ep 14 –The Metaverse, Crypto, Virtual Society

Transcript

[Music] welcome to web 3 with A6 and z a show about building the next generation of the internet from the team at Asics and Z crypto that includes me your host sonal choxie this show is for anyone seeking to understand and go deeper on all things crypto and web 3 whether you're a developer Creator or other Builder so in this week's episode we do a wide-ranging deep dive on all things metaverse what it is what it isn't how VR or virtual reality video games sports brands and communities play out here we also go into where crypto comes in here including discussing Trends in Dao's on-chain gaming themes like

interoperability composability Etc and we also go well beyond technology and into science fiction the Arts low Fidelity design narrative and more our special guest is Herman narilla author of the new book just out virtual assistant Society the metaverse and the New Frontiers of Human Experience he is also the CEO and co-founder of improbable a london-based virtual world infrastructure company born out of Cambridge University which is where narula got his degree in computer science and also joining the conversation is Elena Berger deal partner on Asics and Z crypto where she focuses on games nfts web 3 media infrastructure and more she also published after this conversation took

place a review of Herman's book and broader themes which you can find at asicsandccrypto.com as a reminder none of the following is investment business legal or tax advice please see asicsnz.com disclosures for more important information including a link to a list of our investments anyway our hallway cell conversation winds backwards and forwards from past to present to future but we begin by tackling the topic of VR immersion and more before going into the nuances of metaverse thank you [Music] VR is a really tricky thing because it demos really well to people who've never played video games and it can even feel like the future because it feels more

grown up than what your kids are doing on their console or on their phone and you look at find Minecraft or fortnite or Roblox they're all simplistic graphically relative to games from five ten years ago and that's intentional and related to that wide appeal and their accessibility but you can see this like fancy VR demo and you're like well hang on a second this is different this is more grown up this is more mature and I think for a lot of companies that in any case wanted to see interactive entertainment and virtual environments as a Next Step VR has acted as a psychological capitalist for them to feel like the tools now exist even though I don't think that tool is also important or that useful for them I think the actual reason people are doing it is more gimmicky yeah if you go immersion but it actually doesn't feel

real or satisfying for some reason or if you go in clergy Graphics but it's so immersive and you get you know really really personally invested so there's these two incredible examples of very very early games or MMOs in Herman's book and they're kind of put up against each other in opposition and I think that we're still seeing that today one is called BattleTech which is sort of a VR experience that popped up at Suburban malls throughout America and BattleTech was healed that's the first real immersive VR game but in reality just

the graphics were bad the feeling wasn't very immersive and it just didn't catch on as much as people thought it was going to now there's this other game called habitat and I was totally nerd Snipes on habitat and this was like in 1986 87. but basically it was this game that you could access on a Commodore 64 so like an old computer made in the 80s and you needed a Quantum link subscription to access it and Quantum link was a kind of early version of AOL but the game itself was a multiplayer virtual civilization you could pick an

avatar you had your own home there were like 20 000 regions and there was in-game trading and commerce there were items you can interact with and then the games got more complicated as more people joined and the engineers behind the game have this really really amazing postmortem where they talk about the debate that went into whether or not you could have murder and crime in the game fascinating and apparently there was like a 50 50 split there's a community of like 20 000 people and eventually they decided that you could have murder but it would only be in like the forest

Wilderness region of the game so you couldn't have murder in the Town Square but you could like take somebody out into the woods and kill them and take their entire inventory yeah yeah but what's really interesting about this game and Herman you talk about this in your book is the level of user creativity and also user interaction like there was a chat system you could talk to people let's be really clear on thumbs because I think you did an amazing job of explaining but a lot of people listening we never have heard of either of those games to use similar examples so people are aware think of the difference in playing at Dungeons and Dragons campaign if you've ever played a game with your friends where you could create these incredible worlds with Incredible detail and richness

they're all played on paper but because you're all telling the story and reacting in real time to what happens you can make the world very rich thus is the best Pixar movie you've ever seen right so to build on Elena's Point immersion and presence are two different words for the value of a virtual experience and immersion means that the world feels real in the sense of realistic presence means that the world thinks you are real so you can take different actions within the world and I think they generally end up trading off against each other because of content costs I want to go back to this distinction but I want to ask you guys a very simple question which is let's just Define metaverse What It Is What It Isn't and I want to hear your definition Herman from your book Elena I want to

hear your definition and then I highlighted about four or five key phrases in the book and I want to quickly probe you on some of those too so I'm going to give a very high level what I think the market defines it as and I think the first thing that comes to mind when people think of what is metaverse is simply VR in the form of a virtual world not just VR the device that gives you access to the virtual world which has like a lot of content and some abilities to kind of move between spaces and honestly the canonical example that comes to mind would be something very ready player one-ish where there's this completely kind of single view of of what that world is that you immerse yourself in you go into it that you actually kind of leave your physical world reality and

that's what people think about when they come to metaverse tell me if I miss anything crucial but that's what with my former media hat on I think that's what people really think of when they think of metaverse I think that's what people think it is and that's the definition journalists and companies are working towards or attacking or getting confused about okay so that's the Baseline so then Herman how do you define it and also people are very confused about whether games are meta verses well stop by saying like why is it important to Define it well some people are like oh it doesn't matter we don't even need this word well of course we do because how do we decide how to allocate Capital how to measure at them how to know if the effort entrepreneurs and individuals are placing are good or bad or valuable

or not valuable my main issue with the broad definition is it's not very useful it could describe lots of things a dream any kind of embodied experience an acid trip you know a video game all of these things have similar properties and I think if we fall into the Trap of the med of us is anything Disney plus is the med of Us video games for the none of us everything gets very confused you can address it with both Smart TVs and video games and crypto and it stops meaning anything right what makes the net of us interesting is not that it contains differentiated experiences those are already happening and have happened in our lives it's that those experiences are linked the interesting thing about the metabus is that it's a network of meaning of the transfer of value through identity objects and things between

these worlds and once you establish that you realize that a lot of virtual experiences are not suitable for a metaverse because the economics or practicalities of moving value from one world to another don't make sense and once you think about it as a network of meaning especially a network of meaning that relates multiple socially constructed realities together you also start to see that the concept can be bigger than technology broad enough to Encompass Sport and the real world because these represent networks of meaning so for me the definition is a network that supports multiple worlds where values exchange between them some video games could be the basis for a metabus but not all video games without definition that's fantastic just to close this Loop Elena what is your definition of the metaverse I think a

metaverse is a society or virtual civilization in which people immutably own their assets and I think of metaverse is a virtual environment in which people's actions and ownership is enshrined immutably likely by a blockchain crypto and the metaverse go hand in hand and it's one in which people feel ownership over the society that they inhabit and this does occur digitally and it does occur virtually I am still thinking through the degree to which what does physical embodiment look

and feel like in a metaverse I think we're seeing early examples of that your definition in my definition are lot more similar than listeners might imagine so we're talking about a network of meaningful events people and things that everyone can agree upon and you're introducing another idea which I like so much I'm going to steal it for future definitions but we're introducing the idea that people as a group have to agree upon the history of those things and in my book I talk about an ancient metaverse and talk about the Battle of the eclipse between these two Greek factions that hate each other and we have to agree that the eclipse meant that they could stop fighting it was like a deal they subtly made with each other right they know that Gods want us to stop so this idea of having an agreed

history or an agreed network is vital to building meaningful experiences and I think what your definition does really well is highlight that the difference between the experiences that are relevant to a metaverse and experiences that are just by yourself or pure entertainment or in a dream or in a small game is the impact they have and you cited ownership and for me I call that the chain of consequences of those actions right and this is why I think when people conflate the video games stream the metabus they do both a disservice interesting let's talk more about that because when Elena said ownership and you said it's like kind of connected to people's agency one of the things in your book that I thought was really powerful is you described the impact of a world where you can have cause and effect whether it's at a user

level or like agents or actions in that world and the other idea that I think is really interesting there is this very active and interactive versus passive which is how people currently consume a lot of games and TV and other quote entertainment so do say more about that Herman because I think this will actually sharpen the definition a bit more so let's take an example a very real world one we can support 30 000 people talking at the same time 30 000 people speaking at once in a physical space where everyone's voices operate in a physicalized way so you'll hear a person singing you know bouncing off the walls from the crowd on the other side of the stadium if it was in a stadium you could hit people Close to You louder and people further away quieter and we can introduce all sorts of Tricks now

that's a really dumb feature for a video game like that's an awful feature for a video game which game needs 30 000 people talking at the same time right nobody needs them yeah even 20 is too many but yeah even 20 is too many right however it's a vital feature if your goal is the Latin Indian cricket Fan Experience being at a cricket match for the first time on their phone or your goal is to come to a fashion show in Paris fashion week with thousands of VIPs from around the world because the idea of them speaking and you hearing what they're saying even if you you know don't care the knowledge that there are real people over there that are speaking and the fact that you know you might start a joke that causes a laugh or whatever the possibility of that is vitally important for the space having

presence and meaning otherwise it is just passive consumption and the psychology of experiences is very very clear you have to have the ability to interact and to make changes and for those changes to matter for the world to provide you with any fulfillment so Facebook wants that all people in VR headsets in a zoom meeting that just feels pointless to me it feels pointless on every level you need to have this notion of meaningful experiences and that's what separates traditional video games from the metabus you've mentioned the word meaning a couple of times as part of your definition you know like networks of meaning finding meaning Etc I want you to actually Define what you mean by that for sure I think if you look at the history of the early internet there's this transformation and communication and narratives and media where companies and people realize data

information can be a downable and valuable thing separate from physical goods and services wow you know huge companies got created that did nothing but move bits around then did that in a way that facilitated communication the debacle change now is to go beyond that and go you know what this information this can represent not only physical goods and services and and tangible things like messages from your friends but we can take the intangible world of how we spend our time and our money the indangible world of brands of ideas of experiences of events of cloud and we can turn that in tangible world into a tangible tradable one we're pretty good at understanding how to assign value to these intangible things to some extent maybe not accurately but are more

interesting problem is why does an immaterial token have value isn't that interesting a question when you look at an economy in which you have a trillion dollars in fashion globally or whatever the number is right you know there's so many immaterial and made up things in a society with pyramids and Cathedrals and sneakers that are worth a thousand dollars and celebrity that we already have and ascribe value to where meaning itself meaningful things meaningful relationships meaningful objects meaningful experiences can get Quantified and turned into digital assets and those digital assets can then be the basis of an entirely new economy I call that the Fulfillment economy an economy focused on psychological fulfillment because we're trading experiences and intangible things that is what I mean by meaning it's like the next layer of societal value on which we

can build an economy that's funny because the minute you said that the first thing that came to my mind was nfts like non-fungible tokens because obviously there's so many use cases for nfts more broadly but for me the reason I engage in nfts is meaning the idea that you're essentially capturing parts of your identity who you want to be who you are the communities you belong to kind of modern religion I mean it's just so many different ways to think about it I think we should draw a distinction between one implementation of uh digital assets which is an NFD and NFD itself but I'm going to just use the word nft to mean all kinds of digital assets because I think it's the best representation you have right now of what it would be but I think the idea of like a thing which exists in a protected

context outside of any one world controlled by anybody is incredibly valuable it means that I can trust it I can rely upon it I can use it in ways I wouldn't otherwise use I have an incredible magic item in Neverwinter Nights on one specific server of a game it's a really old magic item it's really powerful I doubt anyone listening cares only a thousand people you know play that it's a mod of a game of a thing I can never show it to you I can never take it out I don't even think I still have a game installed so it's kind of gone but if that item was something I could own or if any of the time I spent you know winning in Halo could have translated into an heirloom or an item that would mean a lot to me and even if

I couldn't use it in a particular game or World in a very minimal scenario it's still like a metal right it's like something you won or you had or a Memento or a picture or something you got from holiday we forget that we just can't do that right now with our digital experiences we really can't we have no means of making that happen and then often we're even banned in the terms of service or in the IP from even describing interacting or talking about these things right which is a horrible situation for people whose you know lives are meaningfully impacted by Virtual Worlds I spent probably a thousand dollars playing one or the other of those games that's a ridiculous amount of time to spend and have nothing to show for it you know I probably spend as much time as you would need to get a

pilot's license or something I'd have nothing to show for so nfds are like a vital building block of meaning within this network or this world totally I'm gonna Probe on one more thing please okay so you mentioned the word experiences that's kind of a generic word it can mean just about anything and one of the arguments you make is that immersion with that experience is almost like pointless in defining a metaverse like you need immersion with experience can you say more about what you mean by experience because I think this connects to the whole finding meaning in the Fulfillment economy so in the end like the unit of value here is I have a cool experience maybe I kill a dragon or make a new friend or I go to a concert but it's those experiences which are why we care about any of this to begin with

right it's the reason why we're engaging in the entire pageantry of interacting online or why we care about owning something because it must relate to some context maybe it just has monetary value but in a game suddenly the reason people care about the objects they own is because of the relevance they have for the world so experiences are the functional unit of how value is created in the metabus and every question needs to be about what new experiences someone is making and therefore how they will actually be used why and how that connects to the idea of the business model and digital assets of the most likely model that that's going to be and how that experience relates to experiences owned and operated by other companies entities or creatives and I think if you look at those three dimensions you can and start to build a

picture of the economics of the metabus so one question then because I was very confused by this then when you argued in your book that you don't think Disney World is like a metaverse essentially why would you say that because to most people listening it probably seems like an immersive world there's a lot of experiences you know there's a lot of meaning fulfillment people get engaged married at Disneyland you know they do dates there it's like people don't realize how popular Disneyland and Disney World is for adults not just children I don't recall the specific place where actually made that argument but I would say that if you look at Disneyland in isolation no it's not a matter of us because it's only one environment in which experiences happen but in your justification for why it is a matter of us you introduce the second

context which is all of these presumed real world relationships like if somebody's getting married at Disneyland then that's an interface of two completely different realities right that's not a Disneyland thing that's a them getting married thing I think if you are having a consumptive experience where Disneyland is not changed by me having been there I go there I leave yes that's not a world I inhabited that's just a movie I saw right that's right but when you introduced all of these things that have changed so the relationships with people like I got married whatever you need another world to store that context in this case the real world and yes then the relationship between Disneyland and the real world is much more metaverse like than that between many video games in the real world why because there's a lot more interoperability and interaction right

because it's in the real world you can get married that you can do stuff there it's a bit weird to get married inside a proprietary platform video game although it has happened yeah no that makes so much sense this goes back to your earlier point about cause and effect so Disneyland right now is effect without cause like people can't like you said exert actions on that world and sort of change things that also highlights the danger and the opportunity if a bunch of people who make consumptive one-way media even games which are linear or which are lobby-based games where it doesn't matter what happens if those people suddenly want to get into the metaverse business they have to be comfortable with what they have created going beyond their control and this is where I think web3 companies have an edge like if people suddenly stop about

gold trading and wow wow can shut that down but if people start gold trading on a game based in crypto while Khan shut that down right that's essentially something that they've signed up to by making the game part of an open interoperable system so all of the Medifast growth we've seen it's all from non-gaming companies who want to interoperate with each other because they like the idea of you taking your handbag from a baseball match into a movie premiere games companies don't like the notion of interoperability yeah Herman I'm so glad you used the word interoperability I think what we're really seeing early signs of now is the crypto ethos or crypto value of interoperability the idea of taking one asset in one context and being able to

use it in a completely different context is really pushing developers both within crypto and outside of crypto to think about how you can generate and sustain and augment value way Beyond its original context or original use case and there are a couple of examples that you could point to in the world of crypto just from a basic starting point you know with some caveats around file formats and how you actually represent an asset I can take an nft in one environment and have it be read in another environment and there are other

cool things that we've seen around composability and interoperability in early crypto games just to give a brief history of composability and interoperability just in crypto games one that I really like to point to is actually crypto kitties it's one of the first crypto games in fact it's so basic and simple that the gameplay mechanics were sort of overpowered by just the fact that people were minting and FTS and getting excited about nfts for the first time but there was also a gameplay mechanic which is you would take two crypto kitties and you would breed them

and then the resulting crypto Kitty could be more rare or less rare there was also sort of a judgment to be made about the value of subsequent generations of crypto kitties who was an OG funnily a lot of these kinds of questions and value judgments are still made today in the crypto space but the important thing about crypto kitties is that when it was on ethereum a majority of the really important gameplay mechanics were on chain and one of them was actually the function to give birth to your cat so theoretically after you mated your two cats you would wait 40 minutes and then your baby cryptokitty

would be born now on ethereum you can actually say a you know 40 minutes from now execute this function somebody else actually has to call a function So within the architecture of crypto kitties and within their smart contracts they would actually give a reward to somebody who called the give birth function to give you your resulting cat and whoever called that function would get a piece of the crypto Kitty give birth fee that a user would pay to breed their two cats which meant that all of a sudden you got this small ecosystem of Bot operators who would scan the

ethereum mempool looking for people calling this function in order to get a piece of that fee in time and there was a developer who at one point when this game was really popular was making I think like one or two hundred dollars an hour just because he was running a bot that responded to this function being called and then also within crypto kitties there were other marketplaces built on top of it somebody built a tool that actually allowed you to see a cat's attributes before it was actually rendered on screen and that allowed people to buy more rare crypto kitties before other people there was just this really robust ecosystem of early

ethereum developers who were super excited about new kinds of gameplay mechanics that could be done because so much of the important data and so much of the important information about gameplay was on chain and yeah going back to this idea of like interoperability and this idea that an asset that lives in one context in one game can mean something very very different in another context in another game you can have an asset in one universe that then can and means something very very different in another universe or you have an asset that has value in one universe and you just want

it to persist with that value into another Universe which is also totally valid that is something that we just have not seen in the digital world of games and immersive experiences yeah and it's something that I think crypto and other platforms can definitely be a big enabler of I love that as a great history of crypto gaming and also highlighting the unique component here which is taking something from one context to another crypto lets us agree upon who owns what and it lets us agree upon sort of contextless data about that object the moment the object starts existing in a complex video game then that does not suffice there's a lot more

information we need to know in order to allow users to usefully use that asset and move that asset Between Worlds which requires more agreement and more structure than crypto gives us which is too expressive or which a game engine gives us which is too limiting so in order for the metabaster really happen you do need this middle layer of agreed upon Services standards and pieces that bridge value between worlds like a layer on top of the blockchain rather than being something that one party could control without destroying all of the value one of the other things is I think you can do a lot more unbundling and bundling of identity through nfts across these worlds if you think about nfts like one thing that we're limited by in our current identities or even gaming

avatars is how limited they are I totally agree I think people forget also some of the problems like everyone's assuming that you can just render all these nfts on screen maybe surprise people to them that most video games can only render about 50 characters that look different it didn't matter for video games but it absolutely matters when you start thinking about these types of experiences it's funny because it's an essential component and everyone just assumes that that problem will get solved and there's a lot of that like wishful thinking with Medifast companies right now where their desk driving this amazing end State and then rushing over 9 or 10 like critical technology problems yeah for sure I think something that's interesting to chart is that nfts and assets that exist on that system only have value ascribed to them because

the system that they're built on is permissionless and that you can extend outward from them and nfts aside from being just extremely interesting and such a fascinating design space because you have immutable ownership because you can see you know who else owns an NST and in doing so get a sense of community or be able to marshal or rally community in that way it is an invitation to filled and extend outward from that core unit and it it becomes like this rapidly materializing world like a world that's being animated or drawn by multiple people in real time and everybody gets

to fill in the sky folds together so to me nfts are an invitation to do that exactly this actually could be a good segue to talk about emergent metaverses or examples of things that could become meta verses by my definition go for it I think noun style is very very interesting for those who don't know nounsdao is an nft project on ethereum Dow stands for decentralized autonomous organization and what they do is every single day they have an auction for a noun nft and a noun it has various attributes that live on chain the noun has always a characteristic set of

glasses every day the head and the body and the various attributes and the colors are different some days the head looks like a skull some days the head looks like a moose some days the head looks like a pineapple and so basically nouns they're an nft they're released every day what's interesting about them is when you buy an nft you become basically a member of the nouns community and what that means is that there are proposals that are brought to the nouns and the treasury right now has around 30 000 ease in it which is about 40 million dollars in USD using the treasury that the community has a mass

through the sale of these nfts the Dow then gets to decide how they want to use their proceeds so there have been I think nearly 150 proposals so far some have been successful some haven't been successful the proposals are completely varied in terms of what they do some of the proposals are to create a clothing brand for nouns or to create glasses like real world glasses for nouns or to have a nouns Presence at New York Fashion Week some of the proposals are things that exist digitally but are like

meant to extend the ecosystem in some way so a recent one that I really liked was somebody basically just came to the Dow and said what would nouns sound like I'm going to create this on-chain module of sounds and allow people to create sounds from that and in addition to the core nouns though there are all kinds of sub Dows so there are little nouns there are noun let's there is the nouns prop house which allows other nfts to have proposals brought to them as well it's become this far-ranging community built

around the nfts I'm not sure if metaverse is quite the right word because I don't want to dilute the physical feeling of presence and embodiment and because so much of nouns exists in discourse and on Discord it's hard like is it a metaverse is it not a metaverse I'm not sure but what I think is really fascinating about nouns is that proliferating it and extending the meme of nouns needs to occur not only in the digital world but in the visible world yes the community is built online yes their treasury is denominated in

Internet money in East but you can use and spend that money in the quote unquote real world in the physical world as well and I think that the metaverse in whatever form it takes will need to have this sense of permeability between the virtual world and the physical world I agree strongly that you don't need embodied experiences that are separate or even in the physical world for something to be a metabus you do need all the things I didn't mention like you need this system of meaning and a system of rules that lets new things get created but the experiences which kind of make up participation in the metaverse they can happen anywhere I

mean they could happen in the real world so this is why I'm so against the sort of Industry standard definition of the metabus as being about 3D embodied experiences because a it cuts out a whole bunch of experiences and secondly it unnecessarily puts the focus on the experience and not on the consequences of that experience and the system and environment in which those experiences are happening that's the new thing the metaverse is a new context for people to buy and sell things have experiences and do stuff what's interesting about that context is not that it's a 3D avatar driven environment it's that it's a context in which in an entirely Digital Way meaningful experiences can happen and there's a lot of plumbing and build up to make that possible and this is where crypto Community is a great example because they have the meaning right now they already have systems

where meaning can be traded can be interacted and can be incorporated they don't necessarily have compelling experiences yet which are important yeah but they do have that first part right and I would just note from your book two phrases that really struck me is you had this phrase that it's not an alternative reality but more reality and you all set another phrase when you were just talking about this idea that the metaverse is not about escapism or entertainment but about so much more and I do think those are phrases in your book that are relevant to this part of the conversation that Elena just brought up because I think that ties as well to the connection between the digital and the physical by the way it connects even to the early use cases with nfts and real world unlocking experiences as well which is another side thing and also

bringing it full circle this idea that it's a place you leave and go into is precisely what is very isolating about the metaverse and the current definition than this thing that can be as you say networks of meaning that are connected and that those networks of meaning can be connected to the physical world which is Elena's points about the seedback loop between digital and physical as well you're after the right context do I think this was Harold bendrick I can't remember was who defined a piece of theater as being like someone does something and somebody else watches uh yeah it was a really simple definition but the water had to be there otherwise it wasn't data right yes that's very similar to like solo wit and art and this idea that the art I'm forgetting who right now but who said the art does not exist without the viewer completing

it yeah and sort of essentially being a part of that you're completely right we actually I was thinking about the play rate bertold brecht a couple nights ago and just like very breathy an idea of denying your audience catharsis so in like Greek plays and in tread plays a play will have a nice happy ending and you know Justice will be served and people will learn a nice type moral but in Breck's plays he used to do this thing where he would deny his audience catharsis so as to compel them to some moral or political action in the real world once they left the theater and maybe that's an interesting idea like

what does denying catharsis mean in the metaverse how do you compel people it's really awesome I'm gonna build on it I'll say that in all the definitions we've talked about the audience is really important so the notion that you know a game is something you play but a metaverse is something Society plays like it requires the complicit activity of lots of observers to decide that it's meaningful like the example I gave is football soccer right you know why does soccer get front page news when a country wins why does it have its own dedicated section in many newspapers and why is it something that is so important is it because soccer makes more money than fortnite or more people play or it's been around for longer none of those explanations are particularly

satisfying those can all be causes but I think the real reality is that sport is given a status in our society like a special status which is different from traditional entertainment and games and it's always been true in the history of sport like Minnesota and in many societies Westport emerged it's almost a sacred thing in some context so that's a decision that requires all of us to go along with it right and I think the Memphis is the same it's not enough to have the infrastructure it's not enough to have compelling experiences it's not enough to have digital assets you need the Willing consent of a society to decide that these made up things have meaning and have value and sure when digital assets can make that easier but you need that to exist and that's why now as well because people are ready to

do that and they weren't ready to do that right the internet was less mature well I would even argue is also the evolution of religion and Society in that sense too yeah like people don't have the same societal structures I was thinking about this when watching a show that's super popular here in the U.S which is so funny which is shit's creek and it's one of my all-time favorite shows I watched it like 20 times during the pandemic but it's interesting because I was thinking about the fact that like it's what societies are people crave like the family unit in one they're literally in two motel rooms and part of that narrative makes people find meaning in adjacency to each other whereas in a sports game people are finding shared meaning as strangers in an auditorium for instance or like watching on TV or online even or Olympic

sports but they're still sharing meaning even if they're strangers and don't know each other and obviously crypto can mediate that so that's another thing religion in many ways is like a mass fiction or mythology or reality however people want to perceive it that people find and share meaning but going back to this audience point that both of you are bringing up Elena you and the point of the brechtian playwrights and then Herman and the point that you're making that people have to be willing participants I would add that even when you think about gaming if you think about the differences between you know early procedural versus content based games there used to be this idea that a game had to have a very linear Arc and completion and catharsis and resolution and then this whole genre of like procedural games that literally have no narrative came up but what's really

fascinating now is we are now seeing games where they're very low Fidelity and this is also true in the crypto world with like examples like loot where people are creating meaning bottom up like they're just taking these core artifacts and then they're creating meaning around it and so I think this is really interesting because sorry just to close this thread but this is like jamming a lot of thoughts for me too which is I once edited this Pioneer of like the Sci-Fi kind of futuristic magazine called Mondo 2000 this guy named are you serious and he is yeah I believe that you referenced that your style but anyway oh my God I'm surprised you even know what it is because it's like before everyone's time but I also edited Doug rushkov and one of the pieces he wrote for me at wired was on this idea of of what he called narrative

collapse and it's this idea kind of closing this thread in this like brechtian way where you don't give your audience catharsis because there isn't a linearity to narrative anymore so think about the endless play of Game of Thrones and so anyway it's really funny and interesting to me because what kind of comes full circle here is a metaverse is a place where you need narrative but the narrative can collapse and it's okay because you cannot have to have a linear story which is actually what I think is so limiting about games as like a model for metaverses right now well I think you're right in that for a Mecca has to be valuable a very wide range of things need to be able to happen and who decides that they happen can't just be one narrator because it won't provide enough context for fulfilling experiences I do think that you gain a

kind of freedom but you give up something as well because what happens in the med of us to create value has to matter has to change something and have a cost of some kind or be associated with something it also has consequences so in that example I gave her the 30 000 person Stadium if I sing in have a beautiful voice and someone notices and it gets on YouTube and I become famous you know one of the things we noticed in our Med device experiences versus our game customers experiences is we get nervous inside on that diverse events performers and people who are there consistently behave differently in large scale events than they do in other types of virtual environment because suddenly they feel like loads of people are there that are watching that are paying attention that are doing what they do and I use the word in the book Ingenuity

which is if you want to be creative in the context of a reality shared by many narrators you have to play by the rules of that reality so you're free to you know propose any change to the world but it has to fit with the previous history of the world and that form of creativity that's a lot more technical right oh it's not just technical it's actually creative because one of the rules of thumb for World building as a narrator content side is that you can break all kinds of rules but they have to be within whatever the rules of that Universe are or even like if you think about Unchained gaming and what's possible in things like dark forest and physics of games I think there's a lot of interesting stuff there oh yeah Dark Forest would be another interesting example of composability or

extensibility in games so dark Forest is an on-chain game on ethereum and what's interesting about Dark Forest is it is one of the first on-chain strategy games and it uses zero knowledge proofs to obscure where a player is so when you look at dark Forester when you join dark Forest basically what you see is a map and the map gradually gets sort of explored and so you uncover kind of this fog of darkness and the map of this solar system gets larger and larger and larger and larger and uncovering the map

requires you to actually output hash power to mine coordinates and so in the process of playing this game you are are discovering other planets you're discovering other players planets and you sort of like wage this Intergalactic battle in order to conquer other people's planets and by the way this is funny because Herman ends his book on the analogy of the Fermi Paradox so it's like obviously very connected but keep going yes 100 I feel like intellectually it's very very related and what's very cool is because the game is entirely on chain all these other players most of them are very technical developers were

able to create plugins and create alternative clients for the game so players created marketplaces players created this tool that automatically scheduled their moves this is one of my favorite examples somebody actually outsourced compute to AWS to mine and uncover planets at a fast faster rate than other players so this player had been playing for like 24 hours but had uncovered way way more of the map than other people have been playing for like several days somebody was like yo like how did you do that and he was like oh I'm running on a multi-cord AWS machine

I have 96 cores running sorry I am running my own sign and playing at a far more advanced level than all of you and so it's this interesting example of players all agreeing over this canonical game what the rules are what the goals are but even within those parameters you can create a much much richer experience another example actually that I really like is somebody created a way for you to sell Planet coordinates that were hidden to other players but known by you so basically in the game information became an asset and for information

about other people's planets became an asset itself and so it's this idea that even if the world itself visually is very low Fidelity or might have a very simple set of rules and parameters if you get enough buy-in and enough people paying attention to and playing your game you can create this incredibly Rich Marketplace and just set up plugins and Alternate experiences around the core game it's really really interesting when you describe it like that because it reminds me a little bit of the challenge of creating a minimal viable product in the early internet era where bandwidth was low no one really could build sophisticated things and it's

interesting that one of the first and obviously very famous things sold online was books right because it made sense to buy books since there was a very high amount of choice and a really bad internet experience you know remember the whiny modem noises the cost the scale it was worth it because you could get that obscure physics book that you wouldn't otherwise get I mean that was my first experience of why I would buy something online and obviously you know nobody needs to highlight why that was a good strategy for Amazon I think with the metaverse it's the same like by focusing so much on experiences that are 10 years out involving VR headsets or something else we don't ask the question what exactly is it that's valuable now yes when you describe that game strip to its essential components you can see that like just a large crowd interacting

with a celebrity with their own voices in one spot even if the graphics are awful that feels extremely valuable to a lot of people I think we forget just the gulf between the halves and the have-nots of experience we're very fortunate you know we both get the chance to meet important people Brands and groups and to have our opinion heard by them for the vast majority of people they will never get a chance to have Mick Jagger hear their voice and none of us could be the first place where that's reasonably possible and could happen regularly yeah and that was actually even if you think about the early premise of Twitter that was the most powerful thing which is such a simple platform and all it did as a child you know you had to write letters to your favorite authors and now you can reply

them and sometimes get sponsors within a second that was such a game changer I think people often take that for granted yeah and you can have immense complexity emerging such systems although the feature ends up being simple it use becomes incredibly complex you know it's these little jumps that if you follow a road focused on experiences meaning value creation and to Elena's habitat reference in my book but also this game focus on presence not immersion you open this wild new world of possibilities just like that game example that you gave which is stripped out yeah I think if you go down the road of immersion you're forced to take more and more control away from the user the key yeah should not a high quality right if anybody could just act in Avatar it would be a pretty crappy movie but yeah none of us everybody's acting

everybody's interacting and a lot of their contributions are not going to be of a high quality so you have to think about what restrictions in immersion you will need in order to make the world make sense this is why Minecraft is so graphically simple because the reality is most people could not build content for a more complex environment we probably wouldn't want to Minecraft wouldn't be better if it suddenly became octagons or some sort of solid tessellating space whatever you know it would just be more complicated for most people even if it was more expressive I love that this is a perfect segue so on this degree of immersion so you actually answered one of the debates I had what is the degree of immersion required or not required for a metaverse and Herman I think you actually just answered that but just to kind of put a fine point on

this earlier you didn't actually close the bottom line for YVR wasn't a metaverse to you I mean is this connected to this point of degree of immersion and cause and effect can you just quickly close that thread for us conflating the two is great for Facebook's attempt that becoming the most relevant company in this face it's pretty confusing for a lot of companies and brands that are like well is this about VR or not VR is one of many ways of experiencing things the med of us is not specifically about the fact that you're experiencing new things it's about the fact that you're experiencing those things in a context which allows you to create and trade meaning in a network The Meta element it's the linking of those things together so there are a lot of experiences that you can have in VR that are not suitable to

be part of America they're also lot of experiences that are going to be important to a metaverse that have nothing to do with being in VR I think the second debate you mentioned which was what degree of immersion is required we're incredibly good at immersion I imagine a lemon just like a fresh lemon and the taste of a lemon I bet you immediately like some people will start salivating right away just in thinking about yeah I just did right so like it's funny because our brains are really really good at making up things and experiences imagine how getting a must in a novel your brain is already fantastic at this right so immersion isn't that important what's important is giving people new ways to be expressive and so if you have to make the experience more immersive because without that people can't be more expressive so for example you need

better graphics because people want to express themselves how they're feeling you want their bodies to come across better or you want to improve the audio so that their voices can work better then great because you're not just making the world more immersive you're using that immersion to enable new modes of interaction and I think when you prioritize immersion above presence you start to create pretty but very empty worlds imagine and how boring it would be if life actually was a movie you couldn't make any choices except what to watch that's what ends up happening if you just go down the road of High Fidelity graphics and no creativity I think funnily a degree of immersion always gets augmented or always feels more substantial the moment you bring in the physical world so things in the

digital world become more consequential when you know that maybe you're generating large volumes of ease in the smart contract that you just shipped or in this nft series that you've launched but if that has gravity outside there is a feedback loop between the physical world and the digital one and that for me is very crucial where the experience is just contiguous between both I agree that it would be amazing if it can be but I think what's most important is that value can be easily transferred from The Real World to the metabus so this is where middlemen set up goals in the the places where value is well and they make it really hard for Value to

leave their world and they intentionally do that because their entire business model is based on gatekeeping some small subset of our lives and that's really antithetical to how value gets created in the metabus so you really do need new business models if your business model was these are my users and you can't have them like most games companies have how is that going to work in a metaverse of seamless businesses and relationships like you think Call of Duty is going to be okay letting its users go into Battlefield no way right they're going to want controls and protections so the metabus forces companies to come up with business models that don't rely on owning the user or on captive controlled unnecessarily toll-filled platforms it forces them to create genuine value through for example digital land digital

assets or tokens these things can be a lot more Pro user in the way they help companies monetize I think oh I mean in the most obvious way which is you have to work harder to retain your users because you're not relying on lazy business models that are literally taking the data exhaust of their lives versus actually creating and serving things or letting them create and serve things and cause and effect with each other as they kind of interact with the world so I totally agree with that like it really prioritizes and puts the user at Center okay we talk about the Creator economy on this show it's in your book you brought up the point of the value inversion that happens in the pyramid where right now the value at the top the creators are a tiny part at the top of the pyramid and you want to invert that

so that the creators are like the base Elena I want to hear your quick take on on the why now yeah I think the why now is the recognition that there needs to be a way for creatives and game makers and just anybody who wants to to make a living on the internet but the platforms that exist today aren't as hospitable to that as they should be and so let's say you're a Creator on Minecraft and you're selling a digital good and you're paying some kind of take rate both to the platform and then that platform is paying a take rate to the Apple App Store or or some other platform that it lives on top of in crypto you don't have

any middlemen or if you do have middle men they're taking a much smaller take rate let's say they're a Marketplace taking a 2.5 percent take rate so last year Minecraft announced that they paid out 350 million dollars to developers so creators generated 350 million dollars from mods on Minecraft but after a 50 take rate that's 170 million dollars in Creator payouts and Minecraft has 140 million monthly active users so if you think about the value that's being created on a platform like Minecraft versus what Minecraft and Microsoft is taking versus you know the amount of

people who are actually enjoying and creating experiences on the platform it feels very disjointed and on the one hand you have close games platforms being a very poor place to make money as a game's Creator on the other hand you have these massive communities that could make a lot of money but don't because they don't have interactive experiences if you're a massive brand or a huge company or a sports League who's happy to make a massive investment in their Community you are actually monetizing your community really really boldly so you know FC Barcelona they have something like half a billion fans and I believe it's estimated that they make maybe a billion dollars a year from those half a billion fans and that's a pitiful level of monetization relative to their potential brand power and I

think that creates this real opportunity for much less expensive and controlling platforms or pseudo platforms probably rooted in web 3 probably providing new experiences and focused on monetizing that under monetized user base but actually one other thing to bear in mind is the current economic model of games involves Free Labor done by players to make games valuable the reason games are free to play it's not only because it's a more efficient way of getting money out of you it's also because that makes the matchmaking queue as large as possible so most players can find someone to play Given that only at that fraction of people actually buy anything in a free-to-play game ninety percent of the revenue is coming from a tiny fraction of people and everyone else is actually a job a job that they do for

free which is being shot by people who have paid money for right when you put it like that it sounds pretty dystopian and so when we start talking about play to earn we're not talking about some like you know pyramid scheme multi-level marketing thing we're just talking about the labor people are already doing in Virtual experiences and if we reward them we'll encourage more labor and if you get more labor and you get more people doing more energy inputting work into a virtual yes yes becomes more interesting so of course we need virtual work if we want interesting Virtual Worlds so the next quick debate I want to check in on is scale so one theme that came up you talked about this earlier one of the points you make in your book and it's funny because you define metaverse earlier you know you describe all these qualities of networks

of meaning exchange of value you didn't actually say at scale which is like the other part that seemed seems like a through line in your book especially because and this is something I don't know people who are long time listeners of the original A6 and Z podcast which I show around for almost a decade you came on twice and the first time was like Tim Schaefer and talking about you know gaming and all that but you came on a second time to talk all about simulation and how the cool stuff only happens at scale then your book you make an argument that like why are we sort of sharding things you were taking the analogy of sharding and describing how communities and groups are essentially sharded and that we should be able to have some sort of intimacy at scale I'd love to hear your case for that really

quick I mean look I can give you simple example so let's say that me and Elena are both famous rock stars and we have done an event which is true by the way for those yeah albums out it's amazing um but we do an Elena we don't but let's pretend that we won um you guys are rock stars but let's pretend that we rock stars and I was doing a concert in the Medifast last night with you know 50 000 very close fan members that were all together and Elena suddenly he showed up and announced in that moment that her and me were collaborating on a new song We performed it live we started hanging out with the crowd and engaging with them and the next day you know someone asks you because you're a huge fan of Elena's music someone goes oh were you there you

can't say yes to that if there were 20 000 copies of that world like the Travis Scott concept and you know Travis Scott wasn't bad everything was pre-recorded you couldn't influence it in any way I was there as meaningless in that context I was there has a very important social function in our society we forget just how important how much we value each other based on what we've done where we've been what we've seen who we know for the net of us to add to that vital tapestry of value in our society of course you can't shot it right you can shot a video game like who cares if you were in the same lobby as me in Call of Duty or not like it's fun if we're friends we're playing together but I can equally have fun even if there's a group of 10 people who are completely randomly

chosen in fact it might be better because you want me to win about 70 of the time so that I keep playing so it makes sense that this is kind of anonymous no doesn't make sense at all if we're talking about were you there where you at that experience did you contribute to a lot of that that is the fundamental reason among many others why I think the video game industry and the metaverse have the same relationship that theater does to television or movies which is well I mean if we take TV and movies and television they all involve scripts they all involve actors they all involve people and audience so on the surface you'd think they'd have the same business but they're completely different businesses the business of theater and The Business of TV and The Business of film use similar words they have Productions and things like that

but you know one makes money through limited time ticket sales or physical experiences the other one selling ads the third one selling tickets so when you look at it that way you realize the metaverse is a very different business to the gaming business it organizes its users its contact creators and its value Creation in a different way and it needs different sorts of services and systems to support it Elena I want to hear your thoughts on this idea of trading communities and more well I have a couple of responses I think in the case of really early Dows maybe they don't have a huge number of members what they do have is a huge number of derivative projects so there are people getting in at lower price points and what they're enthused by is this idea of a

community-owned treasury and I think we will get to a point where people will want that to be physically embodied because quite frankly it's chaotic to reconcile between different discords and discourse and all the different forums and you know figma of your sharing designs that you have things like that like you actually will need a physically embodied and organized Kind of Town Square in order to make something what Herman's saying in that sense yeah we have to do a company town halls in a massive Collective space because it turns out that's the only way it didn't make that make sense you can't do it on slack or Zoom when you have that many people yeah exactly and I do think what I would love to see is some way to chart

continuity of combat conversations kind of like chart intellectual thought what blockchains do a great job of is charting Financial value and charting the ownership what it doesn't do a great job of is how conversations weave into each other where ideas actually came from if somebody is proposing something on discourse and it gets a lot of chatter and then they rewrite the proposal and then the proposal is fulfilled and then they get x amount of eth to do announced out a parallel line maybe you can see the outcome of that via a transaction but unless you go

through and understand all of the conversations that led to that outcome it's actually very very difficult to get a real sense of what actually went on and so I think physically embodying space plays a huge role in terms of just like allowing people to tell story trees and narrative in a robust way and actually be able to share and express history that's fantastic it's how our brains are designed right there's a fantastic book called The Art of memory which I can't recommend enough but if people are familiar with the memory technique where you kind of imagine your house and you remember things by remembering crazy characters stationed around your house or around your room to work or wherever that represent the things you're trying

to remember the reason that works so extraordinarily well like it works so well that people with no special genetics but just for training have used it to learn 80 000 words and their placement in a dictionary and what page they're on and it works really really well because words and numbers are hacks onto a system that was more built around embodied experiences on remembering where you've been on where something is relative to you on your orientation around it like this is such a powerful concept that it was used in ancient Rome all the time and in fact even some buildings in the art of memory the author argued that some buildings were actually probably designed to better support mine palaces because it was such a common practice so amazing this is how we work so of course in bodied spaces

countering what I said earlier about okay it's not the center of the metabus no it's not the center of the metabus but it's of course vitally important to making a lot of things make sense I mean a virtual company with no office no opportunity for people to communicate meet interact you know it doesn't really leave a lot of mental room for even Imagining the structure you're part of a virtual office might serve two purposes it might be a useful place for people to hang out and interact together and do awesome stuff it might actually just be a great physicalization of what that company is in the future when people are in time remote working and giving people like a symbol or an item or something to kind of understand and to lock in if that makes sense no it makes perfect sense I had another thing that I wanted

to respond to before about this idea of real time and the difference between a Travis Scott concert which is sharded across multiple servers and also just recording whereas in other experiences is this idea of things happening in real time I think it's fascinating that one of the biggest problems plaguing blockchains is this idea of time what's an ideal block time how do you decide how to reach finality how do you decide how to reach consensus like those are all really crucial questions of time and I also think that we've reached the stage where whether something is IRL whether something is in real life or

digital is less important now the more interesting question now is is this unfolding in real time or is this a recorded experience and I think the more meaningful digital experiences are the ones that unfold in real time gotta go farther and say if you couldn't affect the outcome did it actually happen like was it already predetermined so what people want rooted in self-determination Theory and psychology which is our best model today and I talk about this in the book for why people do the things they do when they're given a free choice people want to create effects in the world it's a fundamental human need to change something and have that change

reflected back to you and if you take away people's ability to have impact they get very unhappy it even creates social unrest you know if people don't feel like participants in society well then why should they go along with it so the metabaster's opportunity is to provide even more contexts where people can have meaning but for that to happen they have to actually have a choice to be able to make it go well or go badly and that's a step into greater risk and if it isn't it's probably highly sanitized and corporate and extremely repeatable and delivered in a recorded way it's probably not very valuable in our framework of value that we've talked about in this conversation that's so funny because on the note of when you just said Herman about you reminding us over and over again this key distinction of cause and effect and the ability to

exert some kind of change influence Etc not just passively consume when Elena was talking about this notion of real time being important my mind immediately went to the idea presented in science fiction All Around time traveling Oh yeah and to me like a metaverse is a way to also not just change identities and have multiple identities but also be able to travel across time past present future like people engaging with dead members of their family from the past or history or even you know I was always obsessed at wired with this idea of like digital suicide how you can like create an identity and abandon it well on Instagram people already do things like have finstas like they'll have multiple accounts but it's interesting because your point that you have to have cause and effect goes back to this idea of why we wouldn't just ever have a passive

metaverse where you just go like learn about history in the past but it's also why time travel movies to Elena's Point around real time are so popular because that's this idea that you can go back and change the future you're completely right and I would say that since our minds don't care whether an experience happens in the real world or it happens in another context like if I talk to someone's Voice who I love on the phone and I can feel a meaningful change it's obviously better when they're in person but it doesn't really make a difference to the idea of communication yes love to one another given that it doesn't matter to us there are enormous advantages if people start consuming a lot of important experiences online one of them is that they can revisit reimagine rehave those experiences for example the

concept where me and Elena announced our collaboration yeah that you have to be there for but the fact that it happened in that way means there'll be Infinity footage of that event so we can we run it we can run different camera angles we can have different kinds of participants and you know imagine if hypothetically an important political campaign played out in the middle of us one day in the future you know did rallies interactive did those things that's all part of this network and to the extent that any of it happened on chain it's like immutable history my biggest Point here is that Society in Far Future becomes a lot more efficient when more experiences happen virtually this is one of those things that science fiction I think has just got mathematically wrong and I talk about this in the book but in a time of

like climate crisis and challenges like like that why are we talking about the metaverse well because surely our goal is to give as many people on earth as possible the opportunity to live opportunity to be healthy and then to have meaningful experiences if that's our goal we're going to be much better at giving more people that opportunity if we do things virtually it's gonna mix for the cultural fashion far more accessible to billions of people it's going to make many more people participants in society and potentially contributors and even owners of things that they wouldn't be able to contribute to our own and that's why I think we have to get out of the sort of proverbial Silicon Valley mindset sometimes with the metaverse it's so interesting to so many people who've never heard of it that's fantastic by the way I was going to say if you

haven't read it already you have to read in terms of science fiction that tells the story and does Justice the three body problem Trilogy and if you've read it already I love it me too I don't like their answer to the family Paradox I don't like it but I love the series me too I was gonna say what people don't know is a lesser known fourth book that was sanctioned by suchin Liu or Lucha Jin which is the Redemption of time it's like a fanfic that he said could be canonical and it's by this author named baushu and it actually tells Yoon Ting min's story about what happened when he traveled with the trisolorans and it was him being because remember he's a disembodied character who doesn't have a body and is essentially living as like a brain in a vat and it's kind of a great

story because Redemption of time actually gets to your point about like what science fiction gets wrong but also that might be the one case that it gets it right so if you haven't read it you need to read that fourth book I think it's so cool that you mentioned this because it also brings up the dangers of companies making business decisions based on science fiction novels right wait so I totally forgot to mention this when I talked about Dark Forest the game was actually inspired by the three body Trilogy Of course I thought oh yeah oh my God yeah of course I mean not to say companies making business decisions based off of sci-fi I think that was more of like an intellectual inspiration or kind of like a hat tip too rather than like actual

review creation of but yeah no just a fun detail that I totally forgot to mention before that's really really awesome I mean to double click on this for a second because I think it's an important Point companies are getting Chief metabus offices now and I bet you what those Chief metaverse officers are doing is reading snow crash and ready to play all button and of course consuming a lot of you know business information as well but imagine if employees at Nasa sat there watching Star Trek and not looking at that in the correct light which is this is a really amazing Visionary piece of Science Fiction about space travel and many other things and actually looked at it and thought that is what a spaceship might ever look like a lot of the authors have written these Works they were using them as block devices right and also a lot of these

things are dystopian you know they're designed to warn us off progress in science and technology in general because they came from a period of time post nuclear thinking about from the 80s fiction you know they came at a period of time where we'd gone too far right in terms of science so this desk idea of fully embracing the machine was something worth building up and bringing down that's not really all that relevant to the metaverse as I see it because I think it transcends technology and that's why people should get away from the Sci-Fi and focus more on the real value proposition can just kind of come full circle and close all these threads I don't know if you guys remember this post that the kickstarter co-founder Yancey strickler wrote in 2019 called The Dark Forest theory of the internet and he basically argues in that post

that you know we have this bifurcation or like multiple communities sharding across the internet and these conversations happening now in private channels like chat groups and discords and various things and essentially that the internet is becoming a dark forest and for better and worse like whether you want to connect with other groups this goes to your point to networks of meaning and connection being critical Herman or whether you want to stay separate and undercover as you were saying earlier with like the game Elena yeah so Herman on that note let's talk about your thesis that can unshared or like connect all this at scale we'd love to hear you talk about like what's happening there so improbable has involved a lot of the we used to talk a lot about our real world simulation

stuff that's been continuing we've been involved in live military and other applications problems relating the accuracy of simulations while still borrowing a lot of our distributed computing Heritage meanwhile we've also become the provider of multiplayer expertise to the games industry as our business model evolved we're inside so many different Publishers so now we need new experiences that are better than video games it's probably going to support communities and companies that are underserved right now by video games so Hand sport fashion music all of these areas and where companies know that they can build businesses and not be beholden to another platform what's so funny is we see a lot of debates about the metaverse and for us they're not debates because as a company serving Enterprises we can see what they're asking for and it's really interesting to me what they

want they all want largely the same thing they want new ways of bringing large communities together instantaneously and cheaply with themselves with each other with celebrities and experiences and boy do they want to sell digital assets and so I think if you're mad at us doesn't involve those two things like you're going to invest in VR headsets or whatever or smart TVs it's hard to see how you're going to create new value from a technology perspective we handle not thousands of messages or operations per second which is the most important metric in the metabast it represents how much information can be exchanged in a world so how many players you can have how much cool stuff can happen how high fidelity it can be how much interaction that can happen so we've moved from doing not thousands like fortnite or even Millions like messaging services

but actually to billions of operations per second and that technology is now so easy to operate that really every use case we've talked about here is viable you could import assets from the blockchain no problem you could put you know 30 000 people now in a space with really any contacts you want you can have that with an open SDK or API or even a whole world or platform that they own and operate and with M squared these individual platforms can be connected together guaranteeing a degree of interoperability around avatars and digital assets but also creating new opportunities for these companies to create shared value I was wondering if you could talk about UPS per second as a metric it's really interesting so I think it's important to move away from the specific implementation of today's

technology to something more Timeless right so I really like simplifications that have helped us do that in the past I like pixels for example because they are an implementation artifact of Technology but they're very easy for people to understand more pixels prettier Graphics I can show more detail on screen you know people get that I think in the same way people understand more bandwidth is good you're going to be able to watch higher definition videos and stream them and interact with them okay in the same way for the metaverse the number to think about is this operations per second or messages per second that's going to tell you how rich or interesting a world can ever be whatever the designers do and what we've seen in video games in general is that because they've only been able to handle a small number of messages a second say

ten thousand they have to shot the reason fortnite has 100 players and most people couldn't do more with Unreal Engine without serious optimization is because the game can only support so many messages on the back end so you know to go from 100 plus to 30 000 and players you don't multiply ten thousand by thirty thousand times you scale up way quicker you get the billions and billion questions right so this problem becomes very hard to solve it's a very non-parallel problem for the technical folks and you end up having to design all sorts of systems to get around it just compressing bandwidth just that one problem compressing bandwidth down to an individual phone or PC we've used machine learning to compress these updates to some ridiculous level of compression it's to the point where we get to 350 kilobits per second for 10

000 plus people in a single space I'd love to hear about how you're thinking about meaningful interaction in all of these worlds and what that really looks and feels like I'm just curious kind of how you're thinking about the parameters around that what you do want to permit what you don't want to permit what is Meaningful interaction what's a great fantastic question what's remarkable is how different it is from game design so you know we're full of game developers and we've spent years building games but all the instincts you have from game design are to control these experience and to make it repeatable and compelling and those are not really relevant when you're dealing with a massive crowd of people right like there's a massive crowd of people is like an animal it's like a beast it has its own energy and

it goes in a particular direction and we end up architecting things so that everything was modifiable on the Fly the presenter or the actor can press the button and modify the world and have everyone else see the changes that ended up being important because you don't know what the crowd is going to want to do that day or where things might go or flow to the other thing that got really surprising is how much value you can create for people with just making them present like people seem to just be enjoy being in a crowd you know in every experiment we've done these crowds they'll stay logged in for the entire event they follow instructions they really like reacting to and I think that's such an important part of what it is to be human and we've completely forgot about it in the way we think

about our digital and online lives because it's just never been possible a lot of large games companies now they have an innovators dilemma Pro all our revenue and value comes from these games I'm unless they give up not a little bit not 10 not 20 not 50 but the majority of that value to all of the people who will be creating worlds and content for their platform there's just no economically interesting way for that to become out of us so we don't get to the med of US unless we get to it stepping over in some ways the bodies of the Legacy business models of web 2 companies like we don't get there unless we do that you know we're essentially in a dictatorship and we kind of have to overthrow this government if we want to have a free market economy yes look I love

everything about even the chaotic parts of web3 I mean I'm a programmer and this is full of all of the spirit of rebellion and disruption that the early internet had and early Tech had but I'm also conscious of the fact that it's possible to start Reinventing the wheel in crypto because it becomes suddenly Everything feels disrupted but there's quite a lot we can borrow that already exists that we can use to help find Solutions within the crypto space so for example the question how does governance work when some people's opinion definitely matters more than other people's opinion in these systems maybe that was a bit off topic no I I totally agree with that I think that is 100 on point actually I think if we return to the example of noun style or any doubt that's functioning today be it in defy

or in the realm of nfts you have this very very robust very very engaged group of people who debate everything ranging from how to use the treasury to if you're a D5 protocol what your risk parameters should be around loans to even questions around more existential things like do certain people hold too many votes do the people who control the protocol actually have the best interests of the protocol at heart things like that and those are self-consensus and those get hashed out in forums or maybe on telegram or signal and then you have questions of actual

harder consensus and that's when votes are actually executed on chain or to bring that same example into the ethereum development landscape you could say soft consensus are all of the discussions that go around ethereum Improvement proposals and each research posts and then hard consensus are things like when an EIP actually gets integrated into the protocol itself to build on what arena said I'm thinking about what kind of governance you're going to apply to a Medifast world and talk about this one in the book it's hard to see any answer except it's kind of like a country because you just get to a place where people become so invested in these experiences in these

worlds so much of their livelihood depends upon it the idea of it being anything less than a government that they either elect or have some influence over it's not going to create the right level of social legitimacy to the decisions that that entity is going to have to make yeah I think what we're seeing especially with these experiments with governance on ethereum is the early stages of creating what might be thought of as like a network State like how do you get consensus within a vast group of people who share a new currency and maybe a new set of values over how they want to live and what their society should look like and some of that Society will exist digitally and some of

that Society will exist physically and it's right now a question of okay how do you best facilitate that both in terms of encouraging meaningful interaction and how is that currency distributed how is it earned how easy is it for anybody within the community to have their voice heard these are all really really crucial questions just in terms of not just the evolution of the intranet or the metaverse but just Human Society in general what you just said is so spot on because it kind of ties This Thread we have to remember both on this note of evolution that this is actually the next phase in our Evolution as a species like Humanity because we went from nomadic to

like agrarian to City Urban dwellers we've gone to the internet but we've never ever I think people forget this at the most basic level coordinated this kind of unprecedented scale as humans online and that enables new forms of coordination collaboration governance as we've been talking about incentive alignment including strangers which is actually really powerful if you think about it because for most of human society it's always been about people you know whether it's in your local neighborhood Etc I don't know if the network State or the nation-state is still the right analogy I don't know because I almost think we might have to untether to something new and native to this new world and I don't think we're anywhere near there but like you said Herman we have a lot of room for taking what we've already learned for an

instance like open source Community collaboration that's the first example of strangers coordinating to build work in big ways on the internet there's so much we can learn from existing things and Elena to your point there's so much we can learn from what ethereum and other communities are doing online so I think that's going to be interesting to see yeah what is your prediction or Kerman you make a point in your book which we wholeheartedly agree with that you can never predict the form of the thing but certainly the directionality of it what do you see is coming next like a quick kind of 30 second answer without worrying about form or time scale Elena do you want to go first really quickly and then we'll have Herman close out yeah I think sort of a continuation of what we're already seeing which is these internet native

communities rising up they have a shared Treasury and I think what we'll soon see is a more physicalized and embodied form of that both in the physical world and in the digital one as well this is going to be everything now I don't mean that hyperbolically I mean that literally over enough of a time scale more and more of what matters to people will have and inside virtual spaces and involve digital assets I mean you know software hate the world and I think the bed of us is going to eat not just this world but our culture our imagination everything well this is a fantastic note to end on Elena and Herman thank you so much for joining this week's episode of web3 with Asics and Z thank you so much sonal I

haven't void there so much thank you for listening to web3 with A6 and Z you can find show notes with links to resources books or papers discussed transcripts and more at asicsncrypto.com this episode was produced and edited by sonal choxi that's me the episode was technically edited by our audio editor Justin golden with seven Morris credit also to moonshot design for the art and all thanks to support from Asics and Z crypto to follow more of our work and get updates resources from us and from others be sure to subscribe to our web 3 Weekly Newsletter you can find it on our website at asicsnzcrypto.com thank you

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