Don't worry! Here's your metaverse primer (Part 3).
Bring your digital goods wherever you travel in the always-on Internet.
NOTE: Part 1 of our Metaverse Primer is right here. And Part 2 is here.
Meantime, Episode 3 of Meta-Averse is live. Charles Du, CEO of Fast Break Labs, joined the show to talk about the future of fantasy sports and gaming in web3. His early stage company is building the Virtual Basketball Association, a “fantasy fantasy sports” game that combines familiar elements of fantasy sports with web3 staples including tokenization, rewards mechanisms, and — of course — an active and growing Discord-based community.
The VBA caught my eye because I’m a lifelong hoops nerd. But when I dug in a little, and Charles replied to my cold-call tweet, something else caught my eye, too: Charles said his crew is trying to build the kinds of games they and their friends like to play. The banner on FBL’s home page reads: The Future of Play. There’s a genuine sense of, “Let’s build a community around something we all enjoy, and make some cool games our new community will really get into,” that’s informing VBA. I dig it.
VBA is Fast Break’s first product, and there’s certainly a potential future in which they become an infrastructure company building the plumbing for other sports leagues’ web3 games. Nothing wrong with that. But right now, there’s a, “Build good stuff! Build real community!” vibe that came through in talking with Charles that I’m seeing a lot across the less headline-grabbing parts of web3. Hopefully, that feeling will continue to prevail, if and when the grifty-er parts of the ecosystem fade out a little and the technology itself matures.
Then again, Yuga Labs just raised nearly a half-billion dollars at a $4B valuation, essentially on the strength of one really successful art project. Yuga’s deal is directly tied to a classic Silicon Valley consolidation of power, as The Verge’s Jacob Kastrenakes reported:
The funding round, one of the largest for an NFT company to date, was led by the firm Andreessen Horowitz, which has been investing heavily in the Web3 space. It previously funded OpenSea, Dapper Labs, and Coinbase. Also joining the funding round are the game studio Animoca Brands and crypto firms Coinbase and MoonPay, among others. Chris Lyons, a general partner at Andreessen Horowitz, will join the board of Yuga Labs. Funding talks were first reported last month by the Financial Times.
So the Web’s future might already be in the hands of a small circle of power brokers content to pass digital money back and forth ad infinitum. But maybe that’s just another form of community? We shall see. ¯\_(ツ)_/¯
Part 2 of this primer focused on tokens, the blockchain, and the promise of decentralization. This final installment
People who know about this stuff generally talk about web3 like Chris Dixon did in a Twitter thread-cum-essay called Why Web3 Matters. Chris is a high-profile venture capitalist at a16z, a powerful, high-profile venture capital firm that’s invested a ton of money into all of this stuff (see also: That giant Yuga Labs deal mentioned above). Anyway, the essay is a quick read, but here’s an even quicker explainer:
Web1 was the beginning, back in the 90s and early 00s. The web was “decentralized” then — you had to build stuff if you wanted it out there.
Web2 is the era we’re currently in — or maybe that’s currently ending — from around 2005 until the present day, give or take a few years. This era is marked by centralization. Google centralized search and ad sales and, to a bit of a lesser extent, email. Facebook and Twitter and the like centralized social networking and social media. Apple centralized consumer hardware. Amazon centralized everything rich people bought during the pandemic. And so on.
Web3, and I’m quoting this from Chris Dixon’s essay where he attributes it to a Twitter user called PackyM (also directly linked to a16z, FWIW) … Web3 is the internet owned by the builders and users, orchestrated with tokens.
Okay, so the ‘owned by builders and users’ part gets my In Theory footnote. The ‘orchestrated with tokens’ part is the bit to focus on for now:
Web3, supposedly, will be all about tokens. Tokens that let you own things and access things and vote on things and make money off of things. NFTs? Non Fungible Tokens. NFTs the way we’re all somewhat wrongly talking about them these days, the things tied to digital artwork like bored apes and cryptopunks and such? When you buy an NFT, you’re buying a token that gives you official right of ownership over one of these things. But some tokens give you more and/or other things, too. Like a place in a community, maybe the community of Bored Apes collectors and enthusiasts. Or maybe membership in a DAO — a decentralized autonomous organization, these things that In Theory will replace corporations and change the future of work. Yeah, we’ll get to that in a future episode because it’s too much for now. The point here is that the people who want to see web3 happen are all about tokens. Tokens are going to orchestrate everything.
For most of us, it’s all very abstract and theoretical right now. So here’s a concrete way to think about it. Lots of popular video games these days allow you to buy virtual goods to use inside the game. You’ve heard of Roblox, right? Roblox has its own virtual currency called Robux. You can use Robux to buy things inside of Roblox, like virtual clothes for your character, or virtual cars your character can drive around in. You can’t take those virtual goods outside of Roblox, though. If you buy a Maserati in Roblox and want to drive it in Forza 5 (a car driving game I’ve played on Microsoft’s Xbox), you can’t do it., You’ll have to go buy a Maserati in Forza 5 using Forza 5’s virtual currency. Same thing applies in a ton of other gaming platforms, like Fortnite, though I don’t think they have Maseratis in Fortnite.
In theory — yeah, there it is again in theory — in a web3 game built on the blockchain, you could buy an NFT that gives you ownership of a virtual Maserati. You could bring that Maserati with you as you play different web3 games, and you could drive that Maserati, or even trade it or sell it and buy a new one, as you move from game to game. Instead of being tethered to a single platform like Roblox or Xbox, your digital car is an NFT in your crypto wallet, and all of these web3 games and gaming platforms can access your crypto wallet and recognize your Maserati. So you can buy one digital Maserati and do 185 in it in all the web3 games.
Now, in web3, thanks to tokens, your Maserati is not tied to a centralized gaming platform. You can bring it with you and drive it and sell it and buy it again across all of these different web3 games. And you can always prove its yours because it’s written on the blockchain. As a parent whose dealt with umpteen in-app purchases gone wrong, I’m all for this concept. Though, in reality, gamers and big gaming companies alike seem to be pretty anti-NFT at the moment. Fodder for another episode, yeah?
Anyway, this notion of authenticated tokens you can carry with you as you travel web3, granting you ownership of digital goods and access to virtual lands and governance over DAOs … fascinating! Democratic, even! In theory.
Which brings us to the metaverse. I’m going to quote from another essay, and link to it in the show notes if you want to read more. This essay is also written by a venture capitalist, which makes me want to point out (again! sorry) that there’s a lot out there on the topic that’s being written by venture capitalists and VC firms. I’ll just reiterate the line about following the money to the truth, and being wary of decentralized this/ that/the other that’s actually all being funded by the same handful of powerful entities.
I love the idea that a bunch of VC money is being pumped into building a decentralized future that truly puts power into the hands of so-called everyday people like you! But I’m not yet convinced that’s what’s happening.
That said, a guy named Matthew Ball has written a multi-part uber essay called The Metaverse Primer (which I referenced in Part Two of this primer). Part one is entitled Framework for the Metaverse. And about halfway through that, under the “Defining the Metaverse” header, he writes this. It’s a long quote, but it’s from a really long essay, so I think it’s okay to quote it here in full:
The Metaverse is best understood as ‘a quasi-successor state to the mobile internet’. This is because the Metaverse will not fundamentally replace the internet, but instead build upon and iteratively transform it. The best analogy here is the mobile internet, a ‘quasi-successor state’ to the internet established from the 1960s through the 1990s. Even though the mobile internet did not change the underlying architecture of the internet – and in fact, the vast majority of internet traffic today, including data sent to mobile devices, is still transmitted through and managed by fixed infrastructure – we still recognize it as iteratively different. This is because the mobile internet has led to changes in how we access the internet, where, when and why, as well as the devices we use, the companies we patron, the products and services we buy, the technologies we use, our culture, our business model, and our politics.
The Metaverse will be similarly transformative as it too advances and alters the role of computers and the internet in our lives.
I interpret what Matthew Ball so elegantly wrote as the following: Remember when cell phones could get the internet and now you could look things up in your pocket when you were out and away from your AOL dial-up connection? The metaverse is gonna be like that, except instead of leaving your computer behind and getting the Web on your phone, you can leave your phone behind because you will always be in the internet all the time, full-stop.
Ok, I took a little poetic license there, but if you read the rest of Matthew’s essay, I think you’ll agree I’m not too far off, and maybe just being dramatic. The metaverse is when the internet is everywhere. Sometimes it’s on a screen. Sometimes it’s audio in your earbud. Sometimes it’s augmented reality projected on to the physical world, maybe on a screen that uses a camera to help you catch Pokemon on the go. And sometimes it’s when you strap on a headset and join the 300,000 people who are reportedly already using Horizons, the new VR world brought to us by Meta, the artist formerly known as Facebook.
Either way, the point is that this whole metaverse thing is best defined as whatever the internet is turning into now that tiny processors and portable batteries and 5G wifi and 3D graphics and NFTs are making our digital lives as portable, all-encompassing, and always-on as our IRL lives have always been.
In theory, anyway.