For many supporters of cryptocurrencies, the key appeal lies in their ability to provide a currency and financial system that is open, borderless, decentralized, neutral, anonymous, immutable, and censorship-resistant.

Openness refers to the fact that cryptocurrencies are typically based on open-source software, which means that anyone can access and modify the code. This fosters a culture of transparency and collaboration and allows for rapid innovation and development in the industry.

Borderless refers to the fact that cryptocurrencies can be used to send and receive payments anywhere in the world without being subject to the restrictions and fees imposed by traditional financial systems. This makes them a powerful tool for people who need to make cross-border transactions or send money to countries with less developed financial systems.

Decentralization refers to the fact that any central authority or institution does not control cryptocurrencies. Instead, they are maintained by a distributed network of nodes that work together to validate transactions and secure the system. This helps to ensure that cryptocurrencies are not subject to the same risks and failures as traditional financial systems, and makes them more resistant to censorship and control by governments and other powerful institutions.

Neutrality refers to the fact that cryptocurrencies do not discriminate based on factors such as race, gender, or nationality. They are designed to be accessible to anyone with an internet connection and do not require users to have a bank account or other form of traditional identification.

Anonymity refers to the fact that cryptocurrencies can be used to make transactions without revealing the identity of the sender or recipient. While not all cryptocurrencies are completely anonymous, many offer a high degree of privacy and anonymity compared to traditional financial systems.

Immutability refers to the fact that once a transaction is recorded on the blockchain, it cannot be altered or deleted. This provides a high degree of security and transparency and makes it difficult for bad actors to manipulate or corrupt the system.

Censorship resistance refers to the fact that cryptocurrencies cannot be easily censored or shut down by governments or other institutions. This is because they are decentralized and distributed, which makes it difficult for any single entity to control or manipulate the system. This is particularly important in countries with authoritarian governments or restrictions on free speech and expression.

While these are the key attributes that have defined crypto, here are five key events that have driven the need for a decentralized system.

1. 2008 Financial Crisis

The aftermath of the 2008 financial crisis saw a growing distrust in traditional financial institutions and a desire for a more decentralized and transparent financial system. This desire was largely driven by individuals who were distrustful of the government and financial institutions, including a group of early adopters known as the “cypherpunks,” who were drawn to the potential of cryptocurrencies like Bitcoin.

Among these early adopters were the “libertarian quants,” individuals with a background in quantitative analysis who saw the potential for cryptocurrencies to disrupt traditional financial systems and provide an alternative to government-backed currencies. However, the introduction of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 brought new regulations to the financial industry, which some argue have made it more difficult for new banks to be formed and could limit competition and innovation in the financial sector.

The financial crisis of 2008, also known as the Great Recession, was a global economic downturn that led to widespread economic instability, job losses, and foreclosures. The crisis was triggered by a housing bubble and the collapse of the subprime mortgage market in the United States, which spread to the global financial system.

When a system becomes too comfortable with itself, the seeds of its own destruction are sown

The financial crisis led to a loss of trust in traditional financial institutions, particularly banks and investment firms, due to their perceived role in causing the crisis. This loss of trust, coupled with the increasing centralization and control of the financial system, created a desire for a decentralized and transparent financial system that governments or large financial institutions did not control.

In 2009, an individual or group using the pseudonym “Satoshi Nakamoto” released a whitepaper outlining a decentralized digital currency called Bitcoin. Bitcoin is based on blockchain technology, which allows for decentralized and transparent record-keeping of financial transactions.

The creation of Bitcoin was largely driven by the desire for a decentralized and transparent financial system that traditional financial institutions did not control. This desire was fueled by the financial crisis of 2008 and the loss of trust in traditional financial institutions.
The success of Bitcoin led to the creation of other cryptocurrencies, which further expanded the cryptocurrency industry. The cryptocurrency industry has grown rapidly in recent years, with a wide range of cryptocurrencies and blockchain-based applications being developed for a variety of purposes.

In the early days of Bitcoin and the cryptocurrency industry, the majority of early adopters were a group of individuals with backgrounds in computer science, mathematics, and cryptography. This group was often referred to as “cypherpunks” and was largely made up of libertarian-leaning individuals who believed in personal freedom and privacy.

These early adopters were drawn to Bitcoin and cryptocurrencies due to their decentralized nature and ability to operate outside of traditional financial institutions and government control. This was particularly appealing to those who were distrustful of the government and financial institutions and who believed in the importance of personal freedom and privacy.

2. The Rise of the Libertarian Quants

The libertarian quants were a subset of these early adopters who had a background in quantitative analysis, such as computer programming, mathematics, and finance. These individuals were often drawn to the potential for arbitrage and trading opportunities that existed in the new cryptocurrency market.

They were also attracted to the technical aspects of cryptocurrencies, such as the blockchain technology that underpins them. They saw the potential for blockchain technology to disrupt traditional financial systems and create a more decentralized and transparent financial system.

The libertarian quants were also interested in the potential for cryptocurrencies to provide an alternative to traditional government-backed currencies. They believed that cryptocurrencies could serve as a form of decentralized currency that was not subject to the whims of governments or central banks.

3. Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was signed into law in 2010 in response to the 2008 financial crisis, which was caused in part by risky behavior by large banks that were deemed “too big to fail.” The Act was intended to address some of the issues that contributed to the crisis by imposing new regulations on the financial industry and creating new oversight bodies.

One of the key provisions of the Dodd-Frank Act was the creation of the Financial Stability Oversight Council (FSOC), which is tasked with identifying and monitoring risks to the financial system. The Act also created the Consumer Financial Protection Bureau (CFPB), which is responsible for protecting consumers from abusive financial practices.

However, some critics of the Dodd-Frank Act argue that the regulations imposed by the law have made it much more difficult for new banks to be formed. The regulations are seen as particularly burdensome for smaller banks, which may not have the resources to comply with them.

According to Marc Andreessen, the number of new banks that have been started since Dodd-Frank is zero.

Early adopters, including the startup entrepreneurs who would have started their own bank, were instead drawn to the potential of cryptocurrencies like Bitcoin to disrupt traditional financial systems and provide an alternative to government-backed currencies.

While the Act was intended to address the issues that led to the financial crisis, it has also had unintended consequences, highlighting the complex nature of financial regulation and the challenges of balancing stability and innovation in the financial sector.

4. Silk Road

Silk Road was a harbinger of the cryptocurrency revolution, paving the way for a new era of anonymous and decentralized financial systems.

Founded by Dread Pirate Roberts — who would later be revealed as Ross Ulbricht — the promise of Silk Road was also essentially libertarian. The proposition was that anything could be traded, regardless of whether the state viewed it as legal.

Silk Road played a significant role in the emerging cryptocurrency industry, particularly in the early years of Bitcoin’s development. The platform was a dark web marketplace that facilitated the buying and selling of illegal drugs, fake IDs, and other illicit goods using Bitcoin as the primary form of payment.

For many people, Silk Road provided the first real use case for Bitcoin outside of traditional financial transactions. It demonstrated the potential for Bitcoin to be used for anonymous and untraceable transactions, which made it an attractive option for people engaged in illicit activities.

Silk Road also played a crucial role in the development of early Bitcoin communities. The platform was home to a vibrant community of users who shared information and tips on using Bitcoin and helped to drive the adoption of the cryptocurrency among a wider audience.

However, the closure of the Silk Road in 2013 was a significant turning point for Bitcoin and the wider cryptocurrency industry. The seizure of the platform by the US government highlighted the risks and challenges associated with using Bitcoin for illegal activities. It also underscored the need for better security and custodial practices in the cryptocurrency industry, as many people lost significant amounts of Bitcoin that had been held in Silk Road’s escrow accounts.

Despite these challenges, Silk Road played an important role in the emergence of the cryptocurrency industry. It helped to establish Bitcoin as a viable alternative to traditional currency for anonymous transactions and helped to drive the adoption of the cryptocurrency among a wider audience.

5. Launching Ethereum

In 2015, Vitalik Buterin, a Canadian-Russian programmer, along with a team of cutting-edge crypto developers, launched Ethereum to help expand the capabilities of the emerging crypto industry.

Ethereum is a cryptocurrency that was designed to be more than just a digital currency. It is a decentralized platform that allows developers to build and deploy decentralized applications using smart contracts. Smart contracts are self-executing programs that run on the Ethereum blockchain and allow for creating complex applications that can automate many different types of transactions.

Ethereum reinforced the need for cryptocurrency in several ways. Firstly, it demonstrated the potential for blockchain technology to be used for more than just financial transactions. While Bitcoin was originally designed as a digital currency, Ethereum showed that blockchain could be used as a platform for building all kinds of decentralized applications, from supply chain management to voting systems.

Secondly, Ethereum helped to make cryptocurrency more accessible to non-technical users. The smart contract functionality of Ethereum made it possible for developers to build user-friendly applications that could be accessed and used by anyone with an internet connection.
Finally, Ethereum helped to promote the values of decentralization and transparency that are central to the cryptocurrency movement. By creating a platform that was free from centralized control and censorship, Ethereum demonstrated the potential for blockchain to create a more open and democratic world.

Final Thoughts

The emergence of cryptocurrencies has been driven by a desire for a more open, decentralized, and transparent financial system. The financial crisis of 2008, the rise of the libertarian quants, the introduction of the Dodd-Frank Act, the launch of Ethereum, and the closure of Silk Road were all significant events that cemented the need for cryptocurrencies.

While the cryptocurrency industry has faced numerous challenges and setbacks, it will continue to grow and evolve. As the industry continues to mature, it is likely to become an increasingly important part of the global financial system, offering new opportunities and challenges for businesses, governments, and individuals alike.

Gone are the days of static non-fungible tokens, often referred to as simple NFTs.

Next-generation use cases for NFTs are granting these blockchain-secured digital assets far more utility … and very soon, they’ll be more prevalent in our lives than ever before.

We’ve spent a lot of time addressing NFTs in recent months, documenting their impact on the world of collectibles and art, for example, that allow emerging artists to cash in quicker on their talents. NFTs have also been used to tokenize other types of real property to preserve their characteristics in an immutable format.

Now, though, in addition to “static” NFTs, we have “dynamic” NFTs or dNFTs, a new generation of NFTs that can be modified by the owner and/or updated and enhanced by means of built-in smart contracts that describe when and how the dNFT’s attributes and metadata can be automatically modified and updated to reflect new, external data and conditions.

It should be noted that given the channels for automatic or owner-initiated updates to dNFTs, they’re not expected to be as secure as static NFTs – at least initially. But let’s face it, crypto safety in the NFT space is never 100%, given human error and the presence of determined and extremely skilled hackers.

In most cases, and to preserve the integrity of the dNFT, the automated changes are based on verifiable events that are then incorporated into the metadata of the dNFT via an “oracle,” a smart, blockchain-stored contract that links the on-chain code with verifiable off-chain data.

The Upside Appeal of Dynamic NFTs

Why would anyone want to change an NFT?

Incorporating new information and data into an NFT can keep it relevant or even increase its value and utility.

Certain assets will never and probably shouldn’t ever be changed, just like adding a more expansive smile to the actual Mona Lisa would be ill-advised. And it can be argued, for example, that a person’s tokenized military record, once they’ve retired or have left the service, shouldn’t be subject to editing or updating.

But for many other categories of digital assets, and there are more of them coming into view every day, it makes sense to objectively improve certain underlying unique characteristics over time to reflect some new situation, as we’ll see in some of the future use cases suggested below.

Use Cases for dNFTs in Your World

As NFTs are tokenized in more and more settings, the value of updating them is clear. We’ve emerged from NFTs strictly being used in the context of collectibles and preservation to their application in a dynamic, changing world.

Art World

Certain aspects of an art piece can be improved without altering the primary image. Think about an NFT with the portrait of some famous person like Abraham Lincoln or Wolfgang Mozart that incorporates a background that’s constantly changing to reflect the varying seasons. Also, an artist who’s sold their NFT can modify their original work with the advanced permission of the owner via a smart contract.

Real Estate

We’ll soon have dynamic NFTs for a residential structure that incrementally records all the repairs and physical changes made to the building in real time, along with periodic increases in assessment values, all driven by smart contracts and/or the owner’s input.

When it’s time to sell the house, all of that information will be documented in one place, so the negotiations will be based on better, more complete information. The sale process can be shrunk down and will happen much quicker, possibly even bypassing title searches and assessments. New ownership of the property’s dNFT will go hand in hand with new ownership of the property itself.

Digital Identity

Passports, visas, and driver’s licenses will be digitized with a dNFT, and the personal information will be routinely updated. Our digital identity will evolve with us. As a condition for digitizing their documents as a dNFT, an issuing authority will include an immutable smart contract connected to the token that will record any sanctions or restrictions imposed by a governing authority.

Gaming

Within an augmented-reality game, as a participant reaches new levels, gains new skills, or augments their persona, these changes will be instantly recorded within the player’s dNFT based on a smart contract embedded in the game.

Sports cards

Athletes rack up accomplishments throughout their careers and even after they retire. While there may be value in preserving a static, non-changing “rookie year” NFT card, dNFT versions will continually update the player’s stats, awards, best plays, and other accomplishments earned in subsequent years.

Authors

One way authors can keep their readers on the edge of their seats and increase the writer’s exposure will be to release a book one chapter at a time through their evolving, body-of-work dNFT. They’ll offer and release their sequels through that dNFT as well.

Collaborative projects

From blueprints to management plans, dNFTs will offer a secure space for collaboration, incorporating authorized input from stakeholders as well as automated input added via secure contracts related to costs and budgets, for example.

Clearly, dNFTs won’t simply be an incremental improvement on traditional NFTs. They’ll be a game changer.

Very few things in life remain the same. Those that do can be captured and held securely in a static NFT.

But in the future, nearly all manifestations of change in our lives and in the world around us will be recorded in dNFTs, creating not only an evergreen repository of information but a history of those changes as well.

In 2015, I wrote a column, “Going Beyond Micro-Payments to Nano-Payments” where I talked through some of the possible uses for tiny micropayments far smaller than anything possible today. Like others, I assumed blockchain technology would be the key to getting the transaction costs low enough to support micropayments as low as fractions of a penny.

Micropayments are indeed on the horizon but we’re getting there with a slightly different route than many envisioned. The need is more evident than ever, though.

How often have you clicked a link to an article in a premier journal that seemed like it could be interesting, only to be informed that you’ve run out of “free views” of the articles from that journal? Your only option to read the piece is to agree to their trial offer. If it’s not worth the time, hassle, or future subscription costs, you’ll move on.

But a one-time, digital micropayment of 3 cents, processed through a Blockchain crypto account could give you access to that article and compensate the publisher 2 cents, with 1 cent covering the transaction fee. A win-win solution.

The Cost of Transactions

Early cryptocurrency enthusiasts were optimistic about the possibility of making these kinds of near-zero-cost transactions using the Bitcoin blockchain. They were confident that blockchain technology would not only enable secure transactions but would allow for cost-effective processing of extremely small-value transactions – micropayments – for purchasing goods and services in minute amounts.

These early micropayment enthusiasts were almost right. We’re not there yet, though, because the cost of a Bitcoin transaction is now almost $2.00, although it’s been as low as 5 cents in the recent past.

Continuing with that example from above, no publisher, of course, will pay $2 to collect 2 cents, so for now, they’ll continue to lure us with introductory offers they’re hoping will transition us into long-term, full-price subscribers. News services will continue to bundle the offerings of multiple publishers and charge a monthly fee that’s anything but “micro.”

So, if high blockchain transaction fees are precluding micropayments, what’s the alternative? As it turns out, some newer distributed ledger technologies have far lower transaction fees and could even get us to the point of fee-less transactions.

How could that change our lives? Here are just a few examples.

Access to Content

This kind of micropayment system will give us each the opportunity to purchase small experiences and items we wouldn’t otherwise be able to buy – a single journal article for example.

On the other hand, it might also require us to buy something that previously we had access to for free – a limited number of articles in Fortune for example or access to video clips we currently only “purchase” with our time as we wait for the chance to bypass the commercial that precedes it.

But soon we’ll have the opportunity to have ad-free, full access, online experiences no matter what newspaper or journal we click on. Research, browsing, learning, and growing will be easier than ever.

In fact, there’ll be so many content micropayments in this area of our daily lives that the situation could become a nuisance if it’s not handled well. For some, the time cost of authorizing numerous micropayments could outweigh the value as we endlessly click “Approve.” To get around this, we’ll enable broad levels of approvals, so our content consumption can be seamless with no interruptions – either for ads or for authorizations.

and read … not and read. It makes a difference

Incentivizing Ethics and Morality

As a society, we’ve become very focused on punishing people for bad behavior, but we’re still pretty inept at incentivizing them for doing something good. Unfortunately, peer pressure and societal norms aren’t enough to keep us in line, let alone convince us to be noble and gracious. But if we knew we were receiving micropayments for doing the right thing, we might go about our days in a slightly different manner.

Lots of details would need to be worked out, of course. Who would define good behavior and the amount of cryptocurrency rewarded for that act? How would the behavior be monitored if it’s not happening online? Who would assign the reward or penalty for each deed?

In a metaverse, every step we take and each encounter we have can be monitored and logged to be rewarded or punished with a micropayment receipt or deduction.

But I don’t see people accepting that kind of intrusion in the physical world. What kind of Big Brother system would we have to have that records each time we opened a door for someone, wished a stranger “Good Morning,” bagged our own groceries, or took the time to perform any other social nicety that would make someone else’s day a little better?

Initially, then, we would need to limit this micropayment reward system to things that are verifiable by a third party, ideally online (e.g., voting, filing a tax return, making a charitable contribution, earning an “A,” etc.).

But that’s a good starting point.

Turning Consumers into Prosumers

A “prosumer” is a person who both consumes and produces items. Outside of our jobs, we all produce items of value in our everyday lives – but few of us are paid or somehow rewarded for them.

• Marketers capture our browsing and clicking records to better understand our preferences and commercial trends in general.
• Sensor data from smart cars provides information to city planners and others about traffic and road conditions.
• Data that are generated by the Internet of Things (IoT) appliances and systems in our homes is used by manufacturers to design and make even better IoT-enabled appliances and systems.
• Our health data has tremendous value that’s not being used by anyone except our own caregivers, even though it could be very useful for medical researchers.

If someone has nothing to hide in these and similar areas, why shouldn’t they have the option to sell this self-generated data to those who want it and can use it for good or at least for no harm? The value these institutions place on each separate small glimpse into our lives is minuscule, to be sure, but the value of the sum of those glimpses is potentially large.

It’s a perfect job for a micropayment system.

What if we paid a tenth of a cent for every “like” given to a post on social media, and we receive a similar tenth of a send for when someone “liked” one of our posts?

What if we charged the public a tenth of a cent for every email we received and paid a tenth of a cent for every email we sent out? The number of spam emails we received would drop off precipitously.

The number and types of startup businesses that would be created would be breathtaking!

The Bottom Line

A macro system of micropayments will be transformational to our world.

It will give businesses better information to evaluate their goods and services. It will provide more diverse data for health researchers. It will better reward artists and other content producers. It will empower each of us to have the option to benefit from the value we generate automatically in the course of our everyday lives. And we’ll all have the opportunity to be better informed and hopefully even newly exposed to ideas and thoughts we wouldn’t otherwise encounter.

The war in Ukraine hasn’t concluded as of this writing, and victory for either side has yet to be determined. But regardless of how this tragedy turns out, to the surprise of many people worldwide, the bulk of Russia’s ground-based military was stopped in its tracks.
Who would have thought the people and army of this small democratic-leaning nation could stand in the way of the vaunted army of an authoritarian regime like Russia?

The Authoritarian Advantage

It’s easy to assume that a totalitarian government can accomplish whatever it wants, given the nearly absolute power maintained by its singular leader and surrounding advisors. After all, these leaders have the benefit of:

• No viable opposing political parties.
• No legitimate debate on options within the executive branch.
• No, truly independent, empowered, non-executive branches of government.

In contrast, democratic governments are messy and inefficient. Their executive leaders face:

• Competing political factions and intense politicking.
• Aggressive media watchdogs.
• Free speech and enough diverse media and communication channels to meet and reinforce the mindset of any citizen.
• Checks and balances between branches of governments and levels of governments (e.g., state vs. federal).

One would wonder how anything of substance ever gets done in a democratic, representative government in the normal course of business.

Shades of Gray

With the caveat that there are many kinds of democracy (direct, representative, etc.) and variations with regard to autocratic systems, the two approaches lie on opposite ends of a governance spectrum.

In 2020, The Democracy Index, sponsored and compiled by the Economist Intelligence Unit, graded 167 countries based on 60 different indicators, assigning each one a ranking between 1 (strongly authoritarian) and 10 (strongly democratic).

The top five scores went to Norway, Iceland, Sweden, New Zealand, and Finland. Many Western European countries ranked quite high with 8’s and 9’s.
The U.S. had a score of 7.92, ranking 22nd in the world, which placed it in the second-highest tier, labeled as a “Flawed Democracy.” At the other extreme, 57 countries found themselves in the bottom tier, “Authoritarian Regime,” anchored by North Korea, with a score of 1.08. China was 17th from the bottom with a score of 2.27, and Russia was 44th from the bottom scoring 3.31.

One can quibble with the criteria and relative scoring, but the principle is certainly true that there’s a continuum, a democracy scale when it comes to democracy and authoritarianism.

Moving the Needle on the Democracy Scale

It’s human nature to want what you can’t have – that’s true for people in authoritarian countries as well as in democratic countries. It’s just that in the two situations, the goals and dreams are quite different. The collective effort to attain those goals and dreams ultimately propels countries to move along that democracy scale.

The movements stem from citizen exposure to ideas and an empowerment to express those ideas – in all types of countries. As I’ll explain further below, the enhancement of those communication opportunities can have a different and even opposite effect when it comes to moving the needle, depending on whether the country is a 7.92 (U.S.) or a 2.27 (Russia) on the democracy scale.

In autocratic countries, citizens increasingly want more choices in their lives along with access to economic and cultural pleasures. Dictators used to be able to keep this in check with a “What they don’t know, they won’t know they want…” approach. These citizens increasingly want a real say in government policies at all levels and the right to express those viewpoints. And as they strive for better lives and access to governance, they’re moving their countries UP the democracy scale. Greater access to a variety of communication technologies, including social media, is helping to make that happen.

In democratic countries, citizens, for the most part, already have the freedom to make choices regarding lifestyles. They enjoy representative-democratic governments that funnel their views up and into the decision-making system. With those fundamental rights in hand, what do these people want more of these days? They want “Their Side” to win and their policies to prevail. As they strive for this dominance, they’re moving their countries DOWN the democracy scale toward a more autocratic, less tolerant situation. Greater access to a variety of communication technologies, including social media, is helping to make that happen.

The Efficiencies of Autocracies

Human rights, civil liberties, and free and fair election concerns aside, as a futurist, it’s hard not to notice that some of the most significant manifestations of the future are appearing in authoritarian countries like China.

For example, since 2008, China has built roughly 40,000 kilometers of high-speed rail, connecting cities across the country. By 2035, the network will extend to 70,000 kilometers. Not content with that, the country is already preparing to transition to magnetic levitation (maglev) trains.

By comparison, initial high-speed rail bonding for a Los Angeles to San Francisco line was approved by California voters in 2008. We may see 107 miles of that completed by 2030, with neither end touching one of those ultimate terminus cities.

We all know from history that dictators know how to make the trains run on time. And for some people, that’s good enough. But that number is dwindling, as we’ll describe below.

The Achilles Heel(s) of Autocracies

The popular conception that communist/socialist autocracies always lead to squalor and a subsistence standard of life has been disabused somewhat by China. That country’s goal of “common prosperity” – essentially promoting high-performing industries, accompanied by a system to equalize wealth and standing through redistribution and coercion – has generated a decent standard of living for many citizens. But a slightly enlightened autocracy is still an autocracy, and it is destined to be undermined by the same primary natural forces.

The first is poor decision-making. Russia’s recent military fiasco seems to be evidence of insular decision-making by elites striving to maintain their position by not offering unpopular viewpoints. I see the same danger for China when approved videos show 100% of the National People’s Congress members applauding rhythmically when President Xi Jinping approaches the dais to address that body. Absolute power distorts decision-making absolutely and similar videos from North Korea.

The second threat to autocracies is the underlying natural hunger for humans to make the most of their time on earth and be free to pursue their best possible outcome in terms of success and happiness. As David Brooks pointed out recently, “Autocracies restrict freedom for the sake of order.” This leads to a brain drain as talent tends to migrate from authoritarian countries to democratic ones, a dynamic that dooms the former in the long run.
At the same time, the U.S. has demonstrated an overly aggressive assault on crime, asserting criminal justice control over the largest percentage of society in all history. This once again demonstrates that democracies may be better but are far from perfect.

And third, autocracies will ultimately decline because of the increasing presence of open, world-wide communications. Voice of America and others, along with social media, will inevitably pierce whatever bubbles autocratic governments try to maintain to keep their citizens compliant and undistracted. More on this below.

Democracy and Social Media

Communication technology is one of the most fundamental influencers in our lives these days. With its power for good and bad, what’s the logical future endgame for governments? Again, where you end up depends on where you start.

Despite autocratic government censorship efforts, citizens of authoritarian countries will find ways to learn the truth about their governments’ actions and how much better their lives could be. Social media will be key, just as it was in the wide dissemination of concerns about the dictatorial abuses of autocratic governments in the Middle East and Northern Africa during the Arab Spring popular revolts in 2011.

In some countries, these social-media-driven uprisings ultimately led to greater democracy. In others, the effort couldn’t be sustained and may have caused even more repression. But in the long run, even these “victorious” autocrats have been put on notice that the ice under their feet is just a little bit thinner.

The long-term impact of social media is less clear in democratic countries, where social media is making speech “cheap.” Social media bypasses established institutions that tend to moderate and referee debate. Unmediated opinions don’t need to be based on reasoning, logic, or facts. “Experts” are crowned based on readership and their number of followers, not necessarily their experience or credentials. Facts are in the eye of the beholder.

And when cheap speech undermines the pillars that democracy rests on – for example, open and fair elections, an individual’s rights to pursue wealth and happiness, freedom of expression, and losers’ consent for the winner to govern – a country can drop down a point or two in the democracy scale.

In the short term, too many citizens of democratic countries will continue to tune in only to the social media forums and echo chambers that reinforce and prove Their Side. But as those settings become more and more outrageously divisive, people will begin to tune out – either from boredom or a recognition of the irrationality of the messaging and their tiredness of the situation.

In retrospect, covid was a huge anomaly, forcing us all through a period of intense introspection, and most people were less than ok with their assessment. This resulted in a series of anger-frustration-and-denial moments that may have long-term implications!

It’s still too early to tell if the cacophony of cheap speech noise will cancel out, and people will drift back toward the center, closer to realizing that it’s okay to have divergent opinions.

Democracy in the Metaverse

The metaverse offers the opportunity of creating a democracy as we’ve never seen before. After all, it’s founded on two very democratic institutions – the internet (access to all) and blockchain (transparency and a single source of truth).

In its purest form, democracy calls for consent (i.e., a vote) of the people on every policy and leadership issue. That’s proven unworkable in the physical world and will probably be in the metaverse as well. But metaverse elections regarding major issues and leadership spots will be simple, easy, and unchallengeable.

Yet, it‘s still too early to tell if there will be just one metaverse of 10,000 competing metaverses. And while I hold little hope for any kind of utopia, there may indeed be better ways of resolving conflict, and that alone could be a major accomplishment!

We’re starting to see metaverse real estate companies and developers coming out of the meta-woodwork, but everyone seems to have that lingering question in the back of their mind: Is this a good investment? And how much will it be worth ten years from now?

Before we get to those questions, let’s learn a little more about this buying opportunity.

Where is the Property?

Since there’s no single, unifying metaverse yet, there are multiple parallel virtual worlds, each with their own NFT parcels of land under development and ready for sale. The Sandbox and Decentraland are the primary two at this time. In these spaces and others, investment firms are buying up chunks of property and parceling it out for residential or commercial development. Transactions, of course, are made using the preferred cryptocurrency of that platform.

The real estate markets in these worlds function pretty much the same as in the physical world. Space can be owner-occupied or leased. Owners can improve their parcel with structures and features. We have zoning (and presumably neighborhood associations), along with retailer covenants and restrictions.

Metaverse real estate is currently a rich person’s game, but increasingly developers will democratize the movement and cater to average folks by offering micro-parcels because they need shoppers and concertgoers to hang out in this world.

The Economics

Here’s where things get sticky though. As one metaverse expert points out, the issue of scarcity doesn’t exist when it comes to land on the metaverse. Virtual worlds can be unlimited in size, Louis B. Rosenberg explains, since the world can be expanded and have multiple layers – that means potentially multiple buildings on the same plot of land with different owners.

As any Econ 101 student knows, price is set by supply and demand, so how can a metaverse property price be established when supply is unlimited?

How is Meta Land Valued?

In spite of those shaky economics, metaverse parcel purchases totaled roughly $500 million in 2021, and some say that amount will double in 2022. I think it will triple at least, given that new platforms keep popping up and celebrities are helping fuel the craze.

Supply and demand aside, it’s commonly accepted that real estate value – including the land and structural improvements – is a function of location, size, and utility/usability.

The first two seem applicable in the metaverse, although old habits are hard to break when it comes to location. Living next to a celebrity or a high-rent shopping district will strictly be for bragging rights since getting to the shopping center from any location in the metaverse takes the same amount of time.

And while it’s tempting to say that utility won’t be an important pricing factor since we won’t actually be visiting it in person, our avatars will be plodding around in virtual homes and hosting virtual dinner parties. And our avatars will want to shop at only the trendiest virtual shopping areas and attend shows at breathtaking virtual venues.

Thus, property values in the metaverse will reflect all three of those pricing elements, plus one additional one. Just like in the physical world, and maybe even more so in the metaverse, re-salability will be critical. Property turnover will likely be faster and more frequent in the metaverse since deeds are recorded in the blockchain as NFTs and quite easy to transfer.

So, while we will see metaverse real estate agents, we probably won’t see title companies.

The BIG RISK

Market fluctuations in the metaverse are to be expected, just as with cryptocurrencies and nearly any other asset. But the biggest risk with metaverse real estate is that the specific platform you’ve invested in fails completely.

After all, I see us eventually zeroing on one capital-M Metaverse. Right now, though, there are many, and even if we settle on two or three, that still means more will go by the wayside than will survive. These platforms will go blank along with all the property and assets.

Even in the worst real estate cycles in the physical world, it’s hard to imagine a parcel of property that loses all of its value forever. The equivalent situation would be if a beachfront property sunk into the permanent ocean bed or if the Earth were destroyed along with all possible investors.

Who’s Going to Buy?

I can see four types of people who will buy a parcel of property in the metaverse, whether for residential or commercial development.

Advocates

These are the true believers in the metaverse who are ready to build their personal space or their company because it’s where they want to be, and it’s where they believe most everyone else will be too. They live through their avatars and want them to be comfortable and successful.

Marketers

These brand owners want to market and sell their NFTs and other virtual goods or services. They also see the opportunity to strategically place their ads on the sides of buildings and popup billboards.

Hobbyists

Just like gaming is an addictive element of the metaverse, so too will be real estate investing. Buying, swapping, improving, bragging, one-upping … to these metaverse real estate enthusiasts, it’s a game of its own kind.

Speculators

I divide this group into three subgroups. The first is the cynical devotees of the “greater fool theory,” which holds that an investor is willing to pay “X” for an item as long as they’re convinced they’ll be able to sell it for “X+1” to the next person. Second, speculators also include less nefarious long-term investors looking for an alternative bull market option. Finally, other speculators are “fix and flippers” who are skilled at purchasing properties, furbishing them inside and out, and then reselling them to advocates, marketers, and hobbyists who aren’t quite as adept in this space and want a move-in ready property.

Final Word

I’m a futurist, not an investment coach. So please don’t take investment advice from me. Period.

Having said that, and again speaking as a futurist, we’re nearing a tipping point. I think there’s a very good chance the metaverse will be around for a long time and that over time, it will mimic nearly all the good and bad elements of our physical world.

That’s true for real estate in the metaverse too. There will be fluctuations and even bubbles. Ten years from now, any investor’s property might be worth 0 or else 100X what they bought it for. You might be the former, you might be the latter.

New metaverse platforms will emerge and many more will die away, along with all of their meta mansions, shopping centers, and convention centers. But the metaverse real estate market overall will consolidate and survive over time and property owners can too if they can avoid all those nasty pitfalls along the way.

What will you be able to do in the Metaverse that you can’t do in real life? Not much, according to metaverse promoters. And as can be expected these days, there are plenty of people who would like to push the boundaries.

Given the perceived anonymity of the metaverse, it’s understandable that some people are eager to check their inhibitions at the door and engage with others and their surroundings in ways they wouldn’t in the physical universe. It’s not necessarily a bad thing when introverts feel comfortable enough in this alternate reality to open up another side of themselves, for example to be brave, assertive, sensitive, or heroic in ways that they can’t seem to manage in real life.

But, of course, lines can be crossed quite easily, and so far with few repercussions. Some inhibitions, either legally based, morality-grounded, or socially enforced are a good thing, and these checks are currently lacking in the metaverse.

And as the metaverse becomes more and more realistic, so will the trauma that participants experience from the sexual harassment, bullying, stalking, hate speech, exploitation, and assaults they are exposed to there.

The Wild West

We’re hearing more reports of bad behavior in the metaverse, people treating it as a lawless Wild West with no sheriff around to establish law and order.

And like the Wild West, crimes won’t always be the person-on-person, behavioral kind, but financial as well.

We should all remember that cryptocurrencies came of age as a means of payment for illicit activity in the Dark Web before becoming legitimate and mainstream. Similarly, cybercriminals themselves will increasingly emerge from the anonymity of the Dark Web and into the anonymity of the virtual meta-town to rob a (crypto) bank and otherwise swindle and con law-abiding citizens.

And what did citizens of Wild West towns resort to if there was no sheriff in town 150 years ago? Vigilantism, if they were able to get the upper hand. Not an ideal situation either then or now in the virtual world.

Utopia Meets Reality and Human Nature

While utopian thinkers like to promote the metaverse as an Eden-like experience and a place to get away from the problems of the real world, it’s more appropriate to go into this experience with your eyes wide open.

Human nature is human nature, and as such it’s imperfect in the best of us and downright evil in the worst of us. We shouldn’t be surprised to realize that as more and more participants journey within this cyberspace, it will evolve to match the real world. That means we’ll need to install the same kinds of limits for avatars that keep human beings in check – including the criminals, perverts, and vigilantes.

Naturally, the metaverse will begin to develop a series of parallel institutions for law enforcement along with the necessary legal/penal system. And the societal “we” will have to be convinced to embrace societal norms, perhaps as touted by thought leaders or metaverse religious leaders.

Metaverse Laws and Law Enforcement

The metaverse legal system will mirror the real-world legal system.

The Metaverse Code of Conduct

The first step in designing the necessary metaverse criminal justice system brings us back to our futurist topic from last week. We eventually will have a blockchain-enabled repository of laws and regulations for personal and commercial conduct in this virtual space. It will mirror in many ways the structure and content of laws in the real world since much of the real world is replicated in the metaverse.

Some aspects of the real world’s code could be discarded in the metaverse code. Others would have to be added. The idealized rules we identified last week for maintaining this code (sunsetting laws, making them readable at an 8th-grade level, etc.) would apply here too. Who would write the codes? Elected metaverse officials perhaps aided by metaverse citizen voting on the most critical matters.

Metaverse Law Enforcement

When it comes to cybercrimes related to NFTs and financial fraud, currently established real-world law enforcement agencies currently are adding new resources and skillsets to patrol this area of the virtual space. So far so good. This will shift, though, to sanctioned metaverse officers patrolling this space. They’ll be working their metaverse beats day and night, aided by artificial intelligence that helps ferret out anomalous behavior that requires further investigation.

Metaverse Courts

Here we need to make a distinction between metaverse trials that are essentially virtual trials of cases from the real world and metaverse trials held in the comprehensive metaverse for crimes committed in cyberspace. The former is an extension of the remote elements of recent trials during the pandemic.

The latter, though, will be an extension of, ironically, one of the first criminal courts in the Dark Web. This court was actually designed by cybercriminals to adjudicate cyber cases between cybercriminals. While not a metaverse activity per se, this kind of small-claims adjudication system brought complaints between criminals to an impartial judge who would deliver a ruling and establish fines or compensation.

This approach could serve as the basis of addressing certain types of civil matters in the metaverse – an NFT ownership case, for example, between two relatively well-intentioned parties.

But criminals, stalkers, thieves, and assailants would not be likely to agree to this kind of arbitration. Thus, we’ll have elected avatar judges and randomly selected juries of avatar peers to address avatar criminal behavior.

Lockups in the Metaverse

Punishing the guilty bad actors in the metaverse could be the trickiest element of the future metaverse legal system. Sure, we can detect and delete an avatar and even try to identify the person behind it. But our goal will have to be to sanction that person behind the avatar in hopes that their future avatars behave better.

I don’t see a way to prevent that person, though, from placing new avatars in the metaverse, using new usernames, credentials, networks, and hardware. And until we figure this out, we’ll likely resort to a whack-a-mole approach to punishing bad avatar-actors, deleting them as fast as they emerge.

Meet the New ‘’Verse, Same as the Old Verse’

Good conduct. Rules. Consequences. Structure. Punishment. Yes, this all makes the metaverse sound a bit boring and maybe, for some, too much like the real universe from which they’re trying to escape. But if we don’t have this kind of empowered metaverse law enforcement and judicial system, the good citizens will get out of metaverse Dodge and leave it to the marauders and horse thieves!

By my count, the U.S. currently has more laws than any country at any time in history. Well, that’s not true – the part about “my count.” No one could possibly count all the laws on the books across the U.S.

It’s not surprising, then, that the U.S. has far more prisoners than any country at any time in history. Are people in the U.S. bigger lawbreakers than those in other countries, or do we just provide more laws to break?

In 2015 I wrote this column where I proposed the following four-step approach to correcting the situation. Essentially, “Four Laws for Managing the Laws”:

1. Public Access Requirement: All laws must be posted in one central online location. Any laws not posted on this website will be deemed unenforceable.
2. Sunsetting Laws: Any laws that have not been applied or enforced in the past 20 years become unenforceable and must be removed from the list.
3. Simplification: All laws must be written at an 8th-grade comprehension level. No new laws can go into effect, or current laws enforced until they’re certified to have reached this standard.
4. Code of Government Ethics: No governmental entity shall be allowed to directly profit from the enforcement of its own laws. After all, whenever there’s a direct profit motive that links enactment with enforcement, the nature of government changes, and our humanity becomes compromised.

How to make this transition is another matter. When I wrote the column in 2015 it was clear that this would require a technology solution – massive, computerized databases along with personal apps and AI that could steer every citizen down the straight and narrow. Finally, “ignorance of the law” would truly not be an excuse.

Public Access in the form of a Wikipedia for all the Laws

What better way to accomplish items 1-3 than with a thorough AI review and scrub of current laws and then AI management of the process going forward? While the tech world seems to be focused on AI bias in most AI-based service offerings, the biases in our human-based systems are running rampant.

Since any government entity will be loath to take on this project, I predict a judicial reform group or some other entity will develop an AI program that will assemble and combine our federal, state, and local codes into one single website – the first step noted above. This will be like a Wikipedia for all the laws, searchable and complete for all federal, state, and local laws.

With that in place and with all of the public scrutiny and site perusals that will follow, it’s just a matter of time until people demand that governments adopt imperatives 2, 3, and 4 as follows.

Integrating the Legal AI algorithm with records from all of our court systems will allow the system to identify archaic laws that haven’t been violated or enforced in 20 years.

AI editing is not ideal, as any copywriter will tell you, but with the right coaching and continual learning, it won’t be long until the Legal AI algorithm will be able to translate the most obtuse legalese into an understandable 8th-grade version.

The AI-based continual review of this website will also be able to identify the laws on the books that are egregiously self-serving and document all the cases. With all this ammunition in place, a special task force can be assembled and empowered to not only shine a light on these abuses but also devise a strategy for correcting the underlying ethical violations.

The Art of Collective Compilations

We can see one example of how this kind of database could be implemented in a Wiki-type setting. The Center for Law, Science and Innovation at Arizona State University is compiling all of the so-called “soft laws”—principles, best practices, expectations, and recommendations – that have been published around the ethical use and governance of AI itself.

As it stands today, these standards are unenforceable, but the compilation will invariably help guide the activities of companies and individuals around the utilization of AI technology in the absence of government laws and regulations (i.e., “hard laws”) that can’t possibly keep up with the technology advances in this area.

While this wouldn’t be a complete compilation of all the laws, it would be a major compilation nonetheless, putting all of these disparate directives into one accessible database.

Blockchain Option is a Possibility

Since I put this issue out there seven years ago, the evolution of two technologies has convinced me that this reform is more attainable than ever.

This Legal Code would be a massive document, to put it mildly. It would likely be one of the biggest databases ever created unless we do some serious paring back and editing along the lines of imperatives 2 and 3 respectively. Still, it will be big.

Storage of this single source of all the laws might someday be done on a specially designed blockchain. Currently, the files are too large, but I have no doubt that innovators will overcome that scaling issue in the next few years.

The blockchain would be an ideal repository because documents stored on the blockchain are tamper-resistant, can be widely viewed and shared, and remain decentralized so they’re not subject to manipulation by one or more of today’s bad actors.

New, updated versions of our Legal Code could be uploaded daily or, in the future, instantaneously, as laws are adopted, changed, sunsetted, or repealed.

This is also a Job for the Metaverse

I proposed, somewhat tongue-in-cheek at the time, that if I could suggest a fifth imperative of this new legal system it would be that all new laws would be game-tested before they’re implemented.

We’ve got just the place for that – the metaverse, where situations in the “real world” can be replicated and experienced in this parallel, alternate reality.

Sending new laws for a test run in the metaverse is like throwing raw meat into a lion cage. If the new law has flaws, workarounds, or unintended consequences, virtual people and societies will quickly uncover them, and the laws can be modified or scrapped as appropriate.

And speaking of laws in the metaverse, should they parallel laws in the real world? Are there aspects of the metaverse that would require their own laws, legal system, and law enforcement?

That’s a subject for another time – in fact, next week!

The IRS has a lot on their hands right now. The backlog of tax returns they’re facing is staggering thanks to staffing shortages, the need to administer COVID stimulus payments over the past two years and child tax credits more recently, and the fact that 10% of personal returns are filed by paper – in many cases because there’s no other way for filers to submit certain required documentation.

I feel bad for IRS employees, I really do. It must be discouraging to always be behind the curve (or in front of the wave) since it seems that just when backlogs begin to decline, a new filing season opens up.

But their job isn’t going to get any easier in the future. We have an incredibly complicated tax code, and Congress keeps adding to it. That means more errors and more unanswered calls to IRS helplines. Not only that, but we’re on the verge of new reporting complications driven by cryptocurrency and the metaverse.

Taxes will never go away, and this is not about whether effective tax rates will or should go up or down.

Rather, it’s clear to me that in addition to short term fixes to address backlogs, filing errors, the lack of customer/taxpayer support, and the barriers to 100% electronic filing, we are seeing some overarching trends that will invariably cause the collapse of the U.S. income tax system, and by extension, a domino effect of similarly intrusive income tax codes around the globe.

Here are the four future challenges that I expect are keeping Charles Rettig, the current IRS Commissioner, up at night.

1. The Great Resignation

The current labor shortage is working against the IRS in several ways, but I’ll just mention a couple of them.

First, it’s driving up wages in the private sector. According to labor union officials that represent IRS employees, the agency is now competing with the hospitality industry for the same workers in many areas.

Second, it’s a stressful job and it only seems to be getting more stressful every year. And it wasn’t that appealing to begin with. On one hand employees have the stress of working with mountains of paper or dealing nonstop with angry taxpayers on the agency’s helplines. On the other hand, they have the option of doing food service, working for tips, or manning the front desk at a local hotel. It’s understandable that many workers would choose the latter. And IRS managers have little flexibility when it comes to adjusting wages to convince potential workers otherwise.

2. Privacy is taking Center Stage

Our income tax system is quite intrusive, requiring us to provide a lot of personal and financial information. It’s just a matter of time before a cyberattack exposes some or all of that data.

Concerned observers pointed out last year that the IRS technology systems that store records related to personal and business income filings “are the oldest major technology systems in the federal government.” Imagine the havoc and financial loss if international terrorist groups or state-sponsored hackers decided to go after IRS records.

I should point out, this information is necessarily not locked away at the IRS, either. According to these legal service websites, other entities can legally obtain it from the IRS: courts, state treasury authorities, third-party tax investigators, and the Social Security and Medicare programs can all request and receive a business’ or individual’s tax returns and related documents. That means even more data repositories for hackers to exploit.

What this means is that each of us will become increasingly susceptible to blackmail, extortion, ransomware attacks, slander, hacker fleecing, and fraud.

Taxpayers won’t put up with this kind of vulnerability for much longer. They’ll demand HIPPA-grade privacy systems for tax return information, wherever it’s stored.

But more importantly, they will be questioning the government’s need to have access to this kind of information in the first place.

3. The Mainstreaming of Cryptocurrency

Cryptocurrency can be used as an investment or a form of payment for services. Just like buying and selling a share of stock or being paid with dollars, De-Fi transactions are legally subject to capital gains taxation and income taxation, respectively.

That’s easier said than done and it won’t get any easier.

By nature, decentralized finance is confidential and protected by blockchain technology – not the kind of system that lends itself to compliant self-reporting. As more economic activity happens in that space, more of our transactions will become invisible. More pieces of the economy will be invisible and unverifiable. Transactions won’t occur with a single nation and of course, we won’t have a common, single worldwide cryptocurrency.

Due to all these complications, most countries will transition away from a traditional self-reporting income tax to some alternate scheme to collect their due. While countries may attempt to force cryptocurrencies to include systems for monitoring taxable events, crypto-leaders will resist with increasing levels of encryption to obscure actual transactions. It becomes a no-win battlefront for old-school politicians.

Any tax system that resides outside of a blockchain-based system will be vulnerable to hacker attacks. For example, a tax system based on a central bank digital currency (CBDC), i.e., a “digital dollar,” will still be susceptible to hackers since this currency is overseen by a public central bank, and tax records will still be stored on their or other government computers, a sure recipe for disaster

4. Income Tax Becomes Increasingly Murky in the Metaverse

Moving further still into the future, it would seem that virtually every aspect of our emerging Metaverse will be out of sync with our existing archaic income tax system.

When transactions occur and wealth accumulates in the Metaverse is it “real”? Absolutely. But what country did it happen in? Do citizens of a Metaverse community transition into a citizen of a traditional country? Major parts of our economy will be replicated in the Metaverse, so does it make sense to have a taxing authority in that space as well. I sincerely doubt traditional taxing authorities like the IRS are up to the task!

Simplify and Automate … Please!

Once the current, restrictive, return-based income tax system is eliminated, the speed of business will accelerate exponentially. Transactions will occur far faster, priorities will change, and we won’t need an accountant looking over every detail of our lives. Far too much of our economy is dedicated to calculating, monitoring, planning, paying, and avoiding taxes.

Future-proofing the tax system will be a major campaign issue in 2024 and beyond. That debate will include the need to immediately simplify and automate the process. For the IRS – or any new tax system that replaces it – to survive, our government will need to break the habit of automatically turning to the tax code when they want to reward, incentivize, or disincentivize certain behaviors and activities.

One hundred years from now, our descendants will look back at this era and shake their heads at how unnecessarily complex and confusing the IRS house of cards had become. Hopefully, our leaders will transform the system before it collapses under the weight of its own complexity.

A few years ago, I wrote a column titled, “How Much are the VR Broadcasting Rights Worth for NFL Football?” I described how in the near future we would safely attach several cameras around players’ football helmets, and through virtual reality (VR), viewers could immerse themselves into the action those players experience in conjunction with visual perspectives from around the stadium. With some haptic feedback suits, they would also be able to “feel” the action on the field.

In fact, NFL teams are now using helmet cams in practices and warmups but not during a regular season game. The NFL also occasionally arranges for the camera hat vantage point of officiating team members – especially the back and field judges who face the action from the defensive side of the ball and the umpire who watches the play from the quarterback’s perspective.

However, it’s just a matter of time until we have player helmet-cams being used in regular and post-season NFL game broadcasts. Over the last few decades, the NFL game viewing experience has steadily improved with instant replay, color programming, mics spread across the stadium, multiple camera views, and real-time stats. Soon you will be able to add many other user-enhancing VR features to this list.

The Limits of VR

Much of the fun of watching football games, or other sporting events, concerts, etc. – whether on television or in person – is the social aspect of the experience.

Traditional VR technology tends to isolate the viewer from people in the rest of the viewing location.

Sure, viewers and their friends can all wear the same devices and possibly watch the action from the same perspectives. They can talk to each other out of the sides of their mouth as they view the Hail Mary pass or game-saving tackle (“Oh man, did you SEE that!), but everyone remains locked into their own view and their own micro experiences.

Yes, these VR NFL fans are still in the real world, and yes, they’re looking at vastly new perspectives of the real world.

Another World Altogether

In contrast, how about groups of friends meeting at the stadium – in the metaverse – where they’re able to not only watch the game but engage with each other, exchange high-fives and razz the fans of the opposing team sitting behind them?

This kind of emerging experience takes VR to a new level. There’s a big difference between interacting in a single-viewer experience (traditional VR) and viewing it virtually as a group in the metaverse – with all the benefits of the point-of-view technology that allows for a much more immersive viewing experience of the event itself.

Basketball First

Meta, formerly known as Facebook, is already working with the NBA to broadcast NBA games for fans in the metaverse. Based on reported experiences of some users, the technology is in its infancy, but it demonstrates the promise of creating the kind of real-time, personalized, interpersonal experience of being at a game in the best possible seats and among the best possible company.

Future Implications

As this technology advances and finds its way into the NFL experience, we may see a decline in in-person attendance at average in-season games. Team owners who plan ahead, though, won’t be financially affected as they find unusual new ways to monetize the meta-viewing experience.

Competitive teams will still sell lots of actual, in-person $300+ tickets to die-hard fans, along with beers, nachos, and jerseys. But tens of thousands more fans will pay $50 for a meta-virtual second deck seat and proportionately more for seats closer to the field. At halftime, they might buy an official NFL-licensed NFT team jersey. These viewers may see ads during some of the breaks in the action, except for those viewers who bought premium skybox tickets or hold season tickets.

New Angles

And when it comes to camera angles, there will be very few limits. Every player, coach, and official will have a helmet/hat cam with an audio microphone, capturing pretty much everything except play-calling in the huddle. Technology will be available to immediately scrub the audio to preserve G-ratings upon request.

We’ll need to get used to player helmet camera views. A few years back when the World Football League was experimenting with helmet cams, after a particularly hard hit, a quarterback’s helmet was knocked off his head, falling to the ground, creating the visual impression for many that the player had been decapitated!

Beyond helmets, though, cameras will also be at both points of the football. Quarterbacks who don’t throw spirals could make this a pretty troubling viewpoint, although gyroscope technology will limit that effect somewhat.

Drones have been used by NFL teams in many ways – except for recording game action. Among the future metaverse football viewing options will be quiet drone cams programmed to follow plays from either the offensive or defensive perspective, key players, or even sideline activity.

“In-Person” vs Viewing Events

Metaverse inhabitants/avatars will have the option of experiencing an NFL game at the metaverse stadium or remotely at their meta-home or in another meta-viewing venue. Fans at the virtual stadium will likely key in on just a few game views to keep their experience more manageable and realistic.

Metaverse viewing parties will be a different story, though, as the presentation mixes these views in accordance with the wishes of the attendees. They’ll be able to watch a play live from the quarterback’s perspective and then the replay from the football cam as the ball soars to the receiver downfield and then from the back judge’s view as they call pass interference. Hosts will hire producers to adeptly switch back and forth among these views as details of the plays evolve both during and after the play.

We’ll see retired players hosting viewing parties in the metaverse, offering running commentary and answering questions. Yes, quite a bit like ESPN’s breakthrough Monday Night Football ManningCast!

Groups will rent out venues in the metaverse to watch the big game as a for-profit venture, to entertain clients, or raise funds for charity.

Adapting the Game to the Metaverse

To prevent all of the unique views and vantage points in a game from being wasted on metaverse fans, and much to the chagrin of NFL purists, the NFL will likely increase the time between plays from 40 to 60 seconds to allow for multiple vantage point replays. Official overseers “in New York” will also take advantage of these perspectives.

Other rule changes and practices will invariably be adopted to optimize the experience for metaverse viewers.

The Expanding Sports Metaverse

This combination of metaverse in-person/avatar viewing and the more expansive metaverse viewing party experiences can and will be replicated in most other sports. Faster-paced, less predictable sports will probably make the best use of it.

But even aficionados of the more gentile, predictable sports like horse racing and golf will want to be there in-person or in-avatar to see first-hand the event’s nuances, like saddling up and club selection as the action unfolds.

Four years ago, I analyzed the benefits, downsides, and challenges related to creating a citizenship rating system that would document a person’s value to society. And we further discussed the topic in a recent podcast interview with Shermon Cruz, Chair of the Association of Professional Futurists.

The idea was that since most human beings tend to be motivated by personalized, objective rankings (FICO scores for example), a universal system that “rewards” us for doing the right thing and “penalizes” us for doing harmful things could make the world a more positive place.

One of the challenges we identified at that time was that there wasn’t a reliable way to capture and account for every personal activity in order to assign it a positive or negative point value. Another limitation was that most governing bodies focused on penalizing people for bad or criminal behavior, but they didn’t have a way to incentivize people for good behavior.

The DAO Solution

Today’s DAOs (Decentralized Autonomous Organizations) provide a model for how we can overcome both of these challenges and accurately quantify a person’s positive citizenship value, so they can be rewarded … or negative citizenship value so they have an incentive to improve.

Much like Santa Claus, DAOs will be able to record if a person has been naughty or nice within that group. And the groups themselves will take the place of traditional governing bodies in many respects, since they replace geography-based communities with metaverse-oriented tribes.

DAO Communities and Governance

Today’s blockchain-enabled DAOs are formed around aspects of social life, community service, hobbies, gaming, investing, entertainment, art, and other areas of shared interests, including ownership of land in the metaverse. Increasingly, we’ll be relating to peers within our chosen DAOs and less with neighbors in the physical world.

Here’s where things get relevant to our topic. Typically, engaging in a DAO requires an upfront entry fee to buy governance tokens that give the user a vote regarding actions taken by the DAO. DAO members often can earn additional governance tokens for actions they take that provide value to their DAO community – participating in meetings, joining and engaging in workgroups, contributing content, and so on. These governance token rewards are tangible incentives for taking positive actions.

Presumably, a DAO could also be structured and maintained to levy fines for users who damage or undermine the venture.

Since a participant’s activities in these DAOs are recorded on the blockchain, there’s really no reason why user activities can’t be recorded in terms of reward or penalty points. For better or worse, our activity in these niches of the metaverse cannot be hidden or slide under the radar.

One Big DAO Metaverse

As the metaverse continues to replicate more and more areas of our physical world, we’ll see DAOs and pieces of the metaverse merge and link to encompass an even greater slice of this alternate life. Games are already seamlessly linking to cryptocurrency finances, for example.

Ultimately, there will be one system and one login to a comprehensive metaverse. And at that point, it will be very easy to assign participants a comprehensive citizenship score or valuation that reflects their contribution or harm within that new world.

DAO Citizenship

This kind of global metaverse will attract a wide range of people – from those who are mildly interested to those deeply involved in every nuance of a virtual world’s DAO.

Early on, some may poke around in it for 20 minutes a day. Others may be involved 10 hours a day. And many will lose themselves in that comprehensive DAO completely, right from the start. If a person wants to remain relevant, though it will be increasingly important that they engage in the metaverse – just as being off the IT grid today can make a person seemingly non-existent.

Our engagement in this metaverse will be monitored, and our true selves will become apparent. As with the physical world, we’ll see all types of personalities: hard workers, observers, innovators, leaders, followers, specialists, givers, takers, criminals, saboteurs, and anarchists.

Our personality types will be recorded and transparent, modified automatically over time as new activities are recorded. On a more immediate basis, our deeds will be rewarded or punished using a point system linked to cryptocurrency. The best metaverse citizens may even be able to make a decent living by being very, very good as resources are shifted to them and away from the penalized participants.

Criteria for Gamifying Citizenship

The standards for an ideal measurement of a person’s contributions to society require that the system it’s based on reflects current realities is objective and is all-knowing. A metaverse-based system meets those criteria.

As I noted in my 2018 column, citizenship algorithms should be adjusted over time, continually redefining what constitutes good and bad behavior based on current needs and situations. Similarly, the relative value of rewards and penalties should be regularly tweaked based on measured supply and demand. The metaverse, with its nearly infinite access to information, can accomplish all this and more.

With regard to the need for objective observation and the transparency of personal actions, blockchain technology will be the “Big Brain” behind the metaverse making all that possible. It will record participants’ activities and interactions and meter out the rankings and the rewards related to that activity.

Citizens of What?

One last thought on the future of citizenship. Blockchain, cryptocurrencies, and the Internet itself transcend government-set boundaries. Increasingly each of us will be “living” in one or more DAOs and then ultimately within a comprehensive metaverse.

Our actions in the metaverse will ultimately be as important in evaluating us as a person as anything we do in the physical world today. And the evaluations will be ruthless and not subject to manipulation or coercion, providing a strong incentive to do the right thing among our global peers.

That said, for those who cannot live up to the rigorous demands of an unforgiving rules-based system, we will likely see underground movements and even gorilla groups forming to fight back against the “tyranny of the DAO.”

No, there is no such thing as a perfect system.