Over the past few years, the words ‘blockchain,’ ‘cryptocurrency,’ ‘NFTs,’ and ‘metaverse’ have become as present as spring pollen, and for many people, as mysterious and irritating. Tech evangelists promise boundless wealth and opportunity in these spaces… platforms… or assets (what are these things?). Yet, like flying cars and virtual reality, exciting promises seem easy to make and hard to deliver. So, what is the promise of these industries, are they viable, and if so, what should you do about it?
Innovative spaces and developments have always been met with practical trepidation. We’ve seen enough ‘flash in the pan’ developments and innovations rise and fall to temper runaway notions of overnight success or sustainability. Theranos, Google Glasses, Moviepass come to mind, and recent months have seen wild turbulence in the crypto and NFT markets. Furthermore, new products and options initially come across with awkwardness and a sense of weirdness or ‘ickiness.’ Society is certainly normalized to dating apps now, but in the early 2000s, online dating was perceived as dangerous and shameful. Add in all the scams, lies, and misinformation of the era, and it absolutely makes sense that the average investor is dubious of this entire space.
We remember advice like “don’t get in cars with strangers” and “don’t put your credit card number on the internet.” But today, over 93 million people use Uber, and in 2021, 2.14 billion people around the world shopped online (and predominantly, they did that with credit cards). When new spaces are developed, they may begin with semi-lawlessness, exploitation, and/or misrepresentation, before transitioning into tools, platforms, and resources that are irremovable from our way of life and economy.
Blockchain. Cryptocurrency. NFTs. Metaverse.
They will follow the same trajectory.
From unclear origins and with unclear functions, these are the core components of what is called “web 3.0” (the emergent de-centralized, more open internet), poised to be an economic juggernaut. There have been scams, deceptions, and ‘flashes in the pan’ in the infant stages of this space, but as we’ve seen, that is typical in an emerging sector. As technological and material thresholds are crossed over, the scale of what’s possible here will become more apparent and undeniable.
In the same way, you don’t need to understand the mechanics of how your wi-fi works, you don’t need to understand the mechanics of these terms; but you do need to understand what they are, how they work together, and how they are different:
How do these four buzzwords fit together if at all? NFTs use blockchain technology to store and protect the data included in the NFT. Cryptocurrency is also enabled by blockchain. Interestingly, most NFTs are purchased in cryptocurrency, but they don’t need to be. The Metaverse will rely heavily on the financial mechanisms of blockchain and NFTs to power sales and ensure creators are fairly compensated for their works.
We can’t know yet how these innovations will affect the average person. Currently, a handful of factors hold back this space from being the ‘promised land’ it’s being hailed as. Internet speed, blockchain capacity, supporting infrastructure, and hardware requirements are a few of the technical hurdles to be overcome. Safety protocols and governance need to be developed for safety. And of course, more content is needed to inflate this space to its full potential.
As these issues are addressed and resolved, look for the next gold rush to ignite. When it happens, it will happen fast. Keep an eye on this developing sector, educate yourself on it, and be ready to jump in as the possibilities become (virtual) reality.