The Road to the Metaverse: Second Life

 The biggest reason Second Life cannot become a Metaverse is that it does not use an electronic wallet type application. Therefore, it is not possible to make commercial transactions with crypto money and NFT.

In my previous article, I explained the technologies and applications that led to the emergence of Metaverse. This technology and applications; They were Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR). Today, I would like to discuss Second Life, which can be considered the intellectual ancestor of Metaverse applications. Because the stages that the Second Life application has gone through, the successes/failures it has experienced will enable us to make predictions about the future of Metaverse applications.

Concept of Second Life

The concept of Second Life was first used in Neal Stephenson's novel 'Snow Crash'. The founders of Linden Research company were inspired by this novel and launched the application in 2003.

Second Life is an internet-based virtual world that promises a second life to its users. Many activities similar to those in the real world are also available on this platform. A significant part of these activities is used with money. A virtual currency called the Linden Dollar is used. This virtual currency can be converted into real money if desired.

Ailin Graef, who also works as a real estate agent in real life with the avatar of Anshe Chung (online personality), earned $ 40 million in a short time by buying and selling land in Second Life. Second Life's popularity skyrocketed when it was noticed and announced by the press. Second Life's membership exploded. Of course, the aim of most of these members was to make money like Chung.

Chung wasn't just making money by buying and selling land. He designed special islands for international companies, built shopping centers, entertainment centers, product display areas on these lands, and earned the real money from these works. (I will return to this topic when discussing the Metaverse.) Because of these successful activities, Chung became known as the “Rockefeller of Second Life”.

Second Life Membership Status

There were two types of membership status in Second Life; 

Regular membership 

Premium membership

Premium members had some privileges, of course; As soon as they became members, they were given a land of 512 m2 and a house built on it. They also did not collect taxes on properties of this size. Premium members were able to purchase land on the Mainland, enter casinos and enjoy many other privileges. The only reason why these rights were not granted to regular members was to promote Premium membership.

I repeat at every opportunity that Industry 4.0 and digitalization will eliminate some of today's professions. Studies show that by 2030, 85% of today's jobs will disappear. Of course, new professions will be born in their place.

Platforms like Second Life have also spawned some new professions. For example, a profession was born as the business of producing skins for avatars. With this skin, you define the skin of your avatar. The 'shape', which determines the body shape and type, emerged on this skin. Since these products are necessary for all avatars, they have become one of the most profitable businesses.

Another line of business was island and land design. Designing this island and its plots according to the planned work, making and constructing architectural projects has become a serious profession. Moreover, it is one of the best paying professions.

In this new world, the banking system developed. Banking has become a profession. Casinos, shopping malls, entertainment venues were established. Establishing and operating these venues has become a separate profession.

These new occupations gave birth to new riches. Of course, this new wealthy class was a minority group that held most of the wealth, just like in the real world.

The FBI raided Second Life's headquarters and had their casinos closed, claiming that the company's headquarters and computer servers were in California, and that gambling was a crime in California. Those who ran the casinos were the wealthy, the minority I mentioned above. These rich people were also the group that held the banking and land purchase and sale business.

Over time, conflicts of interest began between this group and the founders of Second life. Because those in this group began to take over the economic activities in Second Life. That's why the Second Life founders shut down casinos instead of moving their California servers to another state and continuing their gambling business. So they dealt a blow to this wealthy minority.

In the next stage, the founders started to close the banks operating in Second Life on the grounds that they did not have the authority to establish a bank. This was the second major blow to the wealthy minority.

As computer servers started to get cheaper, Second Life founders created new islands and plots by putting new servers into operation and offered them for sale. This move, of course, lowered the prices of the island and land. Million-dollar lands in the hands of the said minority began to depreciate rapidly. This was the final blow to the wealthy minority.

Thereupon, this wealthy minority began to exit Second Life by selling their properties and companies. This escape from Second Life resulted in a significant cash outflow. At the same time, the fact that this minority left the platform brought about a serious decrease in investments. This resulted in a decline in popularity and a large loss of members.

The biggest reason Second Life cannot become a Metaverse is that it does not use an electronic wallet type application. Therefore, it is not possible to make commercial transactions with crypto money and NFT.

The most important element that distinguishes Second Life from Metaverse is that its images are not in VR quality. Although, many Metaverse platforms are still operating in screenshot quality.

Apart from playing games on Metaverse platforms, there are lessons that those who enter and plan to enter as investors should learn from the stages of Second Life application. I will discuss these lessons and the reality of Metaverse in my next article.