Building the link between sustainability and the metaverse
If we keep building the metaverse there won’t be any earth left in a matter of time.
Observing the growth of web3 and the digital derivative
If you have been an observer or participant in the blockchain, crypto, defi, metaverse, NFT or collectively ‘web3’ space over the last year, like me; you have likely looked on with a variety of feelings — awe, bewilderment, confusion, disgust, excitement, and a general sense of wonder.
The mass adoption of web3 represents one of the greatest cultural and technological transitions in history. It is a transition on the scale of the automobile, the green revolution, or the printing press, as the implications of web3 development will have ripple effects throughout all parts of our lives. More than a cultural and technological revolution, I see web3 adoption as an energy transition at a never-before-seen scale. Unlike with web1/web2 where changes to our lives and work came subtly and slowly — think your first: email at work, google search result, smartphone, Facebook post, smart home device, VR headset experience, etc., the adoption curve for web3 will appear to occur almost overnight for the early-late majority. I have been calling this effect the ‘defi funnel’, building on Balaji Srinivasan’s concept of the ‘defi matrix’.
The defi matrix concept envisions an order book of infinite exchangeability, wherein any digital asset can be frictionlessly exchanged for any other digital asset.
The defi funnel expands this concept to include any physical or non-physical thing that could be made digitally derivative and then traded with any other digital derivative thing. That is, any physical (art, commodities, real estate, etc.) or non-physical (avatars, digital art, experiences, financial instruments, etc.) asset could be converted into any other digitally derivative asset, assuming there are willing buyers/sellers. Imagine for example, exchanging the value of a dozen eggs your chickens laid this AM for store credit at your favorite clothing brand. Or, being able to exchange the value of the fiat (dollars) you made working as a rideshare driver directly for your next vacation.
The defi matrix thus creates a funnel effect for physical things to be made into digital derivatives. As Balaji predicts, the incentive to change a store of value from the original state (eggs) to a nation state-backed medium of exchange (fiat) diminishes. One can immediately convert from the original state of value to the desired state of value, potentially with a single transaction. Yes… the eggs would still need to be picked up and transferred to the new owner but let us assume that smart entrepreneurs have already capitalized on this new market need.
The metaverse and information catastrophe
In 2020 the physicist and mathematician Melvin Vopson released the article ‘The information catastrophe’ which continues to enrapture my imagination. Vopson showed mathematically that if humans continue on the same trajectory of progress, we would convert all of earth’s physical material (atoms) into bits and bytes within the next ten centuries, depending on the growth rate. As of 2020, the world created >250 billion GB of data each day and this number only continues to grow as more users worldwide gain access to the internet. While there are some obvious physical and technical barriers to the complete transition of earth from the physical reality we know now to a global hardware object, this phenomenon can hardly be ignored, especially as we consider what it means to build out the metaverse. And, when I think about humanity blasting through resource scarcity limitations, I am reminded of the Simon-Erlich Wager in which business professor Julian Simon won the bet against biologist Paul Erlich, that inflation adjusted prices of raw earth metals would decrease between 1980 and 1990. For better or worse, humans are marvelous problem solvers and capable of seemingly infinite creative growth. One of my favorite aphorisms of sustainability is that ‘today’s solutions are tomorrow’s problems.’
Building the metaverse and the infinite machine
While the common conception of the metaverse is a virtual reality world, it is better understood as a comprehensive model for the physical (hardware, connectivity infrastructure) and non-physical (experience, interaction, discovery) processes and objects by which humans interact with machines i.e. a new model for the human machine interface. The visual below from game designer and entrepreneur Jon Radoff provides a general model for the metaverse and shows each layer as a nested element.
Bringing together the defi matrix, the information catastrophe, and the metaverse layers model into one paradigm provokes a much-needed discussion about sustainability and the metaverse. Based on these analyses and predictions, it appears humanity is heading down a one-way street into a world where the boundaries between what is physical and non-physical, human and machine, real and virtual, start to blur. It is telling that Ethereum, the world’s first blockchain smart contract system is called the ‘infinite machine’, as it can execute coded contracts into perpetuity in a permissionless environment. And while the energy requirements to support blockchain technology are often discussed in the media, it is moreover the compounding effect of all of these technologies and trends that is leading to an unsustainable situation. How then can the world support the energy needs required to upkeep this level of infrastructure growth? What are the cultural and ethical ramifications of these technologies? And what does all of this mean towards life on earth as we know it? In future posts I will explore these questions in more detail and look at opportunities, possibilities, and solutions that may be born out of the metaverse and all its trappings. Stay tuned.
With gratitude,
Luni
