Virtual Reality (VR) has really taken off over the past year, moving up the Gartner hype cycle's ‘slope of enlightenment’ and further towards the 'plateau of productivity'. The VR industry is predicted to be worth $40 billion by 2020, and we are already seeing it impact sectors from retail to data visualization. Blockchain, meanwhile, is on a similar trajectory, somewhat earlier on the hype cycle in the 'peak of inflated expectations', but still predicted to become a $20 billion industry by 2024.
While at first glance, the combination of virtual reality and blockchain may look like a bad attempt to force together buzzwords, there is a growing consensus that the two may need one another if they are going to reach their full potential. Simon de la Rouviere, author of The Blockchain: Mapping the Decentralised Future, for one, believes that, ‘The more I think about it, the more I’m sure that once VR hits the mainstream, the blockchain will almost suddenly thrive much more in VR than in real life.' Equally, decentralized VR worlds could prove far more workable than those run, recorded, and maintained by a 3rd-party.
In VR today, you are at the whim of the developer. They can alter a virtual reality when they want, if they go bust then the whole VR world gets shut down, and they have control of the increasingly large amount of personal information players must provide to partake. Furthermore, it is the major tech companies such as Facebook who are really taking control, giving them sway in yet another area of our digital lives, a monopoly on our virtual existence.
Decentralized virtual reality changes this dynamic, handing control of their online world back to the user. One startup making waves in the sector is Blockchain-based virtual reality universe, Decentraland. In Decentraland, you can use the platform's own cryptocurrency 'MANA' to purchase a plot of virtual land. You can then build whatever you like on it, whether this be a house or a virtual neighborhood, and populate them with unique virtual objects. You can even turn it into a profitable business, as well as host social events such as parties. Virtual landowners can monetize their worlds by selling space to advertisers or renting it to others in exchange for MANA. The number of Decentraland land parcels are purposefully limited to ensure that it is not left abandoned and so that the value of land increases if the platform gains traction. These transactions don't require any central authority to broker the deal because it is done using cryptocurrency, which further means users receive 100% of the compensation generated through their creation.
The popularity of the platform's ICO suggests that this is also something the public want. Decentraland held its initial coin offering (ICO) last year, raising $25 million from 4,000 investors for its MANA tokens in less than 35 seconds. Ariel Meilich, founder of blockchain-based virtual platform Decentraland, explained the motivation behind the project claiming that, 'We believe virtual reality will flourish once users have a more prominent role in controlling their creations. Currently, the companies that create the virtual worlds own all of the content built by the users. They are the ones who profit, reap the benefits from the network effects, and have the power to undo, change or censor what happens within the world itself. The true potential of VR might be realized, and certainly surpass what already exists, if this power were put into the hands of the users instead.'
Another player entering the space is CEEK. Their goal is to create an authentic virtual concert experience using VR and blockchain. CEEK already has an established VR kit, which is available in the likes of Best Buy and Target, but they are also now introducing blockchain technology onto their platform to create a decentralized concert viewing experience. The company's website explains that, 'CEEK virtual reality environments are governed by Ethereum Smart Contracts, allowing token holders ability for flexible, tokenized ‘in-world’ interactions, rewards, voting, contests, virtual goods and more ‘in-world’ transactions utilizing ERC20 compliant Tokens called CEEK. Each CEEK Token holder will be able to participate in virtual reality space for real-world celebrity concerts, charity fund-raisers, sporting events, VR commerce, classroom learning and much, much more as the exciting world of virtual reality meets real-world opportunity through Smart Contract governance.'
The benefits of VR concerts are many. It essentially allows labels to sell an unlimited supply of virtual tickets. This allows those who either physically can't make a concert to do so, while also introducing some much-needed competition into the sector and driving down the price of tickets. Using cryptocurrency also opens up a range of revenue opportunities. The celebrity coin minting feature, for example, allows artists to create custom coins for virtual merchandise, such as outfits for your avatar. CEEK even has a live, revenue-generating product and a deal with Universal Music Studios granting them the rights to live performances by the likes of Katy Perry, Lady Gaga, and U2, which puts them some way ahead of other startups in the blockchain space currently receiving similar amounts of attention.
It is not just VR that stands to gain from blockchain, though. A virtual world in which cryptocurrency is an accepted fact will normalize its use, hopefully showing people that it can function in the real world. Simon de la Rouviere goes even further than this in his rhetoric, writing that, 'If you can “earn your keep” in bitcoin in a virtual world, governed by incorruptible smart contracts, and it is a world you want to live in and cooperate in more than the real world, what would that do to us? I suspect we will most definitely see a new surge of people demanding exactly that reality into the real world. Down with corrupt governments. Down with archaic governance. Down with intolerance. Down with all the bull****.' This is probably a tad optimistic from Rouviere, but nevertheless, if we can create a virtual world run on blockchain, it could well provide the template for how blockchain functions in the real world. Both VR and blockchain’s boundaries are still nascent technologies and have some way to go, but the possibilities that reveal themselves when you combine the two are endless.