I appreciate that it’s a Sunday and we usually give you all a break on the weekend, but I recently dropped an essay that has been pretty well received and could make for a good Sunday read. Yesterday was incredibly exciting to see Tim Sweeney, the Founder and CEO of Epic Games (Fortnite creators and operators of Unreal, the largest game engine in the world) recognise the potential of these technologies. He is undoubtedly the leading pioneer of change within the game industry and beyond.
The Metaverse: a persistent, live digital universe that affords individuals a sense of agency, social presence, and shared spatial awareness, along with the ability to participate in an extensive virtual economy with profound societal impact.
This piece aims to set out an overview of why crypto is integral to the emergence of an Open Metaverse. I begin this essay with a brief reflection on where we are on our journey as a digital species, as well as the role the games industry is playing in it. From there, we will touch on the origins of the concept of the Metaverse before exploring its more recent incarnation. Despite aspects of it gradually coming into focus, it remains a nebulous idea. As such, we look at some of the core characteristics that the internet of tomorrow is likely to possess whilst recognizing that the evolution of technologies are usually unpredictable. Having established an idea of where things could go, I will explain why I think the tools afforded by crypto are necessary to get there. We’ll look at some of the driving forces behind our current trajectory, and why crypto technologies may be one of the most imperative yet least recognised components of our evolving digital world. From there we explore areas of application, paths to adoption, new business models being unlocked, and how the investable surface area is expanding. I close out with some key areas of focus for various parties that may be interested in the hope it provides someone with something of use.
TL;DR
- Crypto is laying the foundations for a self-sovereign financial system, an open creator economy, and a universal digital representation and ownership layer via NFTs (non-fungible tokens).
- The Metaverse is coming; trends indicate our direction of travel. Our next great milestone as a networked species awaits us: 7B digital souls with the option to exist almost exclusively online and participate in a virtual economy with societal impact.
- More time spent online will lead to more value created and consumed digitally.
- In order to maximize willingness of individuals to allocate serious time and capital to virtual environments, establishing trust in their durability as well as economic robustness is paramount.
- As education of web 2.0’s shortcomings rises, users will prefer credibly neutral platforms that lack altogether the capacity for arbitrary censorship, undue rent extraction (also in the form of privacy cost), or sudden cessation.
- All of these threats are only amplified by increasingly immersive, pervasive, and interconnected digital environments.
- Decentralized networks provide a unique and unmatchable degree of assurance, whilst a universal erosion of trust in institutions is forcing the desire for alternatives.
- NFTs on top of them enable a standardized universal digital representation and ownership layer for any natively digital “thing” such as game assets, digital art, or domain space.
- Early breakout successes will drive FOMO as onlookers scramble to understand the new tool sets available. The network effects of these protocols prove difficult to overcome; their open nature compounds permissionless innovation incredibly quickly as each additional creator builds on the shoulders of all who came before.
- Owning core pieces of these new worlds brings great financial returns to those who believed; many of whom will be from emerging markets who were quick to move on the opportunities available.
- Beyond wealth, the initial players are granted additional advantages. As pioneers of a variety of new business models and technologies, their accumulated IP and know-how provide a significant moat.
- In the same way the rise of mobile forced large buyouts and talent acquisition, so too will the rise of crypto across gaming and the creator economy.
- In hindsight, it will be obvious that crypto’s role in the Metaverse was the most imperative yet least explored by those speculating on its emergence.
Click the image below for the full essay!
