Transcriber: Mai Pham Reviewer: Elisabeth Buffard
Where in the metaverse did NFTs come from?
We believe we were zoomed into the metaverse by COVID.
How many times have you met someone in person for the first time
and ask him or her: “Haven’t we met in person?”
“Wait, have we only met in Zoom?”
That’s because Zoom is an online place that is multisensory, audio and visual,
and it tricks our minds into thinking that we are in person
because it actually is a real experience.
Zoom is a great example to me
because it contains the key elements of the metaverse,
a multisensory, shared, human understanding of authenticity.
It feels real, and it is real.
The way we express social capital and identity
has changed dramatically over the last 20 years.
For hundreds of years, we were in the all physical world.
One’s home was the center of social capital and identity.
Think of the social circle surrounding one’s home
and then a radius from the center of the circle
that might be created by driving our car out of the drive way,
walking our dog, or buying clothes that we’re wearing or jewelry.
One can either invite people into the circle,
or we can travel out of the circle.
So, for me, growing up in a suburb of Kansas City,
my parents would have dinner parties and there was china on the table
and art on the walls.
During these hundreds of years of history,
there were even accepted principles
in terms of the finite number of friends that we could have.
So again, this is what we call the all physical world.
Then Apple started working on what would become the iPhone in 2003,
the same year the first millennials graduated from college
with fewer job prospects, more debt,
and a lower likelihood of buying a home.
A year later, Facebook was born.
A few years after that, Instagram.
Together, they launched us into this hybrid physical-digital world,
in which one’s smartphone became the most important generator
of social capital and identity
The smartphone actually replaced the home as the center of gravity.
All of a sudden, one can travel to Machu Picchu and take a selfie.
One can rent a runway and wear designer dresses every weekend.
Human behavior shifted and people started to say
that they cared more about experiences.
But which did we enjoy more?
The actual experience itself
or capturing it all to distribute it on social media?
So while our identity and social capital evolve to digital spaces,
in this stage, it’s still dependant on the physical.
We still had to go to Machu Picchu, we still had to rent the runway
to take a selfie.
Now we would argue that we’re entering the metaverse.
A fully digital world that no longer depends on anything physical.
We can attend online art gallery events, we can go to dress shops and Roblox.
We can even go to concerts.
DJ Travis Scott grossed $53 million
in his very high-cost physical tour of 56 cities
that had real roller-coasters.
His digital concert in Fortnite was 45 minutes,
and it grossed $20 million, and it got him 1.4 million followers.
And it increased his offline ticket sales by about 400% .
When we're looking for interesting opportunities in technology,
we often say that we want to merge
onto the highway of behaviour that’s already happening.
What this means is we’re looking for new technologies
that don’t require huge behavioral change,
mainly because they’re more likely to be adopted.
This is why we also say that we believe
gaming is the Trojan horse to the metaverse,
because gamers have been buying, selling, trading digital assets for decades.
As an example, in Fortnite, players have been spending about $4 billion a year
on skins and other digital assets.
Now let’s review what’s happened so far with NFTs.
NFTs version 1, I would call Inception 2017 to now
and the results so far have been mixed.
There are a few positives
like new innovative ways to pay artists
and providing property rights in online spaces.
But there have been a lot of negatives: money grabs, scams.
And we still believe that version 2 of NFTs will have a very bright future.
First, a protocol layer similar to HTTP for email
or TCP IP for web 2, is neede to access 2.5 billion gamers
And it should be on that does not require us to pay
for very single action that we want to do with a transaction fee.
We believe that Polkadot solves this problem.
Acting as a Layer zero protocol that allows blockchains
to communicate with each other and to send assets between each other.
Now let’s look at a couple of examples of how NFTs
can provide new tools to build the metaverse.
Like in the physical world, one could build social capital and identity,
and they come with property rights.
For brands, we think of NFT as a new window into engagement
like the TV has been for decades.
Every year, $160 billion is spent on broadcast and cable TV advertising
even though behavior has shifted to streaming services,
which don’t allow advertising and gaming.
Gamers have historically rebelled against
any sort of moneymaking activities in their games.
Advertising, pay to win, the list goes on.
And definitely the first version of NFTs.
So given this backdrop, I was actually really excited
to see the Burberry collab with Mythical’s game Blancos.
Unlike the aversion that we’ve seen to brands in games,
hundreds of assets sold in seconds.
Why did this happen?
The players can now own a branded item that can be played by them in the game,
and it generates the same sort of social capital and identity
that I get from bringing a Gucci bag to a party.
Finally, ownership of NFTs of this kind is multidimensional.
Imagine Sharky and Loki in a surprise and delight moment sometime in the future.
Also NFTs can shrink the distance between creators and fans.
We believe that advertising, which is the core engine of the web 2,
is a human conflict of interest
between the creators of content and the consumers of content.
And it can lead to privacy breaches and fake news that we all know about.
The promise of web 3 is less trust, more truth.
What this means is that we don’t need to trust
that the news is real or true, we can verify it.
So this is an example of an artist, Micah Johnson, who I really like.
He has this great quote:
“Buying is the New Liking”,
and he explains that in social media,
it’s a one-way communication
and there are so many bots he doesn’t even know who he’s talking to.
Whereas in his Discord community,
he has conversations with real fans, real collectors.
It helps him create his next piece of art.
And it’s better really for both sides.
So, Micah’s vision for Web 3
perfectly summarizes our three C’s of Web three.
So I want to leave you with this to remember:
community, creativity, and collaboration.
Thank you for listening, and I’ll see you in the metaverse.