Adam Draper is the founder of Boost VC, which a technology accelerator that has funded over 70 VR companies and over 100 crypto companies since 2012. He’s been in a really unique position to understand how blockchain technologies and the more immersive virtual and augmented reality technologies are both approaching an inflection point. But he also sees that these two technologies are on a convergence path towards creating a decentralized metaverse. I had a chance to catch up with Draper to talk about how virtual reality needs to be a foundational aspect of talking about how it enables a more immersive and embodied experience of whatever the metaverse ends up evolving into. We also debate many different deeper philosophical and ethical aspects of the crypto world that I had some personal reservations about.
Draper has been very bullish in investing in VR companies during the most recent winter of VC investments, and he wanted to come onto the Voices of VR podcast to announce to the broader VR community that he wants to hear about whatever outlandish idea you have about what you’d like to build within XR. He’d like to continue to be on the frontiers of funding and supporting the types of projects he refers to as Sci-Fi Technology ideas to really push the limits of what’s possible with immersive technologies.
We also had a lot of discussions and debates about the role of cryptocurrencies, NFTs, and decentralized finance when it comes to the confluence of other exponential technologies including VR, AR, AI, IoT, wearable computing, and the crypto worlds of blockchain, Decentralized Finance (DeFi), and web3. I entered into the conversation with a lot of skepticism of whether the DeFi worlds of cryptocurrencies and traders NFTs were going to disrupt the financial industry that results in a some sort of financial revolution that creates more equitable culture.
There certainly been a lot of hype about the potential of DeFi, but with the ecological impacts of crypto combined with a focus on personal wealth generation through pump-and-dump scams then I haven’t personally been putting a lot of faith that it would somehow shift some of the underlying wealth inequalities of our culture coming purely from a shift towards a more DeFi tech architecture. I do hold the possibility that this tech can help enable a massive shift and create new ways of empowering and sustaining artists working the open web and allow us to escape some of the ills of surveillance capitalism. But at the same time I do believe that it will require some fundamental shifts in consciousness and the underlying worldview that is more aware of the dynamics of relationality and being in right relationship with the Earth and the larger ecosystem of humanity. For more on why ecological thinking and relationality is a big emphasis for me, then be sure to check out my conversation with Alfred North Whitehead scholar and Process Philosopher Matt Segall.
I entered into my conversation with Draper with some skepticism around some of his unbridled hope and optimism for the potential of cyptocurrencies, and I’m leaving with some more hope and optimism but still a lot of skepticism. There’s still a lot of underlying philosophical and ethical challenges that come with what Draper has coined as the “Tragedy of Scale” that has come from social media apps like Facebook and Twitter. But Draper also emphasized that in order to come up with viable alternatives to the giant big tech companies running so much of our lives, that the market incentives that can come from cryptocurrencies will potentially enable a type of collective action that unlocks whole new realms of opportunities and options that were never there before.
One of the points that Draper made was that we’re still in a transitional skeuomorphic phase of cryptocurrency where folks like Decentraland are selling virtual plots of land. He says that the intent of this is to teach people what it means to have ownership of digital objects that are leveraging the embodied metaphors of owning actual land, but then expanding into new realms of possibilities for digital ownership that transcend the limitations of space in the virtual realm.
After attending the Internet Archive’s Decentralized Web Summit 2018 and Decentralized Camp 2019, then I found a lot of potential for creating alternative infrastructure for what’s generally referred to as web3 that according to Nadar Dabit has the following characteristics: Verifiable, Trustless, Self-governing, Permissionless, Distributed and robust, Stateful, and has Native built-in payments. The Internet Archive’s Brewster Kahle told me at DWeb Summit 2018 that they had launched a part of their website onto a decentralized web infrastructure in order to fight governmental censorship in specific countries.
But even though there’s always been a lot of hope and optimism for these decentralized architectures, one of the inventors of the Internet Vint Cerf told me at the DWeb Summit 2018 that he’s a lot more skeptical that a decentralized version of the web could reach the scale of a service like Google in a way that’s both economically sustainable, reliant, and performant. The economies of scale of centralized systems are just way too efficient, fast, reliable, and affordable to catalyze moving to a decentralized architecture that’s still technologically immature, slower, more unreliable, and a lot more expensive. It takes a lot of passion, dreaming, and vision to commit to building out alternative architectures since it’s not very practical or pragmatic by any other measure other than the more resilience and freedom in oppressed societies with lots of state-backed censorship.
One of the things Draper told me that it could be that one of the missing pieces is having a viable cryptocurrency market and ecosystem that can invest and creative viable incentives for people to do some of the foundational hard work to make the full potential and vision of web3 a reality. So while folks may look at NFTs as a toy today, Draper argues that it’s building up a type of knowledge and networked capacity to be able to leverage in the future.
In order to really tap into the full potential of our decentralized future, Draper pointed out how we needed a company like Coinbase to be steadfast enough to create a bridge for ordinary consumers to be able to get onboarded into the realm of cryptocurrency. Once there’s a critical mass of people, then new affordances are made possible.
One of the conceptual frames that came up again and again at the Decentralized Web Summit 2018 was Lawrence Lessig’s “Pathetic Dot Theory.” It’s a terrible name in my opinion as it’s more of a techno-economic theory of socio-political control where any sufficiently difficult collective problem is some combination of cultural norms, laws, market dynamics, and the underlying architecture of technology and it’s code. Here’s my interview with the Internet Archive’s Wendy Hanamura, who describes how she used Lessig’s theory to curate and program the Decentralized Web Summit 2018.
In the photo above, I like to re-imagine Lessig’s theory as more of a set of mereologically nested contexts where at the highest level is the culture, which drives the governance and laws, which in turn governs the market dynamics, which then allows underlying tech architecture to code to help. This emphasizes the fact that culture will ultimately drive the laws, market dynamics, and whatever technology can exist within the bounds of that culture. It’s may be tempting to take a technological determinist approach in believing that a change in underlying technology will automatically yield entirely new cultures. While it’s true that there are feedback loops up and down the levels of nested contexts, at the end of the day the types of futures that we create will come down to the need to have more fundamental shifts in consciousness and our worldviews to be more in right relationship to other people and the world around us.
What cryptocurrencies and DeFi enables an underlying tech infrastructure that enables new levels of trust enabling people to exchange value. Or the way that Draper says it, “Web3 replaces third party trust with mathematical proof and verifies that things happened.” By enabling new underlying technological foundations for creating anonymous identities, brands, and businesses without having to rely upon state-sanctioned modes of identity means that we’re moving into a world where 1000 Satoshi Nakamotos can bloom, as Draper phrased it.
When all of these decentralized technologies of the blockchain, web3, and DeFi aspects of cryptocurrencies and NFTs are combined with virtual reality, WebXR, and the infrastructure of the Internet and the open web, then it’s leading towards an interoperable future of what many refer to as the Metaverse. Draper’s argument is that you really need all of these DeFi parts of the blockchain in order to create the right incentive structures and fund and sustain whatever the metaverse evolves into.
Talking to Draper emphasized to me that we shouldn’t come up with value judgments about a technology in the absence of looking at the broader culture of people who are using it. Draper addressed some of my skepticism and cynicism around some the more noisy, scam-riddled, multi-level marketing, and pyramid scheme machinations of crypto traders trying to make a fast buck. He’s personally differentiating himself from that culture into one that is investing in a vision of the future that is empowering people with more freedom of expression and sovereignty.
But yet for me, there’s still a ton of open questions around ecological sustainability, and how to deal with other ethical and moral aspects of our networked reality including money laundering, child pornography, spam, human trafficking, disinformation, piracy, terrorism, online harassment and bullying, hate speech & dangerous speech leading to incitements of violence and genocide, human rights violations, and all sorts of other things that have been enabled on unmoderated and unfiltered networks on the web. These are all open questions and challenges that have yet to be fully figured out on the centralized web, and many of these issues are arguably even more difficult to solve technologically on the Decentralized Web and web3 tech stack. Many of these were also points of discussion at the Decentralized Web Summit 2018 and Camp in 2019.
But that all said, we’re still at a very early transitional skeuomorphic phase of technology development both with crypto and XR porting over applications and functionality that exists in previous centralized and 2D contexts and ported them over into decentralized and immersive contexts. And if we really are going to fully live into Draper’s ultimate potential of an economy that’s based more on imagination, then there’s still many of ecological, technological, economic, legal, sociological, and political hurdles that still need to be figured out so that it’s a technology that’s not only in right relationship to the world around us, but also to each other.
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Music: Fatality
Rough Transcript
[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to The Voices of VR Podcast. There is a lot of talk about the Metaverse. In fact, right now, Facebook is thinking about renaming itself in order to be more in line with a company that's helping to build the Metaverse. But even though there is a lot of talk and hype about the Metaverse, there's still a lot of folks that are just using the 2D web to be able to interface into a portal of the Metaverse without being fully immersed. Adam Draper is the founder of BoostVC, which is a venture capital firm that has been investing in early seed and angel funding into 70 or 80 different VR companies, but also 100 different crypto companies over the last 10 or 11 years or so. He's really at this intersection of the convergence between the crypto world, which has been exploding with things like NFTs, Lots of talk of using these crypto technologies to exchange value and build up your own identities and have these decentralized, autonomous organizations. A lot of different things are happening within the crypto world, but there's also lots of stuff that's emerging and coming up to these inflection points within virtual and augmented reality. Collectively, people have been referring to the convergence of these new technologies and new Possibilities as the metaverse so Adam sent out a tweet on October 1st 2021 It says I want to be on some VR podcasts anyone have a suggestion and Rory Mitchell suggested the voices of our podcast and then I got Connected with Adam and set up this interview to be able to hear what he had to say to the broader VR community and what he's up to Also, just be able to explore and interrogate the convergences of these two different worlds. From my side, I'm a little bit more skeptical about NFTs and the cryptocurrencies and the ecological sustainability, and that they're going to be living up to the hype of what everybody wants them to do, which is to decentralize themselves and to have no governments and no regulation and have complete freedom and all these different ways that we've seen the impacts of that when you have networks at scale and these big systems like Facebook and Twitter, that having that sort of unbridled freedom isn't necessarily the right thing, especially when that freedom is incurring on the freedoms of other people. How do you deal with some of those different issues? There's larger issues that Facebook is going through. quite a lot of flak and probably the most numbers of different scandals they've had in a number of years just with the recent whistleblower that's released a bunch of information. Facebook themselves as a company is on this point of trying to rebrand itself as a metaverse company, while at the same time actually building a lot of the technologies to empower the metaverse. But there's a larger skepticism of, are they just doing it to distract people from all these other Controversies in the mix of this there's a lot of talk about the metaverse, but you know What is the actual experience and feeling in the metaverse and how does this? Decentralized vision of the metaverse come to fruition and I think Adam Japer is somebody who's really at the confluence of those two worlds So that's what we're coming on today's episode. Otherwise, it's a VR podcast. So this interview with Adam happened on Tuesday, October 19th 2021 so with that let's go ahead and dive right in and
[00:03:06.753] Adam Draper: Well, first, Kent, thank you for having me on this. This is awesome. I'm excited. My name is Adam Traper. I'm the founder and managing director of BoostVC. Our mission is to accelerate the sci-fi future. And one of those futures is very, very much focused on virtual reality and different 3D technologies at the end of the day. We've invested in about 70 to 75 VRAR startups. This is a random thing. One of my first angel investments was the company that became Snapchat Spectacles, which was a company called Vergence Labs. And so I've been interested in computers on the eyes for, I guess, 11 years now, something like that. I was one of the top 300 score on Space Pirate Trainer at one point. And I'm still just so excited that What I've been able to watch in the virtual reality space, sorry, I should probably just say, we invest in 10 deals twice a year as a venture capital fund, as an accelerator. And so companies apply, we invest, we help them get to the next stage. And yeah, so 80 of those companies have been VR, AR. Yeah. So that's me.
[00:04:20.362] Kent Bye: Great. So yeah, maybe you could give a bit more context as to your background and your journey into VR.
[00:04:25.563] Adam Draper: Yeah. So I guess that would be my original context was I this is an interesting story. OK. I was in a car with my dad. It was a long time ago. My dad's also an investor. I wasn't really an investor at the time. And he said, OK, so computers on the phone. This was 10 years ago, 11 years ago. Computers on the phone like what's next? And I was like, probably computers on the body. And I thought, oh, OK, well, what would that look like? And I was like, oh, well, glasses make the most sense. We all wear glasses. And so I was like, OK, I'm going to try to find a glasses computer thing. And so I randomly, during this time frame, showed up at this founder dinner. And there was this guy there, his name was Eric. And he pitched me this idea for essentially, not VR, but it was augmented reality glasses. They were going to be able to show things in the real world. He was working out of the Stanford lab and I was like, that's super fascinating. So I met his co-founder, his name is John Rodriguez. So I was one of the first investors in this company and no one really cared at that phase, outside of me and like a few other people, like no one was really looking into augmenting reality or virtual reality. I also kept hearing from them, oh, it's, you know, it's similar to like Palmer Lucky's Oculus. And looking back, I probably should have just been like, hey, we should talk to Oculus because again, it was so early. Yes, there was a little bit of a hype machine at the beginning of Oculus, but it was not like, I don't know, it's early. My gateway was really on the infrastructure. It was on the glasses of the actual device. Meanwhile, I actually ended up six months into BoostVC hyper-focusing on cryptocurrency. I mean, that was probably one of the best decisions I've made because it was 10 years of me learning about how communities are built, understanding when technologies are about to hit, when the community is strong enough to achieve sort of a density to make a good business. And about four years into that, we ran across a Samsung Gear. So my first gateway into virtual reality was not actually a DK1, which a lot of OGs, that would be the go-to. It was a Samsung Gear. It was a phone hooked up to my head. And I tried it. I put it on and I was watching Transformers on the moon, so sitting on the moon watching Transformers. And I was like, yeah, this is going to be a thing. And from that moment, we decided to have conviction around virtual reality. Now, I will admit that it took a little while to get enough headsets in the world where there was true density. But I am so thankful that we went into virtual reality so early because we were able to build up this incredible network of believers. And so we know so many great humans who are all obsessed with building 3D. One of our teams, so they're building a prototyping tool and they're building it out. And then an investor was like, hey, VR is not going to be here for a while. Maybe you should build something in 2D. And so they started building something in 2D and they were like, F this. They were like, once you've built in VR, You can't go back to 2D. That was like the strongest statement I've ever heard. And they were just like, yeah, we're all in. We're going to do whatever we can to live through this. But it was so boring to build for 2D. And I was like, oh, I mean, these are going to be assassins in the space. So I would say, to summarize, I brainstormed and imagined, everyone had this idea of what VR was going to be. And I was thinking, it's time now for glasses. I did end up investing in a company that became Snapchat Spectals. I actually have the first version of the Virgin Labs glasses. And then the gateway was really Samsung Gear. It was experiencing it. And then ever since then, it's been... I'm all about people. And so understanding the networks that are so excited to build, that's what brought me into cryptocurrency. That's what brought me into virtual reality. I just love supporting these ecosystems where... I'd say at BoostVC, what we say is we believe first. It's almost like an ethos where it's like, A lot of people will say you're an idiot or you're like building in the wrong space or you're whatever. Like we take pride in sort of saying like, you believe it's possible, go do it. And like here. And that's been our experience in virtual reality.
[00:09:06.258] Kent Bye: Wow. So you, uh, you sent out a tweet at the beginning of October of 2021. You said, I would like to be on a VR podcast. So what do you, what, what sort of catalyze that? And what do you want to say to the broader VR community or the community at large?
[00:09:20.565] Adam Draper: Great. Okay. I didn't even think about that. My answer is. Everyone's talking about metaverses. Everyone. If you're in cryptocurrency, if you're in internet, if you're in whatever you're building for, they're talking about metaverses. But they're ignoring the most important thing about the metaverse, which is literally immersing yourself in that space. And so what I realized was like, everyone's, I don't wanna say overvaluing ownership, but like in cryptocurrency, the thing that NFTs are bringing to the world is really scarcity on the internet. And that's through these non-fungible tokens, which is so exciting. Like I'm a huge believer, we were early backers of Nifty Gateway, Unstoppable Domains, all these crypto companies that are like doing incredibly with Lobus, that are doing really well in supporting artists in that world, giving a new business model to artists. But when people talk about the metaverse, they're ignoring the fact that the metaverse is about experiencing the world, like it's about experiencing three-dimensional immersion. It's almost like this blind spot where everyone's talking about this internet metaverse, but all we're doing is looking through a window, still looking at the same bits, the same stuff through this laptop. or computer. And so what I wanted to start to do was say, hey, virtual reality is common. It's the most integral piece of the metaverse. You never fight the market on what the word is. I don't want to be like, you shouldn't use the word metaverse in this way. But you do want to encourage adoption through the new technology that will make the metaverse real. Like, if we want a real metaverse, you need virtual reality. Virtual reality should be the first stop. And finally, I'm hugely thankful to Facebook. I actually think what they've done to the ecosystem, they've invested so much money that now we have 8 million headsets on the market. That's incredible. Having been through the market of not having 8 million headsets, I'm very thankful that there are 8 million headsets. We have companies who are actually understanding, you could actually create a business off freemium now in the market, which is an insane idea. You could create a business off of paid. You could create a business off of enterprise. I'm watching our companies establish real momentum as businesses and it's easier to adopt new users. It's easier to like where there's this huge flood of talent that's going into cryptocurrency right now. I think the main thing I wanted to say the virtual reality ecosystem is like, hey, yes, that's going to be a business model in the metaverse, but we need the metaverse and like come and build it. Like I think go build awesome games, awesome education experiences, awesome fitness programs. Phil Rozelle, he came and spoke at BoostVC for one of our sessions. What he said was, the killer app of VR is being together. And I think that's 100% true. And now we have a $200 headset where you can actually be with other people. And the usage of it is actually pretty exceptional. So what I really wanted to say while I was going on these podcasts, was like, hey, if you're starting something in virtual reality that seems a little outlandish, come to me. I would love to look and potentially invest. But also, encourage talented people who can build just to experiment. I'm so incredibly bullish and I think the market's still being ignored. I wrote a tweet storm probably about six months ago. that was about why VR has been ignored by... And I speak in reference to investors more than the customers of a market. And I will say, until now, the market size wasn't really big enough to start investing. But if you assume market growth, this is a no-brainer to invest in. No-brainer for virtual reality to be the biggest thing ever. But my tweet storm was about how basically investors, when Oculus got acquired, there was this assumption that the market was gonna be there immediately. And it turned out that there were only probably 10,000 headsets. And 10,000 slowly turned into 50,000, which slowly turned into 200,000. And none of those numbers are big enough to support the billions of dollars that went into the market. So billions of dollars have been burned. That's basically what happened. Billions of dollars were burned. Investors are like, VR is never going to happen. All those people who got burned are like, I'm out. What we did was we were like, okay, it feels like the winter. We've identified this before. And so we doubled down, we went in harder, and we invested in more companies. I'm so glad we did because I would say the light at the end of the tunnel is that in the last three years, the market's grown from 500,000 headsets to 8 million and the price has dropped like 700 to 200. Now, PSVR is going to be a big deal and it was originally the moneymaker and now Quest is the moneymaker. Apple's definitely going to enter. I don't know when. They don't care about being first. They care about being best. So we'll see what happens and being there at all. And then the enterprise headsets are actually, they're okay. I still think Quest is just light years ahead right now, right at this moment. It's exciting. So that's what I would say.
[00:14:56.215] Kent Bye: Yeah. One of the themes that I think is similar to say virtual reality and the cryptocurrency world is this whole tension between centralization and decentralization. So starting in the VR world, we have a lot of the centralization around the quest. And what I've seen at least is in some ways that has helped some people, especially if you're making games and it's also hurt other people, if you're not on the radar of the quest or you can't get out of the quest. I mean, there's been SideQuest, which you're an investor. There's also been AppLab to have like an alternative method for people to get access to some of these apps. But, you know, really when you're talking about that huge installation size of eight to 10 million, whatever it ends up being, you can either win or lose in a pretty significant way if you're not in the good graces of Facebook, which to me feels like a pretty significant liability if you're going to not only be a founder of a startup in this space, but also an investor.
[00:15:46.599] Adam Draper: Yeah, so great comment. So the first part is, first, we need a market to fight over. My thought process is, yeah, it's not the perfect result to have Facebook win and you have to have a good relationship with Facebook to be a successful business. But at the end of the day, also, it's very easy to know that all you need is a good relationship with Facebook in order to be a successful business. And so going in there and actually working with Facebook, I'm a bit walking advertisement for Facebook right now. But on the other side, I've been able to witness the development of a centralized versus decentralized universe in the crypto world. And in order to first access crypto, Bitcoin was originally what the thing was, you needed a centralized gateway. you needed one way in which people were actually being onboarded. Otherwise it was just philosophical and not actually there. This was a real world way in which a bank with bank money, you were able to actually buy Bitcoin and suddenly you're there. Once you're there, you can do other things. And now we've built out like a bunch of other stuff that you can do where it's like decentralized. I don't think people give Brian Armstrong from Coinbase enough credit where it's like, we all needed Coinbase to even get to any of these decentralized products. Like we all needed someone to take the stand and go through the regulatory environments and take that steady, steadfast route. Where at this point, we need the quest. We need Facebook to be able to get through to win. Once we're all there, there's gonna be huge deviations. Like some products will be great centralized. Some won't care about like the centralization nature of it. Also, there's gonna be great competition. I just think competition makes better products. And so we should all thank Facebook right now, and there's so many people who are just like throwing up in their mouths listening to that, for what they've done for the VR world. And I truly believe that. They took the first stab, like they went hard fast. They were like, I'm not gonna lose this platform. We should thank Facebook for losing mobile for VR. Like VR exists because Facebook lost mobile, and now they're like, I'm not gonna lose the next platform. The next phase though, is going to be competitive headsets and that leads to decentralization. So like first one headset needs to work, then competitive headsets, then that's where you want to be an application. You want to be an application that's anywhere on any of those headsets, because suddenly they're all competing for your content. Like all of them, rather than right now, Facebook's the only shop in town, all the headsets who are equivalent, a commodity, they need the best content. So they're starting to pay studios, content providers to create games, to create experiences for their headset. VR has always been a little cart in front of the horse. We're at the point where the horse is actually pulling the cart. That's where we are now. And it feels awesome. So the reason I want to reach out to all these... I want to find a bunch of VR companies to invest in right now. That's at the end of the day what I'm trying to... I want to support a bunch of... Because I think the way that Facebook is the only shop in town, I'm a little bit one of the few shops in town who's actually saying like, I want to support this future. And I'm incredibly excited and enthusiastic about the potential where everyone else is ignoring the fact that VR is the metaverse and everyone else is staring at the metaverse through their laptop. Like they're not experiencing it. They're just looking at it. They're like hoping that they're there someday. It's like whimsical windows. They're like, oh,
[00:19:26.432] Kent Bye: Well, being a part of the VR community since January 1st, 2014 is when I got my DK1. There's been different talks when I went into the MIT technology conference.
[00:19:35.581] Adam Draper: They were talking a lot about- By the way, that's incredible. 2014 and you're still this enthusiastic. You're the reason that I love this market. You knew this was going to be your thing. This was your calling. This is the thing. I want to bring the education. That's incredible to me. Steadfast commitment to an ecosystem is not to be trivialized. And I see that everywhere, where if someone stays at it long enough and commits, you know, I'm sure it's been like up and down with you for over the course of your history. And like, you're still here. You're still believing like that's incredible. So thank you.
[00:20:14.045] Kent Bye: You're quite welcome and thank you for the same. I think both of us have been engaging with these communities that are driven a lot by passion and vision. You call it that you're investing in sci-fi tech. And I do think there's a part of people reading the science fiction and getting inspired with a potential future that doesn't exist yet. All this talk about the metaverse is seeded in these stories that we've read. that are kind of imagining a future that doesn't quite exist yet. And so we're kind of dreaming about the future and we're living into it in a lot of ways. And so there's a lot of, okay, how's that actually going to play out? And as I was saying that, you know, when I went to the MIT technology conference, there was a lot of this discussion of what they call these exponential technologies. So artificial intelligence, virtual and augmented reality, cryptocurrency, the blockchain, and, you know, other aspects and innovations and solar power and other confluences of whatever you can say, the exponential changes that are going to come to culture, given the confluence of artificial intelligence and virtual and augmented reality and the cryptocurrency. And I feel like that's still true, but at the same time, there's parts of me that get more skeptical about the crypto scene because I've been so focused on VR. I've been kind of waiting for the interfaces into that. And we've had the central land, which had all these great aspirations, but then had to kind of revert back into something that wasn't a fully WebXR decentralized future on the metaverse wasn't quite possible. So you kind of switch into Unity and you have these other ways of falling back to the centralized models. But I'd be curious to hear your perspective on the confluence of this crypto world with virtual and augmented reality, artificial intelligence, because you've been focusing on investing in both the cryptocurrency and blockchain world, but also VR and AR.
[00:21:54.128] Adam Draper: When we started investing, we never saw the convergence of the two, like, because we thought of them so separately. We were just like, hey, this is an exciting community and this is an exciting community. Let's support both these. And by the way, going out to try to fundraise for a fund that was a crypto VR fund in 2014, 2015 was basically idiotic. Like it was basically the dumbest thing I've ever done. And it was also the most awesome thing I've ever done. And I got to educate so many great people on crypto and virtual reality, why they're exciting. But it was one of those times when it was like, neither were working. So it didn't make any sense to go out and fundraise that way. Fortunately, I found a bunch of very supportive limited partners and I met the people who wanted to support at the low points, which was great. So the convergence of these technologies. So centralization, people always not hate on centralization, but centralization is fast transactions and high performance. I think that while the nature of adoption needs to be about fast transactions and high performance, you're not going to decentralize the system. And so people are like, well, why can't you make, like, we're just getting to two-dimensional, like successful games in crypto. And think about how many years it took to get from two-dimensional Monkey Island on the monitor games to like Unreal Tournament. And like, we're at that phase where it's like good two-dimensional games collecting, like we have the experience of all this other stuff. where we can pull levers and stuff. But centralization has a fit, which is like, I think it's a high performance, fast transaction. And in any world where you need zero latency, you need centralization somewhere. Maybe it's not the assets, but it definitely needs to be from the game engine or the internet, like those two bandwidth. Okay. So we're not going to decentralize bandwidth anytime soon if we want high performance. Now, I would say what's happened over the last five years from whether it's Decentraland, there's another one called Sandbox, there's this period that people call skeuomorphic, right? The skeuomorphic period of technology, where it's like, we need to build the thing that translates to the real thing. And I feel that that's where we are in crypto. We're in skeuomorphic 3D stuff phase where it's like, hey, you can own this 3D little piece of land and people are still being educated on what owning things in the internet means. I think that's still a big question mark. We still have to educate everyone on what ownership is. It's gone off like crazy. A lot of people who have that trading mentality have entered the NFT space because DeFi was slowing down a little bit, so they jumped on to another thing that created ownership, which is so exciting because all these artists now have a business model. but the convergence is slowly happening. And as Headset gets cheaper, people experience it more. We're trying to educate the masses on two incredibly difficult to educate technologies. And having gone through fundraising for a VR crypto fund, I know what that's gonna take. It takes a billion of me doing that times. So in order for those two things to connect, you need the masses on both sides to be educated on it. Right now, I'd say we have a big group of people in crypto who are educated on how ownership works, and then a big group of people in virtual reality who understand immersion and metaverse, what that actually means. And like both of those people are slowly getting closer and closer together where it's like a couple people over here are moving over here, a couple people over here, moving over here. And because this is a non-visual podcast, no one knows what I just did, but I was shaking my hands back and forth. And so I think The real thing we're fighting against is people's expectations. People in VR who are early adopters are expecting it to happen tomorrow. People in crypto who are early adopters are expecting it to happen tomorrow. And I think crypto has had better positives about finance in the last couple of years, where I think we need to prove the metrics make sense on the VR side. and I see it happening, it's coming. That's why I see the inflection point and I don't think anyone else is seeing it yet from my perspective of being an investor. I think that's when things start to get interesting. Once this hits the inflection point and this is hitting an inflection point, suddenly people in the metaverse are going to be making money in crypto. It's going to be a crazy world that's going to happen. I'm going to build NFTs for my Oculus game and sell to my friends, and it's going to use blockchains to send it around. It's going to be amazing.
[00:26:53.552] Kent Bye: Well, so my introduction to the cryptocurrency world is, you know, I did an interview back in 2014 about someone who was looking at the intersection between virtual reality and cryptocurrency, but then wasn't really on my radar because I was so focused on what was happening in the VR. There's plenty of stuff to cover and keep myself busy. And then I think it started with like self-determined identity, different ways of bringing identity into using the blockchain to go beyond like something like surveillance capitalism. And that's something like the decentralized identifiers is a W3C SPAC now. But then that gave attention to me that there is this confluence. But then I went to the decentralized web Summit in 2018, put on by the Internet Archive and then the Decentralized Web Camp. And I was looking at all these different companies that are looking at what I think is generally called Web 3, which is a decentralized architecture. And like the Internet Archive that has actually got a whole stack of having like a decentralized version of the Internet Archive. And a lot of the functionality of the decentralization is because they were facing censorship and all these different countries that in order to actually still have persistence, they needed to move away from the centralized model to a decentralized model. And when I took away from the web three, I actually had a chance to talk to vent surf, you know, one of the co-creators of the internet at the decentralized web summit in 2018. And I was like, Hey, vent, maybe Google should stop doing this surveillance capitalism thing. And his response was like, well, if you can find another way of providing all the world's information to everybody for free, then let me know. But you know, there's certain. aspects of the economies of scale of decentralization that allows Google to be able to do what they do. But because of that economy of scale dynamic, we basically have these five major tech companies that have taken their valuation into the trillions of dollars now in terms of all the stuff that's going to them. I also look to say what's happened in the mobile phone market, where we have a duopoly between iOS and Android, and there's not really a viable third independent competitor because the economy is a scale of the even actually produced hardware. So when I look at this situation, I get a little bit more, I guess, skeptical that we're going to have this idealized decentralized future because I'm looking at our existing ecosystem and everything seems to be centralized at the point of the technology. We've had the lawsuit between Epic Games and Apple, and that didn't necessarily result in say, you know, regulatory legal changes to be able to break up some of these different monopolies that are out there. And we haven't really had really strong antitrust enforcement over the last 10, 15, 20 years with technology. So there's been a lot of ways in which these companies, probably a lot of them that you're investing in, are getting acquired. But yet, we have the situation where we're maybe at the far extreme of that centralization, and maybe the pendulum is going to start swinging. But when I look at the basics of the economies of scale and looking at the decentralized web, I'd say it's a cultural shift that has to happen where people have to almost in some ways become their own system administrator to really make the decentralized web feasible. Because basically in order to really have this mesh network that spans the world, you have to have millions and millions of people that are willing to actually maintain that infrastructure when it's a lot easier to pay your ISP and have them do it.
[00:30:01.580] Adam Draper: So the, It calls into a very specific question, which is, what do we have now that we didn't have then? And I think the answer is options. So in order to participate in the real world today, like in the economy and build something that's valuable to a billion people, There's a Facebook and Google tax, right? Like you have to pay 30%, basically. There's a joke in venture that like 30% of all funds raised goes to Google and Facebook. But I think that the key thing between web three and the classic internet that has been built by these five, this oligopoly or whatever you want to call it, is we're giving another option. So what if there was a better way? And I think that's the thing that drives this community of millions of people to see if there is. It's the same thing that started when I brought up Bitcoin to my grandfather. who's also a venture capitalist. It's a trend in our family. I don't know why. We like supporting people, I guess. He said, no. He said, no, this can't happen. The government won't let it happen. You need trust. You need government. He listed off all the things you need to have a credible currency. And what I was thinking was, what if the Fed is broken? And what if there was a better way? Shouldn't we be experimenting with that? So I think that we're on a global scale experiment. I'm not saying that this is the way that the world's going to work, but I believe that there are enough people now voting with their time. that this Web3 and talented and energetic and committed people, that they're basically spending enough time building out a country in the internet. They're building countries. I think these blockchains should be thought of more as countries rather than blockchains. It's people who are like, hey, I'm going to build X on Y. They're building a business, inserting it into Ethereum. That's a new business. That's a new group of people who are going to be using Ethereum blockchain to replace third-party trust with mathematical proof. I would say that my one thing is, You are asking a capitalist, like why go web three, right? Like my goal is to make something that's like Google, but like at the end of the day, like be a part of that story, which sounds evil, but I think that the way to impact the world is to add values to systems that will impact one to 9 billion people. And that's my way where I can impact the world. I can move it to a better world for my family. One of those things that is necessary is choice. And I think having people who are disconnected from Google and still be able to create the same value that Google has somewhere else where you're your own autonomous being. I heard about someone who literally downloaded all of Wikipedia on their own thing, so they don't need to go to the server and they have it. Also through Filecoin, not Filecoin specifically, IPFS, they unlocked Wikipedia to Turkey, which wasn't a possible thing before. We're enabling access points that weren't possible because of regulatory environments. We think we are predominantly thinking about United States when we're in the United States, and there are other countries that need to get logged on even though their governments won't want them to. I think that it's about giving more options, more access. You can choose to be a part of that centralized world. I don't think it's bad. I think that's fine. But I think giving us an option to choose outside of it is also important. And I think that's what the future of Web3 is really about. I could reveal my identity or I could not. That's the cool thing. Web3, I could build up an entire identity that has trust, that has done business, that has built an empire, and I could never reveal who my actual identity is. It's almost like the world of the next 15 years is going to be a lot of Satoshi Nakamoto's, like a lot of people who have just built up these anonymous identities, launch them to the world. So I think rather than thinking about the way the world is, one of the questions we have to ask as venture capitalists is why now? So like, why is it now possible? And why now with what you're talking about, where we're deviating from this capitalistic centralization monopoly, the why now is we have a new tool and it does give users peer-to-peer skill sets and it gives them peer-to-peer ability to do not everything they want, but right now, financial things. Eventually, that'll move to better information, better gaming, and it'll segment off into all these different factions where we all choose to join the internet country that we believe is treating the citizens the best. And I believe that once that has happened, where people are actually choosing based off of internet regulatory environments that are really guidelines of community, suddenly real-world governments are going to have to react. And that's going to be the most exciting time to live in, which I think is probably 50 years out. I don't think it's tomorrow. But if governments aren't playing around with Web3 right now, they should be.
[00:35:34.044] Kent Bye: Well, there's a lot of talk about, you know, disrupting things like the government and regulation, but also there's been a lot of talk around just from listening from the outside of looking at cryptocurrencies, that this is going to be a disruptive force that's going to make things a lot more equitable. So I went to the Decentralized Web Summit, Decentralized Web Camp, and my fundamental question was, Are these decentralized technologies going to somehow create a new economic model where the rich don't just get richer? And after talking to so many people in this space, my conclusion is that there's never going to be a purely technological solution to be able to fix the ills of capitalism where the rich get richer. So if you have a lot of access to capital, then you can mine a lot of coins. You can basically come in and overtake these different systems. There's obviously different ways of trying to prevent simple attacks and ways of having things be take over. But at the end of the day, it does seem like even when I look at something like NFTs, even though there's a lot of excitement around it, I'd look at this of like, is this sustainable for like the whole planet to be able to get into this? It feels a little bit like a multi-level marketing scheme where the people who get on early are going to be big winners, but yet it's a bit of the tulip bulb craze that people talk about that it was people. perceiving that there's value, but yet there's only so far that this kind of pyramid scheme infrastructure can go on before someone at some point just loses their house because they bought into the story that isn't actually sustainable in the long run. And so when I see some of the stuff and things like cryptocurrency, I just get like this multi-level marketing scheme vibe where you know, I was on the board apes discord server and I had to leave it because every day I was getting two or three or four people trying to get me to join some sort of crypto scam. So it feels like in the absence of having a real heavy oversight in some of this, you do get this kind of grifter mentality that makes it like buying early in order to be a part of it.
[00:37:26.464] Adam Draper: Okay. Capitalism is the worst ideology except for all the other ones. I don't know if the goal is to escape capitalism as a whole, but we are unlocking our new business models to artists. I've had a bunch of close people be pointing out these loud Discord servers or these loud Twitter or whatever, That's a small percentage of the population of cryptocurrency. When I meet people in that space, they're genuinely trying to solve this for a greater good. I try to see it as people will do what they do. Some people are traders and their mentality is like quick transactions, move fast. I've never been a good trader, so I the way that I look at the world, I invest, I buy and I hold. I'm very committed in that process where it's like, I go all in on VR. I continue to go all in VR. I go all in on crypto. I continue to go all in at crypto, build conviction and commit. And I think that a lot of people are sort of like, experimenting with what they're able to get away with. They're bad actors everywhere. They happen to be very loud in crypto and annoying. I would say we're in an annoying phase where we don't have spam detection and there's no filters. It's just straight whatever you want all day, every day. It's literally pure freedom in these forums, except for the guidelines, which people can kick you out and stuff. So first off, this is sort of a conversation around like, are we trying to escape capitalism? Is there a better way? The only way to get to a better way is to experiment with something like Web3, right? Like we need to see if we have global nine billion. I'd say I define the last 10 years of my life as 4 billion people trying to figure out what it means to be on the internet. That would be my title of the book of the last 10 years. Be connected through the internet. 4 billion people. I'd say that the next chapter is most likely going to be about governance on that 4 billion people, and whether that's through these communities or cryptocurrency or centralized nature of things. I don't think crypto all of a sudden takes out Google. I think people use Google. They're going to be using Google for a long time. But I do believe that we will be using Google and these other freedom moments. I don't think it goes away. It's probably going to be a $10 trillion company, but there's going to be all these other options that you can use if you don't want to use Google that are equivalent. I mean, there are other ones. Capitalism allows you for competition. I'd say brand ends up being very, very valuable in our business. You're presenting very interesting philosophical questions. I believe humans are good. like fundamentally. And so when I think about these technologies, everyone's trying to figure out how to deal with them and how it makes their lives better. And overall, when communities get together, I think they fundamentally figure out how to work together. And crypto and VR are two different technologies that are changing the way that you congregate and get together and solve problems. I think we're at the first inning and we don't know. We don't know what's going to happen. I don't know if it's going to combat capitalism, but I know that we need better alternatives. It's either that or revolution, right? It's either that or we have all the countries just go to war and that would suck. I'm hoping that we have a bloodless war. of governance revolution over the next 20 years. And it's just all about what gives more people more freedom and more freedom of thought or freedom to do what they want. And VR and cryptocurrency are at the forefront of liberating that group.
[00:41:31.990] Kent Bye: So when I went to the Decentralized Web Summit, Decentralized Web Camp, the thing that gave me hope was that in order to really be successful in crypto, it seems like you really need to build an interoperable ecosystem. And there was a lot of like this shift towards looking at things from an ecological holistic perspective, where sometimes it's actually difficult to have firm numbers around what kind of viable ecosystem you've been able to cultivate. But at the same time, this thing I was talking about, like having a pure technological determinism, meaning that you're relying upon the technology to solve what is essentially human problems. Lauren Celestig would talk about how you have human culture and the normative standards there. You have the laws, you have the economic market dynamics, and you have the technological architecture and the code. And I see it as this sort of myriad logical nested set of contexts where the largest context is the culture. And then within that culture, you have the legal context of all the laws, and then you have the economic context and the market dynamics that are made possible within the context of those laws. And at the bottom, you have the technological architecture and the code. And here we have the opportunity for this technological architecture and the code to be able to foster new cultures. But at the end of the day, in order for the D-Web to really work, it requires a fundamental shift in the worldview, away from thinking about yourself and thinking about communities. And I think that what I've seen in the crypto is new technology, but with a lot of the old culture.
[00:42:48.465] Adam Draper: And in order for the morphic culture, it's the onboarding to the new world culture, like we're still connected here, right? Like, you know, I have a family, I'm a part of a town, I'm a part of the United States, I'm part of California, like that represents the community that I'm a part of.
[00:43:05.341] Kent Bye: Yeah.
[00:43:06.138] Adam Draper: And so what's the question? Sorry, I didn't.
[00:43:07.699] Kent Bye: So I just this is a comment that I went into the crypto blockchain world through the lens of the D web, which I think is a little bit less about trying to profit for themselves, but it was really trying to build a new infrastructure for the Internet, which is. countering aspects of censorship and the centralization of these big tech companies and surveillance capitalism and trying to find alternatives to that. But there hasn't been sustainable economic and technological infrastructure to reach the scale of those big, large networks. So then I'm like, as I hear all this stuff that's happening with Facebook, I'm like, well, maybe we shouldn't have networks of 4 billion people. Maybe we should have like more of these resilient, small networks that are loosely joined in some way rather than- Ooh, that's cool. You know, I like that. We're not we're not going to go back from having the access of that. But I guess some of the ethical issues that I see happening with Facebook is that their network is too big and it becomes basically a method for state actors to be able to hack democracy. So I feel like there's certain ethical issues that even at the decentralized web conference they were thinking about things like harassment and blocking and you know how do you do the types of things that you get when you have the opportunity to de-platform people but there are bad actors that maybe need to have methods of being deplatformed. So there are a whole host of these sociological issues of whether it's laundering money or spam, harassment, or all these other things that it's annoying that you have the convenience of having these systems that have AI to be able to filter it. But it feels like the sort of cat and mouse game between the ways in which that can be hacked or taken over, it seems like we're maybe hitting a technological limit And we actually have to move to culture rather than relying upon that there's going to be some sort of magical technological solution to all these cultural problems.
[00:44:51.687] Adam Draper: Interesting. The way you talk, it's sort of like which comes first, the chicken or the egg, right? Like it's hey, is there this governance based around culture that comes first or is it like these I mean, really at the end of the day, identity, does everyone want an actual pseudonymous identity that does have a historical track record that builds around that in order to govern themselves? I think we're just at a weird point in time in crypto. I think it's probably the most interesting too, because we do have this historical baggage of how the old world worked, which makes it look like a marketing platform. and probably to the benefit of people's wallets, has helped garner excitement and garner money and value to the networks. Which to me, it's net good because it educates, it creates more news stories, which creates more people to the network. It gets more people in, which I believe long-term gives everyone freedom. It gives everyone the ability to be a part of these cultures and be a part of these things. Now, the way that you end up long-term being able to just boot people is like a wallet will have transactions and value, and it will be able to have a historical track record. You'll be able to track everything through something like we backed a company called EtherScan. You'll be able to track everything that that wallet has ever done, and that is that person's identity. That wallet is that person's identity. you will be able to say, hey, I only want people who have a year of actually doing business within this framework to be allowed in our community. So that you immediately cut out anyone who's just trying to mess with the system on a short-term basis. You start to be able to just pick them apart and they'll realize they need a longer-term view in order to be a part of the best communities. That's one example. I'm sure there's way smarter people who are working on this general thing. Right now, I think of the negative as almost a feature rather than a bug, which is if you use this old school marketing crypto hack, quick transaction mentality, in your favor, it gives startups a fighting chance against these bigger blockchains or these bigger companies. And so if you figure out how to move that better, I just love, I'm in a constant state of David versus Goliath. And what tools you can use and what the moment in time where that's the most useful tool is, if you identify it, you deserve that success. So D-Web, to your point, We invested in Protocol Labs and Unstoppable Domains, which are two companies who are completely going after freedom of speech on the internet, which I think is the most important and valuable problem. However, defining the value of freedom of speech is very difficult. which also enables people to opt in or opt out of these loud mouths. Like freedom of speech, it comes with a bunch of pain also. We've never really had programmatic freedom of speech on the internet though, distributed across 4 billion people who are actually connected to the internet. You can liberate Wikipedia for Turkey. You can liberate all of Google to China. Right now, we're creating access points for old world internet. That's really what the first step in the skeuomorphic phases is like, hey, we just want the whole world to get access to the services and goods that mostly the United States built over the last 20 years. The next phase is what happens then, right? What happens when everyone has that access? What happens when everyone understands what my kids are going to look at the internet in a completely new way. They're going to look at the internet in this. I can own that thing online. I own it. That's a big deal. I'm a part of that community because I own that board ape. I have a whole thing on NFTs. I think that people are saying they're overvalued. I think on a 10-year time horizon, they're undervalued. I think in three years, maybe. I try not to predict short-term, long-term. I get wrapped up in it sometimes, but I never try to predict the end of days. If you spend your time thinking that the world's going to end, the market's going to crash, everything's going to go down, eventually you'll be right. But in the meantime, I'd like to build a bunch of really valuable things and help a lot of people achieve better services and goods. And I think that virtual reality and crypto are those two technologies. They're going to look like toys and suddenly everyone's going to be using them to like create better goods and services. And ecosystems, economies, we're seeing stuff that are more native to crypto now. And the reason that CryptoKitties didn't end up being the biggest crypto NFT was it was too native to crypto at the time. We weren't ready for it. And now people are revealing things that are similar to what CryptoKitties was, and it's going for crazy more just because We're ready, we're ready for like what is possible with NFTs. It did okay, it just, it isn't the thing that's gonna take over the world. I don't know, I'm speaking in circles.
[00:50:04.057] Kent Bye: Well, one quick, I'd love to get your quick thought on this, because my counter to that is that there's certain aspects of proof of work that is ecologically unsustainable. It actually has an undue amount of energy that it uses. There are talks moving to something like proof of stake to be more of like this movement of clean NFTs and eco NFTs. But this gets back to the thing I was talking about earlier, which is that unless the culture is really thinking about how they're in right relationships with everything around them, then you essentially are creating a technology that could be doing more harm into the earth because of all the energy that it's taking. So I feel like there's a lot of value that's created, but it's also the side effect is actually the bad aspect.
[00:50:41.331] Adam Draper: So I love this. So think about this. This is the way I, I sleep better at night, I guess, but What does Web3 do? It replaces third-party trust with mathematical proof. It verifies things happened. Now, do you know how many companies and empires and governments are built on literally just that and how much energy is used through all of those services and goods that are literally just verifying that something happened? The thing that no one's comparing it to is the energy usage of all banks, all humans traveling to those bank jobs, all governments who are just trying to validate that those citizens exist in that world, all those taxes, all those lawyers. My brother once said this and that's super interesting to think this way, which is, The goal is like there's a world in the future where the imagination and creativity is the paramount. of success. Being able to just create unique items is the paramount. New things. I argue that a lot of people make similar things with little bells and whistles here and there. What this enables is you're able to build trust, replace an ecosystem that really does burn all the energy, and then unleash your inner creative because suddenly you are sovereign and you control your own destiny. And you're not check and balance system. The check and balance system no longer exists. It's completely replaced by this thing that does require a bunch of energy. And I think at the end of the day, yes, there will be systems of proof and stake and proof of work. Both of those things will exist because there are things that you need higher transactional throughput with and proof of stake has proven to be better than that. but if you need a perfect ledger, perfect ledger of what happened, Bitcoin is the one basically. That's my thought process. I think we're in this phase where we are using a lot of energy and the old systems using a lot of energy for that. We're using quadruple the energy and yes, it's not good, but that is the true revolution that's about to happen where the proof of things happening gets slowly replaced on one side. And suddenly the amount of energy that's being used is like nominal. And that's where I hope to live someday.
[00:53:22.347] Kent Bye: Yeah. And I hope that we get there. You know, I think there's both technological and I think there are going to be cultural aspects as well. That is not going to be a purely technological deterministic solution to all this issues that we're talking about.
[00:53:34.010] Adam Draper: And the one thing that's been true is anytime I think I'm right, I'm wrong.
[00:53:39.343] Kent Bye: Well, I think there are going to be a lot of issues with when you get a network at scale, that things like Facebook and Twitter have been able to deal with that will also have to be figured out and having no centralized point to be able to control some of that. My concern is the larger ethical implications of having things at the scale of everybody on the planet. And you know, that haven't been fully figured out and it may come down to a cultural shift that we're not quite ready for. You know, there's always these things of kind of introducing technologies into Myanmar where there's a genocide because of the government's able to incite violence and have hate speech that leads to a genocide. So it's not like having people interconnected is just totally neutral. In some ways, you have to figure out these larger issues.
[00:54:20.699] Adam Draper: So I call it a tragedy of scale. And the way I think about it is about the ocean, right? Like plastic is not inherently evil, but all of the plastic that we use in order to make our lives more efficient ends up resting in the middle of the ocean because our goal is to get it off our coast rather than take care of the ocean. And so I actually believe that we need smaller, better economies. Like you were saying, is it better to move to smaller economies that actually care about specific geographic regions as well as pieces of the brain that get together in order to build those communities around it? But I do believe ownership matters. So I believe if I own something, I take care of it. Hence, I did make a statement which I want to own a million acres of the ocean. And the reason is I want to clean it up. I want the ocean to be like this everlasting thing that is not poisoned by plastics or oils or whatever. And I know that that's an outlandish thing to say, obviously. So I call it tragedy of the scale. And I believe that we are dealing with the ultimate tragedy of scales right now. This historical moment is all about tragedy of scale. And how do we get out of it? And so we need to work together at the end of the day. VR, crypto are the best tools to be able to work together, incentivize good behavior, as well as communicate and be together. And like, those are the two things that translate culture.
[00:55:43.377] Kent Bye: Awesome. The final question that I'll ask you, and I like to ask everyone is what do you think the ultimate potential of virtual and augmented reality matched up with the cryptocurrency blockchain world, what that might be able to enable?
[00:55:56.843] Adam Draper: I mean, it enables, in a way, time travel. It enables, in a way, replicating humans' consciousness. In a way, it enables just getting closer together through technology rather than further away. I think that we have disconnected people from the technology. And so we hate people online. We get triggered at things. But when you talk to someone in real life and you are there with their presence, you realize people are pretty rational. I'd say right now, everyone thinks a majority of people are extremists. I believe that with this technology, with these things, everyone's going to realize that a majority of people are somewhere in the middle. with, there's always extremism, but like all of these technologies together, it allows for the imagination to be the most powerful asset where right now we've been, we really built governance around not allowing imagination to be the asset. Imagination needs to be the asset for us to get off this planet, for us to become an interplanetary species, for us to save this planet. We need new ideas. My fear is that our imaginations are actually being limited. The proof of that is that almost anything in a sci-fi book today is possible. And that shouldn't be true. I should not be able to fathom half of the stuff in sci-fi books. And there are some that are a little outlandish and I appreciate those. But yeah, so that's my final thing is that I think that with these technologies, we've been building the internet, created this world where we really have not garnered the imagination and tried to disconnect from each other. because of the governance of different governments, as well as the governance of these different companies. I believe with these tools, VR, AR, crypto, we are going to be closer together. We're going to be understanding each other and we're going to create an economy of the imagination.
[00:57:55.539] Kent Bye: Wow. Well, Adam, I just wanted to thank you for coming on the podcast and sharing some of your thoughts about being on the bleeding edge of these sci-fi tech of both crypto and VR worlds. And yeah, thanks for coming on and being able to share what's been happening and also give a little bit of vision. And if people are on the bleeding edge of wanting to have investment in the VR world or the crypto world, then how's the best way to get in touch with you?
[00:58:18.616] Adam Draper: You can email me, adam.boost.vc, or definitely reach me on Twitter. We also have an application on our website at boost.vc. Twitter is at adamdraper, which is pretty self-explanatory. Thank you, Kent. This was amazing. Thank you so much for having me on.
[00:58:36.823] Kent Bye: That was Adam Draper. He's a founder of BoostVC, which has been investing in both virtual reality companies as well as cryptocurrency companies. I have a number of different takeaways from this interview. First of all, Well, I think I walked in being super skeptical about cryptocurrencies and NFTs and all this stuff. There's a lot of hype about them right now, and I feel like there's a lot of also just scheming, grifter scams that are happening. A lot of focus of people trying to increase their personal wealth, but it feels like a little bit of a pyramid scheme or a multi-level marketing scheme where you have to buy into The perceived value of something, in order for people to profit it, comes at the cost of other people. There's something that is fundamentally not in right relationships in some ways because people are really focusing on their own personal wealth generation, but ignoring how that may be impacting other people in that ecological system, but also the impact of themselves on the environment, which I think is another huge thing. There's still a lot of questions I have about how all that stuff is being figured out, but I do suspect that we're at this point of centralization within big tech companies that I'm personally losing a lot of faith that the government is going to be able to do something to feasibly be able to shift things. It may end up being that a solution is through the technological architecture and the code, which is the lowest level. to be able to create new dynamics and this new aspects of being able to be synonymous and build up your own identity, build up your own empire. That's what Adam is saying, this whole aspect of being able to bloom a thousand different Shotoshi Yakumotos, being an anonymous person that creates this whole empire. So that's possible with all this Web3 technology stack to be able to do that. Now, I'm also somewhat skeptical that having something be complete freedom of speech and complete sovereignty is necessarily going to be a great thing for the world in the absence of having the cultural ethics of being in right relationship with other people. When you have that type of sovereignty and you have a world of extremists that have hate speech and violence, then that isn't necessarily always going to be a great thing for the entire world. Just look at what happened in Myanmar with the government being able to have access to Facebook and to be able to incite violence. So freedom of speech is not completely unconditionally protected here in the United States. There are certain exceptions, and one of those is that the speech, whenever it is incurring on other people's rights to live or to survive or prevent them from having their own freedom of speech, then there's limitations that we have within the government that is from the perspective of a citizen's relationship to the government. Now, the citizen's relationships to these companies, that's a whole other thing where it's like not protected speech. And companies can do whatever they want to be able to stifle that different free speech. There's certainly a lot of other movements within people getting deplatformed and wanting to have their voice heard that they're creating these alternative, more decentralized models. It's sort of a pendulum that's swinging back and forth between centralization and decentralization. There's still quite a lot of other things that are figured out. I guess what I would point back to is Lawrence Lessig's model of having different aspects of the culture and the laws and the economy and then the technological architecture and the code. For me, I view it as this mirror-logically and fractally nested set of contexts, where there's the culture, and then within that context of the culture, you have the laws, and then you have the economy, and then you have the technological architecture and the code that's being built within those cultures. Now, the goal, I think, is to be able to cultivate new cultures, but in order to do that, sometimes you need to have a platform to be able to have new rules and to be able to actually have those other higher-level things, in terms of the overarching rules of that community, as well as the market dynamics of that community, which then will help to reinforce that culture. There's these feedback loops within all those things. It's not just a top-down thing. There is a possibility of creating new cultures. I do think relationality and being in the right relationship and figuring out how to operate in more of a harmonious communal perspective is the big challenge. Like Adam was saying, you can look at someone's wallet and be able to actually have some accountability for how they've been behaving. difference between people who buy and hold and be steadfast versus a lot of quick transactions and trying to make a quick buck. That type of behavior may be able to be traced through your actions, through your wallets, and is going to dictate how you're going to be integrated into larger aspects of that community. Now, how to go look back into somebody's history like that, to visualize it, and to really understand what the story is, as an example of You have to have a year in business, is one of the things that Adam said. Well, what about people who may not have the financial means to have that? Does that mean that they're automatically excluded? Are you creating these networks by some of these rules that are then becoming less and less inclusive of having a real pluralistic and diverse ecosystem? There's things like that that are still open questions for me for how all this actually plays out in reality. Are we just going to create new oligarchies rather than just replacing the big tech oligarchy? Are we just creating a new crypto oligarchy that has the same problems that are just replicated with a new technology stack, but having nothing really changed at the core? That's the potential. What Adam keeps coming back to is this process of skeuomorphism. Whenever you're creating these new technologies, you always have to look at the previous media, the previous culture, and replicate things one-to-one. Buying virtual land is something a lot of people in the VR world are like, why would you do that? You have infinite capacity. But in some ways, what Adam is saying is that this is a skeuomorphic phase that has to teach people the process of ownership within this world. Once you understand the analogy of owning land and owning your house, owning some piece of property, once you have that same type of ownership and what that means in this new context, then you're able to potentially expand out into the new affordances of ownership and getting away from having things tied down to a specific topology of a city, which obviously on the Internet is going to be very limited when you talk about the infinite imagination. The infinite imagination can't be limited by the limitations of geometry and topology. I think it's sort of boundless in that way. But how to discover and find and experience those different aspects of the imagination is going to be a challenge of creating that infrastructure and user interface for the metaverse and all this stuff. But at the core, you have this new economy of the imagination, is what Adam says. I think that's a really great way to think about some of this stuff. I think overall, like I said, I'm optimistic of some of these underlying principles for these new rules and how to do governance within these different crypto worlds and new aspects of enabling freedom of speech in the context of government censorship. I think there's these larger issues, which is the ethics and how, if people are going to be bad to each other, then these type of networks without really thinking about the harassment or blocking or spam. There's certain ways in which all of that has been handled through artificial intelligence. It's always a cat-and-mouse game, where people are going to be able to profit off these spam scams. Because of that, you still get it, and you get tons of different junk mail. You have things like very powerful artificial intelligence within these email servers that are able to help filter that out, so that you have the experience of being on the Web. It's a lot more signal-to-noise. Obviously, there's always going to be noise that comes through, but as this skeuomorphic phase within the crypto world is happening, then you're reintroducing a lot of those problems that have been solved through a lot of these centralized systems. Anyway, the convergence of these two technologies of the metaverse and crypto worlds, I am also very curious to see how that continues to happen. While I'm still skeptical that there's going to be some core issues of culture that need to shift and to have more of a relational mindset rather than an individualistic mindset, obviously, people are going to be acting in their own self-interest. But to really create a viable alternative that goes above and beyond the ills of capitalism and the rich get richer and the poor get poorer, there has to be some other ways of organizing our market dynamics that come from a cultural sift. I think part of being able to gift people or to exchange value and have wallets that people can send tips or whatnot, this stuff that's happening with Twitch and Patreon, the beginning of this patronage model that is going to be potentially enabled by a lot of these technologies. But like I said, I don't believe in the technological deterministic solutions that the tech is going to solve all the problems. At the end of the day, it still is people, and the people have to make these choices at the highest level. It comes to worldview and consciousness when it comes down to the core of it. In the absence of those shifts in consciousness, then we're just going to recreate a lot of the nightmare dystopian scenarios that we have with technology today. So that's all I have for today, and I just wanted to thank you for listening to the Voices of VR podcast. And if you enjoyed the podcast, then please do spread the word, tell your friends, and consider becoming a member of the Patreon. This is a listener-supported podcast, and I do rely upon donations from people like yourself in order to continue to bring you this coverage. So you can become a member and donate today at patreon.com slash Voices of VR. Thanks for listening.
