Digital assets, online identities, spatial computing and why virtual worlds mean real business
We can see the outlines of the financial market infrastructure of the new economy.
The World Economic Forum’s new Insight Report on The Future of Global Fintech shows that more than a quarter of the world’s fintechs are in the Asia Pacific Region and almost a third of them are in payments. It is a crucible of innovation, which is Victoria Richardson and I chose Money20/20 Asia in Bangkok today (25th April) to launch our new book Money in the Metaverse: Digital assets, online identities, spatial computing and why virtual worlds mean real business.
The kind people at Money20/20 gave us the Pathways Stage to kick off the day with an onstage discussion about the Metaverse and our views on the emerging infrastructure.
In our book Victoria and I talk about the technologies needed to make the metaverses of the near future useful for business and explore the new services that they will deliver. The book links the virtual, augmented and extended worlds where transactions can take place, the digital assets that will be exchanged in those transactions and the owners of those assets.
We go on to develop a comprehensive and practical model of the Metaverse and the nature of transactions in the new business environment. We think that our clear view of VR/AR worlds, its simple taxonomy for digital assets, and its tried-and-tested model of digital identity will provide a better understanding of the opportunities in the many metaverses where we will work, rest and play in the near future.
Thank you so much Money20/20 for giving us this platform to launch the book and for the space and support for our book signing session today!
Why?
While the Metaverse may have dipped out of public consciousness, there is no doubt that financial services strategists have to take it seriously. With demand from the entertainment, education, and defence industries and a forecast CAGR of more than 40% through 2030, the finance sector will look on as the opportunities for transactions proliferate and then be forced to respond because all of those transactions will require rails to move value around, to effect payments whether that value is fiat currency, game tokens or things that have not been invented yet. The transactions may be virtual, but the business implications are very real, and the Metaverse – in fact, a multitude of metaverses – is the next evolution of the internet. This will power new business models that, crucially, demand reimagined financial services.
The Bank for International Settlements (BIS) report on “The Economic Implications of the Metaverse” (BIS Paper 144, February 2024) looks at a Metaverse economy, built in VR/AR immersive environments, where avatars can engage in a broad range of activities. It notes that as their users spend more time (and attention) in metaverses there will undoubtedly be business opportunities from new services. Remember that the BIS is owned by the world’s central banks, so we take them pretty seriously. And when their new report goes on to say that “an important foundation for such services is the ability to make instant payments, ideally across borders and currencies, and to create digital representations of assets (tokenisation)”, we could not agree more!
To this end our book sets out a consistent and we think helpful model of commerce built on spatial computing, in which transactions are the exchange of fungible and non-fungible tokens enabled by the reputations of counterparties. In other words, payments in the metaverse must take the form of fungible tokens that exhibit the characteristics of money in the circumstances. The obvious candidate is what people refer to as stablecoins. In the not–too-distant future central bank digital currencies (CBDCs) or private sector tokens with reserves in either central bank money or perhaps other assets such as gold (or oil, or electricity or who knows what else) will step in to fulfil this role for most jurisdictions. We feel that the time is right for organisations all across the payments value chain to begin working on their scenario planning and strategies for this inevitable future.
Why Now?
Why are we launching the book now? Well, the MIT Technology Review lists the Apple Vision Pro as one of its “breakthrough technologies” for 2024 because the mixed-reality headset has a display that is radically better than any that has come before. The Vision Pro’s twin micro-OLED screen provides a much higher resolution and sharper contrast than the liquid crystal displays (LCDs) found in most VR headsets which means the ability to provide an incredible immersive experience. This device, together with Meta’s new VR headset (which Meta have just announced will also display Apple 3D video), will bring the Metaverse to the masses.
There is a new ecosystem around the corner. Louis Rosenberg, CEO of Unanimous AI, carried out doctoral work at Stanford University that resulted in an immersive augmented-reality system built for the U.S. Air Force back in 1992. He recently predicted that by 2035 people will laugh at images from today that show people walking down the street staring down at a phone. He thinks that we will see metaverses (built on virtual worlds) and augmented metaverses (with layers of rich virtual content overlaid on the real world) and goes on to predict that they will replace mobile phones as the primary gateway to digital worlds, with the transition from mobile phones beginning in the middle of the 2020s and completing by 2035 or “possibly sooner”.
If that sounds hyperbolic, in the light of current technology, bear in mind that “Gen Z” already spends far more time in the proto-metaverses than they do in the web world familiar to you. The next generation of consumers are showing the way: there are roughly 3.4 billion gamers, or 1 in every 2.36 people. 90% of Gen Z, 80% of Millennials and 63% of Gen X already interact with games and/or the metaverse. Where games begin, commerce follows and commerce will come because those standard solutions of the trading of assets between digital identities will form the security layer that was missing from the Internet because security is an integral part of what the metaverse actually is.
Who For?
Our book is not a manual for programmers writing smart contracts or for service providers who want to use the European Digital Identity wallet. Rather, this book aims to bridge the gap between the creators of metaverses and financial services strategists looking to create value from virtual worlds, web3 and digital identity. Our goal is to facilitate more efficient interactions between the stakeholders and more effective development of new products and services. Instead, its a manual for strategies that will lead to a better understanding of the opportunities in the many metaverses where we will work, rest and play in the near future.
Developing strategies to support real business in virtual worlds is imperative and we hope that you will agree that we have delivered a practical and accessible handbook to achieve this.
Here’s what some early reviewers have said about our approach:
“Being a father to a son who is a huge Roblox fan, I’m very much aware of how comfortable the next generation already is with the Metaverse, and how they are quite comfortable imagining the application of digital money and assets in that context. In fact, I pay my 14yo son’s allowance in Robux. So when Dave and Victoria map out the potential of business in these emerging virtual worlds, the cynics should listen. We were always going to end up doing business in the Metaverse, the only question was how quickly it would become a major sector in its own right.”
@Brett King, Bestselling Author of Bank 4.0, Branch Today Gone Tomorrow and The Rise of Technosocialism
“The authors explore the role of trust, security, data and DeFi in what will soon be a dominant domain for business – the Metaverse.”
@Ross Buckley, Australian Research Council Laureate and Scientia Professor at the University of New South Wales.
"Provocative, insightful, and entertaining, this book is a perfect reminder that we’re still in the early stages of a digital revolution. For enterprises big and small, understanding this is essential to ensure your digital future and this book provides an important practical framework for planning your journey."
@Alan Brown, Professor in Digital Economy, Exeter Business School.
"A must read book for anyone wanting to delve into the future of financial services."
@Jim Marous, The Financial Brand.
"If William Gibson and the Haynes Manuals had a baby this would be it."
@Tracey Follows, Futurist and Visiting Professor in Digital Identity.
"Rarely do business-oriented books bring so much imagination to underpin their argument as David and Victoria’s has done."
@Eva Pascoe, Co-founder of Cyberia, London’s first internet café.
Money in the Metaverse: Digital assets, online identities, spatial computing and why virtual worlds mean real business is published by The London Publishing Partnership. Order your copy today!
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