What Crypto, the Metaverse, Web3, and the Bored Ape Yacht Club portend for the future of your business
I’ve immersed myself in study of the emerging new monetary and social economies that, against all odds, seem to abide and multiply. Truth be told, despite my age and relative cognitive elasticity, I find myself perfectly overwhelmed. While fascinating in its creative complexity, and in some ways profoundly hopeful, in other ways I find it profoundly troubling. Nevertheless, I am pushing myself to find meaning in the madness. I’ve gone so far as to engage two private tutors to help ground me in these worlds for two reasons: the first is for my own personal growth and development, and the second is because I believe these spaces will have great bearing on MWS’ work, and subsequently, both yours and my life.
Anyone reading this is sure to know what crypto is and generally speaking why it exists. With currency debasement and inflation seemingly on a 90-degree angle growth trajectory, one might think the central banks are actually trying to support a mass migration to digital assets as a wealth store and / or medium of exchange…
And the Metaverse, at least to me, seems to have found its way into the modern lexicon seemingly overnight. For reference, Wikipedia defines the Metaverse as a network of 3D virtual worlds focused on social connection. In futurism and science fiction, the term is often described as a hypothetical iteration of the internet as a single, universal virtual world that is facilitated by the use of virtual and augmented reality headsets. More on this soon.
These two things are wed by and grounded in a concept known as Web 3 or Web 3.0, defined by Wikipedia as an idea for a new iteration of the World Wide Web based on blockchain technology, which incorporates concepts including decentralization and token-based economics.
Full disclosure, I have personally had portfolio exposure to crypto for some time, and continue to believe in its efficacy as I consider the evolution of money as a concept. I also have exposure to gold and other precious metals and believe in their efficacy just as much.
Taking a step back, let’s remember that before we had a coin based economy, we had cows. Cows have real value but less liquidity and optionality than coins, but it was far easier to carry coins than to carry cows as we developed more social and economic complexity. Crucially, we cannot forget that we devalue that which has real value (i.e., cows, which can be used to feed people, which play a role in carbon sequestration, etc.) in favor of the flexible option.
Coins became more “valuable” than the actual cows whose value they at one time were used to represent because they now did two things instead of one thing. Coins
1) have an optional exchange value
2) gave us speed of optionality.
This tell us that we don’t care as much about real value alone, as we care about optionality. The minute we forget this, we ripen to the perverse incentive of creating representative value ONLY, and even more dangerously, to building a disassociated layer of optionality (i.e, coins, crypto) that ignores the existing substrate of real value upon which that optionality operates (i.e., the environment, our oceans, our forests, the air we breathe — for goodness sake, the cows!).
One of the first things people ask about crypto is, “Where does its value come from?” There are real answers to this as far as Bitcoin, Ethereum and other “blue chip” crypto projects are concerned, but as best I can tell (please tell me if I have missed this somewhere), I have not seen anyone answer the question rigorously enough to elucidate the means by which we are ensuring the balance sheet of real value (the cows!) remains intact, if not profiting, in the context of the tradable value of any currency (token or fiat).
The robust answer must de-couple the perverse game theoretic optionality incentive to break nature vs. binding the long + short term interests of our human economic and social need to have options (i.e., coins or tokens) which are backed by irrefutable evidence of real, enduring, life-supportive value.
So, how do we begin to define real, enduring life-supportive value in the hyper-age of crypto? The inimitable Buckminster Fuller defined true wealth in a more complete way than I have ever seen:
Buckminster Fuller’s definition of TRUE WEALTH is the degree to which:
Organization of environmental resources
by human capabilities
to clothe, shelter, feed,
and accommodate the initiatives + transport needs
enables you to offer ‘life support’
for ‘x’ number of forward days
for ‘x’ number of people
vis-á-vis at hand ‘artifacts’ + consumable goods.
Hard to argue with that definition, yes? Notice how ‘money’ is missing from the formula.
Now, that we’ve been re-set on the priorities of life itself, let’s go back for a minute to Web 3, on which most crypto platforms are built. Why? Because, Web 3 is blockchain. Blockchain, as best I can tell, has a lot to do with our answer to preserving real value — or at least our potential to preserve it. Blockchain, to define it in a crude and overly simplistic manner, is a non-corruptible ledger. Without blockchain, corruption can run rampant because it’s pretty easy to hide. With blockchain, it’s not.
So, this is where the opportunity comes in! Blockchain enables us provenance on the materials economy, making it possible (though not automatic — this must be selected + designed into our systems) to disallow the exploitation of non-renewable resources which erode the value of the options upon which they are built.
So, in the most utopic employment of blockchain, with crypto for example built upon it, we become able to systematically disintermediate both the incentive + the act for a certain type of corporation to profit from say cutting down the rainforest, which is injurious to the commons (i.e, life supportive by Bucky’s definition) while privatizing the gain, and instead enable the re-direction of power back to the commons to make a smarter, more broadly life-supportive economic decision, therefore distributing gains, or the option for gains, back to the commons.
In this example, it’s important to see that the decision is not optimizing only for coin based “wealth,” but for the preservation of life supportive wealth (i.e., the sustainment of the earth and it’s finite resources which includes but is not limited to coin based wealth).
More simply, the capacity for the right type of accounting increases the capacity for robust decision making, which is ultimately more profitable in the broadest sense of the word.
Now, one last detour back into the Metaverse to The Bored Ape Yacht Club (BAYC).
If you’re like me a few weeks ago, you’re wondering what the heck is the Bored Ape Yacht Club? The BAYC is a collection of 10,000 unique Bored Ape NFTs — unique digital collectibles living on the Ethereum blockchain. Basically, it’s a bunch of digital monkey avatars hanging out in what looks like a digital frat house. So, why am I bringing this up? Because thousands of people, including celebrities like Jimmy Fallon and Gwyneth Paltrow, have paid between $300,000 — $1+ million for these digital primates. If you’re also like me a few weeks ago, you’re saying “Um, wut?!! “. In my earnest endeavor to understand this, I said to myself, there MUST be more that I am not understanding. And again, as best I can tell (If I’ve missed something, please tell me), there is not.
Back to value. Where is it? The value exists here because people, like Jimmy and Gwyneth and other bored ape human owners, have decided this is a valuable investment. OK. I have to take that at face value. To me, whether I agree with it or not, this is really happening. Also, to me, this spells c-r-i-s-i-s. Why not buy an avatar of a tree in the rainforest to ensure it remains intact instead of chopped? Good news — it seems you can! But this is not making the headlines, as best I can tell.
Are the BAYC and its celebrity members spoofing the absurdity of the Metaverse, or do they really believe in it? Is this digital performance art? Is there a deeper mental health crisis lurking behind the facade of a 1990s-era Oregon Trail computer game on steroids? Why do we think there is value in investing our money, and our very identities in these simulations vs. investing in our actual human experience at these value thresholds? What is the cost of this to the commons? What would the alternative representative value of these $300,000 — $1+ million investments be in the education, physical, emotional, and creative health of the actual human being? I do not understand these phenomena well enough to have a well-formed answer. Yet, I see opportunity.
Last week we interpreted the jobs report. The takeaway was not to focus on the bean counting of how many total jobs (noise), but instead to consider the headline in the context of what we are building (signal). Crypto, the Metaverse, and the Bored Ape Yacht Club (), is what we are building. The opportunity here is the direction in which we place the bricks in this rapidly rising pyramid.
In a recent interview with Megyn Kelly, The Center for Humane Technology co-founder Tristan Harris argued [paraphrased],
“If you build a virtual reality that isn’t caring for the real reality underneath, you are building a disassociated layer that will ignore the existing substrate. This is not an inherently humane system.
If a virtual reality does not depend on the actual people having real, healthy, embodied experiences, and a real healthy democracy beneath the virtual embodiment you are creating, it is neither a humane nor robust system.
If we are virtualizing everything without securing the foundational substrates upon which the virtual worlds work, we are designing into our systems the highest degrees of fragility.”— Tristan Harris, The Center for Humane Technology
Why is this relevant to a workforce newsletter? Because the lines of latitude between “work” and “life” are rapidly narrowing. And I do not mean that in the “WFH” sense. We are experiencing a rapid acceleration and ephemeralization of our economic and social systems which causes everything to merge. In a spiritual sense, we perhaps get closer to the touted “oneness,” but in a secular sense, we get dangerously close to systemic cascade phenomena where the catastrophic risk / failure axiom is no longer local (isolated, contained failure), but global.
Reprising my now familiar reframe:
For a very long time, we have always and only been asking:
“What is the role of the boss in the world of workers?”
[Feudalism, Industrial Revolution]
And now, it shifts to:
“What is the role of the human mind in a world of technology?”
The opportunity here comes with a pass / fail grade. We win at a global level by universally upgrading people’s access to and support from the technological infrastructure leaps we have made over the past decades, or we will succeed at developing an increasingly dystopic disappearance of bright human minds into something like a Metaverse of digital monkeys. This leaves expansive real life experience to an increasingly feudal few who are designing the infrastructure to maximize benefit to their class.
It’s also important to note that this example of the emerging Metaverse smacks of white privilege, wealth, and exclusivity. That’s a topic imperative to address but I’ve already gone on too long this week.
If you’re reading this letter, you are in a position of leadership and authority. Consider your experience, your requisite rights, your “budget” in the broadest sense of the word. We’re not living through just COVID, or just “The Great Resignation,” or just “BLM,” or just “the war for talent”. “The Great Change” is about the emergence of altogether new social paradigms that have the power to direct emergent technology toward the management of catastrophic risk (i.e., climate change), and the instantiation of civic and social liberties which have the potential, on balance, to be more desirable than dystopic.
The point today is that you must decide. Even choosing to be ambivalent because you are so overwhelmed by it all (that is certainly understandable and a good, honest place to begin a discussion with me), is still a choice. You choose every day, and many of these choices emanate from workplaces in ways that have tremendous ripples backward and forward into your real life. You can complain, you can say the world has gone mad, or you can defend your digital monkey, and justify your crypto wallet until the cows come home.
The question is, what are you building? Are you going to be happy with what it offers to your life, to my life, what it will offer to the lives of your children when they are your age? Can you answer?
It’s time to give this serious thought. These questions make virtually irrelevant the unilateral discussion of ‘on-boarding,’ or the results of a team’s 360 review process; even the discussion of ‘company culture’ is questionable when considered in isolation. This is why MWS all but refuses to think about problems at this level of abstraction with our clients — we would be wasting your time and money to do so. The opportunity set, the P&L, the reputation of your brand, your ability to attract talent and focus their attention on worthwhile targets, the efficacy of your business itself is directed by your ability to think critically about your answers to the questions I’ve just posed and then to make command business decisions around them.
How are you doing your thinking? Let me know.