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The European Union (EU) is studying the metaverse and potential regulation, said Margrethe Vestager, Executive Vice President of the European Commission, adding that authorities needed to understand the space better before they could decide on the best course of regulatory action.
At an online event today, Vestager commented, as reported by Reuters:
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The metaverse is here already. So of course we start analysing what will be the role for a regulator, what is the role for our legislature. Everything we do must be fact-based and based on the information that we can get. We need to understand it before we can decide what actions would be appropriate.
Meta already in Vestager’s line of sight
Metaverses are immersive virtual spaces where people can work, play, socialize, attend events, and more. The concept began to enter the mainstream last year when Facebook changed its name to Meta to reflect its plans in the space.
Meta was already in Vestager’s line of sight over its collection and use of data. If caught violating antitrust rules, companies can be fined up to 10% of their global revenue.
Monetizing metaverse experiences
Meta promotes the view that the metaverse will succeed the mobile internet. It has made significant investments in virtual and augmented reality. While details about how brands will monetize in the different metaverses have not entered the mainstream, there is some information about that.
Brands buy property in different metaverses like they do in the real world. Digital estate value varies depending on where the property is located. Premium properties can be very valuable. A plot in Decentraland’s (MANA/USD) fashion district sold for more than a million dollars recently.
Regulators urge shift to proof-of-stake
In related news, vice chair of the European Securities and Markets Authority (ESMA) Erik Thedéen urged a shift towards the less energy-intensive proof-of-stake mining. He told Financial Times in an interview:
The solution is to ban proof-of-work. Proof-of-stake has a significantly lower energy profile.
The former model is where miners use a plethora of powerful computers to solve complex mathematical problems. This is done to record transactions on the blockchain to earn rewards, which are in the form of new coins. Bitcoin (BTC/USD) and Ethereum (ETH/USD) both use proof-of-work.