2022, here we are. If Back to the future was a basis of comparison, we ought to be flying cars by now. But to give credit where credit is due, we are more connected than ever before. Our phones, virtual reality, augmented reality, Zoom calls — and soon, the Metaverse? Welcome to the new normal.
Simply put, our lives are intertwined with the digital world more than ever. From our identities to our day-to-day activities, we are reshaping cultures and sealing our fate in this new digital world. But what do we get in return for the convenience that’s a click away?
Big tech companies collect and aggregate more and more of our data, whether we like it or not.
Becoming omniscient in our daily lives is simply not enough for tech giants like Facebook and Amazon. What happens when our data is manipulated to shape our every decision, unknowingly?. Your iPhone can predict where you are going, listen to all your activities carefully, and measure the slightest bit of activity or movement. Even the tiniest detail doesn’t go unnoticed: you had tacos for lunch yesterday? They predicted it based on the Instagram post you had been hovering on for a split second, and then targetted special ads or deals, guiding you to your favorite taco spot. Where and what time your kids get dropped off school? They’ve stalked it down to the very last coordinate and split second. Intimate details about your daily consumption patterns are no longer a secret — every retailer has got tabs on you to figure out what you need before you even know it.
Your status is analyzed and they know you better than you know yourself. Your life becomes predictable, there is no room for surprises because everything follows an algorithm. What are we, apart from floating vessels of data, just waiting to be mined?
Yes, it may be convenient when you don’t even have to go out to shop and look for products because the products and services come directly to you. This pushes the envelope for consumerism as we forgo brick and mortar, for artificial intelligence.
But what if we were to tell you that one day, your identity could be completely erased in the blink of a second? Sounds like something out of a sci-fi movie — except that it’s real life. Unbeknownst to many, you are not the owner of your identity. And it’s time to take control back into our hands.
WEB3.0
“Decentralize” has been the biggest catchphrase of 2021 — but what does it truly mean? In layman's terms, decentralization refers to removing power from a single entity and distributing decision-making processes to a wider mass of authority.
Terminology aside, a great way to learn about the importance of decentralized finance is through one of the pioneers himself. Do you know how Ethereum was born? Vitalik (the founder of Ethereum) was a big fan of World of Warcraft and would spend days and months gaming to earn specific characters and attribute. That has been suddenly erased by « Blizzard Entertainment ». Furious, he decided to quit centralized services and create a decentralization system, where no single entity could ever surpass the opinions of decisions of the community. Thanks to Web 3.0, you become the owner of your data. And if someone wants to get them, they will require your agreement, and even pay you to get them.
For example, Brave browser is a secure, fast & private web browser giving you BAT tokens to reward you for your data. And for using their service.
Digital identities
“I think, therefore I am” is a phrase by the French philosopher René Descartes. Unfortunately in this day and age, our identity is no longer confined to ID cards or paper certificates that we have at hand. Today, our identity is entwined in the virtual reality of social media, government-issued I.D’s, e-mail addresses etc.
But who owns your identity?
You don’t own your passport or your government-issued ID. And if at any point a government or authority absolves, or simply decides to make you disappear — who’s to stop them? But let’s simplify and take it to more relatable scenarios: Facebook. Have you ever been locked out of your own account? How easy was it for major corporations to freeze an account without your knowledge or consent? If they were to ban you from their services, you lose all your accounts in the blink of an eye, here is a quick example.
This is where Self-Sovereign Identity comes into play.
Self-Sovereign Identity is an awfully fancy way of describing ownership of your own data and identity. This isn’t new to the scene, with companies such as Proof of Humanity already garnering traction. The challenging issues that we face in establishing such a concept are made easier with blockchain. Thanks to blockchain technology, your data is now secure and free of hacks, changes, and ultimately — deletion (unless you wanted to). Proof of Humanity takes it a step further by allowing you to tokenize your identity and reward users (with crypto) based on how much data users are willing to divulge.
But it’s not arms dealers or drug lords that benefit from a decentralized form of identity. On a broader scale, Self-Sovereign Identity would benefit nations where the masses don’t have access to an official form of identity. Countries or continents such as Africa or India have trouble processing documents of their ever-growing populations. And if they do have government-issued IDs, they aren’t as widely recognized or accepted on an official scale. Perhaps there was an incentive where people could be rewarded through their online presence, instead of having data stolen under their noses by big corporations. If we’re ready to quickly tap “Sign up with Facebook/Google ID”, who’s to say we aren’t ready to accept a standardized form of identification that we truly own?
A proposition would be to have a wallet on a blockchain that is able to identify who you are, across multiple platforms. Login to all your accounts using Metamask, where you own your attributes and digital assets with no questions asked. These assets in mind, Called NFTs — and these days where musicians and billionaires are snapping up million-dollar Bored Apes and Crypto Punks, these assets now become a reflection of you. Say goodbye to creating multiple accounts and signing up for every other application or website, with one handy wallet.
NFT
Taking a leaf out of Vitalik’s book, where he loses months' worth of hard work on World of Warcraft, the true power lies in being able to take back one’s digital ownership. No more figureheads deciding what is and isn’t yours to own. Non Fungible Tokens allow us to own digital assets, and lead us down the rabbit hole of decentralization and Self Sovereign Identities.
With big names like Nike and Balenciaga dipping their toes into Fortnite and its ability to showcase the latest streetwear, there is no limit to the things we may own in the digital world. From avatars to clothes, and even luxury goods that only a handful can rightfully claim.
This is no longer child’s play of exchanging baseball cards, but a $22bn industry of real-valued assets in just 2021 alone — and nobody can take that away from you. Gone are the days where we’re just upgrading our weapons on games. These days there are private yacht parties and exclusive star-studded events, where you’re only invited if your wallet says so. Thanks to the growing demand for NFTs, people are laying big bets on them as serious investments. Take for example the sale of Jake Paul’s World of Women NFT which he paid 230,000 USD for, and ended up reselling for 765,000 USD. Not often can we say our stock options could give us a 535,000 USD return?
But that’s just flipping of investments, and NFTs can do so much more with the introduction of royalties. For example, if you were to buy a Rolex today, you would consider it an investment that gains value as the years go back. Perhaps one day you are to sell it to someone else for a tidy profit, and the list goes on. If we circle back to Rolex, the only profit they’ve made is from the initial sale to you, the first owner. If Rolex, just like NFTs, adopted royalty fees for every transaction, they would be laughing their way to the banks. Naysayers scoff at “saving a jpeg” just because it’s intangible and only exists in the digital world, but cry when Gen Z Tiktokers zip off in their Lamborghini’s from selling a jpeg of an 8-bit rock.
Here’s a possible real-world scenario, where Uber releases 1000 NFT tokens, of which 900 gives you 20% off all your trips. And the remaining 100 give you 50% off your trips. Upon purchasing it for $200, the holder ends up breaking even within 1 month thanks to the discounts. But it doesn’t stop there. Say he choose to sell it in the midst of a bull market, and get offered $400 for the token. Not only was he able to make money off the sale, but Uber was able to get 10% of royalty fees, resulting in an extra $40 to their market. Without any more effort.
Royalties are nothing new in the real world, but giving the power back to the creator, the owner is what sets apart NFTs from the simple trading of stocks. Think of it as lifetime investment strategies that are the gift that keeps on giving.
The main advantages of NFTs are.
Traceability
Each NFT is traceable on the blockchain and all the transactions related to it can be checked, so you can locate all your collection in a second.
Royalties
Creators, artists or companies can get a commission on each 2nd market sale
Bridge to metaverse
Every object in the metaverse will be an NFT. If Uber were to launch a metaverse strategy, they could consider launching 3D cars on the metaverse with platforms such as decentraland, sandbox, etc
Authentification
Thanks to traceability, you can create communities, and identify them by the ownership of the NFT. You will then create a real community, linked directly with the blockchain, and identified with their NFT. These groups can be called DAO: Decentralization Autonomous Organization.
DAO
Imagine a group of people, led fully by a community where the decision is fully decentralized.
And taken by the % of the community you hold. Thanks to the NFT community, you will be able to identify all the members of your community in real-time. Let’s continue with the Uber example.
If Uber decides to create a Real DAO for their holder. Every idea and decision, taken by the company about their NFT community (for example, which platform should we join ? Decentraland or Sandbox) will have to be submitted to a vote, and the holder will decide. There is no more one CEO or leader taking all the decisions.
And a DAO is not only applicable to a company, let’s see further and think of a city.
Cities are run like companies, and just like how companies feed on analytics and data — cities grow when citizens can be traceable and accounted for.
Covid19 has only helped to accelerate the amount of data that is constantly being shared with governments. Under the pretext of tracking people’s positions and actions to be able to stop the spread of the virus, this has allowed a massive increment of tracking tools.
Such as facial recognition cameras (which on paper is used to make sure people are wearing a mask).
Scanning entrance doors for malls and restaurants (which on paper is used to detect clusters)
Tracing smartphone applications, such as Trace-together or Tous anti-covid, that share collects data in the background via Bluetooth and can track all the people's movements and activities.
With that in place, the population is fully tracked down to their personal preferences and daily habits. When they’re able to pinpoint certain groups and predictions, data can be a deadly weapon for electoral campaigns.
But thanks to the doom and gloom of Covid19, questions of personal freedom and human rights are being completely shrouded by death tolls and hospitalization rates.
Why? Because everything is centralized and controlled by individuals.
What if we introduce a Decentralized Autonomous Organisation system to our cities?
Cities 3.0
An interesting trend of the past year has been the rapid adoption of crypto-centric ideas such as coins, non-fungible tokens, and decentralized autonomous organizations (DAOs). So what would happen if we combine all trends together? Does it make sense to have a city with a coin, an NFT, a DAO, and some record-keeping on the blockchain for anti-corruption? As it turns out, there are already people trying to do just that:
CityCoins offer people a way to support their city and grow its crypto treasury while earning Bitcoin BTC and Stacks STX for themselves. Each city has their own coin, starting with Miami and MiamiCoin (MIA).
CityDAO is exploring making assets and governance digitally legible to unleash accessibility, interoperability, and opportunity. What Nakamoto and Buterin did for value and compute, they propose to do for the physical world.
And big names are talking about it already, Vitalik himself has written a full article about it.
Imagine a city where all decisions are made by its citizens, where all the data isn’t controlled by an organization, but by the people. You will own your data, in short.
If you were to have a dinner where there’s a Covid19 cluster, an algorithm will let you know about it with no third parties involved.
All these tools to fight against Covid19 are great, but only if they are put in the right hands.
As cities will become decentralized, real estate is already transitioning to a new model.
Decentralized properties.
What if I tell you that a piece of property could also be decentralized. By tokenizing a house, we can share the value of the house amongst different owners and gives more access to everyone to invest in real estate. In the current climate, the only way to invest in real estate requires a tedious amount of paperwork and legal fees. But what if you were able to buy 10 tokens off a piece of real estate and easily receive monthly rent or sell accordingly, without having to jump through hoops?
Some amazing companies are already building this system, such as realT, which is a fractional real estate investment that relies only on tokenization. This improves asset ownership and blockchain-secured passive income.
But what’s homeownership without insurance?
Decentralized banking & insurance.
Surprise surprise, but insurance & Banking can also be decentralized thanks to cryptocurrencies.
With new technologies such as AAVE or Compound Finance, algorithms devise interested rates that allow you to borrow crypto from other users. Why have a middleman, when I could be my own banker? To lend, or to borrow — that is the question. If I wanted to lend some money, I could even earn commission or interest on it, as opposed to the bank.
Concerning insurance, we can take a look at Quantum (QTUM), which is a blockchain technology designed to combine the smart contract element of the Ethereum blockchain with the stable blockchain characteristics of Bitcoin and use the proof-of-stake consensus mechanism to verify ownership.
The data are auto-populated and the algorithm rules it all. One more time, why have a man in the middle.
To conclude, in a world where a majority of the population is controlled by a minority, more often than not, this small group of individuals ends up making decisions that benefit their own interests. Where do we draw the line and ensure that all choices are free of conflict?
Our system is built to favor corruption and further the divide between the rich and poor — a classic case of the rich getting richer.
Today, with the rise of blockchains, there are solutions. By decentralizing our systems, companies, cities, and governments, we can design a stable system. One that is fair, transparent, and profitable for everyone. Where all the decisions are taken by those who belong to these communities (DAO)
The revolution has started. Get ready for the new normal.
