Thursday, October 6

NFT, Web3, metaverse, DAO and POAP, the five crypto words of 2021


NFT, Web3, Metaverse, DAO and POAP are the five crypto words that have generated the most impact on the economy and society throughout 2021. One of the most important lessons that Bitcoin left us is that money can be created without participation of Governments and States. Thus, this way of creating value outside the states, underlies the origin of all these technologies developed thanks to blockchain.

In fact, the decentralizing power of these five words has demonstrated their ability to transform many industries and sectors. Such as real estate, music, cinema, health, fashion, investment, art, sports, video games and even crowdfunding. The evolution of technologies developed on blockchain is unstoppable. So we are already eager to see with what words 2022 surprises us.

NFT, Web3, metaverso, DAO and POAP

NFT

Although NFTs date back to 2016 and the Age of Chains and Rare Pepes projects, using the Counterparty protocol over the Bitcoin network, the boom occurred this year. After the Rare Pepes came the CryptoKitties and later the CryptoPunks. For the renowned Collins English dictionary, NFT has been the word of the year. Non-fungible tokens (NFTs) are unique assets that are used for the digital representation of a physical asset or a digital asset on the blockchain. Their main characteristic is that they are finite and that they have been designed to have unique and digitally verifiable properties.

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NFTs can be seen as a desirable collectible, for which someone can expect to pay a lot of money to own it. In this logic, it could be said that the NFT market bears many similarities to the art world, where a painting can be worth thousands or millions of dollars. Either because of its rarity and unique characteristics, because of its style, or because of the name of the artist who created it. In fact, the explosion of NFTs occurred in March of this year, when Christie’s auction house closed the sale of an NFT by digital artist Beeple for almost $ 70 million.

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Although the characteristics of NFTs make them perfect tools for creating digital art, the blockchain technology on which they are developed allows us to go much further, and can be useful in multiple industries. Thus, although in 2021 NFTs have been used almost exclusively for digital art. Most likely, its use will increase in video games and metaverses in the coming years. Logistics, the automotive sector, Decentralized Finance and in the entertainment sector. In addition to many other uses that we are not yet able to imagine.

Web3

The concept of Web3 has acquired special relevance in the last months of the year thanks. Above all, thanks to the increase in applications developed on Blockchain. In fact, many tools that some people are still suspicious of, such as NFTs, cryptocurrencies and Decentralized Applications (dApps), are forming the basis of this new internet.

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Like the birth of Web 2, Web 3 promises to fix the problems of its previous versions. Today, much of this website focuses on centralized services run by large corporations. Google, Amazon and Facebook have almost complete control of Web 2. Therefore, the main advantage of Web 3 is that it promises to return digital sovereignty to the user, thanks to the decentralizing power of Blockchain.

The TIME example

An example of how Web3 may work in the future is the collection of 4,676 subscriptions in the form of NFTs launched by TIME magazine last September. Thanks to blockchain technology, instead of filling in a form where you have to provide all your data, all you have to do is buy the subscription in NFT format from an NFTs marketplace. In this case, from OpenSea. Once you acquire the NFT, it is saved in our crypto portfolio, being registered in the blockchain that said NFT is ours and, therefore, the underlying subscription.

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To read the articles of TIME magazine, the crypto portfolio software (Metamask for example), connects automatically through a browser extension, having all the articles of the magazine at our disposal. The main advantage of buying the Time subscription as an NFT, in addition to the fact that the process is completely anonymous, is that the subscription can be appreciated and earn money from it.

Metaversos

Although they have been with us for a long time, it was Facebook’s announcement in October of this year, saying it wanted to be a Metaverse company, that sparked attention to these virtual worlds. Metaverses are virtual spaces where people interact with each other with their avatars. The idea of ​​metaverses has been with us almost since the beginning of the internet, with spaces like Second Life or Habbo. However, the introduction of Blockchain technology and NFTs have taken metaverses one step further, by allowing individual ownership and the creation of economies and markets. In metaverses, users can monetize their talents, buy land, art, music, or trade various items.

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The metaverse built on the blockchain is believed to be the successor to the current internet. So it is not surprising that metaverses are attracting the attention of companies in all types of industries. Little by little, the metaverses are filling with companies that adapt the offer of their goods and services in the real world to the virtual worlds. Just as a person needs to buy clothes in real life, his avatar also needs to buy clothes in metaverses. Therefore, you need a store to sell you these clothes. The possibilities provided by the monetary connection between the virtual and real world is drawing the attention of companies from all types of industries.

Different types of Metaverse

Also, due to their increasing popularity, different types of metaverses have emerged, but it is necessary to distinguish each of them. The non-blockchain metaverse refers to all kinds of virtual world. From those that are totally centralized, such as Grand Theft Auto (GTA), or the mythical Sims, to the metaverses that are becoming popular today. Like Minecraft or Roblox. On the other hand, the blockchain metaverse is the one that is built on this technology allowing the creation of economies and markets within them. In turn, the blockchain metaverse is divided into decentralized or centralized, depending on whether control is held by a single company or is controlled through a DAO.

DAO

In the month of November, the acronym DAO also crept into all the media, thanks to some guys who met on Twitter and decided to buy a manuscript of the United States Constitution, forming the one known as ConstitutionDAO.

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DAOs (Decentralized Autonomous Organizations) are organizations controlled by smart contracts. Smart contracts are transparent and immutable and are responsible for establishing the rules of the organization. In this way, all the members of the same know in advance the rules of the community and that these cannot be modified in the future, as they are registered in the Blockchain.

DAO applications

For example, smart contracts from a DAO could replace the president of a country. Each political party would present their smart contracts with pre-defined rules and voters would have to decide which smart contract “pack” is the best for them. Unlike what happens today with the electoral programs of political parties, with DAOs, citizens would be at all times sure that the rules of smart contracts are being followed.

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The applications of DAOs are almost infinite, since they allow to organize in a decentralized way the cooperation between parties that do not know each other. There are already crowdfunding platforms that are being replaced by DAOs. An example is Kickstarter. This well-known crowdfunding company wants to build a platform that allows the simple development of crowdfunding initiatives that work in a decentralized way through cryptocurrencies and smart contracts. In this way, each person who invests in any of the projects would be the owner of a part of them, being able to verify their authorship through blockchain technology and smart contracts.

POAP

Although POAPs have not yet acquired the popularity of other words on the list, their future applications and expansion in recent months, due to the growth in the number of events in the metaverse, place them as a technology to take into account.

What is a POAP and why can it be very important in the future for organizations?

A POAP is a digital certificate in NFT format that serves to demonstrate attendance at an event in the metaverse or in the real world. POAP is an acronym for Proof of Attendance Protocol and they are ERC-721 tokens distributed on the Ethereum xDai sidechain. Each POAP is unique and can only be obtained by demonstrating attendance at an event. POAPs not only serve as proof of attendance, they also allow for other integrated services such as private chat rooms or giveaways.

Automation of digital certificates

The automation of digital certificates through POAPs opens up infinite possibilities. Let’s imagine that a soccer team distributes POAPs automatically through membership cards, for each game that the owner of the card attends. At the end of the season, each member would have the certificate of the number of games they have attended. In this way, the club could offer different advantages depending on the seniority of each member and the number of games they have attended. Thus rewarding the loyalty of each follower. This example is also applicable to other industries, such as music. Fans who have followed a group since its inception would have an easy way to show their support through POAPs. As a reward, the musical group could benefit them with concert tickets or other benefits.

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In addition, POAPs can also allow access to exclusive activities to their owners. In fact, many blockchain communities are using POAPs to interact with their members. This is the case with DAO SushiSwap and ShapeShift, which automatically distribute POAPs to those who attend weekly community meetings. They are also awarded to voters of governance proposals, with the goal of increasing turnout. All these POAPs hide different advantages for the users who acquire them.

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