The Value Chain of the Open Metaverse

Metadata

• Author: [[Packy McCormick]]
• Full Title: The Value Chain of the Open Metaverse
• Category: #articles
• URL: https://www.notboring.co/p/the-value-chain-of-the-open-metaverse

Highlights

• What has been missing for me is a clear use case, like NFTs, and an understanding of the business models and value chains underlying a lot of these concepts. Yes, there’s idealism, but there’s also a sense of building a new economy in which the value accrues to the people who create the value. That’s capitalism, baby.
• Dixon describes the transition as an S-curve. In the beginning, centralized platforms do anything they can to attract users, developers, and businesses in order to build up multi-sided network effects. Once they’ve built those network effects, though, and they know that users, developers, and businesses are locked in, they switch from “attract” to “extract.” The easiest way to grow revenue is to start charging businesses and developers to reach customers, and to serve customers ads or products based on the data they’ve accumulated.
• Using a bunch of APIs that are really flexible, and figuring out good ways to connect them, leads to a combinatorial explosion of potential workflows. API-first companies turn software into like customizable building blocks.
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• While some people love the privacy that Web3 offers, or the fact that “the man” will no longer own your data, that gets it backwards in my opinion. It’s not about who doesn’t own your data, but who does: you. That’s what crypto folks call “Self-Sovereign Identity.”
• Despite the large sums of money made by the people who own Bitcoin, Ethereum, and other altcoins, I’ve always viewed the Web3 movement as anti-capitalist. That couldn’t be further from the truth. The movement is really about doing one of the most capitalist things there is: cutting out the middleman. It means that instead of value accruing to the Aggregators, there can be a more direct connection between suppliers and consumers.
• It’s not about taking money out of the system, it’s about moving the money around to the people who create and the people who consume, and to the people who maintain and improve the network itself. And it’s about attaching each user’s data and money directly to them (Self-Sovereign Identity), creating a public record that they own what they own (blockchain), and letting them take it with them, and profit from it, wherever they go on the web (Interoperability).
• The reason big new things sneak by incumbents is that the next big thing always starts out being dismissed as a “toy.” Disruptive technologies are dismissed as toys because when they are first launched they “undershoot” user needs.
• Breaking up a formerly integrated system — commoditizing and modularizing it — destroys incumbent value while simultaneously allowing a new entrant to integrate a different part of the value chain and thus capture new value.
• Losers [meaning people who lose the economic game, not being mean] are the people who are set in roles or stations in life where the output of their effort is wholly realized by someone else. As they learn throughout their careers, their skill or engagement might lead to incremental career progress, but no real leverage of any kind.
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