Property Rights = Neo-Renaissance, Autonomy, and Privacy
Following Part 1, this section will cover a) what the increase in innovation will look like, b) what other factors are important and how this new economy will unfold, and c) why data ownership and privacy are essential to make the metaverse fit for habitation.
This essay has been adapted from a more extensive series on why the open metaverse is inevitable, essential, and closer than you might think.
A Neo-Renaissance:
Much like the OG Renaissance, rebundling and leveraging new incentive structures to create agency-infused positive feedback loops for generative (positive-sum) innovation.
Following the move from subsistence farmers → financiers, artists, and small business owners (early protocapitalism), Neo-Renaissance individuals can now re-engage across several domains: culture, economics, science and politics, assisted by the proliferation of AI (lowering barriers from imagination to creation) and incentivised by property rights.
“Beneath the cry of protest, much of [metaverse] life was supportive because it was lived collectively in infinite numbers of [worlds, chains, and, cryptobro-therhoods]. Never was man less alone.” — Barbara Tuchman
Again, they can do so alone or in clusters of individuals, combining and enhancing their freedom of expression around shared values as part of decentralised groups and movements (with the right to fork or exit if they wish to forgo a particular system and devise a better one).
If the first iteration of internet-enabled value creation (already incredibly significant) was a false fork without property rights (largely accrued to corporations, not communities), imagine what will happen in a new era of internet-enabled value creation with property rights and incentive alignment.
So what, pixelated hyper-capitalism?
Property rights are helpful for positive (innovation) and negative (preventing overreach) liberties. It’s less about stomping on necks and more about creating virtuous cycles for you and your neighbour; it’s meaningful, fun, and profitable.
Fortunately, crypto is rooted in equality of opportunity and lowering barriers to entry; all you need is an internet connection and a little startup capital.
These virtuous cycles have resulted in several novel innovations thus far:
Long-form Generative Art: fusion of chaos control and network effects. Example.
Generative Audiovisual: symbiotic fusion of sound and visual chaos control. Example.
Collaborative Audio: trustless incentive alignment of disparate musicians. Example.
Decentralised Science: trustless incentive alignment for healthcare R&D in underfunded areas. Example.
Decentralised Gaming: eternal and permissionless IP building block flywheels. Example.
Decentralised Finance: increasing the access, velocity, and composability of money. Example.
Open Education: globally accessible and verified on crypto rails. Example.
Decentralised Governance: trustless clusters of shared values for coordination experiments. Example.
Virtual Worlds, Ownership and Autonomy:
Back to the more traditional conception of what a metaverse discussion should look like.
Once a baselayer is in place, various worlds can be built on the foundations.
There are many different types: MMO-MMO[RPG/FPS/RTS], social worlds (less structured gameplay), Sandbox, and battle royale (and this is just some of the ludic). These will vary on their needs, so the approach below is illustrative rather than comprehensive.
The level of integration with the baselayer protocol toolkit will dictate the extent of how open or closed it is.
Property Rights and Open Economy: at the platform (ERC-20s) or fractional level (ERC-721s). Incentive to innovate, belong and the right to benefit or exit through a composable economy.
Censorship: credibly neutral.
Codebase: ability to look under the hood, participate in the development and the right to fork and move on. The more open, the more persistent the system.
Storage & Compute: integrating decentralised storage and compute to minimise single points of failure and counterparty risk.
Virtual worlds will experience a similar spectrum as blockchain-based games. Today, almost all virtual worlds are centralised to some extent.
Others utilise crypto rails solely for ownership of in-world items, land, and tokens. Relatively less centralised but still with central points of failure and counterparty risk (rendered elsewhere and subject to de-platforming, etc.), currently less of an issue but likely due to lack of inhabitants.
Then, there are more experimental autonomous worlds which rely more heavily on crypto rails, increasing their openness and persistence. There can be subtleties, as shown below:
The old playbook of limited ownership as a barrier to departure is described below:
“You have to give players a sense of ownership in the game. This is what will make them stay–it is a “barrier to departure.” Social bonds are not enough, because good social bonds extend outside the game. Instead, it is context. If they can build their own buildings, build a character, own possessions, hold down a job, feel a sense of responsibility to something that cannot be removed from the game–then you have ownership.” — The Laws of Online World Design
Including (1) on-chain property rights and a connected economy is likely the minimal requirement for inclusion on the openness spectrum as, aside from take rate limitation, inhabitants can be compensated if they decide (or are forced) to exit certain worlds (liquidity = interoperability).
Just more pixelated hyper-capitalism?
There is a difference between perpetual ownership of in-game cosmetics and land (which can be cool) and property rights as a conduit for various freedoms and rights. Ownership over labour, attention and time, and the ability to affect change (governance) and protection against manipulation and data capture also stem from property rights.
Will people just sell and leave?
A sense of context, belonging and responsibility are not removed but enhanced by true ownership (expanded on here); however, as the barrier to departure is lowered, spaces become less artificially sticky, and worlds compete on the quality of constant experience instead.
The ease of exit will challenge many pre-existing business models (monetisation of tension or time/value lockins) where people had nowhere else to go; eventually, change will be easier and constantly dictated by the competition to provide fulfilling environments.
Within these economies, there will be different balances of non-fungibles. As most digital goods tend to have near-zero marginal costs, much of the perceived value must be earned rather than designed. Using digital land as an example, many traditional valuation factors are challenged: a) location by teleportation, b) size, shape and topography by malleability, c) utilities and or environmental hazards by redundancy, etc. Furthermore, the economy must be more balanced to remove traditional wealth advantages (‘pay to win’ or ‘own to extract’) as unlike physical economies; people can easily exit (creator economy > free rider economy).
When combined with other attractive factors (and city comps):
(2) Credibly neutral base layer = political stability and or nation-state power in risk analysis.
(3) Open source codebase + open web standards = permissive zoning and planning laws.
(4) Decentralised compute, storage and servers = utilities (much harder to achieve for sufficient bandwidth).
NB: perhaps all utilities will be decentralised, or there may be a hybrid of competing federated service providers.
Adding ownership of the world itself (aligned incentives for shared and increased network effects) reduces single points of failure and counterparty risk and increases the openness of the world in question and its subsequent persistence, antifragility and interoperability.
In terms of wider risks, such as assimilation with traditional law enforcement, a transition from less jawboning and wide-net censorship to a more direct and targeted enforcement (the person gets arrested, not the protocol).
Proxy Autonomy: Who’s in charge?
Well, everyone and no one. A commitment to governance minimised baselayers and a lack of need for physical public good provision will reduce the scope of decision-making required. Realistically, most will stop here, but for the extra committed, ample room remains for (5) virtual world native governance (importantly separate from the baselayer).
Against all criticism and a new breed of hobgoblins to leverage fear for traditional compliance, self-governed worlds, to different extents, attempt to put themselves outside the purview of the rule of law in favour of the Lex Cryptographia. Governance is discussed in more detail elsewhere.
Property Rights, Autonomy and Privacy:
Privacy is discussed more extensively elsewhere as it is an instrumental shield to achieving a fulfilling metaverse by protecting other rights (autonomy) and creating a realm where people can reason and think without undue surveillance or manipulation, where creativity, exploration, and dissent (both healthy and unhealthy) reside.
TLDR: Existing dynamics and business models in the closed metaverse will also seek to undermine autonomy and, through several externalities, that may result in unfulfilling and frankly scary landscapes.
Mass influence is not new, but the accuracy and effectiveness of these systems are. Programmatic influence enhanced by AI and design can be more subtle, manipulative, and directly correlated to data availability and other heuristics that determine success.
↑ data availability + ↑ scope for system control = ↓ autonomy
Here is an overview of some of the more alarming externalities:
- Entire personalised worlds, scenarios, content and characters can be created in real-time, catering to any desire and framed in any world-view (respectable and sordid).
2. Information Distortion → Reality Distortion:
- Increased scope for misinformation due to the potential shift of media formats and data collection. Previously, the curtains of illusion were more user<AI>platform owner intentions, but now the content can be created from scratch.
- Networks can be engineered to maximise the ease and effectiveness of influence. If performance (profit) is prioritised over ‘healthy’ system design, externalities will continue to be enhanced and exist where they otherwise might not.
4. AI and Dataism:
- Organisms are biological algorithms, and feelings are not supernatural but probabilities shaped by natural selection to make good decisions. Until now, this has been a bit far-fetched as no one had enough data or the ability to analyse it effectively. But combining aggregate knowledge of the body and brain and data collection (infotech = biotech) with the exponential rise in computing power and AI could make the probabilities much more accurate.
5. The Realignment:
- In terms of general crypto<>AI, they are uniquely synergistic; crypto will benefit from the explosion of AI proliferation and activity, and AI will rely on crypto as an enabler (access to permissionless rails and services) and a counterbalance (verification governance, and realignment). E.g., personalised and ‘trusted’ AIs may develop a type of attorney-client relationship with the user (loyal, discreet, and without conflicts of interest).
6. Phygital Algorithmic Governance:
- Where smart cities <> the metaverse algorithmic governance raises concerns about autonomy erosion, bias reinforcement, and the potential for over-reach.
Censorship and money control are discussed elsewhere.
Alongside novel property rights for data, sufficient, optional, and customisable privacy frameworks will be required to facilitate those convergences and a favourable exchange of information to create dynamic and fulfilling worlds. The extensive solutions to these issues are discussed specifically in the sections linked above and summarised more broadly here, but as a quick recap:
- Positioning decentralised identity and reputation systems as the hub.
- Fusing public blockchains with end-to-end encryption using zero-knowledge proofs (zethereum), zk-EVMs, homomorphic encryption, account abstraction, AI agent canaries, privacy pools, or more privacy-focused L1s/Rollups.
- Preserving credibly neutral access at the base layer.
- Using insurgent and decentralised AIs with attorney-client privilege for consent, negotiation, management, understanding and practicality.
- Innovation in re-architecting network design, move towards peer-to-peer, DSNA and more intimate systems.
Without these, the alternatives are bleak.
If you got this far, you might be thinking: I don’t wanna exist in no goddam dependant, middle-ages-esque, and manipulative closed metaverse; I want a cryptographically enforced Renaissance and autonomy in an open metaverse… I would agree.
For the difference between the cathedral and the bazaar in metaverse design… Next Stop: Property Rights = Emergent Worldbuilding.
