Metaverse Landlords Are Creating a New Class System

“The accumulation of wealth in virtual economies is of great concern,” claims Rosedale. Because there is no ongoing cost of ownership for virtual landowners, he says, there will be an “inexorable” and “destructive” consolidation of wealth in the hands of a minority.

Similar theories are raised by Roger Burrows, a sociologist and professor specializing in digital culture and social inequality at the University of Bristol, and Vassilis Galanos, a lecturer in sociology at the University of Edinburgh.

The evolution of virtual real estate is “profoundly political,” says Burrows. He sees virtual worlds as places people go to cocoon themselves among others who share their political beliefs. In this case, so-called cryptonatives have constructed a world over which they preside, as owners of the land, built around the same suspicion of government and public institutions on which the crypto movement was founded. Nominally, anyone is welcome, but only as a tenant.  

Burrows says metaverse worlds are simply reflecting what’s happening in the physical world, where ultra-wealthy people like Elon Musk and Peter Thiel separate themselves from “the great unwashed, the difficult and the messy.” The result will be a series of virtual enclaves populated by people with a “misunderstanding of the world” and “fear of otherness,” he says, eliminating any remaining hope that the metaverse will deliver on its promise to unite people from different walks of life.

A different interpretation is that virtual worlds provide the ideal setting for a theatrical simulation of class struggle—a new form of slumming it. Having never experienced class struggle before, theorizes Galanos, those with excess wealth enter into a game that requires them to compete for social status in a virtual community. “It’s like playing Monopoly,” he says.

The platform operators are less concerned about the class dynamics that might emerge within the worlds they have created. The thrust of their argument is generally that hierarchies are native to all human communities, or that exploitative setups will be ironed out as the market matures. “A lot of human nature will be reflected in the metaverse,” says Sam Hamilton, creative director for Decentraland. “Some people will always find ways to game systems and generate wealth.”

Others maintain that the metaverse is a force for inclusion, not division. Hrish Lotlikar, cofounder of metaverse SuperWorld, understands the temptation to treat the virtual rental market as an allegory for class division, but says its evolution is more a reflection of modern attitudes to ownership. Instead of buying a movie, people subscribe to Netflix, and instead of owning a car, they use Uber. In the same vein, he says, some people will prefer to rent virtual land for short periods of use.

Either way, these experiments are playing out on a small scale for now. Although Decentraland attracts tens of thousands of people during events like Metaverse Fashion Week, only around 7,000 visit the world each day on average. 

The secret to Second Life’s enduring success and steady social equilibrium—two decades on, the platform still attracts 40,000 concurrent users—is the relentlessness with which it mimics reality, claims Rosedale, all the way down to its system for taxation.

“If you make something more lifelike than social media, you end up with a situation where people are just as good to each other as they are in real life,” he says. But if you make the wrong design choices with virtual worlds—that’s when things go wrong.

Updated 01-20-2023, 10:45 am EST: This story was updated to correct the average number of daily visitors to Decentraland, which is around 7,000 a day, not fewer than 1,000 a day.