Mudflation The primary issue that plagues them is inflation. Players and analysts have observed consistently rising prices of virtual goods since at least the early 1990s, the era of text-based virtual worlds like TinyMUD and LambdaMOO. Inflation so plagued these worlds, called "multi-user dungeons" or "MUDs," that the issue became known within the user base as "mudflation." ⁴

The problem persisted through the era of early graphical virtual worlds as well, and the term became more commonplace in the '00s. It often forced players to get creative. In Runescape, inflation caused prices to pass even the limit of the number of coins that players can exchange (2.1 billion). As a result, players began calculating prices in "party hats" or other items that they could trade which themselves were worth more than 2.1 billion each.⁵ It rides the line between barter and currency, but it works, sort of. "How much for the Sword of Awesomeness?" "Three party hats."

Still unsolved, inflation has ruined the economy of 2010's virtual worlds as well, including Star Wars: The Old Republic.⁶ It persists even now, in the era of blockchain-enabled "metaverses," but with some differences. The last year has seen a devaluation of metaverse currencies which is somewhat akin to inflation. (SOURCE and examples) There is also an interesting example in which the same mechanism deflated the value of "Smooth Love Potions" in Axie Infinity.

The problem in all cases is essentially over-production, which can be conceptualized in terms of too many "faucets" and not enough "sinks." "Faucets" are anything that brings value-bearing items into the world. These come in various forms. In the context of a multi-player RPG, this might be looting currency and things off monsters you've slain. Axie Infinity similarly provided "Smooth Love Potions" for completing tasks or breeding axies, and NFT Worlds offered their $WRLD tokens as a reward for playing games on their platform or engaging in events.⁷ "Sinks," conversely, are those things that take wealth out of the world. These could be "token burns," non-player vendors selling things, items breaking with use, or forms of taxation. 

Faucets and sinks need to be balanced. When the faucets are filling the world with things faster than the sinks can remove them, a surplus accumulates, and the value of whatever is being provided falls. This applies equally to the currency of RPGs and metaverse resources. Without enough sinks, inflation eventually takes over. Here's the issue: everyone likes a faucet, but nobody likes a sink. To illustrate the point, imagine the developers of a metaverse notice that their currency is dropping in value at an alarming rate, and they decide they need to do something. They could reduce the money supply by doing things like implementing a tax, increasing the price of developer-provided items, and ceasing the production of in-world resources. But, users don't like this behavior.

We accept that, in the context of the physical world, we have to pay taxes, that items decay with time, and production rates go up and down. If you don't like it, too bad. You could always move to another country, but there are a lot of costs and inconveniences associated with that. Switching virtual worlds is much, much easier. If one begins implementing sinks that take from the users, they are much likelier to leave, and their departure could spell ruin for the virtual world. Paradoxically, doing the things required to keep a virtual economy healthy may end up ruining it by driving people away. This is a tension that has never been adequately resolved, and will likely require a great deal of innovation or changes in user behavior to address it. Another historically significant source of mudflation has been the action of cheaters, hackers, and bots. When automating actions through computer code, exploits can allow people to generate incredible numbers of items and currency. I described in a previous article how exploits within Ultima Online allowed people to program and run automated accounts that generated 500,000 gold pieces per hour. With just four bots going 24/7, they were thus able to generate the equivalent of $18,720 worth of in-game currency each month. This behavior, at scale, represented a large portion of the total game economy in the hands of very few players. (SOURCE) This was the early '00s, though. The scale of damage that could be caused by exploits and theft in the multi-billion-dollar environment of modern virtual worlds is orders of magnitude greater.

High stakes Individual virtual economies are often quite small relative to those of nations, and it doesn't take much rocking to topple the whole boat. One exploit or hack can drain a huge portion of the whole economy. (AXIE INFINITY HACK EXAMPLE AND SOURCE) There's little to stop a player from leaving if they are unhappy with how things are going. It's a precarious situation for developers and participants alike.

There are legal risks involved for developers as well. The law is sketchy with regards to virtual wealth, to say the least. (SOURCE) If a developer's obvious mismanagement of a virtual economy causes a user to lose thousands of dollars worth of virtual wealth, are the developers culpable? Could users sue for damages? What about in the case of theft? It's really unclear what the developers' legal exposure is with regard to the economy they create and the wealth in their system (SOURCE). Negligence would be far more dangerous to them than it is to a government mismanaging the economy it presides over.

But developers are not economists. If you were in their shoes, knowing the difficulty of the proposition, the danger of messing things up, and lacking the education and experience to manage a large economy, would you take the risk of building a virtual world economy? It's a daunting proposition.

A long road Working these out will require a lot of innovation. We don't have great examples of stable, sustainable virtual economies to emulate in the new, Web3 context. They are almost universally susceptible to boom and bust. We also can't simply copy and paste every solution that works in the real world. The factors that drive a real-world economy are just different. In the physical world, there's not nearly the same level of need to appease citizens in order to retain them. If you could move from country to country with the same ease that people switch virtual worlds, you can imagine the effect it might have on the way governments behave.

But regular people also don't behave the same way in physical and virtual worlds. In the Metaverse, there are no material or physical needs to concern yourself with. One doesn't feel the need to hold insurance. One isn't worried about keeping a roof over one's head. Even the simple obligation of paying taxes is totally absent. The effect of all this is very different consumer behavior. Does it make sense, then, to replicate solutions that have positive outcomes in the physical world? Perhaps sometimes, but certainly not always. We'll have to devise new ways of doing things to create successful virtual economies as well.

A meta consideration Or will we? Perhaps we should be more modest about what constitutes "success" in a virtual context. We think of a successful country as one that survives and provides for its people over a span of centuries, but we understand that even nation-states eventually come to an end. They have a lifespan that is quite long, but finite. Nobody seems to expect that individual virtual worlds will last for centuries, but how long should we expect such a world to persevere, and what should its arc look like to be considered successful?

If metaverses are just a form of software, perhaps we should expect no more than a few years of life out of any particular one. Games rarely get played more than a couple years. (SOURCE) Some special ones go on for longer. If a game built into a virtual world obtains millions of users, but the economy eventually over-inflates and the player population leaves six years after launch, would that be a "failure?" It would seem unfair to say it was. If a virtual world like The Sandbox has a similar arc, is that not a successful product?

I'm suggesting that individual may end up being shorter-lived entities. Perhaps they will last as long as websites can. Or perhaps they will pass out of popularity as quickly as a console game. They may be even as fleeting as a given version of an operating system. We don't really know. The ones we've had so far have not tended to last more than a few years, but the form and purposes of these worlds keeps evolving. Time will tell if the latest iterations - the blockchain-enabled "metaverses" of the last few years - are more enduring than those that came before.

Despite the fact that virtual worlds have been with us for decades, the fundamental characteristics of their economies remain very much unsettled. I anticipate it'll take years for them to evolve into a form that's somewhat predictable. This evolution appears that it will also occur simultaneously with the development and integration of cryptocurrencies, NFTs, and blockchain-based transactions. This is likely to complicate matters, as the Metaverse will be evolving to try to accommodate technology and systems that are themselves in flux. 

Until the day that their forms stabilize and solidify, I suppose the lesson for investors is to closely monitor the state of the world economy they are investing in. They can change quickly, and one unfavorable development could destroy it. Stay vigilant! We have a long way to go yet before we know exactly what we're doing.

1 - https://finance.yahoo.com/news/meta-defends-its-gamble-on-the-metaverse-says-itll-be-worth-3-trillion-210341412.html 2 - https://www.marketwatch.com/story/what-is-the-metaverse-and-how-much-will-it-be-worth-depends-on-whom-you-ask-11637781312 3 - https://www.barrons.com/articles/metaverse-web3-internet-virtual-reality-gaming-nvidia-51648744930 4 - https://muds.fandom.com/wiki/Mudflation 5 -  https://www.pcgamesn.com/runescape/party-hat-most-expensive-item 6- https://www.youtube.com/watch?v=FhhFkszRpKU 7 - https://docs.nftworlds.com/nft-worlds-usdwrld-token/more-about-usdwrld

Why argue? The people who ask it don’t want to understand anything. They just want to make a point about how dumb they think buyers of virtual real estate are.

It was an incredible affirmation for me, then, when someone with the reputation and standing of Dr. David Chalmers weighed in with many of the same thoughts I had on the matter. He is best known as a philosopher of mind and consciousness, particularly due to his formulation of what he called “the easy and hard problems of consciousness.” ¹ In recent years, though, Dr. Chalmers has turned his attention more fully to virtual worlds and simulations, as well as their implications for the primary questions of philosophy. These thoughts came together as a roughly 500-page volume entitled Reality+, ² which premiered (fortuitously enough) not long after Mark Zuckerberg’s infamous “Meta Announcement” of late 2021.

The various ideas of the book are arranged around one central assertion: “virtual worlds are real”. [p.12] If Chalmers’ reasons for saying this are correct, it means virtual objects also really exist, and — the reason for this particular article — that virtual real estate is real real estate.

Getting “real”

Unfortunately, there is no consensus as to what makes something “real.” Like so many matters of philosophy, when one unpacks what one specifically means by the word, things quickly become complicated. For this reason, there is a whole philosophical field called “ontology,” ³ that deals with matters of reality and existence, and the questions these create have existed since at least the time of Plato and Socrates. So, rather than attempt to be the first person to set up an unassailable definition of the term, Chalmers references others’ thoughts on the matter and demonstrates how virtual worlds meet all of their criteria.

The most common understanding of reality is also the one elucidated by the Oxford dictionary: “the state of things as they actually exist”. Chalmers calls this the argument of Reality as Existence. For virtual real estate to meet this standard, it must be shown that it exists. And, indeed, it does. Virtual worlds exist as bits —the 1s and 0s indicating the states of real transistors in real computers. If those bits did not exist how they do, there would be no way for the computer to render the space they encode.

Still, most philosophers feel that “reality as existence” is not persuasive, as it just forces one to ask a nearly identical question: “What is it to exist?”. This folk definition is not just unhelpful for that reason, but also because it doesn’t aid us in our attempt to distinguish between reality and illusion. Illusions and hallucinations exist at least within one’s own mind, so one would be forced to conclude they, too, are real. This has led to the next step up: the argument of Reality as Mind-Independence. 

This is the more typical approach within philosophy itself. “Reality as Mind-Independence” argues that your phone is real, for example, because it would continue to exist in the world even if there were no people to think about it. Unicorns, by contrast, are not real because they only exist in our minds. This rather neatly solves the issue posed by illusions and hallucinations. And within the technical language of philosophy, the term “realism” refers to exactly this conception. Thus, phrases like “moral realism” or “aesthetic realism” are an expression of one’s belief that “good and bad” or “beautiful and ugly” are qualities that actually exist in the world — not just within the human mind.⁴

If we accept reality as mind-independence, we have no problem demonstrating that they are real. Their “persistance,” even when nobody is using them, is actually one of their defining qualities.⁵ It separates them from things like multiplayer game levels or single-player worlds. Virtual worlds continue running, with or without humans participating. Their states change according to their programs, and when you log back in, things will be slightly different even though there may have been nobody there to observe the change.

These are just two, but there are other formulations that Chalmers puts forward in the book: Reality as Causal Power, Reality as Authenticity, Reality as Measurability,” and so on. Chalmers demonstrates that virtual worlds pass through the filter each time, no matter which approach you take. They are not illusory, fake, or make-believe.

Analog and Digital

It’s important to understand, though, that this is not to say that virtual real estate and physical real estate are the same thing. They are not. They are simply composed of two different substrates. One is made up of 1s and 0s, and the other of quarks and other fundamental particles. Still, both exist. 

Perhaps I’m belaboring the point, but I’d say that if you have doubts, put it to the test. Ignore the digital for a week — texts, emails, digital documents found on any computer — and see if there aren’t repercussions. That should settle any questions that linger about the digital’s causative power or its mind-independent existence.

Interestingly, in my own field, I find the digital is quickly becoming more consequential than its analog counterpart. When someone signs a listing agreement with me, I scan it and load it into our software. From there, I no longer have any particular use for the actual paper and ink cop. It would seem that the sole purpose of the analog format is now to allow me to create a digital copy for all parties to use. If the former never existed at all, I could just as easily work with something signed electronically. Strangely, the digital contract is in some way more real and vital than the analog version it was derived from.

We’ve had decades now to come to understand that digital objects are truly as real as the physical, but it’s a difficult paradigm to take on board in a serious fashion. Perhaps because we’re biological beings privilege the physical, even if such behavior has begun to pass out of fashion. Even I, a person who writes about virtual real estate for my own income, still find myself in articles contrasting virtual world objects with “real-world” objects. It’s a difficult habit to overcome. The proper distinction is probably that of the digital and the physical — or perhaps digital and analog, which is a dichotomy we’ve already seen taken onboard in the world of audio and video without too much difficulty. 

Virtual worlds, finally, are not pretend, either. Nor are the sections of it we call virtual real estate. Indeed, people are currently buying, selling, leasing, developing, and monetizing virtual real estate. Although still a relatively small asset class, it affects lives, and it’s time to take it with a certain level of seriousness. Are people paying thousands for imaginary real estate? No real estate. The only pretending left is those who still pretend it’s imaginary.

“That’s the ugly side of [the game]… a side I prefer not to get involved with. Those guys are serious people… I would love nothing more than to see them all rot in prison, but I would fear for the safety of my family if they found out I told anyone.”

It seems like standard mafia fare, but “those guys” referred to here weren’t managing construction rackets or laundering money. They were actually gathering gold coins in the virtual world of Ultima Online, one of the first big multiplayer roleplaying games. The book, Play Money, details the drama of making money while rival gold cartels compete for turf in Brittania, the fictional setting of the game.

The idea of nerd mafias duking it out seems comical. Frankly, it often is. But the money involved is real, and when the sums get large enough, people are willing to protect it. One racketeer named “Destiny” suggested he would show up at the scammer’s real-world house with a weapon when he got ripped off for several hundred dollars. “F**k, I don’t care. I used to live in Long Beach right in the heart of the riots. I don’t give a f**k. I will go packing [a gun] too.”

It doesn’t appear Destiny made good on his threats toward this particular scammer, but he did destroy a competing cartel when they moved in on his poultry sales. You read that right. Called “running birds,” users would set up automated characters called “bots” to purchase 300 units of raw poultry from a butcher, cook it all, and sell the resulting mountain of delicious avian goodness to a tavern keeper. The total profit for each round was six gold pieces. It doesn’t sound like much, but by automating the process, one bot could make 500,000 gold pieces running birds each hour. Those could then be turned around and sold on eBay for about $6.50. (At this time, it was still allowed.) With just four bots running, and each going 24 hours a day, there was potentially $18,720 worth of gold pieces being generated each month.

But the prices were unstable. When the aforementioned Destiny encountered “the EasyUO Cartel,” an international group of coders also making money through Ultima Online, he realized there was an opportunity. 

“…if the REAL producers…you and us… were to begin working together, not bulls***ting, we would literally control the entire supply. That coupled with extreme prejudice on the price structure, you would see a dramatic increase in price.”

This is precisely cartel behavior. And while it’s not a well-known phenomenon, virtual cartels do seem to emerge regularly when in-game resources acquire “real-world” value. 

Take the example of the “Black Lotus Mafia.” The black lotus is the rarest of herbs in World of Warcraft Classic, and if you want to make some of the most powerful flasks in the game, you’ll need some. Raiding guilds often required their members to be stocked up with them, so there was a constant need for more. Black lotus, however, only appeared in a few specific places in the virtual world, and not terribly often.

Sensing the opportunity, a group of players banded together to snag them as soon as they appeared. They were well organized and very effective. For months, if competitors (or just ordinary players) attempted to camp the spots where a lotus would appear, bots would arrive and circle the spawn point so no human-run player could click on it and claim it. Truly diabolical. From there, the mafia bought up all other listings for black lotuses in the auction house and set their price at about 300 gold per blossom. (That much gold was worth approximately $18 on the Internet black market.) Bit by bit, the Black Lotus Mafia juiced the high-level citizens of Azeroth for their gold. 

Enter Loknar, a priest in WoW Classic that had it up to here with high-priced loti. Loknar organized a virtual protest in the city of Orgrimmar. “There were over 500 people doing a line walk and yelling,” he reported to Wired. Realizing the danger he posed, the mafia had him whacked. The bots all reported him to Blizzard, the game developer, for “abusive chat,” and Loknar was temporarily locked out of the game.

Blizzard eventually got wise to the mafia and stepped in, drowning the racketeers in surplus flowers. They increased the rate at which the lotuses would appear, and set up many new locations as well. The tactic worked. Blizzard broke the icy grip the mafia had on the aquatic plant racket and crashed the price in the auction house by about 87%. They also suspended or removed many thousands of accounts they believed were botting. There are still whispers and rumors about back-alley deals to corner the Devilsaur leather market, but for now the WoW Classic mafiosi are staying low relative to how things were in 2020.

How inevitable are they?

These are but two examples, and others are easy to find. The most common are probably in EVE Online, where frankly, pretty much anything short of real-life murder is fair play anyway. The point is that it just doesn’t matter what sort of world we’re talking about, virtual or physical: when a valuable resource is in the hands of only a few people, they often collude to fix prices at an inflated value. It requires only four things:

• Limited resources

• A willingness to collude among the people who control those resources

• Authorities that can’t or won’t stop the collusion

• Buyers in need of the goods

So, here’s my question to you: Why shouldn’t we assume that Metaverse cartels are coming? All four conditions are quickly coming together.

With the launch of Illuvium’s land sale earlier this month, we saw a continuing trend of land that generates usable, salable resources. Prior to them, Axie Infinity had announced their land would generate resources. Worldwide Webb is also bringing resource generation into play. And by far the largest player of all, Otherside, has both items and many different kinds of resources being generated by their land. It seems likely at this point that more projects will soon follow suit, as it provides even more incentive to purchase their virtual land.

Only time will tell how much such resources will be worth. But, it seems that not much would be needed to get people interested. We saw the “Smooth Love Potions” generated within Axie Infinity resulting in an incredible amount of interest last year for just a few cents each. Imagining several of the higher-tier landowners in Otherside colluding to raise the price of the rare “dimensional” resources isn’t out of the question. Depending on their level of utility, buyers wanting to make use of these resources may end up like the black lotus users in World of Warcraft. Many were without a choice: they needed them to participate in the highest-level content.

So, we have limited resources. We have a reasonable assumption, but admittedly not certainty, that there will be both buyers in need of them and sellers willing to collude with each other. The only matter remaining is authorities that either can’t or won’t stop the collusion. And, this is where the Metaverse is particularly vulnerable. 

In the case of the “Black Lotus Mafia,” Blizzard could step in and delete their accounts and possessions. They could also unilaterally flood the market to destroy lotus farming’s profitability. But it’s unclear what, if anything, metaverse projects can do to stop users from doing things that negatively affect the platform. 

It would seem that one thing they can’t do is dispossess the cartel members of their land. Transferring an NFT out of someone’s wallet requires a signature at some step in the process. Without the owner’s consent, the NFT remains in their possession. It would seem that the people running the platform could prevent the wallet user from logging into the game, but then what happens to the land? Is it just left blank in perpetuity — until the NFT representing it is in someone else’s possession? 

Plus, it remains an open question whether a developer could or would intervene at all. Perhaps banning decisions are designated to a DAO rather than in the developer’s purview. Perhaps the party who can stop cartel members from participating isn’t competent, or doesn’t care. The point of the matter is that a profitable cartel won’t stop on their own — ask OPEC — and requires a capable and motivated authority to make it happen. Even if these are all in place, they would need to be consistently operational. It would seem that, given a span of years, there would be at least a few months where the defenses are down on at least one platform enough such that a cartel may appear.

All in all, it seems that such anti-competitive behavior and racketeering is inevitable. There will be at least some. Possibly a lot. If we’ve seen them develop in less profit-oriented virtual environments than modern metaverse projects, why wouldn’t we see them there as well? I feel nearly completely certain we will.

Implications

One of the themes I find myself writing about repeatedly is the damage that bad actors can cause in a decentralized environment. Any time control is moved away from a central authority, there’s a concern that systems will break down. The concerns that these new technologies and the people who use them will be horribly damaged by people with bad intentions is both reasonable and a bad reason to avoid the change.

The promise of Web3 is to deliver control of vital social institutions to transparent code (law) and its users, away from empowered individuals. It is the continuation of a trend that has been with us since the development of civilization. As time passes, authority is distributed. And, as a result of that distribution, life tends to improve. Few people believe that the world was not improved by the movement of rule from kings to elected representatives. When everyone could own land, and not just the nobility class, we found that things were better.

As the structures of policing and governance melt and spread, there will surely be those who will take advantage of the situation. When the opportunity presents itself, they will organize and try to exploit it. There’s nothing new or suprising about racketeers. So, we should be ready for that, even in this new virtual context. History already makes it clear that the gap between digital and analog worlds is not a sufficient barrier to keep them out. So, here they come. Luckily for us, as surely as the creation of new digital resources and decentralized control structures will sprout them, they are not sufficient to stop the broader movement.

• I talk about the potential of virtual reality and virtual worlds to improve language teaching.

• That application requires software tailored to it, and it’s unreasonable to expect the same virtual world that runs games and provides for shopping to do that as well.

• I argue that, if the Metaverse comes together, it will be as a cluster — a soldered-together mass of many virtual worlds.

I received my master’s degree from a Korean women’s university. I’m neither Korean nor a woman. It’s a long story.

The degree was in “TESOL,” which is essentially just foreign language education where the target language is English. Through study and practice, I came to understand that learning a language is much closer to learning to dance than it is to learning biology or history. Language knowledge is composed mostly of skills to be practiced. It’s not just a collection of facts and information to memorize

As such, a classroom is just about the worst place to go about learning a language. The students are arranged like eggs in a carton, sitting in silence, facing the teacher as he explains things like how to conjugate verbs or the difference between “they’re,” “their,” and “there.” Imagine the absurdity of learning to dance that way, and you begin to understand why so many people come awar from years of language instruction with no actual proficiency. Students need to be able to interact, using the language to accomplish different things in different contexts. With extensive practice, guided corrections, and admittedly a little direct instruction as well, the students gradually became good at it.

Virtual reality, then, becomes a much better option. In a moment, two students could be role-playing a cashier and a customer, learning how to politely interact in the real world, surrounded by a virtual grocery store. Later in the lesson, they find themselves in a restaurant as waiter and diner, perhaps interacting with AI-controlled “non-player characters” acting out their virtual roles around them. The utility in VR for acquiring skills — including languages — is just immense.

There’s potential here. But, as a former language teacher, I know I need certain things from a virtual environment to do my job well. These would include:

• the ability to bring up visual aids

• the ability to change a student’s environment to suit a scenario of interaction

• a method of displaying and storing key points or notes for the lesson such that students retain them. Think of this as a virtual white board.

• integration of my students’ records so as to review grades, mark attendance, jot down notes about performance, and so on

• a method of contacting senior staff in case something is needed or a serious issue arises

• a clock or timer

In short, I would really need a virtual world application designed to suit the function of teaching. This is a use case for the Metaverse that I’m familiar with due to my education and work experience, but I imagine the same is true for many people hoping to accomplish tasks virtually. An accountant will need quite different functionality than a therapist, who needs something totally different from a musical performer. Just as not all people use the same software for their purposes, not all people are likely to be in the same virtual environments.

An Alloyed Metaverse

Whether as a result of popular sci-fi or the influence of Mark Zuckerberg, the model that has dominated popular discourse is that of The Metaverse-with-a-capital-M. A single virtual environment in which we can perform all of our activities online. It is a monolithic conception — an alloy of all the utilities anyone might need in virtual space to form one beautiful, shining digital whole.

And developers of the various metaverse platforms thus far created seem to have taken this paradigm on board. Announcements of new projects are so strikingly broad. It’s as if they want people to be able to do anything there. I learned of a new one earlier today: Everdome. Have a look at the use cases presented on their website.

Among other things, Everdome is positioning itself to be a place to game, shop, meet your doctor, engage in social media interactions, and even to use AR to check how you’d look with a new tattoo — all in the context of a near-future sci-fi environment on the planet Mars. It’s incredibly ambitious.

I only single out Everdome because they are the most explicit with regard to this aspect of metaverse development culture. They are not alone. Somnium Space provides nine use cases for their product on the FAQ section of their website, none of which are particularly specific. Decentraland keeps their use case proposition to one, purposely ambiguous sentence: “anything like static 3D scenes to more interactive applications or games.” In terms of software, what couldn’t that be?

It’s not as if there is no reason to make something that has a variety of uses. Buffets exist. So do Swiss Army Knives. But the food at a buffet is never that great, and the scissors in your Swiss Army knife will drive you insane with frustration. Quality almost always comes from focus.

A Welded Metaverse

If “The Metaverse” is to come together, it seems likelier to me to be built of innumerable, limited-use-case virtual environments. It will not be a sleek monolith, but instead a chaotic, interconnected cluster, welded together in many interesting ways. It will still make sense to say “The Metaverse” to describe the whole mass of it all, but one could just as easily discuss all of its constituent parts, much like how websites, social media, apps, emails, and a million other things come together to make the virtual tangle we call “the Internet.”

I wish more Metaverse projects specialized. Virtual worlds are incredibly difficult to build, requiring years of development to do anything reasonably well. Ask the gaming industry if you doubt this. Their development cycles span years, often only arriving at their alpha stage by the time they reach their originally stated ship date. Imagine the difficulty of trying to make one that does significantly more than run a game. Add enough functions, and it reaches a point where it simply becomes unreasonable. How can one team, no matter how large or well funded, produce something that serves the needs of gamers, teachers, doctors, brands, and more?

I can only speculate as to why this has been the approach so far. Perhaps it’s due to the popular, Zuck-fi conception of a Metaverse. Perhaps it’s out of a fear of losing potential users by specifying what their project is to be used for. I suspect that it comes from a deeper desire to make something revolutionary, rather than something just “really good.” An excess of ambition. A thirst to be a real “disruptor.”

Regardless of the cause, I don’t think this is an effective strategy for reaching mass adoption. Rather than trying to be everything to everyone, developers should give us a reason to enter their virtual world — something we can do there that we can’t quite do anywhere else. Make it work beautifully for that purpose, and we will come. We will spend money there. Naturally and of its own accord, when several such spaces exist, someone will develop a convenient way to transverse them. Only through that joining can we finally have a workable metaverse — the Metaverse*.*

One of the projects that fell off my radar was Nifty Island. It only reregistered when a friend brought to my attention an article that featured their founder and his thoughts on scarcity.¹ I read it and felt compelled to dig into the project a bit further. I remembered it when I rediscovered the low-poly palm statuettes they offered as NFTs. They have an odd sort of whimsy to them that sticks in the back corners of your memory after you see them, so I knew I was on land I had explored at least cursorily once before. Nifty Island is what their founder describes as a "gameverse." Like many other projects, it seeks to assemble a virtual world in which people can build what they choose and claim their creations by way of an NFT. This gives them the opportunity to profit from and/or sell them, adding a financial element to the ludic atmosphere of a virtual world built for games. Nifty Island will thus serve a centerpiece in a larger ecosystem they're developing as a part of their long-term goals.

Their unique selling proposition, though, is that land in Nifty Island will be infinite. Anyone can join in and receive a small island via NFT to build whatever they choose.² Over time, through their efforts, users can unlock more build area and further capabilities for development. For its founder, the perhaps pseudonymous Charles Smith, this move both a business decision, and an ethical imperative. "Scare virtual land is not only unethical, it's almost certainly a losing strategy," he opines as he begins the article my friend sent.¹ About the latter, Charles may be right. It could be that a digital infinity in supply turns out to be as useful for metaverses as it has been for YouTube and other platforms of creation. About the former, I believe he is mistaken. It's a weird position to be in, arguing for denying something potentially free to people who want it. Still, there are reasons for artificially imposed scarcity, and acknowledging them will help us understand both why scarcity works as well as how to understand its ethical status.

Games Exist Because of Scarcity In a podcast recorded the day after announcing Nifty Island, Smith provided some insights into the way that he views scarcity. "We think that people are playing games to escape the constraints of normal life and not to be reminded that the land is super expensive." ³ While I agree that games are an escape, and nobody wants to be reminded of their tardy rent in the middle of a battle royale match, the implication is that scarcity of important resources is something that people try to avoid. This is not the case.

A game is often the result of our need for scarce resources forcing interesting decisions. Do you shoot, even though you've only got three bullets left? Do you clear out your inventory to make room for the treasure you just found? These constraints are often what makes the game fun in the first place. Monopoly is hardly worth playing with infinite money - only barely more than Connect 4 with infinite columns. Games are weird when you think about it. We actively choose to be limited in what we can do, and cause ourselves difficulty. Strangely, we really prefer it that way. We just don't want to be so limited that it makes the game unfun. The pleasure actually emerges out of the scarcity and the meaningfulness it gives our choices. One is reminded of the atheist trope of Heaven sounding boring. When every need is met, every wish granted, Death and Illness driven forever into the past, why do anything at all? Of what import is any possible action you could take? Things get interesting only once limits are met.

While I don't believe this is a particularly good argument for making land scarce, I do think it illustrates the difficulty of categorizing scarcity in moral terms. Digital scarcity should not be seen as a bad thing in and of itself. We should be asking ourselves why something is being made scarce, and if the benefits derived from it outweigh the privations it may entail. Its ethical status really depends on how it's done, or on its results. Should it cost thousands of dollars to begin building in a certain virtual world? Perhaps not. But, it should cost something, and our experience with email demonstrates why.

The Spam Problem In the infancy stage of email's development, there was a debate within the nascent Internet community as to how would be the best way to implement it. There were some who felt that "postage" of a sort would be advisable. The amount required would be vanishingly small - less than a cent - but it would act as a deterrent to mass mailings, and it would provide a layer of traceability.⁴ Ultimately, the decision was made to keep email free, primarily on the basis that even the smallest amount of postage could limit access for some of the world's poorest people. It was a reasonable objection, but it has had some negative repercussions. Allowing a person to send infinite emails resulted in enormous mass mailings. Imagine the opposite route had been taken instead. We could have found potentially found ourselves living without "junk" folders and fraudsters trawling email addresses looking for a mark, all for the cost of pennies to a regular user.

"The spam problem" exists anywhere that creation requires no stake on behalf of the creator. It makes it profitable to generate an immense amount of content, knowing that only a small proportion of it will return any money at all. In the context of email, YouTube, and other platforms, we have created means to ignore and avoid most of it. In the context of contiguous 3D space, we cannot. If a world becomes popular without any barrier inhibiting endless creation, the result will be a spamscape. Parcel after parcel of copied and pasted advertisements, phishing hooks, and other such junk stretched out between you and your destination.

Imagine the ugliness of such a place. It's perhaps the only thing worse than the empty landscapes of parcels-to-be-flipped that we see in certain virtual worlds where speculators prevail. Nifty Island has cleverly side-stepped this by making the parcels non-contiguous. Each one is an island in a virtual sea. This is, however, less compelling than a world in which one can move from place to place more freely. 

Other workarounds exist, too. There's transportation by teleportation, which Nifty Islands is, in effect, using. But, that doesn't solve the ugliness problem that would result from free, infinite land. There's also the possibility of a "land tax" for virtual real estate holders, which would have the effect of pushing out speculators.⁵ My own opinion is that a small upfront cost combined with a virtual land tax would be most effective at ensuring digital land is put to good use, but that's perhaps an article for another day. Still, a broad implementation of Nifty Island's model would result in spam land, and the net outcome may be worse for everyone than if there was an upfront cost to begin.

The Invisible Power Glove of Adam Smith

One of the pulls of capitalism throughout its history has been the nearly unequaled efficiency of markets. Clever people have built them into systems that ostensibly didn't even need them so as to make them more efficient with their resources. This is something we see even in Ethereum and Bitcoin, which regulate the use of their processing resources through transaction fees and "gas". Even in the digital plenty of a metaverse, we have resources with a limit, some of which are more arbitrary than others. We have to consider the size of the world we wish to populate, sure, but also processing power and memory (neither of which support an infinite world), user attention, and other, more abstract resources. Creating a market for land helps ensure that these are used to their highest productive potential.

It is of course not necessary that a virtual world have a certain size. But, I'd like to suggest that it should, even if that size changes over time. There's a sort of balance to achieve to optimize user experience. A puzzle with only two pieces is about as worthwhile as a puzzle with two billion. Somewhere in between is the place where we find that equilibrium of concision and plenty that makes for the most compelling experience. The analogy is imperfect, admittedly, but sufficient for illustrating my point: that people find a space pleasant that is neither too densely filled with stuff, nor too desolate and void of content. YouTube achieves this balance with their feed, artificially limiting the amount of their content you see. This becomes much harder when you're dealing with 3D space and people who have claimed the right to a certain stretch of coordinates within it. So far as its capacity to make a metaverse work better, creating scarcity so as to establish a market is a good thing.

A Problem as Old as Money

After reading and listening to Charles, Nifty Island's founder, I couldn't help but be struck by his thoughtfulness. He clearly has good intentions. But, his frustrations with scarce digital land seem to me to be a frustration with the results of the market surrounding them rather than an abstract objection based on principle. He may disagree with that assessment, but I doubt he would feel how he does if the market determined that land should cost $1. The problem with markets, as probably everyone has noted over the course of their lives, is that they are frequently efficient but rarely fair. Smith believes everyone should have a shot to create. About that, he's probably correct. There should be somewhere people without funds in their bank account can be free to build something wonderful. I'm happy his project exists, both to provide that opportunity and also to run the resultant experiment. I want to know what happens when there are no barriers, and if making the land non-contiguous works to offset the spam problem.

My qualm with Charles is couching the existence of scarce land in ethical terms, and describing it as "a losing strategy". Scarce digital land, to me, makes sense in most contexts. The normative question - whether it's good or not - depends on its implementation and the effect it has for people generally. Scarcity is not necessarily deprivation. And, scarcity within reasonable limits has its clear benefits. If it didn't, I doubt people wouldn't gravitate to it how they do, or derive so much fun from the choices it forces them to make. So, a little more subtlety is required here. Rather than sensing something basically bad with "scarcity" of this or that resource, we should be asking how it's being done and what its effects are. There are implementations that are helpful. There's an amount that is preferable. As to how much scarcity? Well…just not too much.

1 - http://blockworks.co/scarce-virtual-land-is-a-losing-strategy-cofounder-of-nifty-island-says  2 - https://www.niftyisland.com/ 3 - https://play.anghami.com/episode/1024086001 [~26:53] 4 - https://amzn.to/3yOiQ5k 5 - https://www.gamedeveloper.com/business/digital-real-estate-and-the-digital-housing-crisis

And so, about a week ago, I created STRAB0 — the group chat for the Metaverse. I named it for Strabo, the Greek writer and geographer that brought information and stories about far-off lands to the people of the Roman Empire. These places were largely unknown and exotic, but Strabo’s Geographica helped make them comprehensible and interesting to a people that found themselves moving into terra incognita — a people who were soon to conquer the ancient world. Just as Strabo invited the people of Rome to familiarize themselves with the great frontier they were moving into, so am I inviting you to join us in conversation and sharing about virtual worlds!

My hope is that STRAB0 can become the place for such discussion, free from the shilling, the spam, the bots, and the mindless hype that characterizes so many Web3 spaces. It is open and unaffiliated with any brands — an independent space where ideas about virtual real estate and virtual worlds can be shared openly.

For $5 monthly, you obtain access to a small and growing community that already includes people in charge of Metaverse investment projects, Web3 podcasters, blockchain developers, data aggregators, and Metaverse researchers. We discuss and react to and casually discuss the latest developments in the space. I myself post links and content there 3–4 times daily, including the rough, first drafts of my own essays, which have become respected in the virtual real estate space. Think of it as camping next to a stream of pure, triple-distilled, 200-proof “alpha,” alongside a community of informed people to discuss it with.

In STRAB0, you can join with some of the best minds in the field, stay up to date, and share your passion for virtual worlds and virtual real estate. Simply visit www.pateon.com/strab0 to sign up. Upon joining, I’ll send you the one-time-use invite to STRAB0’s Discord server, where everything goes down. For only $5 a month, you will not find a better source of information and discussion for virtual worlds. See you in the chat!

"Wow, who would have thought the entire NFT market would just collapse? …Me. I did. Now I'm laughing." ³ This tweet, however unpleasant, is a pretty good distillation of the told-ya-so schadenfreude dominating a lot of the media on NFTs at the moment. The fact that, really, practically everything is down and NFTs are just sort of along for the terrible ride ³… that much doesn't get brought up so much, but the NFT crash feels like a sweet vindication for those that were skeptical of the technology from the beginning. Honestly, I have a sense that few of them understand what an NFT is. They think they're nothing more than .jpgs of primates and such - bait for fools on a hook designed to yank their money directly out from their pockets. The truth is that confusing the image for an NFT is akin to confusing the car for title. The non-fungible token ("NFT") itself sits on the blockchain and provides the information on who owns something that exists in the digital world. 

For those not in the know, a blockchain can be compared to a spreadsheet of data that sits on a network. A new sheet gets added to it every few seconds, and records information. That alone isn't that interesting, but for reasons that are better left to a more comprehensive article, that information is given a few special characteristics: it doesn't change, anyone can read what it says at any time, and nobody has control over it. By referencing an individual file or a piece of computer code, the NFT can tell you all sorts of characteristics about the file, including who the rightful owner is. It makes sense that, for many of the first instantiations of an NFT, people chose to use them to link to simple image files. It's a basic use case for it and way to prove the technology works. But, to confuse the image itself for the NFT is to miss the point. What's special and new is the chunk of code resting on the blockchain, and not necessarily the file it points to.

Between the lack of understanding and the sheer delight that many of the naysayers are taking in the latest market crash, I really felt the need to defend the NFT. It remains to be seen if the latest drop in value is just reflective of the bear market in general or if there's a special deflation reserved for crypto and Web3 assets.³ Still, assuming there is, I'm not particularly concerned about NFTs' long-term survival. Much like how the dotcom crash of 2000 wasn't the end of the worldwide web, NFTs will remain even after the hype is gone.

Why NFTs are Gonna Make It Naysayers sometimes draw parallels between NFTs and things like "Beanie Babies" or the Dutch tulip mania of the 1630s - speculative crazes based on resale, where prices spiked and crashed over a span of a few years. While we still have both Beanie Babies and tulips, they are no longer seen as assets. Stocks in web-based retail companies still are, and the distinction is their utility. The Internet has utility: it has a purpose beyond speculation that brings actual benefits to people. If NFTs are to persist despite this supposed crash, it will be because they do something worthwhile for people better than the alternative products can.

In the excitement over NFTs, which have only been around about four years at this point, people have made the argument for broad and varied applications of NFTs.⁴ These include things like storing title to real-world real estate, tracking the movement of goods through supply chains, as well as a paperless form of tickets and memberships. This broad approach has some merit, and it's at least worth exploring. However, I'll make the argument for one single use: a way of connecting the wealth of virtual worlds and the "real-world" economy.

The Wealth of Virtual Nations The idea of a "virtual economy" is probably super exotic to anyone not involved in gaming. But, multiplayer games like "EVE Online," "World of Warcraft," "Lost Ark," and so many others involve obtaining lots of in-game items. There's in-game currency to trade for them, and the fact that they're scarce and in demand creates a market within the game for them. It doesn't take long within these worlds to realize people really want these things, and if one could find a way to pull it off, you could get paid in dollars for providing them.

Thus, shortly after the creation of the multiplayer online role-playing game (MMORPG) in the late 1990s, a black market emerged to trade in-game supplies for out-of-game dollars. It was typically done over normal venues like eBay, which only banned the sale of virtual goods in 2008.⁵ Such trade still takes place, but now typically in even darker corners of the Internet.

The amount of wealth contained within virtual worlds is substantial. In his groundbreaking 2001 paper on EverQuest (an MMORPG of that era), economist Edward Castronova estimated the wealth within that game world.⁶ He used a few different methods, but the simplest and most direct was to find the value of the characters sold on eBay per level, multiply that by average level, and multiply that by the number of characters. The result of his efforts was an estimated gross national product per capita of the game world that came out to about $2,266 a person. For context, that placed them somewhere between Bulgaria and Russia at that time, making EverQuest's game world "richer" than all but 76 countries on Earth!

In the same marketplaces people sold off their characters, they also traded in-game currencies. You could buy, for example, 1000 platinum pieces on eBay. Upon winning the auction, the players get in touch, and a delivery is made in-game. Definitionally, this sets up an exchange rate between currency in the real world and the virtual. At the time of his article, one platinum piece in EverQuest was worth a little over one cent USD. That made it more valuable per unit than the Japanese Yen or the Italian Lira!  From there, Castronova considered the value in USD of the equipment and cash on a character, and then divided that value by the number of hours played. He was able to determine that players were creating approximately $3.42 in value per hour of effort.⁶ At 40 hours a week with two weeks of vacation, a person could have created $6,840 in cash and goods per year. Today, some 21 years later, that would be equivalent to $11,162.88. That's higher than the average income in Poland or Portugal is currently.⁷

Bear in mind, this was 20 years ago. The participation in online games has exploded since then. "World of Warcraft" was still 3 years away, and "Second Life" launched a few years after that. Second Life alone generated 3.2 billion dollars in trade in 2014,⁸ and the trading of just real estate in virtual worlds alone produced $501 million in 2021.⁹ The total amount of value contained in virtual worlds is hard to estimate, but it's many orders of magnitude higher than it was in that one world at that one time. Taken in aggregate, we may be talking about the equivalent of the wealth of an entire continent, locked behind the walls that separate the digital and the physical.

A Walled Garden And, locked up it is. Developers are generally opposed to real money transactions ("RMTs") for their digital goods. The reasons are multiple, but they primarily cite issues related to maintaining gameplay balance and fairness.¹⁰ The argument is essentially that the game is made worse by allowing wealthier players - or at least players willing to spend more - to acquire powerful or desirable items upfront. Gamers also often protest the potential for this sort of thing to happen, coining the phrase "pay-to-win" to describe the dynamic.

Another reason for developer opposition is their potential liability.¹⁰ In the way games are commonly constructed, items exist as code stored on the company servers. An accident or otherwise that results in that item being deleted would potentially make the developers liable for an incredible amount of lost wealth. That's a lot of downside without really any benefit at all to the company running the game. It's not as if they receive anything from transactions conducted between players on sites like eBay. The player population has responded by turning to the black market to conduct their businesses. Companies often take it upon themselves to find the players involved and remove them from the game. Developers expend millions to hunt down and punish cheaters of this sort and others, constantly remortaring and resealing the wall they've erected between the economy of the physical world and their virtual world.

Sadly, the clock is forever ticking on all the value sealed inside. The goods inside virtual worlds, despite being made of 1s and 0s, are not evergreen. Virtual worlds tend to rise in population rather sharply when they launch, but over the years interest eventually wanes, and the user population moves on to the next project.¹¹ Thus, while there are potentially millions or billions of dollars in value in a given virtual world, that value will eventually diminish and perhaps disappear entirely. What a waste! It reminds one of crops left in the field to rot on the vine before they can be harvested and brought to market.

If we could find a way to address developer concerns about accessing virtual world wealth, we could unlock the gate to that garden and find a way to bring those billions into the real world. The industries surrounding making use of this resource would offer gainful employment for a number of people, particularly in the developing world. One would consequently find new and interesting investment opportunities for capital, and the potential for gamers to begin to see a return on their investment of time - even if only by selling off their character when they're done.

The key, my friends, is the technology of the NFT.

Why NFTs? The non-fungible token does offer a method for addressing developer liability. With the NFT, need not be stored in the servers, but on-chain. This reduces drastically the developer's liability if something were to go wrong with their hardware. What liability is not covered there could be included in the text of the virtual world's end user license agreement ("EULA"). This is the block of legalese that one clicks "I accept" on before starting up a game. It is already used to protect the company against various other forms of legal exposure, and I have to imagine it could be used to good effect here as well.

Still, there will be some potential risk for the developer in opening their in-game markets to the outside world. That potential downside can be balanced by the upside provided by the smart contract of a non-fungible token. An NFT can be created so as to provide royalties to its originator in the event of any secondary sales. What that means is that, if a player sells an item or a piece of property to another player, the developer can receive a pre-determined cut of that sale. This is effectively passive income to them, and depending on the success of the game and the size of the royalties, it could represent a very significant amount of money.

The issues of fairness and gameplay balance are harder to address. There's quite obviously the possibility of the wealthy receiving a boost in-game by virtue of their increased ability to spend money. Players could circumvent the effort of acquiring the item themselves by just buying it, and the meritocracy of the game world is destroyed. NFTs alone do not do anything to fix this, but I do believe that the problem is overstated.

First and foremost, there are a large number of virtual worlds with no pretense towards a meritocracy. From Second Life and Entropia Universe to today's Decentraland and Otherside, none of them are trying to be "fair" with regards to the income of their user base. It's seen as part of their particular world that money matters. For those that do attempt to keep things relatively fair in that regard, one should bear in mind that there are barriers to making use of purchased digital items. You could, for example, put me behind the wheel of the most expensive ship in EVE Online, and I'd probably still get myself killed in it.¹⁰ Or, you could get me a high-level character in World of Warcraft, but I'd still be useless in a raid. In many, many circumstances, obtaining the item in question is not sufficient to make use of it.

Moreover, I have to admit that I doubt the sincerity of most development companies when they say they are deeply concerned about fairness and game balance. A lot of them seem just fine about purchases when it's them selling items. Blizzard Entertainment has their auction houses, EA has made tons off loot boxes, Epic Games has cashed in huge on Fortnite skins, and the mobile gaming industry is absolutely rife with profitable "pay-to-win" mechanics. Not all developers are unprincipled, but for most, I think the concerns expressed about fairness are little more than a virtuous cover for their desire to be the sole beneficiary of sales.

Winning while Winning Trading real money for digital goods is not going away. If anything, the blockchain integrations of the various metaverses are making it more and more normal to purchase digital items. And, as they have for 20+ years at this point, entrepreneurs will not cease to exploit these digital resources. The efforts made to prevent such trading amount to a trying to kill a hydra. Each head removed from the beast sprouts two new ones. We should probably accept that a larger portion of people's lives will be spent in virtual environments, and reap benefits from that while minimizing negative consequences. Using NFTs to engage in transactions for digital goods allows for us to access the significant wealth of these worlds in a way that benefits all parties. Developers can be released from the liability of storing that data on their servers while still benefitting from the income of both their own sales and a percentage of the secondary market. For gamers, they would be able to benefit from the monetization of their in-world efforts without having to brave the dangers of the digital black market. Even those with no connection at all would accrue some positive outcomes by virtue of the fact that a new source of capital worth billions has been linked up with the economy they participate in daily.

Why not make use of this technology? The sealed-off wealth of these worlds could actually help people, creating new sources of income, new jobs, and new possibilities for expressing human potential. NFTs can break that seal, unlocking access to a harvest that will be unlike any that has come before.

1 - http://wsj.com/articles/nft-sales-are-flatlining-11651552616 2 - http://theblockcrypto.com/post/146566/nft-bayc-crypto-markets-prices-ethereum-solana-cryptopunks-terra-luna 3 - http://cnet.com/personal-finance/crypto/are-nfts-dead-dont-count-on-it 4 - https://identityreview.com/10-nft-future-use-cases/ 5 - https://www.amazon.com/Play-Money-Julian-Dibbell/dp/0465015360/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1652622030&sr=8-1 6 - https://www.econstor.eu/bitstream/10419/75918/1/cesifo_wp618.pdf 7 - https://worldpopulationreview.com/country-rankings/median-income-by-country 8 - https://jvwr-ojs-utexas.tdl.org/jvwr/index.php/jvwr/article/download/7179/6375 9 - https://realting.com/news/sales-of-virtual-real-estate-in-the-metaverse 10 - http://groups.csail.mit.edu/mac/classes/6.805/student-papers/fall07-papers/games-property.pdf 11 - https://mmo-population.com/

The Wealth of Virtual Nations

The idea of a “virtual economy” is probably super exotic to anyone not involved in gaming. But, multiplayer games like “EVE Online,” “World of Warcraft,” “Lost Ark,” and so many others involve obtaining lots of in-game items. There’s in-game currency to trade for them, and the fact that they’re scarce and in demand creates a market within the game for them. It doesn’t take long within these worlds to realize people really want these things, and if one could find a way to pull it off, you could get paid in dollars for providing them.

Thus, shortly after the creation of the multiplayer online role-playing game (MMORPG) in the late 1990s, a black market emerged to trade in-game supplies for out-of-game dollars. It was typically done over normal venues like eBay, which only banned the sale of virtual goods in 2008.⁵ Such trade still takes place, but now typically in even darker corners of the Internet.

The amount of wealth contained within virtual worlds is substantial. In his groundbreaking 2001 paper on EverQuest (an MMORPG of that era), economist Edward Castronova estimated the wealth within that game world.⁶ He used a few different methods, but the simplest and most direct was to find the value of the characters sold on eBay per level, multiply that by average level, and multiply that by the number of characters. The result of his efforts was an estimated gross national product per capita of the game world that came out to about $2,266 a person. For context, that placed them somewhere between Bulgaria and Russia at that time, making EverQuest’s game world “richer” than all but 76 countries on Earth!

In the same marketplaces people sold off their characters, they also traded in-game currencies. You could buy, for example, 1000 platinum pieces on eBay. Upon winning the auction, the players get in touch, and a delivery is made in-game. Definitionally, this sets up an exchange rate between currency in the real world and the virtual. At the time of his article, one platinum piece in EverQuest was worth a little over one cent USD. That made it more valuable per unit than the Japanese Yen or the Italian Lira! 

From there, Castronova considered the value in USD of the equipment and cash on a character, and then divided that value by the number of hours played. He was able to determine that players were creating approximately $3.42 in value per hour of effort.⁶ At 40 hours a week with two weeks of vacation, a person could have created $6,840 in cash and goods per year. Today, some 21 years later, that would be equivalent to $11,162.88. That’s higher than the average income in Poland or Portugal is currently.⁷

Bear in mind, this was 20 years ago. The participation in online games has exploded since then. World of Warcraft was still 3 years away at that point. The amount of value locked in virtual worlds is hard to estimate, but it’s many orders of magnitude higher than it was in that one world at that one time. We may be talking about the equivalent of the wealth of an entire continent, locked behind the walls that separate the digital and the physical.