I spent an appreciable amount of time in my teen years playing role playing games which eventually became massive multiplayer online role playing games.
But even before computer RPGs evolved, digital items were held in high value. The ones harder to get which required higher level characters naturally held greater value. One could argue these items have no utility therefore should carry no value, yet, in the gaming world, the rarest items commanded high value. Indeed, useless items can have an immense monetary value.
In today’s world, the metaverse is quickly becoming more substantial. Digital items in gaming such as Axie Infinity (AXS), Alien Worlds (TLM), and Sandbox (SAND) among others all command value.
NFTs share a growing spot in such ecosystems. In a game such as Runescape, certain items such as skill capes could not be traded but only earned by achieving certain skill levels. This greatly increased their social value because obtaining a cape couldn’t be gamed. Such items typically took hundreds of hours of gameplay to earn.
Runescape skill capes are an example of scarcity through time and labour. I’ve always said time is the most valuable commodity because time is naturally limited, making it the most equitable resource. Until one masters time travel or time dilation which would require approaching the speed of light, everyone has the same 24 hours.
NFTs can take a page from Runescape by creating an NFT culture built around merit as opposed to money. We can have time scarce NFTs that are labour-intensive or smart-task oriented whose labour is dependent on one’s creativity at completing a task. N
umerous merit-based NFTs which cannot be bought but earned could include NFTs awarded for voting in a DAO, mastering a skillset, or any other non-monetary achievement.
Such time-scarce NFTs could create diverse communities that aren’t solely financial in nature. NFTs comprise a sizeable portion of the $400 trillion dollar blockchain addressable market which also includes DeFi.
Governments, central banks, and institutions running scared
In addition to a lack of understanding of the Metaverse, those at the top may not be sitting so pretty for long. Various recent headlines show that governments, central banks, and institutions are on the back foot.
“Bitcoin could collapse and isn’t ‘a good safeguard of value,’ warn global central bankers.”
The IMF has issued similar warnings as they see Bitcoin as a direct threat to their sovereignty. Other headlines read:
“How Banks Can Lose $60 Billion to Cybercash Highways”
“Bitcoin ATMs Burn as El Salvador Protesters March against President Nayib Bukele”
That last headline was issued by the opposing party against Bitcoin. And that’s to say nothing of the Metaverse which such entities have little to zero understanding as of yet.
Things are changing at ever-increasing speeds, which probably keeps them in a state of confusion. Indeed, they’re fighting a losing battle. And this is for the greater good. more than 500,000 users in one week in El Salvador have jumped onto Bitcoin since it was legalised so they can transact value while not paying up to 50 per cent transaction fees to send small money to family.
Despite this, the IMF had reported that El Salvadorans were against the legalisation of Bitcoin in their country. This is another of the many examples of FUD that rages amongst governments and the heavily controlled mainstream media.
While newspapers such as the Wall Street Journal do have informative articles, Ray Dalio caught them out about their gross mislead when calling his organisation a cult a few years ago. WSJ also has a soiled, longstanding track record when it comes to relating to cryptocurrencies.
They have published numerous articles against Bitcoin and cryptocurrencies over the years such as the one on March 10, 2017 that headlined “Let’s Be Real: Bitcoin is a Useless Investment” when Bitcoin was trading around $900. Bitcoin has since risen by 5,333 per cent, or $10k invested turned into $543k in just 4 1/2 years. Not bad. Try doing that with stocks.
US fights back
At the heart of this is the ongoing concern that governments will defend their currencies or they stand to lose much financial control. In consequence, the US government could be cracking down on stablecoins since a digital currency of their own could make such stablecoins obsolete. Indeed, the SEC may go after stablecoins and not just Tether but also the fully regulated USDC.
Nevertheless, the blockchain world is populated with some of the smartest minds. Decentralised, stabilised assets backed by yield bearing assets that keep a stable value that accrues over time is one possible way to overcome SEC restrictions. In such a case, the asset would not be stabilised at a fixed rate but stabilised by yield-bearing assets. So instead of fiat backed stablecoins which are inflationary, we could have stablecoins that track the value of real world goods using oracles.
A new stablecoin called $MIM aims to carry these characteristics and is backed by multiple chains which distributes chain risk. It is addressing this issue so could become the defacto decentralised basket stablecoin. This could in time make fiat second to Bitcoin which could become the global reserve currency on which the value of real world goods are based.
To get to such a situation, inflation would have globally run amuck to where more and more individuals sell their dollars, euros, and pounds, not to mention the smaller currencies in which we already see this occurring, for Bitcoin, stocks, and hard assets.
Various forms of fiat would go extinct in their current form as they hyperinflate, much as the Argentinian peso had to be revalued more than a couple of times as it collapsed, or any of the countless other such examples throughout the last century.
A growing number of fiat currencies would probably be revalued like dominoes across the board similar to prior times over the centuries when one world’s reserve currency was overtaken by another while other currencies floundered.
In times past – such as pre-WW2, the pound was the world’s reserve currency. Then the dollar took over when the US was victorious after WW2. The transition began well before 1939 so the transformative process can take decades. In today’s digital world, things move much faster. As it has been said, digital is eating the world.
Could Bitcoin, in time, be the world’s next reserve currency? And perhaps just in time for the dawning of a more mature Metaverse, home to NFTs?
(͡:B ͜ʖ ͡:B)
Dr Chris Kacher, bestselling author/top 40 charted musician/PhD nuclear physics UC Berkeley/Record breaking audited accts: stocks+crypto/blockchain fintech specialist. Co-founder of Virtue of Selfish Investing, TriQuantum Technologies, and Hanse Digital Access. Dr Kacher bought his first bitcoin at just over $10 in January-2013 and participated in early Ethereum dev meetings in London hosted by Vitalik Buterin. His metrics have called every major top & bottom in bitcoin since 2011. He was up in 2018 vs the median performing crypto hedge fund at -46% (PwC) and is up quadruple digit percentages since 2019 as capital is force fed into the top performing alt coins while weaker ones are sold.