June 28, 2022

NFTs: sight, sound, and … smells?

Welcome to the Block & Mortar newsletter! Every week, we bring you the top stories and our analysis on where business meets web3: blockchain, cryptocurrencies, NFTs, and metaverse. Brought to you by Scott Robbin and Q McCallum.

Last week's newsletter was a little heavy on DeFi, systemic risk, and Things Go Wrong™. Things are a little lighter this time around as we dip into the NFT and metaverse sections of the web3 pool.

But will it also make phone calls?

New York City was the home of the NTF.NYC and ApeFest 2022 conferences this past week.  There was plenty of news to go around – including the release of an NFT-themed music video by Snoop Dogg and Eminem – but one item stood out: the team behind the Solana blockchain unveiled the Saga, a new phone

The Saga is a central part of Solana's attempt to make cryptocurrency apps more mobile friendly. Many crypto, decentralized finance and NFT applications are more limited on mobile than on desktop, or have cumbersome user interfaces. Anatoly Yakovenko, CEO of Solana, joked at the event that he still sees people pull out laptops on dates in order to mint new NFTs. "Web3 still feels like we're in the year 2007," Solana mobile head engineer Steven Laver said at the event.

On the one hand, a crypto-themed handheld device was inevitable. (By "device," we don't just mean hardware wallets.  Those have been around for a while now.  And we highly encourage you to get one for your pricier investments.)  So we applaud Solana for being the first big name to this party.  As Yakovenko pointed out, "We didn’t see a single crypto announcement at Apple’s developer conference, 13 years after Bitcoin went live. I think it’s going to be up to us."

On the other hand, Solana is exploring new territory not just for itself but for the wider industry.  That leaves a lot of open questions.  How many people will ditch their phone for a Saga?  Will there be higher switching costs for iOS users, since Saga is based on Android?  How many people will use a Saga as their primary phone, as opposed making it their separate, crypto-only device?  And let's not get into the ongoing maintenance, such as deploying OS patches.  Or growing and maintaining the app ecosystem.

(We're not as worried about the primary hurdle, that of actually building a device. Solana has partnered with handset maker Osom and the Saga is a rebranding of their existing OV1 model.)

The real question, then, is not about whether this particular device will succeed.  It's about what other companies will enter the market for dedicated crypto handhelds. And what a wider ecosystem of those devices will mean for adoption of cryptocurrency and unlocking new capabilities.  Not to mention, whether this will lead to more "crypto-enabled phones" or "crypto-specific devices that are separate from phones."  Time will tell.

Phygital fitness

(Editor's note: If you think this section's title makes for a terrible joke … you should see the ones we rejected.)

It's often said that the metaverse is all about bringing the real world into the digital.  Maybe it's more about defining the overlap between the two?

Enter the term phygital, a blend of atoms and bits.  (Sharp-eyed readers may recognize the "atoms-versus-bits" terminology from Chris Anderson's Free.  We'll come back to that in a moment.)  

Part of metaverse life involves decorating your digital self, or your avatar.  Maybe you're creating a pixelated version of yourself.  Your avatar could also represent a completely different identity.  Whatever the case, you want this digital being to dress the part.  Fashion houses were early to pick up on this desire to personalize one's online representation, and they adapted their real-world goods into wearables for avatars and NFTs characters.  

Why should clothing companies get all the fun? Byredo and Rtfkt have paired up to give your avatars custom perfumes (called "auras") that are digital twins of real-world counterparts:  

Similar to the co-branded Nike and Rtfkt Cryptokicks sneakers, collectors will be able to create custom scents by combining the digital ingredients that can then be forged (meaning physically produced), at up to 2,000 scents. Through NFTs, people can combine two of the ingredients to “mix together, like an alchemist, like potions in video games,” says Rtfkt cofounder Benoit Pagotto. The physical bottles will then be produced and individually numbered and identified with an NFC tag connecting it to its NFT, similar to the upcoming Cryptokicks sneakers.

By the by, you may want to check out Free if you haven't already done so.  Author Chris Anderson explores how business models change when companies can suddenly ship digital goods instead of just the physical variety.  Spoiler alert: a lot happens when the marginal cost of delivery drops to (as good as) zero.

Don't let the book's 2009 publication date fool you.  One of your Block & Mortar editors reviews it now and again as a refresher.  If you see the introduction of web3 – be it for metaverse properties or blockchain-based tokens – as the re-digitization of the world, well, you may want to take a (re)read yourself.

NFTickets

Paris will host the 2024 Olympic Games.  The event is still ("only?") two years away and the city is already deep into planning.

Olympics envoy Michel Cadot submitted a report to the French government outlining recommendations for, among other things, security.  And one item on the docket is the potential to use NFTs for ticketing. (French , English)

This would hardly be the first event to use NFTs in this fashion; but when you consider the size and scale of the Olympics, this would be one hell of a road test.  Consider what it would take to deploy and maintain a system for selling, distributing, and validating the NFTs.  And then there's the potential for people to hold those NFTs as memorabilia, or even resell them as collectibles.

(This is when we'd also mention the environmental impact of paperless tickets, but let's first see whether the underlying blockchain is an energy hog...)

If you've been thinking about using NFTs as tickets, VIP passes, or similar, keep an eye on Paris 2024. And maybe check out this story about a Paris blockchain conference that encountered some ticket scalpers when it used NFT-based tickets.  There are still some rough patches to iron out in this kind of system.

Preparing the job market well in advance

The tech job market is a high-demand, low-supply space.  Even with the popularity of "boot camp" training programs, companies can't seem to find enough software developers and data scientists.  Amazon Technical Academy, for example, went as far as to open its doors to people outside of the company last year.

Creating a training program to backfill empty roles can help, but it's a reactive approach. Facebook – ahem, Meta – is getting ahead of the game.  Working with tech school Simplon, the company plans to offer training for web3 technologies in France.  The program is open to the public, regardless of academic background.  (Admission will be based on interviews and code challenges.) 

To be clear, this is not a hiring pipeline into Meta.  While some graduates will no doubt join Formerly-Known-As Facebook, they may also find themselves filling metaverse job openings elsewhere.  Some could even use these new skills to build their own companies.   Whatever the case, it looks like Meta is playing the long game in the hopes of growing the wider metaverse ecosystem.

Well worth a listen

If you work in the tech space, you never stop learning.  The field changes so much, and so quickly, that you need a steady stream of articles and books to keep track of new developments.

If audio is more your style, we've recently come across two podcasts to boost your web3 knowledge.

The first is Bloomberg Crypto.  These short, focused, daily episodes get to the bottom of current topics in the crypto/DeFi space.  The show is hosted by Stacy-Marie Ishmael, managing editor of Bloomberg's cryptocurrencies unit.  (You may also recognize her name as the co-founder of the Financial Times Alphaville.)  Each episode runs about ten or fifteen minutes.  That should fit into even the busiest of schedules.

The second is last week's episode of La Story, from French business newspaper Les Echos. "Pourquoi les entreprises craquent pour le métavers" explores key metaverse concepts, what kinds of businesses are getting involved, and even some use cases.  If you understand French and have a half-hour of free time, it's well worth a listen.

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Note: We’d like to thank Shane Glynn for reviewing early newsletter drafts. Any mistakes that remain are ours.