Web3 Means Business
Web3 is the next evolution of the internet with a promise of transparency and decentralization. It creates a more secure and private place for users to conduct business. The internet is evolving, first, from Web1, where users searched for answers but couldn’t create or interact with content. And then to Web2, where users create content and share info, but they don’t control their data; big corporates do. And now, Web3 promises to shift that control back to the users and provide more transparency through distributed ledgers. The technology behind it is called the blockchain.
In theory, blockchain technology has the power to disrupt the way business is done today, potentially eliminating the need for many 3rd party services. Further, it offers new ways to generate revenue. Many popular brands are already embracing Web3 and setting the bar for the competition. There are many entry points into Web3, some easier than others to get started. From easiest to more complex, these options include investing in digital assets, accepting crypto as payment, minting an NFT (non-fungible token), and setting up shop in the Metaverse.
Investing in Digital Assets
The simplest way to enter Web3 is to invest in digital assets. Bitcoin and Ethereum are the two most known digital assets. Companies like MicroStrategy are quite bullish on their investments with these alternative assets. Before investing, a business’s board and leadership team need to understand the risks associated with each alternative asset and agree upon their risk tolerance. This is critical, especially as regulation of this area continues to evolve. Companies can custody assets directly through an exchange or use a third party that helps eliminate some of the complexity. On the other hand, not all exchanges are equal, as we saw earlier this year. It is critical that before investing, a business should understand how the assets and exchanges work, as many are not regulated. There are a lot of risks associated with investing in these assets.
Accepting Crypto Payments
If using a third party, the next way to engage in Web3 is to accept crypto as payment. Consumer-facing brands are leading the way. Popular brands such as Microsoft, Overstock, Whole Foods, Starbucks, Home Depot, AT&T, and the Dallas Mavericks accept crypto payments for goods and services. Most are using a third-party payment processing provider such as Flexa or Bitpay. This makes the process easier for brands to embrace Web3 and convert digital assets to Fiat to avoid accounting and tax complications.
Minting an NFT
An NFT is a non-fungible token designed digitally. It is a unique, one-of-a-kind item. Using blockchain technology to create the NFT gives it a unique identification code. Most people think of art when they hear NFT. But, an NFT can be anything digital. There are no rules for creating an NFT; creativity is the only limit. Digitally producing an NFT is known as minting.
Brands are minting NFTs to build brand loyalty, offering limited edition collectibles designed by well-known artists. Some brands sell them, and some offer them as contests. Either way, they are wildly popular with brand enthusiasts. It’s the rarity that makes them popular and valuable. Recent successful brand NFT projects include Hot Wheel’s NFT Garage Series which capitalized on the collectible aspects of Hot Wheels. Alternatively, Taco Bell’s taco-themed NFT loyalists bought and resold digital tacos. NFTs can be bought and sold on trading platforms like Rarible, OpenSea, and Crypto.com.
Welcome to the Metaverse
The Metaverse, is another example that is gaining a lot of momentum. It is the most resource intense to start. Businesses are setting up shops and consumers are buying into these digital spaces. Great examples are Nike which built parks and sports courts for enthusiasts to play. And, consumers can pick up new Nike gear too. Stella Artois built virtual racing tracks and you can breed and race your horse. In fact, there are limitless possibilities that brands can create to grow new audiences, drive new revenue streams, and capitalize on truly unique customer experiences.
These are just a few examples but many more ideas and projects could disrupt business quickly. Web3 is in its infancy but as with any technology, change happens quickly.
Businesses can now educate themselves on the latest and envision future possibilities. This will drive a competitive advantage or create one. Web3 means business and D2 is committed to providing education to business leaders on the evolving Web3 space. To join the D2 community, follow D2 on LinkedIn or visit www.d2.live.