BITKRAFT Summit 2023: Scaling Portable Identity&Ownership in Web3 Games and Social Networks

[Music] [Music] now I would like to invite four Brilliant Minds to join me up here to discuss the portable identity and ownership in web free games and social networks um so please welcome to the stage the CEO at disco Evan McMullen the CEO at CCP HMA Peterson and the CEO at

ready games and moderator of the discussion David benam and joining us remotely from Israel is the co-founder and CEO at addressable Toma shiron hello hello thank you all for being with us today we're going to have a dynamic panel on the topic of how identity and ownership shifts in web 3 these are really like Elemental basic questions that we sometimes take for granted uh but if you think about it in web too um so much of the ecosystem and economy that exists on the internet and online is predicated on who owns the identity um and all the things that unlock from there like whether you're Facebook or Tik Tok or steam these are companies founded on essentially owning an identity right whether it's a social identity in a social context or a gaming identity in a gaming context what begins to happen as both gaming products and other related products start to authorize the consumers of their

products to essentially hold that data and how does it begin to change the economic dynamic between people want to talk to those people those people what does it mean to own your data ultimately is there a benefit Beyond a social benefit could there be an economic benefit these are all some of the topics we'll get into and then I'm going to ask the audience hopefully if we have a little time for questions so we are going to have some unusually Brilliant Minds on this panel and it's a rare opportunity I think for folks in the room who have questions around web 3 especially in this area to ask them so as we go through this very much um think through questions you may have uh so with that in mind I'm just going to kick it off with some basic intros uh and I think Evan you came up first so Evan is the CEO and founder of disco XYZ uh disco is working to develop essentially personal identity on chain uh with enormous implications for how that works I have a product called the backpack which I had the pleasure of using I won't say much more but we're very excited to hear your perspective I'm Hillmar CEO of CCP games many of you

know who that is E online 20 years of operations one of the largest distributed economies in the world in gaming uh you've just raised $40 million for a new web 3 title we don't know anything about it we're very interested in learning what are your insights from operating Eve and how have they affected kind of your vision for what a web 3 game can be and I think as all of us who are game designers are in the gaming industry this is a very pressing question and then from Tel Aviv uh we have toer Sheron who is on Zoom we appreciate that you're able to make it today we understand what's you know happening and so thank you for being here I will just say addressable is the next kind of element in this identity shift which is as this data starts being collected on chain through users through Publishers and so forth how do you interrogate that data how do you use it to make decisions when I say use it it could be from a marketing point of view right which is like I need to acquire customers the data set now is no longer

in a black box at Facebook or the equivalent it's in a kind of viewable box on the chain and what does that imply actually is that uncomfortable for people I don't know like is it creepy that anyone can see your data Maybe it's awesome is the user going to be rewarded for owning this data somehow in a marketing context I don't know but I think uh toer will be able to give us insights into all of that so having said that this is the panel and I Am David co-founder CEO of ready G I will be talking at 5 if you're interested in what I do but that's the end of that so let me begin with Hillmar uh like I said earlier you have built one of the world's most successful games Eve online I've played it it's highly compelling for those of you who haven't played it it's an open world where really you're trading and you're building spaceships and it's essentially a proxy for the world uh or the universe and I imagine there was a reason you thought it made sense to raise $40 million for a web 3 game uh and I'd love to hear what sparked that decision and what did you learn in Eve that you thought aha the

blockchain could actually be useful for me um so just try to give us some context from that perspective yeah so um now after 20 years of operating even online then we have um a set of insights uh which we have almost like scientifically concluded based on a lot of studies of like why does Evan Line work and how can it be made to work even better and some of those are kind of counterintuitive um one of those is that the reason why Ean L has been going for 20 years is primarily an undesigned feature of Eve which is that through being a capitalistic hellscape of uh PVP uh skull duggery um it actually is the best place to make new friends it just so happens when um the place is dark and

gloomy than having a friend has a much higher meaning if it compared to living in a Utopia um this we have then started to develop more and more into Eve itself but other takeaways are um uh and what is driving us to uh explore a web 3 version of an of an MMO is that U about 4,000 developers have joined us in creating the experience that is Eve like around Eve there's a whole ecosystem of of fan sites applications management softwares Discord Bots slack Integrations like you wouldn't believe and this is created by uh 5,000 developers or 4,000 developers you can go to awesome Eve on giop and see an inventory of all the software that's been created so CCP is in the minority of writing software foror E online U and it just happens that using an API with metering and whatnot to to manage this is not like a great way if

blockchains have proven anything and they could be accused of not maybe proving a lot but what they have proven is that distributor development um they're great way to organize that smart contracts with uh execution metering is a way better construct than an API so part one hardness the uh developer EOS system in a way that hasn't been done before check uh number two is that all Al related to this all these third party developers they are paying for their AWS bills with like Google ads they're streaming on twits they're doing YouTube they're they're all trying to come up with some junky ways mostly to pay for their own Ops but also trying to um make you uh on just you have to also live your life um and your day job might be interfering with your Eve job um as a software developer not as a miner in in in the future so so finding a way uh and

all games have this there there's an ecosystem around every game and just a tiny portion of it is a little island that the companies are holding on to like they're Clinging On to every single sand um and then they're dissing it out very carefully with license agreements and like God knows what this is what we currently do uh and I think there is just a better way to build a more inclusive business model and it's good to distinct between business and monetization those are separate thing to build a business model that captures or like puts the ring around the whole ecosystem and just putting a ring out the little company clinging all to every scent so if I understand this it sounds like you have a creater economy in a way we could call it a creater economy and that you see with web 3 a way to reduce the friction in scaling that creater economy and is that a good kind of conclusion from what you're yes you you you you could simplify it down to that

um it is more about like it's more about innovating on it like the the you can refine creative economy I mean Roblox fortnite Creator Edition ex my various versions of Minecraft junky business models are way to refine it but these are not like holistic Innovations of like fundamentally building it from the first principles ground up like that and I know that because I've been peace meing it and quilting it after the fact now I want to like just design for this design premise from the GetGo and and I would more say like um it's a it's an innovation trans SL transformation and and and at that point it stops being the Creator economy it's more like it's a digital Nation with a big business model right so would you say there are things in the game design or maybe it's too early for this but when you look at the actual game design of what you're trying to create now are there shifts in the fundamental game design that would be impossible in web

2 um they they're not impossible uh they're not impossible they just um it's usually with t transitions you can do everything with the old stuff it just becomes patches on top of patches on top of patches just by doing a clean State we used to do horses we can make them poop less we can do build their horseshoes we can breed them so they're like faster and whatnot and we can also make cars sure in the beginning the cars are slower and there are no gas stations and like whatnot but they uh they're more future proof so so it's more like that transition of like okay here's just a premise which is a new design space now we're going to engineer from the ground up uh a a business model for an ecosystem like this and would you say because this is now going to tie in a little bit I think to Evan and toer would you say that the data or the information related to these participants in this new

ecosystem will it be owned by those participants or owned by you how do you how do we think about that data ownership stuff that's on chain basically so uh I mean ownership is a very complicated topic mostly made Popular by hamurabi and papyon 4,000 years ago where he invents the code of hammurapi and says I have police to enforce I have military to protect the clay tablets in the basement so I guess the premise of web 3 is kind of now we're going to have nerds with keys and consensus uh and we're not going to have any police and military to protect it it's nerds with algorithms and now we all of a sudden own our own things I mean like same same there there are opportunities again it's a new design premise that it's nerds with consensus and not Hammer upy with a Cod and tablets and police uh and it does open opportunities um um I think when you think about it in a mainstream sense owning your own data is an extremely

academically esoteric concept that uh maybe 50 years from now our children's Children's have a way to relate with it and us here trying to make up that future we relate to it very strongly I think people just generally don't care as much about it and they also don't really know what identity is I mean most of our identities recite somewhere at Google through the inventions of cookies which were supposed to be a decentralized way to have a relationship with a website it turns into a hideous aggregated um uh ad taric machine so so I I I I think let's not like lose sight of the fact that um these are very esoteric Concepts I'm going to ask Evan about this because I'm wondering whether you agree with whether or not this is esoteric because I think you're building a company founded on the idea that people actually do want to own their data um and you actually mentioned to me while we were off off stage that that this notion of a mindset of play you

literally use this phrase mindset of play is critical uh to get Everyday People to perhaps overcome the concerns that Hillar is Raising uh but maybe I'm wrong about this you you tell me how do you feel about what he just said I oh I agree completely I think that often you know though we enjoy this vocabulary in circles like this especially you know for those of us who hang out on GitHub a lot we care very deeply about you know the the storage custodians ship signing delegation of data but at the end of the day human beings largely are just trying to get through their day with less friction more value more Delight more output and less confusion so the ability to Control Data written about you the ability to share data that describes you as helmar noted largely that's happened kind of under the hood in a way that we as individuals largely do not observe or don't really reckon with uh other than the gdpr popup ups that have you know ruined the internet on this side of the

pond but um you know when we talk about the value for human beings um in the United States where I'm from for example Americans spend about 11 a half billion hours a year filling out forms that means re-entering data over and over again probably making some mistakes along the way too so when we talk about the sort of meme of ownership of data really what I hear is um allowing data to move with its subject so that when I show up so too does the list of things I've done or the preferences that I have that would allow me to shortcut onboarding it would allow an application to see more of me than just the public tokens mapped to my address but perhaps also interact with my primary language or if you come up and scan my fingernail later proof that we were here in this place together uh in control of our just to point out you have a code on your fingernail and if I put my phone and which finger is it on so I'm not going to lift it up for I was hoping you would actually cuz it's on the middle one what

this is sort of of you know anchoring in to be very very tangible here is that the concept of privacy is esoteric as you know this premise of owning your own data well what would I do with all these Json files if I downloaded them and printed them out that's pretty pretty difficult to contend with because it doesn't start with user value it doesn't help me get through my day more swiftly it just gives me more files to manage and so at disco what we care very deeply about is making sure that um data portability is enabled in an easy manner for developers but that we take steps out of the user Journey that you were planning to take otherwise for individuals representing organizations or using tools just as themselves so yeah just to be clear so disco. XYZ is the company and you are building essentially the tools to enable people like us to what affiliate and create a new web 3 identity and then put our data in there like how would you describe that user Journey so the room understands better like what this is says well you referenced one of our our

favorite phrases earlier the first product that we rolled out the data backpack so if we think about our web three wallets today those are largely you know allow us to control tokens that are mapped to our public Keys some of those tokens may be wanted some may be unwanted or unsolicited but we have the ability to control them with those keys and show up in different applications essentially carrying those tokens with us or allowing for them to be you know leveraged on our behalf in in multiple environments um but taking only your wallet only your financial assets as your means of introduction is pretty limited right your financial assets are not sufficient to personalize experiences for you or to curate content or to help with discoverability or finding friends in Gloomy places and so in order to be more expressive with our addresses in order to enjoy experiences personalized to more than just the tokens that we own but to actually be personalized to our traits our preferences past experiences

relationships or you know even folks who've met here at the bcrafty need more data in a form that is not globally public without consent and so we've gotten really good in web 3 at having data that is private only to our keys data that is public to everyone on Earth and in space with an intern connection for all time on chain and moderating the range of publicity and sharing in between those extremes in a form is not trapped in a single app trapped to a single chain that is what we make really easy with our developer tools and applications so I I want to hold on that because I think this actually relates to what toer is working on because toer is building really the method by which you can analyze this data and make decisions and so this raises the question you know as people maybe want to not have that data be viewable or have that data viewable how do toer how do you think about the Privacy implications and how do you think about um will there be sufficient data uh to do these analytics

if people have the optionality to maybe not make it visible so so there's permissions I think that come into this but why don't you tell the room a little bit you know what you're building and explain the thesis around addressable thank you so uh I deeply uh believe in the thesis that blockchain actually enables preserving some of the Privacy uh uh we don't have in the previous world of web 2 because in web 3 you have Anonymous identity and in this Anonymous identity can use to do things that are public like playing games or buying some different uh uh uh tokens or trading in different places um or enjoying this anonymity while you can actually pay which wasn't possible before and at addressable using all of those signals all of the blockchain data to create audiences of people that do something now this is very useful for for marketing for advertisements but without the need to know people's names

or private data and what Evan is saying is that whenever you want to use the private data you can actually modate it and put it encrypted in some way that will enable the protocol to expose this data only to those applications you want to expose but all the public data about what people are buying what people are doing what people are actually having fun of what what they're showing off from their wallet this public data enables everyone or every business in a very equal way to access the data so everybody's equal so all the businesses that want to Target or create a campaign to all the gamers all the games are equal in this space of web 3 you can Target gamers in a targeted campaign very accurately because you can just select all the people that played a game from your genre in the past five days and what addressable is doing is the missing link of web 3 because web 3 is a payment option and its identity it's it's fully private you don't have to

expose anything about yourself except for the fact that you you can pay with that and the things that you buy and what we do in addressable we connected this layer to audiences of social media in social media you can actually advertise you can advertise very accurately and and the way we do this is privacy preserving but you can it's the missing link of communication so whenever you want to grow outside of your community you want to actually advertise you want to scale your your game or your app 10x and your community is is is this SI and you want to go from 100,000 people to to 1 million how do you advertise to the right people how do you know who's in web three what they do what they like and and this is taking the power from the big Tech to all the small businesses any game Studio can actually advertise with all of this richness of this data without using big Tech because everyone is equal and big Tech is not controlling all of the data about who bought what I have a practical question here you know as a marketer

potentially am I still running a Facebook ad or a Tik Tok ad or some other AD connected to web 3 or is this a method where I can disintermediate meta disintermediate Google not pay the tax to them and somehow talk directly to that web3 person and like where would the ad show up then if if it's not in a social feed so I'm just kind of curious about the basic mechanics like where does this actually happen so as of today people uh are paying attention to ads in wherever they spend time and they spend time on Facebook on Tik Tok on Twitter Etc so and and on other AD networks in other games so we we advertise on iron source and unity uh all the ad networks are just we're built according to the places where people spend time in and where their attention is put now we definitely build this this uh connection between web 3 data and AD networks data in a very scalable and and flexible way

so to your question the um the ads are running in all those ad networks in Twitter on iron Source on unity and others and in the future when more more sophisticated ad networks are established on web 3 a way of communic communicating over web 3 like lens and others uh ether mail things if those things catch up with the scale of web to advertising then we can advertise there it will be much easier but we we advertise wherever people spend their time but how would how would if you knew somebody was doing XYZ on the blockchain how would you then be able to tell face tell from Facebook who they are on Facebook I mean isn't there kind of a how do you connect that attribution because right now it feels like those are two very different sets of data so we have correlated audiences dozens of dozens of millions of people from the web three layer according to

behavioral patterns to Twitter so behavioral patterns on Twitter correlate with behavioral patterns on the chain on on the major evm chains so whatever people do on chain usually they follow or they like they retweet on Twitter and that the signals correlate very well um we do this anonymously so we don't do this personally but with small segments so create ambiguity in order not to enable any kind of direct link from person to person but only two small small enough segments that will be very significant in in marketing um and when we connect the data from onchain to Twitter then we have this connection that was the first thing we did we launched this uh almost a year ago and we then connected farther to um Reddit to some um ssps like uh iron Source Unity so identifiers from from different Networks connected back to wallets enable us to not only Target or create

targeted campaigns real ads to those web three wallet owners but also to do the attribution so once wallets come into your de to your application to your game and they convert or even they just connect their wallet it can tell you what segments they come from what segments what do they like what do they do what do they buy what community they're part of and then you can expand your audience very very effectively understood so I know we we have a little bit of time left and I am mindful that I did say the audience May potentially have some questions now I know you don't have microphones out there and you may be feeling a little shy but uh if any of you have a question for our panelists this is an opportune moment it can be related to any of the things we've talked about um do I have anyone in the audience who may uh may have something to ask and uh happy to relay the question like I said no need to be shy any takers here all right well what I will say is this

what I think we should uh potentially address at the end are really what are the economic implications here uh as we see this world coming together and and we can debate maybe the speed with which it uptakes but assuming it does sort of scale what do we think the uh economic implications might be for how how the flow of money shifts in this in this new world I don't know Evan if that's something you've thought about or um certainly and well am I hearing very thank you for you I'm hearing some weird feedback by the way if someone's talking on another microphone please stop um so I think you know earlier we were noting how um in the web 3 ecosystem we've essentially United the payment and identity rails meaning that we have identifiers that can compel currency and also you know represent other signing and and you know Associated capabilities um when we think about the economic implications here this means that both data and Financial value can can run on these rails and

inform the way that Financial value is distributed the way that privileges are granted in game environments and across applications as well and so viewing data as not only an active labor but a store of value that does not immediately become the property of the environment where it was created but rather the party who created it that's where I see a significant shift um and to you know to Toomer's earlier point the relationship between addresses and the contextual data about them helps us understand how to interact with those parties and gives us new methods of engaging economically Beat Around ad networks based on addresses or groups of affinity that we otherwise would have struggled to find and I and I'm wondering Hillmar do you do you buy this all this stuff or are you kind of skeptical um what's your thought here so uh what I do buy is what you said about like Americans spent 11 billion billion hours filling out forms uh it sounds

like a huge friction that is valuable to take away and then I was thinking okay sounds crazy but why do I not associate as much with it and I can tell you a story so I'm I'm from Iceland Iceland is a tiny tiny country um it's smaller than even on line just to give you a sense um and and um and because it's small the trust is very high inside Iceland so we tend to trust our government because it's mostly our uncles and ants which are in the government like the the country is that small so uh we have this uniform it system inside the country so I never have to fill out any forms when I'm in Iceland there's just a little app and I could just choose permissions I can sign up for Bank bank accounts whatever never have to take a gas bill there's also no gas because it's all geothermal so uh I never fill out any forms in Iceland then I moved to the UK and oh my God like

like why do you need my gas bill I mean don't you have a register of where I live and they don't and because they don't trust the government to store the data in any proper way I guess uh I'm speculating so okay um and then we transpose into value so in the world where the government of Iceland is doing this they're not doing it for profit they're just doing it purely for for reducing friction in the economy and in and increasing speed and thus all the companies involved have a have a much uh simpler relationship with the registry than they do otherwise the challenge with value capture it's always going to be a company it's going to capture value it's going to hold the value it's going to sit on it and it's going to try to increase it this is the nature of companies run a company for 20 years it's a it's a it's a it's a natural law um so I just wonder a bit like is there

a a nonprofit way to address this because the value is enormous and as soon as somebody starts to H it and you can also do that in web three there's going to be hoing of value somewhere somebody is going to be a dragon on top of a gold pile and they want to increase it so I would maybe bring that into like are these fundamental things better organized than in for business uh companies I realize I'm saying this at an investor conf okay so it's no tabos capture is real everywhere but I think what you're saying occurs in other countries you know my understanding is like Estonia has something maybe somewhat similar um I was pretty astonished uh recently when I learned that in in South Korea uh to get a phone number you have to have ID like a mobile number which has given the Korean government amazing abilities to control for inappropriate content with children on phones because they actually have all of this provable data around the phone number and I was like wait that actually solves maybe a little bit of the problem around Instagram and teenagers being traumatized but I mean we do have

precedent for governments I guess doing this right yeah and and doing it well like the system in Iceland is largely just uh everyone loves it it's super simple never fill out the form again in the government as in the game verifiable credentials which are the data primitive one of the data Primitives we work with at at disco you know they're embraced everywhere from Xbox gaming to the Department of Homeland Security so the nice thing is that we're kind of all working using these public Open Standards in a manner where we can start to capture this data but we need to solidify refine those user Journeys as we were discussing earlier anchored in a sense of play that invites people to have a more open approach to new new you know manners of interacting in the same way that defi crypto Twitter and you know early connected experiences invited more out of the box uh thinking and you know courageousness for users to learn new things we can make that barrier to participation lower if we anchor these

experiences in things that are deeply human whether finding friends in Gloomy places you know successful raids or even being served the correct content for your needs yeah so would you say at the end um your level of optimism around the benefits that some of this might bring are you pessimistic optimistic you know where would you rank yourself on that on that scale I am always exceptionally optimistic especially given my co-panelists here today and the folks gathered at the bit craft Summit excellent and I see you brought a disco ball so I mean how could you not be an optimist without a if you bring a disco ball course yes if you're interested in trying out verifiable data for yourself come and scan the disco ball too excellent um tomr any any last words from you before we wrap up here I agree with Hillmar businesses are the best way to organize uh and businesses have to be served well in this space of web 3 and um and this is why a lot of the space is now building

for businesses to be able to use this space alongside it's the it's gaps and uh and things that are not working so well so I deeply believe that businesses will be there and capture some value but we have to make it equal and uh and try to to allow all new businesses to be uh as productive as the old and big ones well with that I'm going to thank uh you to for coming all the way in from Israel we know it's a hard time and we appreciate you're making the effort to be here thank you and to our panelists up here on the stage thanks again for this great conversation and you're here for the rest of the day and tomorrow so anyone who does finally have a question uh you'll know where to find them so thank you all for listening and enjoy the rest of the conference thank you so much thank you