Landlords, property taxes, and zoning permits in a virtual world

This article was contributed by Louis B. Rosenberg, Ph.D., CEO of Unanimous AI.

The concept of land ownership is so ingrained in our culture, it’s easy to forget that the practice has only been pervasive in North America for a few hundred years. For 10,000 years before that, the millions of people who lived on this continent felt no reason to think of land as something a person could own.

Why mention this in a piece about the metaverse?

Because land ownership, like many of the social norms that govern our lives, is a cultural choice, not an inherent requirement of a well-functioning society. And yet it is quickly becoming a central element of many metaverse worlds. 

Is this the right approach? Maybe, but it’s worth noting that land ownership has driven inequality throughout history, concentrating wealth and power within small groups of elites to the detriment of everyone else. And yet metaverse developers, who have the power to invent totally new worlds from scratch, have seized upon this old-world norm by selling NFT real estate. In fact, numerous developers have made the sale of virtual real estate a key premise of their platforms. 

This is ironic because many of the land-selling platforms are forward-thinking Decentralized Autonomous Organizations (DAOs) that aim to distribute power to their members rather than centralize power in a corporate hierarchy. I am a big fan of DAOs and their goal of flattening organizations, but the recent craze over virtual real estate is likely to centralize power in the metaverse, not decentralize it.

And if we’re honest –  virtual land speculation is not a particularly good fit for the metaverse. Consider these three points about land in virtual worlds: 

• Land speculation is based on scarcity but virtual worlds can be unlimited in size. If the supply is unconstrained, prices will not follow demand.  
• Even when size-limited, virtual worlds can have countless layers of content that is selectively accessed on the same location, so a square-foot in the metaverse is not restricted like the real world. 
• With hyper-connectivity (e.g. teleporting) any two virtual locations can be in close proximity, so the real estate cliché of “location, location, location” does not work the same in the metaverse. 

In other words, land speculation isn’t a natural fit for the metaverse and yet developers have been rushing this old-world idea into our virtual future.

I’m not writing this to pick on real estate NFTs.  

Instead, I use this as an example of a larger principle  —  the metaverse gives us the ability to conceive and create totally new worlds and yet we’re quickly adopting old-world models. Are developers even stopping to ask themselves if they really want “landlords” and “building permits” and “property taxes” and “zoning regulations” in the metaverse?  Because I fear that’s where we’re headed.

To me, it’s a failure of imagination.

The way I see it, this is one of the few times in history when we can experiment with the basic workings of fresh new worlds. And it’s not just the invention of VR and AR that give us this ability  —  it’s blockchain and Web3 and DAOs and other distributed technologies. These innovations point us towards exciting new ways of thinking about society, which is why it’s lazy to simply replicate current practices in the metaverse.

When I tell people this, they look at me like some kind of utopian. In truth, I don’t expect a digital utopia, but I am afraid of a metaverse dystopia. 

In fact, I spent a year imagining such a dystopia in 2008 when writing “Upgrade,” a graphic novel that explores the dangers of a corporate-controlled metaverse. What terrifies me is that over the 14 years since, more and more of that dystopian future keeps coming true, pushing us towards a society where corporations own every inch of our reality, both real and virtual, and use that power to track not just where we click, but where we go, what we do, what we look at, how long our gaze lingers, even the speed of our gait and the emotion on our faces. 

To address this, aggressive regulation of the metaverse is likely needed to protect consumers from the worst abuses. But regulation will only prevent corporations from exploiting the power of their platforms to manipulate users  —  it will not point us towards new ways of structuring virtual societies. Doing that requires real creativity on the part of metaverse developers. And that means questioning the impulse to simply replicate old ideas in virtual new realms.

One interesting example of a metaverse designed to overcome old-world norms was Virtual Burn, which came to life when the real-world Burning Man was canceled because of the COVID pandemic. This unique metaverse followed the 10 Principles of Burning Man which promote a culture of inclusion and creativity rather than consumerism and commercialism. 

In the words of Athena Demos, co-producer of the BRCvr virtual world at Burning Man, “de-commodified spaces where we are all welcome to come, collaborate and share ideas without any transactions or sponsorships is essential for a healthy metaverse.” I very much agree.

Of course, I’m not saying that metaverse developers need to push for a culture of bohemian self-expression like Burning Man. I’m simply pointing out that the current rush to install old-school materialism into our new immaterial world could limit the true potential of the metaverse. Instead, we should celebrate radically new business models that aren’t possible in the real world — models that leverage the unique capabilities of VR, AR, and Web3.

In other words, we should think bigger.

Louis Rosenberg, PhD is a technology pioneer in the fields of VR, AR, and AI. Thirty years ago, he developed the first functional augmented reality system at Air Force Research Laboratory (the Virtual Fixtures platform). He then founded the early VR company Immersion Corporation (1993) and the early AR company Outland Research (2004). He is currently CEO of Unanimous AI, a company that amplifies group intelligence in decentralized environments. Rosenberg earned his PhD from Stanford University, was a professor at California State University, and has been awarded over 300 patents worldwide for VR, AR, and AI technologies.