04/18/2022 Overview I read “All One Needs to Know about Metaverse: A Complete Survey on Technological Singularity, Virtual Ecosystem, and Research Agenda” from Lee et al. The paper provides a a comprehensive overview of the current state of the metaverse, a term used to encompass the next evolution of the Internet. The researchers examine eight technologies driving our transition to the metaverse – extended reality, user interactivity, artificial intelligence, blockchain, computer vision, IoT and robotics, edge and cloud computing, and future mobile networks. The article also discusses six factors essential to the development of the metaverse, which are avatar, content creation, virtual economy, social acceptability, security and privacy, and trust and accountability. Based on this framework, the authors propose areas for further research on the metaverse. In the article, they also introduce the idea of “digital twins” as a way of drawing parallels between the physical and virtual world, and gradually bridging the gap between the two with the use of new technologies.

In the reading, I chose to focus on the sections about blockchain and virtual economy, since I am interested in blockchain use cases and how an economy might function in the metaverse. The authors go over three aspects of blockchain applications in the metaverse. First, utilizing blockchain for distributed storage of user data can provide greater security by preventing information leakage and tampering. Second, it provides a peer to peer system for sharing data. Finally, it allows for data interoperability by authenticating and encrypting data when sharing across organizations and individuals, which can have several benefits in different industries. ​

Motivation For this intensive, I chose to explore blockchain technologies. This is a topic that particularly interests me for several reasons. For one, I have been moderately involved in the crypto space since 2019 through investing in cryptocurrencies and meeting Vitalik Buterin at a hackathon. I have designed user interfaces for decentralized applications, but I have never programmed smart contracts or built a dapp. Because of this, I have a basic understanding of how blockchains work, but it has always bothered me that I don’t know more. The complexity of the technology, combined with its economic implications, has both fascinated me to learn more, and scared me to put it off, until now.

Second, I feel that learning about the applications of blockchain technologies align well with my career interests at the moment. I am currently wrapping up my internship at Cisco, where I design cybersecurity software. This is where I learned about cryptography as the foundation of both blockchain technology and cybersecurity protocols. This summer, I will be interning at Addepar, a wealth management software company. Addepar was founded in 2009, after the 2008 financial crisis, with the mission of providing more data transparency for investors. In the same year, the first block of Bitcoin was also mined. The meteoric rise of Bitcoin was, in part, hugely due to people’s lack of trust in centralized currencies after the financial crisis. Thus, I am very interested in learning about the role of decentralized finance in overlapping problem spaces, and the economic impact of cryptocurrencies in both physical and virtual worlds. ​

Process Because I plan to build a dapp for my major project, and there is a lot of theoretical knowledge to explore in this field, for this report I will be focusing on understanding fundamental concepts, technology behind dapps, and different use cases. I would like to learn more about the field in order to prototype a meaningful project. Going into this intensive, there were a couple of areas I intentionally investigated, however, I did end up uncovering unexpected insights as well.

What is money? This was a question that had been floating in my mind for a while. What is the role of money in our economies, and why is cryptocurrency a form of money? I read up on the history of money. Money serves as a store of value, unit of account, and medium of exchange. Commodity money, such as gold, or rice, has intrinsic value in objects themselves. Representative money, such as cheques and credit cards, are pegged to intrinsic value, representing at face value an amount greater than its material alone. Fiat money, which is often issued by governments, is not backed by intrinsic value; its value is agreed upon by the people exchanging it. Cryptocurrency is decentralized money, but it has no intrinsic value, nor is it pegged to intrinsic value, nor is it backed by any government. So, where does its value come from? According to subjective theory of value, its value is determined by the importance people place on its role in order to get what they want. Because people use it as money, it is money.

During this phase of discovery, I also listened to five different Lex Fridman podcasts where he interviewed key figures in the blockchain space including Silvio Micali, Sergey Nazarov, Nic Carter, and Vitalik Buterin (twice). Fridman also occasionally asks his guests the “what is money?” question. One of my favourite answers, from Micali, founder of Algorand and professor at MIT, is, “Money is a shared belief system that allows people to transact.”

From these interviews, there were a couple of technical concepts which I found interesting, mainly surrounding consensus mechanisms and energy usage. High energy consumption of blockchain technologies has long been a point of contention, which I have been curious about. Carter, a prominent Bitcoin writer and co-founder of Coin Metrics, discusses this topic. Fundamentally, the debate comes down to the usefulness and validity of Bitcoin. If it is powering meaningful transactions, the energy used, relative to the benefit it provides, is worth it. But, if it’s just a volatile way to make money in the short term, then maybe it’s not worth the energy. Further, Carter explains, at a high level, how Bitcoin consumes energy differently from other industries. Typically, we need energy to be produced near population centres, to match the demand of our consumption. However, Bitcoin is a geography independent buyer of energy, and it largely consumes stranded energy assets that don’t make it to population centres. For example, a lot of Bitcoin is mined in China because there is an overabundance of energy, particularly in four provinces which are far away from major population centres, making it a popular spot for miners aiming to monetize the excess energy.

Bitcoin uses a proof of work consensus protocol, the oldest and safest method of verifying transactions, which requires miners to solve puzzles, and needs a high amount of computing power. But, not all blockchains use proof of work. Ethereum is moving to a proof of stake protocol, which Buterin, co-founder of Ethereum, discusses with Fridman. Proof of stake requires miners to stake tokens to participate in determining the validity of blocks, rather than doing work, which uses significantly less energy. Further, blockchains such as Mina are using zero knowledge proofs, in which provers can hand over evidence to verifiers, and extend the proof to support new blocks, without the need to re-validate the full sequence of blocks like in Bitcoin.

While listening to a conversation between Fridman and Sergey Nazarov, founder of Chainlink, which brings off-chain data onto blockchains, I learned that this industry is fundamentally built upon trust. The technology is simply a tool to solve underlying problems that can span across virtually any industry. Centralized systems and individuals are hard to trust because they are fallible and can have ulterior motives. With self executing smart contracts, we can instead rely on algorithms to facilitate interactions, in a transparent fashion, that participants can collectively agree on.

During this intensive, I also looked into other blockchain applications, such as DAOs, NFTs, and games. However, I was most drawn to the defi space, the potential to resolve trust issues, and transform economies. I would like to work on a project that encompasses these areas. ​

Reflection Last year, I read Snow Crash, which unconsciously shaped my view of the metaverse. Because it was a work of fiction, I saw the metaverse through an imaginary lens. It seemed to be an escape from reality, where the main character is a pizza delivery boy in the physical world, but the greatest swordfighter and hacker in the virtual world. As I pictured the story in my head, I focused on the visual aspects of the metaverse, like avatars and environments. To me, the metaverse was neatly abstracted into a singular 3D virtual reality world. I had few thoughts about the technological layers, or the systems at the foundation.

However, my views have evolved after this intensive. Instead of being solely an escape from reality, I learned how both the physical and virtual world affect each other. Digital currencies are not only used inside of games, but can be used in the physical world as well, and provide viable alternatives to traditional financial systems. The virtual world is not completely separate from the physical, rather, we seek to develop digital twins and mirror entities.

I also realized that, unlike Snow Crash, those who hold power in the physical world, are still the ones with influence and wealth in the virtual world, despite the lack of centralization. Zweigenhaft found that in 2020, 85.8% of Fortune 500 CEOs were white males. And, according to Gemini’s 2021 State of U.S. Crypto Report, the average cryptocurrency owner is a 38 year old male with an annual salary of $111,000 USD. 74% of crypto holders are male, and 71% are white.

Further, there are many complexities when it comes to metaverse development and adoption. For one, the metaverse is not a singular world, but many virtual worlds. We are tackling challenges such as commerce between worlds, cross-chain interoperability, data sharing, accessibility, and more. Nevertheless, I remain optimistic for a better future, in which we apply metaverse technologies to build more transparent and fair systems in both physical and virtual worlds. ​

05/03/2022 Transcription of my demo video.

Project My Atelier project is a decentralized group saving app based on the concept of ROSCAs, which are rotating savings and credit associations. It's a way of saving money that is more common in developing countries, where people have limited access to formal financial institutions. Usually there is a fixed group of participants who regularly contribute sums of money to a pot, and then the total balance in the pot is allocated to one group member based on some type of schedule, lottery, auction or agreed upon rules. This is really useful for people who don't have enough money to make a big purchase or business investment or something like that. And this way every member of the community will be able to have that chance.

But with these ROSCAs usually, the community needs to rely on a central figure to distribute the money. There can be a lack of trust, like what if this person just runs off with the money or they take a bit for themself? With smart contracts and blockchain technology, there is a way to make this system decentralized, so instead of relying on a person or group to execute this transaction, we can write some code that executes it, so that everyone can see what's happening.

For this project, I looked into what features this MVP could have. I decided there would only be one group of members contributing, it will automatically execute once four members have contributed, and the total money would just distribute based on FIFO. So how I built it was, I followed this tutorial about building a decentralized lottery system because ROSCAs are kind of similar to lotteries, in that a bunch of people are contributing money and only one person will receive the sum, except it's a recurring thing, and unlike a lottery it's not random, it's based on some set of rules. With the smart contract stuff, I used the web3.js library, MetaMask and Truffle.

In the future, I would want to work more on the smart contract development. I would also want to read more into the research papers to understand more about if they have any proposals for how to set up the mechanisms. And I think this would be more useful if people were able to create their own ROSCAs and develop their own custom rules. Also another problem is trust, like how can you trust that everyone will actually contribute money every set time period? If someone gets all the money in the beginning, they could just leave and never contribute money again. So there could be some workarounds, like identity verification or reputation type stuff that's associated with their wallet address, or there could be rules that incentivize people for staying until the end, like maybe you get more money if you wait until the end. And I also wanted to look into ways to get more money instead of just keeping the balance the same in the pot, like ways to develop interest or yield farming so that everyone in total gets more money, so those are some interesting things to look into. ​

Works cited Asmundson, I. & Oner, C. (2012). What is Money? Finance & Development, 49(3). (IMF) Crypto.com. (2022). The History of Money Part 2: From Fiat to Cryptocurrency. (Crypto.com) Gemini. (2021). The State of U.S. Crypto Report. (Gemini) Goldberg, D. (2005). Famous Myths of “Fiat Money”. Journal of Money, Credit, and Banking, 37(5), 957-967. (DOI) Keynes, J. (1930). The Classification of Money. A Treatise on Money, 5, 7. Cambridge University Press.  Lee, L. et al. (2021). All One Needs to Know about Metaverse: A Complete Survey on Technological Singularity, Virtual Ecosystem, and Research Agenda. (arXiv) Menger, C. (2007). Principles of Economics. 89. Ludwig von Mises Institute.  Mina Foundation. (2021). What are zk-SNARKs? (Mina Protocol) Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates | Lex Fridman Podcast #173. (2021). (YouTube) O'Sullivan, A., & Sheffrin, S. M. (2003). Economics: Principles in action. Needham, Mass: Prentice Hall. Sergey Nazarov: Chainlink, Smart Contracts, and Oracle Networks | Lex Fridman Podcast #181. (2021). (YouTube) Silvio Micali: Cryptocurrency, Blockchain, Algorand, Bitcoin & Ethereum | Lex Fridman Podcast #168. (2021). (YouTube) Vitalik Buterin: Ethereum 2.0 | Lex Fridman Podcast #188. (2021). (YouTube) Zweigenhaft, R. (2020). Fortune 500 CEOs, 2000-2020: Still Male, Still White. The Society Pages. (The Society Pages) ​

References consulted Tokens Economy. (2021). (Blockchain Consensus Encyclopedia) Vitalik Buterin: Ethereum, Cryptocurrency, and the Future of Money | Lex Fridman Podcast #80. (2020). (YouTube) ​

Other resources  On smart contracts (Are.na) On blockchain energy usage (Are.na)  On consensus mechanisms (Are.na)  On cryptocurrencies and decentralized finance (Are.na) Tools for building dapps (Are.na) ​