Virtual worlds have been around for about two decades: when I was at university, the first mainframe multi-user dungeons were being played. Over the years, graphical interfaces transformed the interaction between player and game and then, more importantly, networks transformed the interaction between players and each other.
Simple text adventure games have evolved into fully fledged virtual worlds and people have developed virtual selves, generally known as avatars, which are more than just playing pieces in a game. The psychological link between people and their avatars may be an indicator of the future relationship between our physical and virtual identities in social, organisational and business "games".
These virtual worlds have already crossed some sort of line we didn't know was there. In some of the largest worlds, a small number of avatars earn a living for their "owners". Avatars from Sony's massively multiplayer online game Everquest are sold on eBay for up to $700, and while Sony Online Entertainment says it opposes such selling, there's not much it can do about it.
In a famous study, the economist Edward Castronova calculated that the GNP per capita of Norrath, the imaginary world in Everquest, is somewhere between Bulgaria and Russia. Incidentally, he has since discovered that the gender gap extends to Norrath: female avatars are bought and sold for, on average, 12-16% less than male avatars.
This is about more than games. As increasing numbers of people go online, and more of the economy goes with them, virtual worlds will force the examination of some interesting questions. One easy way to focus such a debate is to look at property rights. Does Leadbelly Gutbucket, my alter ego in a Dungeons & Dragons game, "own" his magic axe in the same sense that I "own" the computer on which I am typing these words?
My bet is that he does, and some lawyers are saying the same thing. A recent working paper from the University of Pennsylvania Law School concludes that on the basis of economic accounts that demonstrate the real world value of the virtual world objects and the exchange mechanisms for trading them, virtual world property interests are indistinguishable from real world property interests.
If the basis for prosperity is, as many people think, secure property rights enforced by the rule of law, then it is clear that some virtual worlds will experience economic growth higher than many third-world countries.
Property rights are the first step on a ladder of law that will confer rights on avatars as well. Once avatars and cryptography come together - introducing authentication, digital signatures and so on - then the scene is set.
Ultimately, we will stop distinguishing between a person's "real" identity and the identity of their avatars (and possessions). We will grow accustomed to the idea that a physical individual has a number of digital identities, and that Dave Birch, Consult Hyperion employee, is not the "same" as Dave Birch, the private citizen, or Leadbelly Gutbucket, mightiest of the Dwarven heroes of Ravensdoom Pass.
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