A few years ago, ABILITY Magazine sat down with Greg Parker about his company Raketu and his work creating new Deaf communication applications for Sprint. Greg is a software entrepreneur, astrophysicist and pioneer in many technologies. Greg has been busy and we now chat with him about his work with blockchain, NFT, Meteverse and cryto trends.
Marge Plasmier: How did you get into blockchain?
Greg Parker: I basically got into blockchain before it was blockchain. I think you’re aware that I hold the patent for peer-to-peer networks here in the U.S. and the EU. Fundamentally, the blockchain is a peer-to-peer network. It’s called a trust-less network. I can explain that in a little bit.
In 2006, I co-founded the Raketu project, the first mobile video calling app with messaging. That was based on a peer-to-peer networking, but also cryptography, in a big way. When I say peer-to-peer, think of it like mobile phone to mobile phone, not person-to-person. It may manifest itself that way, but when you talk to tech people and talk peer-to-peer, they mean a computer to another computer.
With Raketu, in partnership with Sprint, we created the world’s first real-time voice-to-text mobile applications for the hearing impaired. It allowed them to use a regular mobile phone to make calls where they could speak and the person on the other end of the call would talk and their words would be displayed for the caller in real-time. We had over 98% accuracy of voice to text.
Also, in my history, I co-founded a company called Brainium.com, which was in multimedia children’s education streamed on the Web. So essentially, kids played games while they were learning. It was all curriculum-based and data-driven. It goes back quite a few years. I got a lot of experience with gaming-type environments.
Plasmier: And how did you transition to blockchain?
Parker: When the initial Bitcoin paper came out, which was roughly 2008-2009, the blockchain itself was really a culmination of peer-to-peer networking meets cryptography meets gaming. For me, when I read that white paper, I thought, “Wow, this is right up my alley.” So, I started to get involved about 12 years ago in the whole blockchain movement, quite hands-on. I began looking at the algorithms and the code that was doing the consensus algorithms for the blockchain itself.
After that, I spent a few years doing that, kind of, as a project, including mining some Bitcoin back in the day. I then went on to what we called the alt-currencies, the alt-chains, which are like Ethereum, for example. Any chain (cryptocurrency) that is not Bitcoin is considered an alt-chain. However, Ethereum is now considered mainstream. So, technically, you wouldn’t say that was an alt-chain anymore. But if you lived through the whole blockchain era, you’d call that alt as well. But anyway, that’s neither here nor there.
Parker: I did that for a few years. Later, I guess around 2016-ish, 2017-ish, I started to get more involved directly with blockchain projects specifically, dealing with bits and pieces of authentication, trusted group, things like that, using Ethereum and Solidity, primarily in the Solidity side. Solidity is the language for smart contracts on Ethereum.
Lots of people around the world are using cryptocurrency like Bitcoin to make purchases, instead of using money. This is done using blockchain. So, what is blockchain exactly?
Think of blockchain is an application that keeps track of transactions. It is a chain of blocks that are linked together into a ledger. A block is a collection of transactions. So we have transactions in blocks and the blocks are linked together to form a ledger.
Think of the ledger like a spreadsheet, if you will, where we have transaction after transaction after transaction written out somewhere on the Internet, in multiple locations. It’s termed a distributed ledger technology, or a DLT. That means that there are multiple copies of the identical ledger that exist in multiple geographic locations around the globe for any type of blockchain. Those identical locations are called nodes.
If one of those nodes that holds this ledger disappears off the network, it won’t affect the network. The network can still continue on with the other nodes.
A true blockchain is a trustless environment, which means these nodes have no idea who the other nodes are. They just inter-communicate with each other and they do some mathematical work to reach what is called the consensus. When a new transaction comes up, it’s sent out to these nodes, and the nodes go to work on what’s called mining to reach consensus.—I’m simplifying this a little bit.—They work together to form a consensus on what should be written next to the blockchain.
When they arrive at consensus, they’ve done mathematical work. And that work is rewarded through transaction fees. Then it’s written out to the blockchain, and everybody’s ledger is updated.
Plasmier: Is that where the term “mining” comes in?
Parker: Yes, the nodes (computers), “mine” the transactions with complex math computation. It’s a race to validate the transaction. The fastest computer to complete the block of transactions, gets rewarded in cryptocurrency.
It’s some very complicated math that goes on in there because each one of these blocks that are written to the blockchain is linked mathematically to the previous block in the chain, and the next block will also be linked to the chain.
If somebody tries to tamper with any of those transactions that have ever occurred historically, they will not be able to because you will not be able to verify that chain of blocks. That chain will be corrupt. You cannot deviate—this is why it’s called immutable, which means not changeable. Because once it’s written to the blockchain, you have had consensus and many copies of the ledger exist.
Chet Cooper: You mean people can’t hack blockchain?
Parker: People have tried it. They try to hack the chains. Very few have succeeded. But one of the big things about this trustless environment is the assumptions on the number of good nodes there are versus bad nodes. The assumption is that you’ll always have enough good nodes that will outweigh the bad nodes, the bad actors. So, you will always have a good and valid blockchain. And again, I’m simplifying this a little bit. But essentially that’s what happens.
Plasmier: How does cryptocurrency work?
Parker: The cryptocurrency side of the world is really just a bunch of these “coins” out there, like Bitcoin or Ethereum or whatever the coin may be. And the transactions of those coins are tracked in the ledgers, which are in the blockchain. That’s really what those blockchains are, at a certain level. So, for example, I’m a user, user A, and I want to send one Bitcoin to user B. I put that out onto the Bitcoin blockchain, and it’s picked up. Consensus is reached, it’s written out there, that transaction exists that user A sent one Bitcoin to user B, and that’s immutably written into the blockchain forever.
And it is, to a certain degree, anonymous. The only way it works is by what’s called an address or a wallet. A wallet contains a public-private key pair, but basically, it contains an address in it. That address is my address. It’s unique, and I send from my address to a different address, I send a Bitcoin, and the Bitcoin shows up in the receiving address. If they open up their wallet and they look at that address, they will see that they received one Bitcoin. That’s kind of fundamentally how it works for Bitcoin, Ethereum, everybody, on the coin side of it.
Cooper: We notice more and more people are creating artwork online and selling them using blockchain. They call them NFT’s. Can you talk more about that?
Parker: An NFT is a non-fungible token. How does it differ from a fungible token? A fungible token is like the Bitcoin itself or the Ethereum’s ETH, the Ethereum coin itself. Those coins are called fungible tokens. They’re interchangeable. There’s nothing unique about an Ethereum coin, or a Bitcoin coin. I can send my one ETH that I have sitting in my wallet right now to somebody and it doesn’t matter that it’s the same ETH.
Non-fungible tokens or NFTs are unique. They have what’s called a token ID. They have something that makes them unique. They can be one of ones, which means, I can create a smart contract which creates one NFT that is a one of a kind, so the token ID would be one, there would only be one, the smart contract would say, “Do not mint any more of these.”
Minting is the term that means to create an NFT, by the way. Burning is to remove an NFT from the chain. The contract in that example would say, “Hey, mint me one NFT, and that’s all there will be. That’s the limit. There’s only one NFT. Mint it.” I mint that NFT. It is unique. It is one of one. That’s it.
Parker: I can also create a contract that says, “There will be up to 10 of these.” I can create 10 of them, each one has a unique token ID, and they can be the same visually, as all 10 of them could have the same artwork, for example. But what differentiates them is the token ID. My token ID would be number one, user A’s token ID would be token ID five, and user B’s would be token ID nine. That’s kind of how the NFTs work.
Cooper: Why did they create NFTs—what’s the purpose of NFTs?
Parker: The NFTs—I’m going to say originally there was work that we were doing some years ago which didn’t really involve artwork, but just for the sake of this discussion, they became known for the association of artwork to the blockchain. We could take an NFT and we can point the NFT, that token itself, that unique token, to a piece of artwork also somewhere out there on the Internet. Whether or not the art is on the blockchain doesn’t really matter. The artwork doesn’t have to exist on the blockchain, but it should exist somewhere on the Internet in some sort of permanent storage, and be immutable.
Basically, you point the NFT to that artwork, and then when the user who owns that NFT opens the NFT, they can actually view that particular artwork that’s associated to that NFT. Let’s say it’s the Bored Ape Yacht Club. It’s an ape, I don’t know if you’re familiar with those. That’s probably one of the most successful NFT collections out there. Essentially, I have an NFT that points to a picture of an ape. It could be a picture of a squirrel, or a cat, Crypto-kitties, Crypto-punks. It could be a lot of different things. It could actually be artwork by Monet. I can talk about fractionalization in a moment. But basically, it could point to that art.
You may be thinking, “So what?” The NFT is intricately related to the original contract. Once the original contract is created by the artists themselves, then that NFT you have is associated back to the original contract. So, we have provenance (origin). We can tell that this NFT came from the original artist, and it points to this particular piece of art. So now what I have through all of time, because it’s immutable, I have a link that takes the original artwork provenance that I received in the NFT to the actual digital artwork. So, I have this link that will last forever.
I can also sell the token. I can go to what’s called the secondary markets, like OpenSea or another marketplace, to sell it. When a person purchases that token, it’s moved from my wallet into their wallet, and they have the NFT. They can look at that particular piece of art, and they have the provenance to prove that it is in fact their artwork and where it came from. A lot of work has actually been going on in the background with NFTs, but the art was the side that really sort of took off.
Cooper: What other uses do NFT’s have?
Parker: What’s been happening more recently is what’s called NFTs with purpose and NFTs with utility. The thing is that it’s fine if you have an NFT that has artwork on it, that’s great and wonderful. But what if you could use the NFTs so that they had some kind of utility for somebody. Because we have proof of provenance that it came from a particular contract. It doesn’t have to be an artist. It could allow you to enter into a Metaverse or something like that.
The Metaverse creates a contract, it creates a whole bunch of NFTs. I purchase or get one of those NFTs. What can I do with it? Maybe I could use that NFT to actually gain access into some private areas of the Metaverse? Or gain access to playing a game or watching a Netflix movie or gain access into you name it? Could I actually use it so it actually has utility? And the utility, maybe it’s a reward utility. Maybe I get rewarded for doing something, so I’m actually earning some kind of ETH for holding that particular NFT. NFTs are becoming more founded into the concepts of utility and purpose, along with the artwork.
One of the things that is typically written into these NFT contracts is what’s called royalties on secondary sales, which means that after it’s originally sold, when it’s minted or created or put into my wallet, if I take it and sell it to somebody else, the contract will enforce certain royalties being distributed back to certain other individuals. For example, the original artist can say, “Every time this is resold, I want to get 5% royalties on it.” You can put that in the contract. If I take it and I want to sell it to user A on the secondary market, when I sell it, 5% of whatever that sale price is will go to the original artist.
When we talk about the utility and purpose, other things have happened, for example the ability to take that royalty and split it amongst different accounts. Perhaps if it’s an artist- type NFT, perhaps the artist gets 4% and their favorite charity gets 1%. That goes on forever. They can be funding different charities, different programs and things like that, Save the World, whichever it may be, environmental things or whatever, that you wish to donate to. You can actually put that into the contracts, forever. For every time one of your NFTs sells, if you have that in the contract, you’ll be rewarded with your royalty, and you can distribute that to other people or organizations as well.
The NFT is evolving in a big way. There are a lot of different uses for NFTs. I’ll just touch on two more of them. One is for identities.
There’s the whole idea now around what’s called the soul token. This reference being sort of the individual’s soul. Having an NFT that is an identifier of the individual, and not just like a single NFT. This is where we get to concepts like an NFT of NFTs. You may have an NFT that holds multiple NFTs, which in some way describes you. And they can be protected and private, of course. You don’t want to make all the information that’s contained on these NFTs public, but some of it you will and some of it you won’t. And some of it you’ll choose to actually expose during certain times.
One example is you go to buy a bottle of wine and in your State, you need to be 21 years of age. Today, you show them your driver’s license, which has a lot of information that is not relevant to this transaction. It has a picture of you, your home address, your birthdate, expiry date. It has whatever is associated to that particular license. But all they need to know is that you’re over 21. So, one of the concepts that’s being worked on now as part of this identity type of NFT is things like your driver’s license or portions of it will be verified by an external source like the DMV. And when you go to purchase a bottle of wine, you just bring up your mobile phone and they’ll be able to have a QR code. They scan it, and it will get a response from the trusted oracle, in this case the DMV, saying you’re over 21. But they don’t have to let them know your age or your birthday or any of that other information. You’ll just be able to swipe it and away you go.
It’s things like that that are being encompassed into it. It’s also the ability to gain entrance into things, to watch movies, get into Metaverses and games on the Metaverse side, lots of different things.
One thing I did mention was fractionalization of NFTs. I’ll use the art as an example as well, but it could just as easily be real estate. A Monet, for example, is a pretty expensive piece of artwork. Perhaps you’d like to have a thousand people who want to join together and own a Monet. That will be difficult to do in today’s world. But you could fractionalize a digital image of the Monet. Take a digital image of the Monet and divide it into a thousand different squares. Each of those squares is going to be an NFT. You can give them away or sell them. Basically, they will be distributed out to a thousand people, and each one becomes a partial owner of the Monet.
Now, the assumption here is whoever created that contract is the owner of that Monet and basically can prove provenance of that, and we can write that on the chain as well, into a smart contract. We would have a smart contract that handles all this kind of stuff and creates a thousand NFTs. When you buy one of those NFTs, you are technically part owner of that Monet. That’s one way of doing fractionalization. Another way is a little bit more complicated, where the actual NFT itself becomes fractionalized, but we probably don’t need to get into that at the moment.
I think I covered an awful lot there.
Plasmier: You mentioned two types of block chain, Ethereum and Bitcoin. How do they compare?
Parker: Ethereum is probably not the most valuable chain–Bitcoin obviously is–but the second most valuable from the perspective of dollars. Ethereum is the most valuable chain from the perspective of development. I think we’ll see that going forward.
Ethereum is not unique, but certainly, when it arrived on the scene back eight or nine years ago now, it was the first to do complex smart contracts. Smart contracts are very, very powerful. That allows us to do many things like create NFT’s and fractionalize NFT’s, like I mentioned previously. It’s important because without smart contracts, we wouldn’t have NFTs, we wouldn’t have a lot of the contract work that’s going on now. All the different coins that exist within the Ethereum network, we wouldn’t have any of that.
Cooper: Can you talk more about smart contracts?
Parker: It gets a little complicated here, but essentially, that’s a bit of code that can be executed on the chain where that contract code will be immutable. It’s actually written to the blockchain, just to be clear. Smart contracts are written out into the ledgers on the chains. They can be executed over and over and over again. Think about it like a small section of programming code, whether that is to create a new coin or whether it is to automatically at a certain date to send one coin or multiple coins from one wallet to another. Most chains do have smart contracts on them, or something like smart contracts. Ethereum actually has the vast majority of smart contracts out there, and most NFTs out there are written on Ethereum, although that is changing. But still, that’s kind of where that is.
Plasmier: So, all this information travels quickly around the world?
Parker: Yes. In particular, with Ethereum, it does get bogged down because of the way it was architected in the first place. The transactions take longer and longer to execute on the chain when it gets busy. You can be waiting minutes to have transactions execute on the chain, where if there’s no traffic, you can get them done in let’s say three to five seconds, which is still a hindrance. I mean, these transactions we should be able to get done sub-second. So, there’s been a lot of different technology working on ways to fix up the transactional throughput. Other chains are much faster, and Ethereum 2 addresses some of these issues, more on that later. But yes, it all travels quickly around the world.
Plasmier: What are all the costs involved?
Parker: There is a cost, which called “gas” in the Ethereum network. The gas is the fee that the transaction originator pays to use the blockchain. That gas fee is paid out to the miners, the ones who actually take that transaction, run the algorithms, validate and verify that transaction and then propose the block being written to the chain. When accepted it gets written to the chain, and the miner gets the gas fees. But the gas fees go through the roof when the Ethereum chain gets congested. So that’s another area that a lot of different blockchains are looking at solving. It’s transactional throughput as well as the cost of the fees. They’re interrelated together.
When you mint, you’re creating an NFT. It costs money. You have to pay transaction fees. And they can get very expensive. Make no mistake, a transaction fee – gas fee – on the Ethereum network could cost you $50 or $60, for a single transaction. In fact, the gas fees have gone up to $600. Actually, over $1,000 on very rare occasions. But, as you can imagine, to do a transaction that costs that much money, it has to be a multi-million-dollar transaction or it’s not worth it.
But Ethereum is coming out with Ethereum ETH 2. That’s sort of what we call it in the blockchain world. So, it’ll dramatically increase the throughput, which will result in a reduction in the gas fees. It also changes fundamentally the consensus algorithm that’s used.
A consensus algorithm is that algorithm that is used between these “miners” that basically determine how some transactions, the block, are fit or suitable to be written to the chain permanently. And that algorithm is changing. It’s moving from what’s called “proof of work”, which is very energy-intensive, to becoming proof of stake. Fundamentally, it means that it costs less to actually write a transaction to the blockchain and uses less energy.
Cooper: We keep hearing about the energy that it’s taking for crypto. Can you talk about why it takes so much energy and it’s potentially causing so many environmental problems?
Parker: Currently, the reason Bitcoin and Ethereum use so much energy is because of these algorithms that the miners run in order to gain consensus and win the block, to write the block. It takes an enormous amount of energy because these computers are running full-out just doing mathematical computations that consume a tremendous amount of energy.
Ethereum 2, the new version of Ethereum, which is expected to ship out later this year, changes the way that those algorithms work. It reduces the energy consumption somewhere on the order of 90% to 95% reduction over what the Ethereum chain uses today, as well as speeding up the transactions and lowering the gas fees. It’s addressing the three big hurting points, if you will, for any blockchain.
Cooper: You mentioned that creating blockchain, you have multiple sites around the world, and when you input data into this ledger and then it multiplies that content into multiple ledgers, all identical, but they’re anonymous, you don’t know where the ledgers reside. But somebody had to set it up. Somebody had to know where those computers would reside somewhere in the world, right?
Parker: Originally, yes. When the blockchain launched, yes. They needed to know that. But then they provided software that other people could just install on their computer and begin mining or participating in the blockchain, in that specific blockchain. Each one of these nodes are only specifically for one blockchain.
Cooper: And as they ship out, they basically replace the units that are there now? That would take some time, but that could change a lot around the energy consumption around the world?
Parker: Yes, definitely, new mining software is shipped out, which takes very little time to disseminate. In fact, the Ethereum network is running a parallel network right now using the new proof of stake. They will soon flip the switch from the current network to the new network. Now, there isn’t this kind of hope for Bitcoin. Bitcoin is a different one, and the last time I looked there were discussions on different ways to optimize things here and there, but it’s not as dramatic a type of change as Ethereum is undergoing. They may be able to tweak it somewhat on the Bitcoin side of the world, but it’s not quite the same. This is a fundamental change.
Cooper: Where does blockchain sit on the Web? I hear about Web 2, Web 3. Can you explain that?
Parker: I’ll take you back a bit. There’s a lot of confusion and misnomers out there with respect to the terminology used when we talk about the World Wide Web, Web 2, Web 3. Let me start at ground level.
First of all, there’s this thing called the Internet. The Internet is really the infrastructure that allows all these other things to work. It is the network that allows these computers to connect to one another. Whatever those computers are doing is irrelevant to the Internet. That’s the way you should think about it. It’s an infrastructure layer. That’s how my computer ultimately communicates over this call to you.
There are layers above that, we’ll call them the Web 1, Web 2, Web 3. That’s a layer that sits on top of the Internet. It allows a certain access mechanism for people to interact. It’s like a user interface, the browser. We had Web 1, which was a very rudimentary type browser, pretty bad, frankly. Web 2 came along, and although it was seen as a money-grab by big corporations, that Web brought us a rich browser environment.
Essentially Web 3, if I can summarize it, takes the browser Web technology and bolts it into the blockchain in decentralized way. That’s kind of what it is. But it’s also a movement. The movement is decentralization, away from the huge corporate entities, putting power back into the hands of the users. Web 3 encompassed two fundamental things. One is the tech bolting on of decentralized technologies, and the other one is decentralizing companies or applications.
Cooper: Will there be bolted browsers?
Parker: (laughs) No, they’re the same browsers, currently. It’s just a lot of the plumbing that you don’t see in the background is enabling this transition from Web 2 to Web 3. There’s a lot of plumbing that goes on in there. The idea is not to change the browser side of it, other than to make it better, 3d and decentralized.
The point is there needs to be distinction made between what that Internet is and the Web 2s and Web 3s of the world that we have today. How does the blockchain work in that environment? The blockchain is a bunch of nodes, computers, that are running applications that access the Internet and communicate directly with one another, peer-to-peer. They aren’t on the Web, so to speak. All the communications, all the ledgers, all that other stuff, are communicating with each other, consensus is reached and communicated through the Internet itself.
The ledgers reside on these individual computers, the nodes that are out there. Remember, it’s a distributed ledger, so there’s many copies of it. It exists on many of these different computers, and those computers are running application code that communicates with the other computers through the Internet.
Plasmier: How would you as a human access Ethereum?
Parker: You could go through a Web browser. For example, you would bring up a website called Etherscan. And what that does in the background is it has applications that interface into the Internet to get to the ledgers. But what you see in your browser, they bring that back, “pretty it up” and put it on your browser for you. You get to see the transactions that have occurred for that wallet or that address. You don’t have to install an application. You don’t have to be a node to interact with it. There are applications, like wallets, that have been built so that the user and Web browser can interact with Ethereum or any of the chains.
Plasmier: Does a user always need to use the coin of the particular blockchain? For example, if I created an NFT of my dog?
Parker: Typically, if you create it on Ethereum, I would give you Ethereum to purchase that particular NFT. But it doesn’t have to be that way. You could use US dollars as the purchase mechanism to purchase that, and you would then transfer that token that you created, the picture of your dog, the NFT, to the person who purchased it.
Plasmier: Is there any kind of crossover in the different blockchains, transactionally?
Parker: Yes. There are bridges, they call them bridges, which go between chains. You can do cross-chain transactions.
Some people refer to it as swapping, at a certain level. For example, you can swap Ethereum coins into Polygon coins. That goes through what’s called a bridge. It takes Ethereum from the Ethereum chain and brings it over onto the polygon chain. And you can do vice versa with that as well. There are also exchanges where you can buy sell from one coin to another.
Plasmier: Who decides the value and the exchange rate?
Parker: That’s the free market. Totally.
Plasmier: Does that change daily, minute-to-minute?
Parker: Second-to-second, minute-to-minute. It changes all the time. It’s freely traded, 24 hours a day as well. It’s not like a normal stock exchange. There are exchanges that run 24 hours a day that exchange crypto coins, yep.
Plasmier: So, you know what you’re paying at the time of purchase? And tomorrow it will be different.
Parker: An hour later it could be different. Yeah. It totally could be different.
Plasmier: What types of projects have you worked on with blockchain?
Parker: In 2016, a small group of us created a new blockchain with a focus on privacy, speed and scalability. We built it from scratch, using concepts of zero knowledge proofs, sharing, anonymity, you name it. We were addressing things like proof of age without having to show your driver’s license with all your data, but rather just show a proof of being over 21 for example.
In 2019, I started to get involved with more of the social networking aspects of how we can use the Ethereum tokens and things. We began playing around with different ways of using NFTs in a social context and how that could be used.
I think culminating last year, about a year ago now, with the concept of an NFT that can hold multiple NFTs. We call it an NFT of NFTs, which is a very cool concept. It’s a much more user-friendly way to deal with and address a multitude of distinct NFTs that can be under one “collection,” if you will. They can also have utility. That’s conceptually what we were doing with that.
We also got into the concepts of DAO, which is the decentralized autonomous organizations and how they would be structured, how they would use the blockchain, how they can write governance rules to the chain and how people can participate in the governance by holding the coins. We also (worked on) concepts of DAO of DAOs. Think about it like a fund of funds and how DAOs could interact with each other and collectively collect up different revenue. In a simple form it would be transactional fees that could be used for funding charitable organizations or things like that.
I got involved with the Metaverse side of the world as well. Now, the Metaverse doesn’t necessarily have to be blockchain-related. I got involved with the Metaverse, I guess a long time ago, but it wasn’t called the Metaverse. But certainly, in the last year and a half to two years in a big way we looked at how to bolt the Metaverse into the blockchain world and how to utilize NFTs within that construct and obviously the NFT of NFTs is another one. How to use that so that you can really use it for benefit inside a Metaverse. It’s not just like a game, but it actually has utility.
Cooper: What kind of policing is going on front-facing for the public to get into potential blockchain sites that are real?
Parker: What would the user want to do?
Cooper: If we as a nonprofit wanted to mint something and see if we could put something together as a fundraiser and connect with the idea that we sell something and 5% continues to come back to the nonprofit. If it’s being sold beyond in secondary markets, how do we know we’re in the right place and we aren’t giving information to some organization that’s created a front-facing platform that looks good? We don’t know what’s happening behind the scenes.
Parker: (laughs) That’s a really good question. Because unless you know, then yes, you could be scammed in a way. And there are scams out there with the NFT marketplace. You need to be cognizant of who you’re dealing with at the other end. It’s early days still, so do your homework if you want to embark on something like that.
Let’s say you wanted to buy an NFT in a primary sale which is usually called an NFT drop. You go to the well-known marketplaces to buy it or to the source, They’re the original ones. That’s when the NFT gets minted.
There is a crypto NFT community where everyone there knows about all the drops that are going on and the utilities of the NFTs. But if you want to buy a secondary market one, then you would go to a known marketplace, like OpenSea, for example. OpenSea is the largest secondary marketplace for NFTs. You could then take a look and see what’s for sale and purchase it through OpenSea. OpenSea exposes the original contracts so you can actually just click on that and say, “Where did this original contract come from?” You can get information about that. You can make your own assessments, if you research it as to whether or not it’s legitimate.
OpenSea makes great effort to ensure there are no scams on there. I can’t vouch for them. They do have issues occasionally. There are other ones. There’s Super-rare. There’s Magic Eden. There’s Makers Place, a bunch of different well-known marketplaces, probably 10 or so. That’s primarily for purchasing on the secondary markets. They do original NFT drops as well, but primarily for secondary sales. If you want to purchase on the primary markets or the original NFT drops, you do have to know about that.
And if you want to actually do an NFT drop, that’s something that is, in my opinion, where we are in the industry, allowing anyone to do NFT drops. You’d need to do that through people you’ve become acquainted with and you know will do that for you or the marketplaces. They will build the smart contracts for you. The marketplaces also offer to create NFT drops for you in an easy way.
Cooper: It’s that early in the game that for the NFT minting part, it relates to who you know?
Parker: Yeah. Well, there are places you can go and set up the NFTs, and you can mint them. OpenSea and other marketplaces do minting as well. You could go on there and say, “I’m creating a collection. Here’s a collection of 20 different NFTs. I want them minted.” And you can send people to OpenSea to see your collection on OpenSea and purchase it right from there.
Cooper: How do these partnerships work? Do they get a percentage? Is it a fixed rate?
Parker: Typically, there’s a small up-front cost, which covers their hard costs, and then they get a percentage of the raise from the drop, 1%, 5%, whatever seems appropriate or if you’re using a marketplace, they have a set fee.
Plasmier: I’ve heard discussion of this being the next place people will be building in their applications, on blockchain.
Parker: Yeah, well, they call them “dapps.” Decentralized applications, dapps. It’s hard to answer that question. Not everything can be written on the blockchains. They just aren’t meant for that. So, when you have a game or something like that, your game will be an application that’s not necessarily written on the blockchain, but it talks to the blockchain.
Plasmier: So potentially racking up points, or if you’re selling tokens from your game or log-in type of information, those kinds of connections?
Parker: Exactly. You may need a certain tool to go through this particular part of the game or whatever. The Metaverse will be using that, too. The Metaverse is in some ways like a game, but it’ll be more real. There will be real environments, replicas of real life that can then manifest themselves differently because you’re in the virtual world. It’s not really gaming, but it’s using a lot of the gaming tech, coming at it from a different angle. The Metaverse is the next thing that will be coming out.
Cooper: I don’t quite understand having space in the Metaverse.
Parker: There’s a lot of confusion out there. These people selling virtual real estate, like an island, for example, that isn’t linked into a Metaverse today. That’s an NFT token. They’ll build a Metaverse and they’ll link that stuff in. That’s an NFT with utility. That’s exactly what that’s going to be. Like I said, not all of them, but a lot of the NFTs are moving that way.
The Metaverses themselves are being built out, and they’re very expensive at the moment. It’s a virtual world you can go in and be yourself. You can take 3D virtual scans of yourself and place yourself into the Metaverse space. Or you can choose to be an avatar. You don’t necessarily have to physically be yourself. You can choose to look like somebody else. You interact with AI-type of other “people” who are in there. But there will be other live people in there you can also interact with, whether they’re real images or avatars or whatever is a decision of the other individual.
You’ll be able to do lots of different things. The two of you could be painting, creating music together in the Metaverse, playing a game, watching a sporting game, having a beer in virtual space.
Plasmier: Are there accessibility features for people, let’s say, if they’re blind? It sounds like right now it’s a visual-auditory interaction. How would people who are blind navigate through a Metaverse?
Parker: I don’t have an answer for that. You’re absolutely right. This is early days.
Plasmier: It’s exactly when accessibility needs to be built in.
Parker: I totally understand. The focus is getting one out the door, which may not be the right focus. I totally agree with you. Because it’s still a proof of concept. That’s where it stands. But there are things like—I mean, there will be obviously the visual side of it, for sure. But you won’t necessarily need VR glasses, AR-VR, you don’t have to have those. The experience will be better with that. And obviously there will be auditory stuff as well. But there are other things being built out, too. Sense, the ability to smell things in the Metaverse, taste. There are people working in different areas to bring as much reality as they can, but I understand what you’re saying.
Plasmier: Tactile, any type of the sense of touch would go a long way.
Parker: That is a big part of some of the new stuff that’s being developed, for various reasons.
Cooper: Is there any connection with holograms?
Parker: Yeah. (laughs) I’m not sure I can disclose any of that at the moment. Yes, free-standing holographic interactive images, yes.
Cooper: Many years ago, I got an email from a scientist researcher from Tehran. He was asking if we’d be interested in talking about some research they were doing in holograms that also provided smell. That was many years ago. I always thought that if you could get olfactory senses connected entertainment venues. Bringing smell in as you watch a movie opening a sensory experience within the story being told.
Parker: Absolutely. That’s something they’ve been working on for years. And the taste, too. I don’t know about licking my mobile phone. (laughter)