Crypto, NFTs, and the Metaverse mean big changes for businesses—here’s what they need to know

The internet is in a period of change. Old terms such as e-commerce, social media, and copyright are being supplanted. Now, new terms like cryptocurrency, the Metaverse, and NFTs are becoming household words, their implications and utility hotly debated by governments, businesses, industry experts, and the public at large. The old and the new terminologies are related, and work together in novel, fascinating ways, just as much as the new terms, themselves, are part of a greater, interconnected sea of change in the internet—the transition from Web 2.0 to Web3.

The implications of cryptocurrency, NFTs, and the Metaverse are expected to be wide-ranging. In some cases, they are already making waves in the world of business, the regulatory bodies of government, the daily habits of tech enthusiasts, and the public consciousness at large. For instance, just last year, the cryptocurrency market reached $3 trillion. The market for NFTs, a relatively newer but deeply related part of the internet, is expected to grow by $147.24 billion between 2021 and 2026. The Metaverse—recently announced by Meta (formerly Facebook) CEO Mark Zuckerberg—is still in its earliest stages. But some believe it could be worth $13 trillion one day.

Needless to say, this is a lot of money, and one many parties around the globe are keeping an eye on in the hopes of tapping into. By themselves, the terms are quite simple and understandable even by lay people. However, the ways in which they interact, may interact in the future, grow, and evolve are harder to pin down. The same is true for the opportunities that they pose for businesses and investors.

What are they?

Cryptocurrency is easily the oldest of the three terms. Perhaps the most well-known example, Bitcoin, dates back to 2009. In short, cryptocurrency is a virtual form of capital. A unit of cryptocurrency cannot be duplicated, counterfeited, or spent more than once as many cryptocurrencies operate on blockchain technology, a kind of digital ledger in which each—for example—Bitcoin is accounted for. The ledger itself is decentralized, spread out over a network of many different computers, constantly updating the ledger as the money is spent.

NFTs (or non-fungible tokens) are similar to cryptocurrency in that they operate using blockchain technology. However, while a unit of cryptocurrency denotes money, an NFT acts as kind of virtual ticket of authentication, denoting that anything—an image, a song, a contract, etc.—belongs to the holder of the NFT. Unlike crypto, each NFT represents a unique object. Twitter founder Jack Dorsey, for instance, sold an NFT of one of his tweets for more than $2 million.

The Metaverse, easily the youngest of the three, is anticipated to be a new virtual platform in which users create avatars and treat digital space like physical space. This can include new digital goods, economies, and even real estate.

How are they intertwined?

Beyond the relationship between cryptocurrency and NFTs, the two are also expected to play a role in the Metaverse. The former will act as money, and the latter will show ownership of something such as a digital painting in the Metaverse. Cryptocurrency can also be spent on NFTs, much like real money.

The future of the Metaverse is unclear, but already experts are speculating on what developments may come in the future. For instance, as a wholly 3D world, the Metaverse could contain digital real-estate whose ownership could be shown via NFT. There could also be businesses inside the Metaverse selling novel digital assets such as applications, music, images, and all other manner of files.

When one of these businesses hires a new staff member, the contract for them could be made into an NFT as well, and they could be paid in cryptocurrency while the business sells its wares from its digital storefront. In theory, the security of blockchain technology helps ensure that there’s no question about who the owner of the real estate is, and it helps keep the contract secure (if someone else took the contract, the digital ledger would immediately show who it was).

What does this mean for business?

Already brands like Gucci, Louis Vuitton, Nike, and Snoop Dog are looking into the Metaverse. But if the Metaverse reaches the dizzying highs anticipated, there is room for a truly massive array of other businesses to come on board. The same is true blockchain technologies: there is an expanding list of companies making their own NFTs, and many companies are now accepting cryptocurrency as payment.

The first thing a business should do to get involved is consider the extent to which it can and should engage with the Metaverse and the blockchain. For some, this could mean treating the Metaverse as a marketing opportunity, buying digital real-estate, placing ads for its goods and services—whether they are online or in real life—or holding events to raise awareness. For others, it might mean treating the Metaverse as a digital bazaar, selling tailor-made, proprietary pieces of software for clients who pay using crypto for an NFT of the applications to ensure they stay inside their businesses.

The next thing businesses need to consider is their current capability to reach its goals using these novel technologies. Changing along with these lynchpin pieces of tech may require new hires and restructuring. These massive changes to the internet will inevitably result in a good deal of planning, and changes to how businesses operate—much like how businesses began needing websites in the 2000s, and the whole array of social media accounts in the 2010s. The time when all three come together is still a way off, but a savvy business knows to start looking ahead before the market gets saturated, and any talent they need to hire gets scooped by competitors.

Author bio

Zain Jaffer is the Founder and CEO of Zain Ventures, an investment firm with over $100 million in assets under management. Zain also mentors and invests in frontier tech start-ups across the USA.