Intelligent NFTs And Zero Marginal Cost Societies
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Intelligent NFTs And Zero Marginal Cost Societies

Regular individuals will soon be able to create and own a character that resembles an actual human and authentically converses like the natural person... Instead, they are seemingly intelligent digital beings that autonomously hold their own discussions.

Peter Wicher

President Abraham Lincoln held public office hours three afternoons a week. Imagine walking into his White House office. He rises; you feel the presence of his 1.9-meter stature and deeply etched features. You ask, “Mr. President, are your goals for the emancipation proclamation primarily ethical, political, or both?” You then discuss a pivotal event in world history with the leader who made it happen.

A new generation of avatars with increasingly realistic features are able to authentically craft words like any person who has left enough of a written or spoken legacy. They may soon deliver that conversation. Those virtual beings will also learn from their interactions with people and with each other to adapt to today’s language and context.

We will speak with anyone anywhere, anytime, at zero marginal cost. That offers strong potential for impactful solutions in education, business, and governance.

They Will Live in a Metaverse

These authentic digi-humans will live in virtual worlds that many call “metaverses.” Unfortunately, however, there are as many definitions of "metaverse" as technology pundits.

A common idea is a computer-generated world where users interact both with each other and with synthetic objects and intelligences. Experiences vary from realistic to fantastic: from a business meeting with lifelike colleagues to surfing waves of hydrogen on Jupiter. Many concepts extend the connection to the physical world by overlaying virtual content onto your surroundings via augmented reality glasses.

There are metaverse precursors in worlds like Second Life and Decentraland, where you steer yourself through digital landscapes, interact (there’s plenty of sex in Second Life), or engage in commerce – exponential capital. Today a hyper-realistic metaverse is just ambition, but, as with all things exponential, it could emerge much faster than you think. Two years of covid-induced physical isolation has made hundreds of millions of people comfortable with virtual interactions.

A scene from Second Life, a metaverse precursor. (HyacintheLuynes - Own work, CC BY-SA 3.0)

Why is it Happening Now?

Regular individuals will soon create and own a character that resembles an actual human and authentically converses like the natural person. These are not simple chat avatars where you speak through an animated character. Instead, they are seemingly intelligent digital beings that autonomously hold their own discussions. Exponential technology convergence is making it happen.

Natural language processing, NLP, delivers increasingly high-quality text prediction. When presented with a statement, an NLP AI draws on a vast store of text, plus recent discussion context, to produce the most likely response. Open AI’s GPT-3, a leading NLP example, uses 45 terabytes of internet text, roughly three times the contents of the U.S. Library of Congress. Here is a video of two GPT-3-supported avatars talking with each other about becoming human.

You program ("train") your intelligent avatar's language by giving it call and response examples (It’s called Prompt Engineering.). Teaching an avatar to respond like Abraham Lincoln is a formidable prompt engineering task; the developers will want to reap the rewards of their time and talent investment.. Enter non-fungible tokens, NFTs, the blockchain technique that lets you stake transparent and immutable digital asset ownership. Embedding an avatar’s design and training in an NFT gives its owners a clear and robust title to those digital assets. That bolsters confidence for investing in developing these sophisticated virtual characters.

Seeing this convergence, companies like Alethea.ai are racing to build so-called “intelligent NFTs” or iNFTs. They aim to capture digital beings’ language and personality in unbreakable NFT containers.

Programmable Intelligent Scarcity

Alethea.ai’s founder and CEO, Arif Khan, calls ownership of a trainable, human-like avatar “programmable intelligent scarcity.” His investors are betting that it will attract considerable talent and money. Paradoxically they aim to create an abundance of unique, thus scarce, intelligent avatars.

Immediate commercial applications

Last June, Alethea's first iNFT was auctioned by Sotheby’s for $478,800. Here’s a video of… her:

In this bizarre new world of seemingly abundant money, that price is modest for an actual first. Beeple's ‘Everydays – The First 5,000 Days,’ mere static artwork that can’t even speak, sold several months earlier for $69million.

Sotheby’s iNFT prospectus and Alethea’s White Paper describe multiple monetization methods for creators and, of course, Alethea:

o   The prompt engineering providing the character’s language is included in the NFT, but “The owner needs to pay maintenance fees for tools used.” You can own your Lincoln recreation, but you’ll have to pay a monthly fee to keep Honest Abe talking.

o   Alethea’s own metaverse with the aspirational moniker “Noah’s Ark,” operates on Alethea’s cryptocurrency, the ALI Token. A large chunk of that crypto is held in Alethea’s own treasury account: if ALI’s value skyrockets, so will Alethea's balance sheet.

o   In a "freemium" model, users can create a free avatar with what Alethea calls "Level-1" intelligence. That means it can have a conversation with you, but that's it. You’ll need to pay up to higher levels of “intelligence” to have your avatar do exciting things like:

§ “Learn” from conversations by expanding its vocabulary and its range of potential responses. We biological humans learn very well that way.

§ Generate art or writing for you to sell.

§ Autonomously interact with other people and sufficiently upgraded avatars, and further train through those interactions.

More Ways To Monetize iNFTs

An avatar creator might dream that their intelligent NFT will be hired as a model by a couture house to compete with Balman’s Shudu, or become an Instagram Influencer with 1.3million followers like Lil ‘Miquela. Since the iNFTs are “trainable,” one can imagine Avatar academies offering to coach aspirational owners’ avatars to become the next Miquela.

iNFT platform and tool providers, like the vendors of mining equipment and blue jeans in California’s Gold Rush, can get rich. That’s not bad. Where would technology development be without the allure of personal fortunes?

Blockchains’ most frequently touted benefit is enabling decentralized, disintermediated economies. Yet, ironically, Alethea’s and other metaverse efforts, with platform-specific tokens and subscriptions, curiously resemble centralized entities rather than user-owned decentralized worlds.

Impact Opportunity: Education

Will conversing with an intelligent avatar be as valuable as talking with the natural human it models? No, but it will be 10X better than just reading that person’s words. Do you want to get better at thinking on your feet? You might practice by having real-time debates with Socrates.  And because digital is scalable with the marginal cost of each session declining exponentially, thousands of students could simultaneously have personalized 1:1 Socratic debate sessions.

Anyone who has learned a new language will attest that total immersion with native speakers is essential. Intelligent avatars could be skillful instructors. They could be programmed to tune their responses in real-time to be just challenging enough for the learner to be engaged, but not tough enough to cause frustration (Educators know this method as Lev Vygotsky’s Zone of Proximal Development.).

Business application opportunities abound, like a better understanding of your customers. For example, to design a new service a product manager may need to interview prospective users in Sao Paulo who have specific characteristics. Boom: there they are. Or there their avatars are, selected because they have been trained to exhibit the same tastes and preferences as their models, their time rented out by their owners.

iNFTs could also promote better understanding among people. What if you could talk with a group of intelligent avatars programmed with different religious or political beliefs than yours, digi-beings designed to listen well and to never get testy or dismissive?

Zero Marginal Cost Social Experiments

Human ecosystems are frightfully complex; many well-meaning policies never achieve their intended goals. Even today, developed economies endure poverty, hunger, racial tension, and social mobility barriers. Could social problems be modeled with intelligent avatars in virtual worlds?

Arif Khan notes, “An iNFT metaverse is built up of millions of iNFTs.”  Suppose those millions, or even tens of millions, could interact like us biological humans? Their metaverse might be used to experiment with initiatives like universal basic income (UBI) or counter conspiracy theories.

Once created, that society’s only expense would be computer time, which, as Ray Kurzweil has often written, has enjoyed an exponential cost reduction for 130 years. Consider further that time can be accelerated in a virtual world: thousands or millions of policy experiments might be run in a day. Moreover, such rapid experimentation may ultimately solve many nagging social problems.

High-Stakes Ethical Questions

Realistic, intelligent avatars, democratized to where any individual can create one, are loaded with ethical questions.

If you write a lot in public (like me), there’s a risk that someone could create a faux-you avatar. Is it plagiarism if that avatar generates new written work? Should it be legal to create a virtual you without your permission under a different name?

Suppose a service can upload all your emails, videos, texts, and social media posts, to create an “eternal you.” Would you want your descendants to interact with her, him, it (And what is the proper pronoun?)? Would a hosting service be morally bankrupt to block access to “eternal you” if monthly fees go unpaid? What is foreshadowed when Alethea.ai dubs its own avatars “revenants,” and  Microsoft patents a method for using chatbots to preserve both historical figures and living people?

Digital Dreams and Memories

Making money while you sleep is a timeless dream. So expect initial iNFT development and deployment to hype creating autonomous Instagram sensations and advertising personalities who make money while you’re sipping mocktails on a physical beach.

The general public will create and own convincingly intelligent avatars sooner than expected. For example, making a “virtual you” (a “Digi-me?”) may become as easy as dumping your selfies, emails, and posts into an avatar generator (for a monthly platform subscription fee).

The impact opportunities for zero-marginal-cost, programmable, own-able, intelligent avatars’ may be boundless. These tools could offer decades of meaningful innovation from education to business to personal improvement to interpersonal relations, and heretofore intractable complexities of social systems.

So, if you could pick a trusted advisor from any culture or period to help with your most complex management and policy challenges, who would it be? What would her/his/its counsel be worth to you?


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NFTMetaverseAIGPT-3Ray KurzweilBlockchainiNFTCryptocurrencyEthics

Peter Wicher

Avid mountain biker, cook, and creative business thinker. I use my experiences as a tech executive, educator, and technologist to help leaders perceive tech's exponential growth, and its impacts.