TSwift Virtual Concerts AKA Why We Need Tokens in the Metaverse
Lightly inspired by SBF but not in the way you think....
Two big things are going on these days. TSwift tickets went on sale and according to my Instagram are impossible to get. And FTX (which, if you don’t know about the debacle in crypto markets over the last ten days, lucky you!). There’s a lot of naysaying around blockchain post FTX but actually there should be a lot of positivity because of TSwift. Why you say? That little Easter Egg answer is at the very bottom.
But the real purpose of this week’s newsletter is to discuss one reason for blockchain tech that I don’t think gets enough love - why does the metaverse demand cryptocurrency and tokenization?
In my mind, like love and marriage, you can’t have one without the OT-her (yes, I’m singing The Married With Kids theme song over here.) Maybe not all the time; they have very different utilizations for consumers and businesses, but, here are four reasons you can’t separate the two.
Digital creation needs digital payments
The metaverse is predicated on humans spending more time in online worlds, interacting with each other, building spaces and tools, and conducting different types of commerce. All of that requires digital payments. Forget the primary concerns of cross-border and currency issues; internet transactions demand an internet ledger, to put it naively. If you purchase a digital good, a receipt just isn’t going to cut it, given how easily those are forged.
We need a new system for conducting business when all transactions are digital and cross-border, amongst identities that cannot be verified by the same (pseudo) governmental bodies we rely on typically. There is no point in creating metaverse worlds, full of concerts, experiences, and communities, if there’s no opportunity to introduce scarcity and reward. If everything is just a right-clicked JPEG (a common shorthand for the criticism that you could just download a pic of a Bored Ape NFT et, voila, now you have one!), then there’s no financial value. And you can’t buy a metabirkin with fiat. Creators of all stripes need to be paid for their work, which requires labeling, categorizing, limiting, and pricing those efforts.
Identity needs an anchor
Who ARE we in the metaverse? We need digital fingerprints, pieces of proof that say we are who we say we are and can be trusted to complete the digital commerce we want to engage in. Maybe one day that’s a job in the metaverse, maybe it’s the selling of digital goods on a secondary marketplace, maybe it’s meeting KYC (Know Your Client, a type of anti-money-laundering legislation) for the purchase of assets that may come under the SEC’s watchful gaze. Email is complicated as an identity tool, too easily hacked, too woven into our day-to-day communications, and too unverifiable. If we are going to interact online in meaningful ways, some of those interactions will need to have the trust that comes from verified identities built into them. The only way to do that is to use the blockchain to store identity, maybe linking to external sources of identity (e.g., gov’t databases or Linkedin/Twitter) or just accruing pieces of identity, like credentials or transaction scores, that follow your online identity.
What is ownership?
This idea is tightly linked to identity. If I buy that NFT, not only must the NFT be verified, but “I” must be verified as the buyer, that the recipient entity exists and says what/who it is to some degree.
If you acquire something in a metaverse, want to maintain its value, and want proof, that proof has to be stored in an incontrovertible, publicly distributed ledger. Whether that is land in Decentraland, NFTs to put on the walls of your meta-mansion, or digital apparel. Without blockchain, you have little recourse for ownership unless you stay within, say, the walled garden of Roblox, in which case you might not call that true ownership.
Ticketing and entry
Lastly and very practically, if you’re going to go places in the metaverse that are gated, particularly if those places are high value, like TSwift concerts! or private communities, you need a key to let you in. (I wanted to use the word Shibboleth in this section thanks to SBF’s uniquely appropriate use of the word in some sketchy text messages but it’s a little in the weeds, dontcha think?)
A digital key that is transferable, so you can sell tickets on the secondary market, and yet one of one, so users can’t share log-ins etc., necessitates an NFT or token. Imagine how much easier it would be if the gating system for the tickets was based on a tiered membership scheme maintained on the blockchain. Chef’s kiss. (ps you can see how this would be great for IRL events, too, but that’s for another day…)
In sum, while the crypto markets may be reeling and many people have lost faith in the efforts to bring blockchain to the masses thus far, I’m still long the technology. Our lives, barring a natural disaster, are moving more and more online, and blockchain is a key foundation to this evolution. Can’t wait for my TSwift NFT concert tix!
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