The Virtuous Circle of Token Based Investment Funds

The virtuous circle refers to a complex chain of positive events that reinforce themselves through a feedback loop. A virtuous circle has favorable results, while the opposite, a vicious circle, has detrimental results.

Both circles are complex chains of events with no tendency toward equilibrium (social, economic, ecological, etc.) — at least in the short run. Both systems of events have feedback loops in which each iteration of the cycle reinforces the previous one (positive feedback). These cycles will continue in the direction of their momentum until an external factor intervenes and breaks the cycle.

A well-known example of a vicious circle in economics is hyperinflation. The subprime mortgage crisis of 2008 was an excellent example of the end results of a vicious circle.

In contrast, an Investment Fund based upon a large Token Economy is a prime example of a virtuous circle.

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Blockchain  vs  The VC

I have spent a great deal of time lately pondering the blockchain and its uses to benefit the universe. I have been drinking from this firehose of Blockchain information daily since August of 2017; however, my first exposure to it was hanging out with Jered Kenna of TradeHill in 2011/2012. Jered did his best to get me on the bandwagon back then and I could see its merits and uses but was too deep into my own thing — at the time I was preparing (at the time it was called Agora Startup Idol). was like an online Tournament Shark Tank with a NCAA style 64-team bracket where everyone, including the judges, participated via video conferencing from anywhere around the world.

Jered did try and convince me to build a reward system into the online event based upon this new thing called Bitcoin. Bitcoin was around $2 at the time, added a new layer of complexity to an already overly complex production, and besides, we had no budget. As the saying goes — if I had only known then what I know now……

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Tearing Down the Walled Gardens

Breaking down the walled gardens of the network service providers fueled the explosive growth of the internet. Removing the barriers to playing together and leveraging blockchain to secure virtual goods transactions creates the perfect conditions to similarly ignite the game industry.

However, the VR and AR industry seems to be making the same mistake by trying to lock in content to exclusive hardware contracts. Creating silos around VR hardware with content as the restrictor will slow growth for both that content and the VR market in general. By opening the ecosystem, allowing more people to interact with their friends over all devices is the fastest way to achieve the critical mass required to create the tipping point, that takes VR and AR mainstream as everyday devices.

Just as ‘the fewer clicks = the greater the user acquisition’ rule works in web design, removing the user acquisition ‘friction’ will increase its Total Addressable Market (TAM), allowing the network effect of an excited user to attract more consumers who are able to join in on the fun.

In the 90’s, users’ expectations of VR were nonexistent. Consumers had nothing to compare VR with, which allowed startups to succeed from just the novelty of VR.

The landscape is different now. VR consumers have their “experience” expectations set by $100M+ development budget titles like Halo, World of Warcraft, League of Legends, Overwatch, Call of Duty, Grand Theft Auto, and Final Fantasy.

The Secret Sauce

So, what is the ‘Secret Sauce’ for breaking down the barriers of the current entertainment ecosystem? It lies in the differences between the devices. Consumer entertainment is designed differently than out-of-home; the former is meant to be played for hundreds of hours and the latter is made for throughput, meaning minutes at a time.

Consumer has hardware cost limitations to appeal to the masses, whereas, out-of-home is the opposite, the more expensive the hardware, the bigger the mass appeal. Across these platforms, you also have the differences in types of interfaces: Virtual Reality, Augmented Reality and standard screen interfaces all have different design parameters. The solution is in “Contextual Based Interfaces (CBI)” for one virtual universe. CBI is a broader concept than just the frontend interface, it includes how to pull off the backend infrastructure — everything we have learned over the last 30 years and more we must invent. Many smart minds will be challenged here to develop this. And that is how we like it!

CBI bridges together how we will Live, Work, Learn, and Play on the Experience-Net.