It is no exaggeration to say that the pace of change globally during the current technological revolution is truly astounding.  Whilst I have been no fan of lockdown what I have noticed is that it has accelerated some of the changes that were already happening.  Homeworking, video conferencing, online education, online gaming, e-signatures and scanned documents replacing original ones are just some examples of the changes which have occurred much more quickly during the Covid-19 pandemic.

 

What I am observing is a huge transformation from the physical world to a largely digital one and it doesn’t stop at just the few examples given above.  I wrote a blog in mid-January on crypto art.  Then a couple of months’ later the artist known as Beeple sold a collage of all of his crypto art images at Sotheby’s for $70 million!  Yes, you read that right.  $70 million.  Astonishing eh?  Not only was it a huge sum of money but it was in fact the third most expensive work by a living artist sold at an auction in history!

https://www.cnbc.com/2021/03/11/most-expensive-nft-ever-sold-auctions-for-over-60-million.html

However, crypto assets aren’t merely limited to art.  There are many other forms of crypto-assets emerging including a number of truly creative ones.  So what exactly is a crypto asset?   Well, crypto-asset is a broad term covering all assets stored on the blockchain.  This includes all cryptocurrencies as well as non-currency assets such as security tokens and utility tokens.  The size of the market is huge. The cryptocurrency market alone was estimated to be worth $792 million in 2019 and it is expected to grow to $5.19 billion by 2026.  That is an impressive growth rate of 30% a year. 

One of the biggest growth areas of the crypto asset world is in non-fungible tokens. NFTs are digital certificates of ownership protected by blockchain technology.  Non-fungible means the token has unique properties so it cannot be interchanged with something else.  It is coded to have a unique ID and other metadata that no other token can replicate.

 

 

An interesting example of a creative use of crypto assets is the digital platform Single.Earth. https://www.single.earth

Single.Earth is a digital platform that connects landowners with businesses so that they have a chance to offset their carbon emissions and protect biodiversity by paying landowners to conserve their forests and wetlands. It is an indirect way for businesses to balance out their carbon footprint and eventually become “carbon neutral”.

Single.Earth’s platform turns the environmental benefits that trees provide, such as absorbing CO2 and increasing biodiversity into a tradable asset. This incentivises landowners to protect the environment while having a remuneration for doing so.

Key takeaways

  • Single.Earth is a digital platform connecting landowners and investors
  • Landowners are remunerated to preserve their natural territories, while investors benefit from balancing their carbon footprint
  • Like gold, the created tokens have an intrinsic value as they are backed by real-world assets
  • The carbon offset market could be worth around $500 billion by 2050
  • In the end, CEO and founder of Single.Earth believes in the tokenization of the entire planet

Crypto assets are increasingly spreading into all walks of life.  It is by no means limited to just cryptocurrencies.  All manner of assets are now being traded as NFTs including collectibles, trading cards, Cryptoflowers and even crypto tweets.  

The virtual real estate market, on the other hand, has never been livelier. Earlier this month, cryptocurrency news site, Decrypt, reported that the most expensive NFT ever had been sold: nine plots of digital land on Axie Infinity, a blockchain-based game where players rent out the property to each other. The virtual estate reportedly changed hands for 888 ether (a cryptocurrency), then equivalent to $1.5m.

“We’re witnessing a historic moment,” the anonymous buyer wrote on Twitter (US:TWTR). There are rising “digital nations with their own systems of clearly delineated, irrevocable property rights. Axie land has entertainment value, social value, and economic value in the form of future resource flows”.

I have watched my young step-children playing computer games.  I am amazed at how absorbed they are by these games which are effectively 3D virtual reality worlds without the VR headsets. Adults are also hooked by computer gaming.

 

It all feels rather unreal but clearly, we are heading towards a virtual reality world.  One that presents potentially lots of opportunities but equally lots of threats.  So brace yourself for change.  Be prepared.  You know it makes sense*.

 

*The value of your investments can fall as well as rise. You may not get back what you invest. The contents of this blog are for information purposes only and do not constitute individual advice.