#678: VR Blockchain Alliance on Identity, Currency, & Ownership

High Fidelity and Janus VR announced in March that they were creating a Virtual Reality Blockchain Alliance in order to determine the protocols for the global interoperability of VR.

I had a chance to talk to the co-founders of Janus VR and High Fidelity about how the immersive experience of VR will be driving innovations in blockchain technologies. Technologies like self-sovereign identity will enable the seamless transfer of embodied avatar representations from one VR world to the next.

High Fidelity is experimenting with High Fidelity Coin (HFC) that is a Stable Coin pegged to a consistent exchange rate through the creation of new currency in order to encourage the use of HFC as an actual in-world currency rather than a speculative asset as most cryptocurrencies are being used for.

We also talk about the importance of verifiable digital asset ownership, authorship, and attribution in the context of virtual worlds. The Virtual Reality Blockchain Alliance will also be working on collaborations between different virtual worlds in order to better define the different protocols that will lead towards the decentralized metaverse.


This is a listener-supported podcast through the Voices of VR Patreon.

Music: Fatality

Rough Transcript

[00:00:05.412] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to the Voices of VR podcast. So virtual reality and the blockchain are both exponential technologies, and they're on this convergence path in different ways. So part of my reason of going to the Decentralized Web Summit is that in order to really have a viable currency or seamless and fluid identities across multiple websites, a lot of the blockchain technologies are going to be able to facilitate very specific things within these immersive worlds. So back in GDC this year, iFidelity and JanusVR came together and they formed something called the Virtual Reality Blockchain Alliance. And this is a group that is trying to gather lots of other virtual reality companies that are interested in creating these interoperable protocols for the future of the decentralized and open metaverse. So at the VRTO that happened in June, I had a chance to sit down both with the co-founders of JanusVR as well as the co-founder and CEO of High Fidelity, Phil Prosdale, to talk about the Virtual Reality Blockchain Alliance and some of the major initiatives that they see that they're trying to bring together these levels of interoperability between their two virtual reality ecosystems. So that's what we're covering on today's episode of the Voices of VR podcast. So this interview with Philip, James, and Karen happened on Saturday, June 16th, 2018 at the VRTO conference in Toronto, Canada. So with that, let's go ahead and dive right in.

[00:01:37.809] Philip Rosedale: Hi, I'm Philip Rosedale. I'm the CEO of High Fidelity.

[00:01:41.952] James McRae: James McRae, CEO and co-founder of JanusVR.

[00:01:45.014] Karen Singh: Karan Singh, co-founder of JanusVR.

[00:01:47.767] Kent Bye: Great. So maybe you could tell me about how this virtual reality blockchain alliance came about.

[00:01:53.610] Philip Rosedale: Well, with High Fidelity we're trying to do something that's very open and from the very beginning we recognized that there's so much development going on so rapidly in VR right now, things like WebVR or specific capabilities that are remarkable that we've seen in different products. It struck us that across all these different systems there's going to be a need for shared things like your identity. And so, although we've been building an open source system that's designed to be pretty broad in its capabilities. We thought from the beginning, hey, wait a second, you know, there's going to be this Cambrian era where there's many, many, many different VR experiences. So we should also do something that lets all of us interoperate where appropriate around things like identity and objects. And then we were also starting to work on the blockchain, like for ourselves, you know, like how to make a currency work on a blockchain. But we thought, again, if your digital assets can go between virtual worlds and be stored on the blockchain, that's going to be better. So that's sort of the thinking that went behind VRBA, and then as we started to look at who was out there, naturally we saw people like Janice that it seemed like would be the ones who would want to participate in such a thing, and so, you know, we all started talking about it.

[00:03:01.337] James McRae: So how we got into it, I mean, from the beginning we've always been interested in, you know, bringing in content from wherever it was and bringing that all into, you know, a singular VR environment, and so we took this very web-based approach initially, but I guess we did this talk on transcending reality, but another thing we wanted to transcend was the borders between different virtual worlds. In the early days and stages of this, we were talking about, before it was called VRBA, I think we were playing with names like the virtual reality interoperability group, but a means by which Yeah, like the avatars, identities and assets could traverse one virtual world platform to another. So one kind of exciting goal of ours was actually to be able to see, for instance, you know, a client, you know, an end user, either starting with High Fidelity or starting with Janus, you know, being able to, you know, converse, interact, transact with, you know, the user of who's currently in the other application and, you know, ideally, you know, bridge those and other worlds together. So, you know, I think we're one of the first companies to come in, but it's definitely a far-reaching idea. And it includes, you know, many other companies in the space or, you know, approaches still to come. And if I could say a second point, I think the idea of using blockchain, which has become a very fashionable term among investors of late, is that There's a real need that's being addressed here that you have a ledger and it's proven, it's verifiable, it's durable, it's decentralized, it has all these positive qualities to it. That actually poses a genuine solution for a real problem which is provable, verifiable identity, scalable, and things like that.

[00:04:47.264] Kent Bye: Yeah, and so it seems like by having both High Fidelity and Janus VR, you're really actually trying to create an API, or at least ways of sharing things that are going across these different experiences. And so maybe you could start with, we have currencies of being able to pay for things. You have things that you're owning. And then eventually, identity seems to be this next step. But maybe you could start to see how, as you're going through this, how you're able to then have each of these aspects with the blockchain integrated into that.

[00:05:15.010] Karen Singh: I think that is actually an important part of what personally interests me and we've been thinking about is also representation, which is what is the level of granularity or the atomicity in this space? You know, as I mentioned earlier, You might think of the atomicity being at the level of assets, but then you can have groups of assets. You can have things that simply describe the form of something. You can have something that describes both the form and function. And you have the fact that people also have multiple, and should have, and no reason why they shouldn't have, multiple variants and versions of even identity. We all do. But they somehow need to be coherently maintained, kept together also in a chronologically coherent manner. And so I think one of the things that's going to be interesting is trying to design this whole representation and how it's going to fit within a blockchain structure.

[00:06:15.881] Philip Rosedale: One thing about blockchain is that it actually simplifies the sort of complexity of an API that you could have, kind of like TCP IP before it. It is nice in that it puts restrictions on how much you can do, which is a good thing. You know, like a blockchain, for example, isn't really an API so much as it is just a protocol exchange. You know, you talk to a blockchain server and you say, you know, is there this much money at this location? And, you know, here's a signature. Similarly, the blockchain kind of simplifies and minimizes the interoperation between multiple systems. So, for example, you might put a hash, which is, of course, a kind of an encryption of a file on the blockchain. So at an address on the blockchain, you can say, this little 32 digit hash specifies my avatar. And then that hash is nothing more than the hash of a file that proves essentially that whatever that file is, which might be a big file, it matches that hash. And then, you know, our job as members of the VRBA is to say, okay, cool. Once I do get that file and I look at it, what's in it? Is there like an account name in it? Is there a URL to my avatar? Is there a URL to an object? Are there permissions? Those are the sorts of things that we now need to work out and test with each other. You know, when James talks about like the, We just demonstrated today, you just demonstrated today, which was amazing, the sort of magic moment of like dragging and dropping an object from Janus, from Google Polly into High Fidelity. The trick now is to come up with a simple representation that everybody can agree on about Is that a URL? Is that an object file? Whatever. But using the blockchain simplifies the nature of a working group so that you don't really have... I think one of the good things is you're not going to have too much to talk about because you're just saying, what we store on the blockchain, how do we all agree what that means? But you don't have to get into these bigger miasmas of my company needs to talk to your company's API and then back to this other one and then up to this other one in the sky, which is often the case with

[00:08:10.412] James McRae: Formats and standards amongst companies, you know, and particularly in this industry in the sort of 3d VR industry Just to riff on that one of the you know The things I've very interested in and working on and you know with Philips and other companies participation is this idea of open project? It's just I guess we're calling it sort of the blockchain Explorer project and this is you know, an open web-based solution that allows a client to basically Browse, you know the blockchain the set of transactions all that data there but actually provide a richer, detailed, three-dimensional visualization, bring up information that shows, you know, a certificate, this verifies, you know, this hashes, you know, this is attributed, this was the creator of the product, this is, you know, if it's something like a product that's sold in limited quantities, you know, you have, you know, the sixth instance of 50 that were, you know, to be sold on the market. that kind of metadata would also be there and like directly browsable and I guess it gets us thinking creatively in terms of the sorts of representations. It's like, wow, you know, at first chance I thought about spatializing the web. I might be spatializing blockchain ledgers next and having portals and worlds between blocks. Who knows? Yeah, it's gonna be like a really creative, fun thing to be working on. I think we're, we already showed some stuff here today that's showing promise for that. As Philip mentioned, we have some nice assets. Encapsulations, moving in and out, not currently blockchain driven on the back end, but that is the goal. And as a group, we converge and settle upon that blockchain, that particular network, that set of technologies. As the participating companies create their nodes, it's going to become really easy to hack on that because we all kind of have a copy of it and we all have an active participation in it.

[00:09:50.054] Kent Bye: And I think, Philip, since the last time we talked, you've actually launched the High Fidelity Coin. And I went to the bank. I got my coin. I actually was on stage with you and speaking. And it was an amazing experience, actually, to have people in a virtual world throw money at me, so tipping me. But I saw a visual representation of money coming at me while I was speaking, which I was like, this is great. I'm getting paid for doing what I love to do, which is just teaching and educating. But I have a file on my PC that has this hash that says how much money I have in this high fidelity. And you mentioned today, which I thought was really interesting, that you've found some way to abstract the blockchain. So you're able to maybe swap in and out different dimensions of the stack of the blockchain. And also that you, to a certain extent, have an ability to become like a central bank, or to be able to control the amount of money that's being generated. And so maybe you could just kind of get us up to speed as to high-fidelity coin, what you're doing with it, as well as these different layers of abstraction that you have, and how that kind of fits into this larger VRBA of the Blockchain Alliance, and how you, as an individual company, have your own currency, but yet how that is interfacing with other people.

[00:10:58.460] Philip Rosedale: Well, that's a bunch to talk about. The blockchains that are out today, there's a whole bunch of different blockchains. Like a couple of days ago, we saw the blockchain that's called EOS actually yesterday start to come online in what's called its main net, where basically a bunch of voting was going on. And then they basically started this exciting process of having a whole bunch of people around the world replicating their blockchain, basically. EOS, for example, is a blockchain that can operate very fast. It uses a smaller number of people that kind of have to agree on the contents of each block. And as a result, it can produce blocks really fast, which is one of the things that you've got to have for a virtual world. So, like, we've been looking at EOS for some time as a potential code base or main net for what we're doing. And so, because of that, we sort of had to develop this idea that, you know, information about your identity or even about the high-fidelity coin You can store that information on any of a number of different blockchains. All these blockchains basically provide the same thing, which is a public database. But it has very different features and stuff. So we built a layer on the back end where we said, well, when you're using our client and our system, you sort of send a request to the system and then the system writes it to the blockchain for you. If you want to read it directly on the blockchain or even do a transaction directly on the blockchain, you can do that just right on the blockchain. But for now, we have a kind of an in-between layer that facilitates us being able to turn on and off different blockchains. So we actually have like two internal test implementations of blockchain, one which is based on Bitcoin and another one which is based on EOS. And so we're basically sort of running on both of those and we can actually turn them off and turn them on and get them back up to speed and stuff like that. The way that we're working with the VRBA and specifically, for example, with Janus is that these partner companies with us, we're all running a copy of that blockchain. So the idea is that you could go to either of us and request information about the blockchain. And like James was saying, and this is one of the things we're working on, that Janus is working on, which is super cool. is you also want to have the ability to just manually, as a web page, explore the public blockchain and look at it. You can do that today on Ethereum or on EOS or on Bitcoin using a number of websites, but we don't have a way to do it yet for something like an identity fact or a digital asset, like a pair of glasses or whatever. You want to be able to, like James was saying, you want to be able to browse that and look at it. So it's an interesting time. These blockchains are very much in flux. There's tremendous development going on. The change that's happening right now is probably the highest rate of change that we'll ever see, I guess, hopefully in some sense, amongst the blockchain providers. And so for the two companies, you know, for us and Janice, we've all got to rock and roll with all these changes that are happening. But I think that working together with the group of companies that we've got so far, we should be able to fairly quickly do some really genuinely useful things and target them at the blockchains that have the right properties and are having the most public success.

[00:13:45.690] Kent Bye: And for Janice's perspective, I'm curious to hear, you know, High Fidelity has their High Fidelity coin. And then as part of the Blockchain Alliance, how does Janice interface with that High Fidelity coin or how, in terms of currencies, what is Janice VR doing and what's your take and perspective on the blockchain?

[00:14:01.941] James McRae: We had short conversations in High Fidelity, in fact, about the very topic and about, you know, multiple currencies and exchange and I guess the additional complexity that arises in trying to manage all of that. And, you know, Philip definitely certainly takes the credit for being the originator and the creator and initiating this entire project, this collaboration. So, you know, they started with the High Fidelity coin and I didn't see any practical reason at all to rock the boat on the naming or branding of it. As far as bringing coins onto our platform goes, and we want to keep it open, we're happy to continue having a high-fidelity coin and having that be the crypto coin used in Janus. It's one of many options. Who knows what we'll come to, but it's just integration. So yeah, we would integrate HSC.

[00:14:45.942] Philip Rosedale: Well, the important thing, like you were saying, Kent, is this question of what happens to the money supply. That is, so Bitcoin, for example, there's only 24.1 million Bitcoins that there are ever going to be, and most of them have now been printed, so to speak. There'll be a few million more printed in the coming, what is it, like 50 years? It's crazy. I always forget the time. But basically, there's a fixed number of Bitcoins, and there's a fixed amount of Ethereum in the world. In fact, there's a fixed amount of EOS, although that's a little different because in the case of EOS, you're actually using the EOS coin to essentially purchase access to the resource that is the blockchain itself. So it's a little bit of a different situation. But anyway, what we learned from Second Life is that there's no way to have a trade economy where people are buying and selling things from each other, where you don't have a stable currency. There are different reasons for this and people debate it, but frankly, it isn't very debatable. It's a simple economic principle. which is that if the price of the coins you're using is varying dramatically relative to the costs of, say, the goods and materials you're making things with, or your salary, your need to pay rent, you run into a problem where people will stop using forms of currency that are highly unstable in their value. In particular, the worst case scenario, surprisingly, is when the currency is going up in value, which is what's happening with Bitcoin and Ethereum, deservedly. Because in that case, of course, you're not going to spend the money on something, you're going to keep it because it's going to become worth more. And so if you're in a virtual economy like Second Life, if the currency had been going up in value continuously, Second Life would have totally failed because people wouldn't have used it like they did. We have the same problem in high fidelity and across the board. We have the same problem with anybody in any virtual world who wants to have a stable currency that people can use to buy and sell things from each other. Basically, what it boils down to is you have to have a technique where automatically or algorithmically, ideally, the blockchain can create additional currency in some manner as more and more people come into the system. You basically need to kind of make more dollar bills as more people come in that need dollar bills. And by the way, this is what the US and every other real economy that has a useful currency has had to do. People complain because in many cases those processes have been centralized like in a central bank. And that's a fair criticism and an interesting question. But the thing that isn't criticizable is the fact that you need to make more currency. So one of the big problems of not just virtual worlds, but any use of a cryptocurrency as a useful form of trade is that it has to have a stable value. And so there's a bunch of startups right now that have proposals, that have raised lots of money and are trying to basically solve that problem. And we have a specific strategy that we're going to attempt to use with HFC, which is basically the same as one of those strategies. So it is an important part, though, of getting a big virtual economy online is establishing a stable currency for that economy.

[00:17:24.436] James McRae: I thought about the liquidity aspect of it, too, that, you know, you have these coins that appreciate in value. You would just want to keep them and hoard them, you know, rather than, you know, actively trade. But anyway.

[00:17:35.511] Kent Bye: Yeah, I think that's the challenge of as people see cryptocurrency as a commodity to invest in to go in over time I think that's I have a lot of money that I got from the high fidelity coin in terms of the initial amount But I haven't actively been using it. So there's a certain amount of like if there's a deflationary negative interest rate, or if it's going to be worth less, then there's more incentive for me to go in and spend it. And I think that's actually kind of funding an experienced economy. So something that what you're paying for is experience. But at the same time, you have to enter into the economy. So High Fidelity was kind enough to seed people with initial amounts. But at some point, you have to have an interface for people to be able to actually buy a currency, I imagine. So how do people do that?

[00:18:16.032] Philip Rosedale: Well, they're going to do that because in an open blockchain, everybody can run an exchange. So the long term hope, and actually this is what we did in Second Life in the early days even, is that if you have an open blockchain, people can buy and sell currency. So there'll be many banks, websites, individuals from whom you can buy currency. Of course, you're not going to trust somebody that doesn't have a good online reputation, etc, etc. But basically, you're going to be able to go to a currency exchange just like you go to an ATM in the real world and say, hey, I want some high fidelity coin and they're going to sell you that coin. We soon as a company will start doing that same thing in one way or another to facilitate early adopters being able to make money like you can't, you know, being able to like get paid while you're on stage and then turn that back into dollars. We're going to start doing that soon. I mean, I don't have an immediate announcement on that, but we're working on it. But because it's a blockchain currency, Janus, for example, could buy and sell HFC from people. Any exchange that is currently trading other cryptocurrencies could elect to allow people to purchase that because the beauty of the blockchain is that, you know, any two individuals can trade one or more cryptocurrencies for each other and they don't have to ask anyone. So, you know, we as the parent company, and this is, of course, what's wonderful and unusual about the blockchain, have really no control, in a good way, over that coin being moved around.

[00:19:32.674] Karen Singh: I think one thing that can also be interesting is, especially at the moment, there's this whole need to kind of bootstrap the whole virtual world process, right? The people in it, the assets, the content, and so on. And that can play an active role, I think, also in in, for instance, where the algorithmic influx of Bitcoin ends up going. There can be ways by which you incentivize creators, participants, to keep them just also active, whether there's transactions or not. There are different ways, right? Yeah.

[00:20:08.966] Philip Rosedale: Yeah, yeah. I mean, as Kenton, you were touching on earlier, one of the benefits of being able to make new currency algorithmically is that you can come up with different ways to give that currency kind of to everyone. And of course, there are many different experimental ways you can do that. But fundamentally, if you have a economy that's growing, you have this cool kind of dividend that happens where you want to create new currency. You can find different ways to give that out to everybody. And again, by the way, the United States and many other countries have done this over time. We pay people to build roads. We pay people to build dams. That's an example of the government basically printing new currency and finding a way to give it out to almost everybody, you know. And one of the fascinating experiments that we're going to see in virtual worlds is that it's going to be much easier to come up with ways to say, let's give everybody a very simple job or a simple activity and then give them additional currency in return for that activity as a way of essentially uniformly distributing new currency to a large population. This is something that economists are really looking forward to. We're going to see a lot of experiments, again, not just in VR, in the real world as well.

[00:21:13.907] Kent Bye: It'll be interesting to see if there's ways to overcome the parallel dynamics of those who have access to capital have an exponentially amount of opportunities to have more and more capital. So you have the rich get richer and the poor get poorer. So I see as these new blockchains come up, there's these outside economic influences that are coming in that already have that huge amount of money. And what I would hope is that some of these cryptocurrencies could in some ways maintain an integrity within the context of a community such that there's not these Outside forces that may be trying to come in and maybe take over a currency But yet if it's open on the blockchain, then I don't know what you could really do to prevent that from happening And so, you know, there's this as people see all these cryptocurrencies There's this tension and dynamic for people swooping in and trying to use it as an asset But they're not actually engaged in the community versus the people who are engaged in the community who want to use it as a way so I don't know like how you address that and

[00:22:07.577] Philip Rosedale: That's a topic, Kent, I've been meaning to perhaps implore you to do a whole session on, because I think like many of the complex things that you've brought up and have gotten people thinking about, this is one, and this is what I mean by that. The game Monopoly, we all know, is a game that ends rather quickly. And the reason that it ends is because it's a game in which there's a fixed amount of real estate. There's a free trading game that goes on between everybody, a capitalist game. And it demonstrates an important result, which was discovered in economics by John Nash, which is that when any two parties engage in a transaction, if one of them has a little more money to start, all else being equal, they come out on top. And what that means is that the rich get richer, and that if you have a fixed amount of resources, they get all owned by one person in a capitalist economy very, very quickly. Both the promise and the peril of blockchain, in some sense, is therein. Because blockchains do provide a very high freedom amongst all parties, very low transaction costs, and that essentially allows you to play the game of monopoly as fast and as aggressively as you like. The question, therefore, is whether there's a fixed amount of real estate. And this is the thing that I think you should do a show on. positive-sum economies are things like the American West, where basically you could compete with the guys in the town that you were in. But if somebody got a crushing advantage in that town and kind of became the monopolist that owned the whole city, what did you do? You moved further west, and you made a new city. Second Life is the same way. Second Life was an open map that could expand indefinitely as people purchased more islands. And so we as an operating company were willing to put real estate online whenever anybody wanted it. And so Second Life expanded and expanded and expanded. So expanding spaces, expanding economies, frontier economies, it's fine to have them be very, very capitalist because you don't run into this barrier where somebody starts to then gather a larger piece of the pie. And I think that's a very, very interesting topic for economists and thinkers in virtual worlds to have in their mind as we kind of get things started. That is, if you have a constrained economy or a constrained real estate, and like a blockchain and a lot of free trade, you're going to have a very unappealing outcome where you have literally one very rich person very, very quickly.

[00:24:26.067] Kent Bye: Yeah, and I want to talk about the other two applications of blockchain because we have the currencies we talked about. We have the ability to claim ownership of digital assets, which, you know, in the process of speaking within High Fidelity, I got an avatar that was built for me. It looks like my identity. I don't know if I would want other people to be walking around in the avatar that looks like me because, you know, I sort of want some control over my identity expression. So I could see the value of wanting to have that. But at the same time, there's this dimension of having a little bit of like, hey, this is an opportunity to have like an open source ability and free culture to be able to share and remix content. And that there's already a lot of copyright ownership. And even with the EU coming up with different rules that are going to be basically requiring people to have different ways of checking copyright violations. And we have that with 2D with content filters and AI that's doing that for YouTube. So there's going to be a very small number of people that are going to be able to build the equivalent in 3D, which is Is this actually violating anybody's intellectual property? And so to a certain extent, you are taking the approach of saying, hey, I own this piece of virtual property, which in order to do that, you have to have some way for people to actually sell and make a living. Everything just can't be given away for free forever all the time. If you actually want to have people make a living, that makes sense. And so maybe you could talk a bit about this tension and balance between being able to assign ownership to the blockchain somehow, like how does that work, and then also other aspect of how could that also enable like creative commons or remixing or things that give permissions rather than take permissions away.

[00:26:01.583] Karen Singh: I think this is something that we've actually come across in Janus a fair bit because the way our ID was structured, and actually in some ways still is, it's something that can be very easily changed up until we got our hosting service up. So now with Vesta, there's an actual login system. So now when you, you know, there's a login, there's a profile that actually is stored with us. And so we can kind of vet that. Prior to this, you know, anybody, Philip could have, you know, changed his avatar ID to be James and, you know, for all I would know, you know, I would be interacting with what could be James McRae. And one of the things that we realized, certainly, yes, people were unhappy about the fact that they don't want impersonation. At the same time, there's also talk about wanting anonymity, and various interesting layers and levels of anonymity, especially in the context of the internet, you know, going to being at a common web space, a URL where you might want to meet up with each other and so on. So, you know, of course, so far, people have talked about things being public, your friend circle, and then you yourself. And the way with our model, we were finding a lot of people actually, with that notion of anonymity, actually were interested in the reverse, which is in non-friends and family circle, where they would prefer to be visible by anybody that was actually not part of, depending on where they were in the metaverse at a particular time. So it is going to be a tricky issue. I think The people, in our case, you know, the space creators, the people that have created the web spaces, at the moment, we give them the power to control and change, to impose certain requirements. It's almost like, you know, this is my club. I can choose to allow or bar entry in some way. And of course, that also has its issues in the real world, and I'm sure it'll have its issues in the virtual world.

[00:28:04.166] James McRae: Yeah, so I mean, Karin mentioned Vesta. We originally started with something just highly anonymous, just pick whatever username you had, very little identity management of any happening. Vesta necessitated something, so it's almost kind of like a portal for a very basic kind of identity provision. But from there, what are the things that we're going to add? I mean, in practical terms, we talked about adding the ability to have a wallet. you know, to have HFC and maybe tying that to the identity as a practical step forward. Yeah, there are aspects of identity, there are aspects of, I guess you kind of touched upon it, but it got me thinking of this place of, you know, what are you, what are you the sum of, you know, the assets that you have, the creations that you've made, what about derivative works, how does that all tie together, and that ends up being a sort of complicated topic. But I think in practical terms, and just trying to get a working group for this, I think we'll probably start with something simple that we can really bite into and have that portability of identity, that kind of common standard. I think that's still kind of in flux or in discussion at this point on exactly how that would work. the identities would roll out. I mean, I'm familiar with, I've heard of open systems, like OpenID for one, that it's like, this is like an open decentralized means by which, using public keys, identities can be issued, but, or will it be more like, you know, a user of one system, and then having that user come into another system, so.

[00:29:23.414] Kent Bye: Well, the Decentralized Identity Foundation actually has some W3C standards of decentralized identity and all the various other things as well. So, I mean, I talked about assets, but we sort of slipped into identity, but yeah.

[00:29:36.003] Philip Rosedale: Well, with respect to assets specifically, The way blockchain and high-fidelity blockchain and Janus work together enables experimentation around different levels of ownership, basically. By using certificates on the blockchain, you can attach a very durable piece of meta information to anything that you have in the virtual world. But of course, things can exist in the virtual world without any of those tags attached to them either. So for example, you know, you could make a copy of my avatar and walk around with it, but only when you see the real me will you be able to click on me and look at the little certificate and see that it really is the Philip Rosedale's avatar, at least. It's like the equivalent of the blue check on Twitter. Yeah, exactly. It's a lot like that. And actually, that's a good example of where Twitter has been an example of, like, how many people care? You know, who wants to have Twitter notarize their identity, basically? So we're going to see the same experimentation in virtual worlds, both with identity and with assets. You're going to be able to operate anonymously with respect to identity or anonymously with respect to property. Or you're going to be able to attach these certificates to things that are very durable and very portable. And so we'll get a chance to see how much people are willing to, say, pay for the official pair of designer glasses, you know, versus the copied one. Because there's going to be many servers and many different types of domains that people are operating in, we're going to see all these experiments borne out. And I think that's a good thing. We're going to find the optimal positions. Also, with respect to things like derivative works and creative commons and reuse rights, we're going to see the same sort of experimentation because the blockchain makes this stuff so easy. You can very easily sign something as being a derived work, for example. You can basically, as the original creator of something that's used in some other thing or combined with something else, you can sign that second thing to say, I'm okay with that or here's what the chain of derivative rights looks like. So we're going to see a lot of really cool experiments and I hope that we'll basically find a market equilibrium that kind of makes sense to everybody.

[00:31:30.437] Kent Bye: Yeah, and it sounds like that there's a lot of changes that are happening in the blockchain. And as companies, you're trying to find ways of collaborating. I would imagine that one specific use case would be, hey, I upload my avatar, and I want to be able to go from different virtual worlds and still have my avatar representation go from between in High Fidelity and Janus VR. But there's this concept of self-sovereign identity, which I think is kind of the antithesis to a lot of the centralized ways of controlling identity, which In a lot of ways, the centralized systems allow you a low barrier to entry so that you can just go and start creating. But yet, the cost is that by signing the terms of service, you're basically handing over the access to all of your data that you have. And then that is being used to sort of sustain their economic model. But there are privacy erosion concerns that come with that. So I would imagine that the antidote to that is this self-sovereign identity, which would allow us to be able to have control over identity, but also have this portability between these different websites. that seems to be like if you're able to create a user experience that is better than any other sort of user experience, but also have this, I guess, with the freedom becomes responsibility. So there's terms of service that come from if you violate terms of service in these online public spaces, you may get ejected and not be able to participate. But yet, you have to sort of balance being able to have that freedom and be able to have that control with these blockchain experiences. But yet, the responsibility for dealing with Experiences of people who are trolling you or you know extreme hate speech or things like that that I think become Harder to manipulate in these open decentralized systems.

[00:33:02.109] James McRae: I Mean, I guess at a highest level I kind of see it as a trade-off on the you know The amount of country if you want full control and there's no control on the server side There's no ability to like, you know arbitrate or you know, like you said handle handle trolls and things like that So it's it's I guess it's a balancing act of sorts. I don't think you can have necessarily both ways and Like in an open anonymous system, the first versions of Janus, you had your user ID, which is your avatar information, and some actions and stuff, all in one file, and people were just free to author that, and then just stick it out there, but there were no explicit controls over it at all. Whether that could be seen as self-sovereignty, but I don't know.

[00:33:40.788] Karen Singh: Easy to abuse self-sovereignty, right? It's not just self, it's like you could take on anybody's self, and that's the problem.

[00:33:48.863] Philip Rosedale: It's important to tease apart, I think, the two different elements of what we're talking about. One is self-sovereign identity, where you control your identity information. It isn't stored anywhere, as you were saying, Kent. You haven't clicked on a Terms of Service that lets it be, you know, monetized or resold or whatever. That's one thing, self-sovereign. But the other thing is actually just the primacy of identity as an experience in virtual worlds. And that's actually, I think, the more interesting observation. The thing that we're doing, say, between Janus and High Fidelity, is to say identity matters enormously in the quality of the experience. That is to say, There might be a virtual world out there which is as yet so early and relatively uninteresting that the whole reason that you would go there is to be able to go there as yourself. I mean, you, Kent, are well known in the VR community as a personality, as a person therein. And I imagine that if you could go into a new virtual world that I told you nothing about, But I can tell you one thing, which is when you walk up to somebody in that virtual world, they'll be able to see that it's really Kent Bye, you know, that it's really you who's there. Now, if you think about it, that's kind of fun. I mean, I guess it depends on you and your levels of personality and public nature and vanity and whatnot, but... It also depends on the context.

[00:35:00.632] Kent Bye: of what I'm doing or like sometimes I do want to be anonymous and I don't want to be bothered and other times it's nice. So I think context is an important key there and being able to, depending on the context, have people to be able to choose whether or not they're in a public context where they're walking around or if they're in a private context.

[00:35:16.510] Philip Rosedale: But the point I'm making is separate from that is that I think a lot of the VR companies have sort of said, the experience of VR, driving a race car, is so cool that you're just going to come and do it and buy a headset and get in here. And you know what? That's not happening for a lot of these experiences. But you know what is cool? Being yourself. Not all the time, like you said, but being able to say, hey, I'm that same guy that you were talking to yesterday. Or here's what I want to look like. Here's what my avatar looks like. I think those things are so valuable that interoperating on them gives everybody a competitive advantage. as compared to simply focusing on the features. This is Tilt Brush. It lets you paint in space. But what if I could paint in space, be standing there, and you know who I am? I mean, that makes a big difference. So that's what I think is really cool about the VRBA is that we're sort of saying, hey, wait a minute. This is all about people. And so let's give people the ability to take their identity with them and represent themselves the way they want to. If you do that across virtual worlds, you're going to have a huge success.

[00:36:12.677] Karen Singh: The one thing that I would, you know, that I was going to add to that, that I think the blockchain also potentially has the ability to decentralize is through, you know, the user base or the user community or people, decentralizing this notion of abuse of anonymity. So the thing is, as you said, you know, Anonymity can be a good thing, because we often don't want to be traced doing what we're doing, as long as it is not potentially hurtful to other people in that ecosystem. Sometimes that is the crutch of anonymity, is used to kind of abuse that, or to, you know, whether it's harassment or whatever. And so I think that's where a decentralized system, the people are their own police, really. And that is something that would be different from the way identity is being managed today.

[00:37:03.907] Kent Bye: Great, yeah. And finally, I kind of see the blockchain as this grand experiment in a certain way of decentralization. And to see if there's new patterns of behavior that can emerge from these new decentralized protocols that could enable things that were never possible before. Or it could end up that all of the worst aspects of our culture are actually magnified and amplified. Like you said, it's like the game of Monopoly that gets to the end game super fast. And also, we have this trend of, as we move forward in time, we're going to have more and more of this virtual digital world blending into our real world. And so we actually have this. prototyping of this next generation of cultures and societies then actually sort of being Deployed out into the real world and the blending between those I think are going to become less clear So given that I'm curious to hear each of your kind of visions for this where this is all going the ultimate potential But you know this cross-section between the virtual worlds and the blockchain and I know there's a lot of challenges for where we want to be but I'm just curious to hear each of your visions for virtual reality blockchain alliance and as a group, you know, what you could imagine is to be some of the most exalted potentials of this combination of the blockchain and VR?

[00:38:14.947] James McRae: Perhaps my aspirations are quite short-sighted, but I think it will be kind of an incredible, you know, day in time where I can have, you know, an avatar, an identity, a persona, a reputation, all those aspects of a personality, but begin in Janus and Maybe I don't even know that I'm in Janus, I'm in virtual worlds, but I just have that borderless ability to just travel without any of those practical considerations. Oh, I need to log in for here and there, or I've got to end this app and load that one, and all this annoying stuff for one. So I would just love to just eliminate the borders and just The early days of Made.js, I just thought of it as this gigantic vacuum, like sucking in everything on the web and all the content and kind of trying to bring that into one place. But the real idea should just be kind of like, have all of the places and just be able to go through and be able to access everything. It's kind of inverting the idea that I originally had about it. I'm getting a little right. Yeah, and just being able to move out into everything, I guess. But have all that accessible and immediately available to you. So, you know, certainly from Janus early days and Janus now, I think we're far more embracing and open towards like trying to work with other companies, trying to be super open, embracing what people are doing, bringing it in, showing how we can interact and just kind of showing off that a lot more. Blockchain I see as a, you know, a very promising technology. You know, it's proven, it's tested, it has solid mathematical underpinnings and things like this. You know, I understand on some technical level how it works. And so I have a lot of faith in that being a, you know, a great system that can be open, shared. And I guess as Philip mentioned earlier, we're not going to be fussing about specific API thing and things like this and how to tie everything together. There's just one general network or system that this information lives on that which we can all pull. For each of our clients or level of support we want to provide, support is as much of it as our client can, but certainly this baseline of identity and assets and things. But yeah, I think it really is about some of the most interesting aspects of, you know, the usage of VR, I think do kind of revolve around identity and kind of wanting to be yourself, or like these social, I mean Janice was very, early on was very social and collaborative, that was like an underpinning of the experience, that any webpage became a place, but a social space, and you want to go and you want to interact, so. I think that that's going to be a great motivator of adoption in time for VR as a technology and we're in it for the long haul and we're just going to continue to build and build and support initiatives like these.

[00:40:47.017] Karen Singh: The only thing that I would actually probably add to that is I think it also has a tendency to democratize the ability to create, also for smaller companies, to create applications that connect well with each other and with a larger ecosystem because, you know, while theoretically you can say that the, you know, the internet is is a big open space, the way that eventually it is structured and it is delivered to people is through a few large conduits that actually control it. you know, that control happens through centralized identity as well, right? Centralized mechanisms for IDs and so on. And having that a little more diffused will make it easier, I think, for smaller entities to play on a slightly more level playing field.

[00:41:43.171] Philip Rosedale: When I think about big applications next for the blockchain that are amazing and across the virtual and the real worlds, the thing I would suggest thinking about next and that I've been thinking about a lot is reputation, mechanisms for that. I think that we, by the apps on our phones and by being avatars in virtual worlds, we have a really unique opportunity that we've never had, which is to say things about each other, make statements about the people that we meet and the people that we interact with as a way of creating a kind of a web of trust. The blockchain provides some really unique opportunities to do this in a very open, transparent, hopefully safe way. Right now there's kind of a huge conversation, I guess, going on globally with different actors that are trying out different ideas around what does it really mean to attach reputation to humans above and beyond credit scores, which we've historically thought of as being really one of the only forms of global reputation. Blockchain is potentially a very good way forward on doing that in a way that's beneficial to everyone and is a properly inclusive or can be excluded, you know, and I think that virtual worlds are likely to be a proving ground for ideas and experiments around that. In much the same way that Second Life explored some things that we're now sort of seeing happen in the real world, my hope is that blockchain and, you know, the VRBA and, you know, High Fidelity and Janus that we can all play with forms of reputation and trust that are experiments, digital experiments that we can carry over into the real world. So that's the one that I'd like to see happen next in my mind. I'd like to see my own company doing experiments in that soon that are interesting, that start to answer the question of what's the right kind of exchange between people around who to trust and who they like.

[00:43:30.128] Kent Bye: Yeah, just as a bit of a devil's advocate on that specific answer is because I don't know if you've seen Black Mirror's nosedive where people rate each other and you have this moving towards social score systems in some countries like China where you have the quantification of behavior that is contextual and qualitative and reduced down to a number and you have this other dimension which is the tension between the Fourth Amendment and the First Amendment which is The fourth amendment to the rights of privacy means that when you don't have that privacy, then you actually are constrained by what you're saying. So by having your social reputation be permanently available on the blockchain forever is sort of like the opposite of privacy and the opposite of the first amendment. So I think that this whole reputation thing could be creating a dystopian black mirror nosedive.

[00:44:13.104] Philip Rosedale: Absolutely. And nosedive is the cautionary tale, you know, and that is the problem. For example, in the case of nosedive is that we're using a quantitative, numerical, global system. So you are no better or no worse than that score, which has been given you by everyone. But consider that much more nuanced forms of that can exist. The system could be not quantitative at all. It could be based on statements. You could look at someone that you didn't know through the lens of those people you already like and what they think about that person, which is a different form of these systems. But all of these experiments in reputation can be done first in virtual worlds and then in the real world. And we're going to get to something. So again, you don't want to put your head in the sand about this, right? Because this is a sort of developing nuclear weapons situation here where they're going to be developed. The question is, can we come up with safe ways to use them? But just saying, you know, We're going to pretend that's not going to happen. We'll allow things like Nosedive or maybe a state-sponsored system that would be unsafe to get built.

[00:45:13.925] Kent Bye: Great. And is there anything else that's left unsaid that you'd like to say?

[00:45:19.048] James McRae: Karen was not going to do the interview if your score was under a three, Kent, he told me. No, I'm just kidding. No, just a joke.

[00:45:25.712] Kent Bye: Awesome. Well, James, Philip, and Karen, I just want to thank you for joining me today on the podcast. So thank you.

[00:45:30.187] Philip Rosedale: Thank you. Thanks. Thanks a lot, Ken.

[00:45:32.709] James McRae: Thanks a lot.

[00:45:34.531] Kent Bye: So that was Philip Rosedale, the CEO of High Fidelity, as well as James McRae, the co-founder and CEO of JanusVR, and Karim Singh, the co-founder of JanusVR. So I have a number of different takeaways about this interview is that, first of all, it seems like virtual reality is going to provide a context for these different experiments to happen within the context of both the blockchain as well as virtual reality. So identity is a huge thing within virtual reality. You want to be able to be embodied as yourself and you want to have an avatar and you want to have some sort of representation of yourself. And if you want to be able to go from metaverse world to metaverse world on the 2D web, you are disembodied. You don't have a body or any type of virtual representation of yourself. And so You just have a username. That's basically about it. But when you're walking from virtual world to virtual world, the way that you are dressed and what avatar you have on is actually broadcasting to the world all sorts of dimensions of your identity, your values. And it's just something that I think we see within the context of these video games that people want to be able to express themselves in this way. So identity is something that is kind of a no-brainer when it comes to virtual reality. it's going to perhaps drive some of these self-sovereign identity standards so that you can be able to go seamlessly in between these different virtual worlds. So Symbol just recently joined the Virtual Reality Blockchain Alliance. That's Alberto Elias. And he's been working on a lot of these self-sovereign identity protocols and trying to create these different implementations. He's got an A-frame component that's now out there. And self-sovereign identity may be one of the first things that is this interoperable thing that is between high fidelity and Janus VR. So the fact that High Fidelity has already implemented their High Fidelity coin and have the ability to be able to buy and sell things within a virtual world, it's kind of the first virtual reality experience that has fully integrated cryptocurrencies within it. Now, the High Fidelity coin, as far as I understand, is going to be trying to be this stable coin, which is trying to, I guess, peg it to a consistent currency rate. And that part of the challenge of having a currency that's used, actually used within these virtual environments, is that you have some sort of stable price. And if it's not stable, then people start to treat it more of an asset that they want to hold onto, or within the cryptocurrency hodl onto, rather than actually use the currency. And I think that the intention within these virtual worlds is that there's going to be a lot more compelling things that you can get by using your currency within these virtual reality experiences, whether it's these digital assets, or whether it's you're paying to go have an experience within a virtual world. So the way that High Fidelity and Janus VR were talking about the blockchain was that it was kind of like this decentralized API and that they're coming together to try to figure out, okay, what are the things that we want to try to share with each other? And what is it that we're actually writing to the blockchain? As soon as they decide what data they're going to be writing to the blockchain, then now they have this ability to be able to collaborate with each other with a consistent protocol. And so that's part of the intention of what the Virtual Reality Blockchain Alliance is trying to do is trying to figure out, well, what are these different things that we want to potentially allow for the users to be able to kind of seamlessly go in between these various different virtual worlds and have these things, whether it's identity, whether it's assets that they are able to buy, and if it's been able to be verified and have this kind of lineage of being signed by the original creator to say that, you know, this is an authentic ownership of this avatar or digital asset. and that you'll be able to kind of explore that and see that in different ways. And all of this stuff is being recorded within the context of a blockchain, but within the context of a virtual reality world, there may be more immersive ways for you to be able to track that lineage of the verified claims or the ownership of some of these digital objects. And the other thing is just the virtual currency to be able to actually have people to exchange value between each other, as well as, you know, reputation is something that Philip was talking about. And that's specifically around like these simple attacks, or what do you do to be able to try to prevent, let's say, Russia from creating a bunch of AI bots to go into these virtual worlds and to start to interact with people, if you don't want to be bothered by, you know, these AI bots within these virtual worlds, then what kind of mechanism do you have to be able to have verifiable claims on those bots or to be able to either filter or block them or just to be able to in general deal with reputation systems and maybe you go into these virtual worlds and you say I'm only going to want to interact with people who have already achieved a certain amount of reputation with me so that it's not like you're going into the worst aspects of email spam or just spam in general where there's going to be an increasing amount of this type of embodied spam within these virtual worlds. So reputation is something that is going to have to be developed to be able to start to counter some of these things. So overall, it sounds like that the Virtual Reality Blockchain Alliance, they're looking at things like portable identities, asset recognition, virtual currency acceptance across different virtual worlds, as well as like reputation systems. And they're going to be trying to figure out some of the different protocols and ways to be able to collaborate with each other in these different ways to make it so that as users, we're able to seamlessly go in between these different virtual worlds. So again, I say that a lot of these different things, even like high fidelity, everything that they're putting together is this vast experiment that is testing out both of these kind of decentralized technologies in the context of VR, but also within these cryptocurrencies and, and having an embodied experience of some of these ways of having this global currency that anybody can participate in. And so I think we'll wait and see how things start to play out. I just recently, a couple of weeks ago, had a chance to moderate a panel of five different people at the Decentralized Web Summit talking about the latest and greatest in terms of both of the biggest open questions that are facing these types of decentralized systems. Scaling is one of the big ones. but also what types of things other people are doing in terms of the overall ecosystem of this interface between virtual reality and the blockchain and these decentralized cryptocurrencies. I see it as a bit of an inevitability that there's this collision path between these exponential technologies of virtual reality and this immersive spatial computing, both within virtual and augmented reality, but also the blockchain and what it can be able to do to be able to have this decentralized way of mediating trust and being able to have control over your identity and to be able to mediate that in different ways. So, that's a lot I have for today, and I just wanted to thank you for listening to the Voices of VR podcast. And if you enjoy the podcast, then please do spread the word, tell your friends, and consider becoming a member to the Patreon. This is a listeners-supported podcast, and so I do rely upon your donations in order to continue to bring you this coverage. So, you can donate today at patreon.com slash Voices of VR. Thanks for listening.

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