Decentraland: Virtual World with Blockchain

Blockchain technology is a flavor of the month, as is Virtual Reality. So, lets mash them up together and create, Decentraland is “A blockchain-based virtual reality world”.

The virtual world is implemented with the ubiquitous (and high quality) Unity engine, which is the basis for both the “browser” to visit the world and the editor to create new places to visit. Unity has built in support for VR (it is literally as easy as checking a box), so Decentraland can be visited via popular VR goggles.

The blockchain itself is used as a decentralized land registry, i.e., to manage the virtual “land” that you can build on and visit.

Many virtual worlds “mint” new land area under the control of the central server and the company running the game. In some cases (such as Second Life) players buy land from the company, and may trade among themselves. Minecraft lets anyone set up a server and create land there, and then use it or trade it to other players.

Decentraland goes another way. Land is “mined” through a Nakamotoan consensus algorithm, as well as purchased or traded with other players. This approach replaces one of the critical functions of the game server with the distributed blockchain maintained by all the nodes. There is neither a “Linden Labs” that doles out new land, nor the opaque free for all of Minecraft servers.

Essentially, its blockchain acts as a registry of land, with each new transaction block signifying a new plot. If a player mines that block, they get ownership of the land allotment, which can be later traded away to other players.

From the perspective of game play, Decentraland has a long road to success. The vast majority of players are not really interested in the virtual real estate business, or even business at all. So Decentraland will need compelling stories and experiences. I’m not envisioning that the blockchain land registry will be very relevant to the gameplay, but I’m willing to be surprised.

From the perspective of blockchain technology, this might be a useful tutorial tool, a way to visualize how blockchain records work.   In particular, this world illustrates one of the most important use cases for blockchain technology, as a registry for land or other assets.

It would be especially cool to have an in-game, VR viewing experience to illustrate the blockchain. For example, a virtual data vault, with some kind of interface that lets you find and “pull out” records from the blockchain. It might also offer a dashboard to show ongoing transactions. That might be neat.

On the other hand, this game also shows just how limited the “land registry” use case is. Most of the game isn’t touched by the blockchain. And most of the game is pretty much the same as other virtual worlds that don’t use blockchain.

In other words, this is a classic example of “why do I even need a blockchain?”

It is also possible that the virtual world might be a tutorial for some of the shortcomings of blockchain technology. If there is a major bug or hack, you might get a cool visual representation of a hard fork in action: duplicate land with different owners, and other chaos. If the economy takes off, you might also get an education in macroeconomics. Game operators tend to use land not only as a source of revenue (“taxes”) but also as a throttle and brake on the economy. Minting more land sucks cash out of the world economy, slowing inflation, pulling back pumps up the value of existing assets, accelerating the economy.

The decentralized land “mining” cannot be controlled in this way, so the economy has one less macroeconomic lever (and no one is manning the levers, anyway). This could well lead to wide swings in the business cycle, including devastating episodes inflation or deflation. This might be an demonstration of economics, but they probably not so much fun to play.

It is early days yet, so we’ll have to see if anyone is interested in this world. My own view is that it is interesting only for its technical novelty, and it isn’t really that exciting technically. But who knows?

  1. Decentraland. Decentraland: A blockchain-based virtual reality world. 2017,
  2. Stan Higgins, Blockchain-Powered VR World Enters New Testing Phase. Coindesk.March 15 2017,


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