#1046 Matthew Ball Explains The Metaverse

Matthew Ball is the Author of the book "The Metaverse: And How it Will Revolutionize Everything" In this conversation, Matthew gives us an intro into everything that is the metaverse and what it may become in the coming decade. This is a great starting point if you are hoping to learn more about the metaverse. ======================= FTX. US is the safe, regulated way to buy and sell Bitcoin and other digital assets. Trade crypto with up to 85% lower fees than top competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees. FTX. US is also the only leading exchange that supports both Ethereum and Solana NFTs. Download the FTX App today and use referral code “Pomp” to earn free crypto on every trade over $10. The more you trade, the more you earn. ======================== BCB Group is the leading payment services partner for the digital assets industry. BCB Group provides payment services in 30+ currencies, FX, cryptocurrency liquidity, digital asset custody and BLINC, which is BCB’s free, instant settlements network for the BCB client ecosystem. Find out more by visiting bcbgroup.com/pomp ======================= Coinchange is an automated wealth management platform that earns daily compounded yield for you. Earn up to 10% APY on a risk-mitigated basis – your payout doesn’t depend on the volatility of the market and there are no lockups or minimums. Register now at coinchange.io/pomp and get a welcome bonus of 40 USDC when you fund your account.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Matthew Ball is the author of The Metaverse and How It Will Revolutionize Everything. In this conversation, we talk about the Metaverse, what it is, how it works, what you need to know, and whether it's something that will be around a decade from now, or this is just a flash in the pan. I really enjoyed this conversation with Matthew, and I hope that you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by FTX US. FTX.us is the safe, regulated way to buy and sell Bitcoin and other digital assets. You can trade crypto with up to 85% lower

• 0:43Anthony Pompliano?

  fees than top competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees either. FTX.us is also the only leading exchange that supports both Ethereum and Solana NFTs. Download the FTX app today and use referral code Pomp to earn these free crypto on every trade over $10. The more you trade, the more you earn. Go download the FTX app today and use referral code Pomp. This episode is brought to you by BCB Group. With a dedicated focus on institutional payment services, BCB Group provides business banking, cryptocurrency, and foreign exchange market liquidity for many of the world's largest crypto-engaged financial institutions. BCB business accounts allow businesses to load fiat currency and cryptocurrencies for

• 1:27Anthony Pompliano?

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• 2:10Anthony Pompliano?

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• 2:51Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:15Anthony Pompliano?

  Matthew, I think we've got you. How are you?

• 3:17Speaker 02

  Great. How are you?

• 3:18Anthony Pompliano?

  I'm doing fantastic. A place I'd like to start is you've been in and around a bunch of amazing media businesses over time. You were at Otter, you were at Amazon Studios, and you had a pretty big hand in the directions that they chose to pursue and some of the strategy that they employed. And it feels like, although maybe not directly, there is this like implicit connection between a lot of the work you did before. You kind of staked a flag in the ground on the metaverse. And can you talk a little bit as to like what those past experiences? How did they shape your views as to where you think the world is going today?

• 3:57Speaker 02

  Sure, that's a really great place to start. I started my career in deep tech. That was aerospace and defense, oil and gas, energy in the mid 2000s. I'm Canadian, so we went through the energy spike, the oil rush, the rise of nickel and other precious minerals in Canada. That gave me a really good foundation for deep infrastructure and technology problems. Those come back when we talk about the metaverse because we're talking Talking about really sophisticated 3D simulations, far more so than the games that we're used to playing, but where that same technology is now playing hand in those problems. But in the interim, I shifted very quickly to the mobile app economy at the end of the 2000s, early 2010s, helping publishers, TV broadcasters, video game makers,

• 4:41Speaker 02

  music labels, adapt their businesses to direct to consumer, or at least consumer-facing digital products. After that, when I was at the Churnin Group's Auto Media Division, we were cultivating unique digital-first communities, brands, e-commerce businesses, whether that was Crunchyroll or Barstool Sports. Subsequent to that, I went to Amazon, as you would teed up, and that was building out one of the world's largest ever premium media company. Those all converge into this idea of the metaverse, very deep technological requirements, but all focused on a global community of media, of new business models and experiences.

• 5:23Anthony Pompliano?

  So I think the very first piece of your work that I came across was you were talking, I think through the lens of Amazon Studios, about the movie business and how the intellectual property was going to be so important. And really, your thought process was like, you may have a relationship with this IP over the past decades, where you went and you watched a movie, you liked the movie, and then you kind of left, maybe told some friends about it, but that was almost the extent of your relationship with that IP. It's pretty simple to see, okay, well, maybe we should get into stuffed animals or toys or that type of stuff. But you then extended out and said, well, actually, there's going to be even further extensions, where you're going to see video games that are built on the movies. And talk a little bit as to how you see

• 6:06Anthony Pompliano?

  the intellectual property that may have just been a movie in the past, really now kind of seeping into these various media formats? Because I think that that, in some way, is the easiest way for people to understand this idea of a metaverse. It's kind of like a low-fidelity version, and then we can talk about how it'll get improved over time.

• 6:24Speaker 02

  So this is really fun because we can start millennia ago and I don't mean to sound academic or obtuse, but you know, there was an idea that the mythologies that we told, Greco-Roman mythology, was immersive. The idea was that Zeus may literally be a swan that you pass on your street. They lived in and around us. Most of our early advances in technology around entertainment were designed to reinforce that. Medieval gardens, pre-medieval gardens, were arranged with gargoyles and other epic statues to bring you closer to that experience. It wasn't just go look at shrubs, beautiful arrangements and flowers. It was to get closer to that supernatural fantastical idea. That extends into the 20th century. Of course,

• 7:07Speaker 02

  we would go see Star Wars in 1977, but for many of us, we would then go home and imagine more of it. We would go into the bathtub as an infant and play with a Luke Skywalker figurine. What has changed over the past 20 years is what technology can provide, in particular, that is live, that is semi-curated by the audience, that is nearly persistent, and that has a visual fidelity that we've never before achieved. If that makes sense, that we can access our stories more often with more people, no matter where we are, with greater capability, it makes sense that we're falling deeper and deeper in love with the stories we love most. If you don't want to see Teenage Mutant Ninja Turtles,

• 7:52Speaker 02

  you'd rather spend more time with Captain America, you can in 2022. You couldn't in 1982.

• 7:58Anthony Pompliano?

  What's interesting about this is I think of young kids and in some way, they are immersed in these worlds. And adults may kind of talk down to them, ignore them, kind of thumb their nose and say, oh, that's just what young kids do. But if you think of those young children, they have the actual, you know, toys. They have the movies that they watch, it seems like, on repeat, TV shows. Like, we have seen this in maybe more of like the animation space for children. Is this really what we're talking about, just extending it to kind of more of an adult audience, but also pushing out onto new platforms or new media types as well, where it's not just, okay, you have the toy, you have the movie, maybe we get a theme park and like, let's call it a day. There's all these new surfaces and kind of platforms that

• 8:43Anthony Pompliano?

  we can go to?

• 8:44Speaker 02

  So there's two angles to that. One is to talk about the ways in which we've de-stigmatized virtual enjoyment and sandbox play. You go back five years ago, and it was not considered cool, it was often seen as antisocial, to come home and spend hours and hours building in Minecraft. It was very much the young millennial version of a forty-year-old man who comes home after work and he goes into his basement to play with his train set. You shouldn't do that if you have something better to do. The pandemic has de-stigmatized that quite extensively. We know that the capabilities, the shared experiences, the creative expression is extraordinary. And so that's a big part of that. We actually

• 9:24Speaker 02

  know that everyone likes to imagine fictional worlds, but we were basically told that after you're twelve, unless you're really talented and professionally focused on it, you shouldn't do it. But the second part is industry. The technologies which run game engines, game physics, game rendering today are now being used to live-operate the buildings you walk into. When you go into the Hong Kong International Airport, there's a persistent digital twin of you, of this space, of every airplane and gate and worker, and that simulation determines where you go. Not just, "Well, eighty-two's closed, so let's send you to eighty-four." That is the much bigger opportunity for the metaverse.

• 10:10Anthony Pompliano?

  What are some of the things you're most excited about? Whether it's new platforms where this is pushing out, or specific pieces of technology that you think people may not really understand kind of how quickly this is going to accelerate?

• 10:23Speaker 02

  So the example that I just used about the Hong Kong International Airport is such a fun one, because there's this eerie gap between what is the world's most valuable asset class, and that is real estate, and what is the world's largest and most successful development platform, which is the world itself, and how online real estate and infrastructure is. Most buildings you go into, they're online to the extent in which there's Wi-Fi available, your passcode is authenticated over IP. Perhaps the security cameras are being transmitted over IP rather than recorded to tape. We do almost nothing, and that's because these environments are not legible to software. And that means that when the local city is issuing permits, when you are building

• 11:07Speaker 02

  your storefront dependent in part upon the stores beside you and what they do and don't do, what the city optimizes for, that's all in isolation. It's asynchronous. There's years in between decision making. There's no sharing of information and it's mostly offline and dumb. And so the idea of going to a 3D collaborative simulation for the world's largest asset class, largest development platform, the longest running evidence of network effects, that gets me excited.

• 11:38Anthony Pompliano?

  When I think of the metaverse, there's maybe two different definitions or kind of two different approaches. You have what I'll call like the Mark Zuckerberg. We're going to build virtual reality. It's going to be a place that you go and you're going to be able to experience a lot of the things that you're talking about here. Another version is Sean Perry had this great tweet where he said, "The metaverse isn't necessarily a place, it's this point in time where you care more about your online identity than your real world identity." Are both of these right? Is there kind of a way to think about like, what is the metaverse and how much of a place versus a point in time? Like, how do you kind of balance those two different ideas?

• 12:18Speaker 02

  The terminology isn't particularly important. We'll probably find that in 2035, we don't use the term metaverse. We might just say the internet, but 3D. We might just say the internet, but but more. We might use an altogether dissimilar term. In China, they've taken to the term hyper digital reality. But what really matters is this reflection of the way in which digital existence, virtual existence is different. Today, it is primarily a window into your life. I take a picture of what I'm doing in the real world and post it online and you have a lens into it. I work through Zoom, but I don't perform my work on or in Zoom. My labor is real. It's paid electronically.

• 13:00Speaker 02

  The metaverse can be thought of at minimum, the idea that where I'm sitting and where I exist is co-experienced in physical and real space. But it can also be considered a point in time in which a substantial portion of my identity, my wealth, my friendships, happiness are in digital space, often personified and embodied.

• 13:22Anthony Pompliano?

  When you think about that transition from where we are today to, let's call it the metaverse, right, and kind of encompasses a bunch of stuff we're talking about, are we going to put kind of the Oculus on our face, you know, the crude description of like, put a box on our eyeballs, right, and that's going to be our entry point? Is it going to be more like a Google Glass? Is it VR? Is it AR? Is it kind of everything? Like, how do you just think about, okay, today, the closest we probably are to like, entering the metaverse, or entering that kind of hyper digital world, is like through our computer screens or our phones? What does that relationship look like into how we enter into this digital world in the future?

• 14:03Speaker 02

  So, most people believe that advances in augmented reality and virtual reality headsets are important or required to substantially elevate human existence into these spaces. It's a more intuitive environment. It's better suited to certain use cases. XR surgery, a lot more intuitive than taking a look at a 3D or a 2D screen representing 3D information. But you shouldn't think of it as a technical requirement any more than a smartphone is a technical requirement for the mobile internet. The internet exists endpoint agnostic. There's 25 billion devices connected to it. Not all are smartphones. Not all even have a visual interface. I can say, "Hey, Google," and all of a sudden, my cellphone's going to be on the mobile

• 14:47Speaker 02

  internet without ever looking at a screen. But for the foreseeable future, the technology required to substantially replace our smartphone or any other device when used to access 3D worlds just isn't there. Mark Zuckerberg said in 2015, he expected by the end of that decade, we would replace smartphones with wearables. He's since then, obviously, missed that timeline, but pushed out the initial release date for his first AR devices three times. They're now not even going to see a consumer's hand until the back half of this decade. That technology problem has proven extraordinarily difficult. What has also surprised, though, is not just how far out that tech is, but perhaps how unnecessary it is.

• 15:31Speaker 02

  There are hundreds of millions of people globally, most of whom are in emerging markets, and billions of people monthly who are engaging in so-called "real-time rendered 3D virtual worlds regularly, forming friendships, collaborating, building, attending concerts." They're not a requirement, VR and AR. They may be important, but at least today, we're doing fine with that.

• 15:53Anthony Pompliano?

  So it's very obvious to see how, whether it's virtual reality or augmented reality, could play a role for doctors in training and other types of maybe professional services or kind of corporate use cases. There's also a ton of excitement around the consumer use case and the ability to go to the movie, to hang out with your friends, and kind of do things that may not have a direct economic kind of optimization, but obviously, people get excited about. One of the questions we see in kind of the Bitcoin and crypto world is, is this a business-type entry point? And those are who ends up adopting this first? Or is it more of the individual retail and consumer? How do you think about those two different groups? And is that the right framework to think through for who ends up adopting VR, AR,

• 16:38Anthony Pompliano?

  and kind of this metaverse world first?

• 16:40Speaker 02

  So I'd say that one of the interesting things about the metaverse as a potential fourth era of computing and networking is that it seems strange when you take a look at the economic forecasts that it's coming from a small portion of the leisure economy. McKinsey, KPMG, PWC, Citibank, Goldman Sachs, Morgan Stanley assume that by the end of the decade, the metaverse will be worth 5 trillion at the low end, 13 trillion in annual revenue. That's out of a likely GDP of around 125, 130 billion globally. Most of that utility is coming from industrial and enterprise use case. We struggle to imagine that and often find it weird because today, it mostly feels and looks like gaming. And that's where we start to talk about the crypto community and where much of this seems

• 17:24Speaker 02

  essential, or at least we don't have good plausible alternatives. And that has two different functions. Number one is the technology required to build, to operate, maintain the metaverse, at least at a bare bones level. Let's put aside decentralization, user rights, whether or not we want to live in the metaverse or we just have one. But the extraordinary technical needs basically require us to make better use out of everyone's resources. Your spare GPU, your CPU, your extra broadband capacity. We could build more stuff that will take some time. We could build better stuff that's expensive and potentially unnecessary. And so many talk about Ethereum as world computers or the internet's computers

• 18:09Speaker 02

  or a global computer. Many refer to the old Sun Microsystems adage that the computer is the network and the network is the computer because they believe that these sort of decentralized systems are a requirement to pull it off. The second element is to actually have a metaverse that isn't just technically realized, but one that we want. And if we're to contend with multi-trillion dollar corporations, we need to find a means to consolidate our activities, our contributions, not just our spare GPUs, but our time, our attention, our energy, our resources at large. And that's where many get excited about the structures of DAOs and smart contracts. That actually, there are many different groups that are more valuable than Apple,

• 18:54Speaker 02

  than Microsoft, than Meta. They're just decentralized, but they can, through new technology, be coordinated.

• 19:00Anthony Pompliano?

  When you think about these environments, money is highly important to the physical world, even if it's in electronic format. It is the way that we conduct commerce. It is the way that we measure economic value. And it is ultimately the way that we store economic value as well. How do you think about money and its role in these kind of hyper digital environments? And is it more so we're going to recreate the nation state kind of fiat currencies? Is it something where Bitcoin provides a digital currency that can be used? Or is it something like I would maybe assign to more of the gaming communities where each game actually has its own native currency to some degree?

• 19:42Anthony Pompliano?

  And people will just have a wallet that has 20 or 30 different currencies that they use in different environments they move in between?

• 19:49Speaker 02

  So I think that there are some fun ideas here. Number one is, as flawed as we think that today's financial services industry is today, it's even worse in a virtual environment. And why? Because there's this fight to be the payment rail or gatekeeper, the taxing authority of all things virtual. That's a great gig if you can get it. Why? Because if you believe, as McKinsey and others do, that there's a multi-trillion-dollar future, it would be great if you could forcibly tax all of it, especially at 15% to 30%, but even at 1.5% to 2%. On the Apple iPhone, the only company that is actually allowed to make a mobile payment with tap and go is Apple Pay. Visa's not allowed to do it. PayPal, Square, not trusted.

• 20:33Speaker 02

  When you take a look at Jensen Huang, the founder and CEO of Nvidia, the seventh-largest company in the world, he believes that the metaverse economy will eventually exceed that of the analog world. So 50, 60, 70 trillion. And so as broken and flawed, expensive, subject to regulatory capture, the physical and digital worlds are. The virtual one is essentially subservient to two. And they use that in numerous ways that seem increasingly flawed to maintain that control. And so these questions of, is there going to be a digital currency that spans multiple different virtual worlds? I'm absolutely convicted of that. We're seeing evidence now. Is it going to be blockchain-based? Probably often. In many instances, unlikely.

• 21:18Speaker 02

  But what we're seeing here in the virtual world is really the same sort of fight that we're seeing between Bitcoin and fiat, which is this fundamental understanding that the most potent technology deployed today is money, not even necessarily the abstract idea of capital. Money, but also the payment rails that facilitate that transaction. And there was this funny line the other day when the EU said that they were going to unbundle Apple's hegemony over the App Store. I saw this lawyer say that "Apple is going to fight this case until the heat death of the universe." And on the one hand, that's terrifying. On the other hand, you can see the financial sense. And that's a reflection of every power that bees desire

• 22:02Speaker 02

  to maintain the dominant controls to capital mobility, reinvestment, taxation at large.

• 22:09Anthony Pompliano?

  When you think about kind of this digital environment, my mind, as many people, jumps to Ready Player One. It's probably, if you watch the movie, the most visually obvious, "Okay, this could be one version." The downside in that movie is that, once people put on the headset and they're participating in the digital world, it's amazing. When they take it off, they may not live in the most desirable place. Their life may not be as amazing in the physical world as it is in the digital world. What are some of the downsides or risks that you are at least paying attention to and think that people should be aware of as we move more and more of our lives, our identities, our reputations, and that kind of assets into the digital world?

• 22:51Speaker 02

  So it's a great question. I think that there are two different aspects. Number one, we're 15, 17 years into the last era of computing and networking, the mobile and cloud era, and we've identified many problems with it. Platform power, platform regulation, user rights, user security, data security, data rights, data literacy, toxicity, abuse, harassment, miss and disinformation. And most of the titans today don't have good answers for that question. I think more broadly, the Web 3 movement is as motivated by a belief that it's a technologically better system, but also a very sincere sense that the trade-off

• 23:31Speaker 02

  of the past 15 years was not just. The common defense was that it was a bilateral trade. "I got Service A for free, and Service A was great, and therefore, they didn't rob me." And yet, the fact that I got a good product, let's say, and I'm not trying to make a specific example, Google Earth for free, doesn't mean that I was provided the value that was fair for what Google received from me. And so I think as we take a look at the current state of "Web 2," we look at the growing severity of its many problems, the exacerbated gap between what I receive and what I provide, it's reasonable to worry that we're set for a future that is worse, scarier, more extractive than it is restorative

• 24:16Speaker 02

  to societal collective benefit. The second is who's going to build it? As scary as big tech seems today, they don't literally operate the virtual atoms of our parallel existence. To get to Sean's point, if we're talking about living inside digital space rather than just a window into digital space, then who owns that space is going to be more powerful than that who facilitates the window today. Tim Sweeney, the founder and CEO of Epic Games, had a warning in 2016, at the time no one was paying attention to the metaverse. And he said that should one company gain control of the metaverse, they will be more powerful than any corporation or state on earth. They will be like a god.

• 24:59Speaker 02

  That sounds hyperbolic, but of course, if you take a look at the forecast, Jensen's 50 to 70 billion dollar or trillion dollar forecast, the company that runs that system would be more powerful, at least versus most states.

• 25:13Anthony Pompliano?

  In that world, identity comes up quite a bit. And I think the critics would argue, hey, once you put your real identity into these systems, you are tracked, they have your data, and it's all of the bad things that we know people will kind of levy at large Web 2 companies and extract out into Web 3 potentially. On the other side, there's a belief that, no, maybe I actually may have multiple identities. And I always think, you know, the way you act on Twitter may be different than Instagram, than on a foursquare versus LinkedIn versus Facebook. And so how do you think about identity? And will we have an explosion of pseudonyms and even anonymous users?

• 25:56Anthony Pompliano?

  Will it be more so people will manage two or three identities that are then tied back to themselves? Like, how does that play out? And full well knowing, I'm asking you to essentially try to guess at a moving target, but like, what do you think makes the most sense as we sit today?

• 26:09Speaker 02

  I think what makes the most sense is what exists today. It serves a lot of important functions, both technologically but also societally. Think about you as you exist today. How many forms of identity do you have? You might have a building login, you have a passport, you have a social, you have a driver's license. All of these serve different functions. They get you admittance into some areas sometimes, but they don't bring everything of you. When you want to go into an office park, they require the identity. If you want to go into an H and R block, you require a different form of identity. And if you want to go into a shopping mall, they require none at all. The digital ecosystem is the same. We have a handful of common identities that we use.

• 26:54Speaker 02

  Most people in the United States have an iCloud ID. They have a Gmail account. They have a Facebook account. They not only reflect different forms of yourself, but to different applications, sharing different information with counterparties and often based on what you choose to share, when, why, and how. Again, that's a mixture of functional and technological rationales, but that seems like the best way to solve going forward. I certainly share the opinion that a single identity poses a severe risk, no matter how it's stored. But I'm also not convinced that a single identity solves a real problem.

• 27:34Anthony Pompliano?

  When you think about kind of the experience, regardless of the identity that you use inside of these environments, we usually think of visual as the sense that is most manipulated or kind of leveraged. I did a demo, maybe five or six years ago, where I put on kind of an Oculus-like device. I put on headphones and immediately was standing on top of the Twin Towers. And as I was doing this, the people putting on the demo then said, move your foot, you know, six inches to the center. I hit a rope and out in front of me, I could see a rope. My foot could feel the rope.

• 28:14Anthony Pompliano?

  And then they turned on a small fan and now I could feel as if I was up on top of this building and I could hear as if I was up on top of this building. And I was scared. I did not want to walk on that rope, right? And it gave me this aha moment around this is not just a physical thing. There are these other senses. And in Ready Player One, we see he gets put on the kind of the haptic suit and seems to kind of augment the experience of not just visual and audio, but also with the full body suit. Is that where this eventually ends up? And technology has to be developed to give us all of that sensory control in the true metaverse? Or do you think there's maybe a dream of that, but it's unlikely to happen?

• 28:57Speaker 02

  So we're seeing it right now. It's manifesting a lot faster than I think many people expect. And it partly comes down to that classic adage, which happens to come from William Gibson's Neuromancer, which is seen as one of the antecedent theorists and novelizations of the metaverse. Came out in 1984, about eight years before Snow Crash, where he has this line, "The future is already here, it's just not very evenly distributed." What you're talking about exists. We have what are called MEMS. These devices produce ultrasonic sound barriers that feel like force fields. They're a few inches wide and thick. You can put your hand over on a desk. And I use these examples in my book. I've done these demos.

• 29:40Speaker 02

  You're feeling air, but you have the tactile sensation of everything from a firm bowling ball to a plush teddy bear to the sensation of a crumbling sandcastle. That's augmented by extraordinary technological improvements, but also extraordinary nerve density in your fingertips, atypically compared to the rest of your body. We're seeing myriad other technologies come. Snapchat and Facebook have both been leading acquirers of what's called electromyography devices. Now, these are bands that you'll typically wear on your forearm or other extremities that capture electrical signals through skeletal muscles. And what they're able to do is then, not unlike Luke Skywalker or Darth Vader,

• 30:24Speaker 02

  understand what you would then want to be doing. And so you wear this device, and it's not a glove that's figuring out what you're doing with each digit. You're wearing a band that knows what each of your digits is doing based on the signal you're sending. And so then, in a virtual environment, you'll see your hand exactly, even though that input is not actually being recorded. Now, you get into these really fun examples, and this is where we get fully into Ready Player One, saying, "Okay, I've now got a lightweight wearable, doesn't require a camera, that allows me to play the piano in virtual space. But do I want to play a virtual piano?" And so a famous demo that Facebook's Control Labs has done shows that you'll control a crab

• 31:08Speaker 02

  in virtual space, or frankly, in physical one. And you just map mentally your four fingers to the crab's legs, and all of a sudden, you can walk. And this is where we start to get into these weird things where you don't think it's possible, or you only think of it in The Matrix Gone Wrong, but the technology is here. It's just expensive and not widely deployed, for now.

• 31:30Anthony Pompliano?

  Yeah, it's fascinating to kind of think through how quickly all of this is coming together. You not only wrote the book, you've not only had a number of roles where you've been heavily involved in setting the strategy of how various companies should think about this, but you're also an investor. And one of the things that I found interesting is, you talk about that you'd rather discover a playbook than apply one. Almost this market observer versus kind of a market predictor, if you will. Talk a little bit about how do you think of that? Are there frameworks that you use from an investment standpoint to understand where the world is going? And then also, are there any things that you're

• 32:12Anthony Pompliano?

  cognizant of by being the observer rather than the predictor that could actually lead you to make bad investment decisions as well?

• 32:18Speaker 02

  I mean, certainly, my thesis could lead me astray, but I think my general working premise is more things are going to change than stay the same, and it's very hard to predict specific instantiations. I talk about technology being recursive. It's the same reason why in 1995, you could have all the engineers in the world, all the cash in the world, and the best technical understanding of TCP/IP or the Internet Protocol Suite, and not build the right products. That's not speculative. We know it. Microsoft didn't. TCP/IP didn't clearly say what the future was going to look like. And so I try to observe and see what's happening, lean into what the early signs are, but to be open-minded that I'm going to be wrong. I'll give you three examples.

• 33:02Speaker 02

  We've long believed that some form of ubiquitous, universal identity online would be useful, would be powerful, remunerative. But for a decade and a half, no one knew how to build it. Microsoft tried twice. You might remember the .NET framework. Why? I don't want to sign up for a universal account from Microsoft. What was the answer? The answer was a college hot or not for dorms that eventually became the world's largest photo sharing, then messaging platform ever. When you take a look at Fortnite, an instrumental portion of Epic's Metaverse initiative, it was itself a spin out of a, you know, mostly Miss game. Had they sought out building a quote unquote "metaverse", they probably would not have succeeded.

• 33:46Speaker 02

  But instead, they built a battle royale game that slowly morphed into something more, much like Facebook. And then when you take a look more broadly, no matter the application, we tend to think the new thing is the old thing, but slightly different. What was Skype? Well, Skype was a communications platform focused on communication to PSTN, traditional telephony networks. Who were the leaders of the mobile communications era? Slack, SnapChat, Facebook Messenger, iMessage. They were built on fundamental different premises. In one case, images and AR filters, ephemeral sexting. If you go back to 2007, 2008, and I've done a lot of this,

• 34:29Speaker 02

  there was an absolute belief that online dating was solved. And what was the answer? You spend two to three hours filling out 600 questions, and then you're scientifically matched with people that you will then spend 20 or 30 minutes discussing your fit on. And what was the answer to online dating? The online dating answer was the reverse. It was less than three seconds. That's how long the average man spends looking at a potential match on Tinder. It's seven seconds for women. And what's the basis? Photos. And so I try to keep that in mind and just say, look, we're going to look at this and say, okay, it should be Tinder, but with avatars. I could guarantee you Tinder with avatars doesn't

• 35:13Speaker 02

  make any sense, but that's where the early innovation is.

• 35:17Anthony Pompliano?

  One of the companies that we spend a lot of time with and do quite a bit of work with is Ledger. They have self custody hardware. And obviously, in the crypto space, that is a huge thing. Not your keys, not your coins, hold it, self custody, self sovereignty. When we start talking about the metaverse, one of the promises that I've seen people mention over and over again is you can take your assets and kind of move them between these digital environments. How much of this do you think will end up being kind of software based versus like hardware custody? And I think of it from as a potential friction point. In the Bitcoin crypto world, people have to learn about a digital wallet. They have to learn about a physical piece of hardware. It's scary to people. They feel like they could mess up, right? It's not just go put your money in a bank and then the bank is responsible for

• 36:02Anthony Pompliano?

  it. And so how do you see those types of ideas around self custody and kind of the self sovereignty of these assets actually playing out in the metaverse?

• 36:11Speaker 02

  Look, it's obviously going to be an instrumental part of all investment in the future. There's no way around the idea that as the significance, both financially and personally, of all digital and virtual data, not just investments, but data at large grows, that you're going to be more mindful about where it's literally stored. You're talking about wallets as a difficult onboarding experience for many people. The fundamental idea of custody, or even where it's stored, is not something we think of today. CloudFlare's founder and CEO talks about the fact that he believes the primary use case for edge computing is going to be assurance that your data is stored nationally, right? The things

• 36:52Speaker 02

  that matter to you don't sit in extraterritorial regions. But to answer your question more specifically, I think this is where we have to think about function and purpose. We shouldn't think of custody of data or hardware in binary. The question is where, what, when, and how. We all store things differently. There are some things we store in our house, some things we store in a bank, some things we store in a storage locker. The same reason why that when you take a look at side chains and layer twos, the right example is that the degree of security you deploy for a transaction should be commensurate with the risk and financial value of that transaction. That's no different from how the systems work today.

• 37:35Speaker 02

  When you want to make a wire, you have to spend an extraordinarily large amount of time validating information, complex private information. If you want to buy a $1,000 computer from Lenovo, they're going to ask you for your address and zip code so that they can do a fraud authentication with your credit card. You want to buy something from Starbucks? Well, they're not going to ask for any of that information. A $2 fraud doesn't matter enough. We'd rather keep the customers going. We have to think about flexible continuums. What you store, when, where, how, at which cost, when? And that, I think, is going to be the answer. There's a lot we'll want to self custody. There's a lot more that some people of more import or more wealth will want to self custody. The spectrum is what matters.

• 38:17Anthony Pompliano?

  I literally could talk to you for hours about this stuff because I think it's, there's so many things that are applicable in the short term, but also it's very obvious that over a long time horizon, more and more of this stuff will become prevalent. For those that are listening or watching, Matthew Ball is the author of The Metaverse and How It Will Revolutionize Everything. If you have not yet, I highly suggest going, getting the book. I'm about halfway through it and it is fantastic. And I think, Matthew, you know, what's so unique is not just your ability to understand some of this and it's more so also to be able to articulate it in a way that people understand, which, which makes the book quite enjoyable. Where can we send people to find you on the internet? If, after reading the book, they want to get more of the information

• 39:02Anthony Pompliano?

  or consume more of the content you're putting out?

• 39:04Speaker 02

  Sure. So my Twitter handle is @ballmatthew, B-A-L-L, Matthew traditionally spelled, and then MatthewBall.VC as in venturecapital.com or NOK.com.

• 39:15Anthony Pompliano?

  Awesome. Matthew, thank you so much for, for taking the time. We definitely will have to bring you back as this becomes a thing that is more and more obvious to folks. But I appreciate you putting the time and effort to write the book and I hope that everyone goes and gets it.

• 39:30Speaker 02

  Thank you. Looking forward.

• 39:31Anthony Pompliano?

  All right. I'll see you later.

• 39:34Anthony Pompliano?

  For listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.