The Future of Arts and Culture on the Blockchain And Why Investors Should Care

Non-fungible tokens (NFTs) remain one of the most promising and exciting technologies on the market today. Though most iconically associated with visual art, NFTs–which use blockchain technology to transparently and securely denote ownership of unique digital assets–are poised to disrupt every industry they touch, from real estate to human resources to supply chain and logistics. Their underlying technology promises to vastly increase the transparency and security of online transactions without the need for third-party interference, which has made investors of all kinds profoundly excited about the technology.

At the same time as we continue to expinvestmentlore NFTs’ potentially limitless use cases, it is important that investors do not neglect the arts and culture tilt that helped NFTs initially become a household name.

“For a lot of people in the NFT community, things like smart contracts, real estate tokenization, and decentralized finance are the really exciting use cases of NFTs, with arts and culture being a relatively minor field by comparison,” says Zain Jaffer, Founder of Zain Ventures, an investment firm focused on real estate and proptech initiatives across the US. “We have to remember that, while Web3 will mean different things to different people across every industry, lay users will likely remain primarily interested in lifestyle and leisure. While it’s important for investors to consider future use cases when investing in NFTs, it’s equally crucial not to forget about culture.”

Game on

There are a few key areas that pioneering investors interested in Web3 should look into. The first of these is potentially the most obvious, considering how, at face value, the Metaverse—as one of the pillars of Web3—looks almost like a videogame. There are currently more than three billion gamers in the world, and the gaming industry is expected to generate more than $260 billion in revenue by 2025.

There are many different potential investments in the intersection between Web3, NFTs, crypto and gaming. VR and AR games, for instance, are an obvious choice. Consider the popularity of the game Pokémon Go, which uses AR to make players feel like they are really on the prowl to catch wild Pokémon. Granted, the popularity of the game dwindled after a few months of its release, but an estimated 80 million people still play it.

One feature of that game is that multiple players can all catch the same Pokémon at the same place. NFTs enable the creation of discrete instances of these digital characters. Functionally, a game designer could make each individual Pokémon that appears on the map an NFT and whoever catches it gets the NFT, a unique Pokémon of their own. This tech can be applied to other aspects of gaming such as legendary, one-of-a-kind swords, or even real estate in a digital world.

“All of the massive advances currently taking place in the Web3 gaming space should be a cause for celebration,” says Jaffer. “Not only will NFTs boost the gaming industry itself, but it will also allow more industries to become integrated into the gaming space. There are a ton of exciting collaborations between musicians, artists, video game designers, and social media platforms on the horizon.”

Virtually limitless possibilities

Of course, culture means much more than just art, music, and video games. As VR and AR technologies become more sophisticated, we can expect them to become an integral part of all kinds of hobbies. AR and VR’s immersive qualities will make digital learning–whether that takes the form of online workouts, instrument lessons, or even cooking classes–far more immersive and effective than its current, two-dimensional form.

Moreover, as VR and AR spaces become more widespread, NFTs will become an increasingly foundational part of the internet’s infrastructure. There has already been plenty of talk about the possibility of purchasing unique pieces of digital real estate in the Metaverse, and it is undoubtable that whatever VR and Ar platforms arrive in the future will also employ this model in some form.

“Investors need to approach Web3 with a sense of wonder—think about what’s possible, what they would like to see, and then look around at what different companies are investing in,” Jaffer said. “But, of course, that feeling of wonder also needs to be tempered with rational skepticism.”

Don’t jump the gun

Web3 funding has recently taken a fairly large dip, with the cryptocurrency and NFT markets not faring much better. These markets are notoriously volatile, and many startups have been having a tough time securing steady funding. Of course, many traditional, Web 2.0-type startups also fold quite quickly, so this phenomenon is in no way unique to Web3 pioneers. 

In short, investing is always a risk. Many of the old adages that have guided investors through previous markets still hold true for Web3 investing. For instance, there are clear benefits to having a diverse portfolio and sticking to pre-established goals. Similarly, it’s good policy to avoid looking too closely at old wins to try to estimate future ones, particularly in a market so apt to be disrupted by new tech.

For these reasons, savvy investors should note two things when trying to get into Web3. The first is that some of the best investment in culture may be entirely behind the scenes. This means investing in companies that are working to revolutionize, disrupt or even just improve existing standards in tech. For example, companies looking to deploy NFT tech to develop smart contracts could also branch off into the world of NFT tickets for digital shows. Moreover, companies that focus on security may become incredibly important going forward. These kinds of services will be the cornerstones of Web3’s infrastructure, meaning that they have the potential to bring in massive returns as Web3 gains more widespread adoption.

“I think it’s important for investors to consider what elements of culture they personally enjoy,” says Jaffer. “Of course, many have niche interests that are unlikely to share much of a following, but looking at what you love and thinking about how Web3 can enhance or disrupt it is one of the best ways to find the companies and products that are really going to resonate with people. Sometimes, the best sounding board is yourself.”