How beliefs acquired in the past blind us to the future (Web3, NFTs, Metaverse)

I have been playing chess since I was a child. I'm not really good, but I enjoy the game. Today I play against my seven-year-old son, who (still) has his troubles playing against me. How could it be otherwise. After all, I have decades more experience in this game than he does. One day, however, my son learned a new chess variant at the chess club called losing chess. In losing chess, the normal chess logic is turned upside down. The player who has lost all his chess pieces first wins. It can't be that difficult to lose your pieces, I thought to myself, accepted my son's losing chess challenge, and lost right in the first game. My decades of chess experience became an obstacle, a disadvantage, because I had to rethink the game. Established moves no longer worked; on the contrary, they were bad moves under these new conditions. I could not rethink fast enough, unlearn what I had learned, and before I realized what was happening, my seven-year-old son was rejoicing over his first chess victory against me. Besides the fun of the game, we both learned something important in that game of chess. My son learned that an experienced player, who is difficult to beat in his métier, can be easily defeated under changed conditions. And I learned that under certain circumstances all our experience and knowledge can not only not be an advantage, but even a disadvantage, because they blind us to the right actions. And this is not only the case in chess.

German version of this article / deutschsprachige Fassung.

When I first came into contact with Bitcoin years ago at a startup conference, I couldn't shake off my existing beliefs about the world and business. Bitcoin, a digital currency whose founder is anonymous? I couldn't imagine it. And because I couldn't imagine it, I didn't take the time to learn about and understand the blockchain technology behind it. The beliefs and convictions I developed in my life prevented me from seeing the future. And not just once. While the value of Bitcoin or Ethereum was clear to me in 2017, I raised an eyebrow when the first CryptoKitty changed hands for over a hundred thousand dollars¹ in December 2017. I couldn't categorize the event. Instead of looking deeply into CryptoKitties back in 2017 and understanding the benefits of Non-Fungible Tokens (NFTs) early on, I had immediate negative associations like hype, Ponzi scheme, or money laundering that prevented me from pursuing the topic. Once again, beliefs and convictions acquired in the past blocked my view of the future.

So we have to stop evaluating technological developments or innovations mainly in the light of the past. Web3, NFTs or the metaverse bring with them developments that in some cases cannot be reconciled with our existing experiences and beliefs. An example: If someone today raises the thesis that in the future people will no longer pay to play video games, but will be paid to do so, many people outside the Play2Earn community react with "too good to be true" or "how is something like that supposed to work financially". A video game is bought, then played. The payment stream is one-way toward the vendor. A Play2Earn approach, where players make money by playing, is contrary to what most have experienced or heard in their lives. There is a cognitive dissonance² between one's own experiences and beliefs that have been built up to the present day and the new concept that contradicts them. And it is precisely at this point in the thinking process, where two opposing concepts collide, that an unpleasant state of tension arises that wants to be relieved. The easy way to relieve the tension is to dismiss the new technology or the innovative approach ("it's all a scam", "it's just hype"). Then the issue is settled and the world exists in accordance with one's own beliefs. This path is often taken in a quite automated way, the state of tension is solved immediately and without much effort. The more challenging option is to take the time to understand the new approach, and to adapt one's beliefs to the new environment. For example, an exploration of Play2Earn approaches would show that they are a serious and interesting development to be aware of. One of the leading Play2Earn providers, Axie Infinity, already has over 1.8 million daily active users. In the Philippines, the game is very popular and some make a living³ from the up to $1,000-2,000 that can be earned monthly from the game. What societal effects result from people making a living by playing video games and whether these meaningless activities are not a prime example of bullshit jobs⁴, I leave to the reader to judge at this point. And yes, there are also Play2Earn games that rip off their players and use a Ponzi scheme. But the Play2Earn category is noteworthy.

To sum up: My message is not to uncritically follow every hype. My message is not to write off new approaches, innovations, technological developments prematurely, but to analyze them rationally. If this analysis is not carried out and the new approach is immediately dismissed - without a critical examination of it - then this position is often consolidated over a longer period of time. One's own perception is then directed in such a way that it mainly filters content that strengthens one's own position. A self-created filter bubble par excellence. In this respect, stay open to new developments as long as possible and take the time to build up an understanding of them.

In this publication I would like to help readers gain a deeper understanding regarding Web3, NFTs & the Metaverse. This publication should stimulate thinking and provide fresh perspectives. To achieve this, I will

a) describe and critically discuss relevant developments, their backgrounds and examples in an easy-to-understand way,

b) identify application areas and innovation opportunities and

c) outline possible future scenarios.

This publication is not about how to make quick money via flipping jpegs or investing in cryptocurrencies. There are numerous other publications for this. I would even go so far as to say that most of the publications in this field are concerned mainly with this, but not this one. There is no investment advice from me. I am not a financial expert. My specialty is entrepreneurship, innovation & marketing. Should you nevertheless make investments, do not invest in projects you do not fully understand and whose risk you cannot estimate. Investments in innovative projects can lead to a total loss and are to be classified as high-risk.

1. Tepper, Fitz. “People Have Spent over $1M Buying Virtual Cats on the Ethereum Blockchain.” Techcrunch, 2017. https://techcrunch.com/2017/12/03/people-have-spent-over-1m-buying-virtual-cats-on-the-ethereum-blockchain/

2. Festinger, Leon. A Theory of Cognitive Dissonance. California: Stanford University Press, 1957.

3. Costa, Cameron. “Inside the Metaverse Economy, Jobs and Infrastructure Projects Are Becoming Real.” CNBC, 2022. https://www.cnbc.com/2022/01/15/inside-the-metaverse-economy-this-is-what-will-be-for-real-in-2022.html

4. Graeber, David. Bullshit Jobs. New York: Simon & Schuster, 2018.