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Open Metaverses: The Digital Nation States of the Future?

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By Diego Di Tommaso, co-founder and COO of OVER

Widespread adoption of the metaverse was never going to be something that occurred overnight. However, recent figures are beginning to suggest that an acceptance of these new digital worlds is undoubtedly taking place across the globe, and is doing so at an increasing pace year on year. This is evident from the near tenfold increase in metaverse users from the outset of 2020 to late 2021, and further, from recent estimates which predict that one in four people will be using the metaverse for at least an hour a day by 2026.

With adoption on the rise, it raises the question, will these new online territories become the digital nation states of the future across the virtual world?

Against this backdrop, it is becoming increasingly relevant to dissect some of the key characteristics and future prospects of these budding digital environments. Certain areas of particular concern include: the distinction between open and closed metaverses; property ownership and interoperability; and identity. All of these factors will ultimately be integral to establishing open metaverses, in particular, as the ‘digital nation states of the future’.

Much like nations, which can be characterized as autocratic or democratic, metaverses are distinguished by whether they are either closed or open. What’s more, this is also a potentially informative lens through which we can categorize this dichotomy. Closed metaverses are somewhat akin to autocratic states, not necessarily in that they don’t take account of individuals’ opinions, but in that they centralize power with a singular entity. In contrast, open metaverses can be likened to democracies as they are controlled by the individual members, or users, by operating on a decentralized basis.

This distinction between open and closed metaverses has a variety of impacts and raises a multitude of questions. Perhaps the most discussed issue in relation to this divide pertains to data ownership. Within closed metaverses, there exists significant concern regarding the potential for data hoarding and profiteering by big tech corporations. With an all new third dimension of information that is openly available and necessary to operate metaverses, there is a significant risk that users’ personal data could be put in jeopardy and exploited in closed metaverses as data stores are owned and controlled by centralized entities.

On the other hand, open metaverses, built on blockchain technology, ensure that metaverse domains not only enjoy permissionless access. Importantly, they also enable user ownership of data. This is facilitated by endorsing an open-source philosophy which means that the entire community can contribute to platform growth, ultimately, making the platform independent of its creators. This is crucial to ensuring that data is not harvested in an extractive manner, and it is an overwhelming reason for the need for the widespread adoption of open rather than closed metaverses as we progress toward the future of the industry.

Building on this, not only does an open metaverse model allow for data ownership, but it also allows for property ownership and interoperability within and between various metaverses. This is because in open metaverses, NFT standards grant existence to both objects themselves, and to property rights for those objects, through smart contracts. This means that when someone owns an object, such as a digital wearable, in one particular metaverse, they can carry this ownership across to different metaverses to wear on their avatar there too.

In closed metaverses, however, these types of items are not truly the user’s, and consequently, they do not enjoy the same interoperability. While it is true that digital wearables can still be obtained in closed metaverses, these objects at their base level are owned by the metaverse provider. In this vein, they do not grant the same ownership rights that their open metaverse counterparts do. Accordingly, they cannot be transported and used across different digital worlds, but rather they are restricted to a singular closed metaverse, which effectively operate in silos. If the future of digital nations is one that intends to be as diverse, varied, and intertwined as our traditional nation states today, then this is another huge testament to the need for open metaverses to become the status quo.

Further, we must consider a crucial component of nation states, namely, their citizens. In particular, the question of identity is incredibly pressing when it comes to the occupants of these virtual worlds. Open metaverses allow individuals to create a digital identity that is associated with a wallet address. This is something, almost akin to a passport, which is owned by you, and which can be used to verify your identity across a variety of different metaverses.

However, in closed metaverses, we run into the same issues that were prevalent before. Firstly, that the data facilitating a digital identity will be owned by the metaverse provider, and secondly, that this digital identity will be restricted for use within a singular online environment. This is highly restrictive and, in tandem with the aforementioned, it means that neither your personal identity, nor your personal belongings can travel across metaverses with you. To put into perspective just how impractical this is, imagine buying a pair of Ray-Bans in Italy, but then not being allowed to wear them when you head off on your holidays to Spain – it just doesn’t really make sense!

Moreover, not only does this limit what is intended to be a liberating experience in creating a unique digital persona, but further, it will prove both costly and time consuming too, if different identities and belongings must be curated in each of the online environments that you wish to interact with, while simultaneously running the risk of manipulation of the data associated with one’s personal identity for private gain.

Nation states have traditionally been defined as a large body of people, united by common descent, history, culture or language inhabiting a particular country or territory. With a further component to their responsibilities being the enforcement of law and property rights amongst their citizens.

And while open metaverses do not necessarily consist of a large body of people united by descent nor history, they do group together individuals who are part of the culture and shared language of the online world. Furthermore, they allow for genuine property rights, and enforcement of laws, so to speak, through leveraging smart contracts, a feature which closed metaverses simply do not have at present. All in all, this makes open metaverses a fitting match for the title of ‘digital nation states of the future’.

Let’s unite together and build a brave and prosperous future in the Open Metaverse.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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