The Metaverse Dreams of Reality
The Holy Grail War of the 21st Century
Hello everybody. One month into the new year, and it does not disappoint so far. Two of the most notable developments involve the markets and the metaverse.
Markets are finally down and turning bearish. We’re seeing 50%-80% corrections in tech, growth, and crypto. It’s painful, but this was long overdue.
Microsoft is acquiring Activision Blizzard for $68 Billion dollars, making it the most significant gaming acquisition in history. This is either as overzealous as AT&T buying HBO and Time Warner or as masterful as Bob Iger and Disney acquiring Pixar, Marvel, and Star Wars. Success will depend heavily on how value is created and captured. But there’s a reason why my last post was about Microsoft. I’m telling you guys, do not sleep on Microsoft. I believe it can become the first $10 trillion company. Perhaps even ahead of Apple. Here’s an excellent piece on how and why. I’ve also written about the Unbundling of World of Warcraft here.
I want to synthesize meaning out of these developments properly. The metaverse and the markets are much more intertwined than meets the eye.
There are three questions that I’ve been thinking a lot about that were originally proposed by the legendary Dee Hock that I’m going to try to answer through the lens of the metaverse.
Why are organizations, everywhere, political, commercial, and social, increasingly unable to manage their affairs?
Why are individuals, everywhere, increasingly in conflict with and alienated from the organizations they are part of?
Why are society and the biosphere increasingly in disarray?
What seems chaotic today does have a semblance of order. Or shall I say reordering? Pretty much everything I think and write about has to do with how power, status, wealth, and value structures are reordering themselves because of culture and technology. So technology does seem to be upstream of history in that regard.
Let me give you an example and a quote before getting into the essay.
More of our investments are intangible vs tangible. Back in 2001, capital expenditure and intangibles were about the same. $630 vs. $630 billion. In 2021 intangible expenditures was $2 trillion compared to tangibles $1 Trillion.
- Thomas Piketty, Capital in the 21st Century
Intangible assets like brands, marketing, knowledge, software, and R&D far outstrip the value of tangible, physical assets 2 Trillion to 1 [Thomas Piketty, Capital in the 21st Century]. Let’s think about that for a second. Things we can’t hold and touch are officially more valuable in this economy than real, physical assets. This doesn’t even account for what’s going on with NFTs and crypto.
Capitalism is no longer just about the capital. It’s not even just about labor, real estate, or physical assets. Instead, data, information, and knowledge reduce the need for capital per unit of output. This is why Jeff Bezos instituted a rule that every internal team should be small enough that two pizzas can feed it. This is why start-ups can outcompete large incumbents. This is why Instagram, with only a group of 13 people, can be valued at a billion dollars. Capital is abundant. Good ideas, talent, distribution, community, and IP are scarce. This is why Youtubers want to be investors and investors want to be YouTubers. Everyone wants deal flow.
Technology is so deflationary that it has reduced the need for capital, raw materials, space, labor, and even time. We live in a super-symbolic economy. [Toffler]
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
— T.S. Elliot
Take for instance the hierarchy of data:
Data —> Information —> Knowledge —> Wisdom
Data is the raw unprocessed stuff. The stream of bits that are collected by instrumentation or machinery. The signals between your phone and the cell tower. The packets of data sent over the internet that are recombined by the computers. Information is data that has been processed into a form that may be consumed by a human being. Those stream of bits are converted into an image, or a signal modulated into a sound. Knowledge, then, is what you know, infomration that you have internalized. Wisdom is knowing what to do with that knowldge. [Pomerantz]
Most of the tensions around our power structures today have to do with one fact. Our entire economic system is reordering itself around who can generate the highest stream of data. As a result, even our social systems are undergoing massive changes. How is this related to the Metaverse? Let me read you a quote from Edward Castranova, the author of ‘Exodus to the Virtual World,’ How Online Fun Is Changing Reality.
“Anyone who sees a hurricane coming should warn others. I see a hurricane coming. Over the next generation or two, ever-larger numbers of people, hundreds of millions, will become immersed in virtual worlds and online games. While we are playing, things we used to do on the outside, in "reality," won't be happening anymore, or won't be happening in the same way. You can't pull millions of person-hours out of society without creating an atmospheric-level event. If it happens in a generation, I think the twenty-first century will see a social cataclysm larger than that caused by cars, radios, and TV, combined...The exodus of these people from the real world, from our normal daily life, will create a change in social climate that makes global warming look like a tempest in a teacup.”
— Edward Castranova
Mr. Castranova published that in 2007. Four years later, in 2011, Marc Adnreeson wrote his infamous ‘Software is Eating the World’ piece, which has been the defining investment thesis of Silicon Valley for the last decade. In 1980, before the invention of the internet, the top 10 stocks in the S&P 500 were IBM, AT&T, EXXON, Standard Oil of Indiana, Schlumberger, Shell Oil, Mobil, Standard Oil of California, Atlantic Richfield, and General Electric. The total market cap of all ten stocks back then was $236B. That’s about $766B today. That’s less than what Microsoft alone is valued at. Today, five of the largest stocks in the S&P 500 have a market capitalization equal to the bottom 282 S&P 500 stocks. Facebook, Apple, Amazon, Alphabet, and Microsoft make up almost 25% of the total market cap of the S&P 500. Like the smokestacks of the industrial era, big tech is the behemoth of our time. Both factories and big tech have demonstrated the ability to improve living standards for billions of people. At the same time, it has illuminated a complex relationship between capital, labor, energy, power, and wealth.
The problem with humanity is the following: we have paleolithic emotions, medival instiutions, and god-like technology.
— Edward O. Wilson
What a lot of people don’t know is that Marc Adreeson got ‘Software Eats the World’ from an idea Buckminster Fuller had called ‘Ephemeralization.’ Which is the ability of technological advancement to do more and more with less until eventually, you can do everything with nothing. We’ve unlocked this ability to sustainably produce what most people need to live many times over. We already live in a post-scarcity world, and we don’t necessarily have to compete with each other for resources. Yet we still organize people and resources in deeply problematic ways that haven’t changed since medieval times and the industrial era.
Factories and mass production are fantastic at reducing unit costs and pouring out massive quantities of goods. But it also standardizes, commoditizes, and homogenizes everything we create and consume. Virtually nothing is left outside of this system.
We have moved from a society that produced goods with localized crafts-based knowledge-one in which products and environments were intimately and intrinsically linked with material properties—to a system of industrially standardized mass production. The Industrial Revolution effectively ignored the intimate material knowledge of previous generations. Instead of taking advantage of the inherent material properties within wood or metal, for example, factories started to create standardized components that attempted to limit the amount of heterogeneity and differentiation. We attempted to standardize the trades and create repeatable outputs that did not rely on a single person's skill set or knowledge in the craft—with some good reason: it was much more difficult to make a house out of logs and branches or a stone wall out of geometrically unique elements than it is to construct anything with repeatable components like bricks or two-by-fours. Similarly, at an environmental scale, humans shifted from an intimate relationship working with the earth and the natural forces of rain, sun, storms, tidal shifts, or sediment movement to a top-down, brute-force dictation through the use of machines. We could build anywhere, create land, dredge, redirect water flows, and artificially construct nearly any environment. Most of this standardization in manufacturing, construction, and land use was attempting to fight the dynamics of materials, minimize their movement, and resist the environment's forces (gravity, temperature changes, moisture changes, vibration, natural disasters, and so on). The goal was to produce more and do it faster, cheaply, and better. This alienation from materials has only been exacerbated in recent times by the rise of computing and the digital revolution. Digitalization and virtualization have tended to disconnect the average person from materiality and led us to believe that creating something "intelligent" means either a human being or a digital system with software/hardware that simulates human intelligence. But all of our own human and biological intelligence is ultimately built from simple materials, not computer chips or robotic components. We have lost touch with our appreciation for material intelligence.
— Sykler Tibbits
Thomas Carlyle in the Sign of the Times noted the positives and negatives of the effects of new technologies back in the 1800s.
On the one hand, the living artisan is driven from his workshop, to make room for a speedier, inanimate one, while on the other hand, “what wonderful accessions have thus been made…to the physical power of mankind; how much better fed, clothed, lodged and in all outward respects, accommodates men now are. How the mechanical genius of our time has diffused itself into quite other provinces. Not only are the external kind and physical alone is now managed by machinery, but the internal and the spiritual also.
The Anti-Life Equation
Loneliness + alienation + fear + despair + self-worth ÷ mockery ÷ condemnation ÷ misunderstanding ⋅ guilt ⋅ shame ⋅ failure ⋅ judgment n=y where y=hope and n=folly, love=lies, life=death, self = DARK SIDE
Humanity stumbled out of the dark ages with the philosopher’s stone in hand and, instead of providing prosperity for everyone, used it to turn everyone and everything into property. This anti-life equation fuels climate change and creates refugees, terrorists, and supply chain issues. We’re regressing towards authoritarianism and despair because these centripetal forces are exploited for infinite accumulation in the concentrated hands of the few. There are two main components to the Anti-Life Equation.
The Central Contradiction of Capitalism: r > g
A market economy based on private property, left to itself, contains powerful forces of convergence, associated in particular with the diffusion of knowledge and skills; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based. The principal destabilizing force has to do with the fact that the private rate of return on capital, r, can be significantly higher for long periods of time than the growth of income and output, g. The inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur eventually tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future. [Thomas Piketty]
The Law of Dataism: Data/Debt
Then there’s what I call the Law of Datism. Yuval Noah Harari has called datism an emerging ideology or even a new form of religion in which “information flow” is the “supreme value”. You’ve all heard that data is the new oil, but data in the private, corporatized logic is not necessarily the new oil. It’s actually more like sand. There’s a level of quality to it. It’s only valuable in aggregate and only to the platform that sources it, which acts like a refinery for the data to be distilled and instilled. Data, after all, is potential information analogous to potential energy: work is required to release it. [Pomerantz].
The paradigm of financial value defined by markets today depends on a constant flow of information relative to a platform’s technical debt.
These systems manage everyone on mass. They are making it profitable for a small class of people—dividing the ones using the technology and the ones inventing it. Platforms like Facebook exploit the collective energy of human attention with slick user interfaces to feed the algorithm. The net effect is that it has high jacked our cognition and attention. It has high jacked sovereignty and agency on a mass level. We’re incentivizing the spending away of our most valuable resources. Namely time and attention which at this point just equals energy.
As long as we live under these master and slave systems, humanity will continue to prey upon humanity. The past will continue to devour the future. R > G + Data/Debt = Anti-Life
Now it’s hard to critique the status quo without sounding overly righteous. I’m bullish on technology and the United States in the long term, but I’m deeply unsettled by what is happening now and in the near future. As dystopic as the world seems right now, there are incredibly bright spots to look forward to. It is possible to reinvent the world. The hardest part might not be building bridges to those futures but convincing people that they’re there in the first place.
Last week, we witnessed what could be the crumbling of Facebook’s empire. The stock plummeted more than 26%. Wiping $230 billion in market value because of negative user growth, they can’t track iPhone users, and they’re struggling to compete with TikTok. If Facebook continues to get less data relative to their technical infrastructure and debt, they’re going to collapse.
This extends into our private and public infrastructure. In any given city, you have parks, libraries, and sidewalks are public. Homes and businesses are private. But the two reinforce each other. They’re symbiotic, and if they’re not in harmony, these systems can easily collapse on top of each other. Just like our country.
Our major cities.
Our goods and services.
And our infrastructure.
/Insert ecosystem collapse = To the rate of species extinction x the loss of biodiversity
The problem is that you can’t properly value these public goods even though they’re priceless and generative.
The same goes for software. Software, for instance, creates so much abundance and value because it scales infinitely. And unlike other resources, sharing it produces even more generative value. Think about open-source projects like Linux and Wikipedia.
YouTube gives content creators 55% of its revenue and takes 45% itself. A clear example of a network distributing value at scale to the people providing the most value.
Now when it comes to the Metaverse, there are three main narratives surrounding it with varying degrees of truth and confusion.
The Metaverse is Already Here
The Metaverse is a Redefinition of AR/VR
The Metaverse is the Next Frontier of the Internet
In this essay, I argue that the Metaverse is the next vessel for the Holy Grail. In the literal and figurative sense. But like any vessel, it can be corrupted. It will either liberate us or enslave us.
What is the Metaverse?
Being asked what the Metaverse is by friends and family is a weird feeling. It's as if the most popular kids in my high school suddenly turned all their attention from good-looking students with great hair, jocks with full scholarships, and country club kids in polos to me and my friends playing World of Warcraft in our basements. Cargo shorts and all. "Mom, where are my hot pockets?!"There's no doubt that this cultural flipping was tipped over by Zuckerberg's avatar. Facebook changing its name to Meta signals yet another computing paradigm shift, and he's really good at recognizing those.
Remember, this is a guy that:
Turned down a billion dollars at the age of 22.
Pivoted Facebook to mobile.
Launched the newsfeed (arguably the greatest innovation in advertising).
Bought Instagram for a cool billy (when Instagram was a no-name company and Facebook barely had the cash).
Bought Oculus for $2 Billion.
Bought WhatsApp for $16 Billion
Led Facebook to a trillion-dollar valuation (the fastest company to ever do so).
Tried to launch a cryptocurrency in 2019.
And has now earmarked $10 Billion for the development of the Metaverse.
But what exactly is the Metaverse?
Matthew Ball defines the Metaverse as,
A massively scaled and interoperable network of real-time rendered 3D virtual worlds which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.
Right now, nobody knows what the ultimate form the Metaverse will shape up to be, but we do know what it should be.
Tony Parisi, a VR vet, and pioneer has seven Metaverse rules we should all keep in mind moving forward.
Rule #1. There is only one Metaverse.
Rule #2: The Metaverse is for everyone.
Rule #3: Nobody controls the Metaverse.
Rule #4: The Metaverse is open.
Rule #5: The Metaverse is hardware-independent.
Rule #6: The Metaverse is a Network.
Rule #7: The Metaverse is the Internet.
The purist vision of the Metaverse is an open architecture that is at the scale and interoperability of the open internet. It is cyberspace not restricted by material scarcity. As Barlow wrote in his, A Declaration of the Independence of Cyber Space.
Your legal concepts of property…do not apply to us. They are all based on matter, and there is no matter here…in our world, whatever the human mind may create can be reproduced and distributed infinitely at no cost. The global convyance of thought no longer requires your factories to accomplish.
In terms of practical feasibility, it's literally, as Tim Sweeny says, "You would have to be putting online hundreds of thousands of new servers online every day at some point. The idea that one company can do all of this is unlikely. It will have to be decentralized."
Facebook is hoping to get a piece of the real Metaverse by co-opting the entire idea for itself, but its rebirth as Meta is a surrogacy by artificial insemination. A bastardized of the original idea, and a hail marry pass to the next computing platform. Like the frontier of space and the national space program, Facebook will undoubtedly progress the wide-open design space of the Metaverse. With 10 billion dollars, it's almost guaranteed, but here’s some poetic justice for you. Even though they have the best-selling headset, I bet more blue light blocking glasses will be sold than the sum total of VR headsets. Until 1. They're able to solve the hard physics problem of the natural light spectrum.
LEDs have too little intensity in the red part of the spectrum and too much in the blue part. They don’t quite please the eye. Light efficiencies of artificial sources have improved, but replicating sunlight indoors still remains beyond our tech.
— Vaclav Smil
And two, you have to design worlds people want to spend hours in. Humans are naturally drawn to nature. Even game designers have to create worlds with biophilic design in mind. There are enough research and design principles to prove that people tend to spend more time in virtual environments that are lush and natural. Full of trees, sunlight, mountains, and streams.
Alan Ray Smith, the co-founder of Pixar has an excellent framework for evaluating the progress of technology. In his view, “The conditions for the progress of new technology appear to be an excellent idea, disruptive chaos that demands and drives the idea’s development, and a tyrant or tyranny that that often—unknowingly protects the creators while they advance the idea.” Everyone is talking about the idea, but I think it’s more important to understand the tyrant, tyranny, and chaos.
The Tyrant’s Dilemma
With the exit of Jack Dorsey, Mark is the last founder standing among the big tech companies. This is important because founder-led companies tend to outperform other companies. The narrative around this is that those founders are more in tune with the market and thus will be able to develop better products. They're usually bolder than anyone that comes along the long procession line of non-founder CEOs. There’s also a ton of data to prove it (see below).
One way to look at Zuckerberg beyond just a tech billionaire founder is to see him as a nation-state leader. We live in a networked world, and if networks are the killer app of the internet, Zuckerberg owns and controls the most extensive network of them all. Three billion people and counting. Larger than any sovereign nation in history. This puts him in a precarious spot. Facebook owns a license to print money, but the cash flow concentration is laser-focused on their
mind control machine ad platform. The problem is that 99% of that revenue is purely from advertising, and Facebook doesn't own the computing platform that it runs on top of. Apple's iOS changes have emphasized this platform risk.
To compound this problem even further, Web3 technologies like DAOs, De-Fi, and NFTs have the potential to unbundle Facebook's equity completely. As a result, Facebook's network moats are eroding, and it has nowhere else to go besides the Metaverse. A great quote from Tim Wu's 'The Master Switch,' encapsulates the nature of these technology cycles.
History shows a typical progression of information technologies: from somebody's hobby to somebody's industry; from jury-rigged contraption to slick production marvel; from a freely accessible channel to one strictly controlled by a single corporation or cartel from open to a closed system. It is a progression so common as to seem inevitable. However, it would hardly have seemed so at the dawn of any of the past century's transformative technologies, whether telephones, radio, television, or film. History also shows that whatever has been closed too long is ripe for ingenuity's assault: in time a closed industry can be opened anew, giving way to all sorts of technical possibilities and expressive use cases for the medium before the effort to close the system likewise beings again.
The Tyranny of the Status Quo: The Metaverse Was a Warning Not an Instruction Manuel
The Metaverse is an old idea. Neal Stephenson's Metaverse inspired Ready Player One the same way Dune inspired Star Wars. It was the precursor to a lot of sci-fi fantasies about virtual reality. But the most interesting thing for me wasn't the virtual reality headsets, it was the fact that it always took place in a dystopian environment where private corporations and mafia states ran everything from roads, borders, and law enforcement. Now, most people would look at this and assume that technology companies are to blame, but in actuality, virtual spaces are where people go when the physical environment becomes unbearable. This is not too dissimilar to where we are today. There's a popular meme that I smash the like button on every time I come across it. It's usually a snapshot of any part of the United States. So it could be a parking lot, an urban sprawl, the Starbucks drive-thru, or the highway system, and it has the question in a caption, "Why don't kids go outside anymore?" followed by an image of urban desolation, and the caption, 'The outside they built.'
Studies consistently show that most teens would rather hang out with their friends in person, but the urban-design strategy of our cities doesn't allow for it. That's why we have mall rats. You can see this hostile architecture in the anti-homeless spikes on our bus stops, studs embedded in flat surfaces to curtail skateboarding, sloped window sills to stop people from sitting, benches with armrests so people don't lie on them, and the deplorable nature of our public toilets. You can judge a city by the nature of its public bathrooms the same way you can judge a workplace by its restrooms. It's a quick insight into their values. The next time you interview at a company, make sure to check the bathroom. The next time you visit a city, check out the parks, and if their bathrooms look like a prison cell they probably treat their citizens as such.
These design decisions have knock-on effects called negative externalities. For example, the built environment is brutal and hostile to the youth, the elderly, people with disabilities, tired workers, pregnant women, immigrants, minorities, and people caring for children.
When you try to start a business to change the environment, there’s so much red tape that a father of two kids in San Francisco lost $200,000 in permits trying to open up an ice cream shop. Michael Shellenberger writes in San Fran-Sicko, “None of these problems started with the pandemic. Between 2008 and 2019, eighteen thousand companies, including Toyota, Charles Schwab, and Hewlett-Packard, fled California due to a constellation of problems sometimes summarized as “poor business climate.” California has the highest income tax, highest gasoline tax, and the highest sales tax in the United States and spends significantly more than other states on homelessness, and yet has worse outcomes.”
“Spends the most and has the worse outcomes” is probably the best sentence I’ve ever heard to describe the United States as it stands today. There’s something deeply wrong with the fact that Silicon Valley, the mecca of technology and innovation, looks and feels more like Gotham City instead of Tokyo or Singapore. In fact, you can strike all of our major cities on that one.
It’s these invisible hands that accelerate us into dystopia. It’s not because of technology. It sometimes feels like we’re going to hell in a luxury handbag because the only retail business is at the extreme ends of luxury goods, quick service franchises, finance, and fashion. Anything in the middle gets destroyed. It’s Apple, Lululemon, Starbucks, Nike, Blue Bottle, banks, restaurants, and Sweetgreen condo starter packs all the way down.
“There is a myth, sometimes widespread, that person need only do inner work, in order to be alive like this; that a man is entirely responsible for his own problems; and that to cure himself, he need only to change himself...The fact is, a person is so far formed by his surroundings, that his state of harmony depends entirely on his harmony with his surroundings.”
Back to the Future
Popular science fiction films usually have a simple three arc structure. The world is perfect Eden, new technology like artificial intelligence comes along, and then the shit hits the fan. As science fiction becomes closer to science fact, it's natural for people to be afraid of what's to come. Hollywood has pumped our brains with doom and collapse since the beginning of cinema. Our mental models of technology are path-dependent on AI to Skynet. Robotics to Deus Ex Machina. Biotech to Biohazards. We have to reverse this narrative structure. The problem is that people are conflating Facebook for technology. The same way people conflate capitalism for democracy.
Facebook, along with other social media platforms, has accelerated our visual culture's speed, velocity, and reach. As a result, it's warping our minds, contorting our bodies, deforming faces, misrepresenting the truth, collapsing context and time. It's complicit in racist riots, anti-vaccination movements, and genocidal programs. That stuff is really, really bad. But it's only amplifying the insidious undergirding corpora embedded in our society. Said another way, real corruption makes people susceptible to fake conspiracy theories. [Doctorow]
Chaos: The Meta Crisis
Jean Baudrillard, Neil Postman, Guy Debord, Aldous Huxley, and Marshal McLuhan predicted our current meta crisis. The simulation has replaced our reality. Everyone is living inside of a crystal matrix with their own shard of reality. Instead of a persistent virtual reality we can call jump into, we have servers that run simulations on our devices. We are constantly looking through it to see something else, only to have the black mirror reflect ourselves. We are the viewer and the viewed. We are, as gods, locked into a doom loop. The addiction cycle is attached to a stimulus that has been detached from its original purpose [Hedges]. A meta crisis that makes society collectively go insane and the youth suicidal: an inability to see how we see and a failure to understand how we know what we know.
And here are 5 ways in which this doom loop compounds on itself.
Visual Culture in Crisis: The Ordering of Symbols is the Ordering of Power
Symbols like the United States flag have been hijacked. Words like Democrat or Republican don't mean what they used to. Visual culture is never natural and is thus never without value. Visual culture is power. [Boylan]
Society in Crisis: Believing is Seeing
Screens and media are mediating our reality. Twitter, for example, is upstream of reality, which is then influenced by real-world events.
Authority in Crisis: Glitches in the Matrix
The institutions of the 20th century were based on analog technologies, limited information, and geography. The same systems are being overwhelmed by a flood of information. The elites of the old are losing control of their narrative. Think about what's going on with Joe Rogan and Spotify, the Pandemic and the World Health Organization, and the general chaos of the United States.
Meaning in Crisis: What is real?
As more of the digital world becomes the real world, it will be increasingly difficult for the brain to distinguish the real from the virtual. If we can't determine what has meaning, we won't be able to align on values.
Individuals in Crisis: The Simulation is Burning us Out
The current social media system has hijacked our energy, attention, and cognition. Neurological illnesses such as anxiety, depression, attention deficit hyperactivity disorder (ADHD), borderline personality disorder (BPD), and burnout syndrome are the defining mental illnesses of our time. This leads to more neurosis and paranoia. Anyone can stay off the Internet, but how do you actually log off? Opting out of the system significantly reduces your chances of influence, livelihood, and convenience.
This war on our reality systems is overwhelming yes, but hopeless? Absolutely not.
The Holy Grail =The Mirror + The Sword + the Jewel
The Metaverse is going to be far more pervasive and powerful than anything else. If one central company gains control of this, they will become more powerful than any government and be a god on Earth.
— Tim Sweeny
If you think about it, the metaverse is the next holy grail. It’s a combination of legendary, mythic treasures. Namely the mirror, the sword, and the jewel. The mirror represents knowledge or the mind. The sword represents power or muscle. The jewel represents wealth or money. You can think of the Holy Grail as a mass of pure energy that can be used to control or liberate society.
Among the numberless possibilities, the three sources of power symbolized in the western movie—violence, wealth, and knowledge—turn out to be the most important. Each takes many different forms in power play. Violence, for example, need not be actual; the threat of its use is often enough to bring compliance. The threat of violence can also lurk behind the law. Indeed, modern movies and ancient myths support the view that violence, wealth, and knowledge are the ultimate sources of social power. Thus, Japanese legend tells of sanshu no jingi—the three sacred objects given to the sun goddess, Amaterasu, which to this day are still the symbols of imperial power. These are the sword, the jewel, and the mirror.
The power implications of sword and jewel are clear enough; the mirror's a bit less so. But the mirror, in which Amaterasu saw her own visage-or gain knowledge of herself—also reflects power. It came to symbolize her divinity, but it is not unreasonable to regard it as a symbol of imagination, consciousness and knowledge as well.
Furthermore, the sword or muscle, the jewel or money and the mirror and the mind together form a single interactive system. Under certain conditions, each can be converted into the other. A gun can get you money or can force secret information from the lips of a victim. Money can buy your information or a gun. Information can be used to increase either the money available to you. Or to multiply the force at your command.
What's more, all three can be used at almost every level of social life, from the intimacy of home to the political arena. In the private space, a parent can slap a child (use force), cut an allowance, or bribe with a dollar (use money or its equivalent), or—most effective of all—mold a child values, so the child wishes to obey. In politics, a government can imprison or torture a dissident, financially punish its critics and pay off its supporters, and it can manipulate truth to create consent.
Like machine tools (which can create more machines), force, wealth, or knowledge, adequately used can give one command over many additional, more varied sources of power. Thus whatever other tools of power may be exploited by a ruling elite or by individuals in their private relationships, force, wealth, and knowledge are the ultimate levers. They form the ultimate triad.
— Alvin Toffler
The 21st Century War for the Holy Grail
The opposite of a free culture is a “permission culture” — a culture in which creators get to create only with the permission of the powerful, or of creators from the past. It used to be that non-commercial culture was unregulated. The ordinary ways in which ordinary individuals shared and transformed their culture—telling stories reenacting scenes, sharing, music, making tapes—were left alone by law. The focus of the law was on commercial creativity. The divide between free and commercial has been erased by the Internet. For the first time in our tradition, the ordinary ways in which individuals create and share culture fall within the reach of the regulation of the law, which has been expanded. To draw within its control a vast amount of culture and creativity that it never reached before. Corporations threatened by the potential of the Internet to change the way both commercial and non-commercial culture are made and shared have united to induce lawmakers to use the law to protect them. From the beginning, government and government agencies have been subject to capture. They are more likely. To be captured when a powerful interest is threatened by either a legal or technical change. The consequence is that we are less and less a free culture, more and more of a permission culture. This is not protectionism to protect artists. It is instead a protectionism to protect certain forms of business.
— Lawrence Lessig
Ok, so we all know that the system is rigged and completely captured by incumbent interests. We don’t need to go down that rabbit hole. Thankfully, the holy grail dematerializes and then rematerializes for each epoch. It’s a built-in mechanism to reset our civilization. The last time society was under the power of the holy grail was by the industrialists and the church before that. Today, tech has a monopoly on the mirror (the mind). Nation-states and governments have a monopoly on violence (the sword). The banks have a monopoly on the money supply (the jewel).
The stage is being set for the next holy grail war. This time, the Metaverse is the vessel, and the Internet is the transmutation circle that’s going to summon it. It’s either going to serve us, or we’re going to end up serving it.
It is no coincidence that AI is the favorite technology of the Communist Party of China. Strong cryptography, at the other pole, holds out the prospect of a decentralized and individualized world. If AI is communist, crypto is libertarian.
— Peter Theil
Now here’s the optimistic part of the essay. The Internet is undergoing another massive transformation. I’m not here to say that blockchain and Web3 is going to solve everything. But at the very least, we finally have a way to redesign the current economic system. The one that’s on a collision course with ecological collapse. We can get off the paradigm of infinite growth on a finite planet. We can play the infinite game. The World Game, and stop playing the status games of consumerism. The past can stop eating the future.
Show me your incentives, and I’ll show you the outcome.
— Charlie Munger
Web3 inverts our economic and social systems. By letting users own the networks, we can reorganize the world and better align incentives so that it can better serve humanity. Humans should not be subservient to government, land, money, or technology. Rather, they should be subservient to us. The people.
We hold these truths to be self-evident, that all men are created equal, that they are endowed, by their Creator, with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed, that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.
— The U.S. Declaration of Independence
Web3 isn’t about shilling NFTs. It’s about stopping the constant financial crises, the gutless nihilism, the infinity wars, the stagnation, the unemployment, the poverty, and the dwindling natural resources. It’s about liberty, and for the first time in history, humanity can share the holy grail and get out from under itself. After centuries of hoarding the grail like demons and monsters, maybe it’s time to act as gods. Y’know the noble, and good kind. How can anyone be against that? In my estimation, to be against Web3 or to even be apathetic towards it means that you are for the status quo. And the status quo creates problems from hell.
The World Game: Tech Otakus Save the World
Kids learn by playing games with each other. It’s not that kids are necessarily addicted to games, they’re addicted to each other. Kids, teenagers, and full-grown adults spend most of their time online watching YouTube and or playing video games because they’re surrounded by signs and spaces that are increasingly becoming inhospitable.
Take Minecraft. It’s one of the largest communities on YouTube with the highest engagement rates. It has more daily active users and time spent on the platform than any other game, dating app, or social media platform. It’s no coincidence that the top games for kids and teens are Minecraft, Roblox, and Fortnite which are essentially open-world, creative sandboxes that provide virtual environments for free play. At that age, kids want to explore who they are. They develop social skills, confidence, and find social fulfillment with their friends.
In practical life. The world is mostly fixed, and our values, relatively inflexible. Most of us cannot help but desire, company, food, success. The recalcitrant world and our inflexible values generate certain obstacles. These are not the obstacles we wanted to struggle against, but they are the ones we must overcome in order to get what we want. So we must try to sculpt ourselves and our abilities to fit the needs of the world. The world tells us what we must eat, so we must find a job and pretend to ourselves that we enjoy it. The world tells us that we must find romantic partners, so we learn to be witty, or at least to make a decent online dating profile.
In games, on the other hand. We sculpt for ourselves, exactly the kind of practical activity we wish to engage in. We picked the goals, abilities, and the world. In games, our abilities can precisely suit the challenges we are presented with. In Super Mario Brothers, we are given the ability to run and jump, and a world full of chasms to jump over and monsters to jump on. What's more, or jumping abilities and speed and Super Mario brothers are just barely enough to cope with the chasm's and monsters we face. The chess knight’s strange leaping movement is just what we need to breakthrough our opponents defenses. In games. We are given the right kind of abilities, but just barely enough of them—which creates drama and interest. And not only do the abilities fit, but their exercise is often pleasurable and interesting and exciting, at least when we found the right game for our taste. [Nguyen]
What seems like anti-social behavior (like my friends and I playing World of Warcraft) was actually highly social and technical. It’s also no coincidence that the most well-adjusted champions for the next holy grail war, are gamers. Most of the leaders in tech and business credit video games for their success.
It is games that give us something to do when there is nothing to do. We thus call games "past times" and regard them as trifling fillers of the interstices of our lives. But they are much more important than that. They are clues to the future. And their serious cultivation now is perhaps our only salvation.
– Bernard Suits
There’s a game called Axie Infinity that demonstrates some of these ideas that I espouse. After losing their jobs during the pandemic, people in the Philippines started to earn real money playing this video game. Axie Infinity is a decentralized application on the Ethereum blockchain where players breed, raise, battle, and trade digital creatures called Axies. Even a 66-year old grandmother got in on the action.
On average, Axie Infinity players are making $400 a month. That might not mean much to you or me, but it means the world to them. And if playing a video game is enough to put food on the table for your family, then that’s magical. That’s ephemeralization at work. This is the Metaverse we’re fighting for. One where we can more create more opportunities for all of humanity. Not just the multinational corporations that arbitrage their labor. The promise of Web3 isn’t necessarily about decentralization. It’s about reintegrating the rest of the world with the promise of the new one.
“Once upon a time,” not so long ago, the conquering of physical or territroial realm was the Frontier, but now to conquer sordid, ugly commercialism in this machine age, this “bony fiber of the dry tree”—that spiritual conquest is our new Frontier. Only by growing a healthy aesthetic, organic in the souls of our young polygot nationals can we win this victory, greatest of all victories—democracy.”
— Frank Llyod Wright