AR and Blockchain: A Match Made in The AR Cloud

In my introduction to the AR Cloud I argued that in order to reach mass adoption, AR experiences need to persist in the real world across space, time, and devices.

To achieve that, we will need a persistent realtime spatial map of the world that enables sharing and collaboration of AR Experiences among many users.

And according to AR industry insiders, it’s poised to become:

“the most important software infrastructure in computing”

aka: The AR Cloud.

This simplified yet powerful perspective generated renewed interest in the potential of AR beyond entertainment, and dozens of startups, investors and corporations, came out of the woodwork to thank us for “spelling out what we were thinking about and working on” and started using the term in pitches, press announcements and even job descriptions.

Nevertheless, that intro just scratched the surface on the deep impact the AR Cloud will have on the economy. In contrast to the web era where information was organized in interlinked web pages, the AR Cloud enables a new way to organize the word’s information on physical things, places and people themselves. With it, information is intuitively found at its origin, in situ, without the need to search.

That would allow to access the how-to-use of any object, the history of any place, and the background of any person, by just glancing at it. In situ.

Changing how information is organized is poised to profoundly disrupt the Web economy. This post is about that shakeup. A handful of companies on the chart below became giants thanks to the current model. No wonder they are all contenders in the battle for AR Cloud dominance.

The big shake up

The web economy was primarily based on “clicks on links”: calculating the cost for advertisers based on page impressions (CPMs) and clicks on links (CPCs).

The Web Economy was defined by “clicks on links”

Can that model continue to thrive in the spatial economy? Unlikely.

What can replace it?

I like to call it Clicks on Bricks — a punning rhyme that captures a new world where everything is driven by digital interaction with the physical world.

The Spatial Economy will be defined by: “Clicks on Bricks”

In the early web days (90’s) companies were identified as either a “bricks” company with physical presence, or as a “clicks” company with online shopping only.

The strategy du-jour for retailers has obviously evolved to seek BOTH “clicks” AND “bricks” as exemplified by Amazon.

But the challenge to bring these two discrete worlds together to reduce the friction is still keeping many CEOs up at night.

Why is that so important? How much value can be generated by closing this gap?

How much value can be generated by sync’ing the virtual and physical worlds?

When you perform a task in the real world, no matter where you are or what technology you use, you constantly switch your attention between looking at information required to perform that task and focusing on the actual task in front of you.

How many times do you switch attention per day?

How many times a day do you switch attention between digital information and a real world task at hand?

How do you quantify the worldwide cost associated with the need for workers to switch attention back and forth between real world tasks and the information essential to perform those tasks? What value can you generate when you remove that friction?

I will go on a limb and throw a number:

Eliminating the attention switch between online content and the real world is worth over 20% of GDP

Well, the value is actually proven

Consider this study by GE and Upskill comparing wind turbine wiring productivity between the old way on the left (shifting attention between task and step-by-step manual) and the Augmented Reality way on the right — which synchronizes the information with the user’s view of the physical world.

The worker on the left constantly switches attention from the manuals that guide him what to do — to the task at hand.

The worker on the right, uses smartglasses and AR overlays (by Upskill Skylight software) so he doesn’t need to switch his attention back and forth. The information he needs is always aligned with the real world, at a glance.

The results here are indisputable: sync’ing the documentation with the real world view improves productivity by 34% for a first time user!

Harvard Business Review covered a study conducted by Boeing that showed improved productivity in wiring harness assembly by 25%. And at GE Healthcare with Upskill software, a warehouse worker receiving a new pick-list order through AR (on the right) completed the task 46% faster compared to using the standard process (on the left), which relies on a paper list and item searches on a work station.

Additional studies from other firms show an average productivity improvement of 32%.

So what’s the upside when you remove that friction for a whole nation? How much value can be generated when the virtual and the physical worlds are synch’ed for…a billion people?

Take the GDP associated with all jobs that require to shift focus back and forth between real-world tasks to digital data (or printed documentation). Now, apply the most conservative estimate — 20% time/cost savings: it adds up to a very large number!

How does it apply to Clicks on Bricks?

What does this all have to do with the consumer and retail experience?

Once the real and virtual are synch’ed with the AR Cloud — you have the prerequisite for “Clicks on Bricks” — a digital economy driven by interaction with the physical world.

Here’s one of the first “Clicks on Bricks” examples — a project built by Metaio for Lego stores way back in 2010.

Metaio Clicks on Bricks project in Lego Stores from 2010

The kid looks at a physical product and gets crucial information for his buying decision — right on the product: How does this toy looks inside the box? What does it do? How hard is it to assemble?

The marketer in return can track which boxes where looked at, for how long, and can analyze the overall interaction with the toy.

And BTW — this doesn’t require smartglasses or even smartphones — just a camera, computer and screen (magic mirror).

Here’s a dystopian example from the short film Hyper-Reality.

The product information is customized for your gender and displays personalized information from the advertiser; in this instance a “glitch” in recognizing the player’s gender confuses the system and it briefly switches the display from a female targeted layer to a male oriented one.

Here’s another futuristic example illustrating a product interaction scenario at home — from the short film Sight.

Marketers could learn a great deal about customer interaction with their products while at home: how do they use it? IN what context? how often?

This information collected is so much more valuable as feedback for product improvement than any ad could ever be.

Since the subtle information delivery and gathering of “Clicks on Bricks” offers a far better user experience (who likes ads, really?) and is far more valuable to marketers (Nielsen for the real world!) — it will eventually wipe out the current advertising convention “repeat ad nauseam” — bombarding us with ads anywhere we look.

The good news: the dystopian prophecy depicting ads all around us in the short film Hyper-Reality will never materialize. Like any good prophecy — it’s a warning to focus on the important things: user experience and value creation in order to avert that disturbing future.

A frame from Hyper-Reality Film by Keiichi Matsuda — it will not happen

When every interaction counts

When every interaction in the real world can be tracked and become valuable to someone: you, a friend, an advertiser, or perhaps a competitor — how do you determine the value of each action?

How do you create an economy that can serve as the foundation for this new world?

  • What infrastructure can support a marketplace for Clicks on Bricks?
  • What system can manage the massive number of transactions?
  • What method can empower the ultra-complex incentive structure?

You are the product

Before we find the answer, I have to bring up this warning by cyber security guru Bruce Schneier who said:

“Don’t make the mistake of thinking you’re Facebook’s customer, you’re not — you’re the product.”

How do you alleviate and balance the situation? How do you give all sides a measurable and fair stake?

Gamification and reputation models?

— Not granular enough. Not enough incentive.

App stores?

— Let me make a bold prediction: in a world were the AR cloud is predominant app stores are dead!

What if we match the AR cloud with a crypto-currency based on blockchain?

AR Cloud and Crypto-Currency

If you are new to blockchain — don’t worry, we all are— here is how to think about its benefits.

A blockchain is a public, decentralized ledger of encrypted transactions

How does it help an AR Cloud-based economy?

  • It’s decentralized — just like the world works
  • It’s trusted & secure — to avoid friction and maximize smooth engagements
  • It’s infinitely scalable — designed to manage limitless number of micro-transactions
  • It supports an incentive-based marketplace — an economy that encourages providers to join the AR cloud, help create it and in return monetize its value

Who in XR (short for AR,VR,MR) is already using the blockchain?

Apparently a lot of people!

Here are some of the already published initiatives. I am aware of at least a dozen more that will launch later this year.

High Fidelity

An open, user-driven market for the buying and selling of virtual goods. From the creator of Second Life it offers a better alternative to virtual currency (used in virtual worlds such as Second life). The system is already in beta.

Lucyd

Using Blockchain and a LCD crypto currency to nurture an ecosystem and app store around a new smartglasses.

Lapmix

Blockchain for machine Learning data

It’s envisioned as an ‘image mining’ network for augmented reality or any other computer vision system, such as its own Lampix product.

A new blockchain that will hold {image,description} data-sets of real world objects to democratize image recognition.

Varcrypt

The world’s first blockchain for content distribution designed specifically for Virtual Reality, Augmented Reality, and legacy content.

A Digital Rights Management system for the spatial computing era.

RNDR

Led by OTOY — a light field rendering software company)— blockchain for a distributed GPU rendering economy.

It’s aimed to make it possible for any 3D object or environment to be authored, shared, and monetized through the Ethereum blockchain protocol.

The RNDR token is powered by breakthrough cloud rendering technology, creating a distributed global network of millions of peer GPU devices. The first network to transform the power of GPU compute into a decentralized economy of connected 3D assets.

Cappasity utility token (CAPP)

Focused on retail where there is massive need for 3D content — will be issuing a digital payment vehicle that facilitates AR/VR/3D content exchange among the ecosystem participants from all over the globe

Gazecoin

Get paid to look at things…a blockchain platform measured by gaze control/eye tracking.

Claims to be the killer app for VR/AR advertising, copyright tracking and user rewards. Attempts to fix the main problem with monetizing VR/AR.

Recently completed an ICO! And as of this month is listed on Cryptos (a trading platform)

Arcona

Launched a Blockchain powered AR Cloud and already sold over a million dollar worth of crypto currency.

The blockchain manages sale of digital lands for airrights — the ability to place AR content on physical places.

Potential services to support the AR Cloud that are already using Blockchain

These initiatives and many others that popped up recently — could become necessary services for the AR Cloud. Although many will need to consolidate into fewer services and tokens — to simplify life for users.

But what’s missing here?

A blockchain-based crypto-currency can help build the AR Cloud itself

In my AR Cloud intro, I listed its 3 main ingredients:

The first — a scalable and shareable point cloud — is the hardest to build because of its unmatched magnitude.

A blockchain-based economy could help accelerate its creation in crowd-sourced style.

Get thousands and millions of people to help scan the world anywhere they live or work and upload it to the AR Cloud. In addition, incentivize people and especially businesses to contribute their existing content: videos, photos, scans, 3D content, etc.

Point Cloud scanning demo by Fantasmo — could be crowd-sourced to create the AR Cloud

They would all get some fractions of tokens for contributing to the creation and on-going maintenance of the AR Cloud. Users of the AR Cloud would be charged their respective fractions– depending on the value of the particular part of the cloud being consumed.

With this approach, a crypto-currency could offer the incentive to accelerate the creation of the massive AR Cloud. It could provide the foundation for the Clicks on Bricks economy, allow to eliminate the attention switch by sync’ing the virtual and the physical worlds, and perhaps increase GDP by 20% or more.

Sounds crazy?

Well, a few companies have already started working on this….expect to hear about it any day now. There is no time to waste —

It’s AR Cloud Time — let’s build it together!

Whether you are a startup, an investor or a corporation, come partner with us in building the AR Cloud!

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References and further reading

Augmented Reality Is Already Improving Worker Performance by Harvard Business Review

More case studies by AREA.org

The Global AR Cloud Platform — by YouAR

6D.ai is building AR Tech — 3D mesh of the world — TechCrunch

Building the AR Cloud — by Scape

The AR Cloud will be bigger than search — Forbes

Gree VR Capital Closes First Fund — with focus on AR Cloud

Unlocking data with the AR Cloud — by ARtillry

The Augmented Reality Cloud and the Future of Information — By Rackspace