I believe one of the biggest consumer-focused decentralized application use cases we’ll see very soon is going to be branded digital collectibles on the blockchain.
I’m sure most of us can relate to at least one sort of collectible in our childhood or teenage years. For me, it was Pokemon cards, Tech Deck finger skateboards, Japanese Gundams and McDonalds Happy Meal toys.
Here are the most important qualities for why I traded collectibles, and why I think it can be replaced with software:
- It’s a social activity. You can trade it with either friends or your interest groups.
- There is a market to trade the collectible for better ones OR trade for money.
- It is timeless & lasts forever.
Based on the qualities listed above, there is no need for collectibles to be a physical object anymore. In fact, a digital collectible effectively achieves that exact same usage features.
We’re entering 100% smartphone user penetration in major cities and countries around the world, and the next generation of internet users are smartphone-first kids. Now, more than ever, will the younger demographic of internet users embrace purely digital collectibles over cards and other physical objects. It’s a stretch of the imagination to believe in non-physical collectibles, but often times, the biggest internet app ideas surprised us in really unexpected and creative ways, such as: microblogging (Twitter), instant messaging apps dedicated for the workplace (Slack, Hipchat), messaging apps when we already had SMS and Skype (Whatsapp, Line, Telegram, WeChat, Kakao), self-destructing picture messages (Snapchat), group coupons (Groupon), and going way back, a search engine that used an algorithm for backlinks (Google). As a curious and passionate user of internet websites and apps since I was a kid, I clearly remember there were a healthy number of cynics for each of these hugely popular app ideas before they went obviously mainstream.
The same way Facebook might’ve been a digital replacement for socializing at malls, or eBay might’ve been a digital replacement for neighborhood garage sales, I see collectibles being a very likely real world use case that will be disrupted by a new-enabling-technology which is blockchain.
I am a fan of Sequoia’s investments thesis which asks: “Why now?”. For years, you could have invented digital collectibles with centralized back-end, and I’m sure many have tried and may have been successful at it too. But crypto is disrupting an Internet of Value, and because of that, you’re able to create the following features that change the end-user experience:
- A boundary and borderless market to trade and swap scarce assets amongst each other, or easily trade it for actual liquid internet money (i.e. Ether, BTC, or stable coins).
- Guaranteed authenticity of the asset on a distributed ledger.
- Risk-free trades & you don’t have to trust the seller. If you were buying a rare Magic The Gathering card on eBay, you would have to trust the seller’s eBay’s ratings and history. With blockchain, you only have to trust a public ledger.
I’m personally really passionate about seeing blockchain collectibles come to fruition and I’ll be looking support any teams in the space attempting to build the following pieces of the blockchain collectibles equation. Here are some of the products that I see being needed for collectibles to work:
- A decentralized exchange to trade crypto collectibles for stable coins or Ether/BTC.
- A company to make attractive and fun branded digital collectibles that appeal to mainstream audiences.
- A company to make a very easy-to-use user front-end experience, whether on mobile or web, to discover, buy, sell or trade digital collectibles.
- A wallet provider, either hardware or digital, to store crypto assets much like how we use Trust, Trezor or Ledger. I’m a personal friend of the Trust Wallet team and I believe they’re already have this feature running!
- And lastly, a self-serve website service that lets anyone easily launch their own scarce, on-chain collectible collection.
In the long-term, as we see the decentralized dev stack mature, there will be a lot more interesting and robust dapp use cases. However, in the near-term, I believe technically simpler dapp use cases, such as collectibles, are much more likely to get adoption first.
NOTE: The headline of this article was inspired by A16Z’s Balaji’s post on collectibles. https://medium.com/crypto-simplified/a-simple-explanation-of-crypto-collectibles-8674c4527bd1