JONES DAY PRESENTS®: The Metaverse - Opportunities, Markets, and Regulations
Jones Day Financial Markets partner Mark Rasmussen explains how real-life regulations could cross over into the rapidly expanding metaverse space. He talks about the metaverse's current uses and potential advancements, and the possible legal issues confronting its participants.
A full transcript is below.
The term metaverse is still being defined, and it may have different meanings for different people. The term was coined back in the early '90s by a science fiction writer. What he envisioned was a persistent online 3D virtual world, where we can interact with one another. The way I see it in sort of simple terms is bringing more of your physical world into an online virtual world, and also bringing some of the online virtual world more into your physical world. You might hear the terms virtual reality and augmented reality.
Currently, the use cases for the metaverse have largely been in the gaming and social networking environment. When I was a kid growing up, if you wanted to play a video game with a friend, you went to that friend's house. You talked and you competed and had a good time. My kids are growing up in a world where they don't want to be in the same room because they can't interact together. They want to be in separate rooms because they can talk. They can communicate. Their avatars can meet up, and they can fight and have contests
That's kind of part of the metaverse that we're seeing today. It's a persistent world that's going on even when you leave. It allows for sort of when you're there, real time interactions with other people through their avatars or through other digital figures. That's what I see today as the current use cases, but companies are working on advancing this technology in ways that could impact many different areas of our lives. So imagine instead of a work meeting where you're chatting via some video conference technology, that's sort of a flat screen, imagine a world where it appears that other people's avatars are seated all around you. So that becomes a much more immersive, engaging work environment. The pandemic has really accelerated both the technology development and also our willingness to engage in these platforms. Because by necessity, we're not together.
Many of the laws that govern our physical world are going to be equally relevant in the online world. We've already seen lawsuits related to digital goods that allegedly infringe intellectual property rights. Because a component of this is if you have a digital avatar in a metaverse, you're going to want to dress that digital avatar in cool clothes. Just like in your physical world, you want to dress in cool clothes. Brands signify cool clothes to some people. So there's a temptation to create branded virtual clothing and items like that. If you're a metaverse creator or if you're creating those digital goods to sell them, you need to make sure you have those rights.
Another big component is how are we going to pay for things in a metaverse? There's going to be commerce, and you're going to want to pay for things. Are we going to be using old line existing payment technology? Are we going to be using credit cards, debit cards, or are we going to be engaging with cryptocurrencies or other digital assets? Along with those decisions will come many different legal questions, particularly if you're using the cryptocurrencies. A lot of the metaverses that are being created are being created with their own version of a cryptocurrency. The question is how has that been sold to the marketplace? Are they complying with relevant regulations and securities laws when they sell those digital assets to the marketplace?
We put more and more of our personal data online. Companies are collecting more and more of that, and laws are being enacted to establish standards for how companies deal with all that personal information. I think it's just going to increase exponentially in a metaverse world. Clients that are considering engaging with the metaverse need to really think hard about their brand and what they want to associate their brand with. To me, the metaverse is sort of the inevitable next step.
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