Currently, blockchain technology is at the onset of its evolution. Although cryptocurrency is primarily used for finance and investing, tokens have the potential to provide a quantifiable benefit to humanity. Innovative ideas are already being implemented as education becomes digitised, public goods receive resources through quadratic funding, and individuals reclaim ownership over their personal data. Nonetheless, the adoption of decentralised technology has just started and the proposed benefit they offer the economy and society has barely been glimpsed. In this article, Innovation Analyst Nathan Lenga describes how current crypto innovation is taking effect on improving our daily lives – ranging from data ownership, education and identity to new jobs populating the virtual space.
The metaverse has the capacity to spark the next innovation in communication. In 1843, Samuel Morse created the telegraph, enabling humans to communicate through electrical signals. In 1876, Alexander Graham Bell created the telephone, allowing people to speak with each other verbally over vast distances. Mobile phones came in 1973 and the internet in 1983. Web2, the “read and write web”, heralded social media. Communication continues to evolve and transform as technology improves. With virtual reality (VR) and augmented reality (AR), the metaverse has the potential to connect people in a whole new way.
Through the metaverse, seeing a friend, interacting and spending time with them will be as seamless as it would be in reality. The influence that the metaverse can have on communication will lead to the creation of new relationships which can flourish and develop through the passage of time, despite the absence of physical contact. As the capacity for people to communicate expands, humanity’s potential to grow together increases substantially.
Learning and Accessing Information
Beyond communication, the metaverse is currently planting the seeds of an online, immersive and usable learning environment. Education remains an inaccessible right for millions of people around the world. Over 72 million children of primary education are deprived of the right to education. Further, 759 million adults are illiterate with an absence of cognisance and drive to improve their living conditions. Through more interactive and accessible educational courses, the metaverse will unequivocally alter the way people learn. Teachers will no longer need to explain events in history or show students 2D photos of countries in geography classes. Now, students will see the event playing out around them with VR and walk around countries with AR. As metaverse tools become more obtainable, students will be able to explore the world around them, no longer curtailed by their geographical location. Immersive 3D environments will lead to students getting excited about learning.
Benefits of the Metaverse on the Whole Economy
As the metaverse becomes more mainstream, it is likely that new jobs populate the virtual space, providing more occupations for those losing jobs in the real world. This is the trajectory that the world is on; due to developments in the fields of AI and automation, millions of individuals in the community will be rendered jobless. Just in Australia, the Committee for Economic Development of Australia has reported that there is a “high possibility” that almost 5 million jobs will be replaced by machine learning and automation within the next 20 years. That equates to over 40% of jobs in Australia.
The new paradigm unveiled by the metaverse will be as significant as the industrial revolution and the mainstream adoption of the internet. The populace did not instantly embrace the changes brought about by these ideas. Individuals feared the detrimental effects that these innovations would have on the workforce and their lives. In hindsight, such fears did not come to fruition. In fact, the opposite happened; the industrial revolution and the internet provided more jobs, strengthening people’s livelihoods and the economy. Similarly, the metaverse will open up novel opportunities for its users. These jobs include avatar designers, world creators and much more, providing new streams of income for a variety of people and countering worries that the metaverse will disadvantage the workforce.
How Web3 Provides Users with Ownership over their Data
A key feature of Web3 is ownership over one’s own data. Data possession has proven a severe issue in the previous iteration of the internet. Social media platforms like Facebook and Twitter initially stored and analysed user information to algorithmically provide relevant posts for individuals. Subsequently, these companies ascertained that this data can be sold to advertisers, creating the plight of targeted ads. A survey from Pew Research Centre found that 81% of Americans feel they have no control over the data companies collect on them and a further 79% are concerned about how industry giants utilise the data. Moreover, in 2021, IDC estimated that the value of the American data economy is $255 billion USD and that of the European Union is $110 billion USD.
In contradistinction, Web3 introduces a new model of owning data with user information being encrypted and stored on the blockchain, inaccessible to parties apart from the relevant individual. Through the usage of digital peer-to-peer connectivity, Web3 protocols do not route requests through a central server that would store the information, perhaps later selling it to a third party. Further, with this new framework, users will additionally have the opportunity to monopolise their data by selling it to companies. This novel generation of the internet democratises power by moving it away from tech giants to individual users.
Another application of cryptocurrency that is at the forefront of societal, technical and economic innovation is quadratic funding. Quadratic funding is a democratic and scalable method of funding public goods that has the potential to benefit humanity on a global scale. At a simple level, quadratic funding involves mathematically allocating capital to ideas and concepts based on how many individuals are contributing to the funding round. Resources are funded for novel, ambitious projects, based on the wider benefit they offer to society. Hence, quadratic funding equalises power amongst involved parties, simultaneously being capable of expediting technological development.
This pluralistic funding model is crucial for society given it focuses on the importance of public goods. These goods, including clean air and street air, are non-excludable and non-rivalrous, respectively meaning one person cannot exclude others from using the good and one individual’s usage does not preclude others’ use. However, public goods face the free-rider problem. Given that people can utilise public goods freely, such items are at risk of being overused. Whilst sometimes the free-rider problem can be overcome, for example taxes to fund the public good of national defence, this issue frequently causes market failures. Fortunately, companies have recently begun utilising quadratic funding to preserve public goods. One such team is Gitcoin; the company has already raised $63.2 million USD. Evidently, quadratic funding has the potential to preserve fundamentally important facets of society.
A Source of Identity
NFT is a buzzword that we are all overhearing. Despite the revolutionary technology of verifying the unique origins and existence of art, collectibles, music and more on the blockchain, NFTs’ use cases are currently quite niched. At the moment, the way in which we use non-fungible token’s is largely limited to acting as art and profile pictures. However, we are beginning to see utility for NFTs in the decentralised finance sector. Evidently, some decentralised finance (DeFi) protocols now accept NFTs as collateral for loans, some enable individuals to use leverage when investing in these tokens. Moreover, platforms have started offering fractioned versions of NFTs, thereby allowing people with less buying power to invest in expensive collections.
In addition, the use case of these digital assets may grow to the extent whereby they contain information about human identities. NFTs can become an immutable form of identification that individuals can use to access decentralised applications without risking external parties obtaining their private keys. More to this, identification NFTs will allow for worldwide ID consensus without the necessity of a central authority storing people’s information. Ultimately, NFTs are currently at the beginning of their story arc and will likely see far more growth in terms of utilisation in the future.
Zerocap’s NFT Custody Solution
To support the development of NFTs, Zerocap is working on integrating nuanced, safe cryptographic mechanisms into our NFT custody solutions. Using Fireblocks’ multiparty computation technology, we provide an advanced method of securing your NFTs (and crypto) through our portal. Through auditing various DeFi platforms and smart contracts, our team endeavours to mitigate risks in the space. Moreover, to assuage any concerns regarding the storage of NFTs, Zerocap offers insurance for clients using our custody solution. Zerocap seeks to act as a vanguard for blockchain-related innovation and is remaining at the cutting edge of the space with our storage solutions.
Unique innovations in the cryptocurrency space that are independent of financial goals are coming. These concepts, including the Metaverse, Web3 and NFTs offer novel solutions to real-world problems. The mainstream adoption of these solutions is being seen on a microcosmic level; the Nasdaq utilises their Linq blockchain for representing share ownership and JPMorgan digitises securities as tokens through the Onyx chain. Nevertheless, with many more innovative ideas in the pipeline, the impact that cryptocurrency technology is having on the global economy and individuals’ digital rights is just starting to be realised.
Zerocap provides digital asset investment and custodial services to forward-thinking investors and institutions globally. Our investment team and Wealth Platform offer frictionless access to digital assets with industry-leading security. To learn more, contact the team at [email protected] or visit our website www.zerocap.com