Enabling the Spiral Economy

Trading Physical Assets on the Blockchain

Mattereum Head of Design Kate Pincott’s Presentation from design FAO

So, I’m not going to talk about the blockchain; I’m going to talk about cool things we can do with the blockchain. I’m kind of more interested of what we can do with technology than the technology itself.

The topic of the talk is called Enabling the Spiral Economy, on that blockchain stuff, and before I share with you this project, I want us just to take a moment — there’s a lot of information — I want you to close your eyes — if you trust me; I’m going to close my eyes with you — and I want you to think back to what was the reason why you got into design or into creativity or into problem-solving. Whatever industry you’re in, what was the reason that drew you in? Take a moment to think.

For a lot of designers and creatives, it’s that they want to help people, they want to solve problems, they want to have an impact, they want to make the world a better place. And designers are naturally very empathetic, they empathise with everybody around them, and this makes it quite difficult to find “What is it that I want to do? What is it that I care about?” I had this struggle, and I noticed that I wanted to help all these different people and do all these amazing things, but the places that I was working in didn’t match my values. I was working in big tech companies like Facebook, I worked with Barclays, with US2, with Pentagram, and they weren’t talking about things that I was excited about. And this started to eat away at me, I was feeling really disheartened — I can see some nods; you’ve felt this before yourself.

And then I started to find what I find interesting, and I moved into coaching, I’m also a design coach, and what I love about coaching is that you help people to increase their self-awareness and their confidence, and to level up. So, I kind of found my thing, and I started coaching people from Google, from IDEO, from Figma, and I started to notice that each of us have this thing in common, where we want to find that thing that gives us fire and gives us fuel and lights us up. And the reason I’m excited to share this with you is because this is what my fuel is and my fire is, this is what lights me up, this is what gets me really excited. And so for any of you in the audience that are feeling like “Oh, I just haven’t found that yet…” I want to encourage you that it will come, as long as you stay curious.

We are living in a world of stuff! So much stuff everywhere! If you picture your bedroom right now, if you picture your house… Is there a lot of stuff in there? Behind the cupboards, under the carpets… The average US household has around 300,000 objects, from paperclips to spatulas to whatever, you name it. That’s a lot of stuff! How does it all fit in this tiny home?!

But the shocking thing about all of this stuff is 90% of it is trashed! And you think “God, I don’t think I throw that much away!” but this is a global statistic, this is across the world, and it could be from packaging to elements of it. And why do we care about all of this being trashed, why should I bother?

Well, because it’s kind of getting a big number, guys: it’s 2.12 billion tonnes of waste every single year! And I’m thinking “Why has this number got so big? Why are we throwing away so much stuff?” It’s really hard to picture that amount of stuff, isn’t it? When we say these numbers, how do you picture that? One way to think about it is that in the last 50 years, so let’s go back to the 1970s until now, we have created more waste than the entire human history! I’m talking about going back six million years, my friends! All of the rubbish that all of those people made, all out throughout time, is not the same as the rubbish that we have created — not just us; and our grandparents — in the last 50 years! That’s mind-blowing! Nearly at the present day…

And why do we care about all this rubbish? Okay, it’s ugly, it causes pollution, etc… The reason we need to care about it is because of these guys: greenhouse gases. Do we remember them? They’re kind of in the news a lot lately, they’re kind of annoying things…

Well, all that material that I showed you, 70% of greenhouse gases is because of all of that material. “Okay, that’s a lot… Again, why should I care?” Because — just as a recap, and I know you know this — we are on a trajectory: pre-industrial era to 2100, we’re on this current trajectory. If we don’t stop the planet warming at 1.5°C, we’re going to have some serious problems, and at the moment we’re kind of heading towards 3°C.

So, what does that mean? Well, that means there won’t be any fish anymore, so if you have kids, they just won’t know what it is like to see or eat fish… The sea levels are going to rise about seven metres, so that’s going to change a lot… And I’m going to skip this, but basically lots of extreme weather, which we’ve already started to see, drought, famines… Three degrees is really not good! So, that is why we need to care about all of this waste. And in a room full of creative people and designers, you have power to change this, and that gets me excited!

You’ve probably heard the reuse-reduce-recycle thing. Have you heard the mantra before? Yes. Guys, there’s actually 10, there’s not three, and this is good and bad. The top ones here in green are the most green solutions, and that’s where the designers come in: if we redesign before manufacture, to make products, services, digital and physical, with less raw materials, less servers, less energy, this is going to be the best solution we can possibly come up with.

But for all the stuff that’s already out there in the world right now, these [Reduction, 04–08] are our options, and then these guys [09–10], this is the last resort. And you notice that recycling is the last resort. Who here thought that recycling was, like, the Lord’s work? We often think that that is the best thing we can do. but actually reuse [04] is at the top of the list here for products that are in the world right now.

When we think about reuse, it means things that you have in your home, businesses that have products in circulation today: you can either continue to reuse them until they break, or you can resell them, and the resale or the second-hand economy is what I’m going to talk about today.

Who’s heard of the linear economy? 91% of all things that are made on the planet use this process: it goes in, they make it, it gets distributed, you use it, and then you chuck it away. And what we want to move to, as you’ve probably heard, is the circular economy. This is where let’s say a bottle of water, it gets used multiple times… I’ve got one here… Can you pass me that one? Reusable, great, I’m going to use it again and again… Actually, this one is probably indestructible, I can probably throw this on the floor and… Yeah, that’s not a good example!

A plastic one, let’s say it’s getting a little bit end of its life, a little bit scratchy… Then I could recycle it, melt down the plastic, and use it for a car part, and then it could go in and be used as the car, and then maybe that car gets out of date and maybe the parts need to be upgraded. What are we going to do with all of that plastic? Well, then it might get used in a new chair design, we call this remanufacture, and it comes into anew. And you get the point: it goes round and round and round.

But if we remember what I just told you about this reuse thing… That’s a lot of recycling! The energy that goes into collecting all of that stuff, remelting it down, putting it back, distributing, etc… This is not energy-efficient, right?

So, I want to introduce to you the spiral economy. This is one of the ways that we are going, as a generation, to get ourselves out of a pretty sticky situation. And this is where a product has gone through this process, it’s being used… But, instead of melting it down, breaking it, putting it in landfill, we start to resell it, so that the next person can use it, and the next person and the next person and the next person… and what this creates is a spiral. And so we’re doing a circular economy — kind of, in circles — but not of raw materials but of the objects themselves.

And this is really exciting, because there’s a lot of value stored in an object — there’s a lot of memory, there’s a lot of history, there’s a lot of information — and all of that can be maximised in the spiral economy, rather than lost.

So, what we’re going to start to see is people selling — I’m going to sell to you, and you’re going to sell to you, and you’re going to sell to you, and you’re going to sell to you — and there’s going to be this wonderful dance. But, how are we going to do that today? I mean, eBay is not going to cut it, is it? Amazon is not going to cut it. I mean, they’re terrible… No offence to anyone that works there, but it’s a bit of a headache: listing your item, and then waiting for them to reply, and then… There’s a lot of problems, right? So we’re going to need a new system to build the spiral economy.

Let’s talk about pain points, because I know designers love pain points: on the seller side, it’s pretty annoying to keep getting low offers, when you know that your Leica camera is the business, it’s authentic, when you know that your Abercrombie & Fitch jumper is the real deal. And how can you prove that? You’ve got your word, you might have a receipt or a certificate… You could have forged that, right, you could have faked it — it’s really difficult to prove yourself.

And then on the buyer side, you’re looking at the pictures, maybe you’re looking at some videos on your phone, you’re trying to work out “Is this true, or are you just making this up? Am I being gaslighted? Am I being lied to? Is it being exaggerated?” It’s quite stressful, especially when you’re comparing multiple products and trying to make an informed decision, there’s really not that much choice, because there’s not that much information. And even when you do make a choice, who is to say you’re going to get your money back, if you don’t like what you get? There’s no consequences.

To do a little recap on capitalism: the idea is that you make low-durable products, and you don’t share any information with anybody, and then you make loads of money! And “everybody” has a great quality of life, and you have a really big carbon footprint, that’s how it’s working today. Do you want it to be like that? I don’t want it to be like that!

I think there’s a better way. And again, our job as designers is to say how might we: how might we imagine a different world? What if we could have a world where the capitalistic system incentivised more durable objects, that made you more money, that gave you more information, that made your valuable objects even more valuable? Increased life quality, and at the same time reduced your carbon footprint? “That would be great!” It sounds too good to be true, isn’t it? We haven’t seen this before, because it’s hard to do what I’m talking about, and that’s the main reason… Until now.

There are three problems [on the left] that we need to solve, if we’re going to make this happen, and I need all of your brains in the room to stick with me. We’ve got hidden information — number one, lack of transparency — false claims, there’s a lot of counterfeiting going on, two trillion dollars’ worth of counterfeiting in the world globally, that’s not a small number; all poor legal liability, very little consequences when people screw up, make mistakes, human error, lie, greenwash, right?

In order to fix that, we need to have these three values on the right hand side: we need to be building products for the spiral economy around transparency, trust, and accountability.

The way that we’re doing this today is we are taking physical objects, and we are giving them a digital version, a digital version where all the information about that object is stored: the measurements, the descriptions, the condition reporting, the provenance, where it came from, the history, the manufacturing, the parts that go into making it, the raw materials — the whole supply chain. And we pair these two things for the entire life of the object; wherever this product is resold, the person receives the digital version. And up until now, digital receipts for your purchase — normally you get a paper one — have been pretty tricky to track, pretty tricky to keep hold of. But now we have this thing called an NFT, which is a digital receipt, so now we can track the life of a product and see where it goes and keep updating that information. This makes the product more valuable, it makes it more interesting, and it also poses another problem: where are we going to store all this information, and how am I, as a user, going to be able to access that information?

Mattereum has created this thing called an Asset Passport. Just how each of you have a passport that has stamps and that tells you where you’ve been, each object is now going to have a passport, and it’s going to have different category passports, gold will be treated different to wine or to houses. And inside that passport there’s some really impressive and very cool legal contracts that state “This description is true. This object is in fact connected to this NFT. This has been offset,” and these warranties are certificates that are made by experts in that field.

What’s really cool is that when a claim is made, or a description is put into this passport, you can now have an army of certifiers all around the world, saying, “I verify that’s true. And if I’m wrong, I’m going to give you your money back.” What brand can make that promise? Most brands have terms & conditions in the bottom of the thing, doing everything they can to avoid helping you, serving you, and making things clear for you. But also, brands make mistakes, and it’s not them that normally pays for it; it’s normally the customer, and I’m going to come back to an example later.

Now, you might think “Okay, but I’ve seen loads of stickers that cover this, and I’m pretty happy with my stickers. My stickers tell me that this is vegan, and I’m happy with it. My stickers tell me this is Fairtrade, and I’m happy with it.” The problem with these is that these are centralised, these are central organisations: one charity, one brand. It’s difficult to keep them accountable, it’s difficult to check up on them, the frequency, as they scale — it’s very difficult to prove that these are continuously being held. My favourite recent one is B Corp: I feel like every company in the world now is a B Corp, it’s like the easiest thing to get. No offence to B Corp, it’s a brilliant initiative, but with new times comes new problems and new challenges.

So, what are we going to do? Any ideas? I’ve got one: we’re going to create instead something that is decentralised! Imagine you have this lovely car, and it has these claims: it has one warranty in the Asset Passport for the MOT, this MOT was done and it passed; we have one for the mileage, the mileage has not been faked, it is true; and there was an accident, and here is a condition report about the bonnet of the car, and that this scratch let’s say is there because I’m a really bad driver.

So, we have a certifier, a human person, saying, “I approve this is true. I approve this is true.” This way each of the certifiers is taking some risk. Who here in the room understands insurance? Anyone in the insurance world? The idea is that they’re absorbing risk. Picture a really big tent, like a really, really big tent, imagine we’re all under a big tent. I couldn’t carry that tent by myself; I would need each of you to hold one of the legs around the tent so that we could slowly move it across the grass, right? Each of us are carrying a leg, to lift something together, which one person cannot do alone. It’s the same kind of concept here: each of the certifiers are verifying that a certain aspect of this is true or false, and this way they’re absorbing the risk. We can never say something is going to be 100% accurate — we’re humans, there are always going to be error — but we can reduce that risk as much as we can.

And when there is a problem, and there is human error, or the bastards are lying, we get them: this certifier in this ecosystem would pay back the money, and they’d say, “You know what? I’ve made a mistake, I was wrong.”

So, suddenly we’re starting to build an economy where everything you see in this new world is trusted, transparent, and accountable — I can trust the information.

And this could be happening on all different types of marketplaces. I’ve got mostly crypto ones here, but it could be in the future Amazon, eBay, Alibaba, you name it.

And we have live ones right now: we’ve done it for a trumpet, we’ve done it for a ring, and we’ve done it for an Andy Warhol painting. So it’s real — this is not magic!

When we’re thinking about the spiral economy, we’re basically creating alternative revenue streams. Because the incentive now is not out of the goodness of my heart and because I love the world, no; it makes economic sense. I could get another revenue stream, as a certifier. I, as a brand, can take a little bit of that cut of that jumper that I’m selling in the contract, in the Passport, because I can write what I want in the Passport.

So, suddenly when I give let’s say this trumpet, if I sell it to you, and then you sell it to the next row, and then you sell it to the next row, and you sell it to the next row… I, as a seller, am getting a tiny little cut each time. So am I going to start selling you a really crappy product that’s not very durable? No. Because I want it to go on and on and on and on and on and on, I want this product to last forever so I keep making money. So now we’re changing the mechanics of the economy, we’re incentivising people to make durable products, so that they have extended lives, so that we have extended profit.

I’m going to give you an example of how it works today. Who knows Oatly? Anyone drink Oatly? Amazing, love them! Oatly with my cup of coffee, with my hot chocolate… It’s made of oats instead of milk, and they’re a Swedish company and they do lots of really good work, and even they have made some mistakes. And I continue to support them, because I adore them, and I love their focus on research and their focus on carbon footprint statistics, they put this on all their packaging, they’re an amazing company. I feel like my values align with them, I trust them, but they’re still a centralised company.

And a really cool advert came out. Did anyone see this advert? It was pretty refreshing. Basically, there’s this dad, he comes home late at night, and he goes into the fridge and he’s going to make himself a drink. And his son sits on the table, with the dim light of the fridge flickering at him, and glares at him, and basically the dad is getting really uncomfortable, because he feels he has to explain why he wanted to drink milk. And there’s this awkward, funny, very amazing moment where he doesn’t know what to say, because all he wants to do is drink milk, and the teenager is like “Yeah, dad, that’s really uncool!”

This ad was really successful, it was innovative, it was really witty. But, the problem was they claimed in the small print that their Oatly milk was 73% less carbon footprint than normal milk. It turns out only one of the models of milk that they make, only one of the range, it’s called the Barista range, the Barista range is 73% less carbon footprint, but not all of the milk. So, hundreds of thousands of people went out and bought this milk under a false claim, they spent their money, they invested in a product with false information — it’s a cool company, but that’s not right!

And so then the ASA gets involved, the Advertising Standards Authority, and they give Oatly a slap on the wrist and they say, “Naughty, naughty! Take down your advert, it’s not true!” And I’m sitting there, thinking “Mate, I want my money back! You told me this, and I only bought it because of this, and now it’s not true, and I’ve got this milk that is…” It’s a silly example, there are far more serious examples in our lives, but I just keep thinking…

How much of this greenwashing is going on? It’s so trendy and woke to be green now: everybody is trying to make these claims, everyone is slightly exaggerating. How are we, as consumers, supposed to know what is true and what is not true? There’s a lot of questions: who should hold them accountable? Who should pay me? How are we going to do this? No-one is protecting the consumer.

It comes back to that idea of we need transparency, we need accountability, and we need trust.

I want you to now imagine that we could actually live in a world that’s a bit different, where everything you buy has been ethically and environmentally checked, and you can search by that. Imagine if on Amazon you could search your preferences exactly as you wanted it but Amazon weren’t the ones saying that it was true; a third party, a decentralised group of people could verify that that was indeed true. Would you trust that? Right.

Imagine a world where nothing is ever made to be thrown away. Because these shoes that I like and then might get bored of, someone else will want. And the watch that you’re wearing might be interesting for a few weeks, but then you’re going to pass it on to someone else, and a house you might want to give to your children… Things are always moving, but they never need to be thrown away. So if you take one thing away from this talk, my friends, it’s — and I think you said it earlier — we need to un-brainwash ourselves. Things do not need to be thrown away; it is our own lack of imagination and ingenuity to change the system that needs to change.

Imagine instead that everything you ever buy you intend to resell and find a new home, to someone that needs it more than you do. And that is the future of global trade, and that is what we are building at Mattereum. And our founder, Vinay Gupta, has said, “Nothing is so unloved that it needs to be thrown away.” And I think when you come at it from a lens of love, not just hardcore economics and tech… That’s really nice, that gives me the feels, that makes me all gooey — cool, let’s live!

So, how does that work? Here’s the gradient Metaverse diagram — I feel like I should have like Daft Punk playing in the background or something — on the left-hand side we have the physical object: stage one is going to be in vaults, because we can monitor the condition a lot easier, it’s not going anywhere, it’s safe, in a vault, it’s cool. In phase two we’ll be dealing with objects that are out in the real world. Then on the right-hand side you’ve got the digital NFT, which has all this information and the provenance and what’s going on.

And in the middle you have what makes the Asset Passport unique and exciting and cool and different from anything else in the market today, and the first in the world, and that is the pairing of the certifier, the decentralised experts, and the legal contract, the warranty.

So for the first time in history you’ll be able to buy something and have a really detailed understanding of what you can and cannot do with it, who it belongs to, what happens when something is false, and a trust, an assurance that what you’re getting is the real deal.

And the reason we’ve been able to do this is because we started in this space in 2015, and we’ve been doing this for a long time — who knew that law takes a long time to move! It’s long! But, we were able to contribute to UK law, and turn some of these technological principles of smart contracts into law, turning code into law. So now, with our Asset Passports, if… Most of these things will not happen, most of these disputes will never happen, because you’ve got the contract… It’s a bit like a prenup between two people that are married: you have a prenup to make sure that you never get to the stage where you disagree — “I get the house, you get the jam jar, great.” We hope that we’ll never get to a dispute, but if there was a dispute, because for some reason part of the promises they made to you have been proved to be wrong, then you can go to a court of law, you can show your Asset Passports to a judge, they can push a button, and they can release your funds to you. For the first time in world history, a judge can make that decision — that’s powerful!

Let’s go back to doubt, let’s take an example of a bike. If you’re person 1, and you are selling this very fancy bike — Who’s got a $5,000 bike? Bike lovers! — and you have an expert to verify all the parts and where it came from, and that the brakes are working and that the tires haven’t have any holes in them, etc… Then the second person buys it, maybe they get a few scuffs, maybe the condition goes down slightly, but everything else is working, so it only drops $200. And this happens again and again and again, because these people are looking after it… You get less droppage in price, because there’s less doubt. When you buy a laptop today, you’re like “Oh, did someone drop it? What did they do to it? The keys are a bit sticky…” There’s so many things that you just don’t know about that product. But, when you have this full transparency, you’re willing to pay more for that product, because you know you’re getting a good deal.

So, if we think about all the objects around the world, and we take the ones that we can agree the price on, and the ones that we actually trust the data, it’s a very small amount that’s on the market today. And this is why we don’t have that much choice, there’s not that many objects that we can actually choose to buy from. There are so many objects around the world that will never-ever-ever get sold and they’ll just sit there, or they’ll got to landfill. Remember that image I showed you with all that rubbish? That’s where most of it is going to go, unless we increase this circle.

Now imagine all the world’s objects can be up for sale, because we can agree on the price, we can trust the data. Cue the Asset Passport.

We’re going to start with luxury goods, because there is genuinely a problem with counterfeiting: Gucci, Prada, luxury wines, real estate, gold — there are big industries that have a genuine counterfeiting problem that this could solve. But then we will roll out and move on to non-vaulted items, lower-priced items, everyday items, so that you, as customers, can have that safety and that trust.

And just to prove how serious I am about this: literally a few weeks ago we tokenised the first piece of land in the UK, it was a $1.9 million plot of land and we turned it into an NFT, and it’s on sale right now — this is real, this is not hypothetical!

So, join the War on Waste, join me so that nothing else and nothing ever has to be thrown away again, so that we can Passport everything around us.

And my question to you that I’d like to leave you with is what object would you Passport first, and why? What history do you want to maintain? What transparency are you not seeing in your own life that you would like to see? What accountability would you like to bring?