Digital ownership enabled by metaverse, NFTs empowers both individual users and economies, says Animoca Brands’ Yat Siu

An open metaverse and NFTs can transfer ownership of digital data back to users, who are being “digitally colonized” in an age where tech giants have a dominant control over such valuable assets, Web3 entrepreneur Yat Siu said during Metaverse Japan Summit 2022.

Siu, co-founder and executive chairman of Hong Kong blockchain company Animoca Brands, which owns the popular virtual world platform The Sandbox, highlighted the importance of digital ownership to both individual users and economies worldwide.

He was speaking at Metaverse Japan Summit 2022 via a video call. The event was held in Shibuya, Tokyo on July 14. Siu was among dozens of senior executives in Japan and abroad to share views on Web3.

Siu said data was the most valuable resource today because it created network effects that could derive monetary values. Using AI machine learning, large tech companies such as Facebook, Google or Tencent analysed the bulk of data generated by billions of users on their platforms, learnt about their needs and desires and then monetised such information, Siu said.

The data, however, was not owned by its user or creator, and the tech firms did not pay users for their data even though it generated income, Siu said.

“We don’t own any of this data. In fact, every one of us is currently on Facebook or Instagram. We are, in fact, all working for them for free,” he said. “And we can consider the age as one that we are basically being digitally colonized and we exist in a kind of data feudalism.”

Rules that govern how platforms operate also entirely depended on the big tech companies, Siu said. Taking app development for example, he said it was Apple Inc – and not any app developers – who decided to put their apps on its App Store. “They can remove it from you at any time. The point is that we’ve all become digital services in this environment,” Siu added.

Although the market had corrected itself to some degree since the beginning of 2022, the most powerful companies continued to be “data kingdoms” that controlled almost everything that concerns users, Siu said.

The emergence of blockchain, NFTs and the metaverse meant that for the first time, data no longer resided in private databases such as those inside Facebook or Google, but became a public network. This enabled all users to review the data, know its owners, analyse it and do things to it in a public manner, Siu explained.

“And when people layer experiences on top of these non-fungible tokens, much like open source, they become richer and more powerful.”

Overtime, one basic layer of code could evolve into a whole system like Android or a new company when more users added layers to it. The same would happen with NFTs as well, Siu said, because they represented true digital property rights, which are openly composable with public assets. 

This was achievable because blockchain was a permissionless data structure where people could build on top of it, whether it was as an NFT or Bitcoin, he said. “Either way, the permission you seek is not from the issuer. The permission you seek is from the owner of the asset,” he said. 

“If you have an iPhone and there’s a business that can make headphones, and a business that can make cases and a business that can make accessories for iPhone, Apple did not decide whether they are allowed to do this. People were just doing it themselves.”

“And that becomes a platform, of course, and this is now possible in a digital world because of non-fungible tokens and blockchain.”

Siu likened ownership of digital data to property rights in the physical world. He said countries that adhered strongly to property rights tend to have stronger economies and higher GDP than those with poor property rights. 

He said ownership or property rights provided a sense of certainty and stability, giving people an incentive to build businesses on top of existing assets, as in the cases of house ownership to furniture and interior design businesses.

“It is the reason why economies with strong and stable property rights are strong and the ones that aren’t have nothing,” he said. 

“And so we see the same parallel. When we move to a place where most of the digital world also enjoys property rights through non-fungible tokens and blockchain, in the same way that we do in the physical world, then we will see overall economic growth.”