For this Coffee Conversation, I sat down with Vera Schut and Bas Kemme from IntotheNXT. We talked about NFTs, Metaverse, smart contracts, blockchain and last but not least: Web3. In this blog, I will take you through the definition of the buzzwords of the digital world.
NFTs and the Metaverse are new, but nevertheless already one of the biggest changes of the last few years. The transformation from Web 2.0 to Web 3.0 (Web3) is currently underway, but how can you as a leader position your company to capitalise on the opportunities of these times? And what role do NFTs play in every future-proof company?
Let’s start with the newest version of the Internet, which will make the current web pale in comparison. Our current Internet is focused on reading and writing, but Web3 will be focused on reading, writing and owning. Where currently the power lies with large parties, such as Google and Meta, the power will shift to individual users, like you and me.
Everyone will soon be able to own an asset on the internet, with which you can add value to your daily life. Not only as a consumer, but also as an entrepreneur. When Facebook announced their name change, everyone wanted to know what the deal was. The number of searches for ‘Meta’ and ‘Metaverse’ spiked dramatically.
This brings us to the next buzz word: the Metaverse. This is a kind of virtual world, in which you have social interactions with other users, who are represented by avatars. It is so much more immersive than current virtual worlds, as it is a space in which you can move around. Working from home, we now watch other users through our screen, but you are not really a part of their setting. The Metaverse makes sure that you are really part of the other user’s world. Finding and making contact is so much easier than we are used to now.
Children of this generation are already familiar with buying skins. They no longer pay with fiat money, such as the US dollar or the euro, but with tokens. The sword they buy in one world of game A, they can also use in another world within environment B. This is the interoperability that is essential for the further development of Web3 and the Metaverse. Everything must work together and flow into each other, because all the different worlds form one whole.
The technology behind NFTs allows you to own an asset in a decentralised world. In the physical world, you have your accountant check something at the end of the calendar year and then you can publish the figures. With Web3 and blockchain, everything works in a decentralised way, so you actually have thousands of digital accountants at work. We call these auditors validators, who check each transaction and add it to a block. When a block is full, it is added to the chain of blocks: the blockchain. It’s not possible to tamper with it, as the information is protected thanks to cryptography.
A non-fungible token is irreplaceable and unique. A token is an established asset, a digital contract. The best-known NFTs are perhaps the cartoon-like monkeys, but they can be so much more. For example, buying an NFT can give you access to a particular club or community. It is a technology that is scarce, unique and programmable. Adidas, for example, sells NFTs that give you a discount on physical products. If an artist sells a piece of art as an NFT, he gets a sum of money the first time, but all subsequent transactions receive a piece of commission. All elements are programmable, which brings us to the last term: smart contracts.
So, what is the relationship between NFTs and a smart contract? A non-fungible token is a smart contract, but the reverse is not true. In such a smart contract, you record cause and effect, to which you can add all kinds of conditions. You can automate outcomes and situations, just as you would write an automatic formula in Excel. An example:
- If a wholesaler buys X quantities of product I and they pay within Y days, the height of the invoice should be A
- If they do not pay within the period specified in Y, then the amount of the invoice will change to B
Here’s how you can prepare for Web3 as a business leader
- Gather experienced experts around you
- Legal & Finance is still lagging behind, so do your own research or find CFOs who are crypto natives
- Get involved in communities to share experiences and learn from others
- Look to sectors that have already taken the step, such as art & culture, gaming, fashion & entertainment
Want to know more about the opportunities and possibilities that NFTs and smart contracts could bring to your business? Watch our webinar that covers applications that are already being used. Alternatively, listen to the podcast on Spotify.