It’s estimated that about 100 million Americans have watched the Super Bowl every year in the last decade, which means this year roughly one-third of the country saw advertisements for crypto.com, a cryptocurrency trading platform, as well as the metaverse, a digital world owned by Meta (formerly Facebook). While Matt Damon telling you to invest in Bitcoin or an animated dog dancing while wearing VR goggles seems harmless, I assure you there are much darker undertones to the virtual world.
Epic Games, headquartered in Cary, North Carolina, has shown the power and potential of intangible assets. The flagship game for the company, “Fortnite,” is free to play, but raked in an estimated $15 billion from 2018 to 2021. How did they do this? Virtual assets. Players can purchase cosmetic “upgrades” for their characters that have no real or in-game value. These add-ons can only be purchased with “Fortinite’s” exclusive in-game currency that can only be bought using real-world, fiat currencies. People are free to spend their money how they please, but “Fortnite’s” target market has no money.
It’s a ludicrous and predatory practice to charge more than the federal minimum wage when most of the player base is made up of children, who, mind you, have no source of income. The underlying point here is that the digital world, cryptocurrency, NFTs, the metaverse, and virtual assets are a cash grab by corporations as they find new ways to squeeze money out of the consumer. It is no coincidence that the nation’s wealthiest people are all focused on real-world assets while pushing the virtual ones onto the consumer.
Bill Gates doesn’t care about the virtual world. His transaction history proves it. The third richest man in the world has become one of the largest private holders of farmland in the U.S., buying up nearly a quarter of a million acres as of 2021. Stan Kroenke, owner of the most recent Super Bowl champions, the Los Angeles Rams, bought 510,000 acres in 2016, supposedly the largest single fence ranch in the nation. Unlike the inherent scarcity of land, the value and scarcity of virtual assets are artificial, and the creators of these digital programs control supply. They can always release more supply, tanking your investment. They are the only ones that profit when you buy a computer-generated JPEG or an unregulated cryptocurrency. You’d have better returns investing in the S&P 500, or even gambling at a Las Vegas casino.
There are economic indicators whose decline coincides with the rise of the internet. Since the dawn of the internet in 1995, population growth in America has plummeted from a high of 1.2% in 1997 to a low of an estimated .1% in 2021. Things like the obesity epidemic and the coronavirus pandemic are certainly contributing factors to this decline. Still, at the end of the day, people are having fewer kids as their careers, and personal passions have taken a more significant role in the age of the internet. Rents are at all-time highs, as homeownership has never recovered from recession levels, and banks and property development companies have consolidated land ownership. The internet has brought on record profits for corporations with the dawn of intellectual property and the value of the brand, all while employee compensation has drastically lagged.
As dangerous as the economic impacts are, the environmental ones are far worse. For starters, running the virtual world takes an absurd amount of energy. Mining a single bitcoin produces 288 tonnes of CO2. To put that in perspective, mining one bitcoin’s worth of gold produces 17 tonnes of CO2. A tangible, real-world asset with inherent value emits 17 times less carbon than a virtual asset regulated and backed by nothing. If bitcoin were a country, it would rank 23rd in energy consumption at 204.5 TWh per year (and climbing). This doesn’t include other cryptocurrencies, NFTs, the metaverse, or even the environmental cost of creating the components needed for bitcoin mining. Should we really be focused on developing the virtual world when nearly half the world’s population doesn’t even have access to the internet? Indeed, our efforts would be better off creating a diverse energy portfolio or raising the global standard of living than financing egomaniacs and their aspirations to detach from reality.
Blue Origin and SpaceX compete in a privatized space race while we race to our own demise. Instead of buying and selling computer-generated images of primates, go to a museum and appreciate art produced with the human soul. That deposit on your first home, and the liberties of having your own property and autonomy, is far more valuable than any cryptocurrency. Get your kids off the gaming console and go for a hike in the 85 million acres that make up our 63 majestic national parks. This world is the only one we’ve got; I urge you not to be so eager to make a dystopian nightmare our new reality.
Carter Reilly is a senior studying International Business at Loyola University Maryland and is a graduate of the John Locke Foundation internship program.