Investing in Art in the Metaverse (Snow Crash)

December 8, 2021

It sounds a bit like a sci-fi headline: Facebook recently announced a name change to Meta Platforms to signal a shift in focus. The company would no longer work on social media, but would instead focus its efforts on building and engaging with the metaverse. It’s the biggest news in the metaverse since science fiction writer Neal Stephenson first coined the term in his 1992 novel Snow Crash.

But what does a science fiction term from 1992 have to do with today’s Silicon Valley? Or investing, for that matter?

Here’s a look at the metaverse, investing, and investing metaverse concepts that art investors should know.

What is the Metaverse?

Yes, the metaverse sounds like something straight out of a sci-fi novel. Back in 1992, it was simply that—a crazy sci-fi idea of a future world. These days, though, we’re creating technology that may just make the metaverse possible.

Think of the metaverse as the Internet brought to life. Kind of. Talking about what the metaverse is right now is kind of like trying to talk about the Internet…if we were in the 1970s. Back then, the building blocks that became the Internet were in development, but no one could know what directions the Internet would take. This fostered extensive speculation about what the Internet would become—and not every idea about what that would entail came to fruition.

That’s where we are with the metaverse. We have the building blocks that will become the metaverse, but what that means in practical terms is hard to say.

The easiest way to think about it is to swap the phrase “metaverse” with “cyberspace” in a sentence and notice that the meaning doesn’t fundamentally change. The metaverse isn’t a technology, or even a collection of technologies. The metaverse is a shift in how we interact with technology.

Mark Zuckerberg (of the new Meta Platforms Inc.) described it as a virtual environment you can go inside, an endless web of interconnected virtual communities where people can interact (via their devices) in much the same way they would interact in real life. Granted, it’s hard to separate Zuckerberg’s vision of a world where everyone has, say, a digital wardrobe, from the fact that his company wants to sell clothes.

Basically, if you’re envisioning a virtual doppelgänger world, you’re pretty much on track (as things stand right now, of course).

What’s the Deal with Holograms?

This is where the holograms come in. Yes, really.

Since the whole point of this virtual world is to interact within it, and we don’t have the technology to beam your consciousness into a virtual program (we’re not at that level of The Matrix, at least not yet), you have to interact with the digital world via an avatar.

That’s the practical answer.

The realistic answer is that tech companies have to show off the exciting idea of the metaverse without showing the bulky headsets or awkward glasses behind the curtain. Their solution (including Meta’s presentation solution) is to fabricate a prettier version, whole cloth. Thus holograms, which simply are not possible without extremely advanced versions of today’s technology.

Think about it. If our current avatars are…acceptable, if a bit shaky, a stable, motion-tracked, three-dimensional hologram is impossible to achieve without tightly controlled circumstances and a lot of high-powered tech. We’re stuck with avatars, but holograms look cool.

What Can You Do in the Metaverse, Exactly?

The point of avatars is to gain access to this virtual world, since you can’t traverse it yourself. And once you get there, you have…well, the world at your fingertips.

As Meta and other companies currently envision it, the metaverse is a complete parallel virtual world from our own. You can do just about anything in the metaverse that you could do in real life, including (in theory, anyway) a complete digital economy where users can make, buy, and sell goods.

Investing, Metaverse, and Art

This brings us to art investing, metaverse-style.

If the phrase digital economy rang a bell in your head that sounded suspiciously like cryptocurrency, you’re on track. While we might envision a cool future world where the metaverse allows us to interact with the physical world by proxy, a more realistic version (still far in the future) is a world where the metaverse is a contained digital world with digital items to digitally interact—including artwork.

And since that artwork doesn’t exist, but investing in it would demand a certain degree of security, the most likely art investing avenue in the metaverse (based on our current technology) is non-fungible tokens, or NFTs.

NFTs are a digital asset tied to cryptocurrency. Each one has a unique digital signature which makes it one-of-a-kind and all but impossible to replicate, kind of like a real-world Vermeer. NFTs rapidly gained popularity among digital artists for this reason—digital artists could now make money on artwork they previously had to give away for free.

Of course, this begs the obvious question: is investing in digital art, with as-of-yet-unproven valuation in an as-of-yet-unproven virtual world, worth the money?

Should You Invest in Art in the Metaverse?

Right now, the metaverse is still primarily a Silicon Valley thought experiment, so no, art investors should hold onto their dollars until the metaverse and NFTs are more clearly defined. That doesn’t mean that the metaverse and NFTs lack promise, or that they won’t become a big deal in the future, just that we’re still too early in the game to know.

Your Expert Partner in Art Investment

As of right now, if you’re thinking of investing, metaverse art isn’t the way to go—at least, not yet. But there’s still an exciting world of art investing available to you, even if your last name isn’t Zuckerberg.

We’re the first platform that allows ordinary investors like you to invest in authenticated multi-million-dollar art, backed by research from our expert team and our partners at Citi Bank and Bank of America. You purchase shares sort of like buying stock in a company, and when we sell a piece, you collect dividends. Sound good? Then fill out your membership application today to learn more.

Masterworks is a fintech company democratizing the art market. Our investors are able to fractionally invest in $1mn+ works of art by some of the world's most famous and sought-after artists.