P2E Games Offer a Fun Profit Opportunity

The crypto ecosystem has opened exciting new avenues to earning income.

There’s the traditional capital gains strategy — buying crypto assets directly at low prices and selling them at higher prices.

You can also “stake” or lend your crypto to liquidity pools to earn passive income off your positions, rather than letting them sit in your wallet.

One of the coolest new developments intersects with online gaming.

The current online gaming market is estimated to be worth about $59 billion globally. But for the most part, players don’t see much of that revenue.

Thanks to the blockchain and non-fungible tokens (NFTs), that’s changing as play-to-earn (P2E) gaming is empowering gamers.

In our most recent Weiss Crypto Sunday Special, Marija Matić joins Chris Coney in exploring the numerous opportunities in P2E gaming.

You can watch the interview, or continue reading for the full transcript ...

Chris Coney:

Hi there, guys, and welcome to this week's edition of the Weiss Crypto Sunday Special with me, your host Chris Coney. So, today's topic is, play-to-earn blockchain games, and with me once again is the lovely Marija Matić.

Marija welcome back to the Sunday Special.

Marija Matić:

Thanks for having me, Chris.

Chris:

Thank you for coming to talk to us about this or discuss rather this topical topic. I always say that. So, let's start off with the most obvious point here that investors might have: the idea of play-to-earn blockchain games. It’s exactly what it sounds like — you get paid to play. Instead of me being the player and I pay for the game and then get to play, it’s the other way round: I play and then I get paid for it.

That completely flips the model on its head. How is this even possible to get paid to play games? Can you give us a general answer to that question? How is this even possible?

Marija:

The most general answer would be that in crypto world, in decentralized world, the marketers and creators will have to pay for the attention, but also creators will have to be paid.

For example, we have social networks. The centralized social networks are cutting out the middleman, who is taking money from the other company. [Now, they’re] advertising themselves.

For example, Zuckerberg; you're cutting out the middlemen in order to earn money for yourself because you are a creator. You're creating content on the social network.

The future of metaverses — and the games within the metaverses — will be decentralized. People who are creating these worlds will need to earn money for that, for enriching this world. And so, with the earning of this and the crypto, it became possible to earn money inside metaverses and games.

Chris:

I’m with you. So, where does the money come from? If it is an in-game economy, then it comes from the people consuming the value and it goes to the people providing the value. So, if you're a creator... I'm going to go back to the olden days in Second Life when there were 3D artists and then you had to do 3D modeling.

So, they made virtual shoes and then they had a shoe shop. So they were using their talent to create these virtual shoes, putting a texture on them and then displaying them in the store. And then other Second Life characters would come along and pay Lindon dollars, at the time. I think they're probably still around to buy those shoes, but that's not necessarily play-to-earn. That's almost like create and sell. Whereas in some of these play-to-earn blockchain games, doesn't the money come from token inflation?

Marija

There are many ways to earn money within play-to-earn games. It depends what kind of game it is. You can, for example, build a character, an avatar or a digital pet or something like that, which has a certain set of skills. And by enriching the skills of the avatar that you are creating, you raise the value of that avatar or item.

Or for example, if it's a land within the metaverse, you can increase the value of that land by building something useful on it or something like that. You can definitely raise the value of the items that you own within the metaverse or the game. And once you sell it, of course you can earn. But there are so many different examples, so it depends.

Now, [we’re] in the early days; we have decentralized autonomous organizations (DAOs) of the games, the treasuries, which are in a way rewarding users ... even though they may not deserve certain kind of rewards. But that's how it works in crypto.

People are paying to get involved in the race and then the winners take that money as a prize. So, the money is flowing from different people within the game. And this will create huge economies and there'll be so many ways to earn that it's just incredible and mind blowing.

Chris:

I’m with you. So, one thing I thought in your first example there is when you said, "You play the game and build up your avatar," that's just like playing a traditional massive multiplayer online game, like Diablo or World of Warcraft.

So, you start off with a very basic character and then you basically have to put the time in to log hours and do quests and level up, find gold, find rare items and purely through hard work, you build a more powerful character. Now, someone might want to buy that character off you, [someone] who's just getting into the game and kind of like mobile games that allow you to pay to kind of get extra lives and basically cheat.

Some would say you don't have to put the hard work in, and some might want to buy my character that I've been building for a year. Great. So, if it was a non-fungible token (NFT), I could just sell that character and someone brand new to the game could basically leapfrog a years’ worth of progress.

But then, basically, I've been paid for my time and hard work. So when I thought about it like that, that's much more like the real-world economy. So maybe “play-to-earn” kind of misdirects the understanding, because if you just stop thinking about it like a game and stop saying the word “play,” it's more like “work-to-earn.” So in the way I just described in, say, World of Warcraft, you're still doing work. The fact that we call that virtual world a game, I think, causes people not to take it seriously as an economy, whereas it's deadly serious; it's an actual economy.

So this is where the metaverse and the three-dimensional physical world are going to blur because, if you get a job or work in the metaverse, you're literally going to put your VR headset on and say, "I'm going to work," and you go into the metaverse and do your work.

You'd spend your time creating value in whatever way that’s defined by the buyers. And then when you finish your day's work or whatever, you take the headset off and go and have dinner.

So it's not really play-to-earn, it's work-to-earn. That sort of shifted my mindset. Thanks to you just now and what you said just then. That's clarified it for me, and hopefully the way I've just said it will help it click into place in the mind of investors viewing today's show.

So [one of the] other questions I have here, you've already covered, which is, “how has gaming managed to transition to play-to-earn?” And I've written in the notes that I suspect one of the parties in the old model are having their share of profits reduced. And that is true.Chris:

So the BAT Token, the Basic Attention Token that's transforming advertising. So you download the Brave browser, you turn on Brave ads and then every time a little ad pops up, you receive a fraction of a Basic Attention Token. And that's coming from advertisers who are paying for your attention. That's another way you just said, we're going to monetize these virtual — I'm going to stop calling them in-game, because I think “game” is the word that's messing up — these virtual economies.

So again, you could monetize it through virtual billboards and all the rules of the physical world still apply: Wherever human attention is, advertisers are going to want to buy their attention, whether to direct it into the physical world purchase or more virtual world purchases.

So back to my point here: At the moment, you have most of the game developers and platforms taking a lot of the revenue, whereas we're decentralizing it, taking out a lot of the middlemen. So that frees up more revenue for people providing the kind of grassroots value inside these economies. That kind of answers that one.

Here's another question. How do the developers of these virtual worlds fund themselves? Do we know that? Are there are different models for that?

Marija:

Well, mostly through seed sales — private and public sales of their tokens. That's how they fund the development and usually their allocation, which is preset, is busted for a certain period of time. Then, it gets gradually, linearly released maybe on a monthly level after, for example, being locked for a year or two.

But then you have other funds. Like the supply of the token gets allocated, there are different allocations. So you have the team allocation, you also have a treasury allocation or the one for marketing or different things. And all these allocations are publicly announced, and this information is available, as are the vesting schedules for each. The long-term development has been taught through with most of these games.

Chris:

So of I've seen that most of the developers that put a pie chart on the website and it'll slice it up into original. I suppose the original investors who are risking their capital to fund the development, are taking the biggest risk, right? Because...

Marija:

Right now, you don't really have to risk much because there's so much money in crypto and so many venture capitals (VCs) want to fund the ideas. It's not like the old days where when you had to invest all that you have to kickstart the idea. Right now, you can kickstart only with the idea. So it's not like that. And they're not risking that, they're risking maybe prison.

Chris:

Prison?

Marija:

Yeah. Regulatory issues are the biggest issues for founders of any crypto project. So this is the largest risk of course. And, of course, safety measures taken when it comes to code and audits and things like that. These are the cybersecurity, tricky questions. And also not raising enough money. There is a risk that you're not going to raise enough money depending how ambitious your project is, which is not going to be enough maybe for-

Chris:

To even finish the development.

Marija:

... to finish the development. It's also risky for the investors. And those are kind of things that are risky.

Chris:

Totally with you. So how does the founding company stay profitable, though? Because they're not actually charging for the games in the traditional way — like going to the store, paying $50, bringing home a disk. Access most of these games ... they're free to access. So that's fine. You get capital or you do a token sale, get a bunch of money in and hopefully it covers the development cost, and you launch the thing. And hopefully, you bootstrap an economy, and the token starts trading, and boom! It gets a market cap. Lovely.

But unless you've got inflation of the token ... Say you've got a fixed supply of 20 million tokens in your virtual economy, what happens is when the allocation to the developers runs out?

Chris:

Now, I think I've already answered that in my head just now. Say I allocate 1 million tokens to myself as the developer. You would hope or aim for the value of those tokens to continually increase as the game gets more popular, almost to provide you with an infinite supply of cash. So, on day one, those million tokens might be worth $1 each, it's $1 million. But, as you spend it carefully and slowly, if the token value keeps doubling because the game becomes popular, that stash becomes worth $5, $10, $20 million. And then you keep reinvesting. And I suppose that would provide a way to fund the project long term without actually charging anyone any money for it.

Marija:

Right now, you're talking about the fundable token, like the governance token of the game.

Chris:

Yes. Exactly.

Marija:

There're NFTs which are very important as well. As a founder, it doesn't mean that you're going to end up doing it in a couple of years. Maybe some other team will take over because the aim of these games is art, is to be decentralized through the DAO. Not all, of course, but with the DAO, with the common treasury fund, token holders can vote on which team will receive the grant in the future to develop this or that update or something.

But also, how would you enrich the DAO? How would the DAO make money? For example, you can put NFT sales of virtual land, you can set a percentage for all the resales, the percentage of all the resales of that land within the metaverse.

Chris:

Like a transaction tax.

Marija:

The creators of NFTs are usually putting these percentage giving to themselves royalties from each resale.

You can, for example, do that. So initial sale of NFT land goes to the DAO, to the treasury. And for each subsequent resale, a percentage goes to the DAO, so there are so many ways to earn within the metaverse for the creators.

Chris:

That makes perfect sense. I like that.

Marija:

And of course, the governance token itself is a huge source of income, especially for the founding fathers of the game.

Chris:

Absolutely. And again, if the game continues to grow, their treasury gets richer, and so on. That’s good. As long as it’s governed well and it gives the people what they want, then if they reinvest wisely, [the economy] should just grow and grow and grow. So, that’s cool.

I found this site, playtoearn.net, which has a vast amount of information about most popular games right now and so on, and even categorize it into subcategories within the whole play-to-earn sector. So they don’t all use the same economic model, either. Axie Infinity is the one that keeps getting bounded around, and I've looked at that a couple of times. But that seems a lot more a mobile phone type casual game than a World of Warcraft type quest game. So is there any particular reason why Axie Infinity is doing so well?

Marija:

That's a very tricky question. Many people have heard that you can earn a lot of money. When I say many people, I'm talking about the eastern part of the world. For example, some parts of Asia, where the wages are lower than in the U.S. and the earnings which one player can make [from Axie] are really a lot. I don’t how much they are right now. But a few months ago, you could earn maybe $800 per month, which is a lot.

Chris:

Yeah, absolutely. If you're in a country that lacks a lot of employment opportunities, but has internet access and you have this virtual economy like Axie Infinity where you can earn, let's say, $400 a month, who cares? It's there, you can become sort of virtually self-employed within these virtual worlds. And if the money dries up in that one, you go and work in another one.

It's really flattening the economy and making opportunity available to anyone with an internet connection. Talk about closing the wealth gap: It's access to the opportunities is what's been given to these developing countries.

So, I wrote down in the notes that [there is an] unreleased space game everyone is hyped about. I think that's Star Atlas. Is that the one? Do you know this one?

Marija:

Yes. So it's very hyped.

Chris:

Yeah. So the reason that one's hyped … What does it remind me of? It kind of reminds me of Cardano (ADA, Tech/Adoption Grade “B”) in a way; it's supposedly highly sophisticated, kind of complex and a lot of work has gone into it. And therefore, there are very high expectations of it. But as far as I know, it's not been released yet.

Do you know anything more about that? When it's going to be released?

Marija:

I'm not sure exactly the date, but a lot is expected of Star Atlas, and I really think it's going to be a good game.

Chris:

Do they have a token already that you can buy?

Marija:

Yes.

Chris:

I did not know that. Okay. Interesting. That's interesting to know. So, my other favorite ... Do you know of ZED RUN?

Marija:

Yes.

Chris:

So that's virtual horse racing, the ZED RUN. You earn by winning money off other players, which means the money comes from outside the game.

And it reminds me of my friend, Mark, who is into pigeon racing. So, you breed pigeons and... You know what I'm saying? That's how those races work. There are traditional sweepstakes that everyone pays an entry fee to get into the race. And then the money is pulled. Some of it's given to the organizer and then the rest of it is divided into prize money based on first, second, third, et cetera.

That's a very simple way of playing-to-earn. And you would say that is one model you can adopt in say a virtual racing game. So that's kind of how ZED RUN works. There are NFT horses, which is a whole thing; you can buy and sell them, and the developers obviously get the royalties when they get transferred ownership, and there are stud fees if you breed the horse. But you can also just be a gambler if you like. You can go to the site, place a bet on the horse, look at its track record. And if it wins, you win. And even the owner of the horse wins money if it wins. So that's kind of a very interesting one.

I even said to Mark, I'm like, "Dude, you should get into this. You know so much about pigeon racing. Why not to just do what ZED RUN has done but with virtual pigeons. It would be amazing. Because the problem right now in that sport is not all the birds return because they get eaten by birds of prey on the way. So with a virtual one, that wouldn't happen. Or would it? You could build that into the game maybe, just saying.

Marija:

Yeah. Well, the thing is for example, ZED RUN you have horses which are worth $100,000 — like normal racing horses in the real world.

So generally, in there or in Cryptopia, you have shops that are worth a lot — a couple of hundreds of thousands of dollars. Why is this? Because you can earn with these shops potentially in the future, the same way you could earn with the physical shops. Because you rent them out to interested companies ... and you have so many companies that are entering the virtual worlds. You have Adidas (OTC: ADDYY), you have Nike (NYSE: NKE); Microsoft (Nasdaq: MSFT) is creating their own metaverse.

So many of the fashion companies are going to be the next. They're going to create virtual fashion shows, display new sneakers or whatever. And within the virtual world, the possibilities are limitless and the number of people that can attend these virtual events is much higher as you're not restricted by the physical space and location.

Because you have all these companies, very important global companies that want a shop there — like you would have in Manhattan or somewhere else in the physical world, but in the virtual world — of course you're going to charge them the same. They're going to have maybe even higher revenue from being present in the virtual world than they have in the physical shops that are very limited by location scope.

Chris:

Yes. But it's the same with what we said earlier about attention. So why on Earth is Times Square real estate so bloody expensive? Well, because there are a lot of people walking past. So similarly — and I said this in an episode I did about metaverse investing — you've got several logical levels.

Let's assume the Polygon (MATIC, Tech/Adoption Grade “B-”) network becomes the place to be in terms of building your virtual world, and then you say, you've got a world within Polkadot (DOT, Tech/Adoption Grade “B”) and you've got Polka City within that. And then within the Polka City, you'll have very center of town, wherever that happens to be [as] defined by people's movements. If they start hanging out in this district over here a lot, then they're going to spend their money there and that's going to drive real estate prices.

If I'm a say a virtual real estate investor, my job is to guess which cities are going to be hot and which parts of the cities are going to be hot. Because if I buy the real estate early, boom.

Marija:

Exactly. That's very interesting. And for example, you mentioned Polka City. Polka City is not on Polkadot, but Polka City generally...

Chris:

Is it not?

Marija:

No.

[In Polka City] they don't just rent land, but they also rent gas stations, cars, etc.

You can own a car and rent it out for people who want to drive around and maybe race around or whatever. And they're of course going to run out of gas. So, they will have to charge to put some gas in. And the people who own a charging station or a gas station will earn some money from that.

And maybe they will want to rent a yacht or something in the metaverse, but the owners of the yacht are certain people and now it looks very crazy.

When you're thinking about, let's say Polka City or any other metaverse you're like, "I would love to buy some assets in this, in this metaverse early on. But which one? Should I buy a concert hall? Will this project concentrate on music events?"

Because you already had [something similar]. Remember Ariana Grande doing concert within some games, traditional games? So will they concentrate on music events? Will they concentrate on sport events? Maybe I should buy a stadium, in fact, or maybe I should buy the cars because maybe people will want to race like San Andreas game.

And because people can do so many things within these metaverses, you kind of have to guess. Right now, it's more of a guessing game, but at the same time, these assets are not cheap. Even in these early days, they’re not so cheap. But of course, they're dependent on the success of these metaverses — or as you say the part of the town, the part of the land or the floor on the Cryptopia building.

If it succeeds, then you have a jackpot, probably. If you go to Cryptopia building, you're like, "What should I do? Should I buy on the sixth floor where the events are going to take place — like round table conferences where people will be incentivized to attend by the organizers or auditorium — or should I go for the top floor where the gaming events will be held? Or should I go for the first floor, or should I look where the companies like Binance, Cointelegraph or CoinDesk are opening their shops?"

There are so many possibilities and, depending on how skillful you are within the real world, maybe you can kind of envision and think it's true. But inside these games, you have these metaverses, spaces where third-party developers will be creating some social challenges, social games, so many different things that may attract people as well.

So, it's difficult for an average person who's not in the space. He cannot just come and say, "Hey, I just want to get involved." No, you have to go deep into that thing if you want to meaningfully get involved early on.

Maybe you want to invest in a guild that's already invested in many of these games and metaverses. Or there’s probably going to be an index of different successful blockchain games and metaverses at some point.

Chris:

 The thing is about principles is, they're principles, which means they're universal. It doesn't matter whether we're talking about traditional investing or crypto investing. Doesn't matter. There are 10 principles and you just described one which is, there is a spectrum of risk and you can move that slider up and down.

You can stay down at the low-risk end but, of course, risk and reward are married together. So, the least risky thing would be to decide by Ethereum (ETH, Tech/Adoption Grade “A”). And that's the broadest investment that you'll find. Any growth in the metaverse, and Ethereum is going to capture some of that. So that's okay. That's the least risky, the simplest, but the lowest reward play that you could take.

And then, like you said, halfway along that would be these index funds, like Yield Guild Games (YGG, Unrated) and any others that decide to establish themselves. That's sort of more sector specific, but not protocol or game specific. So, it's medium risk, medium reward.

And then, right on the risky end is buying a specific piece of real estate in a specific virtual world that you think is going to turn into Time Square. And that's obviously massive potential upside ... but the chances of picking the right one requires a lot of time and a lot of skill.

So depending on what type of investor you are, you can sit anywhere along that spectrum and anywhere in between.

So that's sort of the big takeaway from when there's something like this that's complex. You think the real world's complex; this is even more so.

Marija:

Yeah. Especially when you think about the games and everything, sometimes the most stupid looking games, the pixelated ones — which I will never understand, but there's so many people who do understand, they love them —

Chris:

Like Minecraft.

Marija:

It's just like Minecraft.

Chris:

That blew my mind, totally blew my mind.

Marija:

That blew my mind as well. So maybe some pixelated game will become more popular than all these high-tech games and realistic looking metaverses with metahumans where you can basically scan yourself and have your own avatar completely realistic within the metaverse. This is a new thing.

Chris:

That's interesting.

Marija:

You have this game which just announced the first NFT metahumans. But you have to go to their studio in order to get scanned completely with so many cameras around you from floor to the top, all order for them to create avatar version of you.

Chris:

Like a copy of you.

Marija:

A good copy of you. Yes.

You have these creative tools as well which were issued by Epic and some Serbian studio as well. And so this is going to be a thing as well — very realistic copies of digital copies of yourself within the metaverses.

But as I said, maybe Minecraft-like pixelized metaverses are going to become a thing instead of metahumans, Or maybe they both are, but we don't know which. It's quite complicated.

There are so many projects. They're very early. We are very early. These are all in the very early days. And right now, investors can only position themselves. They can't play yet many of these games. They can maybe buy a land; they can buy a governance token.

But this is definitely the future.

Chris:

Do you mean not all these projects have a working product or what?

Marija:

Yeah. Like you said, Star Atlas or some other games, they are [still in progress]. If you look at the traditional world, traditional games, you need a couple of years to build a traditional game. It's not different in crypto world. You just add the element of the blockchain within that economy. You create the economy on top of the visually pleasing game.

Chris:

Yeah, sure. And perhaps in the crypto world, you don't have to do the big two-year run up to a full release. When we do this with smart contracts, they can launch an alpha version and let people start testing it then almost improve it on the fly with real-world data rather than a massive launch after two years.

And it might flop. Whereas if you launch something in its minimum viable product form, you can see if there's a market. You can test out in the real world, tweak it, see if there are any security holes and all that sort of stuff, and then work with the users to perfect it in that way.

Marija:

Yeah, of course. It depends. What we've seen with the traditional gaming world, [that’s] quite difficult, especially if the players are also builders, building something within these games. It's very difficult to update the game and update all the graphics, even the ones which the players have helped build. It's quite difficult. That's why I think these new games and virtual worlds will have to be quite modular.

Chris:

Modular?

Marija:

Modular, yes. And the success will also depend on different games studios that are building within pieces of different virtual worlds or on some land plot or something. You have metaverses that are building different worlds, different games. You have the DAO which is a main DAO, but then you have sub-DAOs, which mean these are governing smaller games within [the main one].

For example, [in the real world] you have the universe, then you have galaxies.

So, [in the metaverse] you have the universe, which is the DAO, and then you have galaxies, which are the sub-DAOs. And within these galaxies, you have worlds or planets or something. It can all kind of expand very much, but it has to be modular so the success of each unit doesn't have to be connected.

Chris:

It seems to be spooky to me. It's almost like how our physical universe was designed. There are certain laws of physics— the universal rules — and then we have different galaxies, but different planets have different gravity and different atmospheres and therefore different types of life. We now already have that in science, in the physical world.

But now you're talking about replicating that in the metaverse. So you could start with a whole new universe with a kind of universal set of rules that apply to the galaxies, and then the solar systems, and then the planets and you might have an Earth-like planet, and then you might have a little gray alien type planet.

Chris:

But then you can have an entirely different universe with a different set of global rules that apply to all the levels below. And I'm like jeepers creepers that really is like some of the theories about the physical universe.

So that's where it that's really where it gets to another [note] I’ve made here about the problem with this sector. It’s the same problem I see with all of crypto when it comes to investing. It's just the risk of [being] completely and utterly overwhelmed at the number of opportunities; it's almost infinite. It’s by definition infinite, because there is no limit in the digital world.

Marija:

Yeah. And to add to the complexity in this virtual world, you have different gains being built with their own tokens. So you have a virtual world with their own token and then the games within that are issuing their own token. So it becomes more and more complex. And if you're going to have some VIP access to some of them, you would need certain NFT for VIP access to some individual world.

So it's all quite complex now ... until we reach the stage where we start using it. When you start using it, it will become more flawless, easier to navigate, to understand how it works, why it works like that.

Chris:

And also be obvious where the big winners are when social networks started becoming a thing. There was loads and loads and loads of them, from Squidoo to MySpace, to this, to that. And then they sort of gradually consolidated, specifically because most social networks start out with one type of media — like Twitter was text based and YouTube was video based and Instagram was photo based. But then, as one takes off, the other platforms sort of add that as a feature.

So now on YouTube, you can add video and images and text and links and all the rest of it. Same on Twitter and Facebook. So they've all sort of blurred together, but we know what the major ones are, which is where all the attention is. And that's the network value.

Chris:

While there's a lot of experimentation right now, the same thing will probably happen [in the virtual worlds]. One or two or three universes will become the primary, popular ones where people are spending their time.

Because that's the ultimate scarcity.

While there might be an infinite number of virtual universes in the metaverse, there isn’t an infinite amount of human time to spend in all those infinite universes. So some of them are going to have to die and consolidate wherever people are hanging out. So that’s ultimately where it’s going to go.

So it isn't going to be this complex forever. Would you reckon?

Marija:

Yeah, I agree. And on Facebook ... I don't use Facebook, but I remember on Facebook you had these small games that people were playing. Some were playing this one, that one, so it would be like that.

Some metaverses will be focused on socializing. So you would be able to socialize plus play virtual games. So not all people will be interested in the same games. But as you say, there won't be — at least, I really hope that we are not going to have — such a huge monopolies like we have now. Like, you have [Alphabet, which owns] Google and YouTube, you have Facebook, you have TikTok. I really hope that it's going to be.

But when it comes to socializing, there would probably be a huge network, a huge metaverse. Because people go where their friends are; it's like magnetic field. You can go on some obscure social network, but you don't know anyone there and you can't really meet your friends there or see their updates and what they're doing, their photos. I don't care about the photos of the strangers.

In a way we will see which one will win over with the social networking element.

Marija:

And I think this will be the glue for all the games and metaverses. So it's quite important, which one provides the easiest barrier to entry for regular people. Probably the ones which do not need VR glasses or something like that where you can just enter from a phone and things like that.

Of course, though, [that trades off from] having a richer virtual experience, if you use some gadgets. Now, you have even the mixed reality ones where you have augmented reality added to the mix with the DVR. And it's all quite interesting.

Chris:

It is. I made that point in a previous episode about wherever people socialize at the minute. The reason that Facebook is hard to beat or compete with is because that's where all the users are. People go to Facebook because that's where their friends are and they go there because that's where they are. It's very hard to compete with that when you've got no users; you have to bootstrap it somehow.

So, there's no wonder that if Facebook sees the trend that people are going to be socializing more and more in the metaverse, they're going to stop socializing on Facebook because they've only got so much time; back to the ultimate scarcity of human time.

If you start choosing to spend your however long people spend on Facebook, two hours a day, in the metaverse instead of on facebook.com, that's a problem for them. Their revenues are going to shrink. They need to do something about that. And that's why they're now Meta Platforms (Nasdaq: FB), right? So we'll see how that goes.

Marija:

With social networks, people kind of stopped socializing in real life. That's not necessarily bad because you can socialize with relatives who live across the ocean and some other people that you really like that you may have not known before with shared interest and everything.

So you may enrich your other experiences. Your experience can be enriched, like maybe your mental stimulation and the conversations that you have maybe richer in the online world than in a real world.

There are benefits. I'm not going to say social networks are evil, it's the time. It's what the progress brought. There are, of course, negative things about it, but virtual world are going to be extension of that.

It's not just going to be for socializing. We're going to spend time there meeting people. Me and you, instead of meeting in a studio and doing this, we will be meeting in a virtual world and doing an interview. Also, you will be trained. For example, you'll now have companies that enter that space, training their workers, how to do maybe a line job in a factory...

Chris:

Or even firefighters and surgeons. I've seen it.

Marija:

Yeah. You have so many trainings for jobs which are realistic, and you can try it out. So many things will be happening in the virtual world, it's not just going to be socializing or playing games. It can be very, very useful.

Chris:

Yeah. Here is the last point I want to make, which was building on something you just said. So you said social networks are not evil, blah, blah. People are not socializing so much in person anymore and that's just the way it's progressed.

But the fundamental question I have — and I think I've got an answer to this part, so I'll see what you think — what on earth is powering that trend though? Because I personally would much rather socialize with you in person, categorically, no doubt about it whatsoever. I would much rather shake your hand, no doubt about it. It's not a substitute in my experience.

Marija:

But we live in different countries.

Chris:

I know that, but...

Marija:

Socializing online is better than nothing.

Chris:

Better than nothing.

Marija:

Better than the latter, I guess.

Chris:

What human need is being fulfilled by this trend? What's driving it? And I'll give you my answer: I think it's easy money. Fiat currency. This is my summation as quick as I can give you it.

I just don't think people have got time anymore. We just don't have a lot of time. The quicker you can do something, the better. Rather than even me driving 30 minutes across town to see a friend, it’s just quicker to walk into the spare bedroom and boot your VR open.

But why do we have to do that? It's because we haven't got bloody time. Why don't we have bloody time? Because the money is not worth anything anymore. Right?

So this is back to primarily Bitcoin (BTC, Tech/Adoption Grade “A-”) is hard money. Austria school of economics: If we can bring sound money back, perhaps once the pendulum swings the other way, we'll not have to work so many hours and then we'll have time for each other in person. That highway goes that way.

Marija:

Yeah. Sending letters is inefficient. It's about time, as you say, and efficiency.

Chris:

That is the problem, though. I watched the documentary yesterday about algorithms and the trouble is if you optimize for efficiency, you basically take out the human element. Humans are not efficient. We're not; we're kind of messy. We're not precise in any way. We're flawed.

All the things that make us human are taken away by efficiency. Efficiency is for machines, not for human beings. And that's where we're becoming mechanized as a race.

Marija:

Yeah. Well, but still people are trying to be more efficient wherever they can, however they can.

Chris:

Because they have to, though.

Marija:

Yeah, we have to.

Chris:

Yeah. Exactly.

Marija:

Because the world is moving so fast that even learning about crypto and the payments with crypto and all these things, it's about the efficiency. That's how many people got into crypto, because they were unbanked, or couldn't do some remittances or they needed more efficient way to send value. Or the gamers, they started selling skins and things for Bitcoin in the early days, because it was easier for them.

So it's just about the efficiency. People are trying to do things more efficiently if they don't, they risk being kind of sidetracked with their careers or in different fields.

Chris:

We'll see how it progresses, but for now, Marija, thank you very much for coming on Sunday's Special once again.

Marija:

Thank you, Chris.

Chris:

All right. So that's going to do it for this week's edition of the Weiss Crypto Sunday Special with Chris and Marija. Until the next one, it's bye for now.

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