Study: Only 16% of people understand what the metaverse is
According to Meta, the metaverse is the next evolution of social connection
That sounds lovely, but what does that mean exactly?
Others say the metaverse will be the new front end of the internet featuring digital spaces and experiences.
Again…super exciting. But how do consumers feel about all of this? Are they excited? Horrified? Do they find value in owning virtual goods?
In May 2022, we set out to find out by conducting a survey of nearly 2,000 consumers about their feelings towards the metaverse, based on their current knowledge. The respondents ranged in age from 18 to 60 and were all located in the US.
Here are some of the highlights and how brands can leverage this data to accelerate metaverse technology acceptance and enthusiasm.
When asked if they agreed or disagreed with the statement “I understand what the metaverse is”, only 16% of people said that they agreed.
This percentage was fairly consistent across all age groups, with 18-29 year-olds performing slightly worse than their older cohorts.
Metaverse definitions are widely disputed, so it’s not surprising that users are confused, but herein lies an opportunity for education.
According to web3 expert and brand innovator, Paula Marie Kilgarriff, brands should “stay away from saying ‘the one metaverse.’ What brands are doing is using technology to create 3D virtual experiences that encourage co-creation and customisation. It’s really about augmenting, not replacing other experiences.”
By calling it a singular metaverse, your marketers and technologists are getting backed into a corner. It creates an in and an out crowd. Users might also think they need a VR headset to access the metaverse.
H&M recently created a virtual showroom (and named it just that) to leverage 3D and VR technology. This experience could be considered a metaverse, but by calling it a virtual showroom, users immediately understand what the digital offering is, and why they might join.
Despite lack of knowledge, there is plenty of curiosity
Even though most people aren’t exactly sure what the metaverse is or how it will benefit them, they would still join. Why?
41% of users said curiosity was their number one reason to participate in the metaverse. Other reasons include gaming in the metaverse or attending a digital event.
New technology is exciting, and people want to experience it firsthand, even if they don’t understand it. This fact should excite brands and digital businesses since curiosity and marketing go hand in hand.
The NBA made the smart decision early on to experiment with curiosity to deliver gamified digital collectibles. A Top Shot NFT pulls inspiration from collectible trading card games, incorporating an element of reveal by allowing fans to “rip” open a digital pack.
The contents, digital cubes that rotate to reveal the stats and footage from iconic NBA dunks, are all highly watchable. But the moments they feature can be hard to find and collect, with just 0.09% representing the “legendary” moments that have been sold for tens of thousands of dollars.
By capturing fans’ curiosity about what their pack will contain, the NBA found major success with NFTs. Within its first five months, Top Shot netted more than $370 million.
68% of users don’t see value in NFTs
NFTs are a popular way for brands to experiment within the metaverse, and companies like Coca-Cola, Taco Bell, and the NFL have successfully created and sold NFTs to their fans.
With constant news of new NFTs, it may seem like NFTs are a no-brainer for popular brands wanting to experiment with metaverse technology.
However, we found that 68% of users don’t see the value of owning an NFT. Of those that do see the value in NFTs, 38% said their reasoning was “The potential value [of an NFT] in the future.” 24% said to own a collector’s item of a favourite artist/group and 18% said to participate in an exclusive experience.
Many early NFT adopters understand the long-term value of these assets, but more education is needed for the bulk of consumers.
NFTs can have tangible value, but brands need to do a better job educating users on what exactly this value is.
NFTs have five main benefits, which include
1. Create liquidity for historically non-liquid assets.
2. Make ownership transparent and accessible.
3. Interact more meaningfully with a dedicated fanbase.
4. Create new ways to engage with digital audiences.
5. Add new digital experiences to existing goods and services.
For instance, imagine a world where your ownership of an NFT gives you the voting rights for the style of the next Nike Airforce One drop in the physical world.
However, users understand (and love) AR
While users might not understand a single “the metaverse” or the value of an NFT, they do understand components of the metaverse and how they add value to their lives.
Consider online shopping. Think with Google found that 66% of people want to use augmented reality (AR) when shopping online and that this kind of engagement can improve conversion rates.
Snap’s latest AR features transform 2D photos (such as product photography) and turn them into turnkey AR-ready assets for Snapchat AR try-on Lens experiences. The user takes a couple of steps back, the camera snaps their body, and then imposes the clothes onto the static image of the user.
Augmented reality is metaverse technology, and it’s already here and incredibly sophisticated. It’s a way of bridging real life and the digital one, bringing metaverse opportunities through mobile rather than through a headset or computer screen.
Engaging with brands in the metaverse? It’s a 50/50 split
50% of users said that they would engage with a brand in the metaverse. This number aligns with other industry standards, including Statista’s 2021 report that 45% of users do engage with brands via “liking a post from a brand”.
We followed up with the question, “What would encourage you to engage with a brand?” and the most popular themes were
– Brand affinity
– Exclusive sales/discounts
– Enhanced experiences
– To experience products before purchasing
Creating a billboard or commercial in the metaverse is one thing. Convincing fans to actively engage with you is another. To successfully do this, brands will need to create a community, offer a discernible benefit, or have an awe-worthy metaverse experience.
Surprisingly, the top perceived drawback isn’t climate-related
We asked survey-takers about negative aspects, if any, that might exist in the metaverse.
By far, the number one response was a hypothesized “disconnection from real life,” with 47% of survey takers responding as such. Following that was the potential for trolling/harassment and then misinformation potential at 19% and 17%, respectively.
Environmental issues? A mere 4% listed it as a top concern.
Even if our survey said users don’t care, we know that energy consumption issues associated with things like NFTs are a concern for brands. The good news is that blockchain technology isn’t inherently bad for the environment.
By using proof of stake instead of proof of work, the energy consumption of blockchain transactions is reduced by about 99%. Today, there are a few platforms that use this kind of validation, the major one being Algorand.
For Algorand, sustainability is a core component. As the world’s first pure proof of stake blockchain, the Algorand network is designed to minimally impact the environment.
Takeaways for brands
People might not know what the metaverse is yet, but they love the tech that drives it.
This includes virtual worlds, augmented reality (AR) via filters and cameras, and online communities. As the line between digital and physical continues to blur, these technologies are the best places to start experimenting and investing.
Approachability and education will be essential.
An average user might not understand your brand’s “metaverse experience” but they do understand a “virtual showroom.” Be clear in your naming conventions so you don’t end up confusing your users.
Create it and they will not come.
To engage with a brand, people want something in return. Sometimes monetary benefits, sometimes exclusivity, sometimes experiences. Creating a successful brand experience will require you to understand your user’s preferences and then deliver.
The research conducted by DEPT® was distributed to 1,777 users in the United States. Ages 18-68, with a 50/50 gender balance. Completed 2.5.2022.
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The impact of automation on the future of work
By Mark van Rijmenam, Author of The Organisation of Tomorrow and Step into the Metaverse
Automation has great potential for society and it is this promise that makes the future of work so incredibly exciting. In my opinion, automation is one of the three parts that will define the future of work alongside data and decentralisation. All three combined have the potential to fundamentally change society and make work better, faster, more efficient – and more humane.
Deploying automated technology
While many organisations are focusing on the low hanging fruit, such as automating call centres or using robotic processing automation, the real potential that AI and machine learning will bring over the years is when organisations start experimenting with it in the way that the big tech firms are currently doing.
In 10 years from now, we will be automating more complex, strategic tasks. Examples include self-driving cars and fully automated warehouses. We will start to see the results of connecting and automating different processes. We see the beginnings of this process already in the Tesla Gigafactory and the ‘dark factories’ of China. Currently, these fully automated systems are outliers, but we are moving in that direction.
What we can learn from the Gigafactory is that it took Tesla a very long time to achieve the level of automation that they have, but once a company has established an effective system, the benefits are enormous. Businesses can operate their factories more efficiently and effectively. At the start of the pandemic, a number of Chinese factories became dark factories which enabled them to continue to operate despite the lockdowns.
Working alongside robots
Automation will undoubtedly affect the future of how business is done. From a shareholder perspective, businesses will have to find a balance to ensure the benefits to the organisation don’t solely end up in the hands of a small group of people.
In an optimal scenario, automation can enable shorter work hours, fulfilling work and sufficient pay for ordinary workers to make a good living. For this to happen, the benefits of automation need to be shared with everyone in society.
Automation can make work more interesting by taking away a lot of mundane tasks. To take one example, it can enable call centre agents to switch mundane calls for more complex cases, which can be more challenging and interesting for employees.
Even the creative industries, such as advertising, marketing, and writing, are increasingly finding that automation has a role to play in augmenting the creative process. As an example, when writing Stepping into the Metaverse, I had about 100 interviews and around 150 surveys to complete. I was able to do these fully automated. I switched on an automated system and saw interview invites popping up on my calendar. I then used AI software to transcribe the interviews and another AI tool to summarise the articles I read. I finished the book in three months, which was only possible because of automation.
Every industry can benefit from automation. It’s about starting small and going from there. For me, automation is like Lego. The only limits to what you can build are your resources, funds and your imagination. You can literally come up with whatever you want to.
The right question is not what automation could do – because everything is possible – but what should automation do. A lot of work can be automated. The question is: do we want it to be? Overall, I’m optimistic about the potential of automation, but there are downsides to automating whatever we can, wherever we can to save and make money.
As people, we need meaning in our lives. And we need to ensure that our choices about the future make sense from a social as well as an economic perspective. This issue is going to become an increasingly interesting and relevant debate, and in that respect, automation gets right to the heart of what it means to be human.
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Are NFTs bad for the environment?
Non-fungible tokens (NFTs) are becoming more widespread as web3 technology expands. If you’re a brand with a loyal fanbase, you’re probably curious about how you can leverage NFTs. However, these tokens have a reputation for contributing to emissions and negatively impacting the environment.
This reputation has caused some backlash from consumers, one example being in the world of K-pop, where labels faced an outcry after launching NFT products.
So, are NFTs bad for the environment? Are there clean ways to mint and sell NFTs?
If you’re a brand that aligns with climate consciousness, high energy consumption is not something you can simply ignore. But does that mean you have to skip out on NFTs?
In this post, we’ll dive into NFT’s effect on the environment and whether there are alternatives.
TL;DR, are NFTs bad for the environment?
Traditional methods of minting and verifying NFTs are indeed energy-intensive. Most of today’s NFTs live on OpenSea, an Ethereum-based platform that is notorious for consuming energy. In these cases, yes, NFTs are harming the environment.
However, there are carbon-neutral blockchains on which NFT marketplaces can be built. These operate differently, with minimal energy consumption. If you leverage an NFT marketplace like this, then NFTs can easily be carbon neutral.
Some NFT terminology
Before we dive into the specifics of NFTs and their impact, it’s important to understand a few terms we’ll be throwing around.
NFT: A non-fungible token. Essentially, this proves ownership of an asset on the blockchain.
Proof of work: validation method that confirms transactions (including NFT transactions). This method requires a lot of computer processing, which consumes a lot of energy.
Proof of stake: a different validation method that uses considerably fewer validators. This method requires much less energy.
Ethereum: An open-source blockchain. Companies can use Ethereum to build digital products.
OpenSea: The largest NFT marketplace, built on Ethereum.
Traditional NFT platforms
The first major NFT platform was OpenSea, and today it represents about 60% of bought/sold NFTs. Because OpenSea was the first major platform, users flocked to it. So did brands.
OpenSea is built on the Ethereum blockchain platform, and Ethereum uses proof of work to validate transactions.
This is a bit unfortunate because NFTs are not inherently bad for the environment. Rather, proof of work is bad for the environment (there is some nuance to this of course). OpenSea (and most NFTs) just happened to be built on this platform, cascading the impact to NFTs.
Luckily, alternatives have emerged. Users and brands no longer need to rely on OpenSea and other proof of work platforms.
Eco-friendly NFT platforms
By using proof of stake instead of proof of work, the energy consumption of blockchain transactions like buying/selling NFTs is reduced by about 99%.
For any brand wanting to leverage NFTs in a sustainable way, you can do so with a proof of stake platform.
Today, there are a few platforms that use this kind of validation, the major one being Algorand.
For Algorand, sustainability is a core component. As the world’s first pure proof of stake blockchain, the Algorand network is designed to minimally impact the environment. Because it’s pure proof of stake, it requires minimal computational power or electricity. Algorand has been a leader in minimising the environmental impact of blockchain technology.
Brands can quickly build and launch their own NFT marketplace on the Algorand blockchain using the open-source project Algomart. Algomart is a carbon-negative, white-label solution that is fully customisable for brands, created by the engineering team here at DEPT®.
It’s also important to call out that Ethereum is in the process of what it calls “The Merge”, where the current Ethereum Mainnet will merge with the beacon chain proof of stake system. This will complete the transition to proof of stake for Ethereum, set to finish later this year. According to Ethereum, this will “start the era of a more sustainable, eco-friendly Ethereum.” If all goes according to plan, this should be a big step in helping brands gain more confidence in experimenting with NFTs without having to sacrifice their sustainability goals.
The bottom line is this: NFTs are not the emission-heavy technology that they’re often painted as. It wholly depends on the technology underpinning their transactions. By using carbon-neutral technology, any brand can mint, sell, and re-sell NFTs without going against their principles.
To learn more about NFTs, and levering eco-friendly tech, reach out to the web3 team at DEPT®.
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Sr. Content Marketing Manager
How to survive & thrive in Web3
Below are top takeaways from a panel conversation from the recent DEPT® event, ‘Web3: A new era for the Internet’.
To view the full discussion, scroll to the bottom of this page or watch the YouTube replay here.
Meet your panel
This panel features a discussion between Tobias Cummins, Director at DEPT®, alongside four Web3 experts:
- Paula Marie Kilgarriff, Web3.0 consultant
- Mike Charalambous, CEO of Threedium
- Stefania Barbaglio, founder at Cassiopeia Services
- Tim Walther, Metaverse & NFT at Volkswagen Group
Below, many Web3 topics are discussed, including how to prepare for Web3, what the metaverse will look like, and how brands can dive in.
Where should brands begin?
Paula Marie Kilgarriff: In fashion/retail, the web3 space is basically a 3D virtual shopping experience, so what I say to brands is that you need to create 3D assets and prepare your website for 3D.
When I say virtual stores, I don’t mean VR and headsets. Use your web browser to interact with a website that has 3D objects. These 3D objects give customers an opportunity to co-create certain kinds of products online.
Mike Charalambous: I couldn’t agree more. We’re actually more of a web2.5 advocate. The reason being is that most brands and agencies have revenue tied to their e-commerce shops.
A steady system needs to be shored up before your start to get your hands dirty with 3D. 3D is not your standard photography. They have their own lighting environment and their own behaviour.
So once brands understand the techniques of 3D objects and how different commerce solutions use 3D, then AR product explorers can innovate and trigger specific consumer behaviours. This allows them to gather data and test them on avatars.
What are the key areas of readiness for Web3?
Tim Walther: In general, you have to dig deep into web3. You have to be aware of what is happening in this space because it is so different from web2.
Customers for your NFT/experience will be a lot different from customers of the past. In the past, you might have fans to which you’re speaking, but now (if you’re selling an NFT), you might have a small shareholder.
To do it right you must have a working roadmap, inroads in place to speak to your communities, and an understanding of how the communities interact with web3. The risk of doing something wrong is big.
To test/learn, find good partners that have a proven record. Learn from them and only then take a bigger step forward.
Is Web3 relevant for some brands more than others?
Stefania Barbaglio: Yes, I think not only fashion but the entire luxury market. Jewellery, cars, drinks, etc. Anything that needs a way to authenticate could benefit from blockchain technologies. Even the secondary market, so buyers can verify that their purchases are authentic.
Tim Walther: If you look back one year, NFTs were more or less digital images and pieces of art that are connected to the blockchain. In the past year, others have shown us what can happen with a smart contract.
If you connect this to a smart contract, then an NFT can become a community. It can become a key or a one-on-one relationship with your brand.
I’m certain that things will show up in the next month or years that we cannot even imagine at the moment.
The metaverse is the era where humans put equal ownership on digital goods as they do on physical goods.
Mike Charalambous, CEO of Threedium
What’s the current state of the Metaverse?
Paula Marie Kilgarriff: I would stay away from saying “the one metaverse.” What we’re doing is using technology to create 3D virtual experiences that encourage co-creation and customisation.
If you think of it recently, some metaverses are centralised, some decentralised, some have tokens, some don’t have tokens, some are VR, and some are AR.
You might have a luxury metaverse or mass-market one, one for retail and another for lifestyle and entertainment.
Brands are figuring out customer touchpoints and journeys and fortifying them with different types of technology. It’s really about augmenting, not replacing other experiences.
The true value of 3D objects is the ability to understand what the customer wants when they want and how they want it.
Mike Charalambous: The most important thing is that metaverse can be anything you want it to be.
Here’s my way of breaking it down:
The metaverse is the era where humans put equal ownership on digital goods as they do on physical goods.
It’s not a butterfly-unicorn-cloudy world you go into to dance and fly.
It’s the era where consumers shift their behaviours, and they’re ready to start spending money to own something digitally, knowing that ownership can unlock different levels of rewards and accessibility for them.
Anyone has the chance to create something. Anyone has the chance to be wherever they want to be. Basically, the metaverse world will act as new means of social media channels.
So always think of the metaverse world as a social commerce channel, where people are going to be interacting with brands in different ways. We’re going to be seeing new KPIs, such as play to earn, wear to earn or sweat to earn. We’re going to be seeing a different way in how influencers and ambassadors find value–not as to how they look (beautiful faces or slim bodies) but what kind of contributions they’re making to the space.
And metaverse and NFTs don’t necessarily have to go together. NFTs are the form of a CRM for the brand, a form of utility. They unlock or enhance your relationship. NFT’s are just the means to the end, an additional way to provide rewards and a stronger sense of ownership for their customers.
Any brand that does not understand this is going to be losing market share starting from now.
It’s like the early days of social media, with smaller platforms vs Facebook. Facebook came in and crushed everybody. So there might be a metaverse world where it’s going to prevail and have massive volume versus everybody else.
But there will also be some micro-verses that are more specialised.
What are your Web3 cautionary tales?
Mike Charalambous: From the brand side, there are two major things.
1. Financial pitfalls when it comes to blockchain and cryptocurrency
2. The fact that taxation is not addressed within this full metaverse ecosystem
That makes life hard for brands to synthesise robust commercial strategies. And this forces them to spend a lot of money on tax consultations. They’re afraid that their public image might be impacted if somebody if they do something in the metaverse.
Consumer-facing, what they’re very much afraid of is ensuring that there’s going to be longevity in my relationship with the brand. How do I ensure that this token gives me that utility in real life?
They have a lack of confidence that the brands are ready to sustain and feed these relationships in perpetuity.
What are you most excited about?
Paula Marie Kilgarriff: Web3 and web3 protocols for the fashion supply chain.
So it could be Zara presenting a new collection to its stakeholders and then they vote on which products are made in that supply chain in real-time.
Stefania Barbaglio: Avatars and digital identities. There will be a different way to look at influences. The community can influence brands on what kind of influencers are selected.
Tim Walther: It’s really the community. And that also, that really means the web3 community. How are you solving X problem? That’s not happening a lot in marketing, but we’re all in the same boat.
What I love about the technology is that it is unleashing some creativity in marketing and in communication that we haven’t had in years. Social media 2.0 was very cool, very interesting, and unleashed a lot of things, but now we have something where we can basically add every, any utility.
And that leads me to the third and last point, which is you able to get closer to your customer. You can get brands and customers one-on-one. A real relationship.
Mike Charalambous: What we’re focusing on a lot is this notion of connected commerce or meta commerce.
How we can take assets, create them once, but sell them thrice across physical, digital, and the metaverse with consistent experiences.
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Sr. Content Marketing Manager
Five questions brands should ask about NFTs
Did you know the first NFT was created in 2015? Yep, it took less than five years for NFTs to reach worldwide notoriety. And since then, the market for NFTs has exploded, with folks either loving them or rejecting the idea altogether.
Because of the polarisation that NFTs have caused, it can be difficult for businesses to confidently participate in the NFT world.
Fortunately, we’ve planned, created, and released many NFT marketplaces, and understand both the strategic and tactical considerations surrounding them.
There are five essential questions every leader must evaluate before starting down the path of NFT creation.
01 What is the state of the NFT market?
02 Should my brand leverage this new technology?
03 What makes a good NFT experience?
04 Are NFTs bad for the environment?
05 Do users need to buy NFTs using crypto?
Below, our team helps you answer these essential NFT questions.
What’s the state of the NFT market?
OpenSea is the world’s largest NFT marketplace, valued at $13bn. In fact, OpenSea traded $5bn worth of NFTs in January 2022.
There’s just one problem. In that same month, OpenSea admitted that 80% of NFTs created for free on its platform were either plagiarised from other artists or spam.
This leads us to the unfortunate reality of NFTs: a lot of harmful activity, primarily around “Crypto Bros” trying to inflate prices and promote schemes that offer little or no value beyond basic computer-generated digital art. A lot of these are very much “get rich quick” ideas, which are often likened to Ponzi schemes.
But amongst the noise, there are real NFT projects that are thriving. This is especially true of digital fashion and unique collectibles.
At the end of the day, it’s the projects that offer the best utility for the NFT that will succeed – the perks, experiences, and opportunities that are unlocked by owning one.
One final thing to bear in mind… governments are looking to regulate the NFT markets i.e. starting to treat them as commodities that can be taxed. It’s essential to stay up-to-date on the regulations around crypto and NFTs to take full advantage.
Should my brand leverage this new technology?
Whether your brand could benefit from NFTs depends on many things – your industry, audience, ideas, and execution.
Generally, any brand with intellectual property or collectibles that an end-user would find valuable can experiment with NFTs. The same goes for brands offering exclusivity.
To give you an idea, here are the industries that have been successful in creating value around NFTs.
Intellectual property and collectibles
Notably, NBA TopShot drove over $700m in NFT sales since its launch, which provides users a chance to “own the moment” by selling motion graphics of top NBA players in games.
And Dapper Labs and Socios have created a variety of sports league and team-related NFTs. Digital cards or videos clips are bought in the same way that children once collected stickers or baseball cards.
Fashion has been a great driver of NFT innovation given the possession-based nature of the industry and people wishing to constantly try new digital outfits and looks. This industry is only going to grow. Plus NFTs also allow fractional ownership of high-worth fashion – be it real-world or digital creations. They allow consumers to buy, sell and trade items, and creators to get residual benefits via smart contracts.
For industry leaders, look to Gucci and Nike.
Gucci was the first high-end fashion brand to engage with NFTs when they sold a four-minute movie for $25,000. And Nike recently announced their acquisition of RTFKT, a virtual shoe company that makes NFT sneakers for the metaverse.
Gaming and fashion in gaming
NFT as possessions in virtual worlds and video games is also a growth market, but a lot of NFT value comes from their utility. Think skins, loot boxes, and access to secret spaces. These possessions can elevate a gaming experience in many ways.
Fashion within gaming is another noteworthy opportunity. Many of the fashion industry’s collaborations have been with Fortnite, Roblox, and other gaming platforms.
Arenas, artists, or event planners that are in the business of selling tickets to experiences can benefit by creating NFTs that complement the fan experience. This could be collector items or in-person perks.
Coachella is a great example. They currently offer NFTs on their site that falls into these two categories:
01 A lifetime Coachella pass with exclusive benefits
02 Never-before-seen photography from past festivals
A final benefit for events is the ability to combat ticketing fraud. Anyone buying a ticket on a secondary market can see if it’s real via the blockchain.
Brands with megafans
Brands that have megafans and go out of their way to engage with them are also a potential market. This could be musicians, artists, celebrities, restaurants, and even consumer goods (Coca-Cola, for example). Giving megafans special perks via NFTs can be a great way to promote loyalty.
Some brands and industries lend themselves naturally to NFTs more than others, but it’s best to do an NFT workshop to determine whether your brand could benefit from NFTS and if they will be well-received.
What makes a good NFT experience?
It depends who you ask!
Unless you are selling art or digital fashion, the experience is all about what the NFT can be used for. How you define this, depends on your brand and how you wish to activate it.
NFTs can be a ticket to experiences, exclusivity, and community both online and off.
If you want to cultivate meaningful, long-term relationships with your audience, then the strategy behind the NFT utility is paramount. Of course, this strategy starts with your users and their desires.
When thinking about creating the most impactful experiences, we always look at the motivations of the people who will be experiencing them.
For example, do people own extremely popular NFTs because they like the exclusivity and events it brings them (Intrinsic motivation), or do they own them because they hope to sell them one day for a lot of money (extrinsic motivation)?
Our recommendation is to focus on the intrinsic value for the consumer. What is a person getting out of the experience? Is it enjoyable? Do they get personal value from it?
Gary Vaynerchuk is involved in a new seafood restaurant that sold 1501 NFTs to raise $15m. According to their site, “This token represents your ownership of membership to our private dining club,” creating both exclusivity and a community of patrons.
Here’s why they decided on creating an NFT experience over a traditional membership.
“As an NFT, the membership becomes an asset to the token holder, which can later be sold, transferred or leased to others on the secondary market.”
Are NFTs bad for the environment?
Currently, the computer power needed to create an NFT is high. Proof of Work networks such as Ethereum can use more than 20kgs of CO2 to mint one NFT. Layer 2 networks such as Polygon have reduced the cost and environmental impact of minting, but issues remain.
Such waste has caused a huge backlash from some consumers, not least in the world of K-pop, where labels faced an outcry after launching NFT products.
Luckily, there are carbon neutral or negative platforms emerging, like Algorand, which will allow companies to offer NFTs without the negative effects.
If you’re interested in environmentally-friendly NFTs for your brand, we recommend using Algomart. Algomart is a carbon-negative, white label solution that is fully customisable for brands, created by the engineering team here at DEPT®.
Do users need to buy NFTs using crypto?
Traditionally, users have needed to use something like Coinbase to convert GBP into cryptocurrency before purchasing NFTs. For many users, this is a huge hurdle.
However, today, brands can overcome this conflict by using a platform like Algomart.
Algomart blends web2 payments with web3 NFTs, i.e., allows you to sell NFTs with standard currency via credit card transactions.
Businesses don’t need a separate crypto-wallet either. There are custodial wallets that hold deposits and allow you to transfer the money in and out. Algomart simplifies interactions with the blockchain and uses Circle’s payment solutions. Not only can you create an NFT “store,” it takes care of the seemingly-complex payment systems.
This technology means that any brand can create and start selling NFTs to their users – whether they know a lot about cryptocurrency or not.
Getting started with NFTs
If you want to explore how NFTs might add value to your brand, we recommend starting with a discovery workshop. During this, we can help you understand whether NFTs are right for your brand, what kind of value you can provide, and the logistics of creating your first NFTs.
Reach out to chat with our team.
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Why the metaverse matters for brands and how to act on it
At Meta Festival 2021, we came together with experts from the digital marketing, e-commerce and tech scenes, as well as futurists, designers and psychologists, to discuss the emerging metaverse trend and what it means for marketers, consumers and wider society.
The new normal is here to stay
The pandemic rapidly accelerated the shift towards remote and hybrid work, pushed new technologies, and simultaneously shaped novel ways of how we connect to each other in the digital space.
This new normal is here to stay and is influencing not only how we work and live, but also how we consume. There has been a notable shift in business mindsets, with the potential of virtual realities being used far beyond the gaming and entertainment sphere. VR (no, not necessarily a VR headset) is increasingly being seen as the next technology revolution to create, discover, identify, socialise, collaborate and democratise. This shift can be compared to how mobile technology revolutionised our culture, from the very first iPhone release to now; the metaverse is the next iteration of the internet and will revolutionise how humans interact and live their lives.
The future outlook predicts there will be shared virtual worlds (all together as one metaverse), where we will have a new economy, environment, currency and behaviours. Where game mechanics, massive interactive live events (MILEs), blockchain-enabled digital goods and virtual commerce will all blend together.
First-movers are entering the game
Pioneering brands like Gucci, Balenciaga,
Disney, BMW and Snap are using first-mover momentum and stepping into the metaverse, maximising its potential by creating virtual fashion, assets, content, communities and experiences. It will be exciting so see which brands will join them and what experiences they will create. One thing is for sure: the time to start is now!
How to act on it
The first step is to analyse the potential of the metaverse in regards to how it can serve your business needs and the needs of your target audience best. How to master the metaverse as a brand is strongly connected to the problems you want to solve:
Do you want to enter the metaverse? Or would you just like to exchange thoughts with us about the topic? Feel free to reach out to us – we’re passionate about the metaverse and happy to find like-minded partners to explore with!
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Head of Marketing, Europe
Is ownership outdated? How new concepts are paving the way for more sustainable fashion
In the third panel of Meta Festival 2021, Maria Spilka, Oliver Lange, Thomas Chabin and Dr. Tim Wiegels shared their ideas about rental concepts and talked about the effectiveness of new technologies for sustainable fashion production. Here are the top three learnings from the discussion.
In the next few years, we will see increased innovation in the production sector.
Oliver Lange – Head of H&Mbeyond
Sharing is caring
Whoever thought that sharing is a new trend, thought wrong. Washing in launderettes, book lending and living in shared apartments have been practised for years. Why shouldn’t we expand sharing to new areas such as fashion? Movements like Fridays for Future inspire people to question their consumption and look for alternatives. Second-hand, sharing and rental models offer solutions to act more sustainably. Companies and campaigns like Mädchenflohmarkt and H&Mbeyond are already leading the way and proving that these concepts are not only compatible with our conscience, but are also economically successful.
As more people want to try out a certain look for a number of days, weeks or months, the need to own clothes will weaken. This is where sharing comes into play. And the best part is that nowadays, we are no longer limited by our immediate environment. Global digitisation allows a perfect match between supply and demand, as we can search for items and opportunities beyond our geographical boundaries.
But still, even though secondhand or sharing offer greater variety than in the past, and are largely cheaper than buying new, only a small percentage of people are utilising these options in the fashion world. The problem is that there aren’t yet enough options available. Offering sustainable clothing is one thing but convincing consumers to make sustainable purchasing decisions is another. Here, the main task of the companies is to make the offer more accessible. The more brands that provide secondhand, rental and other concepts, the more popular and attractive the concept becomes.
The Meta Festival panellists clearly agreed on one thing: in order to make sustainability accessible to everyone, it should not be a luxury but must be democratised.
Technology will pave the way
There must be a change of thinking in the fashion industry to make resources traded more sustainably. This way, fashion can once again become a pleasure instead of constantly fighting our bad conscience. Circular thinking is essential when planning future fashion production since the lifecycle of clothes is becoming shorter and shorter.
Instead of throwing outdated clothing away, it should be reintroduced into the cycle. Oliver Lange, Head of H&Mbeyond, believes that in the next 10 years, at least 20% of customers will use clothing in the form of circular initiatives, which include secondhand, sharing and rental. Of course, the production of new clothing won’t be overtaken completely, as fashion is constantly being reinvented as new trends develop. But to be able to ensure sustainable production, technologies must be further developed. This will allow brands to manufacture high-quality fashion by reusing materials.
The art will lie in designing the product from scratch, in a completely different way, to still have added value for the owner at the end of the cycle. Technology will be a game changer, but not just in the production sector. Technical solutions can also help us to determine what and how much is needed. It is questionable how much must be produced in advance at all. Can we escape mass production by switching to producing, even partly, on-demand? In the future, we will be able to assess the needs of customers more accurately and adapt manufacturing to the actual demand.
The already growing digital presence in the metaverse could also reduce unnecessary ordering of clothes. Avatars in our exact shape and size already exist, making it possible to try on clothes virtually. The concept of on-demand fashion can also be used for customised and more creative fashion lines. At the same time, companies will reduce their carbon footprint. But if we want to achieve the goal of decarbonisation, all levers – from production over materials to sales and consumption – must be pulled.
The mix makes the difference
After all this talk about future plans, we must not forget that now is the time to act. We should not only think of the ideal that will come in a few years since this ideal can already be lived now. Everyone knows how difficult it is to change one’s behaviour from one day to the next, but let’s think in small steps and not overtax ourselves from the beginning, as with small steps we can also reach our goal.
A consumption mix from different sources is already possible today and in this way, each of us can slowly approach and determine the balance of new and secondhand purchases, sharing and rental. The latter two possibilities are of particular novelty in the fashion world and can bring huge big change with them. But, could this change also mean that ownership is outdated? Is it possible that we will live in a world where we hardly possess anything?
Imagining this, we could ask: how can we still express ourselves? Are possessions and property necessary to do so? Our expert panel is of the opinion that sharing allows much greater opportunities than ownership. Depending on our current mood, feelings and desires, we can easily dress in different ways and try out new styles without investing a lot of money.
Even though it is desirable that fashion brands increasingly adopt sharing and rental concepts, it can’t be said that ownership will be completely irrelevant in the future. The desire to own certain items as status symbols, heirlooms, or just for fun will still be there and depends on the needs of consumers. The buzzword companies need to concentrate on is user centricity. Brands must focus on meeting the demands of their customers in the best possible way. And since needs are very individual, it will probably always be a mix.
Clearly, there are many possibilities to act more sustainably when it comes to fashion while exploring numerous new styles. We are definitely looking forward to what the fashion industry has in store in terms of innovation.
And by the way, how cool is it that we can share clothes with EVERYONE? Ever thought that this piece might have been worn by your favourite idol a few weeks ago? Wow!
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Head of Marketing, Europe
Five key takeaways: the CMO’s guide to the metaverse
We’re about to hit a 3D, interactive AR technical age. It’s going to be awesome.
The metaverse is the digital twin of our current reality. It is new, it’s moving fast and here to stay. So what do marketers need to know? On July 8th 2021, we were joined by Tom Rockhill, Chief Commercial Officer of disguise, Paul Doyle of Epic Games and Louis De Castro and Quentin De Fougeroux from Mado XR Studio to discuss how brands can harness the power of extending the customer experience into a whole new reality.
The event, hosted in partnership with xR technology provider, disguise, took attendees on a real-time xR experience of the metaverse. Even though Rockhill and our own Director of Technology, Isabel Perry, at Byte (part of Dept) were actually at our London xR stage, they journeyed through the metaverse – showing marketers what is possible.
Thanks to this revolutionary technology, Perry attended a fashion show, tried on a virtual outfit, took selfies next to flying cars and journeyed through ancient ruins, waterfalls, islands and up an elevator into a cocktail lounge with an aquarium.
The event did not just show off the capabilities of xR, it also held an important discussion on what it is and how brands can benefit from it. These were the top five takeaways:
1. The metaverse will be the next major marketing channel
The metaverse is tipped by many as the successor to the internet as we know it today: a digital twin of our world, encountered in both augmented and virtual interconnected realities as a persistent and synchronous experience. These experiences will be interoperable, meaning you’ll be able to translate digital experiences into the real world and vice versa.
The metaverse already has its own economy, which will benefit individual creators within it, but we also expect to see new global companies to replace the incumbent digital giants.
Investors are taking notice. You can now invest in the metaverse on the New York Stock Exchange. Epic Games recently raised a billion dollars to fund their vision for it. Bloomberg estimates that it is already worth $800 billion.
2. Brands are already using the metaverse to engage audiences
The metaverse signals a move beyond traditional display advertising towards creating brand experiences, which are more engaging and exciting, and less invasive than adverts as we see them today.
Ways of doing this include releasing a digital version of a new product or experience, creating a game or a performance in a virtual space, or inviting audiences into a digital world. For example, Balenciaga has held virtual fashion shows. Gucci has created digital-only products. Star Wars created an island within the Fortnite game which allowed users to watch a film clip; and, also inside Fortnite, DJ Marshmello performed to 11 million virtual viewers.
These digital experiences and items may be free or paid, and people are already interacting with them on digital platforms. Not only is the digital world providing a potential new revenue stream, but it can also translate into real-world sales and revenue.
3. Extended reality makes the metaverse possible
Extended reality (xR) is an umbrella term for real-time, immersive video content that makes the metaverse possible, by combining:
AR or augmented reality – the technology enabling digital graphics, props or characters to sit in the real world from the viewpoints of the camera.
MR or mixed reality – the ability to blend augmented reality in the foreground with LED backdrops or video content in the background to place people inside digital worlds.
4. The metaverse creates a more personalised experience
Brands and artists in particular can provide more tailored, personalised and meaningful experiences to fans, as the nature of the metaverse is that it is uniquely experienced by every individual user. We saw Billie Eilish performing via livestream last year, making people feel they were “inside the performance”, according to Rolling Stone. The metaverse also reaches across many other industries including film production, TV broadcasts, brand experiences, education and corporate conferences and communication.
We’re already seeing AR and digital graphics taking over our day-to-day experiences – for example, broadcast events are using AR to hype up the crowds and bring performers into the space. Even if people aren’t entering the metaverse as a conscious choice, virtual content is already becoming a fixture of branded experiences.
5. Technological innovation will power the future of the metaverse
The disguise software is designed to help creators plan, design and sequence immersive worlds. It automates many of the tricky nuts-and-bolts elements like colour and spatial calibration to ensure accuracy and to realise ambitious creative vision.
Coupled with other key technologies like Unreal Engine’s ability to power real-time graphics projected onto LED screens, as well as camera tracking technologies’ ability to send camera tracking data and allow for real-time graphics updates all means the cost of creating these experiences is going down while the quality of the experience is going up.
It’s important to remember that, as we’re still at the very beginning of this technology, it will be essential to work with technologists and futurists who can create the vision: a deep and ingrained understanding of what’s possible will be key to unlocking its power for branded experiences as we enter this new era.
As Doyle said in the virtual event panel, “much like the internet and mobile technology were major transformations and major technical ages, now we’re about to hit a 3D, interactive AR technical age. It’s going to be awesome.”
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Head of Marketing, Europe
How NFTs and AR can power your brand in the metaverse
On April 6th 2021, DEPT® hosted an interactive panel where brands such as Snapchat, Circle & Fabricant discussed the power of virtual AR fashion, virtual goods and the digital ownership of NFTs. Interesting predictions were made on how NFT platforms could create opportunities for brands in the digital space. During the event, the climate controversy around NFTs and ways in which this new form of ownership can be sustainable was discussed.
Curious about this event? Watch on demand to learn all about NFTs:
Brandon Aaskov, Director of Web at Rocket Insights (part of Dept)
Hi, I’m Brandon Aaskov. I’m the Director of Web Projects at Rocket Insights (part of Dept). So today we’re going to kind of, well, first I should talk about who Rocket is. So Rocket’s based out of the US, we work closely with a bunch of crypto companies in the greater Boston area. I should also talk about why I’m here. So I’ve been in that space for a while, but I will say that back in April of 2013, I definitely traded half of the Bitcoin for a pizza. So myself, like many others, have this whole fear of missing out, especially this time around or receiving all this popularity in the NFT space. Suddenly very popular in mainstream media from Jack Dorsey signing and selling his first tweet to people becoming the third most living valuable artist ever. That said, there is a confusing sea of lingo and barrier to entry. And so it’s still very hard for your average consumer to get involved in this. So today, what we’re gonna do is I’m gonna pass it to Isabel shortly, she’s going to walk you through some slides to really kind of explain this space and where you can tap into it. And then we’ll move into a panel discussion for a little while, where we have some people from all relevant areas in this space from digital creation to actual delivering the stuff on a variety of blockchains. And then we’ll move into a Q&A so we can answer some questions with the time we have left. But I do think the slides are super helpful, so I won’t waste any more time and I’ll pass straight to Isabel.
Isabel Perry, Director of Technology at Byte (part of Dept)
Hello, everyone, hopefully, you can all see my screen. Great. Thank you, Brendan. I am Isabel Perry and I’m the Director of Technology at Byte. Byte recently became part of DEPT® back in February. And I think probably a lot of you are here today, because you’ve been seeing headlines like this. Over the last sort of six months there has been an absolute explosion or sort of conversation around virtual fashion and NFT’s. And a lot of you’re probably wondering, sort of, what is all of this space about? And how can brands participate in this new area of technology. We certainly had our attention caught by the headlines, partly because we create a lot of AR for brands. And I think it really got us wondering if we could create an AR NFT as a sort of proof of concept for our clients about the way that we could bring together virtual experiences with a sort of more interesting area of ownership around those virtual experiences. But to understand what the opportunity was for our clients, we needed to spend a bit of time to really get to grips of what an NFT was because this area really has exploded in the last few months. So I’m going to share a very short summary of what an NFT is before talking about the context around why this thing I think is exploding at the moment. And then going on to what we created for DEPT® as our first NFT edition. So an NFT stands for non fungible token and non fungible tokens are unique digital items with blockchain managed ownership. What’s really key about the word is fungible. It’s quite complex, quite a confusing word. But actually, it’s a really, really simple concept, which basically says a fungible item is interchangeable. If I have $1, and you have $1, and we swapped dollars, we both still have $1. So Bitcoin is an example of a fungible digital item, because one bitcoin is the same as any other Bitcoin. A non fungible item is unique. And so just like the Mona Lisa, an NFT has been created to be one of the kind. And that means that I also might choose to swap an NFT with you because we want to own different NFT’s. They have different values, and they are intrinsically sort of different objects. And the way that that actually works in the blockchain, and I’m not here to talk about blockchains or cryptocurrencies, but it’s really helpful to understand sort of the simplest level, why NFTs exist on blockchains and how they exist on blockchains. And when we show that ownership is managed, what does that mean? So at the simplest level, a blockchain is a method of storing data. And data is stored in these blocks which are linked to the previous block. So it or the cryptocurrency, really what you’re getting is a list of transactions which might be happening on that with that cryptocurrency, and that’s literally pushed to a block and stored indefinitely. And over time, you can understand the way those transactions sort of are continuously stored. An NFT exists on blockchains in a really similar way, because basically you can mint or add to blockchain. And that basically puts that unique item within a block and it’s there forever. And people can check that it’s there. And you can also trade it. So if I mint NFT, I can then go on to sell it, you can also check that it’s there, like I said, and then what’s really interesting is that some other people, if they own that NFT can then continue to resell it. At the simplest level, that is the way that NFT’s exist on blockchains. So that’s how it works. But really, what’s so amazing with NFT’s is just the sheer sort of unlimited breadth of what an NFT can actually be within that context. So NFT’s include collectibles, which might be something that you want to either collect a number of or sort of trade to build out your hand a bit like Pokemon cards, and it can include game items. So within virtual worlds, you might have an NFT of a specific sword, for example, very famously. And that’s a sort of real driver of a lot of the conversation that’s happening at the moment around NF T’s. But they can also as Brandon said, include things like tweets or even ownership records for physical assets. And this is just a little bit of a timeline that you can see actually, NFT’s were first being issued and back in 2017 with crypto punks, which was a very simple image, which would continue to be traded today. And then you can see that there was basically this flurry of activity over the last sort of while in 2021, around things like albums being released as NFT’s or incredibly rapidly increasing sales prices. So you might hear that these NFT’s are being bought and sold, but sort of where are they? Where is this happening. And there are over 130 different marketplaces where you can mint trade and track these NFT’s. And because they’re all sort of built on top of blockchains, that’s incredibly transparent to look into and understand how much money is actually sort of being traded on these different platforms. One example of them is a foundation app, which is one of the largest ones, it’s built on top of Ethereum, which is a blockchain. And you can see here there’s sort of digital art uploaded, and people can bid on that. And then they can also resell those assets. For brands. The most interesting example that sort of the most successful and huge example to date is the NBA top shot, which invites you to witness history and only NFT moments in a new era of fandom. And it started with this video here of James O’Brien reenacting a Kobe Bryant slam dunk. And that was turned into a moment. And moments are really a concept that NBA Topshop created, where they essentially packaged up that footage, and then sold it as an NFT on NBA top shot for incredibly high prices. And then that asset is then treated as a sort of collectible again and again, by multiple different people. And the amazing thing for NBA top shop, because every time it’s resold they can make, I’m not sure if it’s 5%, or 2%. But they take a royalty on that resale. And it’s been so successful that if you look at the top 20 NFT marketplaces, NBA top shot, which is the most branded version of NFT’s has driven almost 43% of all gross value of NFT sales in all time. So there’s huge amounts of money at play here as well, because 1.6 billion pounds has been spent on the top 20 NFT marketplaces. And within the art space alone, 45% of that has just been in the last four weeks. Some of these other marketplaces are sort of around virtual worlds, lots of them around art, some of them around sport, and there’s real sort of breadth and lots of them around gaming, and it’s real breadth in what some of these verticals are emerging around NFT marketplaces. But I think, again, I think it was unbelievable to see Justin March. So last month, when suddenly across all headlines, people were talking about the fact that people had just sold an NFT for 69 point 3 million US dollars. And that is quite astonishing. And it does beg the question, it’s just a JPEG. So are we in a bubble, and Beeple himself did say that he thought that we were in a bubble shortly before his art then went on to sell for 69 million US dollars. But I think that there’s a much bigger and more important context. That means that even though there’s the art world might be in a bit of a bubble right now, there’s something really, really interesting about the sort of need for NFT’s as we spend more and more of our time online. And I’ll sort of go on to explain that slightly. But I don’t really need to tell you on this call that our lives are increasingly being spent online. Just in the last sort of three years, and this is actually from 2018. Now, an increase of 5% people thought they spend almost all of their time online. And you can see here that the younger you are, the more time you spend online. And this data from Q4 2020 shows that around 15% of Gen Xers are spending more than 10 hours online a day. So that’s a really, really key. And that’s not going to change. And as we do spend more and more time online, buying virtual goods has become more mainstream. Lots of you remember the million dollar homepage, which was a genius idea with sort of 1000 pixels by 1000 pixel website, and you could pay to own multiple pixels. And my brother who’s younger than me had a friend who at 16 has become a multimillionaire from selling tepee textures on Minecraft and now lives in Bali with his own helicopter. And then I’m joined here on the panel later by The Fabricant, but sort of that as you can see the transition into suddenly, in like 2019, we are buying these digital goods as NFT’s. And this was the most beautiful version of sort of very, very early experimentation with digital fashion. And that’s what we’re seeing today become more and more prevalent. And I think a lot of the reason why that’s happening is because the gap between in real life and online has narrowed. And we’re beginning to live these augmented reality lives. So back in 2014, when Asos was talking about Halloween, there was sort of taking photographs of real people wearing real clothes, and cut to six years later, he was talking about Halloween in the sort of augmented reality life way, where actually it’s through the use of augmented reality effects on Tick Tock and their invite, then creating these experiences to the customer is not just the sort of creators to really own part of that brand and build out that sort of content, always with a sauce. But COVID has forced us all to behave more like Gen Z. I think we all know that we’ve been spending more and more time, given we haven’t been able to do anything else. We’ve been spending more time online in the last 12 months. And as we live more and more lives, online, digital goods are going to become even more valuable. And so you see the likes of the sort of $200 Photoshop outfits. And Gucci sort of announced that they were creating $12 Gucci sneakers a couple of weeks ago, and RTFKT sells NFT trainers for $10,000 a pop. And this is kind of extraordinary. Because I think it’s always sort of if you’re not really in the space, it’s almost crept up. And suddenly, you realise that there are all these sort of amazing, digital money spent on these beautiful digital goods, which you will never see in the physical world, but it doesn’t matter. Consume online. And I think that really highlights the tension because the Internet has made sharing information frictionless. And this is sort of really at odds with a deeply human instinct to own and to trade. So this is just sort of three minutes of screenshotting, my computer and sort of everywhere you look online, you see copy, download, forge share, and everything is about sort of distribution of information. And that is brilliant and wonderful. And one of the reasons why the internet is such an incredibly special place. But there’s this human need or sort of like unstoppable need to own things. So back in 9000 BC, we were owning cattle in 12,000 BC people’s sort of trading with shells. And I think it’s a real interesting sort of reflection of whatever people value, they begin to create ownership around. And I think because we value being online so much, it’s really important that we understand ways of building our ownership. And I think that’s also reflected by the fact that sort of, there’s a really disproportionate value driven by collectible NFT’s versus unique NFT’s because that is that thing of like I want to collect shells or I want to collect sort of land or I want to own patents. So even though only 50% of the largest of the top 20 NFT marketplaces are offered collectibles, they drive nearly 80% of the gross value of NFT’s. So I think NFT is a really inevitable form of digital ownership. And although there’s definitely hype and there’s definitely bubbles right now, it is really interesting to think about where do you start if you accept that people are going to want to own this digital space. So digital items. And for that, you kind of have to take a step back and address the unsustainable elephant in the room. And there is a lot of talk about this. And I think, actually it was really, it was. So we released an NFT. Last week. And it was really, really brilliant actually to see that there was push back, even within DEPT® and with Byte on should we be doing this, is this environmentally friendly enough, how we address this, so it’s a concern, it’s a really real concern. And if you are building an NFT or creating an NFT on Ethereum, for example, which is the most commonly used blockchain for NFT’s is like flying for two hours. And that is, that is a problem, I think, and just sort of to help you understand, energy is used to mint to bid to cancel bids for sales, every sort of transaction that you’re making on that blockchain does require some energy to enact. But technology has progressed since sort of blockchain technology was introduced 10 years ago? Well, well, no. And there is a sort of new way of building blockchains, which instead of using proof of stake, you can use proof of work to verify that transactions are accurate, and to ensure the sort of stability and validity of any given blockchain. And you can see here the difference between sort of the estimated annual energy consumption of Bitcoin compared to Ethereum, which was a sort of blockchain version two, and Tezos, which is a sort of blockchain version three, which uses proof of work. And it’s estimated that actually even compared to Ethereum, is also sort of 1.5 million times less environmentally damaging. And to the point that is really like running any other website. So there are absolutely sort of ways around creating inviting less environmentally damaging lefties. And with that in mind, we sort of went through this, these five steps of actually, this is how you can create your first NFT. So the first thing is to create your NFT asset. And that’s really, what do you want to turn into an NFT. The second is to select a marketplace and some steps might be required to prove eligibility of that space. The third thing is to set up your crypto wallet. So that’s to sort of create your public address on the blockchain. And also to create the private keys to actually control that. The fourth is to mint the NFT. So that’s when you actually sort of upload your NFT asset into the blockchain. And then you can list the NFT and allow people to sort of bid on it or buy it for a fixed price, or to resell it. And I think we only joined that back in February. And it was kind of easy to see that that already had a parallel line of this, like street wear. And we thought what if actually the next step to parallel drop, which happened really regularly was virtual, and that becomes the NFT. So you can see here the depth of our website, we designed and built this virtual jacket as a snapchat lens using the new sort of full body tracking, which was only recently released. And that sort of opens up really beautiful clothing into Snapchat. And we push that to Snapchat to actually sort of make the jacket beautifully modelled by some Byte colleagues here. Then we needed to choose the NFT marketplace. And for that the number one requirement that we had was that it was a proof of stake blockchain. We also wanted something that was semi curated so that it had a sort of high quality of goods on it, something that supported checkout. So the NFT’s could be bought via the market place because we didn’t have time to build our own back end for that and unlikeable files so that once someone’s bought the NFT, they can then access the design files of that AR lens. So we chose to work with NFT Showroom because it’s built on the blockchain and cryptocurrency Hive. And then we need to set up the crypto wallet. So for this, you sort of create your account, and you register within the name of what you want to be so for us we actually had to pretend to be a collective of artists to qualify on an empty showroom. So we registered as DEPT® department of artists. And then we generated the necessary keys accessing all it when you hear about people that have been trying to uncover hard drives, which sort of would give them access to Bitcoin that somewhere in a dump somewhere. What they’re actually referring to is the private keys which are generated when you sort of register for your crypto wallet, and that’s what this process will sort of generate for you. Minting the NFT’s is in some ways, one of the simpler steps when you’re working with a marketplace like NFT Showroom. We decided to create one NFT of the video render of the jacket and create 20 additions, because there are 1700 Depsters. So we thought any less than 20 was not realistic, we could set the price at around $10, which was 12 Hive at the time. And people could unlock a link to the Google Drive once they had purchased the NFT jacket. And you can see here, you sort of literally upload an image, you can upload videos, and you set a number of settings around sort of, yeah, price and so on.
And then you list it. And I think it’s slightly complex, sort of creating a crypto wallet and buying these NFT’s. I think we had no idea how many people would buy these NFT’s when we first went live. And they sort of essentially sold out within a couple of hours. Someone immediately relisted one at over a million pounds of over a million dollars, at its most at 750,000. And there’s just been a sort of incredible sort of resale activity or flurry over the last five days or so. And I think it was a bit of a window into the NFT world at the moment because someone called Arbitrage has bought about 16 of them and keeps this sort of setting basically gaming the price. And so it’s been incredibly interesting seeing how it’s sort of played out in terms of the actual sort of sell and resale of the NFTs. And on NFT Showroom, if you do want to buy an NFT, the UX is still actually quite sort of challenging. So within NFT showroom, you have to click buy five times to actually confirm that you really, really, really want to buy the NFT. And I guess it was quite a complex process initially getting to grips with how to both generate and buy NFT’s. And it hasn’t necessarily been easy. So I think and sort of the question is, why bother? But I think that the sort of bigger question is, how can we make it easier, and I think both Brandon and Rachel from Circle, are sort of working at companies that are spending a lot of time and thought into thinking about how to create much much richer experiences, and that do make that path to purchase a lot less friction, less friction for. So I think to answer, why bother, you really need to think about why people are buying NFT’s at the moment. So the first thing is there’s a real sort of explosion of people that are speculating on NFTs. And I think we need to be realistic about that. And I think some people will probably lose a lot of money actually on it. But there is sort of a lot of speculation going on. But there’s also a lot around sort of pride and ego and sort of it’s deeply human instinct to own and to want to own something and to have that be visible. There’s also huge growth in sort of sales of NFT, just around fandom, because it’s about a way of always expressing your identity through what you admire. And I think that’s a really, really interesting space for sort of creators and influences as well as for brands, but then also patronage so because all of the transaction history is visible. Actually, if you become a patron of an artist that you really admire, then your early patronage will be indelible sort of when the blockchain so how can brands make NF T’s work for them? Well, I think you need to sort of tap into the drivers behind customers and think about allowing resale to create large markets, creating buzz around ownership, integrating with your existing goods and services, and leveraging sort of a really dedicated fan base. So if you help, if you have existing customers that are really dedicated, then like, lean into that. So I think just to sort of, to sort of some thought starters are just how brands can then leverage NFT’s by category. So for fashion, can you provide exclusive virtual versions of owned outfits that also prove the authenticity of that outfit? Could you actually create a leaderboard at the sort of the top spenders if there is a sort of competitive element of that? And I won’t read through all of these. I appreciate this sort of at time, but just within property, can you offer digital monopoly experience to trade virtual versions of homes within law? Can you fast track paperwork for property sales patents, vehicle registration or even diamonds? And within marketing strategy? Actually, what does sponsorship look like when you actually give away NFT’s, all behind the scenes content to customers that it’s all tradable. Or can you do sort of out of home create location specific coupons for collection and redemption as NFT’s? I think there’s just a huge amount of creative potential in this space. So just to sum up, I think, yes, like a lot of NFT’s are just JPEGs. And yes, we probably are in a hype cycle. But we are only human. And as we increasingly value digital items, we really need a way to earn them. Thank you very much.
Brandon Aaskov, Director of Web at Rocket Insights (part of Dept)
All right. I know when I went through that for the first time, it was like very helpful, and probably the simplest blockchain analogy I’ve ever seen. And I mean that. Cool. So yeah, now we are at the panel discussion side of the talk. So I’ll let everyone introduce themselves. And I’ll pass it in the order here. But basically, we’ve got Isabelle from Byte. We just saw, we’ve got Will from Snapchat. We’ve got Kerry Murphy from The Fabricant, we have Damara Inglês from well, she’s a virtual fashion creator and artist, which I think brings a whole cool concept of this, this whole talk. And Rachel Mayer, who is from Circle, so I’ll pass well, Isabel, we know who you are. I’ll pass it onto Will to first introduce himself. And we’ll go through intros and then I’ll kick off with a couple questions.
Will Scougal, Snapchat
Hey, everybody, thanks very much for that as well. And hey, Brandon, thanks for inviting us along to the panel discussion. And I’m global Director of Creative Strategy at Snapchat, where I’ve been for five and a half years. And I’ve been working on AR since that moment, really, since the vomiting rainbow kind transcended the platform to become the most popular Halloween costume of 2015 in North America all the way through to what we’re seeing today, with augmented reality really becoming a full funnel format across attention, emotion and utility and fashion being very much at the driver of the forefront of of that shift and change. Thanks very much.
Alright, let’s pass it to Kerry next.
Everyone. I’m Kerry, I’m one of the founders of The Fabricant. We are the world’s first digital only fashion house where we focus on creating the digital only fashion industry. It’s highly creative. It’s super technically challenging, but the biggest challenge for digital only fashion industry is to find that monetization, new revenue streams so everybody can become a digital fashion designer. So fashion brands can start their own digital only fashion labels. On the side. We are also an agency, we help fashion brands digitise, we create digital samples, we create content for that lookbooks. And we do marketing campaigns and interactive experiences. But I’m super excited about the digital only fashion industry. So yeah, I’ll leave it at that I’m sure we go deeper into
Well, since we’re on a digital fashion trend, I’ll pass it to Damara.
Hello, everyone. My name is Damara Inglês and I am a self proclaimed fashion tech cyborg, and designer of extended reality experiences and virtual fashion. Basically, I use technology as a lense to criticise analogue fashion in ways to make it more diverse of different cultural identities, more inclusive of our digital citizenship, and also overall more democratic and sustainable.
Alright, and of course, last but not least, Rachel…
Hello, everyone. Nice to meet you all. My name is Rachel Mayer, I’m VP of growth and Product Marketing at Circle based in Miami, have been at Circle for nearly four years. If you don’t know who Circle is, Circle is a payments and infrastructure company. For internet companies, we marry both traditional means of payments and treasury with blockchain based worlds. You also might know us as the creator of the world’s leading stable coin US dollar coin USDC. And we power today a lot of companies and NFT marketplaces, like dapper labs for their NBA top shot. So excited to talk to you about some of the challenges and experiences and how Circle and other companies in this space are tackling some of those for you to build new products and services.
That’s great. All right. I’ve got a few questions queued up that are sort of targeted at direct people. But I figured we’ll start with one person who answers them and then we’ll just go from there. Someone wants to jump in and add in to the answer. Feel free. So let’s see how this goes. We’ll start with well this first one is kind of about the NBA top shot stuff. So What can brands like the NBA, you know, that’s one of the biggest ones. What can they do to involve this community of creators that are out there considering they have these proprietary marketplaces.
So I guess, in terms of the NBA example, which is a fascinating one, I did have no idea about just how much of the NFT economy was really powering and driving at this time is absolutely phenomenal to see that level of growth. From a creator perspective we’re talking from, from the Snapchat perspective and point of view, what I think what we’re seeing is really a democratisation, certainly of augmented reality in terms of the technology that people can use to craft these types of experiences. Certainly, since we released the Lens Studio software for free a couple of years ago, which is the software we use to build all of our augmented reality experiences, we’ve seen over a million lenses built within that software and over a trillion views of those lens experiences. So we’re starting to see a community build up and emerge and really drive influence. And I love this point, actually, around the idea of craft, I think that the influence that we’re seeing through digital creativity and with augmented reality is one where it’s influenced through beautiful craft, as opposed to just personality. And I’m not saying one is better than the other. I just think that it’s really interesting. We’re seeing that emergence. And I think that that is, is really celebrated in what we’re seeing in kind of NFTs and the growth that we’re seeing across you know, whether they’re JPEGs, or gifs, or whatever they might be, it’s really beautifully crafted digital assets that people are celebrating, and buying into and wanting to have a sense of ownership of as the physical and digital worlds are kind of becoming closer and closer together and becoming kind of part of each other. So I do think that for brands, the opportunity is to think about the craft that you can really bring to the table. And for me, that’s about contribution. I think so much of that so much of digital has previously been about interruption whereas I think we’re in this beautiful phase now where we’re thinking about how can we make the digital world better, more interesting, more entertaining, more useful, more beautifully crafted, and as the tools become more democratised and the accessibility becomes more democratised, the volume of content and the quality of content is going to become more democratised as well. And I think that really flipped the narrative and the question back to brands about how can you contribute with something beautiful?
I would like to ask a question on that straightaway. Are you going to tie your lens filters into NFT’s? I think that’s probably the biggest question that we get from all the brands and every single brand is trying to monetize on this.
Well, so I think that with AR and with AR that’s built within the Lens Studio, when a brand builds within the studio, that’s something that they’re building for themselves. What they do with the assets that they create is really, really up to the brand itself. There’s not anything that is currently immediately on the radar in that respect. But I would say that it’s up to brands to realise the opportunity and work to you know, make the most of the asset that they’re creating. Within the studio itself.
Gucci just dropped some sneakers for $12 which you get to release as NFT’s as a AR shoe wearing experience. Yeah, I
I think so, I think one of the things that actually we’re seeing with the AR studio and with Snapchat in particular is 75% of our 265 million users are using augmented reality every day. There’s millions, hundreds of millions of people using AR on the platform that makes an NFT meet that gives you an immediately scalable audience. So when someone like you know if we look at new the question of is this a fad or is it something that’s becoming mainstream? You know, I think art follows fashion brands follow people if you if you know i mean and what we’ve seen in AR and certainly with product trial and fashion trial is Dior, Gucci, Lacoste, Balenciaga, Nike, Adidas, all building digital fashion assets, augmented reality, fashion assets in order to raise awareness and provide accessibility to those assets to people huge scale. So I think in Gucci what they’re doing and actually also with DEPT® what you did with the, with your first NFT puffer was provide interest and awareness and scale through Snapchat and AR trial through body tracking, then obviously released the NFT through different platform.
Alright, well, this is a good segway then because, well, this one’s actually gonna be targeted at Rachel. So it comes as no surprise that there’s a whole bunch of interest from brands and a flurry of interest about having their own NFT based storefronts, since many of those brands are just getting started right now. What’s one or two key considerations that you think they should keep in mind when they’re sitting in meetings planning these things?
Yeah, absolutely, I think Isabel’s presentation did a great job of explaining the pain points of a brand, going through creating a digital NFT good, but also how to put that good out into the world and have your existing audience interact with that and perhaps purchase with it. So marrying those two worlds of how you monetize today and how you interact with the technology today is something that you should consider, and how to have sort of that seamless user experience that your consumers today expect when they’re shopping on something like Amazon, you know, what she just went through? That’s not currently the experience with blockchain technology, it’s entirely new, right? Even the nomenclature, the usage, wallets and fees and gas and acquiring cryptocurrency for your consumers, that is entirely new and scary sometimes. So you need to choose very well how to interact with this technology and partner with a company and an infrastructure provider that abstracts some of those challenges to your audience, but also brings in the crypto ecosystem and crypto natives, who you know, this is their bread and butter and eat live and breathe Ethereum and Bitcoin on a daily basis. So let’s talk about Circle and how we can help you and brands and companies, you know, craft that experience. One of the reasons why NBA top shop and dapper labs has been so successful, in addition to you know, sports being cool is that they created that user experience that really mirrors you know, web today on how to shop through the internet. So they let you put in your debit and your credit card very seamlessly, just with the shopping cart experience, as you would expect. But they also let you pay with traditional crypto currencies like usdc or aetherium, or Bitcoin. So they’re catering to both audiences, both mainstream and crypto, creating a user experience where it abstracts the blockchain that is behind the scenes but gives that digital ownership. And so when you’re choosing a provider, you really need to think about the provider, where do they fit in that spectrum? Can they cater towards you know, why different users and give you the ability to create the user experience that you want for your brand, and not interfere with the user experience that your brand wants to create? So that’s what Circle does, and excited to work with all of you all on how you’re thinking about building new web 3.0 experiences using blockchain technology.
And just on that point, Rachel, I thought one of the things which I found so interesting about the NBA top shop site is that they don’t think that you have to dig really hard to find any mention of NF t ethylone. any mention of sort of all of the language around blockchains. And I feel like it’s not just a UX job. It’s also been a sort of linguistic marketing, incredible linguistic job. And I guess, I guess it’s just interesting to know, how do you find it? How do you position it with your audience that they, like, understand what the ownership means without getting too scientific is going to be a challenge that we’re all going to have to, like, tackle.
Exactly. Like in their checkout flows, there’s, you know, no mention of providers, no mention of how the funds settled behind the scenes or how they’re, you know, bearing blockchain worlds. And it’s just in the fine print where it’s like, hey, this NFT, go to the block explorer and see how you own it. And right now, you know, it’s a closed loop marketplace, but pretty soon, like similar other marketplaces that you show, you’ll be able to trade and and and, you know, send each other these NFT’s publicly transparently on the blockchain. So that’s another consideration for a brand is, do you want to start out in a closed loop fashion, and sort of limit that ownership to just your ecosystem? Or do you want to start with the entire world and there’s different trade offs and benefits to both of those. But the success of dapper is sort of, you know, introducing to their consumers little by little with bite sized pieces of information to get their feet wet with NFT’s.
That’s a great answer. I’m gonna take a little shift on this one and talk about more of the artist community. So Damara I’m going to use for this one to start with, although Kerry expect you probably jump in here too. There’s like a pretty large community of 3D artists out there, I’ve seen some really weird stuff, I’ve seen some pretty great stuff they could be tapping into this and probably already are. But if you think about it right now, we already have kind of basic formats like JPEGs, and videos. If you think about where the technology is headed, what’s the advice you would give to those creators so that they can stay relevant and profitable as the market gets flooded with more and more creators.
And I think that my first advice would definitely be to cultivate your own artistic perspective and your own identity before just trying to follow the mainstream, because what happens in both the fashion industry and the digital art industry is that when there is a sort of meta narrative, then everyone, including the consumers, and the clients think that everything should look exactly like that. And then that aesthetic is consumed, is thrown away, and you are thrown away with it as well. So my advice would definitely be to explore your digital identity within this space. That’s the best way of remaining relevant. Also understanding what is unique to you, to your experience, and to your voice in ways that instead of just remaining relevant in this field, you’re also a valuable contributor. And you’ll also become a mirror to the industry so that more and more people can feel that they are represented to your own particular perspective, and voice. And also, it’s very important to keep track of all the new templates and technologies that are coming up that you can definitely take advantage of. So that you can also sort of ride the wave of hype that these templates come with. For example, Lens Studio just released the 3D body tracking technology that is like a revolution, as someone that has been experimenting with augmented reality for a few years, this is really the first tool that I can see that will truly elevate my work and make it look more realistic, make it look more in the moment. And I was lucky enough to be collaborating with Spectacles and Snapchat, and had early access to the 3D body tracking feature. But as this feature is being more and more talked about, obviously, the Lens Studio in the Snapchat community is looking for this particular type of filter. So if you make it first, you’ll also be one of the first people to define the aesthetic of a new template, or of a new product. And it’s definitely very exciting. I was trying on the DEPT® bomber jacket online on Snapchat, sorry, earlier today. And you know, you move your arms and it moves with you it’s just completely unthinkable a year ago, I would never think that this would be happening today or that there would even be a need for it today. So I think that the best way to remain relevant is definitely to remain authentic to yourself and to your identity. And to keep track of all of these amazing, amazing creative opportunities and features that are coming out.
I would like to add to that it’s also very important to really get people following you. And that really an authentic connection to the blockchain industry is necessary because there’s a lot of people jumping on, they’re just trying to make a quick buck right now because it’s a hype. So for any 3D artists who’s coming there should come with concept, should come with the attitude that they’re there to stay, and not just to like throw something onto a marketplace and trying to monetize on it. Because that’s what that’s what the buyers want. That’s what the users want. When you ask the people who are doing the big investments in the blockchain space. You know what, why would they invest in our piece, they really just need to have an authentic connection to the artist and know that they are there for their artistic and creative reasons for their storytelling reasons. For something that has to do with their digital identity. As Damara says, something that really connects to the space and what I love about it is that it creates a space. A whole new generation of artists like this artist called Ferocious who just did a drop with the RTFKT guys, digital sneakers for 3.1 million. He’s done multiple different drops on his own as well. And he’s making a lot of money. This kid is 18 years old. And he really came into the community with the storytelling aspect of an 18 year old artist, my parents hated my art several years ago. And here I am with my community and they are investing hundreds of 1000s investing millions in my art, people see him as the new key herring of the digital art generation, that story really resonates with that community. And with that space, it really provides kind of like this idea of the new world. We don’t have to be tied to the Sothebys and Christies in the traditional art world, all of a sudden, we have this whole new medium of a whole new generation of people coming in there from a very, you know, genuine perspective. And if anything, no from the blockchain community, they know that they despise data. They’re not all about status quo. They’re not all about, you know, big organisations, they’re all about decentralisation. So, you know, independent people, and, you know, just trying to do things differently than they exist, let’s say in, you know, the old world versus the new world. So for me, it’s the exciting space. And, you know, like, we’ve been in it for over two years right now. And there’s been a lot of people jumping into the space over and over again. And the question always is, do they stand the test of time? Are they here just kind of like dropping in? Are they here to stay? Because these cycles, they come and go, we’re in this hype cycle right now, it will die out at some point, who are going to be the people that are going to stay in the blockchain community when the money’s not flowing anywhere? And who are the people that are going to be stepping out again? Because you know, it’s not a trend. It’s not a hype. But uh, yeah, it’s definitely gotten so much better. And I recently read a letter by somebody who’s knee deep in the blockchain space. And he talked about cycles from 2011, 2013, 2017. And now 2021. And he really says that vision is going to be the one main differentiator between all the players in this hype.
I’m going to agree with that as well. I think that you’ll find that people will rise to the top of that pile, I’m personally wondering if they’re gonna end up getting hired by these luxury brands, or be their own luxury brands like create the supreme that is the digital version or something like that?
I think that’s the latter. Absolutely.
I hope so. Right?
Yes, I just wanted to add up that I definitely think that they will become their own future and present culture, digital fashion brands, like The Fabricant for example, there’s no comparison between the experience of The Fabricant and the experience of a physical luxury brand.That these are two completely different niches. And our challenge right now is to respect both of them. And if luxury analogue fashion brands really want to be part of this niche, and really want to be relevant and create an impact on these needs, the best thing that they can do is to collaborate with artists and designers that already have a voice in this space that are already followed. Because like in any niche out there, this is very important. And if there is no authenticity, people just run away from a concept. So I think that right now it’s really about building up the energy. So that it’s not just a fad. As many people I see, I really do believe in the power of NFT and digital artists, for it to be a new era of interaction and consumption of art overall.
I don’t think you could have made a better segway to the next question, which also ties into a few Q&A questions, which is about authenticity. Rachel, you’re probably gonna weigh in here too. Like there’s any artist who can sell their goods directly to consumers on blockchains multiple, right? But verifying that authenticity can be hard because what’s to stop someone from making multiple copies? What’s to stop someone from selling in multiple marketplaces or multiple times? So even though it’s not in the spirit of blockchain, it seems like we still defer to brands or clearing houses or whatever to be the trusted authority in the matter, the Sothebys and Christies of the digital world. What is the future of verifying ownership when those records exist on multiple blockchains in multiple wallets? Do we look to some one solution to rule them all? I don’t know how we end up dealing with this. How we prevent forgeries.
Right. I can chime in.
I mean, there’s different blockchains that you can issue NFT’s on. And so the proof of ownership can exist amongst those different blockchains. Obviously, the question is how do we enable the creative economy and sort of marry that proof of ownership in the real world and how your brand and identity interacts with the real world today with those blockchains? Today, at the end of the day, proof of ownership relies on who actually carries the private keys across any blockchain, right? So you as a brand and as a creator, you need to choose if you want that ownership yourself, and it’s pretty scary to be your own bank, and custody, you know, 24 words long see phrases and whatnot? Or do you want to delegate that to, you know, such a custody provider? Maybe someone like Circle who can custom NFT’s and, you know, as, especially as NFT’s rise in value, like do you really want to be the owner of an NFT that’s worth, you know, millions of dollars. So that’s one aspect is the real ownership lies and who custody, the NFT’s. But then how do you represent that ownership to your audience? I think it’s going to be a combination of your existing social and community channels, to marry those two worlds. So they, your audience will be able to see sort of your, you know, public wallet address where you’ve minted the NFT. And when you tweet it out, or when you post it on, you know, social and Instagram, and Snapchat, you as the existing sort of brand and creator ownership, you know, voicing that you’ve mentioned this in a tweet married with that proof of ownership with your keys, through the public wallet address is going to be sort of the nuance of how digital ownership represents going forward. And then you can choose where to distribute that across any any, you know, any one of the horizontal or vertical marketplaces that is about one through going forward.
Now Will,l do you see like, kind of stuff happening at Snapchat, where let’s use the Gucci sneakers example? What if I had the skills to make my own Gucci sneakers? And I made them and I’m like, yeah, and there’s my filter, and there you go. And then Gucci can like send you a takedown notice or whatever? Have you had to deal with any of that stuff yet?
So in that respect, that would be between you and Gucci. And with a platform that you’ve used to a certain degree. I think I’ve talked about authenticity, just from another aspect, it’s from the brand point of view. And I think that’s in terms of, I think, for me, just to take a step back from the NFT space and just look at it from a marketing perspective, one of the things that I think brands look for, or have always looked for is authenticity and marketing. And with NFT’s with augmented reality, what you have is a an experience where people are welcoming the brand into their world, certainly when you look at say Gucci sneakers or Adidas sneakers, or any kind of product trial AR experience that may lead on to a purchase of the actual product or of an NFT, what you’re finding is that people are spending the time to choose to pay attention to that experience, right and attention, supposedly, a diminishing commodity within marketing is really not people are just choosing to spend their time paying attention differently, is diversified as opposed to diminished. And I think that with augmented reality, what you’ve suddenly got is this amazing, well crafted high attention experienced lead space where people are choosing to spend time with brands, but they’re doing it totally on their own terms, you have to choose to open up the platform to scan the world to launch augmented reality and to spend time with it and then share with your friends before you go and make a purchase. Really the intent and the attention is all in the hands of the consumer at that point. And then I think that if you build on that again, and look at emotion, which supposedly is also something that’s very hard to build at the moment, well, TV ads are getting shorter, and ad people have ad blockers on again, with augmented reality. And with NFT, you have this opportunity to create an emotional connection through the craft and through the moment that the person is spending with the brand, before they go on to kind of grow and take that action. So for me kind of authentic, the way we think about authenticity is how brands can use this emerging technology. And actually, I don’t think it’s a fad. I think it’s something that’s just going to grow. As we’ve already said, we’re seeing more and more time with our digital lives being just our lives, right? Our augmented reality, virtual reality, extended reality is just the new reality. And I think that people are going to be spending increasing amounts of time and giving increasing amounts of attention and actually building bigger, more emotional connections with these experiences as they become richer and more developed. So I think for me in that respect, authenticity is something that is going to grow in time alongside values of attention and emotion. As people become more familiar with this as an experience that just is a part of the new reality.
Yeah. Well said. So, we’ve been getting a bunch of questions in the chat. And I’d like to take a couple of them and wrap this up pretty quick. But it’s a bunch of stuff around sustainability and environment, which I was surprised about. Maybe that’s just because I’m American. But it’s, you know, it’s definitely top of mind for a lot of people. There’s one particular question that I thought was interesting, which is to say, you know, we’re going back and forth on, you know, is it green energy? Is it okay? Could you use green energy somewhere else? And then we kind of got down this rabbit hole of why do we even need NFT’s in the first place? Do all brands need them? Could they make them without doing it on the blockchain? Or there? Should we look at the breakdown like that? Should we look at it like, hey, there’s a sustainable thing we’ve been doing for a while, there’s this newer thing that uses a lot of energy and everyone’s jumping on that bandwagon? Do we? How do we fix that problem? Do we? Is it a marketing thing? Is it just switching? Do we just all get off of Ethereum? I don’t know. There’s a big question there.
I think there are a lot of misconceptions in this place. And it’s, you know, similar like, Is it just the JPEG, there’s a lot of headlines going on, particularly when it comes to carbon emissions. So there’s a tonne of nuance. So let’s start with a theory. Obviously, it’s one of the chains that has the most adoption when it comes to NFT’s. But there are other chains that Isabel put forth, in her presentation around, you know, proof of stake. And Ethereum in itself is actually migrating to proof of stake. And it’s real, and it’s coming pretty soon. I won’t go into sort of, you know, the trade offs or differences between proof of work and proof of stake. But long story short proof of stake is less energy intensive, because it combines verschil aspects of mining. Similarly, there are layer two solutions that are helping Ethereum communities go faster and minimising some of these work, as they migrate to proof of stake. So this is something that will be solved within the next, you know, year, 18 months. And if it’s really important for your brand, then you can choose to adopt an NFT standard on a third generation blockchain that already supports proof of stake to address the question on, you know, miners, you know, minting fees in latent capacity, it is true, there is excess capacity right now, in places like Iceland, or you know, that use geothermal energy. And these miners are simply solving for a latent demand that exists there and where renewables are actually under utilised and under discussed. So there’s a tonne of nuance, and it’s all relative, as you said, right, relative to specific emissions from a specific artist that might be travelling to Art Basel in a year. And now you know, because everything is virtual and if NFT’s let you take advantage of digital ownership, they won’t take that private jet to basketball anymore. So there’s a trade off between the physical and digital worlds. And in the digital as you said, the trade off is proof of ownership versus not. So it’s a nuanced topic. It’s headline grabby, but the crypto and blockchain community is definitely working on solving some of these proof of work versus proof of stake issues. And if you are as a brand new, you can choose to make a stake, no pun intended, in your marketing, by choosing a specific blockchain and being really conscious about it.
That’s great. Will, did you have something to say?
Yeah, so, I was just going to jump in and say, I think there are other elements to the environmental point as well. I mean, you know, what you’re finding with product trial is kind of trial without travel, right, we can open a shop wherever we want to, we can put, you know trainers on people’s feet wherever they are, they don’t have to actually travel into town or travel to a shop to go and make make the purchase. So there’s a kind of small environmental impact that increases with scale, when you look at it in that respect, and I think that’s possibly also kind of tied to manual manufacturing, too. And lots of other areas of industry where augmented reality is being applied to remove the need for physical presence and physical state. So I think that as Rachel said, there are many nuances to it. But I do think that we’re in a period of positive change and the responsibility sits with all of us, right like to make kind of considered and thoughtful decisions about The way that we, you know, interact with the world with the work that we do.
And possibly just to add to that, I think also, if you think about people flying around the world to look at art and buy art, and then compare that to being able to buy digital art, there’s trade offs in that as well. But I think you are sort of with all of these environmental issues. Why? Why would it be worth doing this? And I think that it’s also interesting thinking about NFT’s as that contract. So beyond the digital art and digital fashion, actually, if you’re using NFT’s to represent a contract, which might previously have had a lot of middleman in the middle. It’s more verifiable, it’s instant. It’s and it’s sort of decentralised and permanent. And there are obviously huge benefits to that. That’s great.
Well, we’ll just do one little layup question for everyone as we wrap this thing up. So we’ll go around. We’ll start with Isabel. And then I’ll go from there. But basically, can you give me like one or two lines about what’s making you excited in this space and where it’s headed? Which is, that’s a loaded question. So let’s try to do one or two lines. I realise. So Isabel I’m putting on the spot first.
All good. Um, maybe often, Art and Design comes first in new technologies. And I think that the next five years will be a sort of sweet shop of interesting thoughts around how you could actually apply NFT technology and even just thinking about NFT’s for the last two weeks has just made me, I was fairly new to this until two or three weeks ago, and I’ve just been totally seen the light on their potential. Damara?
Oh, um, I think that the, what… Okay, let me reformulate this, the most exciting thing about digital art in general, and NFT’s for me right now, is the concept of ethno digitization, which is the idea of making sense of technology to your own cultural identity, and livelihood and background. And I see it as a great tool of being able to construct a more global aesthetic or virtual goal of global culture. There is more inclusion of different backgrounds, because as of right now, specifically talking about fashion, we have the ethnical fashion or the Oriental fashion, and then the mainstream standard, Western fashion. But with digital fashion, I see a lot of inclusion of different cultures. And I hope and expect these different cultures when they actually impose themselves on the mainstream analogue fashion industry as well.
So I’ve been in the crypto industry a long time, and I definitely feel like NFT’s and what we’ve seen in the last two months, you know, people say that crypto is going mainstream. And this is a mainstream moment. But I actually like to think of it as now mainstream is going crypto the other way around where you feel that push towards the industry. And, you know, it’s been many different use cases for the last 10 years. It’s been primarily sort of trading and speculation and you know, store of value and NFT’s are really just enabling the creator economy, for moving rent seeking intermediaries, letting them have control over their demand, and how they get to monetize and making their fans, owners of their work and using a new technology. And so it’s just turning users into fans and fans into users and having a technology power that is really powerful and really powerful to see actually happening at scale, which is pretty cool.
I like that the mainstream is going crypto stealing that. We’ll do Will. And then do Kerry, so Will your next.
Great, thanks very much, so I totally echo all of those. I’m very excited about everything that everyone’s mentioned so far. And I think that I’ll go back to something I said at the beginning which is around craft really quite simply. I just love the idea that a lot of what we’re seeing now is kind of a focus on digital craft and the accessibility and ownership of that not just being democratised as well as the accessibility to being creative itself. I think that’s all wonderful to see. And then just to kind of bring it back to them to improve from a marketing perspective. I think that is relevant to brands as well in that they’re able to create something that’s just a quality with which people choose to spend time with an idea of people being able to choose to spend time with a brand and as opposed to being interrupted with it, I think is unique. I think that AR in itself is probably the most interesting format to come along since film for me personally. And I love to think we’re really at the end, not necessarily at the beginning, but we’re really starting to see a mass tipping point, as we’ve mentioned a couple of times. So I think all of that’s very exciting.
That’s a great segway to Kerry.
Well, we call it the NFT hype right now, non fungible token hype, and NFT is an acronym and I would love to just throw in another acronym that’s been around for a long time to that, I think will be the next hype within blockchain. Now it’s DAO, decentralised, autonomous organisations, I think that’s what I’m the most excited about in this space. And I think within eight to ten months that we’re going to have a DAO hype. We are going to be super excited about that as we are about NFT’s. And that, to me, is the most exciting space because it is really talking about the blockchain economies, it’s really talking about community. It’s really talking about the decentralisation of multiple different aspects. And it’s really asking for participation from people to start taking part rather than just be passive observers. Now you have to be an active participant. And that’s what’s going to be necessary moving forward not only in blockchain, but in you know, general society. So yeah, I think there’s going to be a lot of interesting DAO’s coming up in the next few months, especially this year.
Man, I could not have ended this talk better than that was, that’s great. If you’re excited by this talk, go Google that and you can learn more, you can crawl down the rabbit hole a little deeper. Thank you, everyone so much for joining today and taking the time out of your day to join this panel and educate the masses and talk about this stuff with like minded people. Thank you as well for putting together a presentation and I had a great time. I hope everyone else did. If you need to reach out to me for any questions, my name is Brandon Aaskov. [email protected], that’s probably the fastest way to reach me. And yeah, I’d love to talk about this more soon. I’m sure we’ll hit another bubble soon. So we’ll talk about it then.
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Senior Marketing Manager
What are NFTs and are they here to stay?
When Twitter founder Jack Dorsey sold the world’s first tweet for $2.9 million earlier this month, it made the news around the world instantly. The question was posed: can you buy a tweet? And it seems you can, with non-fungible tokens (NFTs) making it possible. But what exactly are NFTs and why do people pay millions for them? Here’s everything you need to know.
What are NFTs?
A non-fungible token (NFT) is a data unit in a blockchain, mainly Ethereum, that represents a digital file such as a meme, song, photograph or tweet. Ethereum is a cryptocurrency like bitcoin, but its blockchain supports these NFTs, and other blockchains can implement their own versions of NFTs.
Although NFTs are tracked and managed on a blockchain, in contrast to fungible tokens (exchangeable data units, like bitcoin), an NFT is completely unique; so whereas bitcoin is traded for bitcoin, the ‘non fungible’ aspect of NFTs means they are not interchangeable.
Purchasing an NFT serves as a digital title deed or proof of ownership, which has driven much of the hype that people can now purchase, own, collect and sell digital assets, despite the files being shared and copied freely across the internet every day. In this sense, it has been likened to the process of art buying, in that although many copies of an artwork may exist, only one person can own the original.
Why the hype?
The first NFTs were launched in 2015 and one of the earliest successes was the launch of CryptoKitties, a game that operated on Ethereum’s blockchain network. Each CryptoKitty had a unique NFT and users could buy, sell and breed them. The game’s popularity flooded the Ethereum network in late 2017, causing it to reach an all-time high number of transactions. By March 2018, CryptoKitties had gained more than 1.5 million users who generated more than $40 million in transactions.
More recently, NFTs have regained momentum as a result of numerous high profile and high value sales. In February, the Nyan Cat gif sold for more than $500,000. Shortly after, musician Grimes sold some digital art for more than $6m, followed by Twitter founder Jack Dorsey selling the first ever tweet for $2.9m.
The first digital-only art auction, hosted by Christie’s, set a new NFT record earlier this month, after Beeple’s digital artwork sold for $69m. It is within this space that experts see the future of NFTs, using blockchain as the basis of (digital) art trading. This makes sense for multiple reasons: authenticity; democratisation, and zeitgeist.
The value of an artwork depends on a number of factors such as authenticity, age, and the number of owners. Especially with digital art, artists often have the problem of proving the authenticity of their asset. Currently, an artist can upload their artwork to a blog, social media platform or website, but that does not prove ownership.
By using NFTs, artists can upload their art and add the authenticity details directly to the tamper-proof blockchain. Because everything is recorded, the asset can be traced back to its owner and the first date it was published. This also serves as an advantage for art dealers, because proof of authenticity was previously extremely difficult without an art expert, and extremely expensive with one.
In addition to the challenge of authenticity, platforms such as KnownOrigin, which make it possible to present digital works of art and collectibles as NFTs, also help to solve the problem of high entry barriers by making the art world more accessible. To some extent it democratises digital art trading, with no special relationships or contacts required to buy and sell. Even those who can’t or don’t want to spend millions can find digital art on the internet for a smaller budget.
NFTs perfectly represent the era’s zeitgeist. Although the first NFTs existed in 2015, the hype that has developed over the past few months is no coincidence. With digital transformation taking huge leaps forward as a result of the COVID-19 pandemic, forcing people online more than ever, NFTs are almost a logical consequence.
The future of NFTs
Although momentum doesn’t seem to be slowing just yet, there are concerns around the long term environmental impact of creating (known as ‘minting’) NFTs. They use the same blockchain technology as energy-hungry cryptocurrencies, which consume a lot of electricity and generate a significant amount of greenhouse gases.
With climate protection another reflection of the era’s zeitgeist, some artists have decided not to offer their work as NFTs. If no action is taken, this view has the potential to stunt growth, although Ethereum has previously shared its intention to reduce energy consumption by 99%.
But with the right changes made to make NFTs more sustainable, there are lots of interesting opportunities for brands to get on board. Nike has already patented a method by which the authenticity of trainers can be checked by NFT, titled CryptoKicks. Other fashion and entertainment brands are also showing interest, as while artist collaborations and collectibles are nothing new to those brands, NFTs open up a whole new way of co-creating.
It seems we’re still very much in the eye of the NFT storm and we at DEPT® are excited to see how the trend takes shape in the future, most crucially in a more sustainable way. Join us and Byte (part of Dept) at 15:00 on Tuesday 6 April to find out more about NFTs, the possibilities for brands as well as ways to address the climate controversy surrounding them.
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Senior Marketing Manager
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