NFTs are the best technical solution for a more open metaverse, according to author and venture capitalist Matthew Ball.
In an interview with Decrypt following the launch of his book, "The Metaverse: And How It Will Revolutionize Everything," Ball shared his thoughts on the definition of the metaverse, who will rule it, whether cryptocurrencies will play a part, and how NFTs—unique blockchain tokens that signify asset ownership—could solve its biggest problem.
Ball is a former Amazon Studios executive whom Mark Zuckerberg, Epic Games’ Tim Sweeney, and Coinbase’s Brian Armstrong have looked to as a key thought leader for all things metaverse. He told Decrypt that the metaverse is, at its core, a “parallel virtual plane of existence.”
He believes that we are still in the very early stages of creating and defining the metaverse, and its most important players will likely be names we’ve never heard of. So it won’t be Meta, or Twitter, or even crypto-focused brands like The Sandbox or Decentraland that rule the virtual realm.
Instead, companies that are “overlooked right now” or don’t even exist yet will become the metaverse’s heaviest hitters.
“I hope we don’t know those companies,” he said, citing how every technological shift or major wave of innovation has brought with it new and previously unheard-of brands.
A Decentralized Metaverse
When it comes to cryptocurrencies and crypto’s role in metaverse environments, Ball sees a place for it, but thinks the public hasn’t been properly educated. That lack of education has led to stigma, confusion, and has ultimately stifled adoption.
“I don’t think that the ecosystem on either side has done a good job of explaining why the average person should have it,” Ball said of crypto.
He argued that blockchain technology may be essential for technically powering a metaverse that’s better for individuals as opposed to corporations. Because blockchain computing power is decentralized and spread across many computers around the world, a blockchain-based metaverse would put more power in the hands of users and less power in the hands of a few big tech companies, allowing individuals to collectively “fight against trillion-dollar balance sheets.”
An Interoperable Metaverse
In its current iterations, the metaverse overlaps with the world of video games, where users engage in virtual environments and acquire virtual items. But what do gamers really want, and why do so many seem to hate NFTs so much?
“Gamers have long wanted some form of interoperability, of true ownership of their virtual goods. The challenge has been no one can figure out the systems they will use,” Ball told Decrypt.
This desire for interoperability conflicts with technocratic business models, said Ball, creating a “reverse chicken and the egg” situation, because no company wants to create the infrastructure for an interoperable metaverse knowing that its competitors are unlikely to want to use it for financial reasons.
Adding platform transfer fees would be one way for companies to profit from interoperability, Ball suggested.
That said, interoperability is still important, and he argued that it already exists in the global economy at large. While there may be some reluctance toward interoperability right now, “user wants breed solutions in the free market.”
A Metaverse with NFTs
What kinds of solutions? Well, interoperability and digital asset ownership could be achieved through NFTs.
“There clearly is value there,” Ball said of NFTs, adding that as a technology, NFTs can scale with a growing metaverse and are the most “viable a solution for virtual goods [as] we’ve seen.”
He emphasized that virtual and digital collectibles have been popular for decades, even before blockchains and NFTs, so the real question is whether collectibles will benefit from decentralization.
In Ball’s view, NFTs have value, but their applications haven’t been fully realized yet and—as with crypto in general—the benefits haven’t been explained well enough to the general public.
“Gamers have been overlooked for decades,” Ball said, acknowledging many gamers’ resentment toward NFTs. “They feel marginalized, they feel disrespected, and they’re used to micro-transactions proliferating and ruining their games.”
NFTs, then, are a threat to gamers if presented as items that could “ruin” games. But if publishers took a different approach, sentiment could change, Ball said.
“Until game publishers start product and experience first—rather than press release and new tech that will be better for monetization—we’re never going to solve that hostility,” he said. “And that creates a vicious circle where no one wants to take a big bet on solving the problem because all of their peers have harmed it.”