The end of digital property

I’ve been thinking a lot about cyberpunk recently for various reasons. Not only have I been re-reading some old classics such as Neuromancer and Snow Crash, but I am starting to see many worrying trends depicted in dystopian novels in everyday life. But perhaps one of the biggest misses from the genre when describing future technologies has been the Metaverse, that vast online space where we would be spending most of our daily existence via the use of virtual reality. Don’t get me wrong, we do inhabit online spaces in some form, we’re glued to our phones and other devices during our waking hours, but the actual virtual space has still eluded us.

But at some point it looked like we were on the brink of moving to all things virtual and augmented. Let me bring you back to 2007, the time of Second Life, to the heyday of MMORPGs, to the rise of social media. That was a great time for everyone interested in virtual property, the ownership of all things digital. Please do keep in mind that I’m not referring at all to intellectual property, this is more about actual property rights over digital goods. Buying and selling virtual land on the Metaverse. Owning an avatar, and also creating items for them, or buying from other creators. Avatar rights. Character portability. Owning your social media data.

The idea of digital property was not new even then; we had started moving from analogue to digital since the era of the CD and the CD-ROM, but what we are talking about here are digital-only goods. These are intangible products or items that exist solely in digital form, accessible and used exclusively online or within digital environments. Unlike physical goods, digital-only items have no physical counterpart, making them instantly accessible, easily distributable, and often infinitely replicable at minimal additional cost. It is the characteristic of digital replicability which makes digital property so difficult to pin down. Nicholas Negroponte famously wrote in the 90s, “In a digital world, the bits are endlessly copyable, infinitely malleable, and they never go out of print. Millions of people can simultaneously read any digital document – and they can also steal it.”

The concept of digital goods then became a paradox; digital works can be copied and reproduced, which reduces their value. But the whole point of digital works is precisely the convenience over physical goods. It makes them both more convenient, but also less likely to become valuable property as anyone can reproduce them. The main way to make digital property work was through the use of digital locks, particularly technological protection measures. It was this type of technology that was used in DVDs, iTunes music, and many early digital works, thus allowing some form of property over a digital work to pass hands. By 2007 the technology was also being used for books.

So a form of property emerged, mostly managed through technological locks. Some other elements of digital property emerged; value was derived from a variety of sources, such as utility, uniqueness, exclusivity, or user demand within specific digital ecosystems or marketplaces, reshaping consumer behaviour.

So by 2007 there were enough technological solutions in place for virtual property to arise as a viable concept. Many books and papers were written on what the digital property of the future would look like, mostly inhabiting virtual worlds. The economic boom in MMORPG games, as well as growing popularity of digital platforms hinted at this future. Talk of virtual economies where avatars would exchange digital goods became appealing. But then this future failed to materialise; MMORPGs stayed popular, but the concept of “virtual worlds” never truly caught on with the same vigour, and virtual spaces such as Second Life and EVE Online remained niche interests.

There was also a big market change that meant that digital property never really took off, and that is the rise of subscription models. One of the early draws of technology such as iTunes is that you would be able to purchase digital goods for your own consumption, and that those files would be protected with some form of TPM that would make them hard to share. But the iTunes model gave way to the subscription model; instead of iTunes where you purchase music, you sign up to Apple Music or Spotify for an “all-you-can-eat” buffet. In principle it sounds cool, unless you’re the artist getting paid peanuts. But from the digital property perspective, you no longer own any digital goods, you subscribe to them.

This model starts infecting every single digital market. Before you could purchase software, now you subscribe to it. Before you could buy a game, now you purchase it until it becomes obsolete and unusable. Before you could purchase digital files, but then the platforms that supported them went under and your digital goods perished. Subscription is king, and you no longer own anything.

It wasn’t until the Web3 craze of 2021 that we started seeing a resurgence in the concepts of digital property. Cryptocurrencies, smart contracts, and the blockchain had remained as the main holdouts of the digital property revolution, with the idea that you could still own digital goods, and we would use the blockchain to mediate such ownership. So you could actually own a form of digital currency that would be used to purchase digital goods, and there would be a cryptographic infrastructure of smart contracts that would mediate the ownership of those goods.

The NFT craze was an attempt to make digital property work again, but also the concept of the Web3, which would be a new Internet where all objects would have some sort of ownership. One of the ideals behind this was that you would be able to actually own digital goods and exchange them using cryptocurrency, and this would also work with your own data. NFTs would allow you to own digital goods acting as proof of ownership. But then the NFT market crashed; it turned out that having a market where you own a file with a link to a digital work that can be easily copied with a right click wasn’t the winning concept that many believed. Sure, some of the NFT hype was supported by the concept of authenticity and provenance, but for most people this had less value than for believers.

So where does this leave us in our quest for digital property? The cyberpunk vision of a fully realised Metaverse with tradable digital assets and concrete ownership remains largely unfulfilled. Instead, we find ourselves in a strange liminal space, we’re more connected than ever through digital platforms, yet with less actual ownership over our digital presence than before. The subscription economy has trained us to accept temporary access rather than permanent possession, subtly shifting our relationship with the things we consume. We hold gigabytes of information on the cloud, but this access can be taken away with the push of a button. As I am keen of pointing out in these pages, “not your server, not your property”.

Perhaps the cyberpunk authors were right about many things: the corporate control, the technological dependencies, and the blurring boundaries between physical and digital. But they overestimated our collective desire to fully inhabit virtual worlds and underestimated our willingness to surrender ownership for convenience. As we move forward, the question remains whether true digital property will ever materialise in the way those early visionaries imagined, or if we are content to exist as perpetual renters in the digital landscape, forever paying our dues to access what we once might have owned.