Why Facebook Just Bet Its Future On Crypto

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Intro
You’ve probably heard by now that executives at Facebook announced that the company is rebranding as Meta Platforms.

Going forward, all their business activities will be bound to the Metaverse, the alternative digital reality that exists online.

So what has this got to do with making money as a crypto investor?

Well back to my basic tenet that economic activity is human activity.
Wherever human activity goes, so goes economic activity.

For example, as soon as global lockdowns started coming in, I knew that was going to tank the economy, simply by restricting human activity. It was simple cause and effect. I even made a video about it so I’m on record saying that.

But that’s not really the point of this episode. The point here is to discuss how human activity is going to be moving increasingly into the Metaverse and how economic activity is going to automatically go with it.

Talking points

One distinction with the metaverse is its interconnectedness

Early video games were self-contained realities. One game universe did not have any relation to another game universe.

Then we moved to big centralised virtual worlds with massive multiplayer online games like Fortnite, Eve, World Of Warcraft etc

That was the same game world but it joined together the experiences of thousands of different players within that game

While they are huge universes in their own right, they are still centrally controlled and ruled with almost all of the economic value being captured by the software company who built it

There have been attempts to create secondary marketplaces for in-game items but these often prove unpopular with the game developers because they see it as a loss of economic value

Then there is the Steam gaming platform which allowed many independent game studios to build a business, but there are many instances where Steam has removed certain games from its platform and damaged or destroyed those businesses.

Now we move to the world of decentralized gaming where the developers and the players are equals. The players can truly own their own items, participate in governing the game and even be developers themselves.

Some group of developers may start the project but when governance is de-centralised their power gets diluted or removed.

The next stage after that (which we haven’t quite got to yet) is when these games start connecting to each other. That is the world in which you could potentially transfer an in-game item like a sword into a completely different game and use it there.

This is likely the world that Facebook are now preparing for.

That piece where you fully own your in-game items and then are able to transfer them to different games has only really become possible thanks to crypto and blockchain technology.

So what has this got to do with Facebook?
Researchers at Bloomberg Intelligence expect that by 2026, the total addressable market for metaverse products and services could reach $800 billion.
These virtual worlds are the next social networks
If people increasingly socialise in these virtual worlds instead of scrolling through Facebook, Facebook has a problem
If your revenue model is advertising (which Facebook’s currently is), then you are relying on a large group of people pointing their attention at the platform you display those ads on (currently Facebook)
Facebook must now see the writing on the wall in terms of attention turning away from Facebook.com
They are so certain this is the way it’s going to go, they haven’t just started a new arm of Facebook to cover this new trend, they have wholesale rebranded their entire organisation (they previously acquired Oculus).
The Oculus play is likely an earlier version of what they have done with the re-brand. Back then they saw the trend and wanted to get a foot in the door, now they are full body walking through the door.
So where is the investment opportunity?
There are several different levels of opportunity that represent different risk / reward profiles.
Invest in the stock of companies like Facebook or Globant
Invest in Bitcoin or Ethereum
Invest in the token that relates to whichever platform has the most metaverse activity on it
Invest in the token that relates to an individual game
Invest in specific virtual items within an individual game (like NFT artworks)
As you go up those levels, reward potential increases but so does risk.
There is also an optimal level there, somewhere between investing in the most popular network and investing in tokens that relate to the most popular game.
Or a hybrid play like YGG

I think UDC is the best choice in terms of research if you want to be kept informed about the latest Metaverse investment opportunities.