The burgeoning growth of Web.3, with its decentralised Blockchain, NFT (Non-Fungible Tokens), Metaverse, and XR (Extended Reality) organs, promises an evolutionary leap in terms of how businesses function, and more broadly, how people live. Much like how the internet was in the nineties, and social media and smartphones were in the late-noughties, Web.3 is to be the new thing to dominate day-to-day life, and culture.
Now, unless someone is touched by the prophetic fire of a life in emerging technology, they will struggle to make sense of how to prepare and incorporate Web.3 into their business and financial practices.
Kirck Allen, the CEO and Founder of Kaloscope, a “social media metaverse platform” that utilises NFTs, XR, and cryptocurrency, breaks down the likely future of Web.3 and its significance to the business world.
Not all NFTs are equal
Almost anything can be turned into an NFT: art, games, music, virtual fashion/avatars/skins, domain names, collectables. To offer a particular example, Jack Dorsey, Twitter’s creator, sold the world’s first tweet for $2.9 million as an NFT. Better than that, as NFTs use blockchain technology, they are highly secure, easy to authenticate, easy to transfer or sell, and easy to trace. Thus, they unify a certificate of authenticity, a receipt, the history of ownership/provenance, and the asset itself.
With so many types NFT’s available, two natural questions to ask are: Are some types of NFTs more profitable than the others, and how long will an NFT remain profitable?
After all, many physical goods depreciate, or have a short shelf life — bread goes mouldy and clothing styles change. How does someone pick the right NFTs?
Allen suggests that NFTs that have what he calls “perkabilities”, which are real-world bonuses that are attached to the base asset, are the most valuable, and likely to remain useful. This is because the owner of the NFT will be entitled to real-world perks, which go beyond the digital asset.
These perkabilities function like vouchers and special passes, and are fundamentally tied to the NFT. For instance, these perks could be: discounts for products or brands; access to free journeys or accommodation, like flights or hotels; entitlement to activities and services, like a spa day; or financial royalties that come from ownership.
So, Kirck Allen suggests, someone could own an NFT that is an artwork, but in addition to that it could give them a discount with a chain of hotels, and a backstage pass to a music festival. Further, if they were to sell or transfer the artwork, these perks would go to the new owner.
How Brick-and-Mortar Businesses Can Use Web.3
Likely to be the greatest concern, and a key reason for indirect competitors criticising the sphere of Web.3, is that traditional brick and mortar businesses fail to see how their financial models for physical products can be incorporated into this infant technology. After all, how can a virtual asset (NFT), world (Metaverse), or a clever authentication record (blockchain) help someone sell baked beans or notebooks?
Kirck Allen uses a neat three-fold explanation:
- Marketing and Advertising. The metaverse and XR can incorporate traditional billboards. Someone using a phone, or virtual headset can see a product or brand advertised in this digital sphere. It can also allow someone to see and “try” certain goods. A potential buyer could augment their living room to see how a vase would look, or see how certain clothes would look on them. Furthermore, since the metaverse and XR are crucially sensory realms, and it is reasonable to assume that these will be social realms, they place the community first. This makes it easier to establish brand loyalty, as well as carry out market research and customer feedback.
- Tracking and Authenticating Inventory. Through blockchains fast and secure authentication system, goods can be tracked with very little active input. It can reduce paper waste, cut costs – especially if businesses have outsourced this work, save time, and is likely to be more accurate. It can also establish an object’s provenance – the worth and significance of some physical assets, like art, is deeply tied to its history, previous use, and past ownership.
- Gamification and Perkabilities. XR and NFTs with perkabilities can be used for promotions, tier-based discounts, and loyalty programs. These NFTs can also act as collectibles that are tied to physical goods, or the brand as a whole. This means they can be used for social boasting, the fun of collecting, and creating deeper relationships and engagment with a brand and . In this way they can perform a function similar to merchandise.
Technology As Ever Leads The Way
Allen suggests that rather than solely buying up a lot of NFTs, investing into emerging technology is also prudent.
After all, there are companies dedicated to exploring the potential of XR. These may be developing tech that makes the virtual world more immersive, incorporating additional senses, such as touch and smell, or perhaps incorporating digital assets into the physical world as with occlusion technology.
Other companies, meanwhile, are looking to make blockchain more energy efficient and environmentally sustainable. Ethereum led the shift from the inefficient Proof-of-Work blockchain solution, to the equally secure but efficient Proof-of-Stake. These technologies are only going to get more powerful, more efficient, and more intuitive.
Allen also emphasises that smartphones already have AR features – take apps, like Snapchat, that use face filters, which map a digital object to a physical object – so this is far from the world of tomorrow. On the contrary, much of this foundational tech is taken for granted today.
The Future of Business and Fintech
The opportunity to solve problems and ease of use will dictate the future of Web.3 on Business and daily-life. If the tech is ergonomic and powerful, it’ll take hold. To some it is even conceivable that these digital worlds may be more natural and intuitive to us than the actual world.
Blending decentralised digital products, currency and combining social interaction in the form of digital avatars, whilst utilising real-world rewards, seems fun, simple and appealing — and that’s the biggest asset of Web.3. The metaverse employs the convenience of digital communication, whilst playing off sense-based in-person interactions, and that’s what businesses in particular brick and mortars, need to recognise.