Following on from Issue 43, Web3 Growing Pains, I want to talk about areas of growth within the industry. The Crypto market as a whole is a still kind of a niche market and anyone who wants NFT's to grow needs Crypto as a whole to grow and more adoption of blockchain technology. There aren't long enough to do anything than summarise some of my thoughts and you know how I love sharing them.
There are 2 main reasons that I believe the technology behind the blockchain and NFT's will catch on. The first is that the blockchain as a whole is an immutable ledger. Every transaction is visible to anyone who wants to see it. The second is that NFT's are unique identifiers that can carry anything, attached to an end user. The overriding thing for me is that both promote accountability and individual responsibility.
An immutable ledger is what so many people want, even if they don't realise that is what they are asking for. The ability to see every transaction is both a little daunting and a little exciting. It's the anonymity aspects that are most intriguing. If there is an insistence for anonymity then this space doesn't progress as quickly as I believe it can. There is a fine line between digital ID's and government enforced digital ID's, but that (and CBDC's) are for another time.
If you've been following me for a while, you probably know why I believe end user ownership is important now and why I think it will become even more important. To summarise though, I think with the progression of blockchain technology, AI and the moving attitudes/feelings towards corporations, more and more people will want ownership and clarity over their things, digitally or physically. And this includes work and jobs. Content creation is only ever going to grow and owning that content will be important.
When humans were an agricultural society, we ran on credit and debit. People borrowed their seeds and then gave some of their yield to the people that provided them with seeds. It was also a way to barter if you only grew one thing. The term yield doesn't start 7000 years ago, it came about in the middle ages. My point is that humans don't know another way of handling money. In todays society it is no different.
Car finance, credit cards, mortgages and loans are all personal credit. Money is borrowed to buy a thing and then paid back over time. It's the only way some big purchases are possible for the vast majority of people. This is also true of companies and governments. Most world governments are in debt to the tune of their GDP (if not more). To clarify, most countries owe more money than their whole economy can produce in output in a year.
How do governments deal with this huge amount of debt. In a variety of ways but quantitative easing is one way. This is where the central banks and/or governments effectively print money to stimulate their economies. This has a multitude of impacts and I don't have enough room to explain them all today, and you will need more knowledge than I can offer to understand it fully. The main point is it means the supply of a currency can be increased and that can destabilise a lot of things economically inside a country.
Fractionalised banking just adds fuel to this debt fire. Banks only need to keep a small percentage of deposits in hand, to pay people that want to withdraw their money. This has been approved by most governments and is the current way of banking. That means banks can lend a huge sum of their deposits to make an income. This can be via investments, stocks, bonds, loans, mortgages or other forms of credit.
There are so many reasons for DeFi and Crypto, but regarding my points above. The token is bought, earned or mined and you know how that works before you pay for it, put in the work or the power. You know if the 'currency' you are buying is inflationary or not. You are in control of your funds. If they are in your wallet, they are not being lent out without your permission. There are quite a few assumptions in those statements, but when you add in the immutable ledger aspects I think they are fair. If not today, they will be over time.
The most important aspect of the Web3 space is the ownership. NFT's are about unique end user ownership and the benefits that can come with that. At least for me. You, as an end user, own whatever it is that is attached to the NFT. This is immutable and stored on the blockchain. You can attach anything you can think of too an NFT, as long as it has the data storage for it, including physical items. If it doesn't have the data storage required, then it can be a membership token to a place that does have that data storage.
This is an opportunity for consumers to really understand the products they are buying and what rights they have as a user of that product. The Intellectual Property aspects of art and brands is fascinating to explore, the potential is ridiculous and each artist or brand gets to clearly define what their buyers, collectors or end users get as part of their purchase. All terms and conditions can be wrapped into the NFT. This is an opportunity for businesses and customers to do transactions differently.
Without going into all the potential use cases for NFT's, there are a lot, I want to cover two. I think they are big. The first one is ticketing, for concerts etc. Imagine if Ticketmaster was taken out of the game. The artist and venue would be in full control of any resales (they could limit to a max of 25% above purchase price and one sale for example) and both have the potential to earn royalties from those sales. Digital tickets have been a thing for a while.
And data, my big one. When we browse on the blockchain, rather than on Bing or Google, we will be able to attach our data to an NFT. Then as a group, based on our demographics, we will be able to sell our data. Either to companies wanting to build AI language models, do market research or to the blockchain so our wallets can be hit with targeted adverts. Even if we don't drive individual income, we are our own date controllers.
Web3 gaming will be huge. It just will. Will the gamers know it is Web3? Time will tell. One thing I do know is that our industry needs to stop telling Web2 gamers they need to change and that they are gaming wrong. If someone told you everything you are doing is wrong, or sucks, would you want to hang with that person, try out their tech? Probably not.
There are a few problems to overcome before the traditional gamer will buy in to games here. Confirming transactions is one of the biggest things. On-Chain gaming needs to figure that out. A lot of the UI/UX is still incredibly clunky and not smooth to navigate. A lot of games aren't games as such, there is no user input that determines the outcome, or no live gameplay for the end user. The gaming demand isn't there to drive development in terms of playability.
There problems aren't insurmountable and people making games in the Web3 world need to focus on a few things. Remove the need to continuously sign transactions and that could be through a custodial wallet or a portal log in. Keep the user experience fun and simple (there are 100's of games to look at for inspiration and ideas). Reward people in a fun way for taking part, make this a key part of the games eco system.
These are all the start of points to be made as ever, please look into it further. The only way more people come into crypto is if we make it accessible and understandable. Show the benefits without telling people the way they do things is wrong or idiotic.
It's been fairly heavy today, I appreciate that, it's why I shared more images than usual. As ever I welcome your opinion and thoughts. Welcoming other perspectives is one of the ways I grow. Thank you for your company and time, I will catch you next Friday!
If you got this far and you haven't subscribed to my #BlogCast on Spotify, then you can listen to the latest episode (last weeks Blog) and subscribe here!