When you say cryptocurrencies, blockchain and NFTs, a layperson may think about the immediate crazy high gains that people saw when first jumping on the bandwagon. These terms might be strongly associated with the investment hype, but now that crypto is entering another bear market, people are gradually seeing and appreciating blockchain technology for what it really is, and how it can help our economy and society.
Beyond the hype, more enterprises are now adopting Web3 and blockchain tech in their organization, seeing its benefits and utility as a way to advance the way they do business. The current crypto bear market helps the public readjust their focus towards companies building a strong foundation for Web3 instead of capitalizing on the latest trend. Given the current landscape, there are true drivers of success in the Web3 market that organizations need to watch out for in 2022 and beyond to help them be a part of a developed and technologically-advanced world.
Some of the major companies such as Microsoft, PayPal, Starbucks and Whole Foods have adopted cryptocurrencies such as Bitcoin and Ethereum as a new payment method. This trajectory is expected to continue until crypto is recognized as one of the most common and the most convenient payment methods.
Cryptocurrency, especially Bitcoin, might also be a better holder of value than fiat or national currencies. This is because of Bitcoin’s inherent nature to limit its production or supply over time, making it less inflationary than our regular cash and coins.
While money is being printed all the time and deflates its value over time, Bitcoin grows more valuable with the supply tightening, attracting people to turn to Bitcoin or other cryptos to store value and use it in their everyday lives.
While the downtrend in the crypto market weeds out unstable decentralized finance (DeFi) firms, the surviving DeFi companies built on strong and stable foundations can help augment the economy, especially the areas of business and finance. For instance, DeFi companies can help with the proliferation of new businesses and organizations by providing banking, low-cost loans and other financial services.
DeFi firms can also improve competition by offering a direct and decentralized way to bank compared to traditional banking’s inefficiencies. These firms can also enter into partnerships and encourage other partnerships to create and empower new organizations, projects and other offerings. They will foster innovation and bring forth benefits of decentralization such as transparency, automation, democratization and many others.
These factors point to a probable recession on the horizon, which dampens consumer sentiment and slows the economy even more. As currencies around the world weaken and the cost of transferring money overseas gets pricey, developing countries – especially countries bombarded with challenges to their domestic financial systems – have adopted cryptocurrencies to fight devaluation of their money, as well as use it for remittances.
Developing countries like Nigeria, Vietnam and the Philippines have led the global mass adoption of cryptocurrencies, exploring crypto as a way to do cross-border remittances. Blockchain and cryptocurrencies have the potential to revolutionize the remittances sector, as it enables people to do direct money transfers internationally without waiting for days and needing to pay for high fees and middlemen.
Once upon a time, NFTs and meme tokens sold for millions of dollars. That was only one year ago, but is not the case now. As we face a sluggish crypto and NFT market, we also see an increased trend of NFTs that hold real-world value aside from its inherent scarcity value.
The most valuable form of NFTs, which is expected to drive the NFT market moving forward, are utility NFTs and social tokens. The art community was one of the first adopters of NFT, giving it a physical value. From there, utility NFTs and social tokens have sprung and provided additional value that a normal person can recognize and appreciate. Social tokens exhibit social status as they are tokens created, bought, held and displayed by top artists, celebrities, and the wealthy.
Being in a market that is driven by perceived social status, social tokens take stage and are seen as the luxury goods of NFT. (Not to mention the recent rise of “chief vibes officers” to keep ‘vibes’ or social sentiment positive surrounding previously issued NFTs.) NFTs with equivalent physical value, uses or benefits are utility NFTs, and they continue to gain traction despite the market slowdown. Applications of utility NFTs can be seen in gaming (in-game assets, rewards), fashion and art (receiving a duplicate physical product of the NFT), and other experiences (early access to other products, VIP experiences, free products and services etc).
Other innovative uses are seen in tracking and authentication of high-end products, real estate fractional buying, borrowing money using NFTs as collateral, and many others. As more companies enter Web3 and create more utility NFTs and social tokens, the NFT market refocuses on value beyond scarcity and how NFTs can improve our everyday lives.
The next stage for big tech companies such as Meta (Facebook), Microsoft, Apple and Google is metaverse, which uses virtual reality and augmented reality (VR/AR). These tech behemoths believe that the future of the internet is in virtual worlds and enhanced physical reality, and are currently building their own metaverses that combine virtual spaces of work, socials, gaming and entertainment into one or more – possibly interconnected – virtual worlds.
Other enterprises complement these major metaverse plans by creating virtual assets dedicated to these metaverses, such as avatar wearables, virtual land parcels, digital outlets and products, virtual ads and billboards, and many more. As these metaverses come into completion in the next few years, we will likely see the convergence of the digital and physical, and from there, we can imagine the infinite possibilities that this technology can bring. Sci-fi concepts won’t be fiction anymore.
Web3 is a relatively new space, and we are just starting to realize the potential of the blockchain technology and how it can advance our society. While making an impact in commerce and enterprises one step at a time, Web3 and blockchain have yet to see wide application in government, domestic and international trade, as well as in more organizations that push for causes and advocacies to better our communities. Organizations embracing blockchain technology can lead to achieving real-world integration and reap the benefits that it can offer.
As we get deeper into the crypto bear market, blockchain is veering away from just being a shiny space for investment, and is now heading towards providing critical benefits and utility for a technologically advanced future. If your company is interested in adopting a strong Web3 and blockchain foundation that can advance the way you do business, reach out to Gigster now. Do away with the hassle trial-and-error of entering Web3 and set yourself up for success through Gigster. We will educate your organization about the ins and outs of Web3, and also help you easily and successfully build and launch your first Web3 project. Gigster is ready. Are you ready?