Listen in to learn about:
- Supply chain transparency
- Financial transformation
- Decentralized identity management
- Blockchain-fueled AI
- Non-fungible tokens and the new patronage economy
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Resources and references:
- Much of this episode was inspired by Tony Kontzer’s article “7 must-know blockchain trends”
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See the full transcription of this week’s episode below.
7 Blockchain Trends that will Affect the Future of Business
J: Welcome to Conversion Path, a Mar Tech podcast about data and growth by Digital Dames. We gather here every week to talk about amplifying your product, service, or message. I’m Jaclyn Hawtin.
M: I’m Mani O’Brien. In this episode, we’re talking about trends in the blockchain. We’re talking through seven blockchain trends that will affect the future of business, and we’re so excited to dig in. In this episode, we’re digging into seven specific trends, giving a high-level overview, and also providing some tangible specific advice for businesses. So to kick us off, let’s talk about the first trend we’ve identified. Jaclyn, go ahead and start your engines.
J: This is one that I’m really excited about, because it also is going to have an impact on the environment and that is supply chain transparency. As we know, old school supply chains are really complicated. There is tons of information that exists in different silos and there’s not a lot of visibility between those silos. It’s difficult for people within the company or even, you know, consumers outside of the company to know what is going on there. What exactly is happening on that supply chain?
M: Everything from how products are made, to the materials, to the way they’re produced, to the way they’re shipped, and how they end up at the Amazon warehouse. It’s hardly a conscious consumer when you really don’t know.
J: What are you going to do if you don’t have the details? The really cool thing with blockchain at the end of these blockchain networks, consumers will be able to just scan a QR code on a product and figure out what that lifecycle looked like and then be informed and be able to make a decision as to whether or not they want to buy that product based off of how it was made. So that’s a really exciting example.
J: Some companies are dabbling in this now. One example is Wal-Mart. They have a program called Food Trust where the organizations they’re purchasing vegetables from participate. There is more accountability because they know how the plants are being farmed.
We recommend that businesses think about preparing to integrate your supply chain into blockchain technology. As things move forward, companies are going to adopt this into their process and consumers are going to start expecting that they can have that insight into your process. There’s probably going to be some new technologies you need to integrate and maybe reframe your processes a little bit, and it’s definitely going to be work. It’s not going to happen overnight. But if you have a supply chain in your company, you should probably just start doing a little bit of research in your particular sector and pay attention to what that might look like in the future.
M: We covered the basics of blockchain in our previous episode. If you’re new to this space, I would recommend going back and revisiting those episodes where we lay the groundwork for blockchain technology. Certainly none of these changes are happening overnight, but it’s important to us that our clients stay at the forefront of changing technology, and this is definitely something that you want to be ahead of here in the next five, 10 years.
Let’s move onto trend two, which is tokenization. Basically tokenization is made possible through blockchain technology and NFTs that we’ve talked a lot about. This means we now have the increased ability to sell things that we could not sell before. Examples include anything that you upload to the internet, any online or digital asset. We’ve seen the monetization of newsletters, blog posts, and podcasts. People are buying and selling digital art, which has kind of become interchangeable with the term NFT. Although NFTs aren’t just for digital art.
You can also mint and create NFTs out of things like films and videos, even thinking of fashion design assets and your Adobe Illustrator files. You can even tokenize and mint physical goods like designer handbags, paintings, literally any physical good can be minted and tokenized, where ownership can be tracked on digital public ledger and monetized through smart contracts. So this is like a huge topic we’re not going to take completely into. But for businesses today, there’s two recommendations that we would make in terms of what you should be thinking about now and asking yourselves to number one, asking yourself What digital assets do I currently produce? That could be minted, tokenized and possibly monetized. Right now, we’ve been accustomed to producing so much content and sharing it and uploading it to the internet for free. Think of things like your newsletters and your videos. Now in the future state using blockchain technology it can be monetized and minted.
J: You mentioned designer handbags and I was thinking there are tons of knockoff designer handbags. Do you think that this would be a good solution for consumers to know the authenticity of their items?
M: I think there are a couple interesting things, specifically around designer handbags. First of all, authentic handbags have always come with a physical certificate of authentication. This is a digital version of that. But, here are some weird things that are made possible by the blockchain. First off, imagine you’ve got your handbag and then you own the NFT to that handbag. Maybe the NFT is also a digital replication or a digital representation of your physical handbag. Meaning that you let someone take a photo of you wearing the handbag. Then you could somehow monetize that because you own the NFT rights to any digital production of your handbag, which sounds crazy.
And then if you go on to sell it on Poshmark or something like that or to a friend, then you can sell the certificate to your friend and then back to the original producer. The handbag always has a record of who owns the bag and could possibly even write it into a smart contract.
J: I’m imagining a really popular handbag brand. And then this whole onslaught of social media icons that also have a value associated with their brand, their identity. Then what happens is when you have a photo with the two brands together. There are some automated calculations that’s like, OK, I’m this much percent of the value for like this interaction is going to the handbag versus the individual. And then how do you calculate like, what would that look like? Am I thinking about this the right way?
M: I think you are and I think the market will determine those calculations. But the fact that the technology exists to be able to track this type of ownership transfer and the attribution for where sales are coming from is amazing. Let’s say, an influencer is being paid by a brand to sell a purse and then a customer purchases it, it’s all trackable in the public ledger and therefore can be monetized. Both the influencer and the brand can now promote products they’re paid to promote and they’ll have full transparency into how many people purchase through their specific links. There’s just more transparency for everyone. I think it’s easy to feel scared by the idea of tracking on the public ledger. But, I just want to say that there is a great deal of anonymity as well.
M: For a brand today, I would think about the digital assets you currently produce that could be minted, tokenized, and possibly monetized. A brand could allow token holding customers, for example, to vote on a particular topic for an upcoming video or newsletter and then sell it to their community, who all share ownership of the video. So if it goes viral, yeah, let’s say the video goes viral. All owners stand to profit from the distribution and the popularity of that video. So that’s just kind of an example which sounds wild. And then you could also think about the potential to tokenize physical goods. Can you sell a physical painting or limited edition series of prints, each with a unique NFT that could be sold alongside the physical goods? If it’s paintings, maybe someone owns the digital like representation of the physical good and then that’s hung up in the house of their metaverse house in the future. There are opportunities everywhere.
J: I wonder that when this becomes more widespread, how is this going to impact the overall economy because all of a sudden we can buy so much more stuff? What’s going to happen?
M: I really don’t know. I mean, I’m not an economist. I’m just not one that’s naturally inclined to think about money or the economy.
J: That’s such a funny segue into our next trend: financial transformation. What does that mean? Basically, with blockchain, any organization has the ability to become a bank. Because of the way the nature of the technology functions, it’s not that hard to just become a bank if you get the right licenses. One example is that T Mobile just started offering banking services. Even though they’re a telephone company, they have a huge population of customers, and it totally makes sense for them to offer financial services. We’re probably going to start seeing a lot more organizations, especially larger corporations, offering financial services and offering a kickback to whatever their current product line is in order for them to get into this space. And so this is going to drive up competition. And the good thing, I think it will probably end up reducing even more. There’s already been a trend of this, but reducing banking fees even more so it’s pretty cool. And then because of the nature of the system itself, it’s just going to be a lot easier to move around money more freely. So more liberation there. And when we talk about what businesses should think about in terms of the future, from the perspective of financial transformation, I’d say depending on the nature of your organization, you might consider the possibility of providing banking services. You might even think about launching your own cryptocurrency.
M: Cryptocurrency is going mainstream and it’s really wild. Governments are now starting to think about how to transition from the old money model into a new crypto based currency system. I listened to a great interview with Katie Horn on the Tim Ferriss show. She is a former federal prosecutor for the government and now sits on the board at Coinbase. She was talking about her concerns around the U.S. being a little bit behind the ball here. So, yeah, I mean, it’s just happening so quickly. Imagine the Federal Reserve issuing a digital dollar as China is preparing to do right now with its currency using blockchain.
M: There’s also some really interesting data around communities who are unbanked. In the West, it’s so common for most of us to have banks and debit cards. But the majority in the world is made up of unbanked communities, and that’s where crypto is really on the rise not only among the unbanked, but in places like Brazil, where inflation is completely out of control. Cryptocurrency has become a form of currency. It’s kind of become the standard. In fact, I read this fascinating statistic that said it, as of August 2021, Brazilians held $50 billion in crypto, compared to $16 billion held in U.S. stocks.
So, is the future going to be a blockchain economy in which cryptocurrencies have completely replaced today’s monetary systems?
J: I definitely think so. Our current monetary systems are completely antiquated and they’re not efficient. They’re too slow. There is no equality. The blockchain just provides so many better opportunities for access and fluidity.
M:I know we read that statistic once about the majority of people hating their bank, not just like disliking their bank, straight up hating their bank. I think we’re so used to the inconveniences of modern day banking that we’ve just grown accustomed to it. And once you start learning about blockchain technology, it’s literally like handing out cash. You know, me flying to Chile and handing you cash in an envelope. That’s how seamless and transparent it is.
Cryptocurrency is going mainstream and what do businesses need to think about today? No one starts thinking about how you might accept cryptocurrency as a form of payment to and from your customers? This is going to get popular really fast. There’s a lot of learning to be done.
We have many resources on our website. I would immediately get acquainted with setting up a crypto wallet. One of the more popular ones is known as MetaMask. And by the way, we’re not sharing any investment advice and we’re not paid by these companies. We’re just sharing the most popular ones out there. We as a company started a MetaMask wallet to start, and you should consider setting one up more immediately than not and under your brand name just to get accustomed to the technology.
And then the third thing I would recommend is getting acquainted with the various blockchain networks, such as Ethereum who is probably the market leader in the blockchain.
Ethereum is not only a currency, but a blockchain network.
It’s a network upon which websites can be built, and it’s a currency which is unique. Because of this and its current popularity, we would recommend reserving your Eth name. That’s like digitaldames.eth, which is similar to owning your dot com domain name.
Owning your own eth name means that in the future, you could set up a crypto wallet using your brand name to accept crypto payments from your customers so they can easily find you as opposed to providing a long cryptographic token to describe our wallet address.
In the future, hopefully we’ll be able to collect cryptocurrency payments for our Digital Dames invoices..
M: Next let’s talk about decentralized identity management? Jaclyn, please explain.
J: So basically you have a decentralized identity, so you have more control when and where and with whom you want to share your credentials with. This actually ends up giving you more privacy and it opens a number of doors too.
One of the things that you can do with this is the potential to monetize your attention. Like, think of the way that social media platforms have used data to monetize their platforms to advertise all bidding for our attention. It’s been happening for a while now.
Now people are kind of starting to wake up to it, like, “Hey, wait a minute, shouldn’t we own the profits coming from our attention?”
M: Absolutely. It’s been like the attention economy where we flock to the platforms (Facebook, Google, YouTube) and advertisers commonly bid for our attention and customers don’t get anything.
J: We actually get negatively impacted because there’s so much money going into the marketing of attention because it’s so valuable. That the manipulative practices have been implemented through the technology interfaces and they’re actually damaging to us psychologically. So we need to turn this around for sure.
M: It puts power back in our hands. It’s so exciting. I feel like we just talked about this in the last couple of years, how this problem can be solved. And I think that blockchain technology makes it possible.
J: It does. If you have a decentralized ID system, then you can barter your attention and it makes ownership possible on your end. Another thing that it can help with is to accelerate opportunities for social transformation. By having a single decentralized idea that is the only place where things are connecting, there’s like no other silos happening, which make things move really slowly. It will enable organizations like governments and institutions to solve issues faster. It’s just increasing efficiency and the way that data is connected is going to impact a lot of different areas in a really positive way.
M: Imagine applying for your government benefits and your driver’s license and all of that stuff sort of centralized and unique to you. And then imagine that you don’t have multiple passcodes, not to mention multiple places where your data is stored.
J: A really good example is that some states are starting to catch up to this a little bit, but it’s still siloed. Especially like, I don’t know, 10 years ago, every single state was completely disconnected. So whenever you would move to a new state, any information you had and like the legal system had to be like, carried over or you would have to like, deal with like two different organizations like depending on what you had like on your record and that sort of thing, it just made it really, really complicated. So having that centralized I.D. will link everything together, and it will also enable, you know, government institutions to better track those things as like a cohesive whole vs. being kind of isolated silos
M: Think of the impact on medical records and that sort of thing. I’m thinking of an issue near to my heart, which is birth rates and motherhood mortality rates. There’s no central database for, you know, like birth trauma in the U.S., so that could kind of open the door way for again, anonymized data, but centralized in a way that you can actually track traumatic events and things like that in the motor industry.
J: Yeah, we haven’t gotten to the part yet, but oh, I know stuff like that like bringing in like sociologists to do, like high level analysis of these complete data sets that are no longer siloed anymore. Like, it’s just a huge opportunity for social transformation from data as well, right?
M: Canceling of the patriarchy?
J: Another topic we were talking about was class action lawsuits.
M: For example, you get these little paper statements in the mail that’s like you are owed money from Wells Fargo. And I’m like, Oh, now it’s work for me to get this eleven dollars, like, I’m not even going to do it. It would be nice if that was tracked on the blockchain. And they can just deposit $11 into your crypto wallet.
J: Because all of your history is already linked to that ID so they know if you have been involved in whatever it is associated with that lawsuit. With sociologists being able to do analysis like the blockchain stories, tons of information in every block of the chain, all of the information of the entire system. And so the possibility for artificial intelligence analysis, machine learning analysis is incredible. So much potential there. So in the future, companies will be able to see a lot and could never have identified otherwise because we’ve just never had access to data like this before. So it’s going to be really cool.
J: Another thing is that it’s going to make it more available to everybody. Democratizing artificial intelligence being more widely available and not as it is now really restricted to large corporations. It’ll be easier for individuals and small organizations to share their data and do this kind of analysis, which is also really, really exciting. Powerful.
M: There’s been so much talk around democratization and how blockchain technology just is aligned with democratic values in terms of everything from individualized voting rights to representation and distribution of wealth and all sorts of totally hating.
J: It’s the nature of this system, the philosophy of how the thing is constructed is the same as democracy. It’s completely open source. Everybody can access it. In terms of what we would recommend for businesses in regards to machine learning and artificial intelligence. Just keep in mind that any business can benefit by having access to this new data that’s going to be coming online. A big opportunity there and then shout out to all the tech people out there, like because everything is open source. I think the advancement in code in this world is going to be really fast. Obviously, everybody can see everything which is, you know, kind of how it was in the wild wild west days of the initial internet until everything became privatized and closed. This is going to be a fun ride.
M: It’s a great time to be in tech right now. It’s an open playing field. You know, this is new to everybody. If you’re graduating from college or thinking about dabbling in tech, I mean, it’s a great time to be in this space.
J: Even if you’re on a career change and you don’t have any background in tech like this. Exactly. I mean, yeah, it would help a little bit to know some stuff, but it’s a different world. So like you can just jump in and start learning. There’s lots of opportunity.
M: That brings us to our last trend, which is using nonfungible tokens as patronage and fueling the patronage economy. This one is my favorite. As you know, I like to illustrate my point around fees as a form of patronage. If you think about any band that you’ve ever discovered for the first time or maybe like a YouTuber, Tik Tok or where you like among the first people who discovered them, there is a sense of camaraderie and pride that comes with being like an early adopter.
Part of an initial fan base or community. Yeah. So the idea behind community tokens. So one way that tokens are being used and NetEase is creating community tokens, and the idea behind community tokens is that creators can open the ownership of a project to a variety of people who together are incentivized to make the project better. So kind of like in the example I was sharing with, like the video, let’s say you’re a director or even a brand and you’re like, Hey, what should we make a video about? And you allow your little community of token holders to vote on the topic at hand? And not only can they like have the right to a vote, but maybe they actually pay a token in order to vote, and those maybe tokens are then shared. It’s almost like a form of stock in a way so that not only can people participate in the creation of something, but they can actually monetize from it. They’re naturally incentivized to share things across the web. So that’s cool.
Comparing right now, instead of a convoluted network of intermediaries that thrive on the backs of artists and creators, we now have the technology to experiment with mechanics of value, transfer and accrual that are more transparent, transparent, inclusive and open. And by the way, I’m quoting a really great article that I read by a man named Nick Cannon, Cézanne Patz. So we’ll link to that in the show notes. But I just thought it was like a great example of patronage. If you think back to the early days of the Renaissance, when, like, the Renaissance was really spearheaded by a very wealthy family, the Medici family, like all art in general, is generally funded by rich people.
But what’s exciting about this is that digital artists like, rather than relying on a small community of the rich, digital artists can immediately reach a global supply of patrons, and the ownership of ships of art can be demonstrated cryptographically. Yeah, yeah. To all who the patron seeks to impress with their taste. But at the same time, the art still continues to remain free to the public to enjoy. So it’s kind of like a wild theory. I mean, this is just sort of the beginning of this, but it just opens up the doors of possibilities.
J: It’s kind of like crowdfunding for artists. I’m sure there’s a couple of websites that do that for art, usually thought of like startups and stuff that are using crowdfunding, but like a debate and order.
M: Not only are you because like I guess like the Kickstarter model has been so great for people who like, want to get again crowdfunding. But in this way, you fund it and you invest in the company you stand for.
Ok, that’s the wrap up. We already shared some takeaways from NFT and the new patronage economy. Is there any other top level takeaway that you’d share for businesses who are trying to save the forefront of the blockchain and web three and NFT technology?
J: I think just continuing to be open and do research like this is such a new field that there are going to be new things emerging every month. And looking into trying to find specific use cases in your particular industry, if you can. Not everybody has kind of started down this path. But there are some niche areas. And so those are super helpful, you know, to read and to kind of start your creative brainstorm process and like what lens to think about these ideas through?
M: Piggybacking off of what you said, I agree. It’s sort of the beginning. Just look at the way the Web too has transformed. It’s hard for anyone to predict specifically for your business or your industry how you can use this technology to your benefit. The more you know, the more power you have to be at the forefront of emerging tech.
J: It’s the nature of how technology is structured. It flipped everything so upside down that it really takes. You take time to be in a creative brainstorming space to start to be able to see the connections of what you can do. I think in order for you to be innovative and to really figure out what could I do that’s going to benefit my industry, my organization in this space, you have to make time to do that because it’s not like a super fast, obvious thing. It’s going to take some blood, sweat and tears.
M: Hopefully happy tears. We have many resources kind of step-by-step how to. We’d love to share those with you. Definitely check us out on the web. Thank you so much for listening. In the meantime, please keep up with us. We are across social media channels, username at Digital Dames on Instagram, TikTok, and LinkedIn. Please leave us a review and subscribe to us on Apple, Spotify, and wherever you listen to podcasts. For questions, feedback, and to share your ideas for future podcast topics. Shoot us an email at [email protected]