We are going into a new era. Buckle up!
Bitcoin is an exit from fractional reserve central banking that is practiced by all governments today. DeFi is an exit from legacy banking and high finance.
Social media which gives each person a voice is an exit from centralized, monopolistic mainstream media.
Work-from-home is an exit from the 9-5 office grind.
Home schooling is an exit from politicised, no-think, public education.
The creator economy is an exit from the centralised corporation.
A $1 million digital gaming item is an exit from a $1 million piece of analogue art.
Secure, private, and non-censorable online worlds and virtual economies are an exit from the eroding trust in conventional institutions, centralized corporations, and governments.
Welcome to the world of digital decentralization. Welcome to the Metaverse!
2.7 billion online video gamers who tend to be younger – think Gen Z or Millennials – tend to agree with the above as they place a high value in digital worlds. People are spending an increasing amount of time in such virtual worlds that bring a sense of purpose, social presence, shared experiences, and a virtual economy.
The Metaverse is the bridge between the physical and virtual worlds. Within the decentralised and open source virtual world, cryptographic protocols will emerge for managing digital value – think digital art, collectibles, digital real estate, advertising space – as well as identity in the form of personal avatars. The facilitators are NFTs (non-fungible tokens) on the blockchain.
In the same way we hop from one website to the next, our personally designed avatars will soon hop from one 3D virtual environment to the next. We already do this with social media platforms when we move from Instagram to Snapchat to Facebook to YouTube.
Noted investor Raoul Pal was surprised to see his 14-year-old nephew on a headset in front of his laptop through most of the holidays speaking to and strategizing with various gamers on Minecraft around the planet. It has become a very real part of his existence.
Blockchain expert Ryan Selkis wrote an extensive analysis of the blockchain economy for 2021 and predicts that in time, the majority of the world will spend most of their time in such virtual worlds as such environments organically scale with ease.
D stands for ‘digital’ (not degenerate ;). Singularly, there is a growing generational divide as tech separates those who grew up with it compared to older members of society. An early example is when one helped their parents program their VCRs in the 1980s.
Coding, blockchain, and everything in between is standard among the new generation known as Generation Z. A good number hang out on massive multi-player online games such as Warcraft, Final Fantasy, and Roblox.
They have friends around the world and spend hours where they chat, trade skins, and exchange things of value in the digital world. The gaming industry is pushing over $100 billion dollars. Those who grew up with such lifestyles don’t see the digital world as being all that different from the physical world. The digital world is just as real to them.
In consequence, platforms such as Decentraland help players make money through gaming and trade. Digital socialisation is something I did back in the early 80s with early role playing games that employed digital items.
We had friends around the US and would spend hours on the phone in conference calls with up to 59 friends often late into the night. But this was far from standard. There were maybe a thousand of us at most spread across the U.S. who ran the gamut between hacking, cracking, pirating, phone phreaking, and gaming.
Back then, some of these gaming items had great value until the program was hacked and items could be easily duplicated. Today, such duplication is not possible as NFTs each have a unique identifier on the blockchain, thus more than a few NFTs already have cash values exceeding a million dollars whether it is a sought after item in a multi-player online game or a piece of digital art.
Blockchain brings un-hackable rarity to digital items. And unlike a painting and certificates of authenticity which can be forged, NFTs are fake-proof due to blockchain technology.
Over the years, a similar incarnation is repeating from what I experienced back in the early 80s, except participants have far greater bandwidth and tools at their disposal to replicate sophisticated forms of e-commerce which facilitate trade. While older generations might wonder how such items could have value, digital rarity is a form of status. Think about that $50k Rolex on your wrist when you could just wear a Casio digital watch which probably keeps better time. Gen Zs create a market of countless digital items based on perceived scarcity and value. There’s no difference to a Gen Z to pay big money for a rare skin than an adult who buys a Rolex. Humans always flock to status because humans are tribal. And that of course creates the markets as supply and demand create the perceived value, whether the value is derived from actual utility, aesthetics, or perceived rarity.
Metaversal Missives Montage
In the coming weeks across a spectrum of articles, I will cover the interconnectedness between blockchain, AI, virtual reality, cryptocurrencies, NFTs, DAOs, DApps, decentralization, tokenization, Web 3.0, stocks, bonds, debt, interest rates, precious metals, politics, COVID, authoritarianism, and philosophy.
Dr. Chris Kacher, nuclear physicist PhD turned stock+crypto trading wizard / bestselling author / blockchain fintech specialist / top 40 charted musician. Co-founder of Virtue of Selfish Investing and Hanse Digital Access.
Dr. Kacher bought his first bitcoin just over $10 in January-2013. 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.