Legacy Research Group

Chris: Hey, Nilus.

Nilus Mattive: Hey, how’s it going, man?

Chris: Pretty good. How are you?

Nilus: Good.

Chris: We’re recording.

Nilus: We’re in the Metaverse.

Chris: We’re in the Metaverse recording.

Nilus: Kind of. We’re close. We’re not there yet, but we’re close to the Metaverse.

Chris: We’re pretty close. I just read your piece in Palm Beach Letter and loved it. I thought it was a great look inside what’s going on in the Metaverse.

We sort of are in the Metaverse because we’re talking on Zoom. We’re not with each other, but we’re not in this fully Metaverse-y world yet.

Nilus: Yeah. But the point I made in the issue, and this is what helped me get my mind around it… because I think to our audience or to people who aren’t familiar with the concept, it sounds really out there.

But in a sense, you’re right. I’ve never even met you in person. I don’t know when I will meet you in person. But it doesn’t matter. We already know each other and are interacting in a meaningful way electronically. So we’re halfway there.

And probably there a lot faster than maybe I would have thought we would be there 10 years ago, when even streaming technology wasn’t where it is right now – where I just click a button and boom, here we are and I’m looking at you and you’re looking at me, and there’s very little lag between our communication.

I think that’s the easiest way to explain it to somebody. It’s just going to be a far more evolved version of what we, especially with the pandemic, already accelerated.

Chris: I was going to mention the pandemic. Both of us are working with Legacy Research Group. You’re on the west coast of the U.S. I’m in Ireland, where I’m from. I’m in my kitchen, you’re in… I don’t know where you are…

Nilus: I’m in my surf shack.

Chris: That’s nice. We’re doing our jobs from home. We’re communicating online. And it’s all been a little bit hard to adjust to, but weirdly easy. We just pop on these calls. Never met each other, but we can interact.

Let’s dive into some of the stuff that’s catching people’s attention a bit more. I wanted to start with crypto punks. This is something I’m pretty sure most readers would have come across, even just in an article or something. These crazy prices, that these little digital images that are sold as NFTs, non-fungible tokens, are fetching. I read in the issue that you have a crypto punk.

Nilus: I have a share in one. That’s one message for our readers – the NFT space. Last time we talked, I explained how bitcoin was not in my wheelhouse. I was aware of it forever but didn’t participate until more recently. [Legacy Inner Circle members can catch up on that conversation here.]

The NFT thing is an even bigger extension of that, in the sense that when you look at the price action of these things, it’s really hard to understand. This is a digital image, a pixelated image, of a person or a cartoon character, essentially. It was given away for free. And now, one of them was worth $11.3 million the last time it changed hands.

It’s hard to understand. You go, “Well, I can take a screenshot of that same image and it is, in terms of pixels, exactly the same.” However, because the original, blockchain-verified version of that image, that’s the NFT, therefore that is worth $11 million.

Then the question we started to ask is, well, beyond just sheer speculation, why would there be a frenzy for these things in the first place? Why do people want to own them?

An NFT artwork, you can kind of understand from the art world. But a crypto punk? It’s a picture of a guy. So what am I going to do with that? Is it really art? It was randomly generated, 10,000 of them.

I think the answer is because, again, if you start to think about moving to the digital world, and people wanting to show off and have trophy assets in the digital world the same way they want to have trophy assets in the analog world… You know, why do you need a million-dollar car? You don’t need it. It might be slightly faster than a regular car, but it’s because you want to prove who you are, how wealthy you are, how cool you are, and all those base human emotions.

So the crypto punk thing is driven, in my opinion, by that same general human psychology of if we’re going to move into this digital world, where I’m going to have an avatar that represents me in that world, then I’m going to prove to everybody, “Hey man, I have that crypto punk from when this thing first got started. And $11 million, for me, is not a big deal to own that and to be that person or to be that thing in the digital world.”

The Metaverse validates, to some degree, the price action in NFTs.

Chris: I totally agree. I was just doing some research for this call, looking at a thread on Twitter talking about where we are with the internet. 4.5 billion people online. That’s 60% of the world’s population. Americans are spending 11 hours a day online. 11 hours a day in some sort of digital interaction.

So I think you’re right. The sticking point in people’s head is, “Jeez, this is just a digital image.” But of course, we’re splashing out on status items all the time, whether it be sneakers or cars, you name it.

So for folks who have a hard time understanding this, I think the idea is that we’re really becoming a digital species.

Nilus: Right.

Chris: And we kind of know that, but we don’t like to think about how long we spend online. And we’re going to take all our human characteristics into that digital world.

For people who are just coming to this, how would you explain the Metaverse? It’s one of these jargon-y, off-putting terms, in a way. It sounds pretty wacky. So what is it? And why are you guys at Palm Beach Letter so excited about it?

You are investors. You’re hard-nosed about profits. You’re interested in things that can help your readers really move the needle on their wealth.

We know that there is big money in crypto punks and artworks have sold… But where does the rubber meet the road for the commercial or investing side of this?

Nilus: You’re right. It’s hard to explain it in a nutshell. Everybody has a general feeling of what the Metaverse is going to be or what it is, but no one yet can say exactly.

The internet is the same deal, right? If we talked about this 20 years ago, “Well, there’s these websites and these things. It’s going to get here.” But it was kind of hard to fully understand exactly how it would get there.

I think what we can say is, essentially, the Metaverse is going to be the conglomeration of all these different technological trends we’re experiencing right now – blockchain technology, high-speed internet, mobile internet, portability of technology, the idea that we are spending far more time virtually with each other, as well as the gaming thing, which we didn’t even really get into yet.

But basically, it’s going to be the way all of these technologies come together to blend the digital with the analog portions of our life. I think that’s the key. Because you’re right. Right now, the digital aspect is either in my hand or it’s in my office, and then I leave and I go do my thing. There isn’t really a seamless transition from one to the other. They’re not interlaced continually, as they will be when we’re actually dwelling in the Metaverse. And it might be the point where everything is partial digital, partial analog, I think is what we’re talking about.

So as far as the commercial possibilities, beyond speculating on NFTs or buying a crypto punk or whatever, you’re going to see new companies and old companies embrace this idea. And the successful ones…

If you think about it as an economy, our argument is that essentially, the Metaverse will be one of the largest economies in the world, just in and of itself.

And in that regard, it will transcend geographical economies. It’s going to be a great equalizer in terms of spreading opportunities throughout the globe to places, people, and companies where those opportunities aren’t even possible right now.