Looking into the future of a legal metaverse?

01 September 2021 Foley Launch Blog
Authors: Louis Lehot

This article originally appeared in VentureBeat on September 1, 2021.

Initially coined in 1992 by Neal Stephenson, the term “metaverse” comes from his sci-fi novel, Snow Crash, in which humans interact with each other via avatars rendered in three-dimensional virtual space.

As Matthew Ball, the former head of content at Amazon, stated, “The metaverse is a persistent, synchronous and live universe that spans both the digital and physical worlds with total inclusion.”  It is described as a digital shared space where everyone can interact seamlessly in a fully immersive, simulated experience. It is the increased permeability of the borders between different digital environments and the physical world. In the metaverse, you can interact with virtual objects in real life with real-time information. A mixture of what is virtual and what is real. A place where people join together to create, work, and spend time together.

It should come as no surprise that tech giants are already all in and building in the metaverse. Games’ Fortnite, Microsoft’s Minecraft, Facebook’s Horizon, and many more are contributors. In fact, Facebook’s Mark Zuckerberg laid out his vision to transform Facebook from a social media network into a “metaverse company” in five years. “This is going to be the successor to the mobile internet,” Zuckerberg told shareholders this month. “You’re going to be able to access the metaverse from all different devices and different levels of fidelity from apps on phones and PCs to immersive virtual and augmented reality devices.”

How to engage, work and play in the metaverse

The different types of activities that will take place in the metaverse are limitless.  For example, think about COVID-19, where events such as happy hours, weddings, school classes, and work were increasingly taking place with users participating digitally regardless of their actual geographic location.  The metaverse presents the opportunity to leverage remote work even further. Virtual conferences and a plethora of tools specifically designed to facilitate collaboration by distributed teams have already come into play.

The metaverse will further offer fully immersive gaming experiences exceeding current Virtual Reality product offerings tenfold. The gaming space seems especially likely to play a role in bringing the metaverse to fruition since video gamers already own some of the most robust computational processors available.

Investing in the metaverse

Companies are continuously trying to up the ante and keep us engaged and entertained.

The “metaverse” is the newest chapter in entertainment, and its growing popularity means investors should at least be familiar with it.

Every day the sector is growing. It’s still unclear what the metaverse will look like, but according to research firm Strategy Analytics, the global metaverse could be worth $280 billion by 2025 and likely grow from there.  This market forecast amplifies the interest in metaverse companies bringing new ways to interact with users, which intersects with a world spent indoors and a rise in technological capabilities available to innovators.

With all the buzz surrounding the metaverse, and the rapidly increasing interest from foremost industry leaders, investing in metaverse will undoubtedly be on the rise. Becoming a pioneer in the new has paid off for many; think about all of the Bitcoin millionaires out there. As it stands, the metaverse is shaping up to be the next big wave for investors. Investors, keep an eye on this space.

How does the metaverse change the legal system?

The metaverse is upending our legal and regulatory systems and begs the question of who makes and enforces the rules.

Life is not a game, however. And when you apply old rules to new technology, you will find yourself trying to put a square peg into a round hole. But here goes it:

  • Intellectual property: when one or more players in a virtual game collaborate to create a virtual good or a virtual world, who owns it? Is it copyrightable? Is it possible to create, protect or enforce a brand inside a virtual world? What strategies can content creators deploy to protect their brands within the virtual world?  This is particularly important for consumer-facing businesses.
  • NFTs: we have all witnessed the cottage industry of value created through tokenization of entertainment, sports, and media personalities and teams through tokenization of non-fungible content. While today the media is focused on entertainment and media content being tokenized in the metaverse, imagine when entire towns, cities, regions, countries, and superstates are created virtually, with the resulting explosion of content.  In other words, we have only begun to see the metaverse commercialized through NFTs. Are they securities? Are they currencies?  Who regulates?  Who can purchase? Who can trade?
  • Data protection and privacy: as humans spend more and more of their waking (and sometimes sleeping) hours in the metaverse, who owns the resulting data? Who is protecting your identity? What happens if your information or identity is misappropriated? Who is responsible?

These are just examples of the many conundra emanating from the question of who makes the rules and enforces them. Some say that there should be an attempt within every legal system to adapt to the metaverse. Others back the creation of a new legal system specially designed for the metaverse. While the metaverse holds great promise for merchants and investors alike, without a system for design, promulgation, and enforcement of rules, it could be dangerous. For now, the metaverse has been growing in a virtual sandbox. How long will this last? Until the first Meta-tragedy that captures public attention? Or will someone or something lead the charge? The crypto world provides a valuable indicator of what happens when rulemaking remains fully decentralized.

Is a metaverse world far off?

A true metaverse may still be a few years away. In the meantime, Facebook and other pioneers are busy laying the groundwork for a future that permits families, friends, coworkers, and more to meet and interact in shared digital spaces that look and feel authentic. Digital currencies will also be essential.

The metaverse world is in play, and that which is existing separately is gradually coming together. Technology is not proficient enough to support this integrated metaverse just yet, and the reality of its adoption might be a while away. However, the metaverse has the backing of billionaires, talented game designers, and the only rival to the metaverse is life itself.

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