Metaversal growing pains – the sky is just the beginning

The metaverse in its most basic form is the digital interaction between individuals as well as with entities. Mass adoption of the metaverse came with the proliferation of the PC. Nevertheless, all revolutionary technologies have been fraught with apt double-edged sword analogies.

Fortunately, the good side is made sharper by the evil side. Hackers are a necessary ingredient to ensuring a system is idiot-proof and theft-proof which is why the trustless model is key. Early days of the internet, blockchain, e-commerce, and crypto exchanges among many other technologies were bug-ridden thus vulnerable to theft and ops failure.

The internet was spurred by porn and credit card fraud; Bitcoin by money laundering and drug trafficking. The most recent LUNA debacle spurs mainstream media (MSM) to once again declare crypto is fraudulent and a failure. Indeed, Bitcoin has more than 400 times over the last decade according to www.99bitcoins.com. 

The more evolutionary the technology, the greater the amount of corruption which spurs FUD since attack surfaces are dynamic and broad. But there is a counterbalance in the cryptospace; the good is fiercely more vigilant to expose the evil. Top minds have flooded into blockchain at a far faster pace than any technology before it, thus justice is swift; truth ultimately wins. Uneconomic platforms die; economic platforms thrive. While those who lost big on the countless scams and failures may disagree, one must remember that nothing goes up in a straight line. The 50,000 ft view shows the prevailing trend suggests the sky is just the beginning, and reach it we will. 

Progress is exponential

An evolutionary tech timeline dating back to the Industrial Revolution would suggest progress is exponential. Every decade, development is twice the pace of the decade before it. Progress is slow and small in the beginning, but then eventually becomes clear to all. The binomial sequence 1, 2, 4, 8, 16 eventually gets to well over 1 million in just 20 steps. This applies to the internet, blockchain, NFTs, DeFi, and DAOs among numerous other forms of tech. 

Those who argue the internet is the greatest invention would agree that the synergism between blockchain and other industries will reach unimaginable heights. Think how much faster the internet boosted efficiencies. Blockchain squares these efficiencies. Throw in AI and efficiencies can be orders of magnitude higher. 

A big part of progress will trend towards lesser government, or better yet, decentralised governance where corrupt citadels of power and dictators, kings, queens, and guillotines become a distant memory. So while more regulations can help mature the blockchain space and enable further development, in the long run, much federal oversight will be displaced by decentralisation. Web3 will steer this trend.

Decentralised systems such as Bitcoin, DAOs and dApps will rule the landscape in the coming years, un-censorable, private, secure, out of the manipulative hands of centralised governments. Indeed, Web3 could not come at a better, more necessary time in the history of humanity. While some doubters such as Twitter’s Jack Dorsey have said web3 is ultimately a centralised entity with a different label, suggesting that the distribution of wealth and power will be no different, they miss the point that further out along the timeline, distributions of ownership will be far more heavily skewed to web3 users than products such as Twitter, YouTube, or Facebook, which were owned by a handful of investors in the early stages, and then maybe a handful of early employees. 

More importantly, centralised Big Tech owns your data whereas Web3 incentivises users to create. The more they create, the more they own. Web3 bootstraps a network effect when a new Web3 platform is launched. Web3 is a decentralised platform which no single entity controls, yet everyone can still trust as every user will follow the same set of hard-coded rules known as consensus protocols; open, trustless, un-censorable, and permissionless. Web3 apps run on blockchains called dApps (decentralised applications). This will birth an unlimited number of DAOs (decentralised autonomous organisations). 

Such technologies are open, driven by open-source software, accessible to all. Users can interact in p2p fashion, publicly or privately, without a third party (trustless) and without KYC/AML authorisation from a governing body (permissionless). And no one can be censored out of existence; yes on a specific platform, no across all platforms. 

Web3 ecosystem evolutions

Users will be able to participate economically via tokens. Tokens can function like owning stock in a company, or a token of gratitude (tipping), or a ticket to an event, or a club membership such as an NFT, or participation right in projects and communities, or club points. The token can even have rights such as Bored Apes NFTs or DeFi woven into its structure.

Smart contracts on the blockchain enforce the rules. The token’s unit of value is recognized and enforced by the system that issues the token. Protocols exist to manage the flow. For example, SMTP coordinates emails while Ethereum enables blockchain buildout. But only ETH captures value from its tokens. A DAO (decentralised autonomous organization) is a group organized around a mission where human and financial capital is coordinated to accomplish a set of goals.

The token holders have voting rights. The community is made up of token holders who decide the direction of the DAO. Web3 builds decentralized economies, not centralized companies. Such economies benefit all creators. 

Unlike centralised corporations which thrive on data ownership by its users (Facebook, Twitter, etc), the strongest, deepest moat is the network effect. Web3’s open platforms share value with its users. Every DAO token holder who creates/publishes/contributes to the platform creates more value for everyone, including the platform which, in turn, catalyses the growth of the network. All content a user creates is owned by the user. This enables the portability of a user’s data to other platforms. This is a critical difference between Web2 and Web3.

Companies such as Lens Protocol provide a decentralised social storage platform which enables creators take their creations anywhere in Web3. Imagine being able to take all your tweets to Facebook and vice-versa or to a DAO.

The decentralised aspect of DAOs makes such organisations censorship proof. While a particular user could be quarantined or removed from a particular DAO, they would still have unlimited access to the universe of other DAOs. Indeed, growth in the number of DAOs in exponential S-curve fashion will greatly diminish the power and influence of centralised governments.

(͡:B ͜ʖ ͡:B)

Dr Chris Kacher, PhD nuclear physics UC Berkeley/record breaking KPMG audited accts in stocks & crypto/bestselling author/top 40 charted musician/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 contributed to early Ethereum dev meetings in London hosted by Vitalik Buterin. His metrics have called every major top and bottom in Bitcoin since 2011 to within a few weeks. He was up in 2018 vs the average performing crypto hedge fund (-54%) [PwC] and is up well ahead of Bitcoin & alt coins over the cycles as capital is force fed into the top performing alt coins while weaker ones are sold. 

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