I’m sort of like embarrassed to say the word Metaverse. It invokes for me the very low quality movie Ready Player One, of a much better book. And then it also evokes for me Mark Zuckerberg and his hour and a half rendering of himself as a skeleton, telling people why they should buy Facebook stock.
Lex Sokolin, ConsenSys
Yesterday, Dani Marco, director of innovation and digital economy of the Catalan government kicked-off the 7th European Blockchain Convention with 1500 attendees, 150 diverse speakers and 40 high profile panels, organized since 2018 by the team around Victoria Gago and Daniel Salmeron.
At the moment, the digital economy in Catalonia represents 30% of GDP and the government is investing in new technologies like 5G, Blockchain and AI (artificial intelligence) to enable progress, prosperity and the future of work. According to Dani Marco, Blockchain will provide a new form of governance for the digital space. A Blockchain strategy for Catalonia was approved in 2019 and a Centre of Blockchain de Catalunya was established.
The most influential European Blockchain event took place in Barcelona on June 27 and 28, 2022. It is my second time attending, first time in-person.
This is the first in a series of articles with transcripts and audio recordings from the event. Yesterday, ConsenSys Head Economist and recovering artist Lex Sokolin spoke with Banco Santander Blockchain Lead Coty de Monteverde and TRON DAO Advisor Laurent Perello about the Metaverse.
Transcript
Lex Sokolin: [00:00:00] … emotional intellectual exercise. By a show of hands, how many people here have ever owned Bitcoin? Do people not have hands? What’s going on. OK, so over half. How many people own other tokens, maybe know what a Web3 token is. Have Web3 tokens? How many people have lost money in DeFi? (Laughing) It’s not funny. It’s not funny. Any one rug pulled? Anyone here ever been rug pulled? My man! There’s a lot of honesty here. That’s fantastic. Okay, great. So welcome to the Metaverse panel, and it’s a pleasure to be here with you. My name is Lex from Consensus, and we’ll do a quick round of introductions with Coty and Laurent. And so maybe Laurent will kick us off with an introduction and then we’ll go across.
Laurent Perello: [00:00:54] Nice to meet you. It’s a real pleasure to talk with you guys about the Metaverse and what it is currently, but more what could it be in the next future? I’m a TRON DAO advisor, a kind of veteran now in our industry.
Lex Sokolin: [00:01:17] You’re actually 24 years old.
Laurent Perello: [00:01:22] And I’m 49. I’m clearly an idealist. And the reason why I am involved in what I’m doing on a daily basis, I’ve been trying to build an inclusive, sustainable, open minded, multichain ecosystem. I clearly think that our next future is multichain, and I do my best to onboard people to explain to the full potential of what we are building. It’s not only about the topic of economics that’s far away. I think there is a lot of amazing experience that in several DAOs (?) mostly, but aim to experiment a new way to manage our daily life. And it’s also a piece that I try to to share with everybody, to be totally aware that we are part of a unique moment in human history. We are experiments in offering a real sustainable alternative and solving a huge problem.
Lex Sokolin: [00:02:47] Absolutely.
Coty de Monteverde: [00:02:49] So it’s great to be here with you today and back in person. Maybe in some years. We celebrate this thing in the Metaverse. Right? So I’m Coty de Monteverde, I’m leading the Crypto Blockchain Center of Excellence at Banco Santander. We’ve been working with this technology for almost six years and we’ve been working with digital identity, self-sovereign identity, payments, bonds on the blockchain. And we realize that Web3, Metaverse, blockchain (?) assets has a great potential, right? So that’s why we are here today. And I’m also on the board of Alastria. alastria.io is our National Blockchain Association that has over 500 members and we recently set up our art NFT Metaverse Sectorial. So we also believe that it’s very important for the next decade.
Lex Sokolin: [00:03:48] Fantastic. And I’m Lex, I’m from ConsenSys where I lead the crypto economics team. ConsenSys is known for Metamask. If you’ve been rug pulled, you’re welcome. This is recorded, this is terrible. Too much copy. Metamask is the leading Web3 wallet with over 30 million monthly average users. So if you’re interacting with the economics of these worlds, you’re likely using it. And then, of course, if you’re a builder and you want to connect your software into Web3, maybe you’ll use Quorum or Truffle or other developer tooling. So what I’d like to just start out with is laying the groundwork for this incredibly embarrassing, geeky word that if you say out loud, I mean, I’m sort of like embarrassed to say the word Metaverse. It invokes for me the very low quality movie Ready Player One, of a much better book. And then it also evokes for me Mark Zuckerberg and his hour and a half rendering of himself as a skeleton, telling people why they should buy Facebook stock. So so that’s kind of where I am. Can you help me understand a little bit better what is the necessary architecture within this construct that we call Metaverse? Like, why does the word matter? What is what is in there that is interesting for us, what is maybe unique or necessary? So, Laurent, if you want to start.
Laurent Perello: [00:05:16] Yeah. It’s a really interesting question. But, you know, in order to define what is the Metaverse, I think we have to travel, make a time travel and imagine what it will be. Temporality, in my opinion, it’s the main question. I will quickly switch to what brings everybody mostly here. I mean, the Satoshi Nakamoto white paper. And everybody is trying to figure out what is Bitcoin, what is the real utility of Bitcoin and so on. And I used to say, Guys, we are just child in the sandbox and playing for the moment. It’s just the alpha version of what it will be. Why? Because the real moment is when the last Bitcoin will be mined in 2142, 2143. And we have to also try to imagine what will be the Metaverse in 50 years to understand what we have to build right now. I think that currently we are at the pre-historic stage. There is amazing innovation, but we are still experimenting. I have met several projects working on the next Metaverse. It will be not one Metaverse. It will be like the universe. Now we are (?) the question of multiverse. It will be a meta multiverse. And what does it mean? What what do you need to reach this goal? And this is the real question to consider when you build right now a project. If you base your innovation, your definition of the Metaverse on what is currently existing, you miss the point, it will not be a pixelated world. It will be the real reality.
Laurent Perello: [00:07:29] We will switch from the real world to the real metaverse constantly on a daily basis to go to work. It will not be any more question about remote work. We will go to the office in the Metaverse. We will go to the cinema in the Metaverse. We will travel in the Metaverse. So what do we need to offer such experience? And maybe in a more extensive way that we can experiment in real life? Considering this for sure, we will see two kinds of projects, the centralized one built by big (?), big companies like Facebook and so on. And we will see some fully decentralized governed by DAOs (Digital Autonomous Organizations). And I don’t think we will see one way of delivering or governing or promoting a Metaverse. It will be a coexistence. I’m a dreamer and I like to dream to try to figure out what it will be and which direction I have to follow. And I advise several projects in the domain since years and I onboard a lot of project on TRON DAO. Today we see the first cross-chain bridge. We will need the same. Some bridge to go from one Metaverse to the other one without leaving, without logging out and doing whatever. We will go somewhere in the maintenance. We will open a door and switch to another one to live another experience. And when we consider what it will be. So you can define what we have to build.
Lex Sokolin: [00:09:39] Absolutely. I feel very logged on right now. And I think that paints an aspirational experience, right? Where it’s not about like click this button or download this app or drill this particular USB port into your brain and have Elon Musk download himself there. But it’s more the sort of the accessibility of this world being right at the edge. Coty, I want to ask you a similar definitional question, but about how you would think about the financial architecture of a place like this. Right. So in in the current world, if you want to go buy a sandwich, you invoke Visa, you invoke point of sale systems, you invoke (?) banking, you promptly end up with some brokerage.
Coty de Monteverde: [00:10:28] Cash!
Lex Sokolin: [00:10:30] Ouh, cash (laughing) … cash and equivalents. That’s a joke for the bankers. How do you think about the financial architecture of a place like the one that Laurent describes?
Coty de Monteverde: [00:10:43] Let me link first to the previous question. So I think that depends. Are we talking about Web2 Metaverse or Web3 Metaverse? I guess that we are all here because we believe in a decentralized future. Right? So I would tend to think that the Metaverse in singular, it’s going to be based on Web3, it’s going to be an ecosystem of different platforms, but all interoperable thanks to blockchain technology and orchestrated through tokens, right? So that financial ecosystem of the Metaverse, obviously it should be digital and programmable, right? So I think that we are talking about a financial system based on all types of tokens and digital cash. I was saying cash because I wanted to introduce the digital cash, maybe CBDCs, stablecoins and commercial bank deposits being tokenized as well. Cryptocurrencies and you name it. And obviously NFTs, which we haven’t mentioned yet and are a core piece of a decentralized Metaverse. Right. It’s a way to represent the ownership of those virtual assets. So as you mentioned before, wallet in that financial system is going to be built around wallets, wallets where you store all your digital assets that are not only money, but also anything that you can imagine that can be represented with hand with an NFT. And there’s a lot of things to do, right, because we are all here used to deal with crypto assets, but we need mass adoption as well. So we need a great UX, on-ramp, off-ramp systems to this new digital economy.
Lex Sokolin: [00:12:39] Can you double click on what those systems are? Like what’s the connectivity in your mind between non digital cash, digital cash payment rails, rails as they connect into crypto systems? And then further, how would that spread into an environment like the one that Lauren describes? Like what are the bare components of that?
Coty de Monteverde: [00:13:08] So as I mentioned before, I think wallet is going to be the central piece, where you create your identity in that wallet and we’ve already heard some governments like here in Europe that they want to regulate our digital identity. That could be a core piece of that wallet. Obviously, tokens, we all know what they are. Right. But you need those mechanisms to get into this digital economy so you get your salary to your bank account. But how do you transfer that salary into digital money that you can use in the Metaverse? And that’s a piece that is right now we’d say missing or at least missing in a seamless, easy way for everyone in the street. And for me, those pieces are the ones that financial institutions could be building to make an easy transfer of our analog world or financial system into that digital world. But as I mentioned, the core piece of a decentralized Metaverse would be the wallet. And it’s well, you are an expert in wallets. So I do ask you this question. How are you thinking about that future Metaverse and the role of wallets?
Lex Sokolin: [00:14:37] So it’s a good turning of the tables, but I’ll answer the question. I want to also kind of tweak one thing, which is either your employer pays money into your bank account or ultimately your DAO pays into your wallet account, right? And so these things in the long run are identical, although quite awkward now, but things like payroll systems and so on. So I’ll share my mental framework for what a wallet is and hopefully this is helpful and interesting. So I think in the physical world, money is very flat. It’s it’s very abstract. So it’s an abstraction layer on top of economic activity, right? Because bartering isn’t really that great. We can’t all carry around infinite commodities. We can’t carry our houses around and certainly not more abstract things like services. And so we abstract all, all of our economic output into into some unit of account which is cleared by the economy and markets. And then that’s what you put in a wallet, right? So your physical wallet might have cash and your digital wallet might have a representation of cash in a bank. But it’s this abstraction of the real thing that I think unlock magic of something like Metamask and other wallets and Web3 in general is that you actually get rid of the abstraction out of the economy.
Lex Sokolin: [00:16:12] You actually don’t have to compress the economic activity. So your wallet literally has your house and it has all your clothes. Right. And it doesn’t have, so, for example, your passport, which is a sticker that summarizes all the things you’ve done to get membership, your Web3 wallet actually has your real membership accrued as history on chain. And so I think that’s one of the aspects of a crypto wallet that’s really interesting is that it’s more of an inventory than it is a wallet. It’s an inventory in the sense that it actually contains all your things without compressing it down. I’ve gotten so excited about my own mental model that I forgot entirely what we’re talking about.
Lex Sokolin: [00:17:04] I wanted to establish another thing about the Metaverse before we kind of jump into the economic activity that you see there, which is that Blockchain is the economic and property layer. And we’ve talked about the financial systems. And then on top, right, there’s there are other technologies that have gotten far enough to be useful and interesting that this term congeals together. So things like augmented and virtual reality have gotten far enough to create compelling user experiences where people actually want to be, you know, not for too long or you’ll get nauseous, but generally speaking, people want to be in these experiences. And so there’s a hardware and a software component that has nothing to do with blockchain that’s being built, that’s really meaningful. And then the other one is, is the state of artificial intelligence and machine vision and the ability to kind of digitize the real world and augmented with digital objects. I mean, if the Metaverse is with us all the time, it’s probably not in a VR headset. It’s probably a digital twin of the world. And so it’s contextual to where everybody is today. And I think that’s a really interesting idea as well. But let me let me come back in with a question to you about economic activity and the creative potential. So just as you have an empty room in VR or in the physical world, it doesn’t make it special. It’s what you can do in that room. It’s what what people create. So what do you think is the economic activity of this space? What are people making and what will they make?
Laurent Perello: [00:18:44] And, you know, it’s something it’s really a fascinating question because I am constantly thinking about what it will be. And not in two years, three years, honestly, it’s not so fascinating. But what it will be in one century and the more you think about what it could be tomorrow, the more you can define what we have to do right now and say it again. It’s for me, it’s really important to think in with a long term perspective. We are always trying to figure out which financial potential it could be. $1 trillion opportunity, but what does it mean in one century? $1 trillion? It means mostly nothing. In fact, rather than trying to define the value in, you know, let’s say based on what we know today, what will push the Metaverse adoption. And then you can consider this potential going through several paradigms. For example, I often explain that everything all that we see and made today by politicians are mostly based on the (?) reports, published in 1974 saying there is no infinite growth in an infinite world and when you introduce the Metaverse, it’s changed completely this paradigm because in the Metaverse there is an infinity of possible. We can do everything with mostly the same footprint. And so two months ago I was in London saying, Guys, you will see that soon we will have to stay one day per month or one day per week at home to save the planet.
Laurent Perello: [00:21:12] And it’s so boring, remote work and so on, Netflix and so on. And then the Metaverse, we will go in the Metaverse all to travel, to go shopping, to meet our friends, whatever. Last few days in Germany, there is German people they will be able to confirm. They try to think again to reintroduce a law that they will (?) pass by the past, in 1974, during the previous oil crisis. No cars on Sunday. Don’t use your car on Sunday. What we will do? We stay at home? No, we will go in the Metaverse. It will be a natural step. In fact, we are all thinking about how onboarding the next billion users (?) it will come naturally because there is several factors that push us together to experiment a new way of living, simply a combination between the real world and the digital one. But with no frontier, it will be ready natural in 5, 10 years. Part of the attendees there will be in the Metaverse. We will see them because we will have the technology to show to ask these people there. But they will be from home, from their office, from a dedicated space somewhere where you sit down your scan and boom: there you are.
Lex Sokolin: [00:22:59] I agree with you and I think the answer to the narrow question of, you know, in the long run, what is the economic activity? And the (?) answer is all human, economic and social and so on. Coty, we’re coming up against our time because this is an awesome topic, but I want to ask you the same question. But with the lens of, you know, in the short to medium term in terms of economic impact on industries, what do you see kind of the trends that are happening now? Where do you see the most impact, whether it’s the financial services or media, where is it going to make the most difference?
Coty de Monteverde: [00:23:37] So we’re talking about short term. So that future Metaverse where you can do everything, where we’re talking about that mindset. So I think that most adoption is going to come from the entertainment industry. That’s where I see most potential in the short term. So I’m talking about two years from here to two years more or less, and I’m talking about gaming, events, advertisement. Obviously, the fashion industry, you’ll see that there are already luxury brands getting into the Metaverse because they want to connect with consumers, they want to create communities. Right? So I think that in the two coming years, that’s where we are going to see more activity, entertainment and obviously in the gaming industry. In the future, obviously, as we were mentioning, it has a potential to change all aspects of our lives, but that’s what we are imagining. But we have to say that we haven’t said it yet that this is under construction. We don’t even know if it’s going to be a Web2 Metaverse plus a Web3 coexisting. It’s just going to be a set of different platforms for interconnected. I mean, we have to be honest, we don’t know what’s going to be there. But right now what we are experiencing, what companies are doing, testing and learning are all related to having experiences with their customers, to getting close to the audience and to create those senses of community. So I see in the entertainment industries where we’re going to see a lot of activity.
Lex Sokolin: [00:25:31] Awesome. I think that there’s two things I’d add, which is I remember speaking with folks in kind of the virtual reality space and the framing of that technology is often as the empathy machine. So it’s a way for people to feel other people’s feelings in a way that a 2D screen doesn’t give you. And so I think when we talk about like beyond the NFT experience, beyond just the UX of like I can charge you more for my video game, there is this idea of just embodying and being with people in a more authentic way. And then the second thing is, I think as we build this thing under construction, the financial and economic architecture, by the nature of it has to be on chain. That has to be Web3 native. So if you’re building a Web three native economy, you’re going to have a Web3 native financial sector. And if any bank is having trouble with that, I mean, that’s just it’s just not going to happen unless you’re engaged in it early on. And so I think when we recontextualize some of the failures of DeFi, for example, if we think of that as a financial sector for Web3’s economy rather than as a financial engineering factory, it becomes clear that the real focus of the industry should be on building out this economic activity. So with that, we’ve got one minute left. We’ve been asked to make room for questions. And so I’m going to create an awkward pause until a question appears. Thank you, yes please.
Lex Sokolin: [00:27:18] So the question is about brands. So how are brands creating their own Metaverses, their own worlds? Or are they going to open and become interconnected with other things? Or do you want to take it?
Laurent Perello: [00:27:34] I really do think that we can’t imagine a Metaverse segregated, in fact. If brands will want to survive, they will have to integrate all Metaverses and finding a way to offer the best experience to switch from one to (another) one. There will be maybe entertainment Metaverse, and you will be able to go through a Mateverse dictated to traveling and learning. The brands have to find the best way to offer this simple way to switch from one Metaverse to another one. And like we see now, I say it again. Multiple reach (?) cross-chain solution. It will be the same. You open the door and you switch. Technically, it’s physical (?), it’s not really important. There is so much bringing people in our industry that it’s in my opinion, I mean our topic.
Lex Sokolin: [00:28:55] Yeah, you go where your users and where your clients are and they’re going to be everywhere. Thank you, everybody. A pleasure, thanks to you.
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