Web3 and Enterprise Technology

IDC have published a brief back in May with some insights into the impact of Web3 on enterprise technology organizations. The report itself is a paid-product, though if your company has an IDC subscription I suspect it’s available: IDC TechBrief: Web3, Doc #US49035522.

The summary is great, as it has quite a few key points… one though, jumped out at me:

While NFTs gained publicity through the exorbitant prices they gained as digital art (i.e., “Bored Ape Yacht Club”), their effectiveness as secure, immutable, and non-fungible stores of information and value was unquestionably demonstrated.

I’m struggling with just this communications problem — the second I say “NFT” people think “the hype of digital art and collectibles” and not “the utility of NFTs, that may in-fact be free”.

Pete Huang at Coinbase describes NFTs in a way I absolutely love

NFTs are a common file format for culture

NFTs as Community Secret Handshakes

The thing that’s clear to me, and us here at BCware, is that NFTs represent something important. Let me try at least to articulate my chain of thought to help you see what I see, at least directionally. I am, surprisingly because in my personal life I’m very black-and-white, I am able to operate in an abstract environment. Specifically, if I have an abstract or not-so-clearly defined destination in mind, I am able to move things forward with confidence while the target gets more fully defined.

Think about “our data” and the (false) trope that “Facebook sells our data” and that the “user should own their own data”. (Judging Facebook’s business is outside the scope of this thought, please.)

One of the things about Web3 is that the user themself owns their data. This is done because it’s associated with their digital identity, represented (at least in part) by a wallet address.

A quick explanation… the identity of your users has evolved in three phases:

  1. Create an account, that account info is owned by the site owner
  2. Login with an existing identity (login with Apple, or Facebook, or Google), the account info is mediated by BigTech
  3. Login with wallet (or ENS), the account info is managed by the user

As phase 3 progresses, users’ wallets will contain “tokens” that represent relationships with the sites or companies with which they do business. Let me say this again. The company won’t only have a list of users, but the user will have a list of companies/brands (in their wallet).

The simplest “but why?” is it aligns to the trend of the user owning their own data.

But wait, there’s more.

One of the reasons I love how Pete explains NFTs is that it’s interoperable, which allows companies to know you better, and align to their community’s values.

Making the World Better

Let me give you an example that we used in a brainstorm the other day.

Companies often support charitable causes. However, other than in the most broad way, those causes are disconnected from their humans (the causes that their customers and employees care about).

That’s OK. It’s good to do good, right?

Yes, and it’s better to do more good. A more specific association between your human’s values and your corporate activities would bring you closer.

Imagine, without having to ask, do surveys, etc… imagine if I participated in a carbon offset DAO, and earned an NFT to represent my participation. That NFT is in my wallet. I login to my airline, they see I’m pro-planet, and they decide to allocate a share of their giving to offset the carbon footprint from my upcoming trip in alignment to my values.

This is clearly a “value to me” and I’m going to support this airline because we have shared values. This is what it means to build community, instead of transactional customers.

Back to IDC and the Enterprise

Enterprises need to prepare for Web3 according to IDC.

NFTs are more than hyped collectibles according to Coinbase.

IDC suggests that companies:

  1. Inventory your systems that might connect into or influence your Web3 activities
  2. Pay attention, the next 12-24 months are critical
  3. Lay a foundation

Wouldn’t you know it? BCware provides that foundation.

Here’s the key point I’d like you to understand, having read this far:

No matter how big you are, and how much influence you have over your customers, they’re going to show up with their own preferences for cryptocurrency, blockchain, and wallet.

And you’re going to have to support it.

We’re in a participatory economy, one that’s an extension of the trend from companies defining our technology choices, to consumers defining them.

If you’re an airline, a bank, a hotel, or an entertainment company you’re going to have to go find the your customers in the communities they’re already participating in. And you’re going to have to balance that with the innovation you can bring to bear on the value you’re trying to deliver.

By helping companies, and their developers, deploy on any blockchain (for example), BCware helps lay a foundation to experiment on whatever chain suits their immediate needs… but not be limited by that early choice as the market evolves.

The same goes for Web3 infrastructure. Want to start with NFTs? Use IPFS. But we all know that IPFS has some limitations. We can plug-in Arweave, Storj, and others so that as your use cases evolve, you aren’t limited by the technology decisions you’ve made early in the experimental phase of your projects.

It’s not only about making development simpler or reducing time to market anymore. It’s about reaching and connecting with your audience on whatever chain and wallet they’re already using AND as your use cases evolve being able to adapt to the technology that best meets new requirements.

By the way, this is the philosophy we’ve put into production with our NFT app for Shopify merchants. It’s how we support Ethereum, Polygon, Solana, and Flow on the first release (with Avalanche in beta). If you’d like to see the app, reach out and we’ll hop on a zoom and I’ll personally give you a demo and talk you through the architecture of how we accomplish this.

Tokengated Commerce and Crypto Wallets

Crypto wallets are the digital spaces that contain the different elements of a composable identity.

In plain English:

Your wallet might contain a variety of “things” that serve to identify who you are:

  • your Starbucks’ loyalty card,
  • a collectible you’re proud of,
  • an achievement you share, and
  • your work ID.

We’re going to compose the things in our Web3 wallets to reflect our personalities. And, brands that recognize this, will help their customers identify with them through innovative Web3 loyalty expressions that manifest in these wallets.

Many of the things in the list above can be stored in the wallets that exist today (like Apple Wallet).

But these wallets are “dumb” containers. They’re functional and not expressive.

What gets interesting about crypto wallets is two bits:

  1. What’s in Web3 wallets doesn’t need an intermediary to the technology that stores the “thing” you’re putting in the wallet. It’s not just about money, but if I complete a class on Swift UI Programming, and that course certificate is minted on-chain, my wallet can display it. What’s gained over an Apple Wallet like solution? Provenance. Proof that what’s in your wallet is yours. This may not matter for a collectible (one that you’re not trying to sell) but may matter for a credential.
  2. The other interesting thing is that Crypto Wallets are ‘smart-contract’ enabled, which is like having little apps in the wallet that enables capabilities on top of the composable item.

Connecting on-chain innovations to off-chain infrastructure

I’m going to share two articles on what’s driving the current interest in wallets, but before I do, I want you to consider one thing.

Let’s say Starbucks allows me to mint an NFT that represents my loyalty card, to store in a crypto wallet.

Do you think that even Starbucks will be able to tell customers what wallet and chain they need to download to access the NFT?

Or, will Starbucks need to find their community of users on the chains that these users have chosen for themselves with the wallets that their members are familiar with?

Do you think Starbucks wants to put every loyalty transaction on-chain, starting from scratch to build a new loyalty system based on a Web3 technology stack… or, do you think Starbucks will need to connect their existing loyalty Web2 systems into this new Web3 stack, to combine the best of on-chain and off-chain capabilities in order to deliver innovative solutions?

(Hint, it’s the second choice.)

Just to be clear, I’m using Starbucks as an example that we can all relate to, not because I have any inside information into what they’re doing. I only know that they’re exploring a “digital third place” based on public information they’ve shared.

Learn More

If you’re curious, and want to start from the User Experience to understand the benefits of Web3, Identity in Web3, and how wallets play a part, please read these two articles:

  1. Simon Taylor’s “Why is everyone doing a Web3 wallet?
  2. The Crypto Wallet, Unlocking Digital Identity

In last week’s Tokengated Commerce announcement, Shopify talked about C2C as an expansion of B2C. B2C is “business to consumer”, while C2C is “connect to consumer”.

The wallet is the container in which businesses will connect to their consumers, and that’s why, as Simon asks, “everyone is building a Web3 wallet”.

Innovative NFT Use Cases: Legal

It’s interesting that considering the heavily restrictive bitlicense that NY State has in place or the ban on mining they’ve recently instituted that the NY Supreme Court is leading the way with an innovative NFT offering.

Though, I doubt this is the sort of NFT anyone wants to collect.

The short of it is that airdropping court documents to the thief’s digital wallet, even though the court doesn’t know the identity of the thief, satisfies the due process notice requirement.

Is this useful? It seems to be. Can this be done another way? I think the real answer to that is over my head, but consider that a wallet address is being treated differently than an email address. It’s obvious (to anyone who sends a newsletter at least) why an email address can’t be used in this way (hello spam folder). But it’s interesting that a wallet address is being treated differently.

My thoughts are going in many directions as I write this… the implications should CBDC’s take off and how courts could block addresses from participating in the monetary system.

But we’re here at BCware for one thing – the integration between Web2 and Web3 and enabling companies to solve innovative problems with Web3 while taking advantage of existing Web2 infrastructure.

My Jailhouse Experience

A while back, I worked with the Virginia Department of Corrections on a project. The process of moving inmates between jail and court came with a lot of paperwork. They’d literally put that paperwork in an envelope and pin or clip it to each inmate as they were moved around on their court dates.

Seems like a formula for a lot of mistakes, not to mention how demeaning it must have been for inmates. Regardless of how you feel about these inmates, demeaning them can’t be good for the safety of the corrections officers. But, social justice aside, it’s an inefficient system.

We were brought in to help with the business process automation and integration to ensure that inmates flowed smoothly, courts ran efficiently, and costly errors were minimized.

Modern Day Due Process

Back to the present. There’s a big gap between a court that can serve a wallet with notice, and inmates who literally have packets of information clipped to them as they move around a courthouse.

In both cases, there are a lot of back-end systems that contain information useful to these activities. And, while what the NY Supreme Court has done is truly ground-breaking, if it’s done in isolation without integration to all the back end systems on which modern legal activity is built, it really is only a proof-of-concept for what the future of enforcement in the metaverse might be.

Not to mention the other obvious thing… one can airdrop to a wallet address only if the chain is supported for minting the NFT. We’ve shown how multichain NFT support can be simply built right into any application as we’ve done with our BCware NFT app for Shopify. It’s important that this sort of thing is done transparently to the application, for a variety of reasons including lower cost of ownership, reduced impact of change, timeliness of support for a particular chain when notice needs to be served, and so on.

Read more about this innovative NFT use case on twitter.

Want to move past a proof-of-concept and deploy meaningful innovation on Web3? Drop us a note and let’s chat about your project.