Minecraft vs. NFTs
Absolute power corrupts absolutely.
“Drawing on scholarship in ludology, postcolonial studies, and phenomenology, [this paper] suggests that sandbox games like Minecraft habituate players to myths of empire and capital that rationalize political and economic inequality. More than simply offering a blank slate for player creation, Minecraft rewards players for assuming their entitlement to the world’s resources and thus their superiority over other inhabitants of the game world.” — Daniel Dooghan, in Minecraft and the Apologetics of Neoliberalism
About a week ago, Minecraft creator (Mojang Studios) announced that the platform will not support the integration of non-fungible tokens (NFTs) because they are “not inclusive of all our community and create a scenario of the haves and the have-nots.”
This article discusses the credibility of that statement.
Scenarios of the haves and the have-nots already exist in abundance, both in the physical space and digital space. Wealth disparity is a well-studied issue. The OECD uses five indicators to measure income inequality: the Gini coefficient, S80/S20, P90/P10, P90/P50, and the Palma ratio. These indicators have been used by economists to measure and compare wealth disparity.
In games like Minecraft, there exist an internal economy as well, where some players have more than other players. The primary goal of Minecraft players in the “economy” server is to advance in rank. Advancement can be purchased with gold, which functions as these economies’ unit of account and exchange. Players use tools to “mine” resources which have a degree of fungibility with tools or armour. In mines, property rights are not enforced — players can attack other players to take all the resources on their rivals. Markets allow players to buy or sell resources, or exchange gold into rank. Property rights are enforced in markets, where attacks and repossessions cannot take place. Mines seem to have created the greatest amount of inequality.
A 2018 academic publication found that the pure market economy of Minecraft has a greater wealth inequality than any single nation’s economy. The study used the Gini coefficient to measure wealth inequality. The Minecraft economies were found to be substantially more unequal than the world estimate, or compared to a country with high inequality (e.g., the United States). The publication outlines that virtual economies which lack redistributive policies appear to generate more inequalities than real economies. This observation was made years before the hype of NFTs.
Looking at the evidence, perhaps we could further qualify Mojang Studio’s statement. The platform will not support NFTs because they “create a scenario of the haves and the have-nots” which is outside of their control.
If we examine Minecraft economies objectively, we could ask ourselves what is different about NFTs that the current gold and resources do not already do. We return to the core thesis we have explained in our earlier articles: NFTs enable true digital property ownership. If players ‘truly’ own their resources, there will be a possibility to transfer their ownership to another player. If the status quo was to be preserved, then Mojang Studios retains absolute control of the platform including the power to single-handedly change the rules of the game and eliminate all players’ resources overnight. Resources currently in the platform merely provide an illusion of ownership. Let us repeat the main argument here: the underlying issue is control.
How could such a flawed statement be used as the core moral pillar of a major strategic decision?
Two propositions:
1. The public understanding of economics
2. A red herring
A 2020 study on the public understanding of economics in the UK found that people generally understood economic issues through the lens of their personal economy rather than the abstract, and often removed, national economy. The study found that public understanding of broader economic concepts is generally very weak, leading to questions about people’s ability to understand economic news or stories. While the study sample was limited to Brits, arguably a similar phenomenon is also ubiquitous elsewhere.
Our second proposition, the red herring, is only made possible by the first proposition. A red herring is something that misleads or distracts from a relevant question. In using the “scenario of the haves and have-nots” as a reason for rejecting NFTs, Mojang highlighted a valid, pervasive, and important issue… which exists regardless of NFTs. The statement gives the illusion that such inequality is external to the core Minecraft game, and is solely and inevitably introduced by the NFTs on the platform.
The Milken Institute Review published an article in 2019 on wealth inequality, using Minecraft as a case study. It proposes that understanding Minecraft inequality helps to explain why wealth inequality is vast in a country like Russia. A kleptocracy with poorly enforced property rights has a very large Gini coefficient. To quote the article, “capitalism has always required strong and evolving property rights to flourish.” Property rights policies have been considered effective for mediating the rise of data-driven wealth concentration (read: how internet giants accumulate wealth).
This is one of the many reasons why it is important to fully understand the implications of Minecraft’s rejection of NFTs. Arguably, the use cases of NFTs within the platform remain somewhat unconvincing. We acknowledge that there exists an NFT hype. Just like any other asset, NFTs are prone to risks. But, you own them. Without a clear utility for NFTs in the platform [see further reading for a great article on utility], the risks stated in Mojang Studios’ statement outweigh the potential rewards. A completely separate issue is the inequality in Minecraft which is built into the game mechanics and economics. Combining the two arguments is reckless and does not hold water.
If Minecraft is clearly against wealth inequality (in the platform or in the real world) as the statement claims, banning individual property rights by rejecting NFTs does not solve the issue. Just like democratic governments around the world don’t tackle inequality by annulling individual property rights, but rather by government subsidies and progressive taxes. (It’s instructive to call to mind those governments throughout history that have abolished private property, and the effect this had on their citizens.)
A potential solution could be to reexamine the game dynamics and parameters that create the conditions for a highly unequal community to form within the platform. After all, as Lawrence Lessig says, “code is law.” Cyberspace is regulated by code, which sets the terms on which users experience the platform. Lessig believes public obsession with the idea that liberty means “freedom from government” obscures the fact that the internet that we know is already highly regulated by code — the software and hardware that sets the terms for how we experience the digital world. “We therefore don’t see the threat to liberty that this regulation presents,” he explains.
At the risk of sounding reductionist, the way digital platforms are coded does reflect the values of their makers. A commitment to reducing wealth disparity (in game and in society) requires much more than a red herring.
Dr. Sabrina Anjara leads the Metaverse research theme in Accenture’s Human Sciences Studio. All opinion stated are her own and does not represent the views of her employers.
Further reading:
References:
Blackwell, Calvin and Carroll, Jack, Minecraft Economics: A Study of Wealth Inequality in a Virtual World (May 25, 2018). Available at SSRN: https://ssrn.com/abstract=3185048 or http://dx.doi.org/10.2139/ssrn.3185048
Dooghan, D. (2019). Digital conquerors: Minecraft and the apologetics of neoliberalism. Games and Culture, 14(1), 67–86. https://doi.org/10.1177/1555412016655678
OECD (2022), Income inequality (indicator). doi: 10.1787/459aa7f1-en
Runge, J. (2021) ‘Public Understanding of Economics and Economic Statistics: How People Think About Economic Concepts and Measurement’ ESCoE Conference on Economic Measurement 2021
