Digital Assets End The Week Flat
Virtual, Augmented and Mixed Reality
The world, as we know it, is rapidly changing around us. Whether we like it or not, it is something we have to accept as truth. Our world has been thrust forward by significant advances in technology, creating a better, more fruitful world for all; yes, many still endure extreme hardship. Yet, if you had to look back on history, there have been very few times you could point to when this many people had it this good.
There have always been opponents to advances in technology and its effect on humans, such as the Luddite movement in 19th century England. However, more often than not, they have been on the wrong side of history. It is easier to embrace it and leverage it than it is to fight against it.
Today we will cover a topic that is controversial in what it means for the way humans interact with their environment and one another in the future: Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality(MR). We say it is controversial because if you ask most people you know, they would more than likely say they would rather interact with someone in real life as opposed to a virtual environment. However, with new innovative technology and a shift towards a more digitally-native world, we believe that the use of VR, AR and MR in our daily lives is an eventuality. So let's dive in:
AR is a blend of both the real and virtual world. To achieve this, our world becomes the framework within which artificial scenes and objects are placed. Everything that we perceive in AR takes place within a real environment and may not require the end-user to purchase specialised hardware as tools like smartphones already have this capability. A good example and one that took the world by storm just a few years ago was Pokémon GO. The game's purpose is to walk around the real world, and you 'catch' Pokémon and battle other players. You could superimpose the Pokémon you wanted to catch onto the environment around you:
Other companies are also starting to adopt AR to increase sales or provide a better experience to their end-user. IKEA will allow you to 'test' out different furniture options and locations in your house so you can see what it would look like before you purchase it.
Instagram uses AR to put filters, masks and other objects into a picture with you to make it more exciting. We have even seen a military application of the technology where fighter pilots can see flight paths and other details through their helmets' visor. AR use is appealing because it often doesn't require the specialised hardware that increases the barrier to adoption; therefore, access for the everyday person is more manageable.
MR takes AR one step further. MR will allow real and virtual elements to interact with one another and allow people to interact with these virtual elements as they would in the real world. For example, as you move closer to an object, it will move closer to you, and you could also turn the object around with hand gestures. The big difference between MR and AR is that virtual objects are manipulatable; they arent just superimposed.
MR is the most recent advancement in the immersive technology sector, but we have seen big companies already getting involved. Microsoft has created the HoloLons, Samsung the Odyssey, Lenovo the Explorer and Facebook the Oculus. Apple's Tim Cook has also stated that the company will be involved saying that this technology is potentially as significant as the iPhone. The enabling technology is also rapidly improving. It is even predicted that AR/MR contact lenses are a decade away. From medicine, science, business, retail and education, the possible use cases are also vast. Scientists can manipulate and play with atomic structures, doctors can map and analyse DNA or perform surgical simulations, educators could teach across the globe, and businesses could conduct meetings face to face thousands of kilometres away.
Imagine for one second that you are in a mall walking between shops; with the use of your MR lenses, you could view specials and their full range of clothing. Retailers could even create a holographic image of you and suggest clothing combinations. The interactive experience people will have going forward will be very different from what it is today.
VR is the creation of a simulated environment where one can fully immerse themselves. The computer-generated environment will feature scenes and objects that appear real to the user; yet, everything is artificially constructed. You will, however, require specialised hardware like VR headsets and sensors to interact with the environment around you. The applications of virtual reality are almost endless as you could create any virtual experience you want to. The first use case, therefore, will most likely be that of entertainment. Take the following map into consideration:
More people are living inside the highlighted area than outside of it. Due to the sheer number of people living within such a small area, we can assume that most people live in cramped housing conditions with minimal access to non-virtual forms of entertainment. The ability to ‘escape’ and live in a different reality may be very attractive to many here. This provides the opportunity to create varying forms of entertainment that happen within an immersive digital environment:
Movies and documentaries - filming using 360-degree cameras, you can immerse yourself in the movie or documentary. Using your VR glasses, directors could make you feel like you are really there and provide a perspective that hasn't been possible before. It provides a whole new medium for creative expression.
Sport - imagine being able to walk around the field or stand behind your favourite player as they are about to make the winning put or throw a touchdown. The way sport is delivered and viewed will change; for the first time, you will be able to 'take to the field' and get a unique perspective and experience usually only had by those who are good enough to play.
Media - imagine being at the scene of a crime or standing next to your favourite newscaster as they interview people? You could even sit next to Oprah as she spoke to a celebrity. The way people deliver news and other reality-based TV will change. You can be on the front lines of journalism across the globe for the first time.
Education - the platform for delivering education will also change rapidly. You can now attend lectures at Oxford while sitting in Seychelles with the exact same level of attentiveness. It also has significant implications for delivering high-quality education to young kids in developing nations—less need for brick and mortar infrastructure, and you will have a deeper penetration into rural areas. Kids won't have to walk 30km to school and back again as all they will need is an internet connection (probably provided by Starlink) and VR glasses.
Virtual tours - The ability to explore the world from the comfort of your own couch has never been so accessible. Innovative companies like 5D Global are allowing you to explore the globe. They also help brands gain further visibility by leveraging Google listings and enabling you to explore their shops. They allow you to list your home accompanied by a virtual tour of the house, significantly increasing one's visibility which is an excellent opportunity for both buyers and sellers. They have even gone so far as to allow you to do virtual tours of schools, showrooms and other companies, even enabling builders to see their construction site progress. All of this from the comfort of your home. It may even change the concept of travel for a majority of the globe.
Metaverses - One of the most exciting applications for us is the opportunity to build massive virtual worlds where people can interact with one another and the world itself. We have covered the rapid rise of these worlds in a previous update. Whether it be gaming, socialising, conducting business or other activities such as attending art galleries or building your own home, it can happen within this virtual realm. All coordinated and settled by blockchains like Ethereum. Whether it is 'real' enough to convince people to 'live' their lives within this realm remains to be seen. One thing is for certain though, our reality is a summation of our senses. We can easily trick these senses into perceiving or believing something is there when it isn't. Even with the technology at its current level, we can do this with hilarious results:
If this is where we are currently, imagine what will be possible ten years from now. All these technologies still need time to mature and allow the industry to reach its full potential. As it does, the lines between reality and the virtual world will become more blurred. We will live in a ubiquitous, virtual geospatial layer where technology and reality intercept. While it may seem in the realm of Sci-Fi this technology is fast becoming a reality and will fundamentally shift the way we as humans operate.
Notable News Stories This Week:
Morgan Stanley Becomes the First Big U.S. Bank to Offer its Wealthy Clients Access to Bitcoin Funds
Morgan Stanley has become the first U.S. bank to offer its high net worth clients access to bitcoin. They circulated a memo on Wednesday that informed its financial advisors of its decision. They have initially launched by offering access to three different funds. Two are through Galaxy Digital, and the third is through FS Investments. They have stated that the product is suitable for people with "an aggressive risk tolerance".
Read the story here
Investor Howard Marks Warming to Bitcoin
Howard Marks, the billionaire investor and founder of Oaktree Capital, has reversed earlier comments on bitcoin. In 2017 Marks' made a comment that cryptoassets were an "unfounded fad". However, in an interview this week with Korea Economic Daily, he stated that the comment was a "knee-jerk reaction without information". In a recent memo published by Oaktree, he remarked that his son "thankfully owns a meaningful amount [of bitcoin]".
Read more of the story here
Inflation Takes Over From COVID as Biggest Market Risk: Bank of America
This time last year, Coronavirus was the most considerable risk cited by investors in America. However, with the vaccine roll-outs and the possibility of the economy reopening again, that concern has shifted towards the loose monetary policy that has occurred during the recent pandemic. Fund managers now believe that this poses the risk of higher-than-expected inflation. This may also increase the demand for a store of value asset such as gold or bitcoin.
Read more about it here
This week, we thought we would introduce a new section that may be included from time to time—Curated Articles. In it, we will share an article that we feel is worth taking the time to read.
Whilst we all have the option to look, to seek to understand, it’s often easier not to. Bitcoin, Ethereum and distributed ledger technology are complex systems that require significant due diligence. At Etherbridge, we aim to lower the barriers to understanding this fast-growing digital economy.
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This is not financial advice. All opinions expressed here are our own. We encourage investors to do their own research before making any investments.