Location in Web3
Intro / Warning: Partially Formed Thoughts!
I’ve been thinking a lot about Web3 and how I vacillate between excitement and disgust when I see Web3/Metaverse concepts discussed. That’s a signal to me that I don’t understand it well enough and so I’m learning by thinking by writing - hopefully these are helpful to you to.
Why are we pumped about digital scarcity?
The prompt for a recent feeling of Web3 disgust was the idea that various efforts are underway to try to develop and profit off of creating digital scarcity modelled off of one of the original scarce resources: land. Despite the decentralization and potentially infinite nature of the Metaverse, there are clear attempts to replicate a housing / real estate market model that puts a huge amount of power and wealth in the hands of a tiny sliver of market makers.
The dystopian concentration of wealth and access may be moving towards a decentralized group, a different group that those who currently hold global power, but maybe the point should be do avoid the same mistakes again (similar to the questions that get raised when we talk about colonizing Mars or other parts of space).
But, the quesiton is whether this will work, or at least, will it work in the same way that traditional real estate does? I don’t think so.
Location, Location, Location
Metaverse and NFT early adopters are consistently aping the physical real estate mantra of ‘location, location, location.’ What is location when:
Physical locations can be copied and replicated cheaply.
While things like NFTs and smart contracts will be able to keep a record of originality, will that matter, or will what is perceived as ‘the best’ matter? Does it matter that the first Gucci store is in Italy - today it does. Will it matter that the first Bored Ape store is in one particular iteration of the Metaverse? Or will it matter where the current best one exists?
Different Metaverse servers or worlds will behave like different countries or different cities, but with nearly no cost to traverse among them. I predict that we will see a back and forth of exclusivity to ubiquity similar to artists on streaming platforms, where Metaverse platforms will pay for access to the best ‘content’ to drive growth, but artists and brands will not be able to afford not being ubiquitous and will eventually tailor their experience to different Metaverse worlds and be omnipresent.
At that point, does the value of individual locations mean as much as the ability to move quickly and effectively to where people congregate? Tools to manage multiple Metaverse instances will be needed and are a huge business opportunity akin to social media management tools.
Post-Scarcity and Post-Distance
Within the Metaverse, there’s nearly no scarcity of ‘land’ resources, space, and crucially, no true meaning of distance. Idealized physical spaces can be created without geo-engineering (though we may see zoning / restrictions come up within various Metaverse worlds).
Distance only matters as a function of server capacity and the ease / experience of manual navigation. I predict we will see ‘skeumorphisms’ like public transit in the Metaverse but likely only as covers for loading of servers like in MMORPGs and as nostalgic or fiction-replicating experiences unto themselves. Consumers will demand a better navigation experience and it will become ubiquitous.
Location could even become irrelevant in some cases. What would prevent someone from creating a ‘build your own mall’ which integrates multiple land experiences possibly from multiple Metaverse services.
This is a big departure from traditional fictional depictions of the Metaverse - which tends to imagine a single monolithic service, even if that service is extraordinarily large, the users have very little agency over experiences and design. It’s actually quite centralized.
The amount of centralization has a major impact on the value of land vs the value of the experiences and content places on/in that land. Higher centralization implies higher value to land. Lower centralization implies higher value to more ephemeral social agreement on servers/services and mechanisms to gather people.
Watch Out For Artificial Scarcity
My fears and red-flags for Metaverse experiences and location center around artificially recreating these modes of scarcity. I fully expect to see:
Costs to teleport / move quickly.
Zoning / restrictions on the type of experiences that can be built in particular locations.
Fees to build in certain Metaverse experiences.
Payment to bring your own materials / experiences and payment to use the ‘world’s’ materials and experiences.
And all of these things keep me on the disgust side of Web3 despite the possibility for truly revolutionary and exciting experiences.
