NFTs and Web3

Summary of Packy McCormick's "Nifty Corporates" article on the future of NFTs

This article by Packy McCormick is about corporations getting involved with NFTs and web3, the next big stage of the internet.

Web1 started around 1996 and lasted until around 2004. Web1 was all about information and the ability to read it. It was just webpages on the internet.

Web2 started around 2004 and lasted until around 2017. This stage of the internet was about reading information and writing information. The interactions on the internet during web2 revolved largely around people which sparked the creation of social media, allowing users to post information like a photo and comment on each other’s photos.

Web3 is the next stage of the internet and this stage revolves around text, writing and execution. The execution aspect will involve smart contracts that will use code to execute transactions instead of people.

NFTs and blockchains are estimated to play a pivotal role in web3.

An NFT or non-fungible token is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files.

Packy McCormick is one of my favorite writers when it comes to learning about web3 and NFTs so I highly recommend subscribing to his Not Boring newsletter on Substack if you are interested in learning where the future of the internet is going.

The next big platform shift, Packy says, will be the transition to web3 and it could be as big or potentially bigger than the internet and mobile. It will change what products are sold.

"Web3 is a more decentralized, peer-to-peer, and liquid version of the internet often but not necessarily powered by crypto."

- Packy

The big corporations are starting to get involved:

- Visa spent $150k to buy a CryptoPunk
- Budweiser bought a Budweiser themed rocket NFT and the beer.eth Ethereum name service domain
-Coca Cola sold 4 NFTs
-Arizona Iced Tea bought a Bored Ape NFT
-Shopify launched a way to sell NFTs

Packy sees almost all consumer companies and business-to-business companies becoming web3 companies in the next 5 years.

NFTs are currently at the peak of inflated expectations stage in the Gartner Hype Cycle but this doesn’t necessarily mean that they are going away.

Cloud computing, 4G and internet TV were also once at the peak of inflated expectations stage in the Gartner Hype Cycle but so were Process Portals in 2003 so being at the peak of inflated expectations doesn’t guarantee success in the future.

Packy believes that it's still early for NFTs since the target market is anyone who purchases goods online and more than 2 billion people have made an online purchase.

Big companies are introducing themselves to NFTs in 2 ways that are really only bringing gains right now by helping them market their brands better.

1. Purchasing NFTs
2. Creating NFTs

Purchasing and creating NFTs have been helping companies market their brands better because there is so much attention surrounding NFTs right now that it creates a buzz around the companies that are getting involved.

This is similar to when companies were introducing themselves to the internet by creating a webpage just for marketing purposes back in the late 1990's.

Visa, Budweiser and Arizona Iced Tea purchased NFTs.

Coca Cola, Marvel and Shopify (teaming up with the Chicago Bulls) created NFTs.

Packy says that the companies that will do the best with NFTs are the companies that have very valuable intellectual property like Pokémon, Star Wars and Marvel.

Packy sees the biggest opportunities for companies to make money in NFTs is by adding product experiences like video game companies do with skins, play-to-earn and emotes but these opportunities are far away in the future.

Right now companies are just learning NFTs through experimentation which generates some press for them and helps their marketing department.

NFTs may be at the peak of inflated expectations stage right now but Packy still believes that they are not going away and they will be normal in 20 years.

"I think we'll look back and wonder how commerce happened at all without digital ownership, a liquid, always-on global marketplace, and items that come with experiences baked in. As with the internet, the companies that dismiss NFTs and web3 will be left behind." 

-        Packy