Man wearing VR headset

Money & Markets: Facebook/Meta’s VR project boosts cryptocurrency

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With its name change, Facebook has announced the metaverse. This has boosted cryptocurrency tokens, which have seen price jumps as virtual currencies are well suited to use in the virtual metaverse

It is quite a popular idea that we are all just living in a simulation. The idea is that in due course there will be infinite simulations of us in the universe yet only one real universe, and as such the chances of us being part of one of those countless simulations rather than existing in the real thing is extremely high.

It is all very nihilistic.

Simulations of the world go back a long way and even the young engineer's favourite Meccano set or a box of Lego speak to the desire to recreate and simulate real-world objects. What could be more exciting than simulating whole worlds?

Once called god games, they have been rebranded as the metaverse.

The metaverse is little more than a playroom or Disneyland on your computer, and if you want to feel you are really there you can strap a VR headset like the Oculus Rift to your face.

Spielberg’s film 'Ready Player One' laid out the dream/nightmare of fully immersive online games and now Facebook, with its VR headset in tow, have bought the whole bill of goods.

Facebook is renaming itself Meta.

This may well be a diversionary manoeuvre in the same way as the Google monopolies renaming to Alphabet seemed to speak to the idea of diluting an ever-building wave of negativity towards the brand by giving the company a new name.

Meta (Facebook) keeps getting hauled into hearings all over the world, for the simple reason that it owns the attention and life of a huge slice of humanity. The percentage of the adult population that stumbles down the road while surfing a Meta product or wakes up and goes to bed with Facebook as the first and last thing they see is truly impressive, and governments are rightfully terrified of the impact of such power in the hands of a company which professes to ‘move fast and break things’.

As Facebook becomes Meta it is good to remember this is a company worth about $1tn, or $3,000 per American, or the US fiscal debt for a bad year.

Is Facebook/Meta Platforms finally going to be the birther of VR into the mainstream? Will it become the engineers of a new reality where people will go live when they are not slaving ‘for the man’ in meat space? Will we soon be strapping VR headsets to our faces and perhaps running on treadmills in body suits like the Lawnmower Man?

I predict not. Why? To explain in Californian parlance: because VR sucks. It is ‘lean in’ technology not 'sit back’ technology, and lean in means you have lost 90 per cent of your audience in one go.

This hasn’t stopped the Metaverse crypto denizen from seeing their tokens explode. Tokens like Decentraland, Sandbox and Aavegotchi (which I own some of) all jumped as Zuckerberg told a bemused world that Facebook was now Meta. Facebook has been unable to release its cryptocurrency for years; meanwhile kids in their bedrooms have been spawning them like Japanese hunting dogs. As such, it will be seen whether crypto is the future for the metaverse rather than aka Facebook with its mobile entranced audience.

The crypto-metaverse is not a VR wonderland; its world is behind the windowpane and the users look through it. This is a much more mainstream set up.

Now many might think my VR resistance is just a function of age and old-fogeyness, but as someone who actually headlined electronica gigs in 2005 with a VR headset and bought practically every consumer headset iteration until the recent generation, I can assure you, like 3D movies, VR seems great on paper, is fun to use, but is just too exhausting to be the ‘next big thing’. The difference is screen = game, VR headset = sport, and while playing sport has an audience, that cohort is dwarfed by high entropy gamers.

Facebook/Meta’s play on the metaverse is not going to pan out but the metaverse itself will, it’s just a matter of device delivery. It might be a Star Trek-style holodeck concept (surely not that far away now), or just ever-bigger screens, or simply what we have now with ever more engaging content, or yet another emerging crypto concept, ‘play to earn’.

In play to earn, the game pays you to play. You can run with that idea any way you like, with the players acting as securers of the crypto network, or simply owning items they buy and can trade on and off the game for tokens that can be sold for fiat, competitions with prizes, cash back... the permutations are many. The key, though, is the idea that all those goodies you collect in a game like 'World of Warcraft' belong to you and have an independent existence and value outside of the game, which cracks open a whole new resource of value in an activity where millions of people spend hours of the day playing in one metaverse or another and build up goods that up to now have had no channel to be bought or sold.

Many will frown and say, how can these items be a resource of wealth to be unlocked? At best it’s a tiny niche. There is no real value in such ephemeral things. You might have said the same thing of songs. Humans have been singing since time immemorial, but Edison monetised it and created the platform for enormous industries that rely on that foundational technology to generate vast wealth.

But that won’t mean you will be strapping speakers to your head... Oh, wait...

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