METAVERSE—a social cyberspace where people—or their digital avatars—work, hang out and shop—is the next big thing, you may have heard.
Actually, this was the hottest new thing in 2003 as well. When Philip Rosedale and his company Linden Lab launched Second Life, an immersive digital platform where users can build worlds, create art, and purchase and sell digital goods, that was the beginning of the Second Life phenomenon. People who prefer the virtual world of Second Life to the real world have kept the virtual world alive despite the fact that Second Life has faded into the background of internet culture following a spike in interest.
Build a Better Metaverse
Compared to Second Life, Facebook’s “metaverse” isn’t all that different from Facebook’s “metaverse.” However, Rosedale’s creation fell short of the global impact that motivates entrepreneurs like Mark Zuckerberg to get out of bed in the morning. What could be different this time around?
High Fidelity founder Rosedale recently returned to Linden Lab as a strategic advisor as the company looks to capitalise on its early claim on virtual existence. To avoid a dystopian metaverse, the true value of purely digital goods, and why VR headsets are a waste of time, he talked to WIRED about these topics and more. The interview has been condensed and edited for clarity.
WIRED: As soon as Mark Zuckerberg started talking about the “metaverse,” we started talking about it as well. All of Facebook’s revenue comes from advertising, which has been renamed Meta.
To what extent will advertisers be able to track and profit from users’ online activity as they spend more time in virtual environments?
Philip Rosedale (author): We all know how bad it is when Facebook succeeds in creating an online world where people can be targeted by their online behaviour. However, it is not inescapable in the least. As far as I’m concerned, Second Life is making more money per user than either YouTube or Facebook. Like Facebook, Gmail, and YouTube, Second Life offers free basic access. However, fees are the primary source of revenue for Second Life.
When I started working on Second Life in 1999, there wasn’t much of a temptation to go into the advertising business. That was prior to Google introducing the concept of an ad auction market that has since become completely irrational. If you choose to own land in Second Life, you will be subject to a fee that can be thought of as an equivalent to a property tax. The rest of its revenue comes from transaction fees. As a result, Second Life charges a small fee to anyone who sells an NFT or digital goods through the Second Life marketplace.
You say NFT, but you’re not referring to a blockchain-based system, are you?
Correct. Second Life’s “primitive” atoms, which are the building blocks of everything else, are all stamped in a public database, not a blockchain. Also included in this data are the creators, current owners, and the price, as well as any restrictions you may have on what you can do with the item if you purchase it. A lot like blockchain address metadata, in this way. It’s a very interesting concept. In order for people to trust Linden Lab to keep the database up-to-date, we store it in a central location.
The name of Ben EGLISTON
If it’s done correctly, transparency can help build trust. Think about it: A public database might be all you really need for some of these things that blockchains have been touted as solving.
And how does Second Life deal with virtual currency in the virtual world?
Our present-day cryptoassets work by having a limited supply of tokens, which are distributed to early adopters who use their computers to collect coins or buy in at a discount. This mechanism allows the majority of tokens to be given away. On the other hand, things were very different in Second Life. It was important to us that the value of the Second Life currency remain stable, rather than increasing, because this would make it more useful as a trading currency on a day-to-day basis. You’d have people hoarding and not spending if it was rising in value.
On the open market and in complete transparency, we printed new currency, which we then offered for sale. Basically, that was our Fed desk. To keep the Linden Dollar’s value in line with the US dollar, we issued more Linden Dollars to the public. Finally, it was a great success. A decade ago, I don’t recall seeing a change in currency prices of more than 10% or so. In 2006, the exchange rate was about 250 Linden Dollars to the dollar.