Who’s Really Profiting From Your Data? #technology

Data is very, very valuable. And the problem is that people don't understand it. And also data and the users and the social networks around them create these network effects that are really, really valuable and powerful, and they have no benefit in that. I think if there's one thing that is unifying, ideally, is that if you can have an area where prosperity is more shared, then I think you can create more happiness out of that, which is typically rising middle class generally means a more happier society. And I think definitely if you look at the last 20, 30 years, that hasn't been the case. The middle class has been squeezed out in most countries. Wealth inequality is rising over time. And this is certainly true in some places in Asia as well. And that breeds unhappiness and that breeds polarization. And then you're looking for things to demonize as a result as well. And it's very easy to demonize people that have sort of appear to be successful or have money, because it seems unfair. And I think one of the big strengths of America is that you've made money, you've achieved something, and that's commendable, and I want to do the same thing. And among certain circles, that is beginning to die. But that has a lot to do with the way that America has been unnecessarily extractive in the way they do business as well, particularly with the big tech giants and big tech companies.

Right.

And I think crypto and blockchain and Web3 will change is already changing that. Because just think about how wealth and money is broadly shared across the ecosystem. One of the things that I really do love about our space, sure, there's funny stuff with meme coins and so on, but at the end of the day, we're more than willing to put the money that we made in crypto back into crypto.

Yeah.

Right. Everyone in the industry plows it back in, makes investments, supports companies, builds projects, buys shitcoins, like all sorts of stuff. Right. But they're back in the ecosystem, which is not actually what happens in Web2. So we ourselves are prolific investors. We have over 573 portfolio companies, but we're not alone, right? So many other companies are redeploying back into the ecosystem. And then you look at the giants of Web2, the biggest companies in the world, Apple, Microsoft, Facebook, even Google. What seed early-stage investments do they do? Almost none.

Yeah, that's true.

And yet those are the guys that are depending on them to build on them, and yet they're not putting any money back into it. The top 10 companies in the world have roughly $1 trillion of cash.

Wow.

$1 trillion. That's basically not productive capital, except getting interest in these kind of rates. Now imagine if you took like a single-digit percentage and you created a seed ecosystem fund. We're talking about tens of billions of dollars. That's like a rounding error for those countries, really. I mean, that's insane to think about, but it's a rounding error. But it would do so much for those ecosystems. When the judgment came against Apple because of the Epic case, where Epic basically had to force open the payment rails, which is great for crypto, by the way, because— And we launched a game on the Apple Store, one of our existing games, and basically made it possible to use Tower tokens, which is a crypto token for the game. It was an experiment and it was approved, which is great news, right?

Right.

And that's fantastic. But when that judgment happened, who came to Apple's defense? Crickets, right? Nobody said, oh, Apple, Epic, pay your 30%, or no, like nobody, nobody came to Apple's defense. Now imagine, because we think of it as like a tax rate. Imagine, right? Your husband's Swedish, right? Imagine if someone got away from paying his taxes in Sweden. What do you think the people in Sweden would say? They'd be like up in arms and say, that's not fair, whatever. Like, you need to all pay your taxes because you know that at least the taxes go back into contributing into society, whether it's building schools, creating infrastructure, opportunity. And for Apple, because they only take, It's extractive. It's extractive. They sell you iPhone, they don't give you anything back for it.

And you are the product.

And you're the product. Exactly. I'm an app developer. You take 30% from me. You're not investing in me. You're not helping me grow. I don't get distribution anymore.

It's like a mafia.

Yeah, pretty much. It's a cartel. What happens is that people just don't like that. And so there's no support, there's no love. If Apple had an ecosystem fund, they would actually get a lot more support because people realize that, okay, I pay my 30%. But a portion of that money goes into building a better ecosystem, new apps, new products that others are building, new opportunities for young people, you would accept that there's a form of, I guess, social tax that comes with it because you want to build a good community. The point being is that that's not in the DNA of those companies, and that needs to change. And I think it's one of the reasons why society in the West in particular is becoming, in certain circles, sort of more anti-capitalist because the capitalists are being extractive and not contributing back. Whereas in Web3, we're ultimately reinvesting back in the ecosystem. And also everyone is a stakeholder, right? Everyone owns a share in the network. If Bitcoin goes up, everyone wins in the space, right? It's not just a select few.

Oh, I love that. I know we've delved a little bit deeper into that topic on other podcasts, and that's just like the North Star, one of the North Stars of Web3, that true ownership, but that everybody can rise together and have access and, you know, really can access those tools in a way that you never could before.

It democratizes access to the type of sort of capital assets that you never could before.

Yeah. And so, like, it's not that capitalism is bad at all. It's what we've talked about before as well, the financial literacy, which is now being drawn into the equation, and also data literacy. Because Brittany Kaiser was going to be on earlier, and, you know, she was like the whistleblower for Cambridge Analytica.

That's right. That's right.

Yeah. And she was, she gave a great analogy on one of her interviews, and it was something like, you know, the Disney princes. What type of Disney princess are you? But people were going crazy and doing it, but they really didn't know what was happening to the data on the backend. And so it's this whole new way of understanding how data should be processed and things like that.

For Animoca Brands, we care about mass adoption. We care about making sure that more people sort of go into Web3 and growing digital property rights. And so we always look for ways in which we can best do that. So I would want to highlight 2 things. And then some final thoughts on this one. One, Mocaverse is a huge area that we're focused on, digital identity, and particularly the reputation stack. When you think about how do we create a safer space and still preserve anonymity, it's reputation. I don't need to know your name, but I do need to know whether I can trust you somehow.

Right. What you've done.

Exactly. What you've done, or that someone can attest that reputation. And we do this in real life, right? And the fact that we can trust each other, we can conduct business in a certain way without having to worry that you run away with the money, all that kind of stuff, because you've got laws that sort of ensure that kind of setup.

Right.

And in Web3, because of the anonymity, or at least implied anonymity with setting up a new wallet, it's hard to do that. But if I have a way in which I would know your reputation, and there's a reputation I want to protect, then it's worthy for me to sort of maybe do business with you or give you credit. And we've experienced this with things like airdrops. When you do an airdrop, we think of it as actually giving credit to the user, right? Because we hope that the user will do something positive with it, or they could just sell it, of course, right?

Right.

And what's happening, especially with airdrop farming and bots, you realize that 70% or 80% of the users in many cases are actually not real users even at all. And it also turns out that if you're going to sort of KYC the wallet or do some proof of humanity, That's not enough either, because then they just sell the wallet to someone else who basically does that stuff. Selling wallets is a huge thing. We discovered that when we had a mint and we did a KYC before, something like 30,000, 40,000 wallets were sold off to people around the world that wasn't related.

That's a much bigger number than I thought.

Yeah, it's large, right? And we see this with some of the airdrops. Now, again, anytime there's money involved, all sorts of people will try funny things. So this will evolve, and we think reputation layer will solve that. Because if you keep doing that, then your reputation will sink, and eventually you have to start from scratch. And if you don't have reputation, just like in the real world, you tend not to be able to have the same opportunities. Like, if I don't—