The Metaversal Evolution Will Not Be Centralized
Crypto fuels the metaverse
Traditional fiat has and always will be devalued by central banks. It is only a matter of time before the Fed moves from QE-lite to full blown QE, spurred by another crisis. This is why crypto which acts as fuel for the metaverse is so important. The metaverse is simply communication in digital form back in the day of 300 baud modems when the growth of email went exponential, spurred by the PC revolution in the early 1980s.
Crypto is the counterbalance to government control over our money. Bitcoin IS the magna carta of code. There are no constitutional rights without the freedom to transact. CBDCs (central bank digital currencies) are an intentional effort to revoke this freedom under the guise of convenience. The Canadian government’s response to the truckers protests nicely illustrates this when they froze the bank accounts of those who tried to help the truckers.
Ultimately, it is good when the citadels of truth and benevolence coincide. Web3 ensures that. Web3 is composable meaning anyone can build on anyone’s creation. This spurs exponential growth across decentralized autonomous organizations or DAOs, some of which will become hyperstructures such as Uniswap where no central authority can stop its growth. This is akin to p2p file sharing that underwent mass adoption with the launch of Napster in the mid-1990s. Governments tried to shut off all the front ends such as Pirates bay file exchange sites, but for every Pirates Bay shut down, 10 new ones sprung up like mushrooms. In consequence, the number of users mushroomed from a couple million to over 100 million over the next decade. Fair platforms such as Netflix and iTunes have legitimately attracted such users away from illegal file sharing. So I would hope we learned that strong-arming users into not violating copyright law had little effect, compared to the launch of economically fair platforms where users could legitimately watch or buy product.
Despite the bear market, building continues. The realization of countless ideas into workable projects with utility up to an order of magnitude or more over traditional systems continues. This was true in 2018 even though typical altcoins lost 98% or more of their value, but from the rubble, DeFi and NFTs were recognized while growth of the metaverse accelerated.
On NFTs
NFTs are one of the hugely promising areas of the cryptospace. They have been massively misunderstood.
Non-fungible tokens (NFTs) are based on digital scarcity. Digital art is just the ice cube on the iceberg. NFT’s have already evolved in multiple directions, from the digital replacement of sports trading cards, evolving into short videos of sporting moments, to integration into gaming, ticketing systems such as the work of Ticketmaster and the NFL, the collection ‘Bored Ape Yacht Club’ which has increased in value from $100’s into the millions and spun off music, fashion tie ups and merchandise.
We see the future of NFT’s in the FinTech space as product such as securities and in the more conventional art space; it is a way for large collections and galleries to leverage their existing assets, ‘beyond the digital gift shop’.
NFT use cases are numerous and run deep. For example:
1) Early investor: Be the first of, say, 1000 fans for an unknown artist that shows great potential. If they become a star, those 1000 NFTs will soar in value. This is analogous to the way people buy “rookie” cards for athletes. The NFT could also grant special rights to such NFT holders such as free attendance to their concerts, special merchandise, members only channels, or participation in royalties. This spurs community involvement.
2) Digital art which becomes collectible and contains various rights such as the bored apes. Bored apes grants rights to their NFT holders so the holders can make royalties on allowing others such as major motion picture companies to use them in their movies. Beeple is one of the best known examples of digital art but numerous others abound such as cryptopunks.
3) Exclusive membership: Fnatic is one of the biggest e-sports teams out there that developed tiered membership NFTs that would unlock access to exclusive events, products, and one-of-a-kind drops. Thirdweb works with Fnatic among others such as Coinbase and Shopify to provide tools for companies to build web3 apps. Thirdweb makes it easy so you dont need a wallet, just your email. You dont need to pay with crypto, just your credit card. And transactions are gasless so no costly gas fees.
4) Online gaming: The vast multiplayer worlds of online gaming are issuing NFTs which you OWN. You can sell them. You can bring them into new games. You can rent them out to other players. Gaming giants like Ubisoft and Epic are starting to issue NFTs. By contrast, in Web2, if the game went out of business, one’s items disappeared. Or if one moved to a different game, their items could not be ported over.
5) Profit-sharing of a brand’s value: The Hundreds is a company that announced it would pay royalties to owners of the NFTs that were used in some of its clothing collections. Every new clothing line that used that emblem would give you a dividend. Partially decentralizing the brand’s value in this way spurred The Hundreds’s community to go out of their way to promote it. Sharing ownership incentivizes everyone to become a builder and contributor. Because of the way Web3 is designed, one can build on every web3 company. This means the community around a platform can co-create enabling the platform ecosystem to grow even stronger.
6) NFTs for the Subscription business: Across the internet, the subscription business model is fully economic. In web3, a DAO can be created that offers a subscription-based product, say a newsletter. Two or more tiers of NFTs can be issued to subscribers. Tier 1, whose NFTs are unlimited, grants the subscriber access to paid content for a set amount of time. Tier 2 NFTs on the other hand are limited meaning there’s only a certain number of customers who can purchase this tier. Members of this tier receive dividends from the revenues of Tier 1 purchases, so are economically incentivized to help market and grow the Tier 1 customer base.
The DAO could also decide by way of vote from Tier 2 NFT holders to create additional products and services to generate even more revenues for the Tier 2 NFT holders as they receive dividends on Tier 1 sales and an NFT that may appreciate over time. This is a massive value-add for your Tier 2 NFT-holding customers.
But Buyer beware: NFTs that are stored on centralized servers can be edited and will become worthless if the server ends. To date, 57% of NFTs fit this category. So just because an NFT collection receives the blue checkmark on Opensea.io does not mean it is stored on the blockchain. It is extremely expensive to store NFTs on the blockchain, typically on the order of $100k for full color images, so only a scant percentage (<1%) are stored on the blockchain as text art since text art takes far fewer bytes of storage. This is the only way to ensure your NFT is permanent. The rest of the NFTs are often stored on a decentralized storage platform called IPFS. Most will remain safe on IPFS and are immutable. But this is not 100% guaranteed. There is a small chance that your NFT stored on IPFS gets deleted in a purge if a node is taken down if its not accessed often enough. Such a node would not get duplicated on IPFS thus would become centralized.
Also, IPFS is not a free service. If the payer stops paying, IPFS will remove the payer’s node. This happened with the platform HEN who started to compete with Opensea. One day, HEN ended. Fortunately, HEN’s smart contract code was open source on Github which made it possible for a third-party company called DNS to step in and create a mirror site. But the NFT media itself was stored on IPFS. HEN was no longer covering the costs necessary to keep those NFTs in storage, so the community had to pick up the slack to save the NFTs. But it pays to remember, not your storage, not your NFTs. https://rameerez.com/no-your-nft-not-on-the-blockchain/
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 & bottom in Bitcoin since 2011 to within a few weeks. He was up in 2018 vs the avg 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.
Website 1 of 4: Virtue of Selfish Investing Crypto Reports
LinkedIn: https://www.linkedin.com/in/chriskacher/
Company 1 of 3: TriQuantum Technologies: Hanse Digital Access
Twitter1: https://twitter.com/VSInvesting/
Twitter2: https://twitter.com/HanseCoin
Encyclopedia1: https://de.wikipedia.org/wiki/Chris_Kacher
Encyclopedia2: https://everipedia.org/wiki/lang_en/Chris_Kacher
Author: https://www.amazon.com/author/chriskacher
Composer: https://music.apple.com/us/album/teardrop-rain/334012790
Youtube: https://www.youtube.com/user/teardropofficial
Interviews & Articles: https://www.virtueofselfishinvesting.com/news