This piece was originally published on Doug’s Substack, Uncomfortable Profit.
Any idea that touches gender or race is uncomfortable. It’s easy to devolve into political and ideological beliefs when you talk about the most powerful components of personal identity. But this isn’t about politics or ideology. It’s about profit.
The demotion of gender and race as primitives for identity in the digital world gives way for digital assets to assume that role. Never has anything other than genetic code formed the fundamental basis for human identity. That’s why I think identity will be the defining theme of the 2020 decade. As we embrace the metaverse, we need to establish new, digital-first identities where race and gender are irrelevant.
The Helen Question
A few months ago, I saw a Twitter exchange between a reporter from Forbes and a popular NFT influencer, Beanie. The reporter was building a list of NFT influencers and asked Beanie for recommendations, diversity strongly appreciated. Beanie recommended himself, was told by the reporter it was TBD if he would make the list, then informed the reporter that he was an Asian trans woman. When Beanie asked if his claimed minority status helped, the reporter replied that “plenty of people in this world are fully pseudonymous, so it doesn’t always apply.”
The last line stuck with me. If gender or race may not apply to fully pseudonymous accounts in a world built on pseudonymity, when should it apply?
Pseudonymity is a core feature of the metaverse where identity is built on avatars, digital assets, and activity rather than physical being. All avatars begin as full pseudonyms. The person adopting the avatar may choose to remain fully pseudonymous or connect his identity — parts or all of it.
Pseudonyms easily and often have a gender or race different from the person behind it.
There’s a popular pseudonymous hedge fund manager on Twitter that goes by the handle Trailer Park Helen. The manager is known to be male but uses a female avatar. His followers call him Helen. People often refer to him in third person with she/her pronouns.
What applies here? Should Helen be viewed as male because that’s who runs the pseudonymous account, or female because that’s the identity of the pseudonym?
On a Forbes fintwit influencers list, should Helen represent male or female? What if Helen were Hank, and Hank’s account owner was a female?
Exploring the Helen Question requires consideration of two higher-order questions:
– What is the purpose of the metaverse?
– How then do gender and race fit into the metaverse?
The Purpose of the Metaverse
Most definitions of the metaverse are abstract and esoteric. They center around VR, Ready Player One, and futuristic utopias. Those definitions may paint a vivid picture, but they fail to capture the imperative characteristics of what makes the metaverse the metaverse.
The metaverse is a holistic digital world built on the inseparable necessities of property ownership and a functional economy.
The metaverse is the metaverse, not a metaverse because it must expand everywhere we are digitally connected. Any corner of the digital world that does not recognize the property ownership defined in the metaverse are not separate metaverses. They are something else that depends on a centralized, walled environment. It may be a game or a social network, but it isn’t a separate metaverse. Just as we own all of our stuff in the physical world in aggregate, not in separately defined spaces, we must own all of our stuff in one metaverse.
To span across the digital world, the metaverse will likely rely on a decentralized blockchain or blockchains. While there can be only one metaverse, that metaverse can incorporate many chains of ownership so long as those chains are recognized by substantially all participants similar to different countries in the physical world.
As property rights extend to every corner of the metaverse, a digitally native and self-governing economy can form. Ownership includes the right to trade, and trade is the basis for all economies. As digital assets hold fiat value, a trade economy allows resources useful both within and outside of the metaverse to change hands.
The combination of property rights and a functional economy make the metaverse fundamentally play-to-earn. Play-to-earn economies are meritocracies where participants are rewarded for effort and skill. It’s no accident the play-to-earn concept has flourished on crypto protocols that serve as a digital property rights layer.
Property rights are the primary building block for any civilization. Without acknowledgement of property rights, there can be no life, liberty, or pursuit of happiness, and there can be no economy. If property rights are also the fundamental building block of the metaverse, then the purpose of the metaverse must be to create a digital civilization optimized around digital assets.
Physical and digital worlds have far different constraints. One deals in the constrained and challenging form of atoms, the other in abundant and flexible bits. Atoms are hard to reproduce. Bits are not. Ownership of atoms is not the same as ownership of bits, nor are economies built on moving atoms the same as economies built on moving bits. We shouldn’t build the metaverse in the guise of the physical world given these differences.
Gender and Race in the Metaverse
An identity born in the metaverse starts as an entry on a ledger — a blank slate to be given meaning through effort at the game that results in ownership of assets. That identity is unbound by any influence from nature. It’s completely opt in, not opt out, and it starts with no information about the person’s gender or race unless we add it.
Back to the Helen question: Should Helen be viewed as male because that’s who runs the pseudonymous account or female because that’s the identity of the pseudonym?
We can split the question into two parts:
– Genetic traits — the gender and race of a person participating in the metaverse
– Chosen traits – the gender and race used in the metaverse
I’ll start with chosen traits first.
The name Trailer Park Helen and the Caucasian female image were chosen by the account owner. A lady in a trailer park is probably the last person you’d expect to share hedge fund insights. Those chosen traits are playful and ironic. They guide the tone of the character, but neither trait impacts the usefulness of the content Helen creates. In a play-to-earn world, a male pseudonym in a glass tower would have garnered the same attention given the same quality of content.
Twitter is the most important play-to-earn game in the world right now. Those who excel at playing the game earn influence, which is valuable in the contexts of both money and power. Follower counts are the digital asset of Twitter. The follower count is like a bank account of non-fungible, non-tradeable tokens that earn interest through influence and, ultimately, money.
Players can only win the Twitter game through skill at playing the game — creating great content — not through advantages inherent in someone’s genetic makeup. The chosen traits of a pseudonym do not guarantee great content or even attention.
The other part of the question, about the importation of genetic traits into the metaverse, is answered with the same idea of meritocracy.
Gender and race are not digital imperatives in the metaverse. They are optional entries on a ledger, no more important than any other ledger entry. Since every identity in the metaverse starts as a full pseudonym, the creator must intentionally import aspects of his real identity to the digital one.
The question becomes what benefit someone might gain by importing his or her genetic traits into the metaverse?
The harmless answer is that genetic characteristics provide such a strong part of real-world identity that people entering the early metaverse may see gender and race as inseparable from their digital identity. In this sense, gender and race can serve as a bridge between the physical and digital worlds for those uncomfortable with the flexibility of full pseudonymity. This bridge will only prove temporarily valuable as new generations grow up in the metaverse comfortable with fully pseudonymous identities.
The harmful answer is that some may want to import genetic traits because they believe it will create an advantage for them in the metaverse just as it has in the physical world. Those who attempt that are likely to be disappointed. Removing the issue of genetic bias is a natural feature of play-to-earn games. The playing field is inherently level.
If Helen were Hank, she’d still get the same attention through great gameplay. If the person behind Helen were female instead of male, she’d also still get the same attention through great gameplay. So, the answer to the Helen Question is gender and race don’t matter in the play-to-earn metaverse.