“This desecration of reality will not go unpunished.”
What is the Metaverse? Why is the world going crazy over NFTs? How will life look like in this new world?
Exploring my thoughts around these questions, this entry will cover:
Why the Metaverse is not a place, but a “Singularity-esque" tipping point.
How we have only just scratched the surface with NFTs.
Why earning money playing games is a sustainable endeavor, and how it will become the future of employment.
Join me to discover why the Metaverse isn’t madness, its just... Strange.
Into the Metaverse
Most people think "the Metaverse" is a virtual place. Like in the movie Ready Player One.
A virtual world, like Minecraft, Roblox, or like Mark Zuckerberg showed in his Meta demo.
But what if it's not a place?
What if, instead, it is a moment in time?
A tipping point?
A cultural phenomenon that we have been building up to for the past 20 years?
Similar to how in AI, the concept of ‘the Singularity’ is when AI becomes smarter than humans.
Our attention used to be 99% on our physical environment.
TVs dropped that to 85%. Computers down to 70%. Phones.. 50%.
Our attention has been sucked from physical to digital.
And where attention goes, energy flows.
Every important part of life is going digital.
Work --> from factories to laptops. Boardrooms to zooms.
Friends --> from neighbors to followers. Where do you find like-minded people? Twitter. Reddit. etc.
Games --> more kids play Fortnite than basketball & football combined.
Identity --> filters are the new makeup. Stories are your personal billboard to broadcast who you are.
Everything goes digital. Your friends, your job, your identity.
And now with crypto, your assets are online too.
Bored Apes are the new Rolex.
Fortnite skins are the new skinny jeans.
If everyone hangs out online all the time, then your flexes need to be digital.
And so, the Metaverse is when our digital lives become more important than our physical lives: a tipping point in human society.
Credit to Shaan Puri for inspiring this section of the blog.
Virtual worlds can be incredibly liberating. The promise of cyberspace, right back to its inception, has been that it makes us all equal, allowing us to be judged not by our physical presentation or limitations, but by what’s inside our heads, by how we want to be seen. The dream is of a virtual place where the hierarchies and limitations of the real world fall away, where the nerdy dweeb can be the hero, where the impoverished and bored can get away from their reality and live somewhere more exciting, more rewarding.
Of course, anyone who's used the Internet would know that reality isn't so rosy - replete with scams, cyberbullies, brutal comments sections, toxic DotA communities flaming people's mothers... the list goes on.
The Metaverse is not a good or bad thing inherently. It is a new avenue of innovation, and like every innovation before it, will have good characters and bad characters, and all the good and bad of human behavior will play out on its stage.
Digital Property Rights
What enables the Metaverse, what pushes us over the tipping point, is digital property rights.
Or, if you prefer, NFTs.
An NFT = a digital property right to something.
That's it. That's all it is.
The focus being on the 'right'. Because the property is interchangeable: it can be a JPEG, or a .mp3 file, or an Axie, but it is the ownership of that property that gives you the rights to do all the other things.
I bought a house last year - what gives me the rights over the property? A piece of paper? A digital signature on the PDF file? When you really dig deep, you realize that what gives me that right is an invisible social contract, not just between me and the seller of the house, but also with everyone else in Singapore and possibly even the world - to recognize that indeed Eugene is its owner and has the rights to sell, rent, stay in the house or use the property for other means. It's just good ol' fashioned trust.
Its the same with digital property rights. We just finally have a way to authenticate the uniqueness, the scarcity, of a digital good (basically a line of code, similar to how in 'real life' its just a line of pen ink when you put your signature). Recall from my previous blog entry that crypto is simply about wrapping stuff in military-grade encryption.
So yes, while you can right click and save stuff, and be able to view the picture, or use that picture in whatever documents or content you want to make, that is not the point. The picture is different from the NFT of the picture.
The NFT is that digital signature, that provable, authenticated Ownership, which gives you rights to other things.
The right to flex, the right to start playing a game, the right to join exclusive communities.
NFTs are rapidly becoming the medium of conspicuous consumption. Rather than show off your Warhol to a few friends in your home, you will show off your Bored Ape to billions. Everyone who owns a computer or smartphone will be able to view your portfolio.
In order to even start playing Axie Infinity, you need to own 3 NFTs (the Axies). We will explore Axie more in the next section.
NFTs are also being used as tickets for events or parties, and access to Discord chat rooms or communities. For example, each VeeFriend NFT is a ticket to future VeeCons. Soon, music artists will launch their concert tickets as NFTs as well. And if you are a fan, you would much prefer having an NFT ticket to a pdf or paper ticket, because the NFT lives in your crypto wallet forever, and it becomes a part of your digital identity that everyone else can see.
Anyone can buy art. Anyone can buy followers. But not anyone can buy first generation status. All gamers who have played RuneScape, or Fortnite, recognize how valuable the original digital assets are.
The difference here, of course, is that blockchain technology allows these assets to be rare in perpetuity. Epic Games can code a few more lines, and the rarest Fortnite skins can lose 90% of their value. But NFTs are immutable. They will never die.
To those who don't think NFTs should have value, for whatever reason, I'll let Gary V take you on:
People thought that Andy Warhols and Jackson Pollocks shouldn’t have value, people thought that sports cards should not have value, they thought that sneakers shouldn’t have value. The thought of people deciding on their opinion of what should and shouldn’t have value has made me laugh my entire life and has historically been incorrect. The market will decide if something has value. So for me, its about understanding WHY people buy NFTs. Its the same reason why people buy Chanel handbags and Nike sneakers and Mercedes Benz. This is about brand. And if you look at the behavior of the under-15 year old crew - Fortnite, Roblox, Minecraft. If you look at why people care about blue check marks on Instagram, or how many followers you have on TikTok - we are living more and more increasingly in a digital landscape. And NFTs become assets to communicate who you are, and that's something that human beings have done forever - bought things to communicate, and NFTs will be the scaled version of that.
Yes, I do caveat that the NFT craze at the moment does feel like a bubble - a massive FOMO phenomenon of people wanting to get in on the latest thing - without knowing what it is or how much value it is actually bringing. We are taking the principle of artificial scarcity to an absurdist extreme - to make you want things you absolutely don't need.
If you buy an NFT with the sole thought of being able to sell it at a higher price later on, then yes, this will be unsustainable. There has to be an emotional utility, a sort of attachment, or meaning, or sentimental value to them. You have to feel like you are ‘’spending” money on the NFT, rather than "investing". The steady state for NFTs will be when they are valued intrinsically for their utility, scarcity and aesthetics. We call this the NFT trilemma.
Speaking of NFTs that I have sentimental value towards...
The poster child of the Metaverse is not Meta, not VR - its Axie Infinity.
Now that we have established the basic building block of the Metaverse, let's see what a proper building looks like.
I came across Axie Infinity in July last year, right after the launch of the Ronin wallet. I fell in love with the game right away: I'd grown up playing Pokémon semi-competitively, breeding for IVs, theory-crafting and battling whoever was up for it. I loved strategy games and card games, so this felt right up my alley.
Plus the fact that you could earn crypto by playing it?? Shut up and take my money!
To explain Play-to-Earn games, I like to use Golf as a real-world example.
Golf is a game.
Yet in the US alone, it accounts for over $80billion USD in economic activity, from club memberships, to real estate, to equipment, to events and tournaments, to media and education. Think about how many moving parts there are in the golf industry - from the player swinging that golf club, to the person mowing the lawn, to the guy crafting the equipment, to the person organizing community events. So many people have a part to play, and they all contribute to the economy.
They all get paid. For a game.
You may say, "But the player doesn't get paid, only the rest of the industry does. The player effectively pays them their salaries."
Good point. But don't you see that everyone else is getting paid based on something arbitrary? Something 'artificial'? Point being, if your game is designed well, people will be incentivized to participate and follow your rules. Would anyone be incentivized to craft golf clubs if nobody wanted them?
So, the first foot forward through the door is actually to take a step back from the 'player' mentality and see the wider games economy.
You could be a ‘golf club crafter’ in the virtual world, gathering raw materials to build things that other people want to use.
You could be a community leader, bringing people together for events, tournaments, etc.
You could buy a piece of land that people play on.
But why would the average player get paid?
“In an attention economy, users who give us their attention should be rewarded,” says Jiho, the Growth Lead for Axie Infinity.
Playing the game is an important job. You need a lot of people to play to concurrently make it fun. Part of what makes a PvP game fun is playing against people at your skill level, and for that to happen, you need to quickly match players with other players who will give them the right level of challenge. Play-to-Earn makes Axie more fun by adding player liquidity; it’s worth giving people most of the money to achieve that. - Jeff 'Jiho' Zerlin
To continue the golf analogy, imagine if each time you played a game of golf, you were rewarded with some golf club crafting materials (the wood, the steel, etc.).
You could use the materials to make more clubs, then play using those, or sell the newly-made clubs to other players.
That is essentially what is happening in Axie Infinity: you earn the raw materials used to make new Axies. Of course, you would need to spend a lot of time playing before you have enough to do so.
Here's where the next critics come in: "Axie is just a ponzi/pyramid scheme!"
Many people use the premise that the game's economy will only continue to work if new players join and put money into it in the form of purchasing Axies for a high price. Well, isn't this the case for any business with employees? Seems obvious to me that if there are no repeat business/sales, the economy (business) will shrink, so it's up to the game developers to keep innovating new and exciting reasons for the business to grow and people to re-invest into the economy.
Is golf a ponzi? If we stopped having new players play the game, wouldn’t the entire ecosystem of golf collapse too?
So is the case with nearly everything in this world - if people woke up and stopped believing in it, or stopped desiring it, it would collapse. Think of money, or religion, or any top brand. If everyone woke up tomorrow and just stopped believing that Singaporean Dollars were worth anything, or if we woke up and stopped believing in God, or thought that Supreme was uncool, then it would be so. We are creatures of meaning, and we imbue meaning into the things around us, be it digital or physical.
Now for the icing on the cake: Scholarship programs.
Axie Scholarship programs have sprung up across the globe to provide aspiring players with their own teams of Axies. The scholarship essentially rents players Axies, and gets paid back through a revenue share from crypto earnings.
I thought, this is amazing. Scholars in the Philippines are earning double what they could in a regular job just from playing this game. I wanted to do that too. I wanted to help people.
Earlier today, I onboarded 5 more scholars into my program - these are total strangers who I connected with on Discord. But their background doesn't matter: all that matters is that they have the time, the passion and knowledge of the game to start playing. Why should their ethnicity/gender/educational background matter anyway?
This is the new-age capital-labor relationship. Players like me who are 'time-poor but capital-rich' would rent our digital assets to other players who are 'time-rich and capital-poor.'
Axie and similar titles are not even in the same league as other video games. These games are actually competing with other forms of gig work—like Uber, or Grab or Gojek, where you're delivering food for someone and get paid a small amount for it. Why not work from home, play this game, and get paid in tokens, instead?
To me, it feels like an altruistic yet capitalist endeavor.
Late last year, when Typhoon Rai devastated parts of the Philippines, one of my scholars' home was wrecked. He was sending me pictures of the destruction, how the entire town was flooded so badly that he, his family and his neighbors had to stay on their rooftops. I told him he should stop playing the game so he can focus on dealing with the crisis, but he said that the money he would earn from the game was more important - he would use it to buy new furniture for his home. They needed the income from the game now more than ever.
In that moment, I realized first-hand that this was more than just a game. More than just another job.
It was saving lives.
The Metaverse is the next stage in the evolution of the Internet. Just like how social media transformed the Internet from read-only to read-and-write, the Metaverse would transform it once more to be read-write-own.
Digital property rights enable us to build tangible, meaningful digital identities. They form the foundation for a new frontier of creativity, communication and expression.
But the Metaverse will need more than entertainment; it will need to blur the lines between entertainment and employment. Axie Infinity is already proving that’s possible.
The Metaverse has the potential to upend not just how we work, earn and spend, but also the fundamental ways in which we live, plan and run our lives. In essence, it promises to transform the way capitalism functions.
Only one question remains: where will you be when that transformation comes?