Keys To The Future: Digital Assets & Virtual Space
In this series I explore the impact of technology on the global economy through observations made on the structure of digital networks. I suggest that specific technology sectors are going to change the way we engage with each other and do business online. I believe Blockchain will become the necessary liquidity vehicle to drive a new industrial revolution, and AR/VR hardware will help create a new sensor based, data rich platform for users to create global value without the limitations of time and space.
Prologue: The Once and Future King
“We have had a good time while we were young, but it is in the nature of Time to fly.” — T.H. White
I fully believe that blockchain technology is a return to what we know works. Humanity tends to thrive when access to a new technology is present and existing social and economic systems are willing to provide relatively low cost access to new opportunities for a return on value. Eventually, tools are created and new innovations are sought that help to rapidly develop these new lucrative industries as the promise of increased return over time is discovered.
A romanticized ‘Gold Rush’ is how the mass media perceives the economic revolution we find ourselves witness to. However, it is in my opinion that the globe is entering a ‘New Industrial Revolution’ which is spurned by the economic necessity of increasing digital liquidity within globalizing populations. Gold rushes assume scarcity based on a commodity that usually cannot be accessed by the majority of a population and that is the exact opposite of what the most popular projects in blockchain are proposing.
In fact, I would say we are at the most critical point of modern technological advancement in recent memory; a time where the intersection of existing industrial infrastructure will have to choose to act as an inhibitor to the digital world, or to allow it to redefine the way the economy interacts with rapidly globalizing populations.
The theme of these writings will be focused on observing the ebb and flow of the economic tides of mankind in the digital age in no particular order. We will explore how some technology trends are indicative of certain shifts in society, as well as cultural and economic policy, and finally how governments play a roll in their structuring and maintenance.
Today we are uniquely positioned in that our generation is wittiness to critical digital technologies like Uber, Paypal, Amazon, and Google structurally changing the way people, things, data, and money are moved across the rapidly digitizing world and yet, we also have the remembrance of how things moved in the past.
In this amazing juxtaposition of historical exposition, what is left to us is the ability to have an educated guess as to which industries are going to be the most disruptive in the future.
Personally, I believe the sectors most primed to build upon the foundations set by these current digital market leaders are Fintech and VR. Concepts like the ‘internet of value’ and ‘decentralized networks’, as well as ‘Augmented Reality and ‘Virtual Economics’ reveal the underlying driving force behind new age digital industrialism which will be built on global liquidity needs of digital eCommerce industries.
Financial Blockchain technology like xRapid, and Augmented Reality hardware like Magic Leap are two technologies uniquely positioned to take advantage of existing hardware and digital infrastructure to rapidly expand into new sectors and marketplaces for the benefit of the majority of the worlds digital consumers. These technologies will allow them to spent more time and more online.
But before these technologies can disrupt the way we communicate and consume, the users of such technology need to understand the role they play in spurring adoption.
Chapter One: Structure is Key
What is the shape of the the Internet?
Form is crucial to how a mechanism functions. It matters not if the mechanism is mechanical, social, cultural, digital, or economic — form dictates its function within the space it operates regardless of the manipulations of the creator.
In order for us to examine how advancements in the past have lead us to this pivotal time in the present, we must look towards how digital technology has grown and evolved within our society.
Most understand the technical structure of the internet to varying degrees, yet instead of looking at the internet as a ‘tangle’ of data, let’s look at it from under the lens of utilization while pondering how utility shapes technology. For instance, how the internet has slowly structured itself into three utility based pillars, or paradigms, over the past 10 years specifically:
- Entertainment Networks
- Social Networks
- Financial Networks
Why have these three concepts dominated web use? And how might this affect developing blockchain networks and augmented realities? Let’s take a look at how these three pillars created the form of the internet we know today, and how they might affect the form of the next generation of digital technologies.
Entertainment networks have continued to dramatically increase length of daily internet usage since inception of the internet. If you can create an incentive to have increased user exposure to the same content for a prolonged amount of time, you inevitably begin to see the secondary effects of such habits. Monetizing these habits became the natural response as users continue to want convenient access, repeatable content experiences, and more freedom to explore other entertainment online.
Corporations that can satisfy the above conditions explode in value as users entertain themselves in the new digital world; they realize that complex entertainment is now possible by satisfying normal social interactions digitally.
The age of online multiplayer gaming, video recording and personal content streaming and more has ushered in a wave of demand for personal computational hardware and access to global networks which has forced both telecoms and hardware industries into the profitability spotlight within the global entertainment economy.
This explosion in user base is a necessary step where digital interaction is no longer hailed as a fringe activity but a social norm. Structured expansion into newly developed markets is now not risky, but an economic necessity, and thus regulation from the government becomes necessary and proper in the eyes of authority which has often misinterpreted the organic growth potential of past technological systems.
In capitalistic economies, governments fear the power of any entity that controls both ideology and economic growth potential. Take old Hollywood, or even early Vegas for an example as to what happens when you mix the gasoline of ‘cultural popularity’ with matches known as ‘extreme profitability’ without the need for especially expensive government oversight.
As people become entrenched in digital culture, their daily lives begin to evolve around it even more culturally and economically. They create spaces to discuss their own involvement within digital spaces catered to their specific niches. This gives birth to the first social based networks as its users realize discussing digital culture is almost identical to discussing almost anything else in normal reality, and through these types of conversation there exists an even bigger opportunity for business to be conducted.
The reign of the social network has had a polarizing effect on the masses. On one hand, increased empathetic attachment to digital technology has shown that social networks have access to something that no other business model has had access to before at such scale — intimate effect which has been in play at a global level like never before.
On the other hand, social networks have shown a willingness to forgo consideration for basic user privacy protection in exchange for fair taxable treatment, and other cohesion with management bodies. Nothing is perfect, but lessons of technological infallibility are important to learn. I believe the security flaws in Token ICOs and Digital Asset Exchanges in 2017 are perfect examples of this.
Within social media, and the market places that popped up from the growing access to such platforms, methodology formed that began to focused on creating moire effective opportunities to purchase goods and services outside of the traditional eCommerce experience. The race was on the find the first limitations of the digital economy.
However, there were weaknesses in the new network structure, as traditional finance systems had a rough time translating into these new digital systems. It was hard to pull fiance out of the analogue age, banking and credit cards became a plastic albatross around the neck of the digital mariner.
Payment became the longest step of the digital conversion process, with the only alleviation focused around payment gateway optimizations through services like Paypal, Circle, Stripe who could speed up the process by creating financial CRM and tying it to optimized payment channels in existing markets.
And still there was a lack of focus towards the ability for users to purchase goods ubiquitously in any market, with any currency, and have the transaction occur without being caught up within the bureaucracy of the global financial hegemony which was slow, prone to breakage, and generally wasteful.
While the current versions Entertainment and Social Networks had recently taken the commanding role in normalizing the habitual digital use of technology in human populations, they did indeed require an more optimized third ‘pillar’ or financial network which can act as a liquidity vehicle for the sustained growth of the preceding economies.
And so, finally we arrive at the silent patriarch of the entire system. The Peter Pan of Neverland, the boy that doesn’t want to grow up. Built with two layers in order to act as an intermediary between past and future, financial networks have always favored the stability of the archaic over the growth potential of the new technology offerings of software and hardware advancements.
The first and primary function of the financial networks of the web is a layer of translation into existing ‘analog’ infrastructure of which humanity continuously builds upon. This provides a way for populations to migrate to new services thus creating growth.
A perfect example is recent growth in digital banking which is creating ease of access to more liquid digital payment structures, which in turn led to the boom of eCommerce and global digital retail. What modern digital banking did not account for completely was the difference in traditional banking structure in every separate economy on the planet which would slow down any advancements made within payment processing.
The second layer of the financial networks is comprised of the systems that allow collectivized growth to be directed towards the path of least resistance and most profitability within the model itself. This is mostly through economic incentives, normalized within capitalistic economies that most of the west exists in, and the east is beign drawn towards.
Digital technology tends to increase profitability by creating optimizations within existing systems. Financial networks that embrace digital technology tend to be able to direct the strongest flow of new capital into the most promising economies by offering incentives to users to join these new networks. For instance, Airbnb, Amazon, and Uber have all transformed their verticals by convincing people to leverage their property and social connections for profit.
As usage of online content grew, so did the titans of the digital industry. By creating businesses online, marketing existing goods and services, or serving digital content on the internet for western markets, the internet has allowed for a rapid change in how the world has come to do business, and its effects are now global.
However, it has also illuminated the aspects of existing global economic structure that will continue to be the limiter of true potential for digital growth. How will these networks embrace technology and reward adoption to ensure economic prosperity for a rapidly globalization world? This and more as we will continue to explore technology and its intersections with society in the next section.
Lesson Two: What’s Behind The Curtain?
A very little key will open a very heavy door. — Charles Dickens
Something is changing the way we approach interacting with digital economies. And by something I mean everything. Currently the concepts of transacting withing a digital environment are all largely based on existing methodology. But what happens when you are not confined by the limitations of a 2D platform, and you open up digital interaction into the third dimension?
What will happen with new virtual and augmented systems? Will the ‘cart even exist? That concept has a lot to do with how Financial Networks function at their core, and so when these institutions look towards the future, what questions are driving their adoption of new technologies?
Advancing technology sectors in AR/VR, and even MR are advancing alongside blockchain and is driving the next generation of interactive digital environments now being called XR. How those experiences might actually change the way we interact is going to be left up to how users adopt specific technology, as well as how we as users may structure our lives around it.
I believe that digital technology is going to find the strength to pivot humanity into a new epoch of user generated content that will be hosted on decentralized networks. For this to happen, there will need to exist the same bi-layer of support systems within the same financial networks that helped to incentive content creation before in current and previous digital platforms. Financial firms will have to provide the initial boost into the new paradigm, thus helping expedite the translation of users onto this new platform.
The wild west is alive once again and the rebirth was not instant. It came upon the heels of industry once again, with the same socioeconomic indicators of the previous capitalist revolution.
This time it wasn’t six shooters or horse drawn carriages racing across a barren landscape in frivolous attempts to beat the looming steam engine. In fact, the hidden spark that ignited that same flow of goods and services out in the wild west ‘way back when’ has been beckoned into the present with the same whispered word that changed the face of the pre-industrialized world: Liquidity.
Liquidity may refer to, “cash, cash equivalents and other assets (liquid assets) that can be easily converted into cash (liquidated). In the case of a market, a stock or a commodity, the extent to which there are sufficient buyers and sellers to ensure that a few buy or sell orders would not move prices very much. Some markets are highly liquid; some are relatively illiquid.” 
A powerful word in economics, and absolutely pivotal to how any micro-economy tries to establish itself as a dominant force in the world in a short amount of time.
Enterprise Use Case: Liquidity Tool for Financial Institutions Enterprise-focused use cases for digital assets have come forth and are gaining traction. Financial institutions are beginning to leverage digital assets to source liquidity for global payments more efficiently than has ever been possible. Liquidity is one of the most critical, yet costly aspects of cross-border payments reach. Until now, liquidity was sourced by pre-funding accounts in foreign markets, limiting reach by locking up capital and creating exposure to foreign currency risk.
Before we dive into the ever expanding world of Augmented Realities and Digital Assets, let us explore how liquidity promotes growth and how increasing the utility of the digital transactions may lead to a new economic renaissance.
Manifest Destiny 2.0?
How will I buy a house in virtual reality? How will exchange goods and services in an augmented space overlayed over any empty or occupied physical space?
Those are the questions that keep me up at night now. Everyday more and more data is being created by users around the world. There is something close to the Matrix being cooked by connecting data sets and networks around the world together as a new globally interconnected nodes of users begin to see the various benefits of a structured stratus of networks.
This new augmented and virtual reality is going to create levels of global engagement that is hard to comprehend without experiencing it first hand. The recent Magic Leap announcement is a perfect example of the coming epoch, same with ‘Ready Player One’ hitting theaters soon and, the Facebook Oculus buyout competition with HTC Vive for hardware dominance over peripheral access to Augmented spaces.
10 Ways Banks And Credit Unions Are Using Virtual Reality
The banking world is not fun. It’s complicated and boring, built on numbers and math — topics that typically turn off…
The new age, this resurgent digital wild west, is where engagement based microeconomics will be the norm. The ecosystem is going to become a space that requires an entirely re-imagined economic engine to drive it’s growth potential. In an age of crowdfunding replacing investment banking, and globalizing economies paired with developing nations finally realizing they don’t have to follow a specific industrialization pathway to grow their GDP, anything is possible, but what is going to work and work well?
The world will continue to flip on its head as it tries to rationalize the way money can potentially move throughout global digital economies. This understanding is going to be vitally important to the rate of technology growth, leading to why Banks will be the first to understand these new concepts intrinsically. Ripple is doing a good job with their recent video series so I urge you to take a look at how some optimizations can be made to existing systems:
In the modern era innovation has been spurred by financial institutions, the biggest of such are known as banks. In the future, economic and technological progress will be determined by the same factors as it was in the ancient past: proximity to liquidity. Whether it be a river, or an institution, access to fluid digital assets, or new trade goods, it is vital for the success of new ideas to have access to a mechanism of low cost expansion.
A LIVING LEDGER
A Living Ledger is a visualization depicting transactions on the Ripple Network in real-time. It uses the Data API v2…
The next era of mankind progress is going to be built on the human capital of combined interfacing in digital platforms. This will be compounded by new layers of data in augmented and virtual systems at an exponential rate and is only now starting to be realized in terms of market reach with mobile devices. This will create a new flow of information and data which is inherently valuable. By extracting the value from this economic stream, advancements in the tool sets used to explore digital environments will undoubtedly be made.
Over 150 years ago, gold was found in California. An entire migration of utility, resources, and liquidity was compiled to help transition an industrialized eastern economy through access and infrastructure hurdles to extract this commodity from the physical realm.
The year is almost 2018, a new type of digital commodity was found on a platform called the internet. An entire migration of utility, resources, and liquidity is being compiled to help transition a digitized global economy through access and infrastructure hurdles to extract this new engagement commodity from the digital realm.
When these same new age digital interactions transcend physical boundaries, and cross over into developing markets there may exist a crisis in which the development of society shifts to accept the new access to the vast richness of human capital.
Chapter Three: A Drop In The Proverbial Bucket
This is the ripple effect: modernize and optimize an archaic system so that it provides more utility and value to its users.
I’m continually in awe at one example of blockchain technology, specifically in their strategy to rapidly disrupt the archaic nature of the financial networks, forcing the oldest of the networks to modernize is a herculean task and requires planning to execute. I speak of the tactics utilized by Ripple as they help transition existing financial infrastructure into the digital age in order to take advantage of these shifts in modern economic thought with tools like xCurrent and XRP.
Their explosion into the spotlight of fintech doesn’t prove that traditional finance is forever dead in fact they say that they are a bridge for traditional finance. However, I believe recent trends in both cryptocurrency and traditional global economics are starting to reveal patterns that suggest the old world is slipping away faster than it can be saved.
If the old ways have any hope in surviving the second industrial revolution centralized financial institutions must begin to rely on innovative technology to grow their ability to serve a utilitarian purpose. For as we have now witnessed, technology has the ability to replace them entirely long term if they do not adapt to the changing tides of digital economies.
We’ve seen it suggested time and time again that when access to technology is increased, economic prosperity has greater actualization potential. In fact, an inverse correlation can be observed in areas where restriction to modern technology presupposes economic insolvency.
Whether restricted by geographic remoteness or geopolitical strategy the correlation stands that access to technology and new digital commodities like human capital, when leveraged correctly, lead to economic prosperity.
If companies like Ripple utilize tool-sets like XRP to help banks speed up the flow of money around the world and in doing so help developing nations grow and new digital economies flourish, then Ripple becomes a massive pillar of the new digital economy by default. But that’s only the first drop in the proverbial bucket.
Wait what about the VR Hardware?
We are getting there I promise. While Blockchain is changing the way data is shared around various networks, we as users must begin to change the way we understand out own engagement with data and by association the networks themselves. VR/AR hardware is going to completely radicalize the way humans engage with digital environments.
The current methods of online user engagement are designed to extract as much raw data from the user as possible, refine that data into constructed observations with varying degrees of value for different entities, and then process it into actionable events that attempt to reengage the same users for other valuable propositions down the road.
If this sounds like we are being quite literally ‘mined’ for data we are. Our digital actions have become the energy needed to economy sustain the economy.
As such, digital actions will have to incur some incentive for the user as more people come to the realization that they are being mined as a dynamically valuable renewable resource. The era of true human capital is upon us and surprisingly, it was the gaming industries who figured out how to take advantage of its potential through micro-transactions that showed increased engagement rates were possible if access to rewards were dependent on time spent in game.
This created an incentive for users to spend time within a specific environment, performing a certain task for an opportunity for reward. However it also correlated digital reward relative to time based on task specifically to promote the acquisition of the reward without burdening the user.
Social media networks jumped at the discovery and quickly integrated their platforms with game engine technology that increased user engagement and time spent on platform. It also started to incentive task completion for the masses through social and digital action. A good example of this is a referral reward system that connects into the in game economy in some way.
The effects of which prompted players to tap into real world networking for new users. Advertisers took notice as user base populations exploded around network-effect based games that took root first in social media engines, and later transitioned into Mobile applications. Just follow the money.
Where does that money point now? Virtual Reality; on all every single front, it all points to Virtual Reality.
Why? Because virtual reality will allow the user to provide an exponentially larger amount of new data to these growing platforms that are stricken with an endless hunger for consumable information. The life force of the new industrial revolution. And how special it will be: a revolution not dependent on coal, or oil, or even solar energy, it will run on information generated from users interacting online.
And that is why there has been such a massive grab for control of user information online, it is the battery of the future economy.
A Mouse, Keys, and Reality: Shifting Perspectives
You engage with your entire online world with a few strokes of a mouse and the pressing of keys on a board. Imagine if all the same cues you use to interact with the real world were possible within the digital space. VR tech is attempting to translate many of those same gestures into virtual space which will open the doors for true interaction and therefor true value for such interaction.
As such, if you start to actually plot the development dots of AR/VR over the past 4 years there is one massive gap: There is no consideration towards how users will be able to transact within these spaces.
How do you pull out a credit card when you have an HMD on your face? Should you have to sign a receipt after an in person credit purchase in a virtual space? I mean at the end of the day we could integrate a handshake to actually represent a transaction within VR. You could make a wink an agreement to the ToS of a PM. In fact ever single thing we have come to understand about how we interact online is going to be changed as VR/AR technology is adopted by more users.
- Social Media Networks will control the interaction of users online in virtual communities.
- Entertainment Networks will control the access to content for users in online virtual communities.
- And Financial Networks will control the ability to create economic opportunity through content creation for user based online virtual communities.
Social Media and Entertainment are already off to the races. They are developing rapidly into the new spaces like they developed rapidly into their original verticals. But this time around Financial Networks have a secret weapon: Blockchain.