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Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I Heart podcast,

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Speaker 1: and I'm Stacy Marie Ishmael, Managing editor of Crypto for

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Speaker 1: Bloomberg News. It's Tuesday, November twenty nine. This episode about

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Speaker 1: buying land in the Metaverse with my colleague Carly Juanna

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Speaker 1: was recorded before the collapse of FTX. Just putting that

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Speaker 1: out there for context. Have you heard the one about

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Speaker 1: how broke millennials who had given up on owning a home.

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Speaker 1: We're supposed to be super excited about the opportunities in

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Speaker 1: the metaverse, or maybe you've heard that it was gen

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Speaker 1: Z who's supposed to be super excited about opportunities in

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Speaker 1: the metaverse. Yeah, about that not quite turning out that way.

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Speaker 1: Despite the hype and the fact that entities is different

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Speaker 1: as Snoop Dogg himself, and for reasons not entirely cleared me,

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Speaker 1: the Beijun government boils into said hype, Owning a property

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Speaker 1: in the metaverse hasn't turned out to be a winning

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Speaker 1: investment strategy for everyone, and yet despite falling prices and

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Speaker 1: declining user activity, some people are still betting on virtual property.

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Speaker 1: For more on Who's building what in the Metaverse, I'm

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Speaker 1: joined by Bloomberg reporter call I wanna. There's a fixed

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Speaker 1: plot of land, so there's certain levels of values that

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Speaker 1: are attributed to that, and it's your individual plot. It's

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Speaker 1: your n f T. Carly, Welcome to the podcast. Tell

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Speaker 1: us what you do? I cover crypto at Bloomberg News.

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Speaker 1: How's that been? It has been fascinating, to say the least.

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Speaker 1: It's odder than I would have expected coming in. It's diplomatic,

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Speaker 1: yes when you say odd. One of the stories that

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Speaker 1: you published recently is about Virtue to all Land, which

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Speaker 1: to me seems like a contradiction in terms, but to

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Speaker 1: some people seems like a worthwhile investment opportunity. What did

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Speaker 1: you find in the course of reporting that story. Yes,

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Speaker 1: I found out a lot. I think the most surprising

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Speaker 1: thing I found out was that it's very expensive. You know,

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Speaker 1: people will spend thousands and thousands of dollars to buy

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Speaker 1: these virtual plots of land in the metaverse, and a

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Speaker 1: lot of them are looking at it as an investment opportunity.

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Speaker 1: They think that these plots of land are actually going

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Speaker 1: to increase in value significantly, and so they're willing to

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Speaker 1: shell out for it, despite the fact that over the

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Speaker 1: past year, values have really dropped off. When you say

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Speaker 1: values have really dropped off, like what kind? And you

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Speaker 1: say expensive, like what are we talking about here? We

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Speaker 1: talked about five five million dollars, Like what's the range? Right? Yeah,

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Speaker 1: so it varies. I talked to one guy, for example.

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Speaker 1: He told me that he had bought a plot of

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Speaker 1: land in one of these virtual worlds. It's called the

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Speaker 1: Central Land, and he purchased it for about three thousand

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Speaker 1: dollars in August. Um. I talked to a guy last year, though,

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Speaker 1: who kind of in the fall, purchased something that was

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Speaker 1: sixty dollars. And granted that was a bigger plot of land,

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Speaker 1: but you know, the prices on these really do vary.

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Speaker 1: And part of the reason they were so much more

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Speaker 1: expensive last year was because, you know, these virtual plots

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Speaker 1: of land I should mention too, are often denominated and

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Speaker 1: sold in cryptocurrencies, so their values are inherently tied to that.

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Speaker 1: Last year crypto prices were a lot higher than they

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Speaker 1: are right now, especially you know, in the October time frame.

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Speaker 1: So the guy who bought the plot of land, you know,

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Speaker 1: the value of that sixty thousand dollar estate as it

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Speaker 1: is called, is a lot less. Now today, what do

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Speaker 1: you do with the sixty dollar virtual plot of land? Exactly?

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Speaker 1: That is a golden question. You know, a lot of

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Speaker 1: the people who I spoke with and even just kind

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Speaker 1: of walking around these worlds, you know, there's not that

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Speaker 1: much going on. So going back to the guy who

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Speaker 1: purchased the plot of land in August for three thousand dollars,

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Speaker 1: he is years old. That was his first quote unquote

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Speaker 1: real estate purchase, if you will. And he actually has

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Speaker 1: done nothing with that plot of land. He doesn't really

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Speaker 1: have any specific plans in the future to do anything

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Speaker 1: with it. Right now, he rents it out. He rents

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Speaker 1: it for fifty to seventy dollars a month to a company.

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Speaker 1: And on the plot of land there is a billboard

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Speaker 1: that is touting a a metaverse marketing startup, which is

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Speaker 1: very meta in my opinion. So and when I reported,

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Speaker 1: you know, I would go into these lands that you

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Speaker 1: can access from a web browser and you walk around,

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Speaker 1: and you know, give or take, there's not that much

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Speaker 1: going on. There's kind of you know, some areas are

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Speaker 1: more populated than others, but a lot of these people

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Speaker 1: are betting that these virtual realities really will take off

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Speaker 1: and they will become cool and popular and fun. Okay,

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Speaker 1: I don't know if I would describe any of this

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Speaker 1: as either cool or fun, and it would seem from

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Speaker 1: the user numbers, because you know, you mentioned to Central

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Speaker 1: and another big one of these is the Sandbox. They're

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Speaker 1: not necessarily popular either. Our colleague of Miller, who's regularly

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Speaker 1: on the podcast, in a story that she published closer

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Speaker 1: to the end of October, said that the Sandbox has

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Speaker 1: about five hundred daily active uses. That's not a lot

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Speaker 1: of people in these particular environments. So, you know, various

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Speaker 1: of these places were sold as this is going to

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Speaker 1: be a place to hang out. This is like Mark

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Speaker 1: Zuckerberg's whole thing. You'll do anything that you want to

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Speaker 1: do in the metaverse. But what they're turning into is

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Speaker 1: almost like desolate strip malls where there isn't a ton

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Speaker 1: of activity. There's weird inception e billboards, but not a

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Speaker 1: lot of happening. When you ask the folks in the

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Speaker 1: story who were continuing to buy land why they're optimistic

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Speaker 1: about the future of these platforms, what did they say?

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Speaker 1: A lot of them really bet that at some point

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Speaker 1: these lands are going to become more popular there's a

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Speaker 1: lot of risk associated with that because there are so

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Speaker 1: many of these digital worlds. You know, we kind of

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Speaker 1: focused on two of the biggest ones being Sandbox and

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Speaker 1: decentral Land. Part of the reason that those are kind

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Speaker 1: of getting a lot of attention and are more popular

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Speaker 1: is because they're the ones that have gotten a fair

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Speaker 1: bit of traction off of one of the things that

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Speaker 1: causes them to have higher property values, which is celebrities

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Speaker 1: and companies and brands that are taking interest in the metaphors.

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Speaker 1: So granted this is not a universal thing. There's still

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Speaker 1: lot of room to go, but there have been some

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Speaker 1: companies and brands that have purchased land in the metaverse

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Speaker 1: or otherwise made investments or marketing campaigns there. So, for example,

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Speaker 1: Gucci has purchased an estate in the metaverse, and they're

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Speaker 1: going to be able to have some sort of events

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Speaker 1: that they're going to put on on the celebrity front,

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Speaker 1: you have Snoop Dogg has purchased land in the metaverse.

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Speaker 1: I've got my Monuma money and my money only I

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Speaker 1: built the whole metaverse called you know what I'm saying

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Speaker 1: to STANDBOXXM and you know that then makes other parcels

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Speaker 1: and plots of land that are around them go up

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Speaker 1: significantly in value because the assumption and the bet here

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Speaker 1: is that, Okay, if you own land that's really close

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Speaker 1: to Snoop Dogg, you're going to be in a cool

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Speaker 1: part of town where more people are going to be

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Speaker 1: walking around. You know, if you're near a really cool

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Speaker 1: fashion brand store, people are going to be walking in

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Speaker 1: and out of those districts and they're going to see

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Speaker 1: your area, and you're going to have a highly valued property.

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Speaker 1: You know, there's a taco Taco bell is having a

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Speaker 1: wedding in the metaverse soon. There's all sorts of weird

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Speaker 1: and kiki things going on, and they are they are disparate,

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Speaker 1: But these people who have bought this land are betting

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Speaker 1: they're going to become more common. I spoke with one

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Speaker 1: guy who he wants to set up a virtual furniture

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Speaker 1: store in the metaverse, and he wants to hold onto

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Speaker 1: his plot of land so that then he can eventually

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Speaker 1: be able to do that. So it's kind of a

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Speaker 1: bet overall. But other people have, you know, entrepreneurial aspects

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Speaker 1: and kind of interest themselves. I'm just gonna say a

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Speaker 1: couple of like nineties kid things as a as a

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Speaker 1: nineties kid one. Anytime I have people talk about Snoop

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Speaker 1: was like this like cool childred, I am reminded that

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Speaker 1: this was also a dude who became famous for seeing

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Speaker 1: the song Murder was the case that they gave me.

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Speaker 1: So so you know, just putting that out there, like

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Speaker 1: you know, Martha Stewart, Snoop and Stoop of the nineties

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Speaker 1: are two very different people. But I also I'm a

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Speaker 1: person who played the SIMS and Second Life, which was,

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Speaker 1: for all intents and purposes, one of the very earliest

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Speaker 1: of these kinds of metaverse like experiences where you have

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Speaker 1: an avatar and you had brands that showed up in

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Speaker 1: these spaces and you have like the Microsoft's of the

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Speaker 1: world and the royces Is of the world. Royce's had

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Speaker 1: a bureau in there, the you know, like various tech

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Speaker 1: companies would sort of set up you could like buy clothes.

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Speaker 1: And there are still people I don't know if they're

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Speaker 1: still brands who are in Second Life, but like every

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Speaker 1: generation gets the metaverse it deserves. I suppose one of

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Speaker 1: the things that strikes me about the biggest difference between

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Speaker 1: these current meta verses and places like Second Life is

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Speaker 1: what you identify, which is the prime refocused being like

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Speaker 1: the potential for monetization. Right. Second Life absolutely had monetization.

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Speaker 1: It had enough to have a bank run, which is

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Speaker 1: a pretty good indicator that there was a real financial ecosystem,

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Speaker 1: but it wasn't pitched as come hand, make your fortune speculating.

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Speaker 1: And a big criticism of Web three has been around

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Speaker 1: the idea that profits come before fun. Did the people

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Speaker 1: that you spoke to sound like they were having fun?

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Speaker 1: I think the best way to answer that would be

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Speaker 1: going back to the fact that not a lot of

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Speaker 1: them had done much on their land. That's not to

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Speaker 1: say that they didn't have ideas to do stuff on

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Speaker 1: the land, for example setting up a furniture store or

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Speaker 1: other endeavors like that, but the bottom line is that

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Speaker 1: they hadn't yet. I think one of the things that

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Speaker 1: we've reported on a Bloomberg is that, you know, gambling

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Speaker 1: and casinos have been popular for terms of entertainment that

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Speaker 1: have taken off in these worlds, but yeah, they're not

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Speaker 1: seeing this as a fun place where they're hosting parties

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Speaker 1: with their friends. I talked to a professor who said that,

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Speaker 1: you know, in some ways. Buying land in the metaverse

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Speaker 1: is a way to diversify your crypto holdings, because even

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Speaker 1: though it's a little bit different than buying bitcoin, I mean,

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Speaker 1: it does kind of come with this promise of an

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Speaker 1: online experience that you would assume comes with some sort

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Speaker 1: of promise or hope for fun. At the end of

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Speaker 1: the day, they're denominated in crypto, their prices are at

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Speaker 1: least right now somewhat moving with cryptocurrency. Exact, a pot

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Speaker 1: of land in the metaverse is a non fungible token, yeah, exactly.

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Speaker 1: So that's a little bit of a distinction too, is

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Speaker 1: that when you buy these, you know, it's recorded on

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Speaker 1: the blockchain. It is its own separate thing, and these

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Speaker 1: plots of lands are fixed. That's another thing that is

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Speaker 1: going to appeal to a lot of the buy areas.

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Speaker 1: That's not like ubiquitous across virtual worlds, but that is

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Speaker 1: a big selling point is that there's a fixed plot

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Speaker 1: of land, so there's certain levels of values that are

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Speaker 1: attributed to that, and it's your individual plot, it's your

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Speaker 1: n f T. So these individuals who are buying these lands, yeah,

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Speaker 1: they might not be doing much on them now, but

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Speaker 1: they're thinking they will in the future, and I would

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Speaker 1: assume that if more activity comes to the metaverse, that

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Speaker 1: would increase the chances that they actually do set up

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Speaker 1: their virtual furniture store. With the reports of places like

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Speaker 1: Sandbox only have active users, the investors in these platforms

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Speaker 1: say very similar things to the folks that you're talking

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Speaker 1: to who are buying land. So yeah, so of anamoca.

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Speaker 1: You know, made the case to our colleague Hannah Miller

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Speaker 1: that like looking at just daily active users is not

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Speaker 1: really as he described it, like representative of the overall

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Speaker 1: scale of activity, like he has amazing quotes, which is

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Speaker 1: to look at this metric would be comparable to claiming

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Speaker 1: that how many people trade on Wall Street is the

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Speaker 1: size of the American population. And you know, from his perspective,

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Speaker 1: what you need to look at is things like revenues

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Speaker 1: that are being generated and other opportunities that people have,

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Speaker 1: which sounds very much like what you're also saying. I

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Speaker 1: think the challenge for a lot of folks is if

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Speaker 1: the speculative asset isn't currently delivering returns to them, if

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Speaker 1: there doesn't seem like very much to do right now,

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Speaker 1: holding onto their attention can be a little bit hard.

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Speaker 1: You know, so the folks who you spoke to, how

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Speaker 1: many of them see like the this activity is going

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Speaker 1: to pick up in the next six months, the next

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Speaker 1: five years, Like what's the time horizon that's they're talking about.

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Speaker 1: Oh gosh, it's so hard to say. I think the

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Speaker 1: other distinction here is that there are dozens and dozens

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Speaker 1: of these virtual worlds. So you know, the sandbox might

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Speaker 1: be the thing today, but that's not to say that

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Speaker 1: another one won't come in and completely take its place.

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Speaker 1: So when you buy these lands, not only are you

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Speaker 1: taking a bet that the metaverse will become cool and popular,

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Speaker 1: you're taking a bet that you were specific chosen digital

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Speaker 1: world will be the one that is cool and popular.

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Speaker 1: So this isn't like a, oh, in twenty years, this

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Speaker 1: will be the thing. It's kind of more of a

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Speaker 1: right now, you're assuming that this will be the thing.

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Speaker 1: Like I talked to one guy who I mean he's

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Speaker 1: bought He's diversified his diversified crypto holdings in the metaverse

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Speaker 1: by purchasing land in a variety of different virtual worlds.

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Speaker 1: I mean, he has dozens of plots of land. So

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Speaker 1: it's kind of a question of all right, you're choosing

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Speaker 1: one digital world, but you're also choosing that digital world

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Speaker 1: among several other options that you could possibly have. Right,

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Speaker 1: It's like, you know, ten years ago nobody thought TikTok

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Speaker 1: was a thing, and now TikTok definitely a thing. Will

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Speaker 1: it still continue to be one in ten years from now?

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Speaker 1: Up next more from Bloomberg report to Collie Wanna on

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Speaker 1: buying land in the mesa Verse. We'll be right back.

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Speaker 1: I think one one of the things it's often helpful

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Speaker 1: for us to remember is that at its hots, the

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Speaker 1: dynamics and crypto are a tech story, and they're a

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Speaker 1: lifestyle story and their culture story, and they're not just

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Speaker 1: always a monetization or financial one. When you were reporting this,

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Speaker 1: did you how much time did you have to spend

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Speaker 1: in these worlds? I spent a fair bit just walking around.

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Speaker 1: There's a games reporter at Bloomberg who Cecilia. She is great,

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Speaker 1: She is so cool. She showed me kind of the

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Speaker 1: ends and the outs of these worlds. And I will

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Speaker 1: say when I walked around, I would get forward a

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Speaker 1: little bit fast. I'm not that in to gambling in casinos,

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Speaker 1: but it was fun to just kind of get in

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Speaker 1: your little avatar and pull up the browser and just

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Speaker 1: run around a little bit in the world. I also

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Speaker 1: enjoyed in talking with my sources. I asked them for

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Speaker 1: for photos of their avatars on their plots of land.

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Speaker 1: I'm a reporter. I'm very used to people not being

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Speaker 1: comfortable giving you photos, and I guess maybe it's a

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Speaker 1: little bit different if it's your digital avatar. But they

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Speaker 1: were excited, like they love their avatars, they love their

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Speaker 1: plots of land. They were happy to share them. One

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Speaker 1: even said, like he sent me one during the daytime,

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Speaker 1: and then he circled back later in the day after

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Speaker 1: he emailed me and said, oh gosh, like I realized

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Speaker 1: that that picture isn't like the best, I'll send you

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Speaker 1: another one, And so he sent me a different picture

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Speaker 1: to like cover the basis. It was just nice, like

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Speaker 1: they enjoyed and we're very proud of it. So, you know,

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Speaker 1: I got bored in these lands, but it does seem

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Speaker 1: like some people are very, very, very very excited about them.

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Speaker 1: I will say that really reminds me of kind of

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Speaker 1: playing SIMS, where, you know, since it's a game, as

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Speaker 1: opposed to sim City, where you design an entire ecosystem

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Speaker 1: and sims, you like control little folks that are called sims.

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Speaker 1: And I was certainly a person who would spend so

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Speaker 1: much more time just like designing the sim and then

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Speaker 1: never doing anything. I was like down to like the

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Speaker 1: eye color and the outfits I once recreated, like the

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Speaker 1: j Lo dress, and I was like, it took so long,

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Speaker 1: and then I'd be like, okay, cool, like let me

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Speaker 1: move on to creating another one and continue to do

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Speaker 1: nothing else. So I I understand being proud of of

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Speaker 1: one's digital personas. Yes, it is. It is a real thing.

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Speaker 1: Thank you so much, Carly, appreciated having you on the show. Yeah, absolutely,

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Speaker 1: thank you so much, y'all. You can find more of

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Speaker 1: Carly one as reporting on the Bloomberg Terminal on Bloomberg

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Speaker 1: dot com, or follow her on Twitter. She's at Carly

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Speaker 1: d Wanna. That's c A r L Y d w

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Speaker 1: A n n E. This is Bloomberg Crypto, a daily

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Speaker 1: podcast from Bloomberg and I Heart Radio. For more shows

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Speaker 1: from iHeart Radio, visit the I Heart Radio app, Apple Podcasts,

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Speaker 1: or wherever you get your podcasts. Send us your comments, questions,

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Speaker 1: or suggestions for the show to Crypto at Bloomberg dot net.

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Speaker 1: The supervising producer of Bloomberg Crypto is Vicky Very Galina.

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Speaker 1: Our senior producer is Janet Babin. Our producers are Mohammed

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Speaker 1: Faruk and Sharon Barriro. Our associate producers are Ty Butler

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Speaker 1: and Moses on Them. Desta wonder At is our engineer.

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Speaker 1: Original music by Leo Sidrn. I'm Stacy Marie Schmal We'll

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Speaker 1: be back tomorrow.