The Physical and Digital World Are Merging
The way we discover and purchase goods and services has changed over the years. In the past, we would do this through physical means, such as going to a store or booking a service. With the advent of the internet, e-commerce platforms began to emerge and compete with the offline world. Shopping online typically involves browsing a website and seeing a 2D interface with listings of products, information, and prices.
Covid-19 has changed many aspects of our world. Physical stores have closed, and e-commerce platforms are now the only way to purchase products and get them delivered. Our social interactions are now limited to telecommunication and social media platforms.
Because of the COVID pandemic, many people have had to switch to working remotely. This has changed how companies operate, as employees are now relying on Zoom calls and Teams meetings to communicate. The pandemic has also had a negative impact on the entertainment industry, as concert tours and sports tournaments have been cancelled. Even the manufacturing industry has been affected, with plants shutting down and workers being laid off.
All of this has to do with the metaverse and NFTs. The world has changed a lot, and we need to find alternative solutions that will allow us to keep our daily lives running without making compromises. We need to explore how we can use digital assets in our economy, so that in extreme situations like a pandemic the world does not come to a stand-still suddenly.
The metaverse is an imagined future in which companies explore extended reality experiences in order to create opportunities for consumers to interact with businesses and brands. This environment has the potential to transform entire industries.
Non-fungible tokens (NFTs) have the potential to act as the fuel for a decentralized metaverse. NFTs, which are based on blockchain technology, would allow everyone to own a piece of the Internet—unlike in the more centralized metaverse experiences such as Fortnite/Minecraft/Roblox. In addition, NFTs could extend a consumer’s identity and unlock experiences beyond our current imagination.
The metaverse is becoming more common, and we’re helping our clients’ brands keep up with this change by expanding their presence to include the metaverse. So far, mostly FMCG and luxury brands have been incorporating a Direct-to-Avatar or NFT strategy, but we expect the next wave of adoption to come from B2B brands through what we call “The Corporate Metaverse.”
The Corporate Metaverse is a term used to describe virtual environments that are owned and operated by a company. These environments can be used for a variety of purposes, such as virtual production, cross-office collaboration, or sales support.
As any asset gains more recognition and importance in society, its value becomes more about expressing the owner’s identity than just being a transactional item. Its value comes from the community not only seeing it as a valuable product, but also as something that is connected to a valuable person. This is true for physical possessions, and it is also true for NFTs. However, NFTs will only become widely accepted if they are adopted by a broad range of people.
NFT creators and owners don’t just want other people to enjoy their products and property, they want as many other people as possible to enjoy and contribute to them. They want their possessions to be known, used, loved, and, increasingly, remixed. The fact that non-owners can also consume NFT content doesn’t mean that owning them isn’t valuable. It’s the opposite. For example, if an NFT is minted for a particular moment, the more that moment is appreciated, the more value the asset tied to that moment accrues. In fact, art owners have *always* benefited from public display and reproduction — because appreciation of art/media/collectibles makes them more valuable, because widespread reproductions elevate the status of the “true” and original; and because widespread dissemination educates the market. This contributes to its culture. Reproducibility is a feature, not a bug.
NFT owners need to make sure that there are good ways for other people to consume their NFTs, because this will make the NFTs more valuable and increase the chances of them being bought and sold. Good consumption experiences will also lead to new genres of NFTs, which will make the original NFTs even more valuable.
The user experience for non-fungible tokens (NFTs) art and collectibles is not great. Marketplaces, social posts, data-driven transaction ranking sites, and crypto-wallets are the main ways to interact with NFTs. These platforms are focused on buyers or collectors and investors and are not designed for enjoyment. We need more museum-like environments for NFTs.
Do not take the analogy too literally. Some people have tried to build three-dimensional museums and galleries in the virtual world, which is impressive. However, unless you are really interested in VR, you probably haven’t been invited to or enjoyed the experience. These virtual spaces are difficult to move around in, too similar to the real world, and don’t do the main thing that an NFT consumption app should do: connect users to the media they are most likely to enjoy quickly.
What should the experiences with NFTs be like? They should be integrated into the experiences we currently use for exploring and consuming media on phones and other screens, where each application will have a different way of showcasing NFTs to consumers based on its purpose. For example, if it was a player for NFT songs, it might let you listen or navigate by genre or most popular.
There are some key differences between the consumption of NFTs and the needs of those who own them. The first is that the owners of digital assets should be recognized. By placing the owner in a position of prominence on the user interface, we make them an important part of the creation story. This increases the value of ownership, which in turn allows artists to charge more. We have traditionally lionized labels and studios, and by extension the oligarchy of huge corporations that own them. But with NFTs, we can instead salute the smaller, entrepreneurial collector. And not just the current owner, but the first owner—the one who took the initial risk to invest. It makes sense to be able to see what else they own, or have owned in the past, and to be able to enjoy that as well. Of course, owners might not necessarily be individuals.This can change the way media companies and platforms structure their relationships with both creators and consumers, providing the value proposition of “ownership”. In this way, a DAO’s current and past media ownership functions both as a playlist and a sort of index fund.
A key difference between NFTs and other digital assets is the importance of being able to link to transaction opportunities for the NFT. For example, someone who owns an NFT for a comedy routine ticket might want to be able to bid on or buy an NFT that is a collectible for the comedian’s upcoming show. This need not interfere with the user’s experience with the NFT. The app can be designed for users who do not own the NFT, but who still want to be able to buy and collect them. Another difference is that owners of NFTs are likely to want to promote their NFTs more prominently, similar to how a featured post is promoted on social media. Instead of paying the app for this promotional space, the owner could “stake” the NFT, which would contribute to the app’s revenue.
The flexible nature of the NFT standard and the unbroken connection to the creator means that the consumption experience could offer features that today’s media apps don’t. For example, a song could come with lyrics supplied by the creator, visual art could reveal its underlying layers, and a dance routine could include a tutorial. Works could also change over time, since they are programmable entities that can respond to external stimulus or the presence of other NFTs. Additionally, assets that are part of a multi-artist collection could link to the rest of the collection, or to other items with similar attributes. Finally, consumption experiences could be inspired by gaming concepts. NFTs could ‘compete’ against each other in contests and tournaments, with prizes and promotion going back to the owners and creators.Revenue from digital purchases at venues might increase when people start gathering in-person again.
Some app developers will store user data on their own servers, in order to take advantage of the benefits that come with it. However, this could create a problem in the future if one app becomes so dominant that it is able to control the NFT ownership economy.The widespread adoption of decentralized identity systems is probably the best way of ensuring a competitive landscape in which artists and collectors get the best deal.
The question of whether data-hoarding giants will adopt NFTs or not is secondary to the question of whether the new incentives of ownership have forever changed the equation. Do creators and owners, having tasted the fruits of independence, refuse to accept the ‘bad old’ deal?Are all of us intentionally choosing the media platforms that will do the most to support widespread creative productivity? If we are, then it won’t matter which platform – Instagram, Tiktok, or Spotify – becomes the most popular way to consume NFT content. Because, to achieve that popularity, those platforms will have to adopt a culture where artists and collectors have control. Nothing is inevitable.
The NFT market is exploding as more people speculate on the potential for decentralized creation and distribution. Consumers are adopting the technology as they realize that NFTs are proof of passion, digitized tokens that confer status. However, the market is still underdeveloped and if NFTs crash, it will be because we have yet to figure out how to use and enjoy them.There is an opportunity to build a more equitable future by avoiding the centralized challenges of our current consumption and creation stacks. But we have to choose to build it that way.
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