Introducing concepts of Decentralized Intellectual Property, or #DeIP

There’s an exceptionally pervasive theme within the blockchain gaming and NFT community that if (A) we begin to tokenize digital assets in our virtual worlds, like video games, then (B) somehow it will lead to a future that looks something like Ready Player One’s “The Oasis.” The problem is: there is a major gap between these two ideas, and nobody has provided a roadmap for how, why, or if this could actually happen (let alone if blockchain should even be involved).

This post is an attempt to outline such a roadmap.

Somehow true ownership of virtual items leads to a crazy virtual reality future… But how?

Mass Exodus

If we are creating a roadmap, then it is important to understand the destination we are headed to…

What’s Our Current Frame of Reference?

It’s abstract at best, but there are a number of terms we currently use to describe this all-consuming “virtual reality future.” Some of these include The Oasis, The Metaverse, and (Video Game) Interoperability. Each term serves a different purpose. The Oasis is good for storytelling — especially of dystopian or utopian social reformation. The Metaverse invokes more philosophical themes — mostly of human experience. And Interoperability dives into the technical details to illustrate how virtual worlds could fluidly interact with each other.

While all these terms are fair and appropriate, none of them actually justify the need for blockchain in a “virtual reality future.” Nor do they describe this future as an inevitability — something that’s bound to happen — which we believe it to be at Hoard. If we could use better language to understand this future as an inevitability and in terms of it requiring blockchain, then we could collectively have a stronger grasp on the scope of exactly what needs to be built and why — and we’d be able to design incentive models accordingly.

Adjusting Our Lens of Focus

Future forecasting and technological consumption patterns fall into a specific field of study: economics. If we want to know how people might behave and if blockchain will be involved, it may, therefore, be highly beneficial for us to explore an economic lens by which to understand this totally immersive “virtual reality future.” Fortunately, there is a succinct economic term already used by virtual economist, Edward Castranova, in his book Exodus to the Virtual World , called “Mass Exodus.”

“The Oasis” illustrates this future as a colorful story. The “Metaverse” portrays it as a philosophical abstraction. And “Interoperability” describes the technical details under-the-hood. “Mass Exodus,” on the other hand, explores the economic impact and forces required for this future to manifest.

Professor Castronova describes Mass Exodus as being analogous to something like early settlers discovering the New World. In this analogy, however, the old world (which people are leaving) is the real world, and the new world (which people are flocking to) are synthetic or virtual worlds.

He estimates that if people begin spending more of their time in these synthetic worlds than in the real world — and if they manage more of their resources in them — then the economic impact could scale to the extent that GDP is literally drained from some nation states altogether. Such a scenario would qualify as a Mass Exodus.

People will flock to virtual worlds to explore and discover new opportunities in much the same way early settlers flocked to the Americas.

Why would this happen?

In order to understand why Mass Exodus might occur, it is important to consider some of the economic forces involved, which might drive people from the real world to these synthetic ones. The primary reason discussed by Professor Castronova in his book is simply: virtual reality might be more fun than the real world. Game developers are acclimated to competing for people’s attention by providing them with progressively more fun experiences. Why would that level of competition one day not directly oppose reality itself?

While “fun” is certainly a strong force, there are many other economic reasons for people to turn to synthetic worlds en masse. Job displacement, due to automation and artificial intelligence, is one such force — and it’s the primary one Hoard has built its thesis upon.

Virtual jobs in synthetic worlds may become a safe haven for low-skilled workers — workers whose jobs can be fully replaced by machines. In a whitepaper by Professor Castronova, titled Players for Hire: Games and the Future of Low-Skill Work, Ed explains that playing games could, in fact, be a human-specialized service, resistant to AI. Multiplayer games of the future might hire low-skill workers to play the game and advertise “real life player communities” to big in-game spenders in much the same way grocery stores advertise “fresh, organic produce” to health conscious consumers. Having a thriving human community bears a premium.

Lack of economic opportunity and physical limitations in the real world may cause people to leave in mass exodus.

Even without the economic pressures of automation and artificial intelligence, it is still quite possible to imagine a person in a developing nation or community turning to virtual jobs as an alternative means of generating wealth. A person who normally sells fruit on an impoverished neighborhood street corner could probably make more money if they provided a comparable virtual service to more affluent players in a popular video game. And, in fact, we already see this type of behavior happening with Chinese gold mining farms in World of Warcraft.

Physical limitations in the real world could also trigger such an event as a mass exodus. When an environment no longer serves a population, they will no doubt go in search of alternatives “worlds” to inhabit. On a micro scale, this decision could be based on an individual’s physical abilities — a person confined to a wheelchair may find they experience a wider breadth of life in VR than in the real world. On a macro scale, an entire cosmic climate could force people to retreat into virtual worlds. Imagine the day when people spend half a year traveling to Mars. Why would they not immerse themselves in virtual reality en route? Or how about once they get to Mars — where harsh surface conditions would dramatically restrict their physical boundaries.

What Keeps Us in Virtual Worlds?

If we understand some of the economic forces that might drive people to leave the real world (above), then it is also important to recognize what requirements would be necessary in a synthetic world for people to stay and fully immerse themselves in it. Maslow’s Hierarchy of Needs serves as a perfect template.

Regardless of if we spend spend our time in the real world or virtual worlds, we all have a hierarchy of needs.

Regardless of technological dependency, people have basic needs. They require physiological security and a certain threshold of safety. Humans all want a sense of belonging and to feel loved. We thrive when we hold ourselves with a high self-esteem. And, ideally, we strive to become self-actualized, whereby we can express and experience ourselves in honest, authentic ways.

What’s interesting is many of these needs have already been partially outsourced to synthetic worlds and commoditized as virtual assets — most notably by social media and video games. In a mass exodus, synthetic worlds which satisfy our human needs the most— and there will be many synthetic worlds competing— will likely be the ones that “win” the attention and time of the population majority.

Jobs, friends, lovers, social approval, and creative endeavors can all be experienced in synthetic worlds today as commoditized, virtual assets.

The problem with synthetic worlds today — in games and social media — is we don’t own any of our virtual assets. They are someone else’s intellectual property. If you want to extract any value from them as digital resources, you are confined to access them only on their respective platform.

Furthermore, you can only extract “approved” value from these resources. This is enforced either programmatically — by which limited features are available on the platform— or by human/AI intervention, resulting in the demonetization, deplatforming, or shadowbanning of individuals. Imagine a scenario where you get deplatformed from Twitter for saying something controversial. You would lose all your followers — virtual relationships, valuable digital assets. These relationships would be expensive and difficult to replace.

You don’t truly own any of your virtual assets in synthetic worlds today.

This type of forced behavior control is costly to users and antithetical to the type of opt-in future we’re describing in a successful mass exodus. In a thriving, competitive marketplace of synthetic worlds, people will no doubt demand human-value-based experiences to fulfill their hierarchy of needs. Corporate interests will be secondary, just as they are for a majority of individuals currently in the real world — for most people, human experiences come before business.