What is it?
At its inception, the world of cryptocurrency was written off as the “Wild West”; a financial unknown lacking both regulation and consistency. Cut to 12 years later and we’re auctioning off tweets at $2.9m for charity, Elon Musk is selling cars in exchange for bitcoin and people are buying digital homes. (Struggling to get your head round this? It’s no stranger than being able to buy a plot on the moon).
In the world of gaming, cryptocurrencies and non-fungible tokens (NFTs) have long been common practice in the exchange of digital assets and online privileges for real money. Now, gamers can keep digital pets, buy into the personal cryptocurrencies of E-sport celebrities to access private channels and even buy luxury clothing for their digital counterparts.
Where ownership was once defined by physical reality, the virtual world now offers the same richness and ‘real’ qualities.
“It’s the future because millennials and Gen Z have a different view on life, whether it’s their views on sustainability or governance. For this demographic, it’s really about libertarianism where you’re in control of your destiny.”
Jasper Tay, co-founder and chief operating officer of Plutus, a decentralised fintech
But before we go any further, a quick intro to NFTs - NFTs are digital files underpinned by blockchain technology. The same technology on which popular cryptocurrencies like Bitcoin and Ethereum rest. But unlike cryptocurrencies, an NFT is totally unique and the blockchain ledger it sits on verifies who the rightful owner is of that unique asset. That secure and incorruptible provenance means forgers can’t make a copy of an NFT and pass it off to some unsuspecting collector as the original.
NFTs are THE hot topic of the moment. Even if it is ‘just a bubble’, they are an example of a growing evolution of ownership. In an increasingly digital world, the concept of “ownership” is changing.
We’re diving into the digital to explore new models for membership, loyalty, and translating digital ownership into real world impact.
TOKENISING OWNERSHIP
Decentraland is a virtual world owned by its users. (A bit like combining Second Life with SimCity). Based on blockchain technology that enables verifiable property rights, its users can create, explore and trade in virtual land. Decentraland offers parcels that are bought and sold using MANA, its crypto token.
The average price of a parcel of land in Decentraland over the past week was $1,653.64 compared to an all-time average of $393.22, according to NonFungible.com. But Decentraland isn’t the only one. There are a host of other platforms offering a similar experience: Somnium Space, Cryptovoxels, Axie Infinity and The Sandbox.
According to Janine Yorio, head of real estate at Republic, an online investment platform for early-stage startups and crypto that intends on launching a series of digital real estate funds soon, this is about the “pride of ownership”. “This pride of ownership is nothing new. In fact, owning land has always been the American dream. Now, this phenomenon is just playing out virtually.”
So what?
It can be difficult to understand a charity's role in this space. But we think it's interesting when you extend the idea of virtual ownership translating into the real world to deliver systemic change and impact.
Single.Earth is a trading marketplace that rewards landowners for NOT cutting down trees and preserving their ecosystem. Their goal is to “provide the technology that people who own the land would be able to create profit out of it without having to sell it as raw material.”
The marketplace uses the blockchain to ‘tokenise’ land. Purchasers buy tokens to own small amounts of land, getting carbon offsets in return for protecting them. The returns from offset projects could generate 5% annual returns for landowner investors. Single.Earth also connects landowners with sustainable companies and private investors to ensure that the natural resources remain intact and the land is now safe, and even monitors the land using satellite and sensor data.
ENHANCED MEMBERSHIP
Socios.com is a community membership model built around superfans. Fans buy tokens which enable them to vote on club-specific decisions: from changing the club logo to voting on kit design. The more tokens you own, the more influence you can exert. E.g. if you own ten Fan Tokens, your vote will count ten times in any poll. Tokens can either be purchased using a digital currency called $CHZ, or fans can hunt for tokens through the Socios app using AR technology - basically rewarding engagement through gamification. There are some big football names already on board, including: Barcelona FC, Juventus, PSG, Atletico Madrid, Roma and Galatasaray.
So what?
How can you create a membership offer that gives people a real sense of 'ownership' or control? That empowers them to deliver or influence impact? Rather than the traditional role of membership where members get to vote in the AGM. How can tokens enable people to have a say in part of what your charity does?
INCENTIVISED LOYALTY
Founded in 2018, Lolli is a platform that allows users to earn Bitcoin through shopping. While most reward programmes offer loyalty points or cashback, Lolli sends Bitcoin directly to customers’ wallets whenever they shop online with Lolli’s partners. Lolli currently works with over 1,000 retailers, including Nike, Sephora, and Bloomingdale’s.
So what?
We’ve included this one as we don’t think it’s that radically different from standard loyalty schemes like Nectar. Bitcoin/crypto isn’t the answer to every problem but it’s yet another answer of cryptocurrencies finally achieving mainstream traction.
Act Now:
Consider - Fast Following:
NFTs are very ‘right now’. There's the potential to be the first charity 'in' the space and therefore pick up on the bubble. But we'd question the longevity of it, so recognise it for the opportunity that it is. When a tweet goes for $m’s, what does this mean for high value auctions, for one-off opportunities?
Explore - Building & leveraging community:
What links all these examples together is community. The groups of people who connect through their shared passion, love or obsession with a brand or cause. In the case of Decentraland “young people are immersing themselves in such virtual experiences of the “metaverse” to create communities and fill real-world voids in social interactions and peer engagement.”
Experiment - Handing over control:
What would it look like to experiment with empowering supporters to make decisions about mission and impact? How could you do a series of micro-experiments with limited risk?
Inspiration - Digital ownership translated into real world impact:
Take inspiration from Single.Earth and consider how you could tokenise your assets or services and leverage that digital value to deliver real world impact.