In an extreme scenario, such a highly aligned and autonomous digital community may even gain political power through collective action. Entrepreneur and essayist Balaji Srinivasan argued in his new book The Network State: How to Start a New Country, published this year, that technologies such as Bitcoin, Web3 and the metaverse allow people to exit legacy arrangements and form new groups more easily than ever before. This leads to the possibility of a network state, whereby a community originating in the cloud can crowdfund territory in the real world and negotiate for diplomatic recognition to become a true state.
The civil European metaverse
In recent years, Europe’s political preference for a civilized bourgeois cyberspace has served as a counterbalance to the commercially driven view of the US. Through major frameworks such as the General Data Protection Regulation (GDPR), the Digital Markets Act (DMA), and the Digital Services Act (DSA), the European Union has developed global regulatory influence for minimizing bad behavior, protecting privacy, and guarding against dominant platforms on the internet.
Being more intertwined with the real world, the metaverse is expected to accentuate the downsides of the internet, including privacy protection, online harassment, hate speech, cybersecurity, addiction and competition. We can therefore expect Europe to extend its internet regulatory approach to the metaverse. For example, a Council of the European Union paper recommended that Europe take the lead in tailor-made policy tools and innovative political thinking to safeguard the metaverse. Partly driven by Europe’s increasing scrutiny, Meta announced the creation of 10,000 jobs in Europe to showcase the metaverse’s benefits.
It is unrealistic to envision a completely interoperable and interconnected metaverse
The authoritarian Chinese metaverse
Underpinned by its Made in China 2025 and China Standards 2035 strategies, China takes a long-term view in shaping technical standards of foundational technologies as a source of geopolitical influence. It has been promoting a vision of the internet that enables centralized and fine-grained controls to ensure that Chinese Communist Party (CCP) ideals are upheld.
China sees the metaverse as the next internet battleground, in particular guarding against the development of a decentralized economy that would remain outside of state control. Its strategy encompasses both the foundational and the application layers of the metaverse. At the foundation layer, it is aggressively developing its own central bank digital currency and Blockchain Services Network (BSN) to ensure that transactions in the metaverse are centralized. At the application layer, it is bringing together key metaverse companies via the state-backed Metaverse Industry Committee to shape standards and applications in the metaverse.
If this state-centric vision of the metaverse is realized, it has the potential to strengthen the rule of the CCP through the granular control of reality. Not only can it offer the possibility to create altered versions of the real world for its citizens, different levels of virtual reality with different levels of access for different groups can also be created, with tight control over how access is distributed.