Imagine a world where you can visit an art
gallery, get a tarot reading, watch a dog show and take part in a Halloween treasure
hunt, all while sitting at your desk. Sure, that seems feasible. Now, imagine someone paying a lot of money,
say $6,000, for just one of these 16x16m squares of this world. Well now hold on a minute. This is Decentraland, a virtual city home
to 90,000 parcels of land that are growing in value by the minute. It’s just one of many metaverses you can
visit to buy, sell or just come along for the ride. And we’re talking about real money here… The Ethereum blockchain, host of Decentraland,
settled $2.5trn-worth of transactions in the second quarter of 2021 - about the same as
Visa. Virtual real estate is looking more and more
like the next frontier for digital ownership. Its technology has the potential to shift
the global economy into a new age of decentralized finance. And now that we’ve begun, there’s no going
back. To truly understand, I knew I had to visit
Decentraland myself. But first, I needed some guidance. Lastraum is a developer at Decentraland. He’s staying Hey, Lastraum. Hey, how are ya? Lastraum, what is Decentraland? Decentraland is a metaverse. Metaverses have existed before. We play Grand Theft Auto V online. That is sort of a metaverse. It was made public in 2020 by Argentinians
Ari Meilich and Esteban Ordano, who wanted to build a virtual reality experience owned
by its inhabitants. No big corporation pulling the strings. The world’s inhabitants are contributing
to the content and experience, and in turn, helping drive up the value of Decentraland’s
cryptocurrency. So cryptocurrency is both a digital asset
that can be used to trade for value, but also be held to increase its own value. So it’s a mix between a currency and a stock,
let’s say. Cryptocurrency uses a decentralized system
to verify transactions and keep records. Think Bitcoin or Ethereum or yes, Dogecoin. And so for instance, with Decentraland, they
have their own currency called MANA, and I can hold that MANA like a stock and they can
appreciate in value significantly, or I can use that currency in-world to purchase unique
items. So, how are people making money in Decentraland? So it’s called non-fungible token, meaning
there’s only one of them, it’s unique and it’s digital. Because each NFT is unique, they’re not
interchangeable, unlike a dollar bill for example. With these digital assets, these digital ownerships,
people are providing utility, being able to utilize that ownership for certain things. In Decentraland, people are buying and selling
NFTs in the form of art, music, digital apparel called wearables, games, and, yes… land. People are using real money, through MANA
to buy, sell, and rent digital land. Land is separated into 90,000 256-square-meter
parcels. Each parcel is its own verified NFT, meaning
it’s completely unique and can’t be duplicated, just like land in the real world. You own the land, that’s an actual NFT and
that gives you rights to build whatever you want on your land. Or to provide access or denial to anybody
on your land. I don’t have to go through the title office
or the normal ways of selling land, I just… put it on the marketplace and digitally swap
it. It’s very simple. You know, today this is blank and in 1 hour,
this could be a skyscraper. The person doesn’t need to go through all
of the city planning, the physical limitations in the real world. Their imagination can control what they can
put on here. On this land, owners can build businesses
that offer something to buy or rent, or just store the NFTs they’ve purchased. For example, I buy a parcel of land for 3000
MANA, just under $2000. Let’s say I build a gallery to showcase
some NFT art. Artists could promote their work and curious
visitors make my land more popular which, in Decentraland, makes it more profitable
- kind of like living in a trendy, desirable neighborhood in the physical world. Decentraland really does feel like a typical
virtual roleplaying game. You can tell the developers were inspired
by games like Second Life and Minecraft. Developers encourage active participation
in Decentraland and that translates directly to higher land value. And it’s not just individuals that are investing
in the community. Playboy hosted a Miami Beach-themed art exhibit. Atari partnered with Decentraland to open
a virtual casino. And the digital real estate investment firm
- yes, that’s a thing - Republic Realm made news earlier this year for making the largest-ever
purchase of NFT land: nearly $1m for the equivalent of 16 acres of land for a virtual mall. This is why virtual land here is valued so
high, or at all for that matter. As long as there are people using this world
as a domain for the creation, purchase, and sale of NFTs, the land will hold value. At the beginning of 2021, Decentraland’s
daily active user average was around 1,500. By March, it was at 10,000. And this is just one of many metaverses attracting
the attention of big tech companies. Facebook CEO Mark Zuckerberg has announced
that Facebook will become a "metaverse company." calling it “the successor to the mobile
internet.” Lastraum believes each metaverse can coexist
as if they were different countries, where users will be able to visit each metaverse
to experience their unique benefits. I truly, truly hope and have a desire to push
this platform to be the Oasis from Ready Player One. Hopefully not the real world replication where
it’s all gone south and we’re all living on top of each other in stacks. But at least the immersion and experience
that an online space can provide. It’s a
really cool flip of the script where the users own everything and the users create everything
and the users decide where this goes. Especially Decentraland has the capability
to be what the internet should be. Thanks for the tour, Lastraum! And now for the million-dogecoin question:
What’s the catch? Well for starters, let’s look at energy
consumption. At the moment, just one Ethereum transaction
uses the same amount of electricity that the average U.S. household uses over five days. Thankfully, it’s something Ethereum’s
team is working on solving. Then there are some familiar problems that
plague our real-world economy. People will look for ways to hack and game
the system, launder money, or fill it with microtransactions. In the cyberspace, now becoming the metaverse,
we’re bringing very similar risks along, but they’re getting more amplified because
of this unknown, uncharted territory. This is Kavya Pearlman, founder of the non-profit
XR Safety Initiative, which sets privacy, security, and ethical standards for immersive
technology. She’s got some concerns about all this. There is no framework. No security, safety, or privacy framework
that addresses these things. There are no laws even. If we don’t proactively understand this,
then we are really just experimenting. Then there’s privacy. Every time you’re connecting, creating,
or doing commerce, we need to be sure of what is going on with all of this data. Every time the data exchanges hands, we’re
giving all this sophisticated data to these folks. If you were to buy some land in Decentraland
only to have a big tech company CEO peeking over the fence to keep an eye on your activity,
the corporate-free paradise may need to revise some of its privacy rules and regulations. At the moment, metaverses are largely community-run,
with decisions made through a DAO, Decentralized Autonomous Organization. Users vote on policies that shape their virtual
world, from what kinds of wearable items are allowed, to upgrades to land and estate features,
right down to the date of future land auctions. But in the face of serious digital crimes,
a DAO can only do so much. If somebody replicates what you made into
a different record, where are you going to go to fight that? And that is a huge issue, and those are rights
that we need to establish. Ultimately, with great power, as they say,
comes great responsibility. Whoever is going to hold this power, we remain
committed to holding them accountable and keeping ourselves accountable and that’s
the crux of it all. If metaverse economies like Decentraland want
a seat at the real-world table, it seems they may have to face real-world scrutiny. That means helping ensure that the future
of virtual reality belongs to the people. It’s like the folksong says. “This land was made for you and me.” Well, as long as you’ve got the crypto to
buy it.
