  Exploring the transformation of value in the digital age By Michael J. Casey, Chief Content Officer Nov. 19, 2021 If you were forwarded this newsletter and would like to receive it, sign up here. Sponsored by 
It's a mark of how much non-fungible tokens (NFT) are attracting attention that the topics we cover in Money Reimagined keep referencing them. This week, I dive into the intriguing move by the government of Barbados to acquire non-fungible token-based virtual real estate in Decentraland to set up the first "embassy" in the metaverse. I argue this is more groundbreaking than the gimmick that some people saw it to be. And in the Conversation section, we highlight a fun Twitter exchange that highlights uncertainty over who owns rights to NFT art.
This week's "Money Reimagined" podcast is more firmly rooted in more typical MR themes. Our guests were Brett King, an entrepreneur, author and podcaster who has been talking about the disruption of banks and money for the better part of a decade, and Patrick Murck, who as the first lawyer involved in bitcoin helped shape its regulatory standing. He is now helping Transparent Financial Systems, a stealthy software company, design a new community-based system of money.
Have a listen after reading the newsletter. 
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Government in the Metaverse  Rachel Sun/CoinDesk CoinDesk's scoop that Barbados had become the first government to acquire virtual land and create a "metaverse embassy" was met with great interest, but a lot of quizzical looks as well.
The question some commentators asked was: What is the point? If Barbados is trying to digitally solve some problem – such as how to make issuing visas and permits more efficient – why use a blockchain when a simple e-government services website would suffice? The metaverse part seemed like a gimmick.
Our own Will Gottsegen, who knows the nooks and crannies of non-fungible tokens and the metaverse far more deeply than I do, concluded a skeptical column on the topic by stating, "Not everything needs to be on the blockchain – in the absence of clarity, the metaverse embassy just feels like an empty ad campaign from a government official with a stake in the crypto industry." He was referring to Gabriel Abed, Barbados' ambassador to the United Arab Emirates, who is also the founder of crypto company Bitt and the person who brokered the deal between the government and blockchain-based virtual world platform Decentraland.
To Will's point on clarity, we definitely need more information on what Barbados plans to do with this project. Still, I think there's a lot more here than meets the eye. This raises some pretty interesting questions about how sovereignty is exercised in the digital age. And it has the potential to be quite disruptive.
To understand why, we need to go down the rabbit hole of property rights and state power, starting with how it currently works in real life.
Treaties and property rights
When governments set up embassies in foreign lands, international treaties ensure they're granted certain protections from interference by the host country's government.
Those treaties hinge upon the control that national governments legitimately exercise over access to their territory, a power that stems from their command of the security forces that police it. The host commits to not arbitrarily exercise that power.
Meanwhile, legally enshrined property rights give foreign governments the freedom to use that space without interference from the state, much like those enjoyed by private homeowners in modern democracies. This combination of treaty protections and the right to own, occupy and use property creates a sufficient degree of sovereignty for an embassy to function.
It's important to note that both of these rights exist at the whim of the host government. There are plenty of examples of one state deciding not to grant another diplomatic recognition – the U.S. did so with Cuba for decades – because of one geopolitical issue or another that, in its view, outweighed the benefits of reciprocal rights. |
Continue reading this column here.
–Michael J. Casey
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Off the Charts
A Bitcoin Top, or Not?
Whenever bitcoin suffers a big correction such as the 15.6% decline it saw from peak to trough this week, the question looms as to whether this is a lasting move into a more bearish outlook or just a "dip."
One way to assess that is with a measure favored by Coin Metrics: market value-to-realized value. MVRV takes the current total market value of all freely floating tokens – a measure that excludes those for which the key is provably lost and those that haven't changed hands within the preceding five years – and weighs that against the realized value, measured by the price at which the tokens in question were last sold. Changes in that ratio can be compared to the price of bitcoin to seek out trends. Here's how it currently looks.
As Coin Metrics noted in its State of the Network newsletter this week, "During previous cycles a free float MVRV of 3.0 or above has indicated a local top, while an MVRV of below 1.0 has indicated the bottom of the cycle." That would suggest that although the indicator pushed higher as the price rose to new all-time highs on Nov. 10, it never crossed that traditional sell signal threshold.
There are plenty of other factors to consider, but, based on this analysis, a bitcoin bull might be tempted to buy back in.
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The Conversation
A Meta Take on the Metaverse
Illustration: Rachel Sun/CoinDesk
I loved this tweet as a way to highlight the uncertainty that currently reigns around who owns rights to art and media that people are turning into NFTs. It was a valid question from @sammajammaz (aka "Suki Claws") – appropriately "meta" for a metaverse themed topic: could they create an NFT from a screenshot of a Twitter dispute between two people arguing over who has rights to a Bored Ape NFT image?
Then @OlibuFJF (aka "Olibu is Erratic") took it to another level, "stealing" the screenshot from Suki Claws.
To which Suki Claws responded with the same hostile wording used by the would-be litigant in the Bored Ape dispute.
It was all in good fun, but the subtext was that people continue to struggle with how to define rights to images and other media that are associated with NFTs – as @DenverByDefault (aka "canned cranberry asmr") observed:
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Relevant Reads
These Truths Are Self-Evident
It was the buzzy story of the week: A group of crypto enthusiasts set up a decentralized autonomous organization (DAO) known as ConstitutionDAO to bid in a Sotheby's auction for a rare original copy of the U.S. constitution.
- As Andrew Thurman reported on Monday, the rapid expansion of the DAO, which had by then raised $20 million in ether and boasted an 8,000-strong Discord channel, said as much about the emergence of new governance models for investing as about the auction project itself.
- By Wednesday, the sum raised stood at $27 million, with 7,600 ETH addresses contributing. As Thurman wrote in a followup piece, the contributors were not so much buying a share in the artifact but tokens, dubbed $PEOPLE, that allowed them to vote on what the DAO would do with its acquisition. There seemed to be speculation that this governance token could rise in value in the future.
- For all the excitement, ConstitutionDAO failed. Even though its tally topped $40 million by the time of the auction on Thursday, it turned out to be insufficient. The winning (anonymous) bid came in at $43.17 million, as reported by Danny Nelson and Eli Tan. It's worth speculating whether that buyer was motivated to stop whatever unpredictable action the ConstitutionDAO might take with this historical and culturally important document. (There was talk that the group might publicly burn the document and make an NFT out of the video, as the owners of a Banksy piece recently did.) One lesson: The public nature of a DAO's funding is unhelpful in an anonymous auction because a competing bidder knows exactly how far the DAO can go before running out of money.
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