will explode and then all the value will absolutely collapse,” said Ben Nolan, founder of the virtual world Cryptovoxels.

“Doing NFTs as an investment or as a way to make money is really ill-advised.”

However he does see a future for virtual worlds and NFTs.

“Do I think most people will use virtual worlds? Probably not, but I think a lot of people will and I think NFTs are a big part of that growth,” he said.

“Actually walking around with another person in a virtual space and looking at art together is a really nice way to spend time,” he added.

We can expect that more companies will enter the blockchain-based virtual worlds marketplace, attracted by the possibility of making profits from virtual real estate—whether that real estate is used for galleries to show NFTs or not.

Interesting times! I choose to remain safely outside the fray, peering in occasionally to write the odd blogpost—emphasis on odd 😉 . The following are links to all my previous blogposts written about four of the currently available (or soon-to-be-available) platforms:

Stay tuned for further dispatches from the blockchain-based virtual worlds and social VR platforms! (Yes, both Cryptovoxels and Somnium Space support VR.)

And I’d love to hear from you: Do you hold land on these four platforms? Do you think we are in a financial bubble? Feel free to sound off in the comment section!

We’d love to hear form you!

The Sandbox: A Brief Introduction

Yep, yet another blockchain-based virtual world. This one is called The Sandbox:

Here’s the requisite promotional video:

Basically, you build and animate voxel-based assets, and you can put them up for sale in the store to earn cryptocurrency called Sand (get it?). Their virtual land parcels, 96 by 96 metres square, are called LAND (gee, sounds familiar, doesn’t it?) and the presale starts in eleven days from now, when 166,464 LANDS will go up for sale (with all the expected talk about land scarcity, buy now, supplies are limited, etc. etc. etc.):

The Sandbox looks an awful lot like a cross between Cryptovoxels and Decentraland (there’s no mention of virtual reality support). A potentially interesting twist is their VoxEdit software, which they claim is “the first software that allows you to create your own voxel models, rig them and animate them in no time”. They have an alpha version of VoxEdit available to download for Windows and Mac users.

They also are offering cash rewards to attract game developers for their new platform, from a US$2 million fund called the Game Maker Fund, which will grant amounts from US$5,000-30,000 each to fund up to 100 games:

We are happy to announce the creation of the Game Maker Fund, our exclusive program that will reward the first 100 original game proposals that get accepted. Yes, you read that right: we’re offering free exposure for the games you create in The Sandbox, one of the most anticipated blockchain games of 2019. The Fund will be used to reward and incentivize Game Crafters to submit unique experiences. Don’t worry if you have more than one great idea: there is no limit on the number of proposals that each candidate can submit!

If you want to follow The Sandbox as the project develops (as far as I can tell, they haven’t launched yet), they have accounts on all the standard social media: Facebook, Instagram, Twitter, Medium, Telegram, and Discord.