It fell hard and fast: the photo tweeted by the new owner of Twitter, Elon Musk, of him walking into the headquarters of the social media channel with a sink under the heading ‘let that sink in’. The share price went through the hole and many users left the channel for the decentralized alternative Mastodon. Decentralized social media are on the rise, but why exactly? How can you get started with it yourself and what does the future look like?

Since its emergence in the mid-1990s, social media has become an important and integral part of the daily life of our society. Half of the world’s population now has access and we spend an average of 2.5 hours a day on it. Regardless of the distance, friends, families, and communities can connect and communicate. It makes the exchange of information and ideas very easy and it has given people the opportunity to create and share their own content. Companies have a wealth of new marketing options and the bulk of politicians’ campaign budgets now go to social media advertisements.

Negative effects

The benefits have had a positive impact on our society. But unfortunately, we are also increasingly seeing the negative effects. From fake news and hate speech, to manipulated elections and increased anorexia and suicide among teenage girls. The centralization of current social media platforms (web2.0) ensures that users (be they consumers, creators or brands) do not own their profiles, content, target groups or data. You have no control whatsoever.

The ad-based business model of these platforms also relies on the sale of this data to companies that serve targeted ads based on it. If you don’t like that, you can leave. But you can’t take your content, data, and followers with you. In addition, the code used to develop the platform is closed-source. So you cannot make any adjustments to this.

The decentralized alternative

The decentralized (web3.0, which I wrote about earlier) social media platforms have numerous advantages over their central competitors due to their technical build. Especially since they often use blockchain technology. The data from the platforms is stored decentralized, cryptographically, and transparently, making surveillance or hacks virtually impossible. Smart contracts automatically control the platforms and there is no central authority that can influence this.

But what is also really interesting is the operability. This is virtually non-existent with the existing central social media platforms. Facebook, TikTok, Twitter, LinkedIn… they all have so-called ‘walled gardens’. For example, you cannot send a message from Twitter to Instagram or from LinkedIn to WhatsApp. This is much easier with the decentralized socials, due to the decentralized set-up, where you manage your identity and data yourself. It gives users more control over their own data and online interactions. For example, they can choose which servers and networks they want to join and easily switch to another server.

Contributors are rewarded

You can share insanely good content every day and get millions of likes, but most of the central platforms won’t give you a penny for this as a reward. Only YouTube and TikTok, but that is so marginal that 99.99% of content creators cannot live on this. The decentralized social media channels are built on blockchain technology. This is the same technology that cryptocurrencies and NFTs are built on. You can see a great ‘token economy’ emerging here at the various decentralized social media channels: makers who receive a fair reward for their contribution to the platforms.

A good example is the Dutch DeSocialWorld, where advertisers pay makers under the name ‘Post2Earn’. There are already 2 million users active on this ‘Twitter on blockchain’. The content is open and moderated by all users. It is therefore no longer the case that a central army of moderators in San Francisco determines what we see for content in the Netherlands or India. This content is posted to feeds such as “Sports” and “Politics” and tagged as “NSFW” and “Opinion”.

Censorless

For me, one of the most beautiful features of these ‘web3’ platforms is that there is no censorship. In 2023, almost 4 billion people live in a country with censorship. Countries like Russia, Iran, China, and Turkey, where governments can ban a “web2” channel like Facebook or Twitter overnight. Something that is virtually impossible with the decentralized alternatives.

In addition, innovation is really stimulated again because users and developers are free to experiment with new ideas, without being restricted by the rules and policies of a central authority. Many web3.0 platforms, such as DeSocialWorld, reward not only the content creators but also the builders for their contribution to the platform.

Decentralized mushrooming

Due to the Twitter vicissitudes in recent times, the decentralized alternative Mastodon has quickly become popular. Peepeth offers the same functionalities but is built on a different ‘blockchain’, Ethereum, on which, for example, all NFT activity also takes place. Diaspora is the oldest decentralized social network, which was launched in 2010 as a decentralized alternative to Facebook.

Personally, I think Pixelfed is cool, which is a decentralized alternative to Instagram and was launched back in 2018. And YouTube competitor DTube. Chingari is a mobile video-sharing app and already has more than 5 million daily active users and 40 million monthly active users. The app is in the top 20 most downloaded apps in the world on Google Play. Also a number of veterans, such as Steemit (2014) that offers a decentralized Medium, and Aether who take on the decentralized attack with Reddit.

Going a step further is the Lens Protocol, which gives users the opportunity to create their own decentralized social media platforms. Mirror is a decentralized, user-owned publishing platform that allows users to easily crowdfund other users’ ideas with cryptocurrencies.

Are we all going decentralized?

Personally, I do not see the current central ‘2.0’ social media platforms becoming more decentralized any time soon, in order to compete with their ‘3.0’ competitors. This really requires significant changes in server architecture. So that all data can be placed decentrally on a blockchain, without a central authority checking the platform or the data stored on it. A lot of data, with which the current platforms earn a lot of money, can no longer be collected within a new set-up. And so a completely different business model has to be developed.

Nevertheless, the central social media are already taking steps towards web3.0 and decentralization. For example, Meta is experimenting with NFTs on Instagram. Reddit goes further and has introduced so-called community points. These are proprietary digital tokens that users can earn by posting high-quality content and contributing to the platform. The platform does this together with the decentralized platform Arbitrum.

Twitter has rolled out support for NFTs, allowing users to connect their wallets and display NFTs as profile pictures. In addition, the former CEO and founder Jack Dorsey is working on his decentralized Twitter variant Damus, to which more than half a million users are already connected.

Decentral difficulties

There are not only decentralized dreams but also a number of significant challenges. While Elon Musk is currently being criticized for making it too easy again to publish hate speech on Twitter, the decentralized alternatives have no central authority at all to moderate content and enforce rules. This can lead to a Wild West-esque atmosphere, where users are free to post whatever they want without fear of being banned or punished. There are more and more decentralized moderation models, but they are still in their infancy.

But the ‘network effect’, which shows that a network becomes increasingly stronger as the number of users increases, is not yet great with decentralized social media. The platforms struggle to attract a large user base, as most people are used to using central social networks such as Facebook, Twitter or Instagram. They find switching too complex or they simply experience little inconvenience from the current disadvantages.

Big move

Switching and using the decentralized platforms sometimes leaves much to be desired. Unfortunately, the interfaces are still often too complex,
the number of interesting functions (compared to the central variants) is small, and the links with cryptocurrencies and digital wallets also scare people off, with the negative reports about plummeting crypto prices and large-scale fraud.

In principle, you manage cryptocurrencies and NFTs yourself, in your own digital wallet. But what if you lost the cryptographic key of that wallet? Then you can lose all the money you earned on a decentralized platform like Steemit in one go.

As with decentralized money (cryptocurrency) and decentralized property rights (NFTs), many consumers are still waiting for clear laws and regulations in this area, which are also not in force in any country with regard to decentralized social media.

Baby steps in infancy

Everything is still in its infancy. But I am convinced that decentralized social media has the great potential to significantly change the way we think about social media and how it affects our daily lives. The rise of decentralized social media is likely to lead to even more platforms popping up and gaining traction in the market as more people become aware of the benefits.

Despite the number of challenges, the following points are driving the adoption and acceptance of web3.0 technologies:

• The ever-increasing desire of users to gain more control over their data and privacy.
• Being able to earn money by posting your own content.
• Being able to resist censorship.
• According to the Talkwalker report, it will therefore have a major impact on the central alternatives in the coming year:

There is still too much friction

According to the founder of the Dutch DeSocialWorld Edo Koevoet, it will take at least 2 to 5 years before this will really make a difference. According to him, it is: “A combination of human and technological factors. There is still a lot of “friction” when it comes to creating a digital identity and earning and using cryptocurrencies. There are only hundreds of millions of users of decentralized money (crypto) vs. billions of social media users. The threshold for switching is still too high. After all, your ‘friends’ and your content are still on the traditional platforms through a platform lock-in.”

Whether it takes 2 or 5 years, I already think the current developments are great. If only for the positive impact we are already seeing on users, innovation, and fair payment from makers.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

It is fascinating to see how quickly technology can develop in such a short time. When I started with blockchain in 2015, there was really only Bitcoin as a use case. Today there are countless other cool developments. From NFTs and Metaverse to Decentralized Financing (DeFi) and Organizations (DAOs). Also stablecoins, smart contracts and much more. However, the news has only recently been about crashes in cryptoland. That is why I share the 5 coolest developments in the field of blockchain in this article.

Crash after crash after crash. For those who think blockchain technology is all about Bitcoin, last month’s news probably felt like the end of the technology. Cryptocurrency prices collapsing, companies going out of business, and lawmakers cracking down. These are tough times for crypto enthusiasts. But even though the confidence in digital currencies among small and large investors is disappearing, developers and companies are working hard on the underlying technology in the background.

1. Bubbles, keep building and wider adoption

The State of Crypto Report from one of the largest blockchain and crypto investors, Andreessen Horowitz, shows this beautifully. The research they conducted shows that cyclical price increases lead to interest in the ecosystem. This attracts new entrepreneurs who set up new startups and projects, which then lead the next cycle.

They call this the ‘Crypto Price-Innovation Cycle’. In each cycle, even after prices fell, more developers and startups remained in the ecosystem than there were before the cycle started, according to their research. These entrepreneurs are building a better infrastructure and new applications. And they turn potential use cases into real ones.

I, therefore, see recent developments in the field of cryptocurrencies mainly as positive for the entire ecosystem. Errors come to light: from errors in code to wrong companies. The nearly 19,000 developers who develop the technology on a daily basis can pick up and address these flaws.

Legislators can prepare regulations to make the ecosystem more stable and secure. Where in the beginning I only saw negativity among lawmakers around the technology, in 2022, I see not only a much more constructive attitude, but also a lot of positive recognition of the potential of the technology. In the broadest sense of the word.

Developments users

I also see great developments in the field of users. In 2015, I was mainly involved with ‘magic internet money’ Bitcoin with a collection of other nerds. Today 15% of Dutch people own cryptocurrencies, and more and more organisations, governments, and consumers are using the technology in the broadest sense of the word. From NFTs to supply chains and play2earn games to smart contracts.

According to recent research by Deloitte, as many as 75% of retailers want to enable payments in crypto within the next 12 months. And not just companies. Banks also continue to expand their interest in the technology. Meanwhile, 55% of the top 100 banks worldwide have invested in blockchain companies, which is already in the billions of euros.

Disruptive and innovative

Services and solutions that already exist and work, but are sometimes not quite perfect. According to Clayton Christensens’ theory of disruptive innovation, that makes no difference. On several levels and for many users, these new solutions are worse than their existing counterparts. For an ignored segment of the market, this newcomer’s offering is ‘good enough’.

Companies in the blockchain ecosystem that prove disruptive, according to Christensen, find a foothold with a small group of those overserved, ignored users and then expand the market. We see this, for example, in the use of cryptocurrencies in developing countries, where banks refuse to provide their services to many consumers. And when using NFTs in the creative industries, because a way has finally been found to capture the ownership of digital art.

Many of the solutions that come up are not yet perfect. But they are “good enough” for a certain group of users. They often meet certain needs that centralized and more secure products do not. According to Chainalysis’s State of Web3 report, this is also one of the reasons for the NFT hype. It attracted a lot of people who sometimes cared little about cryptocurrencies but cared a lot about art and entertainment. After crypto and NFTs, the wait is for the next killer app (which I wrote about earlier) for the technology.

2. NFTs of your life, in space and on Instagram

Non Fungible Tokens (NFTs) are for me a really great use case that shows the multifaceted potential of blockchain and also has a really profound impact on our society. What started as “overpriced monkey pictures” for many critics has now expanded into a great tool for many industries and even countries. Earlier I wrote about the African country of Central African Republic, which wants to ‘tocanize’ $600 billion in raw materials. Before that, I wrote about the many possibilities of NFTs for companies and communities.

Meanwhile, Instagram’s parent company, Meta, has announced that they will be testing NFTs on Instagram Stories using their augmented reality platform Spark AR. Makers and collectors can share their digital collectibles on Facebook and Instagram. First for a smaller group of US users, then worldwide.

There are also cool NFT developments within the music industry. In addition to merchandise and tickets, Spotify now also makes it possible for artists to promote NFTs. In addition, fans of a well-known female Dutch DJ can invest in the DJ’s career after the summer by buying NFTs. The name of the DJ has not yet been announced, but I also think this is a very cool development: the tokenization of a career.

The soul wallet

Not just careers, by the way. The co-founder (Vitalik Buterin) of one of the largest and most influential blockchain companies, Ethereum (on which most blockchain applications are also built), has submitted a proposal for so-called “Soulbound Tokens” (SBTs). Moreover, The DUO (and at the European level) is currently experimenting with creating NFTs for diplomas from educational institutions, for example, to combat fraud. The idea of ​​SBTs is to establish a powerful identity and reputation system.

The idea is still fairly futuristic and is part of the ‘decentralized society’ (DeSoc) idea. Including Decentralized Autonomous Organizations. These are not only the diplomas and certificates that you obtain by successfully completing education but also medical data, for example.

According to Buterin, they are “non-transferable tokens that represent commitments, credentials and preferences that are part of the social relationships on Web3 networks”. They should already be available to users by the end of the year. By 2024, they should go mainstream and become the next big blockchain hype after NFTs, according to the Ethereum co-founder.

Aircraft manufacturer Lockheed Martin and the Filecoin Foundation also came up with extraterrestrial plans. Both organizations have launched plans to launch a satellite or other space platform, which will contain the technology to become a so-called InterPlanetary File System (IPFS) node. The IPFS is a decentralized version of Dropbox, which now also stores most NFTs.

3. We’re going to make it all

For many people, Decentralized Autonomous Organizations (DAOs) are still fairly futuristic, but there are already 20,000 worldwide. There are also the first three companies in the Netherlands that will convert their organizational structure to a DAO model.

Recently, a very unique new DAO has been added. The English football club Crawley Town Football Club, which has been renamed We’re All Gonna Make It (WAGMI) United. Fans of the club can buy NFTs, with the NFT serving as a kind of stock. NFT holders receive exclusive merchandise, voting rights, and many other benefits. With this, the club is suddenly very decentralized and democratically managed, because fans get a direct say.

Major partners have already been connected to further expand the possibilities in the blockchain field. Like Adidas and Gary Vaynerchuck.

4. Metaverse is here to stay

If you’ve never worn Virtual Reality glasses or don’t game, I understand that you can’t imagine much with the metaverse. Recently, when giving keynotes on the subject, I often received the comment ‘that it is a hype that would soon blow over’. But recent announcements from Dubai and Shanghai show otherwise. Shanghai aims to develop a $52 billion metaverse industry by the end of 2025 with more than 100 metaverse companies. Dubai aims to have created more than 40,000 metaverse-related jobs by 2030.

Steps are also being made on a technological level. Facebook owner Meta has launched a digital clothing store in the metaverse. There, users can purchase designer outfits for their avatars from brands such as Balenciaga and Prada. For prices between $2.99 ​​and $8.99. The company has also revised its vision for the Metaverse. They think the metaverse experience will likely be more focused on flat 2D displays for many users in the beginning. Instead of using virtual reality or augmented reality technology, such as headsets and lenses.

To immediately set standards for metaverse developments worldwide, the Metaverse Standards Consortium was founded by giants Alibaba, Epic Games, Meta, Microsoft and Sony. The organization strives to develop interoperability standards for an open metaverse. That means if different companies want to build their own versions of the metaverse, they do so in such a way that users and applications can move freely between different metaverses.

Inspiring Metaverse Solutions

Every day, inspiring examples of organizations and individuals launching special metaverse solutions and environments. Spotify has launched Spotify Island. A ‘paradise’ of its own where fans and artists from all over the world come together, listen to music, do scavenger hunts and obtain exclusive merchandise.

Those plans were probably too thin for singer Snoop Dogg because he wants to start his own metaverse ‘Snoopverse.’ In his latest video clip, you get a good idea of what this should look like. All Snoop Dogg style: a large villa that is a 1-to-1 copy of his California home, luxury cars, and statues of the artist. Previously, a piece of virtual land next to Snoop Dogg’s was sold for $450,000. The ‘Decentral Eyes Dogg’-NFT, a digital portrait of the rapper, also fetched almost €700,000 at an auction in November.

5. Slavecoins

After the various crypto crashes in recent months, US and European governments have been rushing to announce laws and regulations to better regulate stablecoins. I personally find the developments in the field of Central Bank Digital Currencies (CBDSs) even more interesting.

According to the ‘bank of banks’, the Bank for International Settlements (BIS), not crypto, but CBDCs will become the cornerstone of the future monetary system. The institute is not that enthusiastic about crypto. In its latest report, they indicate that they only find the technical functionality of a handful of crypto interesting. They are not impressed by the size of crypto and stablecoins. Still, the institute recommends that banks be allowed to hold 1% of their reserves in Bitcoin or another crypto. So a bit contradictory.

Opaque process

The European Central Bank has released a new report on the digital euro, with a comprehensive technical analysis of a possible European CBDC and its position in the existing financial system. During the Dutch Blockchain Days I spoke to the Dutch rapporteur of the House of Representatives about this. Member of Parliament for the SP, Mahir Alkaya. We have now arrived at the most difficult phase of the process, where many choices have to be made about the design.

According to Alkaya, the process is currently extremely opaque. Very little is published about the process, which causes a great deal of misunderstanding among the Dutch parliament as well as among citizens and consumer organisations. Even though the Dutch government has very recently presented its own vision of the digital euro, more and more commentators are calling the ECB’s future CBDC a ‘slavecoin’.

The plans that are now in place would not be in line with the current protection of privacy and data in the EU. If complete anonymity is not guaranteed, governments would suddenly gain a lot more control over all privacy-sensitive payment data of European consumers and companies.

Phygital

Further developments in the wonderful world of blockchain are piling up. I personally find the development of ‘phygital’ interesting: companies from the ecosystem that only worked digitally and now come up with physical ‘touch points.’ Like Solana, who plans to release her own ‘Saga’ web3 mobile phone next year. All kinds of blockchain applications can be used on it. And the first physical feast for Bored Ape NFT owners; APEFest.

web5

While many people, organizations and developers are still working on the switch from web2 to web3, the founder of Twitter, Jack Dorsey, is already working on web5. According to him, this brings decentralized identity and data storage to individuals’ applications.

He has often expressed his displeasure with the current evolution of the internet. He thinks that web3 is already completely in the hands of big investors and eventually will be centralized again in the hands of a handful of large companies, as is now the case with web2. In his pitch deck he explains his plans extensively.

Cool developments keep coming

It is wonderful to see how many new ideas, projects and initiatives keep coming within the ecosystem. Some as an update of existing things and sometimes really completely new, revolutionary technologies. With the multitude of developers and the speed with which things are being built now, I think we will see and hear many more cool developments within the blockchain ecosystem in the coming months.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Who would have expected that when the first iPhone hit the market, years later we’d be navigating more with Google Maps, listening to music on Spotify, and editing and sharing photos on Instagram? Let alone that we spend an average of 4 hours a day on it? I now have the same with cryptocurrencies. When I started with it in 2015, everyone was mainly focused on Bitcoin. There are now countless developments such as NFTs, stablecoins and CBDCs. In this article I look ahead at the 5 most important developments.

1. Not so stable after all

Last week, many cryptocurrency traders and owners watched with concern as the market suddenly collapsed completely. If you zoom out, you will see that this does not only concern cryptocurrencies. The war, high inflation, interest rate hikes and shattered supply chains have left all financial markets in limbo. During the recent salami crash, established tech companies also lost $1 trillion in value in 3 days.

In addition to the volatile crypto, there are also all kinds of so-called ‘stablecoins’, which I wrote about in 2019. This is a cryptocurrency that always retains its value. For example, the most widely used stablecoin, Tether, always equals $1. A safe haven for cryptocurrency traders, but nowadays also for residents of countries where their own currency is far from stable, such as Venezuela, Turkey and Nigeria.

Most stablecoins always have a 1–1 cover with “fiat” money, such as dollars and euros. For example, for every Tether, USDC, PAX dollar, etcetera, the issuing party has one dollar in a safe account, if you want to exchange it. Stablecoins also continue to develop, and so-called ‘algorithmic stablecoins’ have been working for years, which automatically adapt to supply and demand on the basis of algorithms.

Shockwave among cryptocurrencies

One of the most bizarre and extraordinary events in the crypto world happened last week when one of those algorithmic stablecoins Luna lost its peg (1–1 peg) against the dollar. At that time, this coin was no longer worth $1 dollars, but in the end it was only worth 10 cents. The project was one of the top 10 cryptocurrencies in the world, and the shock wave generated by this flaw caused $1.25 trillion of cryptocurrency market cap to evaporate.

This is not only because the organization behind Luna dumped 80,000 Bitcoin on the market, but also the reactions that follow standard with this kind of violent price swings. The beauty of the underlying blockchain technology is that you can analyze all transactions worldwide. This shows that often the youngest crypto investors (the people who have been in it the shortest) are already selling their crypto. Buy high, sell low. In addition, you see that traders who ‘short’ (anticipate a fall in a price) further amplify this falling effect.

Governments such as the American and European were quick to announce laws and regulations to regulate stablecoins much better. Something they announced much earlier and, for example, will already be addressed in the upcoming European ‘MICAR’ (crypto) legislation that will come into effect next year. Yet the ECB indicated that there is now much faster action on stablecoins should be undertaken because of fears of the major impact of cryptocurrencies on the mainstream financial system.

2. Making money dancing, playing sports and walking

Instead of buying cryptocurrencies, you can also ‘mine’ them. This is validating transactions on the blockchain. But instead of using regular power for the computer to mine, the most special other models have been developed to generate energy, for example. For example, there are: people who try to do this with pen and paper, companies that make it possible to mine Bitcoins by sweating enough, and the Dutch startup Institute of Human Obsolescence does this with excess body heat.

Indeed, get rich while sleeping.

But in the meantime countless other models have also been developed ‘to earn’. The best known is ‘Play to Earn’, with which you earn cryptocurrencies by playing games. This is already billions of dollars worldwide.

But you can also earn cryptocurrency by walking. STEPN is a good example of this. By buying a pair of sneakers from STEPN (they are already worth $7500 per pair on marketplaces) and running, your activity is tracked in an app via GPS and you earn GST tokens. You can then use these tokens to buy new sneakers and exchange them for ‘fiat’ money such as euros. I myself am involved in a project to earn cryptocurrencies by partying in clubs: party to earn. Make your steps count and cash!

3. More and more adoption

Both large companies and governments are developing their own digital currency or implementing an existing one in all kinds of ways. Writing off Meta’s Libra project hasn’t stopped the Telegram chat app from introducing its own TON coin. This coin can be used by users within the app without transaction costs. Something that the other chat app Signal did before with a privacy-friendly crypto and Meta wants to do again.

In addition to many platforms introducing their own token to use within their own platform, there are also more and more large companies that accept cryptocurrencies, such as Gucci, Emirates and Starbucks. I personally find the different discussions within countries interesting. More than 90% of central banks worldwide are working on their own ‘Central Bank Digital Currency’, which I wrote about earlier.

But there are also many countries that are looking at a possible adoption of existing cryptocurrencies, such as Bitcoin. The most famous example is El Salvador. This country has turned crypto into legal tender, is mining Bitcoin using geothermal energy from volcanoes and even wants to set up an entire Bitcoin city. Recently, the Central African Republic was also added. Here too, Bitcoin is now legal tender. And many more countries may be added soon. Last week, 44 developing countries had coffee with the president of El Salvador to explore the possibilities of Bitcoin adoption. While they were in the country for a conference.

4. Are monkeys going to take over the world?

It started with a collection of 10,000 monkey pictures created by artificial intelligence. This collection of ‘Bored Apes’ has become so popular that they sell for an average of $400,000 each. Much more interesting is the whole economy that has developed around it. From the Bored Ape Yacht Club (an exclusive online community, only accessible to owners of a Bored Ape) to the Apecoin (the own currency) and Otherside: a metaverse under construction, where 55,000 lots were sold as ‘Apeland’.

Often when I talk about this, people think I’m crazy. I personally find these developments incredibly interesting, because all kinds of developments come together. From the rapid rise of NFTs, to the building of powerful online communities, the reward for your efforts within this community, new ways of contact between companies and consumers and of course the metaverse developments, which are happening at lightning speed.

5. There is no end to new coins

Every week new digital coins come onto the market. Sometimes with very special, new functions. I was a bit shocked by the company’s ‘black mirror’ idea, which is researching ‘reputation tokens’. Earn coins with “meaningful contributions” on Facebook or Instagram.

No shortage of tokens. No shortage of cool developments. It promises to be an interesting summer for cryptocurrencies, which I will follow with enthusiasm.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Heineken just opened a virtual brewery there, Tommy Hilfiger now holds his fashion shows and according to Marc Zuckerberg, the metaverse economy will be just as big as the physical economy as we know it today. Not a day goes by without another organization reporting that they have joined the metaverse. Many trendsetters say that 2022 is the year of the metaverse, but what can you concretely do with it as an organization? This article provides an overview of the latest options.

If you’ve never worn virtual reality goggles, you probably don’t understand much of all the commotion surrounding the metaverse. Immersing yourself and really feeling part of the virtual environment is what sets it apart from the current virtual environments we see on our flat screens. Today, the gaming industry is worth more than the global movie and sports industry combined. Where the internet is built by web developers, the metaverse will be built by game developers.

High hopes for the metaverse

According to the researchers at Ark Invest (pdf), in 2021 we spent 38% of our free time digitally and this is expected to be 52% by 2030. By 2026, according to Gartner, a quarter of people and a third of organizations will be active in the metaverse. According to Grayscale, the number of users has already increased tenfold in the past year. By 2030, the metaverse economy could reach $13 trillion in size, according to investment bank Citi. According to research by Accenture, 71% of executives believe the metaverse will have a positive impact on organizations. 42% even think it will bring about a major transformation.

We spent 38% of our free time digitally in 2021 and that is expected to be 52% by 2030

There are no physical constraints — such as real estate, supply chains, and geographic reach — in the metaverse. This opens up many opportunities for companies of all sizes to earn money and get in touch with (potential) customers. We see the lines blurring between the physical and virtual worlds and companies are increasingly committed to creating experiences that engage consumers on a personal, deeper level. As humans, we are born and raised in a 3D environment. Because of this, it is also very logical that we will find the metaverse more interesting than the ‘flat’ internet on which we now spend a lot of time.

But the metaverse is not new. Every day there are still 1 million people walking around in Second Life, a virtual world in which $500 million was spent last year. More money than in the economies of many countries. But the game Fortnite is even bigger, with 350 million users, of which 15 million are logged in on average in a day. A concert in Fortnite by Ariana Grande has already attracted 78 million visitors. No wonder that all kinds of artists are suddenly queuing up to perform virtually. Manchester City and Sony are building a metaverse stadium and the Dutch Beyond Sports processes real-time data from events in all kinds of VR products. It won’t be long before you can walk around in a match live in the metaverse.

Marketing in the metaverse: experience is central

You can already experience Heineken’s Pixel beer, McDonalds’ McRib and Fantafonteinen at restaurant Wendy’s in the metaverse, but of course not taste it. They are especially funny examples of new ways of marketing. The key word here is real experience. Creating a virtual item does not mean that it will immediately stand out and customers will buy it. If you want to build something like this, think carefully about a user’s involvement in this experience and how it aligns with the fully immersed digital experiences in the metaverse.

Restaurant Wendy’s, for example, has a Buck BiscuitDome basketball court, where visitors can play and buy a real burger for just $1 as a thank you for visiting. Gucci opened her vault: a shop in the metaverse with all kinds of unique digital vintage clothing items. The company has more plans: “It will be a time machine, an archive, a library, a laboratory, and a meeting place.”

But it is not just about the flat ‘selling’ of products and services. A good example is Nikeland, a mega complex of the sportswear manufacturer in the metaverse. Not only can all kinds of sports be practiced virtually here, but you can also design your own Nike sneakers here. You can virtually put them on as you walk through the metaverse. But you can also have them printed physically and sent to your home.

Co-creation, innovation & customer contact

You see more and more companies experimenting with the possibilities that the metaverse offers. Sharing ideas and concepts, discussing prototypes or even co-designing, or even letting people make something themselves. As a company, you can not only test beautiful prototypes and new innovations faster and more effectively.

In the metaverse you can also improve customer contact in all kinds of unique ways. A good example is car manufacturer Hyundai, which recently opened a ‘mobility adventure’ in the metaverse. Visitors can not only try new cars and participate in all kinds of cool activities and experiences, but also put together a custom physical car, try it out and order it right away.

Recently, the first Fashion Week was also organized in the metaverse. For five days, famous fashion houses showed their latest fashion in a unique way. Visitors could also try on Estée Lauder virtual make-up and free gold glitter was provided for each visitor, which made the virtual visitors sparkle.

Content and advertising

It will also usher in a new era for content creators. More than 50 million people call themselves “content creators”. A market of just under 100 billion euros, in which 41% of the makers actually earn a good income. With the new possibilities to not only create 3D content but also bring it to life, for example, by letting visitors experience and absorb it, this industry could even double in the next 5 years.

And what will the possibilities for advertising in the metaverse be? Meta has already applied for several patents for this, which show that it will be an important part of their metaverse strategy.

Events and training in the metaverse

I have now organized the first events and training sessions in the metaverse and the reactions have been positive. People go to events for a bit of experience. With a good setup you can also facilitate this beautifully in the metaverse. Everyone can participate from their own favorite location. But the metaverse has no restrictions, as I wrote before, you can build and color the event space yourself. The Sims goes events!

Research shows that training in a metaverse can offer many advantages over regular physical training. Not only can you visualize things much easier, but you can also make training much more interactive. It would be much nicer for introverted and autistic people to participate, which in turn reinforces the success of the training.

Not only meeting, but also in the field of collaboration I see great opportunities.

Learning and Collaborating in the Metaverse

Many elements that are now becoming popular in the metaverse have been used by companies for years. In the field of digital twins in particular, major manufacturers are leading the way with the deployment of virtual reality by their staff.

Aircraft manufacturer Boeing, for example, turns its aircraft into a digital twin, which mechanics can virtually walk through. This way they can test and practice certain things. That alone has saved 75% of the time required to train its technicians. Hong Kong airport trains employees in a virtual reality twin of the airport. Car manufacturer Ford is now also training all its technicians with VR environments, and care providers in England are trained in this way. Chipmaker Nvidia has therefore invested heavily in its software Omniverse, with which it offers a platform to more than 500 parties such as Adobe, Lockeed Martin and reportedly also Apple to develop metaverse applications.

Earlier I wrote about Salesforce, which has built an office in the metaverse for its 30,000 employees worldwide. And Microsoft wants to launch a metaverse variant of Teams: Mesh. In the past 2 years we have become accustomed to virtual working, meeting and meeting at breakneck speed, but only on the flat screen. Gartner also predicts that employers will be able to better engage and collaborate with their employees through immersive workspaces in virtual offices.

Working together and strengthening each other

Some tasks and business problems can be a much better approach for you visually, but in the real world, that’s just not always possible. For example, architects may want to design and draft several detailed mock-ups before setting a direction for further design. But there are time and cost limitations. Often mistakes are overlooked due to the lack of precision.

The metaverse gives all the space here, where almost anything can be modelled. For example, NextMeet offers such a metaverse platform aimed at interactive working, collaboration and learning. Pixelmax even offers the possibility to create workplaces designed to improve team cohesion, employee wellbeing and collaboration among employees. Employees can even meditate virtually, walk into the forest or even fly to the moon. But also to stimulate ‘coffee corner conversations’, which according to research accounts for 90% of communication in organizations. Gather gives employees the opportunity to design their own office. Are you going for the pirate office or a spaceship? This kind of technology has been used in healthcare for some time, by software from companies such as Medivis, which allows students to work with 3D anatomy models.

AI Solutions

Are you talking to a standard doll? No, the New Zealand SoulMachines has already developed an AI solution for the metaverse. Based on your own emotions, it returns a modified emotion in the virtual person in front of you. Whether that is a broker, dermatologist or a healthcare provider, you will receive a tailor-made response, which fits your own emotional state at that moment.

These AI bots can be used wonderfully as assistants or advisors for basic tasks, so that you can deal with more fun, more complex tasks. An example is Daniel, the virtual financial advisor of bank UBS. So in principle you can design your virtual colleagues and have them take place in your virtual office to take over certain activities from you. Not a bad idea, now that the sun is breaking through again and the terraces are open again!

More than just marketing & measuring

I haven’t seen a single option that doesn’t have a cool use case for it. From an educational institute to a gym, from a manufacturer to a service provider, from a museum to a fashion store. You can already see cool examples emerging all over the world, of the most diverse activities, which are now also offered in the metaverse.

When the gyms closed, online sports classes shot up like mushrooms. According to research, you seem to participate much better in the virtual sports classes in the metaverse, so that you ultimately burn more calories. Will it still be okay with the summer body!

But also a wedding, which partly took place in a real temple in India and partly, for a large group of people who did not fit in that temple, in the metaverse. Yes, you can already reserve your own spot at the first metaverse cemetery.

Governments are also looking at the possibilities of building their activities in the metaverse. For the military, the possibilities are endless: preparing missions, viewing scenarios and training soldiers. Combined with the rise of Massive Open Online Courses (MOOCs), free online courses and education, great metaverse educational institutions can be set up for children from all over the world to attend virtually. The first metaverse university is a fact and the first existing universities are exploring the possibilities.

Metaverse, not Meta!

When I talk about metaverse at events, I hear a lot of people say that they assumed that Meta builds the (only) metaverse. But several metaverses are already active: the major game builders of Fortnite, for example, claim that their game is actually already a kind of metaverse and there are all kinds of open solutions, such as Decentraland and The Sandbox.

Here is another interesting development. I’m not a big fan of Meta due to the endless stream of scandals surrounding the misuse of user data. According to research from Stanford, being active in the metaverse for 20 minutes provides 20 million data points. With VR headsets, companies can collect all kinds of new data: how people’s legs, hands and bodies move, when the pupils of their eyes contract and dilate, and how their minds react. I don’t know if I want to put all that data in the hands of a company known for exploiting the data commercially.

But what if Meta develops a similar model for retailers to easily create a place in the metaverse? Just like they did with Instagram Shopping? This will ensure that many more companies can join the metaverse. Such a model seems to be already being developed in China by Alibaba. Apple is now also investing in the metaverse.

Metaverse Innovations

The innovations are actually not possible without the involvement of large companies with a lot of money. The development itself alone costs a lot of money. Meta estimates it will cost $10 billion this year already. I also see cool, decentralized and open-source metaverses emerging, managed and built by the users themselves. They do this with the structure of a Decentralized Autonomous Organization (DAO). The rules are designed by the users. Fully democratic. Since the rules are programmed on the blockchain, misconduct is prevented. Doing evil is automatically made impossible.

According to Meta, it will still take a few years before we really use the metaverse en masse. VR experts also predict that the hype cycle will not just continue to spiral upwards at the moment. There are now all kinds of flourishing discussions about the necessary legal frameworks and, of course, studies are also being conducted into the effects of, for example, the long-term use of metaverse on the body. I will continue to follow developments closely!

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Easy ‘money grab’ or an endless new stream of possibilities for organizations? Even though the first NFT was already made in 2014, developments have gone through the roof in the past year. More and more organizations are making full use of the many new possibilities that technology offers, in addition to simply making money selling items. In this article I share 4 possibilities to use NFTs for your organization.

NFTs have opened up a whole new type of economy in the past year. It allows digital creators, artists, brands and others to offer unique digital assets that only have one owner at a time. They have also opened up a whole new field of marketing for organizations in my view. Which opens up new ways to engage customers and fans, offer new types of experiences, increase brand awareness and loyalty, and create new revenue streams.

1. Get rid of flippos and frequent flyer miles

Not only sports clubs, but all types of organizations use NFTs to get fans more involved. For example, by giving certain benefits and extras to every person who sells an NFT, or by giving away NFTs for free to a group of fans (a so-called ‘airdrop’). An American newspaper gave away special tours of NASA for its loyal readers. Tequila brand Patrón gave away virtual bottles of tequila. And Paris Hilton gave the audience of ‘The Tonight Show’ all an NFT as a thank you for coming.

Previously, the American basketball organization NBA has been very successful by selling $350 million in NFTs of all “top shots” made in the competition. Many football clubs such as FC Barcelona and PSV are now also issuing NFTs and the purchase of a club in England is even financed by the sale of NFTs.

A wide variety of models are used here, from reward to decision, to get fans more involved. Reward by giving something extra when loyal fans buy an NFT or by giving a group of fans a free NFT. To be involved, for example by allowing everyone who has bought a certain (group of) NFTs to participate in the decision-making process. For example, the football clubs Fortuna Sittard and Juventus allow owners of their NFTs to participate in the decision-making process about the design and furnishing of the new players’ bus.

2. The mycelium

Setting up a community through NFTs can also be incredibly powerful. A nice recent example of this is VeeFriends, which was founded by marketing guru Gary Vaynerchuk. He spent just over 10,000 NFTs, all of which give access to his online community and events. In addition, they also have different properties and the rarest of them gives the opportunity for a one-on-one conversation with Gary.

The NFT communities are springing up like mushrooms and NFTs are therefore also referred to as ‘social currencies’ within communities. Many organizations are also cleverly responding to this. For example, you only enter the virtual Playboy community (“the mansion”) if you have one of the 12,000 “Rabbitar” NFTs. One of the most famous and best clubs worldwide, the Amnesia in Ibiza (where I am a consultant), has since recreated its club in the Metaverse, where you only enter certain VIP decks if you have a certain type of NFT.

A successful NFT project starts with looking at your community.

The power of a community

In my view, a successful NFT project starts with looking at your community. Looking at what’s going on and what people really care about. They start from the bottom up, not from the top. If we look at the way organizations get in touch and stay in touch with their customers, you see that this is actually no longer about the organization itself, but really about the ideas, stories and shared passion(s) that bring people together. A good example of this is the ‘DinnerDAO’.

The community aspect and story is, in my opinion, just as important as the NFT itself. Recently I heard the wonderful comparison of an NFT community with a mycelium. The interconnected fungal network that forms a community, much like tree roots are interconnected.

I previously wrote about Decentralized Automone Organizations (DAOs) that are basically programmed organizations on the blockchain, where the ‘rules’ are laid down in so-called ‘smart contracts’. DAOs are also usually the technical foundation for NFT communities. A good example here is the DinnerDAO. You can join here by purchasing a particular NFT and then gain access to the community, where the restaurants are discussed for the next dinner party. Voting is decentralized via Snapshot and payments for food are automatically arranged via cryptocurrencies.

3. Digital twins

Juices, nutmeg and talapia fillet were the first consumer products where, with blockchain technology, consumers could view the entire supply chain with an app, see who was paid what at each step of the process and whether claims such as ‘sustainable’ were correct. An infinite number of consumer goods are now being put on the blockchain, from medicines to vegetables. When I speak about this, I often hear mostly jeers and questions why this is necessary. But an average of 500,000 people still die each year from wrong food and hundreds of thousands of people from fake medicines, according to the World Health Organization.

When you buy an expensive branded bag or shoes, you want them to be genuine and not to take home a copy. That’s why you see more and more brands, such as Prada, Cartier and Louis Vuitton, turning their physical items into an NFT as well. So that you, as the owner, can see if the item is genuine by scanning a QR code.

Nike goes a step further with its ‘cryptokicks’ and even lets users customize and resell the digital shoes in the app. In addition, the company recently set up the platform Cryptokickers, with which you can design your own virtual Nikes, make them an NFT and sell them immediately.

A ‘clone’ of your physical product

It is not only the well-known clothing brands that turn physical products into an NFT. From winegrowers to bank producers, countless companies are creating a ‘digital twin’ of existing physical products. This is fairly easy to do and not only can be interesting as a new way to reward loyal customers, more and more companies are also making good money selling NFTs. Adidas sold more than $20 million worth of NFT sportswear last year.

Are these ‘digital twins’ only useful to have? No, they’re going to play a big part in the metaverse, which I wrote about earlier. Even though it is still a ‘far from my bed show’ for many people, it is coming closer faster than we think. Microsoft is already working on Mesh, the Metaverse version of Microsoft Teams. When you’re 3D in a meeting or in the previously described metaverse version of the Amnesia club, do you want to be a standard 3D pawn, or wear cool Nike and GAP NFTs?

4. NFTs: good for charities

Not only commercial companies, but also charities can use NFTs in a new, unique way. I was sad that the World Wildlife Fund’s “Non-Fungible Animals” project was eventually cancelled. They wanted to start selling beautiful NFTs for the conservation of 10 endangered species.

Several charities have already used NFTs strategically for awareness-raising and fundraising, such as: ocean conservation and land conservation,
education for women in Afghanistan, Taco Bell sold NFT wraps to fund scholarships for underprivileged children, and Charmin sold NFT toilet rolls to people in extreme poverty. Charities are finding it increasingly difficult to raise money, especially among the younger generations. NFTs can be a wonderful way to let this target group contribute to the goal in an innovative way and also to become more aware of the necessity.

Developments are accelerating in the field of NFT:

Samsung has already announced that it will support NFTs in both its new TVs and mobile phones, in Asia there is already more searches on Google for ‘NFTs’ than for ‘crypto’, and As I wrote in my previous blog, the technology is developing so insanely fast that all kinds of new possibilities are being added at a rapid pace, such as POABs and PFPs. WWF rejected the NFT project because of the energy consumption involved in making NFTs. According to the most current and reliable estimates, NFTs cost as much energy as the city of Singapore consumes.

Now there are now NFT platforms that are so energy efficient that they even use 5 times less energy than a transaction with the VISA card. But the transition to these platforms is difficult. I am getting more excited every day about the possibilities of NFTs as a foundation for a new digital economy. A day in NFT land now seems like a year in a person’s life. Developments go so fast. I will continue to follow them closely.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

For one, they are overpriced JPG images. For others, a shift in power, heralding a golden age for creatives. NFTs are the talk of town and are now embraced by countless major brands. Unfortunately, the news about NFTs is mainly about the large amounts that are sometimes paid for them. Or about the people who earn a lot of money from trading (so-called flipping). While so much more is possible and will be in the coming months. In this article I share 4 trends.

It’s not just brands like McDonald’s and Warner Bros. that are entering the ecosystem in a big way. Facebook recently announced that it wants to allow users to create and sell NFTs on the platform, in addition to the YouTube CEO announcing that he wants to integrate them into the platform, where Twitter already did this recently. As a result, it suddenly becomes possible for everyone to easily create, sell, store and use NFTs. Analysts expect the market to more than double in size in the next 2 years. And for the launch of the NFT Marketplace of one of the largest cryptocurrency trading platforms, Coinbase, 2.5 million people are on the waiting list.

1. Buying is the new liking

It is very cool to see how fast not only interest in NFTs is growing, but also how quickly the technology is being further developed. Where for many people NFTs are just flat digital pictures, countless new innovations have been launched in the ecosystem in recent months, all opening up new possibilities for brands, makers and consumers.

The internet has great opportunities to exchange things like information, news, music, tweets, porn and memes easily and for free. But the internet lacked the possibility to determine things such as identity, authenticity and ownership, which are necessary for makers, for example, to get paid (fairly) for their work. That is why I see NFTs really worrying ‘buying is the new liking’.

2. POABs

At home I have large antlers with hundreds of event badges, from all the events I have been allowed to attend. Beautiful memories, especially in a time when much was not allowed. Most people throw away badges. Just like that after scanning a ticket (if it is not already on the phone), it also disappears in the container when you enter a festival.

Soon I will be using POABs for the first time at a major event that I am organizing about NFTs. These Proof of Attendance Protocol are NFTs that are issued to participants of an event, physical or virtual. They are a kind of virtual badges that are immortalized on the blockchain. So you can prove that you have attended an event, physical or virtual.

With the POABs already released, you can see that some people like to keep as a digital collectible. But most visitors to the event find it especially interesting to show that they have been to the event. On the one hand, this is to demonstrate their activity within a community. On the other hand, to get priority over ticket sales for a next event or certain benefits.

For example, with previously issued POABs, visitors received a nice NFT from Adidas after an event through a so-called ‘airdrop’ (distribution tokens, such as cryptocurrencies or NFTs). With the issuance of NFTs of Kings of Leon, the buyers received ‘lifetime front row golden seat tickets’. The Dutch GUTS already offers concrete options for issuing these kinds of tickets, but you can also get started with the open source project that is online.

3. PFPs

Cats, frogs and King Kong. You have probably already seen them on the various social media channels: the PFPs. They are a type of NFTs that have quickly grown in popularity. That started in 2017 with Larva Labs, which gave away 10,000 automatically generated avatars for free. The so-called CryptoPunks. They have since become cult objects and the most expensive CryptoPunk, Alien #7804, recently went under the hammer for $7.5 million. Auction house Christies has even set up a separate department for PFPs.

For some a funny picture, for others one of the first recognizable elements for the metaverse. A PFP is your face to the digital world and can also be or become the key for certain online communities. Microsoft will be adding metaverse components such as 3D avatars in Teams next year. Do you want a standard pawn doll or a cool cartoon?

PFPs are therefore really seen as a means of propagating one’s own digital identity. General and within certain communities. The example here is the Bored Ape Yaght Club: an online community that you can only access if you have an NFT from the Bored Ape collection. The trading volume of these lazy monkeys has not only been $1 billion in the past six months, brands like Adidas are now also connecting with this community and handing out free NFTs to the participants.

4. Wearables

It’s not just the avatars. With the entry of all kinds of major clothing brands, all possible clothing items and asset scores are issued as NFT. Earlier I wrote about Gucci’s NFT bags that sold for more money than the physical ones. Adidas and Nike already sell NFT shoes and Amsterdam based The Manufacturer makes entire NFT clothing lines for brands such as Tommy Hilfiger, Adidas and Puma.

This is still something new for many people, but several of my gaming friends have been using digital wearables for years. If you are in a shooting game with a team, then a special vest or unique weapon is of course much cooler than the standard variant. This in-game market could grow to $65 billion in the coming years.

Looking at the $2.7 trillion global fashion industry, digital wearables could become very large. I saw the first examples in the Amnesia: one of the most famous clubs in the world, in Ibiza. Not the physical variant, but the virtual one built in the metaverse. Tens of thousands of people came virtually. Dressed in the most beautiful digital outfits.

Developments around NFTs are progressing like a spear

Every week I am amazed at the new possibilities that enthusiastic developers have built around NFTs. From the ‘play to earn’ games, which I wrote about earlier and in which the most famous game Axie Infinity now spends $10 billion. But also complete music labels, which are built entirely on blockchain and with NFTs and Decentralized Autonomous Organizations (DAOs, which I wrote about earlier), let artists come into direct contact with fans and can involve them in the creation of music in all kinds of ways. Even films are already financed with NFTs.

In the meantime I also see several NFT 2.0 movements emerging. These are, for example, NFTs that can be updated in the future, but can also perform actions on their own, for example. Such as day and night variants, based on the time of day. There are also NFTs with multiple underlying files, such as a book NFT, which contains the front cover, the PDF, and the audiobook.

NFTs Loan/ Mortgage

NFTs are also increasingly being used for certain purposes. For example, in the United States you can already take out loans and mortgages with an NFT as collateral. And Twitter wants to prevent fake accounts by using NFTs as profile photos.

Developments in the field of NFT continue to go so fast that with the publication of this blog all kinds of new possibilities have probably already arisen. I will continue to follow them with enthusiasm!

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

The internet is broken. Filter bubbles, myth traps and the Facebook scandals predominate. What started as a decentralized and democratic system is now controlled by a handful of large tech companies. We have become the product ourselves. We share our data en masse with these companies, with all the negative consequences that entails. In my view, the internet is the most important technological revolution that we as humanity have seen and will have an increasing impact on our daily lives in the coming years. But how can the weather become all of us? Web3 is the next evolution of the Internet, taking care of the many problems it currently plagues.

Data is used against us

Today’s web has turned out to be different from how the inventors envisioned it, according to world wide web founder Tim Berners Lee. The goal of enabling people to find and connect information has certainly been achieved, but the same possibility has also caused major problems. Combined with digital authoritarianism, data and information are being used against us as citizens right now. By directing our opinion, by algorithms that identify innocent people as perpetrators and even incite them to suicide. As Marleen Stikker writes in her book The internet is broken — But we can fix it: “We have lost our digital sovereignty. We are being tapped, directed, followed, lived, and we let that happen ourselves.”

The big technology companies Google, Facebook and Amazon offer amazing services that represent great value to billions of people on our planet. Google’s search engine simply works best when it has all the information. But on the other hand, they have acquired a terrifying power over our daily lives.

The World Health Organization warns of an infodemic. And the authoritative Edelmann, who annually surveys trust in various areas, indicates that public confidence in technology has never been so dramatically low (pdf).

Down with the walled gardens, welcome web3!

It’s time for a fresh new start for the web! With the right motivations, a safer and stronger infrastructure, fairer, more democratic and governed by the collective. Tim Berners Lee coined the term “web3” in 2006, but it was popularized again in 2014 by co-founder of the well-known blockchain Ethereum, Gaven Wood. According to him, Web3 is very simple: “less trust, more truth”.

With the endless stream of scandals surrounding technology companies, but also the increasingly far-reaching digital transition of our society, the call for web3 is growing. In my view it will be much more than a flat version of the internet. Take a look at the insane role the Internet plays in all facets of our lives: from learning to love, from entertainment to confidence, from shopping to even living in the Metaverse. Then I see endless opportunities and possibilities.

The biggest change is the architecture. From a handful of central parties that dominate to a decentralized environment where everyone regains control over their own data and is rewarded fairly for their contribution to the web.

The internet owned by the builders and users, orchestrated with tokens. — Chris Dixon

With the rapid developments in the field of blockchain and cryptocurrencies, we are building a new economic system. Where the motives of owners, participants and developers are fully aligned. Where the merits of services and systems benefit the users, instead of the ‘gatekeepers’, as is now happening.

The future is already here. It’s just not evenly distributed yet. — William Gibson

From web 1.0 to web 3.0

What does web development look like? From 1991–2004 we saw the web 1.0 emerge. Static pages that were ‘read only’, without, for example, options for interaction and logging in.

From 2004 until now, the development of web 2.0 has opened up amazing new possibilities: create, share, collaborate and communicate. Think of social media, online shopping, blogging and vlogging, video calling and gaming.

The transition from web 2.0 to 3.0 is already underway, but is slow and unnoticed by the general public. If you look at existing web3 applications, they often have the same look and feel as web 2.0 applications, but the backend is fundamentally different. Decentralization is central to this. Applications and databases are not hosted and managed on a single server, but are built on blockchain technology. For example, the Bitcoin blockchain is currently hosted by over a million computers, not one exchange.

Web 3.0 will redefine the Digital Age. — Gavin Wood

When I look at the infinite limit of new possibilities that web3 offers, I get more excited about it every day. We already see a lot of web3 applications, which more and more people are using. Cryptocurrencies are the best-known use case here, next of course NFTs (part of tokanization). Recently I also wrote about Decentralized Autonomous Organizations (DAOs) and Self Sovereign Identity, which are also very important parts of web3. Basically they are all decentralized applications. Cryptocurrencies to send and receive money decentrally, NFTs to arrange decentralized ownership, DAOs to organize an organization decentrally and SSI to have an identity decentrally.

Decentralized data pods

We regain control of our own data and personal data. Not a separate account for every website or social medium, but one digital identity. With this you log in to the various sites and platforms and you have control over which data and personal data you want to share.

The Web as I envisaged it, we have not seen it yet. The future is still so much bigger than the past. — Tim Berners-Lee

To immediately show how this can work, web inventor Berners-Lee set up Inrupt for this. This works with personal ‘data pods’, personal vaults with data. A website can then always request access to your data vault, in exchange for certain services. But they cannot extract or resell this data.

Several major websites such as Reddit are already using web3. Users can earn crypto tokens by posting on a web3 section. The number of tokens can also rise or fall, due to the number of up- and downvotes. Twitter is working on project Bluesky, which is to become the web3 version of the social media platform. Founder Jack Dorsey recently tweeted that he doesn’t believe this will democratize the internet.

The key to the Metaverse?

Web3 could also become the key to the real Metaverse, bringing together all of the aforementioned functionalities in one virtual environment where things ranging from social interactions and entertainment to work and shopping come together. As I wrote about this before, this may still sound fairly futuristic to many, but the speed at which web3 and metaverse applications are currently being developed and the amount of money invested in them can already make this a reality in the short term.

Gradually, then suddenly. -Ernest Hemingway

Still a lot of bumps along the way

The road to web3 is still full of bumps. Building web3 applications involves a lot of complexity to make it truly decentralized. The interaction of an application with the decentralized network, all requirements related to management, maintaining privacy, etc. are technically a major challenge.

Governments worldwide are also stumbling about what they should actually do in the field of legislation and regulations regarding decentralized applications. A lot of work is being done on NFTs and DeFi in that area. But a day in blockchain land equals a human life. The developments are going so fast that they are impossible to follow for many people and governments. We are therefore looking closely at what things like DAOs and the Metaverse could look like. Most makers and implementers of legislation and regulations I speak to about this have absolutely no idea what to do with it.

In the meantime, I continue to dream about decentralized countries and the transition of traditional nationalities in online identities and communities. With thoughts about web4 and the day-to-day developments in the web3 field, we are entering a very cool, decentralized time.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Recently, we have rapidly started to work in a more decentralized way. No longer constantly at work, but much more or even completely at the home workplace. Major technology companies such as Facebook and Twitter have already indicated that they are fully committed to a ‘decentralized workforce’. The Dutch government has also started to regulate various activities in an increasingly decentralized manner. Decentralized autonomous organizations (DAOs) go much further. But what exactly are those? In this article all information about this new phenomenon.

As humans, we have been organizing ourselves in ever-changing, newer forms ever since we walked the Earth. In recent years, the accelerated digital transition has pushed more and more organizations into the cloud. Research shows that more than three quarters of internet users are now in an online community, and another survey shows that almost 80% of respondents indicate that the main community they are a member of operates online. We are even seeing all kinds of new organizational forms emerging, such as the sharing economy and content networks, that reward people for their contribution to a network.

The current dilemma: differences in wealth and profit maximization

Thus, over the past hundreds of years, corporations have played an important role in building our human civilization, which has never been so rich. But at the same time, they are now creating major problems that have a strong negative impact on our society. Such as large differences in wealth and the very negative social consequences that result from profit maximization.

The new organizational forms are also still centrally coordinated. This makes the differences between the participants within such an organization even greater. We see the large differences in pay between employees and drivers of Uber, but also, for example, that the top 1.4% of musicians on Spotify collect 90% of the royalties.

Where in the beginning companies provided structure in our society, this now seems to cause a divisiveness in various areas. This, combined with the rapidly increasing loneliness and ‘the great resignation’, has ensured that DAOs have become popular at a rapid pace. DAOs address many shortcomings of current companies, such as the maximum focus on profit, the barriers to entry and the large difference in remuneration between shareholders, management and employees.

What are decentralized autonomous organizations (DAOs)?

DAOs are basically programmed organizations on the blockchain. The rules are laid down in so-called ‘smart contracts’. Where Bitcoin makes (financial) intermediaries superfluous when sending and receiving money, DAO’s management makes it superfluous. Everything is done transparently and automatically, by the users themselves, together. There is therefore no hierarchy, but also no bureaucracy.

Often DAOs are set up by a worldwide community around a certain mission, who are jointly responsible for the programmed objectives. As a result, the whole works in a completely decentralized and democratic way. It provides an innovative, new way of organizing organizations on the web.

“Corporations organized the Industrial age, DAO’s will organize the Internet Age” — Aaron Wright

This way of working creates a solution for the ‘principal-agent theory’, where friction can arise between the principal (read: management) and the agent (read: employee), because the agent has no interest in performing the task as the principal intended him. Consider, for example, a commercial hospital, where management prefers to see as many treatments as possible, but doctors prefer to take the time to properly help a patient.

How do you encourage organizational members to manage and maintain the DAO?

DAOs often use their own digital token (or coin). This token gives the holders voting rights, and can also be obtained as a reward for working for the DAO. The smart contracts can make many of these payments happen automatically.

Suppose we turn Frankwatching into a DAO, and create the FrankCoin. We lay down the rules of participation and the reward system in advance in a ‘smart contract’. As a writer, for example, I can be automatically rewarded with FrankCoins for my blogs, based on the number of readers (I’m in favour!). But we can also reward other aspects, such as writing newsletters and maintaining the site. In addition, we as a community can vote on topics that we would like to see on the site and which we would not.

DAOs started in 2014 with an idea from Vitalik Buterin, who already gave the possibility to build smart contracts and decentralized applications (DApps) with his Ethereum blockchain. Today, there are 190 DAOs worldwide, with a total of more than 1.5 million members and worth billions of dollars. They build nicely on the ideology of Ricardo Semler, who wrote a book about this and about whom VPRO made a good documentary, and Nobel Prize winner Elinor Ostrom, who after decades of research and work experience came up with 8 powerful design principles for how common resources are sustainable and just. can be controlled in a group.

How will DAOs be deployed in 2022?

DAOs can be used for all types of organizations, from charities and freelancers working together to a political party. We now see them mainly arising around investments, fundraising, but also, for example, buying NFTs. For example, the JennyDao, which regulates fractional ownership of NFTs, bought an original track from DJ Steve Aoki. Elon Musk’s brother started the Big Green DAO, a charity focused on food justice, and there are also DAOs that support public services, for example.

Play to Earn (P2E)

The first Dutch DAOs are now also a fact, including IgniteDAO, which builds applications on the Zilliqa blockchain, and The Merit Circle, which responds to the ‘play-to-earn’ economy (P2E), which is rapidly growing. is. Where with traditional games you mainly see the value going to the maker of a game, P2E games reward the players for playing the game and their performance in it. This works like an economy.

In exchange for the time and energy they put into it, sometimes also accompanied by capital (such as an NFT), the DAO rewards them with the token of the game played. The most famous P2E game is now played daily by almost 2 million players. More than half of these players are from the Philippines. According to research, they thus earn more than a nominal salary.

Learn to Earn (L2E)

But don’t just play to earn, learn-to-earn (L2E) is also starting to emerge. In this new educational model, the DAO rewards an individual when they can demonstrate that they have learned something. This, of course, if he can demonstrate that it adds value to the DAO and the members of the DAO also see the value of this. A good example of this is RabbitHole, which provides gamification within a DAO. Users learn a new skill and get tokens for it, and crypto companies get trained users as a result.

But we’re not there yet

It’s really cool to see the rapid developments unfold within the DAO landscape. We’re really moving from the community-led organizations, like Etsy and Github, to community-owned organizations. Starting a DAO yourself is nowadays very easy via a platform such as Aragon or Colony.

But with the speed at which everything happens, several things also go wrong. One of the first DAOs, “TheDao,” which raised $150 million in investments, was hacked due to a code flaw. As a result, $70 million was stolen. Also, $130 million was recently stolen in the BadgerDAO hack. We are working hard on solutions to prevent hacks and to minimize the damage of a possible hack, but there is no watertight solution yet.

Also in the field of regulations, I can hear The Hague sighing again. Thirteen years after its inception, next year there will finally be legislation and regulations (MiCA) surrounding cryptocurrencies such as Bitcoin. But we have already seen so many new developments within blockchain technology, such as DeFi, NFTs, and now DAOs. It’s great that anyone worldwide can participate in a DAO, but what about contractually and fiscally, for example? What if things go wrong, like a hack? Is the system liable or a natural person?

They are big challenges.

Through damage and shame, more and more DAOs are becoming wise, also, for example, in the area of ​​joint decisions. That can take a while if you have a few hundred thousand members. The first major steps have been taken, the first successful DAOs are a fact. Now that it is becoming easier and safer to set up a DAO, I am very curious about the developments in this area in the coming year.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

What a great year it has been for blockchain. And what an amazing year we have ahead of us. Never before have there been so many startups. Never before has so much money from investors gone into technology. And never before have so many organizations worked on implementations. If we leave all the Dogecoin Drama and the hype surrounding the Bitcoin Boom there and focus on the technology itself, I see a lot of cool developments that are currently playing and will play in the coming year. I share my top 5 in this article.

Blockchain, not Bitcoin or blockchain beyond Bitcoin. Many professionals and enthusiasts around the technology try to make the clear distinction with the best-known cryptocurrencies. Away from the current speculative hype around prices. Focus on the development and implementation of the technology itself. Understandable, although I can see that the current madness in the cryptocurrency market is also positive for blockchain. The news is once again full of it and there has never been as much money invested in the technology by investors as in the past year.

Today, 81% of large companies use the technology. And I also see more and more smaller SME companies experimenting with it or even implementing it. Now I often leave enthusiasts disillusioned by saying honestly that they don’t need the technology in the organization at all. You often see that the wrong thinking sequence is used. We want to do something with blockchain and then we look for an internal problem. Instead of: we have an existing challenge and blockchain is a good solution for that. Nevertheless, I see that there are currently a lot of challenges being tackled with technology.

Startup showtime

It’s not just implementations. At the moment it seems like showtime almost every week, with one after another unveiling a new product or service from a startup in the Netherlands. If we look at the Gartner Hypecycle of blockchain, we see that various elements of the technology have already gone through the tough ‘trough of disillusionment’ and are now walking the ‘slope of enlightenment’. As I wrote before, compare it to the development of the Internet and you’ll see that we’re only just getting started. We are at the beginning of a great technological revolution.

In the next decade we will have more progress than in the last 100 years. — Peter Diamandis, founder of Singularity University

First look back

Also last year I was allowed to look at this year in the glass blockchain sphere of Frankwatching. Back then I already saw many companies that were rapidly making these chains transparent. This very recently published report shows that the number of countable implementations has doubled in the past year compared to the year before.

Another trend that has undergone a lot of development beyond expectations is the “government crypto”, the Central Bank Digital Currencies. I will share an outlook for the coming year about this later in this article. I also foresaw many developments in the field of the ‘fintechization’ of our society, which has entered a fast waters worldwide with the unprecedented development of the Decentralized Finance (DeFi, which I wrote about earlier).

1. DeFi continues to amaze

As I wrote in my cryptocurrency trend article for the coming year, ING published that they find DeFI insanely interesting, we see a lot of established financial institutions worldwide already working with it and I see the ‘total value locked’ in the ecosystem in the coming doubling from $200 billion to $400 billion year on year.

A recent report from investment bank JP Morgan shows that it’s not just about experimenting anymore. $9 billion in profits alone are made each year by individuals and organizations that are “striking”: locking/saving crypto that earns you interest.

Building bridges

I foresee a number of developments in the coming year. Now that big finance, the big banks, are working hard with DeFi, you see many startups building bridges with their products. Bridges between traditional finance and new crypto world. Synthetix is ​​the best-known example of this, Nexis does this nicely with insurance and many other startups will also launch their product on the market next year.

The virtual gas price is going through the roof

The high fees that many people in developing countries pay for sending money are often the marketing argument of enthusiasts to promote cryptocurrencies. Where easily 10–20% is charged by parties such as Western Union, crypto transactions are often a fraction of this. For example, someone recently paid $0.80 for a $2 billion transaction in Bitcoin.

But with the Ethereum blockchain, on which the majority of blockchain applications run, such as ‘smart contracts’, ‘NFTs’ and DeFi products, this is unfortunately no longer the case. The costs for transactions, the so-called GAS, have increased by more than 300% in 1 year. Developers are therefore looking to other blockchain networks for the development of their applications, where Polkadot is currently doing well, which was set up by the co-founder of — yes — Ethereum.

It is a much discussed topic and with all the new technological developments from existing companies and new startups, I expect that the high costs will largely disappear in the coming year.

Decentralized trading platforms

What will certainly not disappear are the decentralized exchanges, such as Uniswap, Pancakeswap and Sushiswap. Names that put a smile on your face at first sight. But when you see how much money these decentralized exchanges (DEXs, cryptocurrency trading platforms) are currently processing per day, the smile turns to amazement.

Nowadays, more is traded on these types of decentralized trading platforms than with central parties such as Coinbase and Binance. Although it is still fairly complex for many users to use and the US government has indicated that it wants to strictly regulate these platforms, I see an insane growth in trading volume in the coming year. All kinds of new DeFi applications are being developed on these trading platforms, which will only increase the growth of the ecosystem.

Blockchain based games

A final development, which is currently emerging in DeFi and could become very big in the coming year, are blockchain-based games. There are 2 billion gamers worldwide who currently spend $150 billion on this. And $250 billion in two years. The in-game purchases are a big part of this multi-billion dollar market and 62% of gamers and 82% of developers have indicated that they would like to see this on the blockchain.

There is still a lot of work to do in the security shop because of the many major hacks. Recently, $600 million was stolen during the Poly hack and $115 million during the Cream hack. Research shows that 2/3rds of these hacks are due to developer incompetence and almost 1/3rd to code errors.

2. NFT boom or crack?

It seems that if you haven’t made NFT yet as a creative, you don’t belong anymore. My social feeds are full of enthusiasts who mint (make), sell and buy the NFTs. Earlier I wrote about the great possibilities, for both makers and companies. Where with Web1.0 companies made and earned content and the current Web2.0 people create content and companies earn from it, with Web3.0 I see that people not only make content, but also start earning real money from it. NFTs play a key role in this.

In my view, NFTs will really have a major impact on the art, fashion, music and sports worlds. Not only the large companies such as VISA, Disney and Adobe that are working with this, are piling up. There are also more and more possibilities that were not (technically) possible before.

The lazy monkey community

In addition to the flat buying and selling of content and artworks, you also see a new trend emerging: communities. The best example of this is the Bored Ape Yacht Club. All owners of one of the Bored-Apes, which on average sell for a few million each, can become a member. Many owners even buy a Bored Ape to join this community.

Monkey owners make their own monkey their Twitter photo as a sort of status symbol. In addition, they also get a number of benefits with their property: access to a Discord group for other owners, access to virtual merchandise drops, and free additional NFTs. NFTs makes all this (technically) possible and I think this is going to be very big not only next year, but also beyond.

Play to earn blockchain games

In my trend blog about crypto I also wrote about another cool trend within blockchain / NFTs: the ‘play to earn blockchain games’ (P2E). Because who wouldn’t want to make money playing games? For example, Louis Vuitton has launched its own online NFT game and the most famous P2E game, Axie Infinity, has already made $1.6 billion. Players in countries such as the Philippines and Indonesia are now playing these games because they earn more money than regular work.

Also within NFT there are new developments every week. LOOT is really a revolutionary thing in this. The creator of VINE created 8000 ‘LOOTbags’, put them online and all were claimed for free in no time. They have all turned out to be conversation starters. All kinds of communities of fans, artists and creatives are currently looking at future creations. It is inspired by how the famous Marvel spent billions developing all kinds of sci-fi films. Hundreds of writers and artists received money and came up with ideas for the films, where eventually a combination of all ideas was actually produced. LOOT does not want to do this top-down, but directly with the virtual community.

The coming year can’t go wrong in my opinion, with the great drive with which many people continue to develop the NFT ecosystem. A lot of news is still about the insane amounts that are sometimes paid for NFTs, such as $533 million that was supposedly deposited for a CryptoPunk. The great thing about many blockchains is that everything is transparent, so you can also make big data analyzes around the earnings. Then you see that only 2% of NFTs sold are sold for more than $600 and the majority of the large sums end up in the pockets of just 50 artists.

3. Stablecoins on the chain

It is a thorn in the side of lawmakers worldwide: stablecoins like Tether. Earlier I wrote about the importance of this within the global financial and cryptocurrency systems. Due to their rapidly increasing size, according to several governments, they could actually endanger the global financial system.

Credit rating agency Fitch warned this month that the rapid growth of stablecoins could have “destabilizing effects” on short-term credit markets. The global Financial Action Task Force (FATF) recently warned about the huge increase in money laundering. And the Bank for International Settlements wrote in its most recent report that they see no value in it at all.

Tether

While the coins imply bringing stability, the largest stablecoin, Tether, has been in the news on a continuous basis lately. Many people assume that stablecoins are ‘pegged’: 1–1 backed by another asset. So for every Tether in circulation, there would be a dollar stored somewhere. This coin is now worth more than $70 billion. And after great international pressure, it turned out that the company behind Tether had a very strange mix of assets to cover all this money on its balance sheet.

As a result, the company had to pay a fine to the American government and the same government has now urgently developed a framework to severely restrict stablecoins, such as Tether. Trade exchanges such as Bitcoinmeester have already taken the coin offline. It’s not just about Tether, though. There are dozens of stablecoins in circulation and the big wait is still for the stablecoin that shook up many governments: Diem, initiated by Facebook.

In addition to expressing great concerns, European, Chinese and American governments have now rapidly developed legislation that will come into effect next year. President Biden has already indicated that they are in the same category as banks. And the head of the US central bank, Jerome Powell, has already indicated that he does not want to ban them, but that they are strictly regulated. It is important to filter the cowboys out of the industry and actually gain broad acceptance by larger institutions. In a recent Deloitte survey, 83% of executives said they see current fiat money being replaced by such coins.

4. Governments are working overtime

Normally, governments always lag behind technological developments, the so-called pacing problem. In the blockchain field, however, I see a few important developments emerging from governments in the coming year.

MICA Regulations

First, the important MICA regulation is likely to be extensively tested, discussed, and then implemented in the coming year. An extremely important step in the further professionalization of the sector. And with it the entry of even more organizations.

Self Sovereign Identity

In addition, the EU announced last June that it will further intensify the efforts around ‘Self Sovereign Identity’, about which I wrote earlier. The EU is also making great strides with its own European Blockchain Services Infrastructure. By creating this infrastructure, the European Commission aims to provide a large number of cross-border digital public services. ‘For the benefit of citizens, society and the economy.’

It is the first EU-wide blockchain infrastructure to be created in an effort to make public services more reliable and accessible to European citizens. By making governance more transparent, facilitating compliance with EU regulations and working on data compatibility.

5. Gradually, then suddenly

Bitcoin’s inventor, the still-mysterious Satoshi Nakamoto, is said to be turning in his grave. Several times. The initial idea of ​​the Bitcoin blockchain was to take power away from financial intermediaries (such as banks) and governments and by returning the decentralized nature of blockchain technology to the citizen.

The Chinese government is now using the technology to launch a digital central bank money system, the E-CNY. According to many experts, this gives the Chinese government even more control over its population, by being able to largely control financial transactions in the country. It is only 100 days until the Winter Olympics in the country, where this so-called Central Bank Digital Currency (CBDC) will see the light of day. Meanwhile, the Chinese government has pressured American companies operating in the country, such as McDonald’s, to accept the currency during the games.

The influence of China

Even though there are already countries that use their own CBDC, such as the Bahamas and very recently Nigeria, China seems to be having a major impact on the financial system here. And in the long run, even weaken American power considerably. With its E-CNY infrastructure, it can seriously undermine the current infrastructures, which are dominated by Dollars and American power (such as the SWIFT system).

In the coming year, people are eagerly looking forward to what China will come up with. It will not immediately take over global economic leadership in one year, but as Ernest Hemingway’s beautifully describes in his book The Sun Also Rises: ‘gradually, then suddenly’. Just like the impact of many technologies; slowly, but suddenly extreme and unexpected.

The ‘bank of banks’, the Bank for International Settlements (BIS), recently launched its latest report on the worldwide developments in the field of CBDCs. This shows that 86% of central banks worldwide are looking at CBDC. And 60% are already developing it.

Away with the wallet gardens: power to the people!

Decentralization remains the magic word in many developments. In more and more areas, we see not only the call for the return of certain power to the user/citizen, but also the launch of blockchain solutions that make this possible.

The decentralized storage of big data, no longer in the ‘wallet gardens’ of the ‘big tech companies’.
Putting power and sovereignty back in the hands of makers, owners, small organizations and citizens. What we are now seeing in the major developments around NFTs and DeFi.
Fractional ownership through ‘fantokens’ such as those of Ajax, PSV and Fortuna Sittard and real estate, such as with the Amsterdam Bloqhouse.
It all fits into the next phase of the development of the Internet: Web3.0, built on a decentralized architecture.

Fortune favors the bold

We are looking forward to a very cool blockchain year. I’m really looking forward to all the developments that I don’t see coming at all. It has become clear with all developments that these are often started by the brave, great thinkers. We’ll see if the courage of many of them will be rewarded in the coming year.

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.

Perhaps the most beautiful year in the history of cryptocurrencies. Exploding stock prices, records of investments in startups, big as the writing of this blog started, I couldn’t choose what I expect to happen in the coming year. I’m going to try it anyway in this 2022 trend blog about cryptocurrencies.

One day in crypto is equivalent to a year in a human life. Even though the technology is still very young; on October 31, it will be only 12 years since Bitcoin was established, the developments are moving at lightning speed, and it is almost impossible to keep up. Earlier I wrote about Decentralized Financing (DeFi), Non-Fungible Tokens (NFTs), Stablecoins, Central Bank Digital Currencies (CBDCs), and the Metaverse. Many gave developments, which are currently taking place in the sector. Meanwhile, the Bitcoin price has risen to an ‘all-time high’; a record high of $62,600, and the US government approved a so-called Bitcoin “ETF” in 2019.

Looking for the moonshot

This Bitcoin price has doubled this year, at the time of writing, and there are also all kinds of altcoins (alternative cryptocurrencies) that have increased in value by percentages such as 15000% and 10000%. The well-known ‘Stock to Flow’ model predicts that the Bitcoin price could even double again to $100,000 around Christmas, which will also have a positive catalytic effect on the altcoins.

The nice thing about this madness is that I suddenly get a lot of old acquaintances on the phone again, who are looking for advice when buying cryptocurrencies and especially; which altcoin I expect to “moon” (crypto terminology for strong rise). Many people seem to have gotten high because of the crazy price increases that many coins have gone through, the stories of acquaintances who have made a lot of money with them, influencers who promote one coin after another as a new moonshot and the endless stream of positive developments in the sector.

Waiting for the black swan

The world is flooded with liquidity by the endless printing of money by governments and the zero percent interest rates. Liquidity, which is partly returning to the cryptocurrency market. We saw in the United States that 7% of the stimulus checks that the government sent out to its citizens were used to buy crypto, and in the Netherlands, 5% of people already had crypto, and 25% are planning to buy it.

In my view, the madness will continue for a while, now that the economy has recovered so quickly after the corona dip and the stock markets are reaching record highs. However, we have to wait for an unexpected ‘black swan event;’ totally unexpected but with great impact.

At the beginning of June, we saw how one tweet from Tesla CEO Elon Musk caused the entire crypto market to collapse.

What did I expect in the past year?

Also, last year I was allowed to make predictions about what trends I expected around cryptocurrencies this year. No pressure for next year’s predictions, but this year has all come true. The large institutional parties have entered with insane amounts, and according to this nice overview, new investments are regularly added. The bull market has started very clearly, with a big dip here and there, but if you zoom out, you see an unprecedented rise in all coins.

Will something be done with the money that all these projects collect and earn from this increase? Certainly! Many large projects are constantly working on major new updates to the platforms, forging new partnerships, and unveiling new technological advances. Bitcoin has published the major ‘Taproot’ update, Ethereum has made a big step forward in its transition with the launch to ‘2.0’, Cardano now comes with an update every month, Binance has just launched a $1 billion fund, and Solana is also hammering hard on the highway.

Unfortunately, we also see the less positive predictions come true; cryptocrime has also taken off. Hacks, scams, pump & dumps, and many other criminal activities are the order of the day and are increasing rapidly. Governments have started to look at their own role at an accelerated pace, with regard to legislation and regulations. Now I very much welcome this, to make the sector mature and ready for the entry of many more (large) investors. Unfortunately, however, several exaggerated and unhelpful responses from governments have actually done damage. More about this in my predictions for the coming year.

1) Bitcoin for the groceries

From a nine-page document, Bitcoin has grown in 12 years into a global ‘reserve asset’ with social impact. In the west, most developments are ‘underground’; the underlying blockchain technology is already used by 81 out of 100 companies but is often not visible to the consumer. In many developing countries, cryptocurrencies have become part of everyday life. If we look at where cryptos are used the most, you will see some interesting countries in the top list; Nigeria, the Philippines, Turkey, and Venezuela. Countries that, not coincidentally, also have problems with their current currency.

The central American country of El Salvador surprised friend and foe by making Bitcoin legal tender. As a result, companies are obliged to accept Bitcoin. I’m still not sure what to think about this step. If you have just converted your income into Bitcoin and an American billionaire has almost halved the price with a tweet, it is inexplicable. But on the other hand, 70% of residents simply don’t have a bank account, often because banks don’t offer it for a variety of reasons.

In addition, a quarter(!) of the national income enters the country via a foreign money transfer, where often high percentages (up to 30% of the amount sent) are charged by parties such as Western Union. More than 70% of residents receive this type of payment, which is on average 50% of residents’ income. Cross-border money transfers via Bitcoin can therefore save $400 million in fees for residents on an annual basis. Money that the population can use hard.

International Monetary Fund

The last word has not yet been said; the International Monetary Fund has put a planned loan to the country ‘on hold,’ and there is also domestic resistance. Even though there are already 2 million ‘Chivo’ wallets in use (on 6.5 million inhabitants), 70% of the residents voted against the introduction in a large survey, and 93% of the companies say they have not yet made a Bitcoin payment.

Ticket to freedom

The precedent has now been set. Countries such as Paraguay and Brazil are now also looking at the possibilities of making Bitcoin a legal tender. In countries such as Afghanistan, it is now called the ‘ticket to freedom.’ And, In the coming year, I expect more countries to use Bitcoin and possibly other currencies as legal tender. In the fight against high cross-border payments, in the fight against inflation, and to reduce the US dollar’s power grab.
Not only as payment but also as an investment. Countries like Bulgaria and Ukraine have already bought billions of euros worth of Bitcoin.

2) Flashes of light

Cryptocurrencies are not only actively used in developing countries; also, in western countries, there are all kinds of applications that are used on a daily basis. In several ways, it has been made possible to thank content creators for their work. Twitter has added the Tips feature to the platform, which allows you to give a Bitcoin tip to your favorite Tweeps. This is now also possible with podcasts, by Podcasting 2.0 from ‘podfather’ Adam Curry.

Both functionalities use the lightning network. This is a so-called ‘second layer solution,’ which is built on the Bitcoin network. It, therefore, offers a powerful response to Bitcoin’s critics that the number of transactions that are possible on the network and the speed thereof, lag behind current payment methods such as credit cards. Where Bitcoin can handle 7 transactions per second and VISA 65,000, Lightning can handle millions.

Just last month alone, the number of Lightning transactions doubled, and the number of users increased by 11164%. This is not only due to the Twitter Tips because it can process very small payments relatively cheaply, it is also widely used in the gaming world for the purchase of small in-game items and in developing countries such as El Salvador for payments. A cool development, because it really has a positive impact in developing countries. In the coming year, I expect the volume of transactions to increase very strongly, with positive effects for Bitcoin itself as well.

3) Art & Capital keep flying

The money that is now going around in the NFT market and Decentralized Financing (DeFi) continues to rise. Not only the smaller ‘retail’ investors but also existing institutions such as ING indicate that they find DeFI an incredibly interesting development. Crypto would make financial institutions, such as banks, completely obsolete. But now we see that many large banks are actually working with it themselves and offering products. The ‘total value locked’ (money that has been invested) in DeFi is now greater than $200 billion, and I see this amount doubling to $400 billion in the coming year.

There are still some really big steps to take to make DeFI mature. Of all hacks in crypto land, 75% take place within DeFi. In addition, the US regulator, the SEC, recently indicated that it will introduce strict regulations for DeFi in the short term. Institutional DeFi will therefore have to wait for a while, the general DeFi world is growing fast in the meantime.

Interest in NFTs also continues to grow. In the past quarter alone, more than $10 billion was traded. That’s not just bored monkeys, the very first source code of the internet, and a spot on the arm of a famous tennis player. More and more larger parties are also entering the NFT market, such as Disney, Electronic Arts, and the WWF. There are also all kinds of new developments, such as ‘play to earn blockchain games.’ Earn money while playing a game; who doesn’t want that? Not entirely unexpectedly, almost 1 million people are already doing this, and the games are shooting out of the ground. Louis Vuitton very recently launched the game ‘Louis: The Game.’

4) The big boys keep coming in

The great thing about blockchain, and especially Bitcoin, is that you can see and analyze all transactions since its inception. This allows parties such as Glassnode and Chainalysis to make the most interesting analyses. From identifying and tracking criminal transactions for secret services to mapping out what accounts hold Bitcoin.

Owners who own more than 1000 Bitcoin, also known as the “whales,” are often followed. Some whales are known to be who they are, but most are unknown. It creates a lot of speculation; are they wealthy individuals or the banks that anonymously buy and trade Bitcoin? There are all kinds of tools that monitor the movements of these ‘whales,’ such as the Twitter account ‘Whale Alert.’ Where Bloomberg wrote that 2% of Bitcoin wallets own 95% of all available Bitcoin, Glassnode shows in an in-depth analysis that this is distributed much better and that this distribution is also increasing.

Due to the reporting obligation that many public companies worldwide have around finances and large investments, large purchases of Bitcoin are often announced worldwide quickly. However, this information is not available from large institutional investors and the so-called ‘family offices’ (management companies of very wealthy families). In a recent event that I organized around the new European crypto legislation MICA, several experts indicated that they also expect that this type of investor will only buy cryptocurrencies on a large scale once this MICA legislation has been implemented.

5) Crackdown the cowboys

This legislation is now being drawn up worldwide at a rapid pace. Many governments realize that they cannot wait for years with legislation and regulations surrounding cryptocurrencies. The US government has woken up and, on the one hand, indicates that it does not want to ban cryptocurrencies but is very concerned about its transactions and stability. Like the European Central Bank, these two power blocs fear that the sudden collapse of the cryptocurrency market could endanger the stability of the global financial system. They refer here to the Bitcoin crash in 2017, where Bitcoin lost 2/3 of its value in a month, and the top 10 altcoins lost 80%.

As I wrote earlier this year, I am and will remain enthusiastic about regulation as long as the balance between regulation and innovation is not skewed. In the Netherlands, we see that too strict legislation, on the one hand driving unicorns out of the country, on the other hand giving Dutch companies a very unfair position vis-à-vis competitors from abroad, who do not have to comply with these strict rules. Governments worldwide are now taking strong action against the trading platform in cryptocurrencies, Binance, about which even the Dutch Central Bank has already publicly warned.

I, therefore, expect many developments worldwide in the field of regulation in the coming year. Stablecoins and DeFi will probably first be looked at closely, in addition to the crypto market in general. The US government already introduced 18 different laws last quarter, and the European Union is now also making major steps with its MiCa legislation, which will apply equally to all countries in the European Union. It is expected to enter into force at the end of next year, early 2023.

It continues to surprise, it continues to be careful

When the iPhone was introduced, nobody knew that we would navigate with Google Maps, edit photos with Instagram, and stream music with Spotify. It is also a surprise every day with cryptocurrencies what new developments are announced. We are working hard on challenges such as the excessive power consumption of certain blockchains, security, stability, and speed. It remains to be careful for investors in cryptocurrencies. TV Program Radar recently showed how easy it is to set up a ‘pump and dump’; a way of significantly manipulating the price, which puts many investors at a disadvantage.

The scam ads with well-known Dutch people such as John de Mol and Humberto Tan have already caused dozens of victims in the Netherlands. Also, ‘fake projects’ that bring in money and then disappear from the face of the earth are still the order of the day. Check this blog I wrote earlier, how you can prevent this.

While I see an insane amount of potential in the possibilities of crypto, in the long run, 95–99% of projects will fall over at some point. We also saw this three years ago; Cryptocurrency projects also remain startups, with all the investment risks that entail. With all the cool developments I foresee in the coming year, my enthusiasm about cryptocurrencies remains insanely bullish!

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.