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Crypto Collapse: Death Star for Metaverses? | GlobeSt


Just when we were getting used to the idea that the metaverses—yes, there’s more than one, actually nearly a dozen and counting—are The Next Big Thing, a lightning bolt of reality hit these emerging virtual worlds and fried them.

The domino-like collapse of cryptocurrency in the wake of the biggest Ponzi swan dive since Bernie Madoff—Sam Bankman-Fried’s “I don’t know where the money went” Houdini act at FTX—has wiped out the value of the non-fungible tokens (NFTs) that were the primary currency used to buy space (a.k.a. “land”) and virtual toys on the most successful metaverse platforms like Decentraland, Sandbox and something called Bored Apes.

Blockchain-generated NFTs have lost 97% of their value in the crypto collapse—and the other 3% is on life support.

To put this in real terms—even though we’re talking about a virtual yacht floating in a virtual world, purchased by someone who wants to serve virtual caviar to their buddies while they all wear VR headsets in different zip codes—anyone who bought a “yacht” from Decentraland when the platform’s MANA tokens peaked last year at $5.60 each will be lucky to get a dime for each of the hundreds of thousands of tokens they purchased to get the “deed” for the virtual boat.

Exhibit A: a virtual boat purchased by pop star Justin Bieber last year from the Bored Ape Yacht Club for $1.3M now is worth an estimated $69K.

As an NYU School of Professional Studies blog that tracks metaverse developments noted in a post last week, “the NFT economy has essentially collapsed on itself.”

“The magnitude of FTX’s bankruptcy will have long-lasting consequences on the general public’s trust in cryptocurrencies, NFTs and the metaverse,” the NYU blog said.

NY Times columnist Paul Krugman has called for regulators to rein in crypto enterprises, pronto. In his column last week, the Nobel Prize-winning economist said the collapse of crypto exchanges calls into question the validity of crypto and crypto-derivatives as instruments for alternative financial transactions in any context.

“Recent events have made clear the need to regulate crypto, but it also seems likely that the industry couldn’t survive regulation,” Krugman said.

This much is certain: you won’t be hearing anyone in the CRE community hyperventilating about a “land rush” on a metaverse anytime soon, for the same reason that you won’t ever see MLB umpires wearing FTX patches on their shirts at the World Series again.

(At least not until Meta unveils the Horizon platform that is consuming most of Mark Zuckerberg’s fortune—quick question: does anyone really want to live in a world designed by Mark Zuckerberg?—or Apple surprises us with a great leap forward in a platform that definitely won’t be called a metaverse.)

But even though its blockchain-generated coins and tokens have joined bundled sub-prime mortgages in the dustbin of speculative financial instruments, the VR patient still has a pulse—primarily in event- and entertainment-oriented applications that can be “game-ified” as immersive experiences—like Decentraland’s FashionWeek virtual runway, which engaged several major retail brands, and its global star-studded MusicDistrict concerts.

The rich folks apparently still want their own private virtual toys, including virtual villas and yachts, which, according to NYU’s blog, they’re still scooping up—albeit at heavy discounts.

VR technology will continue to advance, powered not just by the Manhattan-project ambitions of the tech giants, but by dozens of startups that have assembled A-teams of experienced game designers as well as CGI magicians from special-effects wizards like Marvel.

Someone eventually will come up with a business model that doesn’t involve encrypted fake money.

But the smart money—meaning, in this case, the crispy paper Franklins signed by Janet Yellen that mainstream corporations spend to grow their brand equity—most likely will migrate, as CEOs awaken from their FOMO nightmares and cancel their plans to hire a Chief Metaverse Officer, to a bridge technology that’s ready for prime time in the physical world: augmented reality.

Here’s the good news: AR is a technology already being widely embraced in the CRE world for virtual property tours as an extension of digital-twin proptech. It may soon be coming to an enhanced flex office near you, expanding the definition of hybrid work and amenities.

AR is ready for the world we already inhabit, with technology we can already use for numerous applications without hiring James Cameron as our CMO or buying tokens generated by a 24/7 data center designed to “mine” our wallets.



Read More: Crypto Collapse: Death Star for Metaverses? | GlobeSt

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