What You Need to Know Right Now About the Metaverse
Part I: Timmy and the Metaverse
Timmy agreed to be homeschooled last year, but his parents couldn’t get the 15-year-old to do the work. As a punishment, his father pulled him from his baseball team. Timmy didn’t seem to care, so his father imposed additionalsanctions: No more outings with friends. His TV was removed from his bedroom. And his collection of vintage comic books was put in storage. Timmy didn’t object to any of this. But when his father tried to take away his cellphone, he refused to comply.
These days, Timmy spends virtually every waking hour on his cellphone. He’s out of school. He doesn’t play catch with his father anymore. His social life, such as it is, exists online.
Timmy’s father is worried. “His body is still here,” he says. “But his mind is somewhere else.”
It’s true. Timmy’s body remains in the physical universe, but his mind is no longer a citizen of the country he was born in, or even of the world at large. Timmy’s mind lives in the Metaverse.
In the Metaverse, Timmy can be an adventurer, a warrior, and a rock star – all on the same day. He can go to work as a stock broker, build and decorate his house, develop and profit from a farm, manage a professional sports team, even compete in mixed martial arts.
His Metaverse is not lonely. It is populated with fellow denizens – some avatars of his real-life friends, others beings of his own creation. He can play with them, fight with them, have sex with them, and kill them – all from the safety of his bedroom.
Everyone Is Doing It
For his 9th birthday party, Cathy Hackl’s son didn’t ask for favors for his friends or themed decorations. Instead, Ms. Hackl told Time magazine, he asked if they could hold the party on Roblox. On Roblox, a digital platform that allows users to play free games and generate new activities of their own, Hackl’s son and his friends would attend the party as their virtual avatars.
“They hung out and played and they went to other different games together,” she said. “Just because it happens in a virtual space doesn’t make it less real. It’s very real to my son.”
Everyone Is Talking About It
Several years ago, some of the investment analysts we publish began writing about a development in technology they called the Metaverse. As they described it then, it was going to be the future of virtual reality games. And it was going to be big. The clunky video games of the past were fast evolving to a point where the experience of such games would be indistinguishable from experiences in the physical world.
If you have paid any attention to these sorts of games recently, you know how prescient those analysts were. The animation is natural. The visuals are in 3 dimensions. The audio is lifelike. It is very easy to get lost in them.
And refinements are occurring at the speed of light. It feels like we are just a few years away from fully formed virtual experiences covering all five senses. It’s no longer just about video and audio. It’s about smell and touch and feeling.
Why Facebook Changed Its Name
I’m sure you’ve read that Facebook recently changed its name to Meta. In an amazing display of bravado, Mark Zuckerman and his team decided to make the change to overtly announce its vision of its future.
Facebook was an amazing business that grew into a behemoth of social media. As Zuckerman sees it – and I don’t doubt it – Meta will be more than that. Much, much more.
In explaining how they chose the new name, Zuckerman defined the Metaverse as a technology to “make everything in life – from business to entertainment and mostly to human communication – easier and more efficient.”
That’s one way of putting it. I’d put it differently.
The term was coined by Neal Stephenson in his 1992 sci-fi novel Snow Crash – a portmanteau of “meta” and “universe.” In the novel, humans use digital avatars of themselves to interact with each other in a three-dimensional virtual space (the Metaverse) that exists outside of the real world.
Thus, the Metaverse is a parallel universe that exists digitally for each individual that lives within it. It is Facebook and Instagram and Roblox put together. It is online chatting and texting, gambling, sports, research, education, book clubs, discussion groups, travel blogs, chat groups, online dating, and every other form of social interaction one can think of, including sex.
The Metaverse is the inclusion and synchronization of all of these into an interactive universe of digital communities, each of which is controlled by a pantheon of digital gods.
And Mark Zuckerberg is one of those gods.
Part II: The Metaverse as a Virtual Country
I think of the Metaverse as a federation of digital nation-states. But to simplify the metaphor, let’s consider just one Metaverse: the Metaverse of Meta, what Facebook is fast becoming.
As a digital nation-state, Facebook/Meta is far along in its development. In terms of population, it is already the largest nation in the world with 2.9 billion users. In terms of GDP, it’s nowhere near number one, but it’s not doing badly. With advertising revenues of $27.2 billion and total revenues of $86 billion, it is tiny compared to the US and China. But it is larger than 98 other countries, including Oman, Luxembourg, Croatia, Jordan, Belarus, and Iceland.
There is a reason that Facebook (and the other major digital nations, such as Apple, Alphabet, and Microsoft) are growing so fast.
From the citizen’s point of view, a country is a place where one lives. From the government’s point of view, a country is a place full of citizens that must be given certain products and services, and also taxed and controlled.
When I began thinking about it this way, one thing became shockingly clear. In all the important ways, digital countries are superior to real ones. They are better at doing what they must do and better at doing what they want to do.
They are better at providing the goods and services a government provides. They are better at taxing their citizens. And they are better at controlling them.
The primary purpose of a nation-state is to provide protection for its citizens in terms of their lives, liberties, and property. A secondary responsibility that many governments have taken on is to provide some form of happiness – or, at least, the right to the “pursuit of happiness.”
In all of these areas, the Metaverse is more comprehensive and more efficient than physical nation-states.
Let’s take a look at why I say this.
How Meta Is Meta?
In the Metaverse, you have not only the right to life, but to the life of your choosing. You can be a doctor, lawyer, farmer, or rock star. You can be six-foot-four or four-foot-six. You can change your race or your gender with the click of a button.
Plus, your right to life isn’t limited to a single life. You can rise from the dead. You can also live duplicate lives sequentially or simultaneously.
In the Metaverse, you have the right to acquire as many digital goods and services as you want. You can be rich. You can be famous. And perhaps most importantly, you can enjoy the love and admiration of everyone in your digital nation-state.
You can have all these things because, as a citizen of the Metaverse, you can design your own life experience.
If the Metaverse is better for its denizens, it is equally better for its governors.
What does a government want from its citizens? Two things, primarily. It wants obedience to its laws and regulations. And it wants the ability to tax them.
The Metaverse satisfies both of these needs well and efficiently.
Let’s look at taxes.
Taxation in the Metaverse
In the US and other nation-states, you have to pay income tax on the money you earn, property tax if you own a home, and – if Elizbeth Warren has her way – a wealth tax if you have wealth.
These taxes are mandatory.
In the Metaverse, the only tax you pay is a sales and usage tax on the products and services you buy in the Metaverse. Individual taxation, in other words, is voluntary. And for many experiences, such as games and gaming, you have options. You can pay with money or you can pay with time.
In either case, there is no way to avoid paying what you owe. Every transaction in the Metaverse is tracked and sent to the cloud and recorded on the blockchain.
Business and property taxes exist in the Metaverse, but they, too, are optional. As a citizen of MetaLand, you don’t have to have a business. Nor do you have to own property. But if you do, you pay a fee for that. That fee is also tracked and sent to the cloud and recorded on the blockchain.
In short, the taxation system of the Metaverse is superior to the tax system of the US (or any other nation-state) because it is both voluntary and impossible to evade. It is easy and unobjectionable for the private citizen and 100% efficient for the government.
Law and Order
In the physical universe, it is possible to reduce your taxes through myriad tax code loopholes (if you have the right lawyers and accountants). It is also possible to cheat on your taxes. But if you get caught, you are likely to end up in jail.
Likewise, in the physical universe, there’s the risk of punishment if you engage in any other kind of criminal activity – from cheating your customers to abusing your spouse to rape and murder.
In the physical universe, order is possible only when the government has the capacity to enforce its laws. And that enforcement is only possible with coercion. The threat of punishment (sometimes extreme punishment) for citizens that break the law is reasonably effective at deterring crime, but it is far from perfect. Not only does crime continue, the fact that the government allows itself to use physical force puts it always in danger of being overthrown.
But in the Metaverse, there is no need to resort to the threat of punishment to enforce the law.
The digital nation-state has no need to intervene in the physical lives of its citizens because it cares nothing about their physical lives. The only thing that matters to digital nation-states is the digital attention of its citizens. When they act improperly, they can be punished by temporary or permanent banishment. No guns. No breaking down doors. No bloodshed.
And 100% compliance.
In Summary
The digital nation-state is better than the physical nation-state both for the citizens and for the government. And because everything is or seems to be voluntary, the digital nation-state can exist without fear of rebellion or revolution.
The Metaverse is not a fantasy. Nor is it a prediction. It is already here, today. It is where Timmy, and Cathy Hackl’s son, and many of their friends live. It is where millions more people their age are living every day.
Whether in virtual reality (VR), augmented reality (AR), or simply on a screen, the promise of the Metaverse is to allow a greater overlap of our digital and physical lives in wealth, socialization, productivity, shopping, and entertainment.
These two worlds are already interwoven, no headset required. Think about the Uber app telling you via location data how far away the car is. Think about how Netflix gauges what you’ve watched before to make suggestions. Think about how the LiDAR scanner on newer iPhones can take a 3D scan of your surroundings. At its core, the Metaverse (also known to many as “web3”) is an evolution of our current internet.
“You’ve got your goggles on, 10 years from now, but they’re just a pair of sunglasses that happens to have the ability to bring you into the Metaverse experience,” says John Riccitiello, CEO of Unity Technologies, maker of a video game engine that is increasingly used to develop immersive experiences on other platforms. “You’re walking by a restaurant, you look at it, the menu pops up. What your friends have said about it pops up.”
Yes, you heard it here first. The Metaverse is here. And it’s here to stay. It is not a part of our world. It is its own separate world. And it’s a world that is, in most ways, preferable to be a part of. Metaverses like Meta or Apple or Google will eventually be richer and more powerful than nation-states. Zuckerman understands that. So do his fellow meta-gods. They are doing their best to keep us distracted by talking about customer experience. That’s not the goal. The goal is universal, voluntary domination.
I’ll have more fun thoughts – such as why the Metaverse will result in a drastic decrease in human population – in upcoming blog posts. Stay tuned!