Metaverse is not a product or a game. It was not created by a single company. Rather, it is a worldwide 3D network where companies, information and communication tools are comprehensive and interoperable. - Prof. Scott Galloway, University of New York
From the Web 1.0, where the information produced by centralized and controlling companies is consumed by individuals and companies make profits with the information economy model, the platform model where cloud computing systems are put into use, social media affects human life, streaming streams are derived, and finally individuals produce content and interact with the Web. We have stepped into 2.0 and now the 'Metaverse' phenomenon in the Web 3.0 world. The relationship between Web 3.0 and the metaverse is since Web 3.0 is the infrastructure of the metaverse. In Web 3.0, which does not have any central control structure, data will be shared, and a completely open-source entity will be established. The metaverse is the integration of virtual reality into daily life with 5G technology, rather than a digital product replacing social media. Therefore, we are talking about a reality rather than looking at the screen as if it is an external subject in the metaverse universe that goes beyond the screens, in which individuals take place and interact. In this reality, not only companies but also the people who create and manage the content wins.
The pandemic, economic dissatisfaction in modern human life, the change in the way of internet usage, and the digitalization trend are among the factors that are important in the worldwide emergence of the concept of the metaverse, its rapid spread. In addition, Mark Zuckerberg, the owner of a group of companies such as Facebook, Whatsapp, and Instagram, changed the Facebook application name to 'Meta' and the magnificent launch made the concept of metaverse unique popularity and awareness. To this effect, we can also add the IPO of the gaming company Roblox, the pioneer of Web 3.0. From this point of view, we can say that the metaverse is not a fad, a fashion, or a trend and that it will deeply affect many sectors.
Metaverse can be defined as blockchain-based, decentralized 3D platforms where we will experience augmented reality with virtual reality (VR) devices. These platforms can be a company product such as Facebook, Apple, or a product co-developed by users. There are also some procedures for entering the metaverse world. First, it is necessary to create an avatar as an identity. With this avatar, we can travel to a place we have never seen by paying with crypto money, carrying out trading transactions, doing office work online, attending concerts and events, talking with a world-famous person, and making a TV show. We will have the opportunity to own property rights on land anywhere in the world, which is very trendy now. And we will even be able to design the outfit we want in the metaverse, try it on and have a fashion designer make it.
Metaverse Effect in Sectoral Activities
It would not be an exaggeration to say that the internet and the business world have evolved with the metaverse. It has become a phenomenon that attracts and invests in almost every sector. To explain with examples, Yemeksepeti stated that they are working on predictions such as the use of crypto payment methods in restaurants and on-site experience at member restaurants. Paribu, one of the crypto trading platforms, has launched the Paribu Box market to list the Tokens of various projects in the metaverse universe, as well as to establish a domestic blockchain network. Uyumsoft Information Systems and Technologies Trade. Inc. manages R&D studies on business models that conduct new generation trade-in metaverse. On the other hand, Yolcu360 announced that it has developed an IoT device to receive and process machine data. Finally, Refik Anadol stated that by moving his projects to the Dataland Metaverse, his works can be experienced by NFT collectors with multiple sensors.
Trade now seems to proceed on the metaverse. Money will now be replaced by digital currencies, cryptocurrencies, tokens, and digital wallets in the metaverse. As a result, people will sell their digital assets or use their crypto money as a means of exchange. At this point, it is worth mentioning that the world of the metaverse creates a real economic value. It is said that to date, sales of products such as virtual land, goods, and services have exceeded 200 million dollars.
Where is the law in Metaverse?
The legal infrastructure of the Metaverse world consists of smart contracts with blockchain technology. Therefore, it is very important to know these terms and concepts. Blockchain technology is a distributed database that enables the management of encrypted data on a security-protected and easily accessible network. In this system, we come across bitcoin currency. There is no central authority in the blockchain system, just like in the crypto money system. In other words, we cannot talk about the existence of a structure in which any country's authority is involved. In this context, legal problems arise at the point where there is no interlocutor before us. The concept of smart contracts, on the other hand, is a computerized internet protocol that provides the basis of blockchain technology and differs from traditional contracts. Smart contracts will provide all the conditions of traditional contracts. However, unlike the classical contracts, we have made today, according to the perspective conveyed by technology giants; It is not possible to change (amend) the provisions of the articles in smart contracts and prevent some of them from being put into practice. Therefore, it is not possible to request revision or cancellation of contracts. According to other statements, there will be no need for third parties such as the ministry, bank, land registry, and notary public with smart contracts. For example, once an NFT is minted, there will be no need for copyright protection with the timestamp system and smart contract provisions. Because when the NFT was done by whom can be verified with the timestamp. Again, in the same direction, when a movie is produced, there will be no need to apply to the Ministry of Culture and Tourism for registration and registration procedures, copyright protection will already be provided with NFT minting. We cannot say that all states are ready for the metaverse world. In particular, it should not be approached as 'we take action according to the process'. There is no global legal regulation and study for the metaverse current, which is developing day by day. This is also felt in cryptocurrency investment platforms. To prevent malicious intent and abuse regarding these platforms, it is necessary to establish a regulatory and supervisory mechanism.
In Metaverse, all the information that users create directly or indirectly, such as location and banking information, consumption and gaming habits, and biometric data, are personal data. What kind of regulatory rules will be introduced in the processing and transfer of this collected 'Metadata' is a very important issue. Because there will be more control, freedom, and economic gain over the personal data, content, and assets arising from metaverse users. In addition, it is an undeniable fact that regulations will be needed to prevent actions such as data theft and hacker attacks and to eliminate the grievances arising from these actions. For this reason, in our next article, we will be discussing how to protect personal data, privacy, and privacy in the metaverse world and how current regulations will move forward.
By Onur Kucuk, Managing Partner, and Ezgi Anasiz, Associate, KP Law