After researching all available technologies that might help us guarantee a product’s authenticity and lifetime provenance, we believe blockchain is the most promising solution. Blockchain networks (often referred to as Web3) can store chronological transaction history while also eliminating the possibility for counterfeit digital records. It is a foundational technology that enables a decentralized method of cloud computing and storage.
State of the Market
Since its inception as the technology powering Bitcoin in 2008, blockchain has had a volatile relationship with media companies and the general public. During blockchain’s first decade in existence, a number of cryptocurrencies became popularized as speculative securities. A small subset of cryptocurrency users gradually grew into a more substantial group of supporters who brought blockchain and cryptocurrency to the mainstream media by the late 2010s. In early 2021, blockchain-based digital assets called non-fungible tokens (NFTs) made waves throughout the press and began a massive crypto bull market run.
Shortly after the 2021 bull market, cryptocurrencies and NFTs took a turn in the opposite direction. The largest NFT marketplace, OpenSea, transacted $5 billion in January 2022, but that figure fell 90% in just seven months. In 2022, cryptocurrency trading experienced a steep decline with major currencies such as Bitcoin seeing losses in excess of 75%. The situation worsened in November of 2022 when one of the major crypto exchanges, FTX, wiped away billions of dollars in cryptocurrency due to illicit and unregulated behavior.
Since the FTX collapse, the crypto market as a whole has been fragile, with consumer trust at a low. The general public is more skeptical than ever about blockchain and NFTs due to the lack of cryptocurrency regulation and a poor reputation in the greater financial industry. The days of speculating on multi-million dollar JPEGs are over, and Web3 enthusiasts are waiting for stronger applications of blockchain to emerge.
Proof of Authenticity
Many still confuse cryptocurrency with NFTs because they both are built on blockchain. However, we avoid the volatile nature of cryptocurrency and use non-fungible tokens for a very specific purpose. With our model, we steer clear of the digital speculation that peaked in 2022 and we match each token with a physical good that carries conventional value. We liken this to a “gold standard” for a tool that was once purely digital.
In several industries, namely the fine art world, physical works are sold with paper COAs (Certificates of Authenticity) that validate a work’s origins and buyer history. At One of None, we future-proof the COA by using the immutability of blockchain to replace slips of paper that can be lost, torn, and counterfeited. We refer to our digital certificate as an item’s Proof of Authenticity. Now collectors can rest assured that their digital receipt is backed by legitimate and tangible value regardless of market conditions.
In addition to its publicly visible transaction history, Blockchain offers a number of benefits including:
- Immutability. Non-fungible tokens cannot be copied or hacked, thus proving each token holder is the one true owner of the corresponding physical asset.
- Portability. Blockchain-based tokens allow collectors to use their hybrid in the One of None digital ecosystem or in any other approved decentralized application.
- Utility. Because they are fully immutable, tokens carry specialized utility such as exclusive access to drops, content, or events.
- Customization. At their core, tokens are computer programs that can be customized to distribute resale royalties and enable/disable transfers under certain circumstances or on specific exchanges.
- Liquidity. Non-fungible tokens can stay listed on decentralized exchanges in perpetuity, so hybrid collectors can always receive bids and resell their items at will.
One of the most exciting features of blockchain is that it enables the growth and development of an open Metaverse. The term “metaverse” first appeared in a 1992 science fiction novel called Snow Crash, and it described an internet-based virtual reality that humans could access with a special pair of goggles.
The metaverse has since come to represent a fully immersive 3-dimensional digital space that mimics and expands upon features of the real world. Humans can use virtual avatars to interact with one another, build communities, buy and sell property, attend digital events, co-create and share digital content, and much more. It has taken nearly three decades of technological advancement to pave the way for a functional metaverse.
An open metaverse hinges on the interoperability of different software applications. For example, gamers cannot currently take their virtual assets from one game into another. Even with existing “metaverses” such as Decentraland or Sandbox, users are limited to the capabilities of their respective digital world. They must log in with separate accounts governed by separate rules, thus differentiating these worlds from an interoperable, “open” metaverse.
Today, several businesses are building virtual environments that can communicate with other virtual applications via web APIs and blockchain technology. Users will soon be able to move digital assets like NFTs from one application to another without barriers.
The open metaverse is rapidly approaching the mainstream market, as metaverse builders are working with some of the world’s most recognizable brands like Disney and McDonald’s. The easiest way to think about the impending metaverse is to consider a 3-dimensional (or “z-axis”) website, where visitors can use their keyboard’s arrow keys to explore the depth of a webpage, rather than being limited to scrolling in two dimensions.
These solutions are approachable and accessible via any standard web browser, and the implications of this technology are far-reaching. For example, retailers participating in the metaverse are able to offer virtual e-commerce experiences that mirror their physical stores, so remote users can have a familiar shopping experience without being physically present.
Instead of buying products through standard e-commerce product grids, metaverse stores allow users to walk the aisles and try on potential purchases using their avatars. One barrier to metaverse adoption is the disconnect between digital and physical assets after purchase - how can a user purchase an item at resale and trust its authenticity?