The Breakdown - WTF Is A “Metaverse?”

Episode Date: September 5, 2021

On this week’s Long Reads Sunday, NLW reads David Hoffman’s recent essay in Bankless “The Metaverse Emerges”  Enjoying this content?   SUBSCRIBE to the Podcast Apple:  https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M=   Join the discussion: https://discord.gg/VrKRrfKCz8   Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by Nidig and produced and distributed by CoinDesk. What's going on, guys? It is Sunday, September 5th, and that means it's time for Long Reads Sunday. Now, this week is a holiday weekend. It's Labor Day, the official end of summer, the beginning of fall. And all around us is a crypto-marking. that is going absolutely bananas. Whether you think all of this NFT Metaverse stuff is absolute madness or whether you are totally bought in, it is an unignorable market forced, at least in this

weird little corner of the world. And at least for now. It's that word Metaverse that serves as the central point, the central crux of the piece that I'm going to read for LRS today. This is from David Hoffman, one of the co-founders at Bankless, and is called The Metaverse Emerges. As the NFT media grows in energy, so has the conversation around the Metaverse. We all talk about the Metaverse, but no one has meaningfully attempted to define it. This article offers an actionable proposition about what the Metaverse actually is. The Metaverse will be an orchestration of many different layers and technologies, but it will ultimately collapse upon a single shared source of truth that all components of the

metaverse will abide by. The metaverse will be made up of objects, and all those objects must know that all other objects exist. From this foundation, we can create a ledger of all objects in the known metaverse, as well as their shared history of interactions and stories. Understanding the metaverse requires stripping it into its component parts, and then recomposing it into a single narrative of what it is. Let's dive in. Building the Metaverse Bottom Up. The Metaverse is a new organizing body for the digital age, but we've seen this before. Before we define the Metaverse, we need to define the iterations that have come before it. Seeing Like a Nation State.

I recently read Seeing Like a State, which illustrates what it is like to take the perspective of a nation state. A nation state is a unified body of incentives and desires, using people inside of it to achieve those desires. The nation state is one central registry of everything inside its domain that is worth registering. Nation states like order, and thus employ systems of order to account for all of the things

which it has power over. We have many ordering phenomenon define our lives by the desires of nation states. Social security numbers, physical addresses, telephone numbers, business EIN numbers. The serialization of the people and entities inside of a nation state helps a state become aware of what composes it. Once a nation state accounts for everything it controls, it can also begin to tax everything. It goes much further than just serializing people and their businesses.

According to seeing like a state, the current orderly nation state structure we have is built upon previous attempts to account for the value of the land that tax collect. manage. Traditionally, land would be evaluated and measured on its ability to produce yield on its crops, and the nation-state would employ surveyors to properly access the value of land, based on the value of the crops that the land could yield. Good fertile land would be taxed more than arid land because the central accounting body wants its fair share. Early systems of agricultural accounting would go so far to map out the land and the types of crops that grew on it. Aspen trees planted every six feet, with six-foot-wide rows, used for lumbar farming, would be taxed by the state according to tax code

653-723-3-3-5-1. Potatoes were to be planted every six inches, meaning one acre could host exactly 120,000 potatoes, and would net the state exactly 50,000 in taxes on an annual basis. The nation-state would go through strenuous efforts to ensure it was accounting for all the value it had dominion over, as knowing this would lead to higher tax revenue for the state. This is how wild, diverse forests would get turned into homogeneous crops of one specific type of tree. Forest turned to grids of trees suitable to be farmed for lumber. Wild plains turned into orderly pastures with only one kind of crop. chaotic unsettled lands turned into grids of streets, all with numbers. Nation states need things orderly, numbered, and accounted for in order to optimize their ability

to coordinate resources. The central registry of a nation state needs to be aware of all valuable resources inside of what it has control over, so it can properly extract taxes and grow the state. The crypto industry has recently bumped up against this nation state desire to label and subsequently tax everything. The tax-collecting ability of the U.S. Treasury has been hampered by its lack of oversight of property and ownership inside of an economic system that it cannot control. This is why they don't like crypto.

The nation-state desire to account for everything is good for the health of the system as defined, but it comes at the cost of individual freedom. Nation-states reducing all humans in their property down to a serialized number for tax collection purposes is inhumane and restrictive of freedom, and why there is always pushback against government overreach. That's because of the nation-state gets its way, the long-term conclusion of nation-state desires might look something like this. David then includes the human farming scene from the Matrix. The nation-state is built upon a central intelligence about the state's

the state of itself, as well as the world around it. It is looking to know the world around it and extract its resources. This concept explains the frequent oppression of indigenous cultures by nation states. Nomads are difficult to tax because you can't find them at one specific location. The resources they produce and consume are nebulous and difficult to trace, because they are produced in a disorderly fashion. Nation states don't know how to measure the value of goods that are produced or consumed in the while, aka the unaccounted for. Indigenous cultures inherently do not mix well with nation states. Indigenous people operate closer in harmony with nature, whereas nation states want to consume nature's disordered chaos and output-ordered civilization. We have seen

nation-states confine and restrict indigenous cultures into smaller and smaller areas of land, as the desires of the nation-state begin to capture and order the world around non-nation state cultures. This has become a significant blemish upon the current structure of the world, and one that has great sources of stress and inequality across global society. If larger and more just human organizational structures are ever going to emerge, they must be rid of cultural bias over the legitimacy of identities or objects under their domain. Seeing like a protocol. Crypto-economic systems are capable of managing significant amounts of responsibility previously held by nation states, while preserving the rights of the individual

to maximally express their desires upon the world around them. Ethereum is a neo-nation, a nation in the clouds with bottom-up opt-in participation rather than impose top-down coercion. While the mechanisms for participation are different, we see similar functions of nation-states that are also facilitated by Ethereum. Ethereum also likes things ordered and serialized. In fact, if you want anything to exist on Ethereum, you must comply with the laws of the EVM. Want to establish a settlement on Ethereum?

You'll need an Ethereum address. Want an identity on Ethereum? You'll need an ENS name. Want to deploy a token? You'll need a contact address for the token. Want to buy an NFT? Your specific Ethereum address will need to interact with a specific contract address

so Ethereum can know what part of the ledger to update. Ethereum is a protocol for serializing objects into the Metaverse. You initialize the state of an NFT by deploying smart contract information to Ethereum. Ethereum doesn't need to employ land surveyors or have treasury departments. It doesn't need labor to understand the value of the resources inside its domain. Ethereum knows addresses, values, balances, and tokens. Ethereum knows address location, Ethereum amount, number of tokens owned, and the value of the tokens owned. Since Ethereum is an internet protocol, it won't ever come knocking in order to collect taxes.

One of the significant improvements of Ethereum as an organizational system is the cost efficiencies in maintaining liveliness about the ledger. By removing its own material desires of maximal tax extraction, Ethereum collects only the minimal amount of tax revenue, e.g. transaction fees, needed to maintain the system. Taxes are paid by those who actually incur public costs to the members of the Ethereum Neo Nation, those who secure and make state updates to the global ledger. Object permanence in the Metaverse

Whatever the Metaverse is, it will require object permanence. The items found in the Metaverse must behave like the items in the realverse. Objects in the Metaverse must collide with other objects in the Metaverse. If they don't, are they even objects at all? Metaversal objects must be aware of each other's existence. In the digital world, this can only be achieved if all objects are known to a single source of truth of all the known items in the Metaverse. While nation states assign numbers to objects it discovers inside its domain,

individuals assign numbers to the objects that they create on Ethereum. The process of tokenization manifests the object into the Metaverse, and makes that object known to all the other objects in the same plane of existence. A universe is born. This is Ethereum's role as a neo-nation. Register all the objects and make them interact. In Defi, we call this money-legos, but in NFTs we call this the Metaverse. Writing was invented when humans needed to make records of object ownership in the real world,

and this invention began the process of recorded history. The Metaverse will arrive via a similar process. First, we will document the items that exist and sited upon a universal ledger, and then we will build the digital civilization around that single source of truth, which we call the metaverse. A universal ledger is the underlying skeleton of a metaverse. Identities are objects. Like all organizational systems that came before it, religion, nation states, etc., Ethereum is composed of people. But so far, Ethereum has had difficulty in actually knowing who the individuals who compose it actually are. Our human souls and human identity are not something that can be

serialized or added to the blockchain. That is something exclusively in the meat space layer of the world and always will be. Nation states don't care about the human spirit. They give you an eight-digit social security number and move on. Your identity is bestowed upon you by nation states. It also expires every six years. If you don't go to your nearest licensing department, there will be consequences. In the metaverse, you choose your own identity. Ethereum addresses are free for everyone and aren't individually capable of linking an address to a person. I've personally used over 50 Ethereum addresses over the course of my time in Ethereum,

and many of those are shared with other humans. While my personal activity is largely confined to just a handful of addresses, all of the fungible ERC-20 tokens that pass through these addresses do nothing to actually link a specific identity to that address. Currency and other fungible assets are designed to remove associations between owner and unit. Currency is supposed to be a faceless, apolitical public utility that holds no bias and accepts no information about the entities that use it. ERC 20 tokens come and go fluidly out of wallets.

Since they're fungible, once they co-mingle with other tokens, they lose any sort of traceability. My Ethereum address holds a balance of ETH, Uni, Avey, Maker, or any kind of. any other ERC20 token, just like thousands of other Ethereum addresses, non-differentiated, non-unique. Indeed, I could sell all tokens from one wallet and re-buy them from another wallet without any link between the two wallets. As privacy tools like Aztec come online, I could even send ERC20 tokens from address A to address B without associating the two addresses, making the addresses useless for establishing identity. The inherent neutrality of ERC20 tokens is a fantastic property that is required to produce a fair and open global financial system,

but falls short of establishing what would be required to host a digital nation in the cloud. This is where the power of non-fundable tokens comes in. My Ethereum address holds Cryptopunk 1118, of which there is only one. I cannot privately send Cryptopunk 11118 to another wallet. Since there is only one Cryptopunk 1118, the NFT functions as an on-chain object establishing a chain of identity across all Ethereum addresses it touches. Rather than the address itself, it's the objects that the address holds that Ethereum is concerned with. ERC20s do nothing for associating an identity to an Ethereum address, but ERC 721s do everything for it.

As a real metaphysical being, people can traverse the metaphphere and interact with the objects they come across in their travels. NFTs are specific, and thus ownership over an NFT illustrates specific taste. Here's my NFT wallet on OpenC. There are many wallets, but this one is mine. No other wallet hosts this specific collection of human-generated objects. NFTs begin to form a shadow of identity behind the private keys that control. them. The NFT-P-P-Avatar movement. It becomes trivially easy to understand the human behind an address when people add NFTs to their social media profile pictures. EnS names do the same trick.

In fact, ENS is actually making great strides with adding an identity layer to the ENS name itself, above and beyond just a human-readable name appended to an Ethereum address. I expect ENS to play a significant role in aligning identity with Ethereum. ENS addresses are NFTs too, and they contribute their own unique layer of identity to Ethereum. This podcast is sponsored by NIDIG, and they put out a research newsletter that's one of the best ways to track market insights and track the turning points of Bitcoin adoption. Sign up at Nidig.com slash NLW. That's NYDIG forward slash NLW. Serializing humans on Ethereum. Ethereum doesn't bestow your identity upon you the way a nation state assigns you a number at birth.

You choose who you are on Ethereum. Theorem doesn't know that you're a specific human, nor does it care. But when you purchase an NFT, especially one that you put as your Web2 avatar, you're selecting one specific NFT from the millions plus that exist to become a digital representation of your digital self. I've chosen Cryptopunk 1118 from contact address 0xB47E3, 3BBBB, as a representation of my human taste and human spirit. And I've chosen to bestow the properties of Cryptopunk 11118 to a random Ethereum address.

I've chosen my Ethereum address and I've determined what its identity is. In turn, Ethereum becomes aware of the presence of a specific identity that exists, which is molding Ethereum by instantiating specific identity properties inside one Ethereum address. With the association of specific objects in the Ethereum Metaverse, the Ethereum address stands apart from the rest. It has come in contact with a specific set of unique NFTs, and those non-fundable interactions distinguish it from all other Ethereum addresses that exist inside the Metaverse.

It has its own traceable path with its own unique story to tell. Only it has taken its path, and that has made all the difference. NFTs are how humans become an identifiable object to the state of Ethereum. Not the nation state of Ethereum, but the state of memory of the Ethereum virtual machine. Weird, they use the same words. A renaissance of identity. Ethereum identity flips the script from how we know it under the nation-state model. On Ethereum, we choose our identity, rather than have our identity bestowed upon us in the form of an eight-digit number,

Theorem asks what identifies us. In the Renaissance, a time marked by the rise of the individual out of the tyranny of oppressive, top-down religion, we saw a transformation of art from 2D profiles and primitive perspectives towards 3D representation and photorealistic styles. I believe the Metaverse offers a similar paradigm shift upon the properties of identity. We are on the cusp of a 2D to 3D transformation of identity. In the physical world, our identity is largely tied to our physical form. So much, in fact, that the nation state uses skin color, eye color, hair color, sex, and height to register your properties to its central database so it can keep track of you. Check your ID. It's all on there. The physical properties

of your human form simply aren't relevant to Ethereum. Theorem has no way of knowing your skin color nor does it care. There is nothing stopping humans with some specific physical properties from selecting a digital representation that is entirely different than the DNA they were bestowed with at birth. The practice of mindfulness teaches individuals how to separate their mind from their body, and to become more aware of their internal processes as independent from the processes of their physical body. Your human form is an overlay upon your human spirit. While these things interact, they are also distinct.

Given the opportunity your human spirit could, in theory, choose to embody a different vessel. Your face is just what you see in the mirror. You are you. Diverse Metaverse Representation I fomoed into my Cryptopunk after People Pleasers, Fortune magazine cover debuted. The cover is full of references to crypto-tweater personalities.

There's Crypto Dog, Lomdart, Bantag, Tetranes. Santiago Santos, Kobe, and others. As a crypto-twitter personality, I was super bummed that I wasn't included in the cover. Every crypto person had an opportunity to be a part of crypto history, but it became immediately obvious I was never going to have been included in this piece of art. My Twitter and social media avatar was a picture of my human form. There were no humans in People People Pleasers' images. There were only digital representations. That was the point. Criteria for inclusion in this historic piece of art required a digital, non-human representation of identity. People-pleaser's art was a slice of the metaverse and

the human form does not compute inside this plane of reality. The rest of the Metaverse. Lute? Identity is the first thing that arrives in the Metaverse, but as soon as we establish ourselves, next comes our things. As soon as humans evolved from nomadic hunter-gatherers to agricultural settlers,

we started collecting things. Similarly, as soon as we're capable of settling the Metaverse, it's time to collect items. Metaverse Lute. Just this week in Ethereum, we have seen something brand new, capture an insane amount of attention and energy, Lute for Adventurers was dropped on the 28th, where 8,000 bags were minted, each with

eight different items, each on a scale of rarity. On OpenC, the items looked like a black square with a list of words. Previously, NFTs have all been about a specific JPEG. The NFT Generative Art or NFT PFP movement has been centered around purchasing specific JPEGs that have come to be associated with Ethereum culture. The JPEG standard is just a specific cosmetic layer upon an object that doesn't actually hold any cosmetic information about itself. So when you buy a loot bag, are you buying a JPEG that is a list of items?

No. The JPEG on OpenC is an illustration of the token, not the token itself. These loot bags have properties that create a set of objects and bestow these objects with unique properties. OpenC hasn't been updated to render the properties of these objects, but websites like ZeroX Inventory are capable of expressing the relevant properties of loot bags. The ZeroX Inventory app website is rendering a higher resolution version of the Metaverse, as it relates to the loot tokens. It uses the properties embedded inside the tokens to make cosmetic changes to its front end.

These changes are primitive and simple. The text that identifies the object has changed colors based on rarity. The changes that Zeroxinventory. Apps brings to the world are just surface layer changes that are simply illustrating the properties of the tokens themselves. Whether they're rare, epic, legendary, or just common. But this is the first step that tokens must take in expressing their properties into the metaverse that's rendered around them. Today, your token changes the color of its own text on a website, to make a moment, to make a

Tomorrow, the Metaverse manifests specific digital objects into your hands and changes options that are available. Lute Forks. So, what did Lute Project unlock? Potentially nothing. It's brand new and no one knows. Anything that is four days old at the time of writing has an immeasurable amount of risk to it. But ever since the genesis of Lute Project, derivative projects have been spun up to attach

or append value upon the Lute corner of the Metaverse. While this corner of the Metaverse is completely unstable, this model for establishing how the metaverse grows has gained precedent. This new model has pushed expression to the surface, while value and utility are embedded deeper into the Ethereum protocol. A few people have noticed the potential behind this model. By embedding tokenized properties into a deeper layer of the technological stack, you optimize for maximal cosmetic choice, while establishing a single source of truth of object properties inside the Metaverse. This helps reduce complexity and development costs for developers while giving freedom, creativity, and expression to users. Someone spun up an ability-scores

contract that created stats that can be bestowed upon the bearer of these loot objects. They're basically role-playing game stats that are common throughout legacy games. After all, Ethereum is a money game landscape. Characters. A contract was sprung up to establish the first manifestation of a character that wears all the loot that is held inside of a loot bag. There was no relationship between this and the original loot team. It was just spun up by like-minded participants who wanted to append additions upon the loot ecosystem. Realms. Realms were able to be minted by loot-bag holders, and there's some kind of generative map of an imagined universe that could theoretically surround the loot. It's not yet known how it will interact with the above objects.

A generative metiverse. The metiverse will be rendered at the periphery. Ethereum cannot dictate what the metaverse will look like. It can only host the valuable objects that it holds. The metiverse cannot be determined by a single source of truth. That is fundamentally unscalable. Rather, the metiverse will be rendered locally, based upon a local set of rules and properties. But while the Metaverse will be rendered locally, the valuable objects inside of that

Metaverse will be common and interoperable. Composing the Metaverse Whatever the Metaverse is, it will compose itself as an emergent structure. It will not be a specific Genesis moment or location, but rather the Metaverse will slowly manifest all around us. The Metaverse will be a composable universe whose objects are shared and interactive. In order to become more immersive, the Metaverse will have to manifest cosmetically. The computation required to produce a cosmetic layer upon the Metaverse metaverse will not come from a blockchain. That's technologically unfeasible. It's more realistic

that the metaverse will be rendered by parameters that are determined by the local rules of the relevant metaverse. The Fortnite Metaverse will manifest by the Fortnite rules, axi by decentralands by decentralands. What makes all of this part of the Metaverse is a shared registry of metaversal objects. Just like SMS and TCIP, the Metaverse will be built on a protocol for identifying objects. If it matters in the real world, it can be represented by a serialized object in the Metaverse. The Metaverse may begin with many distinct and incompatible silos. These separate silos will only acknowledge certain specified objects that are relevant to that corner of the verse, and the only connections to the rest of the Metaverse will be via deep-connected

structures like Uniswap or OpenC. Many items will only be relevant to a specific locale of the Metaverse. They will be connected by the underlying liquidity layers of ETH, Uniswap, and OpenC. But just as DeFi slowly migrated from separate applications into single universal financial structure, the Metaverse will stitch itself together via similar Money Lego mechanisms. The Metaverse will grow by appending larger and more seamless components of a Metaverse universe shaped upon a central foundation of asset and object identification. It will slowly manifest into one composed alternative dimension of digital existence. Ethereum is the economic foundation of the Metaverse.

Specifics on how the Metaverse actually manifests will be determined by the unique rules of a particular corner or niche. Yet one thing is certain. The Metaverse requires, one, a central asset registry, two, a layer of financial applications. Three, an economic engine. This is what Ethereum is. A registry of tokens, a composition of defy applications, a native money and economic system. Composed together, these are the underlying foundations

of an economic system for the Metaverse. Ethereal desires. We began this article illustrating the desires of a nation-state and alluded to how its physical nature establishes material desires upon the land over which it controls. Crypto-economic systems like Ethereum are a step-function improvement between the relationship between the individual and social organizational structure that Ethereum offers. Rather than devolve humanity into a yield farm at harvests,

Ethereum is a public good system that optimizes for minimum value extraction. Rather than telling it how it is, the people of Ethereum tell Ethereum what it is. Rather than optimizing for rent-seeking, Ethereum charges based on the size of the object in data terms and the complexity of its interactions with objects around it. State-level taxes. All economic systems we have seen in history have had some sort of tax. collection system. All systems need to maintain self-protection, and the stronger the economy can finance its own protection, the better the civilization does. EIP 1559 collects its taxes

proportional to one's use of Ethereum. The more data you put on chain, the more you pay. Rather than taxing wealth or income, Ethereum taxes you based on your consumption of a public good. Blockspace. As the metaverse expands, more and more objects will arrive inside of Ethereum's block space, and some portion of these objects will have continued on-chain interactions with other objects, which will require state updates on Ethereum in order to update the state of the surrounding metaverse. The vast majority of object interactions in the Metaverse will either be executed via roll-ups and hostile environments the wildly or by a trusted database and friendly environments. But even as Layer 1 transactions become cheaper and more efficient, this will largely be

offset by a Cambrian explosion of metaversal objects and object-to-object interactions. The Metaverse will be no friend at cheap gas prices, which thanks to Ethereum's monetary policy, generates a flywheel of security around the ecosystem. As the metaverse grows larger, Ethereum becomes more secure, making the metaverse itself more secure with it. The meme, art is priced in ETH was created during the winter 2020 NFT boom. As everyone noticed that all NFTs were valued in ETH terms. Cryptoart is just the beginning, of course.

Naturally, the metaverse will start with a highly valued speculative art pieces before it matures into a more functional intertwined ecosystem. While the metaverse is in its early phases, it will be siloed and separated. The only unifying thing about the Metaverse will be the underlying financialization layer, aka Defi, that establishes a common economic base between all the sub-zones of the Metaferes. The first commonly shared aspect of the Metaverse will be ETH. Eth is common money that unites all separated silos of the Metaverse upon a single liquid asset. While objects outside of Axi Infinity cannot yet interact with objects inside of Gods Unchained,

they can both be bought or sold for Eith, allowing value from Axi Infinity to be passed towards gods unchained or any other part of the Metaverse. Money will be the first thing that ties the Metaverse together, and ETH is that money. Conclusion. This image was recently shared with me on Twitter. This is a meme that says technology terms used in startup descriptions in their tech articles. 2020, multiplayer game.

2021, Metaverse. 2020, virtual reality experience. 2021, Metaverse. 2020, augmented reality filter. 2021, Metaverse. 2020, 5G connection, 2021, Metaverse. Air Cloud, Digital Avatar, Digital Event, ML Classifier, e-commerce, blockchain, internet, social media, video call, porn, potato, Metaverse, Metaverse, Metaverse.

On the surface, it illustrates the overhyped nature of the word Metaverse, and now it is so nondescriptive that it doesn't actually illustrate anything. It's simply a hyped-up word that everyone wants to align with. I think this is a meme on the surface, but actually much more profound than what lets on. All technology is progressing towards a unified body. The Metaverse will build itself, and it beckons towards those closest to helping it achieve this. A metaverse is an object that calls towards its surrounding. It wants to be built, it just needs humans to do the building for it.

Like the protocol sync, the metaverse is an object that attracts. It rewards those who contribute to it, and the more scalable structures find themselves embedded deeper within the holistic structure. The NFT mania has begun with JPEGs, but there are so many more file formats we must get through before the metaverse has established. When it comes to how this will all unfold, your guess is as good as mine. I can only lay view with the same lessons that we've learned over and over again throughout crypto. Fair launches work, leaders matter, we're going to ape into something until we figure it out. I'm looking forward to exploring the metaverse with you all. It seems we've just recently discovered massive untouched new fields. Let's build something cool. All right, back to NLW. So

who boy, that was a really long read, maybe even longer than I realized when I started reading it. But here's what I wanted to say about it. There are likely some of you out there who are like, well, that's more times than I've ever heard the word Ethereum and more times than I ever wanted to. And God bless, thanks for listening. If you've made it this far, I truly appreciate it. There are some of you who are just literally imagining ripping the biggest bong as you listen to everything that went into that piece. There are some of you who are probably like, what the hell does that have to do with shifts in power? And I don't want to go too far on that argument. Mostly, this is, I think, a topic that is going to be discussed more. It's a word that's going

to be seen everywhere. And I really liked and appreciated that David tried to put some context around it. But there are two really salient points that I think are worth teasing out. The first is the idea of humans' desire to express themselves, to express who they uniquely are. One of the things that I think the critique of NFTs as JPEGs that are easily stealable misses is that the people that the representation of ownership of those JPEGs matters to are the people that the person is trying to represent themselves to. In other words, a person who's changed their avatar to be their punk It doesn't care what Bitcoiners think about them.

They care what other people who think that punks are cool think about them. It's a statement of being a part of a specific community that has a shared sense of what's cool. In my experience as first a teenager and then a young adult and now as a middle adult or whatever the hell I am in my 30s, there's very little that drives people as much as what the people that they think are cool think is cool. Self-expression doesn't have to be for everyone.

It's aimed at a specific set of recipients. So to the extent that for some subset of people, this new NFT avatar thing and NFT collections in general are a way of communicating self-expression to a group that matters to them, it is an empowering thing for them based on the community and values that they've chosen to be associated with. Now, the second part is much bigger and more interesting and gets us into the territory of Ready Player 1. It seems fundamentally impossible to me, certainly implausible, that digital worlds

don't increasingly, don't compete for our attention with the quote-unquote real world. I think increasingly we'll stop using the term real world, we'll start to shift to the physical world and the digital world. Metaverse is a single word, pre-hackneyed though it may be, that means digital world. The competition between physical worlds and digital worlds isn't zero-sum, except insofar as every individual has limited time. I think there will be many times in the years to come that people seek to demonize spending time in the not physical real world because it doesn't seem as real. The first 30 years or so of

the internet teach us that this is so. I personally think that it's not going to be mutually exclusive to enjoy the physical world fully for all the things that it has to offer, but also enjoy the new uncharted waters of human creativity and interaction and global exchange that this sort of digital world this metaverse could create and enable. I do tend to think that this loot project, which David gets into is one of the first times we've seen an actual real flowering around the idea of how an ecosystem like that could be built. From the single genesis of these loot bags, there are thousands and thousands of people, writers, artists, designers, guild masters,

probably a fair few of whom play Dungeons and Dragons and things of the like, but still, thousands and thousands of them who are actively creating this world around this single Genesis event of these objects. I have no idea if it'll stick. I have no idea if it'll be fun for people to continue to experience that world, to explore it, to build it, but the sheer number of people who are throwing themselves into it with vigor. And I'm not talking just people who are trading these loot items,

which got instantly too expensive to let most people in. I'm talking about a whole ecosystem of people around them. I think there's something interesting there, and to the extent we see this metaverse, this digital world, as actually genuinely competing for our time, or at least for some people's time, from the physical world. This could be an interesting moment in that story. Anyways, guys, mostly it is a long Labor Day weekend,

and I find that's a good time to get a little weird and wild. So thank you to David for writing, like I said, such a comprehensive piece trying to put together these thoughts. Thanks to you, if you've listened to all 40 or whatever minutes of this that it's been now. And for everyone, I appreciate you listening, and I hope you're having a great Labor Day weekend. Until tomorrow, be safe and take care of each other. Peace.