Unless you have been hiding under a rock for the past year then chances are you have heard the terms Cryptocurrency, NFT’s, and most recently the Metaverse. Whilst you may feel like these things won’t impact you or your eCommerce business, I am here to shed some light on the potential opportunities that lay ahead in all of these spaces.
This post isn’t going to dive too deep into defining the different terms as there are much better resources out there, by people much more qualified to explain succinctly. If you want to learn more about what Crypto, NFT’s, and The Metaverse is then please click the appropriate links for a good beginner explanation.
Now that you are up to speed let’s take a look at why you should care about these three areas and what it could mean for eCommerce globally.
#1 Crytocurrency & eCommerce
This one probably needs the least explanation and is perhaps the most obvious. The fact that Paypal has their own Checkout by Crypto option and even most recently confirmed they were experimenting with their own crypto called PayPal Coin. With many advocates for Crypto predicting that digital currency will one day replace traditional (fiat) currencies like the US dollar or British pound, it becomes obvious how Crypto and eCommerce become intrinsically linked.
What many don’t realize is that the first Cryptocurrency, Bitcoin was first used for eCommerce transactions on the now-defunct Silkroad, a marketplace for drugs and other illegal items on the dark web. The website was launched in 2011 and was shut down in 2013 by the FBI. The decentralized and anonymous nature of Bitcoin made it the perfect currency for the dark web and illegal trade. Since then Bitcoin has surged in both value and popularity with it now being the largest, most popular, and most widely accepted cryptocurrency.
This is why many believe that Amazon has partnered with Venmo to offer their checkout by Crypto services to Amazon users in the near future. Thus propelling Crypto even further into the mainstream. It certainly seems that Cryptocurrency isn’t going away anytime soon and it will become more and more normal for people to transact online using their digital wallets and cryptocurrency when buying goods and services.
#2 NFT’s and eCommerce
Once you understand the potential for Cryptocurrencies and eCommerce, the next step to take is looking at NFT’s and eCommerce. For the vast majority, NFT’s are still a grey area in understanding the reported value that are making the headlines. Right now the digital art scene is what most people are talking about when it comes to NFT’s but if that is not your industry you may still be wondering how NFT’s could apply to eCommerce.
The wider application of NFT’s has a huge amount of potential from verifying ownership digitally to also ensuring authenticity with certain products. This could become the norm for luxury, high ticket, or commonly counterfeited products. Nike filed a patent back in 2019 for something they have called CryptoKicks. The purpose is that whenever a genuine pair of sneakers was purchased the buyer would also receive an NFT of their sneaker with a unique identifier stored on the Ethereum blockchain. This identifier would make it much harder for people to counterfeit Nike sneakers as without the NFT it would appear to be a fake. This would greatly impact the second-hand and shoe collector market.
The other main feature of NFT’s in eCommerce would be to create communities with people who have something in common. This is one of the key drivers behind the famous Bored Ape Yacht Club NFT project where ownership of a digital ape artwork grants you access to a community of other bored ape owners. With owners such as Shaquille O’Neal, Stephen Curry, Gary Vaynerchuk and Eminem it’s easy to see how membership to this virtual club could come at a price.
In speculation mode, I think over the coming years we will see luxury brands tap into this community nature of NFT’s with their own digital versions of real-life products, especially in the Metaverse. The likes of Gucci, Supreme, and more could utilize the power of NFT’s in all of the ways mentioned above to boost their eCommerce and online presence. The question is…how can you do something similar with your business?
#3 The Metaverse & eCommerce
The third, final, and perhaps most obscure one on the list is The Metaverse. This one only really hit the mainstream properly a few months ago off the back of Facebook’s big rebrand to Meta. The truth is, there isn’t a one size fits all ‘Metaverse’ but instead it is a representation of a world that is accessible online.
Whilst The Metaverse might be a new name, the concept isn’t new at all. In fact, some may remember the online website second life where users could create an avatar and live their virtual life. Interestingly enough eBay founder Pierre Omidyar was a famous resident of Second Life back in 2014.
What is different now though is how much more connected the world is through eCommerce and purchasing digital items. After the pandemic year, many people were locked inside and were used to doing all of their social interaction through things like Zoom…which has set the stall for a Metaverse push.
The Metaverse, as ridiculous as it may seem, does hold a lot of opportunities for eCommerce businesses. As it is expected that more and more people will flock to the virtual worlds, so will the demand for individualization. Adidas has already seen the opportunity and started getting involved in the NFT and Metaverse space, knowing that avatars will of course look better in their Adidas branded pixels.
The next big opportunity in the Metaverse is real estate. Back in December 2021, someone paid $450,000 for virtual land next door to Snoop Dogg so they could be neighbors in the Sandbox Metaverse. Owning virtual land in the Metaverse brings with it a lot of opportunities, for people to host virtual concerts and events that could be pay to enter. Also, virtual storefronts could be set up where exclusive virtual products could be sold for fellow members of your Metaverse.
Whether you like it or not, all of these things are likely here to stay…they have significant funding, and most importantly significant attention from high-profile people. This means that there is an interesting business opportunity for the right entrepreneurs to learn the rules of the new games and carve out their own niche. What will you do?
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