5 Things Blockchain You Need to Know for August 30, 2022

How NFTs Transforming Business Models

TLDR: NFT is transitioning out of the hype phase of two-bit graphics into genuine web3 business models.

The subscription business model became popularized by telecommunication companies and was soon adopted by music and video streaming providers. With this type of business model, access to content became more important than owning individual items. This provided a new look at ownership and consumption, lowering the initial expenditures. People found the idea of only paying for what they use attractive. Subscription services are presently widespread, and as competition for consumers grows, businesses must seek an advantage to retain them. Companies that embrace NFT subscriptions might gain a competitive edge. But how?

There are two types of authentication with NFTs that make them perfect for managing subscriptions. The first is confirming that it is an original, and the second type confirms ownership as there can only be one owner per NFT. The fact that NFTs are on the blockchain makes them verifiable, which in turn allows for their use in managing content behind paywalls. These characteristics make NFTs unique. A subscription-based business model is key for any Web3 project. The concept of a non-fungible token (NFT) subscription is expected to be introduced in the world’s first subscription service for a digital luxury fragrance brand, Scents of Wood. As part of this exclusive program, NFT owners will receive one of the brand’s fragrances twice a year. With this ground-breaking project, the fragrance and NFT industries are now colliding helping increase and empower the group of subscribers, customers, and bloggers that are associated with a brand.

NFTs offer a wide variety of possibilities for subscription-based businesses, such as reducing reliance on central payment processors. Brands might provide consumers with the tools needed to bring new people into the funnel. Customers could be engaged, rewarded, and interacted with in new ways, allowing businesses to adapt to growing trends more quickly and efficiently. The current onboarding process is lengthy and complicated, but we have only just begun to tap into what is possible. The future looks very promising for NFT subscription businesses and those that embrace this approach.

DeFi Credit Scores: Coming Soon to a Blockchain Near You

TLDR: A web3 credit score would help individuals to prove their trustworthiness when trying to transact on blockchains.

One would not initially think to find a credit-scoring system in the world of Web3, blockchain, and decentralized finance (DeFi), with their predominantly libertarian users. The goal of a web3 credit rating is to assess the trustworthiness of people attempting to do business on blockchains. The way they operate isn’t too different from centralized finance credit scores. The distinction is in how they define identity, and how simple it could be to trick them. Because anonymity is a core aspect of Web3, blockchain, and DeFi technologies, it’s difficult to see how credit scoring can effectively eliminate internet fraud without troubling many of its supporters.

Web3 credit scores, like real-world ones, utilize a number of metrics to build a profile and determine the level of risk the user presents by allowing an algorithm to crawl through the linked wallet’s on-chain, and sometimes off-chain, history. A user’s virtual wallet may contain a variety of things, including financial transactions, NFT holdings, gaming transactions, salaries, governance votes, and so on. As a result of this bundling, the user is also revealing their pseudonymous identity.

The various DeFi credit agencies issue NFTs as a token of creditworthiness after the score is determined. Those NFTs may potentially be utilized in place of collateral, which is usually how DeFi transactions and loans are backed, on any blockchain system that supports smart contracts, such as Ethereum. However, widespread adoption of decentralized identity constructs and application is required before we can have reliable credit scores in Web3.

Web3 Will Make or Break Social Media

TLDR: With social tokens, we can generate entire economies in which users can trade and hold stakes for the purpose of redeeming tokens to gain access to certain content or experiences.

Web3 has been praised as the game-changer of the internet, a fresh perspective, the future of networking, and a digital revolution. It enables the free flow of money, similar to how the internet allows for the free flow of information. Cryptocurrency has the ability to make global payments more convenient, including small transactions, and empower social media users who may be rewarded for their content. This is achievable through “social tokens” which are given to end users such as artists and even whole communities.

With social tokens, we’re not limited to one-way transactions, subscriptions, or donations like with Web2. Instead, we can create whole economies where users can trade, hold onto stakes, and redeem tokens for access to specific content or experiences. If designed correctly, social tokens give most, if not all, of the economic power to end users, providing a better way to monetize than on Web2. For all the talk of Web3 disrupting everything from fashion to social media, it’s still just out of reach. The technology is present; the audience, on the other hand, has yet to arrive. With time, more and more people will be attracted to the Web3 ecosystem as the market for crypto and stablecoins expands. It won’t happen overnight, but it is inevitable.

How Blockchain Technology Is Changing the Face of Hospitality

TLDR: Industries that have long avoided the Web3 revolution are beginning to embrace this new way of doing business. Blockchain, for instance, now provides much-needed transparency in the hospitality supply chain.

Although crypto might be experiencing a down period, blockchain technology in the hospitality industry continues to grow and evolve. There are many potential opportunities that blockchain technology offers the restaurant world in terms of supply chain transparency. Blockchain solutions alleviate security and safety problems by offering ways to track the exact origin of sourced materials in the supply chain, preventing them from being falsified. It is almost like a certificate of authenticity, in that it can track and monitor every part of the process, from when goods are being picked and packed, to when they arrive at the final destination — the restaurant. Every touchpoint a product goes through is tracked on the blockchain. This is an excellent way to ensure that the process is secure from start to finish.

Many high-end restaurants have already begun selling tickets as prepaid seats, suggesting that NFTs may replace traditional ways of reserving a table. No-shows are always a pain, but for small restaurants with fewer tables, they can be devastating. If just two out of ten tables don’t show up for their reservation, that’s 20% of the restaurant’s income down the drain. Rather than being physical, if tickets were digital NFTs they could be more easily sold or traded on an open market. This would come in handy for those who can’t make it to their reservation and instead wish to sell or gift the ticket to someone else with no hassle.

The only potential downside is that others could resell the experience at a markup. However, the NFT resale percentage would still go back to the restaurant. This implies that the restaurant won’t miss out on any of the advantages of being so popular that people are prepared to pay four times the worth for a table reservation. By integrating blockchain technology with physical products and services, we open up a whole world of possibilities that are only just being explored.

Metaverse for Marketing

TLDR: Imagine being able to meet someone from any part of the world in an immersive digital space that allows you to interact with them as if they are next door. Metaverse makes it possible, allowing users to interact with one another in a fun and unique way.

With the current buzz about Web3, NFTs, and Metaverse, questions have been rising about how this will impact digital marketing and social media advertisement. Web3 is being marketed as a more intelligent and immersive version than its predecessor, with a focus on users who want direct interaction with brands.

The Metaverse provides an immersive, digital space for consumers that allows them to interact with people from all around the world in a fun and personalized way. Although it has many benefits, there are also some challenges that come along with it. You no longer have to visualize being in an alternate place where space and geopoints limit access and interaction. We already live there. Metaverse combines the marketing knowledge of Web 1 and 2 to provide a more sophisticated Internet experience for customers. Marketing is all about interacting and connecting with people, as well as getting your message across. The general idea behind traditional marketing techniques is to be relatable and authentic so that people will like you and your brand. In the future, a significant amount of success for a brand’s marketing campaign will depend on its authenticity. With Tokens and Web3 marketing, users can be confident that they have an equal opportunity to participate in the engagement, buying, or selling of products.

Blockchain and crypto have gone from pipe dreams to billion-dollar breakthroughs because they were able to align the market toward worldwide access and direct connection. Brands are discovering NFT markets and establishing unique connections with their fans based on their desire to establish genuine communities. Many of us are still new to marketing on Web3, so we’re bound to make some mistakes along the way. However, the trip will be interesting, and users will be able to reap the benefits of such an experience.

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Sani Abdul-Jabbar

Sani is the Board chair at VezTek, a Los Angeles based provider of software development and on-demand tech. talent for Blockchain and Web3.0 initiatives.