Despite recent market fluctuations, the harsh conditions of the so-called crypto winter are receding for digital token traders. The resurgence has been bolstered by the launch of spot Bitcoin exchange-traded funds (ETFs) in January and strong endorsements from prominent figures like Republican presidential candidate Donald Trump. This recovery follows the sharp downturn caused by the collapse of cryptocurrency exchange FTX.
In contrast, major technology companies venturing into centralized metaverse platforms have faced significant challenges. Meta Platforms Inc.’s Reality Labs, led by tech mogul Mark Zuckerberg, reported a staggering quarterly loss of nearly $4.5 billion, highlighting the difficulties in achieving profitability within the digital space.
Tokens.com has also suffered severe losses, with its virtual real estate portfolio losing 80% of its value. The company has since shifted its focus from the metaverse to developing silicon humanoid robots powered by artificial intelligence, following its acquisition of Simulacra, a producer of hyper-realistic sex dolls.
Similarly, TerraZero Technologies Inc., which once aimed to facilitate metaverse property loans, has been adversely affected by the market downturn. In early 2022, the company offered one of the first metaverse mortgages for a property valued at $40,000 with a 25% down payment. However, since then, the company has rejected all subsequent loan applications, citing speculative behavior among applicants and a lack of genuine development plans. As land values plummeted, the initial mortgage was returned at cost.
Dan Reitzik, CEO of TerraZero Technologies, expressed concerns about the complexity of crypto and NFTs for the average consumer. He believes that the general public and brands are not yet ready for these technologies. Reitzik suggests that a metaverse based on fiat currency could be more appealing to the broader market.
James Casey, an associate professor of computer game design at George Mason University, agrees with this perspective. Drawing from his experience as a video game developer, Casey argues that while blockchain technology is promising, the success of the metaverse will likely depend on integrating fiat currency and centralized assets. He points out that, even in virtual environments, people desire ownership and control over their digital experiences, viewing them as new frontiers of property ownership.
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