Why Improbable’s Herman Narula believes virtual society will foster transhumanism

Herman Narula, CEO of Improbable, wrote a book about the metaverse dubbed Virtual Society. And he thinks that one day, someone without a body will read it. He predicts that will be possible as the metaverse comes along and makes transhumanism possible.

That’s one of the things we talked about at our fireside chat at the GamesBeat Summit Next 2022 event. Narula’s company is making software that can help make the real-time metaverse possible. It is being used, for instance, to create Yuga Labs’ OtherSide metaverse game, which can pack more than 4,500 people into the same virtual space with real-time physics, 3D audio, and synchronous movement.

And while Narula has been very focused on developing that technology, he has also been a big thinker on the implications of the metaverse, which is why he wrote the book. He doesn’t want any single company like Meta or Apple to dominate the metaverse, and so he believes we should create the “data commons.”

That is where users control their own data at all times and take it with them wherever they want to go in the metaverse. Narula believes the metaverse should be built with decentralized technology. Those things are part of the strategy for preventing a single company from ruling the metaverse.

Narula’s Virtual Society: The Metaverse and the New Frontiers of the Human Experience book is available now.

Here’s an edited transcript of our interview.

GamesBeat: Do you want to tell us more about Improbable? How you got going, where you are now, what scale you’re operating at?

Herman Narula: Improbable does three things. We’re probably now the leading provider of multiplex to about 60 different publishers. We supported the recent Modern Warfare launch. We helped build Fall Guys and a bunch of other titles. We also build metaverse technology that allows you to create experiences that wouldn’t be possible otherwise. Thousands of people in the same world interacting together in the same place, talking with their own voices. We’re also applying that technology to build MSquared, which is a network of metaverse platforms that work together. A number of different companies and partners and experiences we’ve done earlier this year are all part of that network. It’s quite a different approach to creating content. Everything is interoperable. Everything is owned by the partner. It’s built to build a sort of internet of metaverses.

GamesBeat: Herman has written a book, Virtual Society. It’s a new metaverse book. Why are people now, say, bashing the metaverse? How do we continue with building the evangelism for it?

Narula: I think they’re right to bash it. As I argue in the book, there are quite intellectually dishonest and inconsistent conceptions of the metaverse which are being sold to us for a variety of different reasons. Like in the early internet. In the early internet a lot of companies renamed themselves “.com” in order to capitalize on the hype. A lot of businesses popped up that had a very mixed-up idea of what the internet could be. The same is true of the metaverse.

If you’re a game developer, a big game developer, the idea of suddenly sharing your users with other game developers is not an appealing concept. However, if you’re a sports league or a fashion brand or a record company, the idea of now being able to have massive highly monetizable interactive events that closely link to one another, that’s a lot more interesting. What we’ve found is there’s probably two metaverses, at least, in our current parlance. There’s the Facebook version and there’s the everybody else version. The everybody else version is very interesting, especially once you start incorporating web3.

GamesBeat: We have a lot of popular entertainment making people aware of the metaverse. Are you seeing that as a good thing?

Narula: Oh, absolutely. The distraction is Facebook and crypto prices going up and down and VR. When you look behind the scenes, this is our best year ever. We’ve said publicly that we’re on track now for profitability. So many companies very pragmatically, even in a down market, want to build experiences that appeal to their communities and their users. The popular conceptions of the metaverse, the literature that we’re all fans of, have definitely propelled that into the minds of executives at big companies. But the real revolution isn’t Facebook and it isn’t game companies. It will eventually be all these different cultural institutions getting excited about how they can interact with their users.

GamesBeat: When you were getting going, the opportunity was enabling people to take advantage of massive experiences. The question is, why is that important to the metaverse?

Narula: It’s funny how fundamentally important it is, and how fiendishly difficult it is technically. If you look at it below the level of a particular genre or game–I argue about this a bit in the book. Some of you may be fans of self-determination theory, which is a branch of psychology that’s become very popular over the last 30 years and has done well at explaining a lot of things. What it implies is the reason people enjoy experiences online is kind of the same reason they enjoy anything that they’re motivated to do without coercion. They seek fulfillment. They want to be fulfilled by feeling like they’re getting better at something: competence. Or feeling like they’re making meaningful choices: autonomy. Or feeling like they mean something to other people. If you’re going to build a successful product, whatever it is, you have to give people fulfillment that they can’t have somewhere else.

Massive experiences where thousands of people come together and interact, that’s a rarity in our real society. It’s not something games are good at providing, and it’s not necessarily clear that traditional games would even be more fun in that context. But once again, to use the example of sports, it’s almost fundamental to sports. It would not work as an industry if you didn’t have stadiums full of people. These massive experiences for me, they’re the critical bringing together of value that unlocks new experiences, new business models, new ways for customers and people to interact.

From a purely technical perspective it’s also just insanely complicated. We started off years ago now with early versions of our technology, which we called Spatial OS. We just couldn’t handle density at that level. Only recently with Morpheus have we been able to do more than 5 billion messengers a second.

GamesBeat: That’s your second-generation product.

Narula: It’s more like our fifth-generation product. But we’ve only bothered to name this one. The other three are probably just swear words, is how we would name them at this point. The problem is just getting bandwidth down to a level that’s acceptable on a phone. We had to invent a new machine learning-based bandwidth compression algorithm. We had to build new rendering technology. Nobody talks about this stuff. A lot of businesses just assume scale will happen. It is insanely hard.

GamesBeat: So gaming is going to lead the way to the metaverse?

Narula: I think it’s a lot like theater, TV, and film. They all have scripts. They all have actors. But they’re very different industries. Game developers will certainly lead the way. All these companies need interactive entertainment. The industry that knows how to do that is the game industry. But will it be game companies in the traditional sense? I don’t know. I think it will be a lot like mobile, where the majors didn’t necessarily pick up on mobile. It took new businesses structured around that new distribution strategy, retention strategy, and monetization strategy. Once you change those three things, you’ve changed your company, if you’re in the game industry.

The metaverse will be monetized through digital assets. It’s going to acquire users in radically different ways. It’s going to retain those users in quite different ways, because the content relates us to each other. That’s a big break from how games have worked in the past.

GamesBeat: You recently powered this very interesting tech experience. As you explain it, how is it different from what everybody else can do?

Narula: I wonder if some folks might have seen it or been a part of it. If you’re part of that community in web3 you would have. We were able to put 4,600 people all inside a dense virtual environment. It was rich, beautiful. There were actors playing the role of giant NPCs. Everyone could speak at the same time. All 4,600 people could talk, and their voices would reverberate around the room. You could hear people closer to you or further away. There was a magic to it. People loved it. They loved the experience of being present with so many other people, of being tossed around through physics, of jumping through wormholes and being able to interact and fight bosses together.

Every time we’ve done these events–we’ve done several over the last year. This one really blew up in terms of attention versus the previous ones. We did a K-pop concert and other pieces. But I’m always shocked by how wrong we were as a company, over and over, about what people would really enjoy. If you look at that event on paper, the script of it, I would have assumed as a gamer that people would say, “I want more game stuff.” But in fact, once you appeal to a broad audience, which is who the metaverse seems to appeal to, the wonder and novelty of being in a massive crowd is so engaging that it almost defies the need for a lot of the traditional retention mechanics.

I’ve seen this time and time again and I’m shocked by it. I’m also shocked that people follow instructions. You see–it’s really weird! You see me in a 4v4 Halo game and I’m a complete lunatic. I won’t follow instructions. I’m highly antisocial. You can probably attest to that. But if you look at a crowd of thousands of people in a massive audience–last year we put a few thousand people on a lake and had them battle 10,000 AI. Everybody just followed instructions. These giant characters told them what to do and they did it. Many of the people didn’t speak English, but they followed instructions. There’s something magical that happens in crowds. You need to be able to produce them to see that magic.

GamesBeat: In this case it was a crypto company that led this. What companies and brands are you expecting to be the early adopters in the metaverse?

Narula: Web3 and crypto brands and companies are generally happy to adopt this type of stuff. They want interoperability. Their entire business model is built on the idea of digital assets being used in multiple places. They’ve already sold digital assets. Many companies in the space have done that. They’ve built communities. Now they want to monetize those communities. That’s a very different situation to large, successful games which have already acquired and retained and monetized users, and have very little interest in having them mingle with other companies.

The sleeping giants of the metaverse are massive communities – celebrities are a great example – who don’t monetize those communities very well. They can’t engage with them very easily. They want a new way of doing that. That is who the metaverse is going to unlock value for. If you think of all the money left on the table in sports, in music, in culture, that’s going to become a whole new opportunity.

GamesBeat: The technology is not done. 4,600 in the same space in real time with real physics and 3D audio–you’re not done.

Narula: That’s done. But we did show 20,000 a couple of weeks ago. We’ve reached a point where there are scaling limits that we’ve previously encountered, and they just aren’t there anymore. We’re getting to stadium scale of individuals. These aren’t cut down characters or limited avatars. Everyone can be customized and look different. People can move or interact at great distances. That has required us to solve the sniper problem, which we talked about earlier in the year. How do you scale the fidelity of the information you receive from someone depending on your interactions? But there’s so much more to do. We want to make content creation a lot easier as well. How do we make it much quicker for people who aren’t game developers to make content that can scale to this extent?

GamesBeat: Experiences that are like that–concerts, giant Lord of the Rings battles, what are you thinking about?

Narula: Commercial real estate where people hang out and buy and sell things. Anything involving a fandom or celebrities. This format of an announcement or a presenter–anything from a podcast to a TV show to the town halls for our company. All these things require this basic capacity. Sporting events. The other interesting thing about events is that they’re quick and cheap. The difficulty of finding new gameplay and spending nine years making a game and then hoping that it succeeds, that it retains, goes away. Companies can experiment with large concentrations of users finding gameplay that’s fun, and if it isn’t fun, they can do another event, or even have those users take their digital assets and go somewhere else with them. That’s a lot more agile than traditional game development.

GamesBeat: Given that you can do these tech demos now, how far away are you thinking a fully functional metaverse is? In some ways we probably thought this was about 10 years away, because it’s so difficult to do.

Narula: I think it’s here now. If you’ve been to those experiences, and we’ll do more of them later this year with many different partners over the next six months–the general public will start to experience this through things like the brands and companies we’ve talked about doing experiences for the first time. What’s missing is the other side of it, which is the interoperable commerce. That’s what our MSquared project is about. We’re trying to bring these companies together to agree on a very simple system of interoperable commerce that everyone buys into. That, I think, would be a powerful catalyst. Other people are working on problems like this as well.

GamesBeat: It’s coming fast, but maybe you want it to come in the right way. How do we defeat the corporate metaverse?

Narula: I think it’s going to defeat itself. I talk about this a lot in the book. There are some fundamental incentive challenges that no one seems to articulate as clearly as they should, looking at companies like Roblox or Epic or even Facebook. Let’s start with amazingly successful platforms like Minecraft, Roblox, and Fortnite. These are incredible companies, incredible products. There is a challenge, though, which is they take a lot of the revenue and upside, and a lot of the control of users, from the content creators that are on those platforms.

That isn’t an issue for 80 percent, 90 percent of content creators. But if you’re a very large sports league, you don’t want to give your 100 million fans to another company. The relationship you end up having with platforms like this is licensing deals. Licensing deals are very value destructive. They don’t allow other businesses to create value. If, instead, you just say, “I’ll eat the revenue share and live on top of one of these platforms,” the problem isn’t that you can’t build great content. The problem is you can’t raise growth capital. Your revenue will never be valued more than one or two times its actual value because you’re subject to enormous platform risk.

This isn’t a question of morality. If the goal is to attract the maximum amount of content dollars, the best IP, the best celebrities, the best people into a metaverse, that metaverse has to radically give up ownership and control of the users, content, and even value, in order to make that economically worthwhile for the people who are going to bring in the users. This is going to be the central tension between the kind of cultureverse and more traditional games-led metaverse projects. Which will also succeed.

The other problem with some of the press narrative is it’s very binary. We live in an age where, “Who will win the AI war? Who will win the metaverse war?” There’s no conception of the idea that it’s going to be more like an ecosystem. Theater and TV aren’t gone because there are films, or vice versa. We’ll still be playing single-player games 10 years from now. The metaverse represents this brand-new field and opportunity, which is all upside, all growth, all potential. I don’t think it will cannibalize existing content very much at all.

GamesBeat: As we build this open metaverse, how important is trust and reputation? What would you be satisfied with as an open metaverse?

Narula: A lot of the discussions around the open metaverse are quite performative. They’re not grounded in solving a near-term problem people are facing. They’re grounded in wanting to be more metaverse-relevant, for a lot of the people involved in that discussion. Look. I benefit from that too. I love talking about the open metaverse. It’s great to talk about the metaverse. But the challenge is, what does that mean?

I talk about this in the book. The internet is not a good metaphor for the metaverse. The reason it’s not is because–you can do it with a simple thought experiment. If you and I are on Amazon together, great. I’m on Amazon, you’re on Amazon, no problem. Your experience doesn’t impede my progress. Now imagine you’re in a hyper-realistic simulation of Hogwarts because you love Harry Potter. You’ve played this for years. You’re deeply immersed in role-playing Harry Potter. Suddenly Master Chief breaks into the room and shoots Voldemort in the head with a battle rifle. Is that fun? I don’t know. Maybe you want that and maybe you don’t. But the point is, content doesn’t entirely play nice.

Interoperability is a great theory, but the question becomes, how do you create these networks of related content which are actually relevant to each other? What are the rules by which that content relates? I think of the metaverses that are going to pop up as more like networks, which need to have some clearly defined reason to have value exchange with each other. That, in turn, makes the metaverse quite different from the conceptions we see in popular culture. Remember, when people write novels, they’re writing fiction. They’re not building something that has to be a consistent vision of the future.

GamesBeat: I think of the Star Trek transporters and the holodeck. The transporter would transport you, but only in the form that fits what’s in the holodeck.

Narula: Star Trek is a great example to bring up when talking about how fiction can lead us astray. You watch that series and think, “How do people who can generate matter from energy have any problems at all? How is anything an issue for these people? This is entirely made up. They’re just having fun out there in space.” But my point is–you’re right that there will probably be rules and context.

With MSquared and all the partners we’re announcing and stuff that happened earlier this year with Yuga, everybody is committed to interoperability in very specific ways. Every single contract contains, almost like the European Union, a freedom of movement clause. Avatars have to be allowed to leave the world. It doesn’t mean you’ll be able to bring your avatar everywhere because of moderation and content reasons, but that’s a decision for the receiving world, not a decision for the people who created the IP in the first place. That’s a very powerful step in real interoperability.

GamesBeat: What is the concept of a data commons?

Narula: That’s a great segue way into another thing I talk about a lot in the book. I feel like we live in a sort of digital dark age right now. What I mean by that is, quite literally we live in an age where certain feudal overlords define our security and protect us. They are often kind enough to share some value with us as well, these six or seven companies. If you aren’t happy with that, well, you’re out of luck. The internet is those companies. Their networks define and create structure.

This isn’t because they’re bad people. It’s because the incentives of the internet, and any open network, will always result in centralization. The historian Niall Ferguson, who’s absolutely brilliant, whose ideas I mercilessly steal in the book, talks brilliantly and eloquently about every historical instance of this happening, from the printing press to the internet. When things are open, transaction costs tend to mean that people cluster around particular centralized systems that make it cheaper and easier for them to do that. Network effects quickly arise.

How do we defeat that? We defeat that by recognizing that these companies are actually two things. They’re a set of services and features. If we take Facebook, all the cool features on Instagram are an example. But then they’re also databases, databases of tons of user data and very important information added in by other people. Those databases actually, if they were fairly accessible by many different companies, would end up creating far more value than the market cap of these businesses. All of a sudden there would be a whole thriving ecosystem of companies leveraging this information quickly. You and I could build a WhatsApp competitor tomorrow with different features that accessed the same network. That’s good for the economy, good for everyone.

I would encourage us to both create systems and encourage regulation of systems in such a way that we separate the commons of information – identity, key stuff. We stop gatekeeping that to make margin. Instead, we start creating value more from the services. It’s what we’re doing with MSquared. There’s a tiny take rate on the platform. That tiny take rate is shared with every token holder who’s part of the network. It’s reinvested into the platform. The real money is made in the metaverse. The real money is made by the content creators, who take far more of the value than they normally would.

GamesBeat: How critical is web3 and blockchain?

Narula: Without it there’s no metaverse. As I would argue, the metaverse is a network of socially constructed realities that exchange value between each other. The world of sports in the real world is like that. If you win the World Cup, you create actual value that actually translates into the real world. The mechanisms by which value can move from one world to the other are the limiting factor in the prosperity of that network. If you have no means to conceptualize and create assets between different parties that represent these different worlds, you end up with a single centralized platform, with all of the problems and disincentives that we talked about. Without that there’s no metaverse. VR, on the other hand, is quite tangential to the metaverse. It’s cool-looking. I put it on the cover of my book. But that’s not really the catalyst for enabling this new stuff.

GamesBeat: What standards are you supporting?

Narula: So many standards, so many standards committees. We’re taking the approach of being as pragmatic as possible. We’re ultimately supporters of companies that build metaverses and experiences. What those companies want to use, we’ll try to support it, as long as they fit with the values of the network.

GamesBeat: You’ve given some thought to how the metaverse can lead to transhumanism. Can you talk about that?

Narula: You’re going right to the crazy stuff. I put that in the last chapter entirely because I thought no one would read that far. If you’re on the audiobook, I’m slightly drunk at that point as well. It gets a little wilder toward the end. Wait a minute, what are you on here? But the basic idea here is–I think it was Schwarzschild who was offended by the ideas of general relativity. He was disturbed by it. If gravity works this way, you’d have these singularities. How can that be so? And it turned out to be so.

If you look at self-determination theory, the need to provide fulfilling experiences for billions of people–when I say “need,” it’s not optional. There’s a reason why the oldest monument in human history predates agriculture. We care a lot about fulfillment and the world of ideas. If people don’t find fulfillment, they don’t want to participate in society. When they don’t want to participate in society, they blow shit up. They’re not interested. They’re not involved. We see this time and time again. We can’t make a happy, healthy society without everyone having fulfillment, feeling involved, feeling like they have a role to play. And there just isn’t enough society as things get more automated.

My argument in the book is that we’re going to need to generate ever more fulfilling virtual realities and other experiences to grow as individuals and as a species, to go beyond what we’re currently able to do. I argue that rather than exploring outer space, we’re much more likely to end up exploring inner space. I don’t think VR is the catalyst for that. I think it will take brain-computer interfaces, which are far, far away. Nobody is claiming that will arrive any time soon. But when that happens, when we open that door–this is almost a kind of temporary period prior to that happening. Now you can see why I had to be drunk to read the end of the audiobook.

GamesBeat: In what ways is gaming so close, and yet maybe so far from delivering this virtual society?

Narula: Gaming has all the tools, all the talent, all the amazing IP, and all the incredible content. It’s just organized into a business model that’s increasingly cannibalistic and difficult to frame in the context of a shared universe or metaverse. Everybody in the room, in the industry can probably relate to this. User acquisition costs are astronomical now. It’s very difficult to get people to play your game, even if it’s really good. It’s hard to retain them. It’s hard to monetize them. Moving out of that rut, from a highly cannibalistic market into something a lot more value-generative, requires a different business model. Once you get past the vitriol and the hate and the fear of blockchain, that’s what it represents: a better way of monetizing content and potentially distributing that content. That step has to happen to unlock the real value of the metaverse. Without that, we’re just playing video games. Nothing wrong with that, but it isn’t world-changing.

GamesBeat: Improbable has had a long history. You’ve had a vision for a long time. You had some struggles. You’re kind of coming out at the other end. How do you build confidence that your company is going to deliver what it says it can deliver? As you’re rounding up partners now, how are you convincing them that this is going to work?

Narula: I spent a lot of time, years, traveling around, flying to different places, trying to convince game developers to adopt technologies. It’s been the best year of those 10 years. I don’t have to do anything. People have seen these experiences. They’ve played them. They just contact us. We don’t have to reach out to people. Our entire biz dev pipeline is stuffed with people whose emails say, “I was at X event. That was awesome. How can I have that?

The other thing I’ve found is that outside the game industry, when you think about the ingredients we bring–we can fully make content for people if they want. We’re a service business. And the platform and the technology. It’s quite important for a lot of non-gaming companies, who need that capability, to get started within this space.

As far as how we know we’re going to be successful, I’m an old-fashioned person. I think revenue is a great measure of a company’s success. We don’t talk about that a lot in the startup world, but it’s important. Being finally quite close now to profitability at the current growth rate is a big relief for us at Improbable. When we started the company early on there were very high expectations. We think this is an important step in demonstrating that we’re able to live up to that.

I will say, though, that we were complete idiots when we started this company. Oh, my God. I didn’t even know it was billions of messages a second. If I had understood that I would have given up immediately. Some of the latest technical developments at the business, they’re above my understanding. Even the field we came in with, distributed systems, it turned out to be a lot less relevant than some of the machine learning stuff. I’m shocked about how much machine learning ends up getting used to deliver this. It’s entirely novel stuff compared to where we started the business.

Question: I had the pleasure of seeing Herman present quite a few years ago. I remember hearing you talk and thinking, “This is some high-level computational stuff.” You’ve mentioned some of it. What are the core tenets? What are the foundational principles that you had at the start of the journey, and are there first principles–I think you’re alluding to them, but you’re now taking it a step higher. What are the first principles that you would add to your original statement? Assuming that you’re also in the game stage, because you talked a lot about simulation in general at the time too, before the metaverse was very popular. What’s changed in terms of first principles for you?

Narula: There have been changes on the technical side, but also the business side. On the technical side, I don’t think we could have conceived that it was viable to fluidly change the information received by every single participant in a giant distributed system fast enough for no one to notice, and efficient enough to process billions of messages. That was an exceptionally daunting problem that required us to burn down our architecture.

The other problem was, we came into this naively believing we could convince all of you to start using a new programming language and new tools. You never will. You never will. Game developers will smile and nod, but they’re never going to do it. They’re going to use what they’re going to use. When we completely surrendered to just plugging into engines–now it’s idiot proof. We ourselves internally, when we play with our own tech–we would rather not have a feature than have it require you to learn something new. Everything we do is just about plugging into anything, into the off-the-shelf engines. Sixty percent of the industry, the top end, still uses their own engines. We can plug into those. That’s key.

On the business side, selling technology into the game industry is a terrible business. Don’t do it. It sucks. It really does. Game companies don’t have, for good reasons, any interest in spending lots of money on technology. They look at it primarily as a way of saving money. You need to find a way to end up on the buy side, on the side of sharing in revenue and value. What really catalyzed that for us was having a value proposition with our MSquared metaverse, where we can share in the transactional upside. We can also share in the initial development of these experiences. That’s been really transformative, and it wouldn’t be possible without a crypto basis. Those two things–I was a huge skeptic of web3. I kind of regret that now, seeing the numbers. Even in the business early on, I was skeptical. But it kept growing and growing. I feel like that is where the gold lies.

Question: I’m a vendor selling technology to gaming companies.

Narula: My condolences.

Question: We’re in the trust and safety space, and one of the things I get asked a lot about the metaverse is how, with decentralization, when you have 100 or 1,000 metaverses instead of one centralized platform–one of the things these platforms do, even if you can argue how well, is spend billions on trust and safety. Where is that money coming from?

Narula: Joking aside, our approach is actually to help people who are providing these key services by changing how they do business. With MSquared, we’re doing this ourselves. We give away the technology, but we get tokens back that represent a share of the value of the platform, in the way that we operate. Different service providers have an equal footing with us. We have no special privileges. They can provide competing technology, different technology. Trust and safety and moderation services are a big area. Hosting is another area. As those technologies get used, the network becomes more valuable, and every provider, through the mechanisms we’ll talk about later in the year, will be able to monetize much more efficiently than licensing technology or directly selling a service, if that’s what they want to do. There’s no obligation to use that monetization mechanism.

The other key thing is, the platform itself has a fund. The platform itself has a token. It’s already valued at $1 billion and raised about $150 million earlier this year. The platform is able to invest confidently in technology and services that benefit all members, without it being someone’s business and therefore becoming a very zero-sum game. That’s been great. Some of our partners have been really enthusiastic about contributing technology, tools, ideas, elements of their metaverse into the MSquared platform. All it’s taken us is to not try to own it.

The most important lesson for us is we’re not going to be the people who own the user accounts of the metaverse and have that iPhone moment. That will never happen. What will happen is a collective of different companies providing key services. If we can crack that, that’s viable. Otherwise you just end up right back where we started, which is a single closed platform where you end up having to own everything to make any money. We need to avoid that if we want to encourage investment in this space.

Question: It’s inspiring to see how you go so hard into innovation. What are the biggest innovation network effects that you see happening right now that maybe folks aren’t aware of, just because you’re working with a lot of different people right now?

Narula: One cool thing is web 2.5. People wrapping digital asset ownership in very easy to use services and tools. The truth is, look at open source. Everybody was raving about it, and then they said, “What happened to open source?” Well, it took over the world. But consumers don’t know their iPhone runs on open source software. I think web3 is like that. There’s now new innovation. People have seen recent articles about Reddit incorporating web3 components. The funny thing is all the comments on Reddit about, “Wait, I didn’t know this used a blockchain. I’m in web3 now? Do I have a wallet?”

That’s how we need to think. I see a lot of companies doing this. How do we make it really easy and simple? How do we Fisher-Price it? How do we make it as simple as buying something in a game? There’s a consequence to that, which is that I doubt exchanges are going to end up being where most transaction volume happens. I suspect it will happen inside the content itself, which is quite unusual and different from what people are expecting.

Question: Why do you say distributed systems aren’t relevant?

Narula: Oh, they’re incredibly relevant. That’s my mistake. Everything we do is distributed systems. What I meant to say was, and perhaps I misspoke–I was surprised at the relevance of machine learning. That is what I would say. When we were hiring early in Improbable, if you had asked me if that would be relevant to what we do, I wouldn’t have thought so in 2013. And now every single component of the platform uses some form of machine learning. The whole thing turns into a problem about effectively compressing information at different levels of what we do. That turns out to be a very successful approach. Rob, my co-founder, he’s probably spinning in anger at hearing me butcher this explanation. But that’s what I meant.

Originally appeared on: TheSpuzz