To learn more about Blockchain, Cryptocurrencies, NFTs and Web 3, how they are intertwined, and strategies to utilize these technologies for opportunities, read IDC’s new eBook, Blockchain, Crypto, NFTs, and Web3.
Web3 is no longer a hypothetical evolution of the current Web2.0, it is already taking shape and becoming reality as you read this. IDC defines Web3 as a collection of open technologies and protocols, including Blockchain (as Crypto and NFTs), that support the natively trusted use of decentralized data, knowledge, and value. In other words: Web3 will be built on a foundation of Crypto and NFTs, to equitably exchange value—both as currency and as content—between the creators of that content, the platforms which will host that content, and the end consumers of that content.
But what do we mean by “content”? Today, “content” is more than just someone’s cat pictures and cooking videos. In IDC’s definition, content is any and all data being shared from one entity to another: this can include cat pictures (which as we all know is the bedrock of social media), third party apps (such as games, i.e., what the original FarmVille had been), videos, music, stories, update posts, and similar. But it is also much, much more: data which is captured by content platforms every time a user watches a video, or “likes” a post, or spends a few seconds longer lingering on particular images, can be classified as content, as that user’s input, however minute, directly impacts the algorithms which determine what content will be shown more (or less) to other users with similar profiles.
All of this data has value from a business intelligence perspective, and therefore also monetary value, as this data, in Web3, will be more easily captured, stored, sorted, and repackaged as a marketable product, by utilizing NFTs (Non-Fungible Token). A single user’s entire Web history can be captured and stored, securely, on an NFT—a sort of long-term file of every uploaded picture, video, message, comment, click, like, view, and more—while on various pages and content platforms on the Web. In the ideal, utopian vision of Web3, that individual user would have total command and control over that data, stored in their NFT.
Related Reading: NFTs for the Metaverse and Web3: More than Just Digital Art
What is revolutionary is that through the use of NFTs, all this data and content can now be accurately and equitably tracked. The user actually creating content—whether it is a single person “liking” an image or a third-party app developer creating a game—can track and own their content, on an NFT. Now, if that content can be tracked, it means it can be purposefully exchanged for value. That value can range from a monetary renumeration (i.e., pay $4.99 a month to play the game, or pay $0.0001 for every “click” on social media platform) or access to benefits or perks (i.e., receive permission to access some of the user data from users playing your game, or gain access to VIP social media groups if you spend enough time engaging with posts, etc.). The critical factor is that by tracking all this in a secure, immutable, traceable, and unique record—an NFT—businesses can now offer to exchange value for that content and data.
THE DATA MARKETPLACE
Now that a business, such as a social media/content platform, can offer users monetary compensation (or special rights or access) in exchange for the right to use some, or all, of their content and data, it becomes much more appealing for users to willingly share their content and data. With an increase in user data, willingly shared by users, social media/content platforms can now repackage that data, and sell it on data marketplaces.
For example: A large fashion designer (i.e., LVMH) is planning their Spring catalogue for next year. They would like to know what are the hot trends that their target demographic are talking about or looking at this summer. So they go to a data marketplace, and place an open offer to buy a data set outlining what images or videos their target demographic have viewed. Let us say: people between the age of 22-30, living in major metropolitan areas (10+ million urban population), in the countries in which this fashion designer has stores, who viewed videos or pictures of clothing, during the summer months. The data, being packaged and sold (with permission of the users creating that data) in the data marketplace by either a social media platform (i.e., Facebook/Meta), a video content platform (i.e., TikTok or YouTube), or picture content platform (i.e., Instagram), can be priced fairly (with bid / ask pricing) and purchased by the fashion designer. Now, the data may bear out that videos and images featuring purple polka-dots get the most likes and views, and is trending higher and higher through the summer—leading them design a new product line for their spring catalogue with the soon to be hottest fashion of purple polka-dots.
CHANGING THE WAY BUSINESSES DO BUSINESS
In the above scenario, every participant is equitably compensated for their contribution, however small it may be (i.e., a “click” or “like” on an image), through the entire value creation process. The user has retained the right to sell their data/content, the platform company is being compensated for providing the content hosting platform and gathering and packaging the data, and the buyer of the data set (here, the fashion designer) is gaining value from having the most accurate and insightful data available to plan their business strategy. The foundational technology that allows for this accurate, secure, immutable, traceable, and unique record—and the ability to assign equitable value and compensation—is the NFT, and the underlying technology of the blockchain. Additionally, the rise in use of NFTs will coincide with the rise in use of cryptocurrencies. Forgive the pun, but NFTs are essentially the “other side of the coin” of cryptocurrencies. Cryptocurrencies permit the decentralized and secure exchange of digital value, whereas NFTs permit the decentralized and secure exchange of digital content.
Related Reading: Retail Applications of Cryptocurrency
Expect to see a rapid rise in the use of NFTs (beyond the hype of NFT art, which is an interesting proof of concept use case for NFTs), as businesses realize that any digital information—from cat pictures to music to pharmaceutical drug formulations—can be securely recorded and exchanged on an NFT. As NFTs rise, thus will cryptocurrencies, as the logical (and easier to use) exchange of digital value for digital content. To learn more about Blockchain, Cryptocurrencies, NFTs and Web 3, how they are intertwined, and strategies to utilize these technologies for opportunities, read IDC’s new eBook, Blockchain, Crypto, NFTs, and Web3. Click the button below to download the free eBook.