#258: Web 3.0, Crypto-currencies, Metaverse and NFT's - Loyalty Insights

Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

 

This episode is sponsored by Epsilon. Today, I’m delighted to announce a unique opportunity for one lucky listener of Let’s Talk Loyalty to enjoy a complimentary workshop with the loyalty experts at Epsilon. One brand every month will have the chance for a unique, independent loyalty lab. A review of your loyalty program where Epsilon will share their expert ideas, how to drive your program’s performance to a whole new level. This workshop is a powerful way for you to measure and then increase the return on your investment in your loyalty program. So to apply head over to letstalkloyalty.com/epsilon and enter your details.

 

Hello and welcome to today’s episode of Let’s Talk Loyalty. Are you wondering about web 3.0, blockchain technology, cryptocurrencies, the metaverse, and NFTs. And more importantly, what their potential could be for your loyalty program? Web 3.0 is one of the hottest topics in business and society right now. But I, for one, am certainly finding it very challenging to know whether the hyper ran these is justified or is simply that, hype. Joining me today to share his passion for all things Web 3.0 is Stuart Evans, a strategy advisor, and a proud proponent of disruptive thinking with a passion for understanding and playing with you and emerging technologies that excite consumers and really engage them.

 

If you are working in loyalty marketing, I know you’ll enjoy my conversation today with Stuart Evans. He’s an inspiring thought leader who joins us to simplify the facts from the fantasy. And if you’re brave enough, He also shares some ideas to get started playing in the wonderful world of web 3.0.

 

So Stuart, welcome to Let’s Talk Loyalty. 

 

Thanks, Paula. Delighted to be here. 

 

I feel like it’s long overdue Stuart, We’ve been talking about these wonderful topics for a long time, but we’ve never recorded them.

 

Yeah. It’s, uh, I don’t even know if it’s something I’ve got to say, that’s interesting to people. So maybe there is, maybe there isn’t, we’ll find out.

 

We’ll definitely find out. And of course, I always find it fascinating. Um, I always think of you Stuart as the, uh, the font of all knowledge when it comes to web 3.0, so we’re gonna test that today. We’re gonna put you on this spot.  

 

When get describe as an expert, I typically turn around and say, there aren’t any, because the stuff that I work at is moving so fast you can’t be an expert in this stuff. So yes, I may learn no bit more than the next person and I try and keep up to speed, but, uh, definitely not an expert and learning as fast as I can. 

 

Okay, well, thank you. And actually, that’s a distinction I also make, um, I tend to prefer the word specialist because I do think there are things I specialize in and therefore have some knowledge to contribute. So yes, I like that, uh, that distinction. So we’ll call you a specialist. So with all of that, uh, background Stuart, we are here to talk about, all to do with web 3.0, but we’re going to start as usual asking you about any favorite loyalty program that you as a, you know, loyalty specialist, uh, or web 3.0 specialist. What is it that you, I suppose, admire and respect at the moment in the middle of 2022? 

 

Okay. Um, Well, as you know, I think web 3.0 is something that people say is a, uh, is a misnomer, there’s many naysayers in the marketplace, you know, is it gonna be a thing? Is it related to loyalty? Is it actually real, um, in any shape or form, um, and therefore I have to quote, I guess the, um, uh, the program, a loyalty program run by the browser, Brave, which was created by the founder of Mozilla Firefox and in a web three context, what they allow you to do is to, um, be tracked or not tracked when you do your browsing. And if you are tracked, they will then monetize that tracking as Google does today. Yeah. But uniquely, they will then reward you back. Um, and they reward you back with crypto tokens, um, called BAT. So basic attention token, and they launched this program, um, a few years ago, and today they are running about 55 million customers collecting BAT token for browser using the Brave browser and controlling and monetizing their own data. And if you wanted a web three example of why things are different in web three, controlling and monetizing, and ownership, Is exactly what you need to do. 

 

Totally, totally. That is a wonderful example, Stuart. So thank you for that. I had not realized it was operating at that scale. Um, you know, I think we all kind of end up in our own little filtered world like, you know, I use Google Chrome, so therefore I assume the rest of the world does too. And clearly, it is the dominant browser, but Lordy B 55 million. That’s absolutely incredible, uh, scale they’ve achieve.

 

It’s uh, if you talk about web three, the, um, you mentioned before my, my favorite words I learned from somebody else is, uh, you know, D-commerce web three is community driven and is not captive and extractive. It’s not about, you know, billionaires going to, um, taking joy rides to out space. Yeah. It’s about community-driven, owned, and owned and operated by the community. Yeah. So it’s actually a mindset that’s different as opposed to the technology underneath more so. 

 

Yeah, I think that is, uh, something that you’re the only person who’s explained that to me. I think what I mentioned to you, Stuart is, uh, the first time I heard of this concept was, you know, the world-famous inventor of the World Wide Web, Timothy Berners Lee, um, who did, uh, speak at Web Summit, um, quite a few years ago now and talked about this mindset of, you know, the freedom I think, to, to create and communicate, uh, to use some of your other wonderful words, but, who would you, I suppose, attribute, do you think this is something that human beings are driving in terms of our preferences for a new way of being in terms of our digital experience? Or can it be connected back historically to somebody like Tim Berners Lee? Or what would you say the origins are of Web 3.0?

 

Oh, I think it’s, um, I said it’s a social movement. I think you can look at, you know, the, I think it’s again, 50 plus million daily active users of Roblox, you know, whether they’re 13, 14-year-olds, what they’re allowed to do is to go into their game space and create anything they like. Do anything the like, and go anywhere they want. So the freedom, um, and I think the, um, the web three space is about choice, freedom and control, um, and it’s a social movement and I think it comes from crypto natives, people have grown up thinking this way and acting this way’s come up from gamers who have access to freedom in the games they play. Yeah. Um, which are very non-prescriptive these days. Um, and it’s a backlash against, you know, the eCommerce was captured by, you know, the big guys, um, and, and therefore captured in extractive. And there’s a backlash against it where people are launching protocols to, um, stop that happening. Um, and I’ve worked on some of those where people are saying the reason for doing this is to allow freedom of community movement, uh, and commerce across a network and not have somebody take control and make it theirs. Um, yeah. If you wanted to give an example of exactly Web 3 is not about, know Facebook capturing the word Meta. Yeah. It’s exactly anti-web 3. Yeah. Um, it’s exactly the opposite and that’s why there’s a massive backlash against, um, Mark Zuckerberg and his Zucker Verse and what he’s trying to do there. Yeah. On from the Web 3 community. 

 

Yeah. And what about it fascinated you Stuart? I know you’ve been studying this now. I think you told me since 2015. So why was it that you were so fascinated? 

 

Oh gosh, I, uh, I read a magazine actually. It was Wired Magazine and, um, it said that, uh, uh, Bitcoin is a programmable open source currency. And having spent at that point 20 plus years in loyalty. Yeah, I thought I could take that, I can change the value proposition for customers. I can improve the tech underneath and I’m pretty sure I can improve the commercials for both customers and business. If I could use something like that. That was my starting point. I spent, uh, 2015 learning, reading as much as I could. I attended the launch of Ethereum Devcon 1, uh, in where they were live, coding green screen on the big picture. Wow. Like he did, did the math just now I think I tried to buy a thousand dollars of Ethereum or Eth as it was, uh, as it is, um, at that point in time. I just looked up the price was 42 cents and this has done a, a million percent appreciation from now, it would be worth about 10 million dollars today. Had I done that? So.

 

Oh, dear.  well, I can only say, I’m sorry to hear that Stuart, you should be a 10, 10 times millionaire by now. Huh? 

 

And since then we’ve been trying to use, um, and learning. You know, and the way to learn I think is to try and do. Yeah. And a lot of people talk. And I think what we’ve been trying to do with lots of different companies and clients is, yeah, how do we make this work? How do we try and do this? How do we use crypto, blockchain, NFTs for different things, different ways, um, and I think most importantly, What I’ve said to people is don’t solve existing problems with new tech solve new problems with new tech. Okay. Cause all thinking on new tech is expensive, old thinking, we need to actually break out of the mindset. Yeah. Um, that we think we understand programs and customers and go forward into the Web 3 nature and come back, therefore, to look at loyalty today. So I haven’t tried to move loyalty forward. I’ve actually stepped away from it to come back at loyalty from a, a Web 3 mindset and perspective and see what we could do differently. 

 

Yes. Yeah. Well, I’ve no doubt there’s some extraordinary examples of what can be done differently and what is being done differently, Stuart. But I do like, uh, what you said, you know, just about, you know, individuals, for example, and again, we talked about this when we met last time to me, there are so many conversations, these are the buzz words, everybody wants to be involved in web 3.0 or seen to be, um, at least testing, learning. I think there is the appetite in certain companies, let’s say the more, um, the braver kind of companies. Um, but I always feel like. I don’t know where to start as an individual loyalty marketer who, you know, is curious, I would say, and has never bought any crypto. Um, you know, I did consider buying, you know, a Bitcoin, I think in 2017 when I realized all the cool kids were doing it. And then somebody told me it was $6,000 for one at the time. So that kind of shut me up pretty quickly. And I’ve lost track. I know it’s been all over the place now in recent months, but, you know, to take it back to its simplest Stuart, you know, for the audience listening, as you know, I think first of all, anybody listening to Let’s Talk Loyalty has a love of the loyalty industry. Um, so would really value your expertise, um, and speciality, uh, to go back to our, our former wording over the last 20 odd years. But if somebody like me, doesn’t have a clue about Web 3.0 Stuart, what can I do to educate myself? Like, where should I start? 

 

Gosh. Um, well, one reading, um, and there’s a lot of stuff, um, written, but actually, it’s not necessarily on LinkedIn. Um, so the Web 3 movement actually operates on Discord. So find projects that you like and go and follow their Discord and get involved, um, by seeing what people are posting through the official channels on and the unofficial channels on Discord. Okay. Um, and Twitter. Um, so it doesn’t really operate on LinkedIn as much as a traditional business does. Um, I think the, the way to learn is to. And I think whether it’s sitting in a business and trying to launch a project, um, as people have done and they learn, um, you know, the hard stuff, cause it’s not easy. Yeah. Um, but also as a consumer, I mean, you know, it’s dead easy now to link something like a Coinbase Wallet. You know, put a, put a few dollars in there and go and buy some crypto and by the way, it’s probably not a bad time to be buying right now, or had said that last week would been even better, cuz Ethereum’s up at 30% in a week. So that’s not a bad return in a week. Okay. Which is interesting because that also shows why consumers are interested in crypto too. Yeah. There are use cases in the states where, and their pensions are cashing in their 41k retirement pension pots and putting it into Bitcoin. Wow. Because they’re seeing this appreciate, and you know, of the course, you know, it can depreciate as well, but the volatility of, um, of crypto potentially particularly a market flow crypto is what drives consumer attention. I saw people are interested in it. Yes. It’s gaming. Yes. It’s gambling. I, I completely agree. Yeah, but we’ve gotta look at that and go, but that’s interesting and people are bored and how could we use that to get their attention? And that’s what loyalty’s about the end of the day, isn’t it? Yeah. Now creating value, creating tension, creating engagement, and, you know, people are engaging with crypto in, in a way that we should be able to replicate that and use some of that learning in the stuff that we, we do.

 

You know, I really, I think you’ve, you’ve nailed an insight right there. Stuart, I was literally talking with somebody just here in the Irish market, generally about the programs and whatever and you know, we’ve also been talking about the UK, which you get is a market. I admire for, for lots of the, the work that’s done there. Um, and clearly I’m, I’m passionate about innovation and it’s one of the reasons I have this show. But the conversation that we had was actually, we do feel that there is a lot of fatigue, a lot of boredom, and you know, we’re not just thinking about Web 3.0, you know, for the sake of it, you know, to do something different, like I think the market needs something exciting. And I think that the volatility, as you said is absolutely right, that’s, that’s one concern. And that comes back to whether that individual has, I suppose, the, the discipline to, uh, to, to manage the, you know, their assets in the marketplace, I would guess. Um, which I wouldn’t know, but what was occurring to me is you were talking about that as well, Stuart is like my first concern as a, as an individual, when you talk about a Coinbase Wallet. So pretty sure I could Google out, you know, Google that and figure out how to, how to get involved, but are there, you know, fraud risks that I would need to take maybe a separate credit card to make sure that my crypto exposure, like I have some negative association with them with cryptocurrencies in general, that I would almost like, you know, wonder, can I start with my current credit card and just get going? Or are there basic kind of fraud principles that apply in Web 3.0, that are different? 

 

Yeah, I mean, there there’s loads, of course, in Caveat Emptor, I think, um, you know, be aware of what you’re doing and only, only risk what you can afford to lose. I mean, let’s, let’s get down to the basics. This is gambling effectively putting money into crypto. Yeah. Um, but I think, well, my point was about, you know, trying crypto, you know, what you would’ve seen in a 30% appreciation is your heartbeat. Would’ve gone up. We got excited about that this week. Yeah. And that doesn’t happen if you’ve got loyalty point sitting in account that don’t go anywhere. So yeah, I think, yes, of course, there’s, um, you know, concerns and there’s lots of things about making sure we come onto, you know, things like energy concerns and, and, and, uh, green challenges with the Bitcoin. Yeah. But, um, I, I think, you know, The point is, go try these things, go find out, um, keep it simple. You know, I just bought, um, an NFT this morning. I spent $500. Um, it wasn’t expensive. Wow. Yeah. Um, and I know what I’m doing and I know why, and we’ll talk about it in a minute, but, um, yeah. Uh, yeah, it’s a bit of fun and just go play. Uh, I think that also as an individual player, I think as a company, there’s also ways of playing and, and you know, is anybody gonna move their entire loyalty points portfolio onto, onto blockchain? No, no, one’s gonna move billions of dollars of points onto blockchain. No, CFO’s gonna sign that off. It’s just not gonna happen. Maybe a new startup might start on blockchain, prove it, and, and that’s what back did. Um, but, um, there are ways of using blockchain technology underneath, which we’ve talked about before has, um, a number of capabilities within, um, uh, running a loyalty program, which is better than traditional tech arguably, um, the crypto itself has an interest for customers and also in a peer-to-peer network as a, as a currency movement of value between different, different partners, NFTs. Um, yes, there’s the crazy art stuff, but actually there’s, um, a bunch of capability coming down the pipe in technology around NFTs that make some really interesting from a membership point of view, and there are membership examples out there and then we get to Metaverse over the top, which is where. , you know, you can create basically unbounded experiences and, and what do customers want post-pandemic? Yeah. They want trust. They want value and they want experience because, you know, they want transparency and trust for things that they, they clear on. Yeah. Value because they’ve all been sitting there doing web shopping and they, they wanna make sure they’re getting the best price, um, for, for two years, um, and experience. Cause they’re. We have the opportunity within web three to create a whole bunch of different mechanics, these different layers using, I said blockchain underneath as a technology using crypto as a tool, um, for, particularly for value, um, transfer and storage. Um, NFTs for me is actually a, a tool for value capture and creation, which is interesting. Yeah. And then Metaverse is the, is a space where you can create experiences. And again, I don’t see Metaverse being something that people say, oh, 3d headsets or whatever, or, or blocky, pixelated 2d versions on a screen. Metaverse um, according to the guy that created Pokemon Go is everywhere. He talks about augmented, you know, you pull out a phone and you’re wave it around. And when you want to to see what’s the other layer that is the digital across the physical that you’re engaging with. Yeah. Um, and people say, oh, well, you know, brands, well, consumers completely exist in the Metaverse. Well, I don’t think so. They’ll dip in and out. And people have talked about omnichannel before, Well, a lot space I’m in, we talk. Multilayered, so that they’ll go through different layers of virtual versus physical as a customer experience in real-time, I’ll be dipping in and out of these different layers. So again, I’m just challenging us to think differently about what customers are expecting, how they will use, how they will engage, and bringing that back. Therefore then how do we design and work on, value props and customer experiences within the loyalty space. 

 

So have you, any examples, Stuart, you know, with all of those, you know, you’ve talked about a lot there and I, I, I do wanna go back through them now in a minute, but blockchain, crypto, NFT, and Metaverse. You know, if there’s a particular, you know, whether it’s a company example or a per a personal example of, um, of taking these and creating something new that you think is impressive. Uh, I think you mentioned airBaltic, uh, before we came on air. So that might be one to, uh, to talk through. 

 

That is the NFT I bought this morning. So I went buy a, a city collection, um, NFT. Yeah. And it was interesting that actually it got flagged up recently, airBaltics plans for their plane NFTs, um, were flagged up recently. They’ve released some, some press about what they were trying to do. And there was some criticism about, this is just about why do we need this tech? And it’s about this. And it’s about that. And I actually put a post back and said, look, guys, they’re just trying to learn. And actually I’ve written an article that says. NFTs could be a better distribution for airline tickets than GDSs in the future, because actually it’s a better way of moving. It’s a secure, trusted transaction. And as a vehicle, an NFT, which is basically a bucket with some code in it. Um, but in moved across a network with, you know, security and transferability could be a really interesting way for people to do things like on tickets. Um, has anybody moved to an on ticket? NFT system now? No, but should they maybe try it in the loyalty space as getting their toes wet and something that they can maybe not quite get it right first time around? Sure. That’s a great thing to do. And I think airBaltic is a super brave in what they’re saying around their, um, investigation around NFTs. They’re getting it right from my point of view, in a certain extent, because the reason I bought the, City collection NFT is because they are going to launch something called play NFTs. Okay. Um, and that play NFT will have some value and it’ll have some credits within the airline and you can read on, on the, they’ve been talking about, um, but it will continue from there. And what we’re talking about really is the concept of a perpetual game model. So I get engaged here, but I moved to there. The NFTs allows you to have this ability to, um, burn one status and get another one because I’ve traded up, you know, luckily a game I’ve leveled up. And that, that becomes interesting. So I think they’ve got a lot of the thinking, right. Um, okay. In the articles they have actually, um, all their board hold NFTs. Um, but they’re saying they’re just playing, they’re trying to learn about this stuff with the, to see where it goes in the. And as I said, you know, putting something out there, it’s not about the money, it’s about the engagement. It’s about having fun. It’s about creating something that customers are interested in. Yeah. Um, and seeing how it lines to the business model for loyalty and the business model for the airline in the future. So I said credit to them for doing it from a, uh, yeah. From an example, point of view in their market cap of their, um, uh, their city collection NFT’s is only, uh, $16,000 today. I saw 220, which is slightly, slightly below the Bored Ape Yacht Club, which is the one people have heard of. Yeah. Which is currently 1.6 billion, and today there was a sale of Bored Ape Yacht Club, for, um, hundred $165,000. Um, wow. They were sold for, I think, about a few hundred dollars in the first place. Yeah. And what they did, you know, Bored Ape a is a great example of how they’ve actually created value for people, the people see value in and the interest thing behind Bored Ape Yacht Club is in theory, there’s a space in Metaverse, there is a space where you can go called Bored Ape Yacht Club, and if you hold their NFTs, you allowed access into different rooms and, okay, great. That’s the kids playing. Starbucks, have announced they’re going to do the same. Starbucks have announced they’re gonna do NFTs, Um, and their NFTs will allow customers to have different unlocked experiences and different access. And therefore, one of the biggest loyalty programs of modern times is going to be engaging in this tool. Um, and Starbucks have also, um, said that they’re using, um, blockchain technology underneath to transfer value between partners. Um, they haven’t said they’re gonna move stars forward as a cryptocurrency, but own my word, what would happen if they did  seriously? Yeah. Yeah. It’d be amazing. So I think you’ve gotta look at, you know, over your shoulder hard at the moment. Yeah. If you’re running programs and go, what is happening in the market? Not just in our space, but other space. Yes. Um, and see what we can learn from and where can we, we can go with it.

 

For sure. Wow. That’s huge. And just so I’m clear Stuart, the, the Starbucks exploration of NFTs and experiences, that’s purely digital experiences. Am I right?

 

Oh, I doubt it. Um, I, I think it will be an experience where you can, as an NFT holder go into a digital space, they talk about third space in their strategy, which is the space between yeah. Um, home and the store. Um, and they wanna be involved in that third space, which they’re not currently, which is why they’re doing the partnering, uh, thing. Um, but I’m sure it be a layer. Um, experience where as an NFT holder, I will certainly look at, you know, do I get a different flavor? Do I unlock this? Do I unlock that? Can they play a game with coffee, and coffee drinking? That’s interesting exciting to customers way beyond the fact that it’s a cup of caffeine that’s se it. Sure they can. They’re bright and I think that’s the kind of experience they’re gonna try and create. Yeah. Um, I said, it’s all nascent. This is very emerging. It’s a been announced, but not, um, not, not done yet. Okay. You know, it’s all bleeding edge. Um, but you know, in terms of going out there and saying, and trying to do and trying to trial, um, now’s a really good time to trying to do that. 

 

And the one that you bought today, Stewart, that sounds exciting, your, your airBaltic’s city collection, uh, little investment is, is that a piece of art? You mentioned NFTs and to me, NFT, non-fungible token in case anybody hasn’t heard the full word. Not that that illuminates anyone. I don’t think, I think your container explanation is, is, is a better, um, simpler, uh, definition, but is that what you’ve bought a piece of art. Or, or what is the, the city collection? 

 

Yeah, I’ve bought a, a piece of art. It’s, uh, a numbered, Um, I think I’ve bought number 98 of the hundred. Okay. That were released against, um, it’s a piece of art and it’s for the city of Coldigger, uh, um, uh, which they’ve released, um, But really what I bought is you say, as an investment in, um, the fact that when they go to release the plane, these NFTs, every wallet, and they can see this, cuz it’s transparent on the web, every wallet on the blockchain, every web, every wallet that holds, um, a city collection NFT will be airdropped, and this is the exciting stuff. Um, air-dropped free, um, for free some of the Plane is NFTs. So by buying the city collection one and getting involved into the relationship with airBaltic when they go to their next level and they drop their planes NFT, I’m gonna get some of those for free. Okay. I can also buy some potentially as a, in a pre-mint environment, which means they’re much cheaper than the market rate. Um, and it’s a way of engaging and you have this kind of con if you like, we used to, we’ve always drawn loyalty life cycles as, you know, acquisition, onboarding, activation and everything else. And then the Web 3 space you’ve got. You know, you start with a PO app, which is a proof of attendance digitally, where I’ve been somewhere, I’ve done something. Okay. You may buy a smaller NFT. You get the chance to buy the bigger NFT cuz you bought the smaller one. Cause you hold two of the smaller ones, you get a chance to trade it up or throw those away and buy a, get a big different one. And what they’re building is game models. They’re building game engagement models that as games through these tools and devices. And, and that is the, I think for me, the super interesting piece, we have to look at games. We have to look at customers having choice and control and playing games the way they want to play them. And, you know, any program today that says the rules of these, the thresholds of these, and we’re gonna take away your points and downgrade your status and you know, all these things it’s like, you gotta think differently mindset has moved on. And by the way, I mean, the big thing behind Web 3, I think is, um, today, uh, every single launch program in the world is discretionary. What does that mean? You don’t own the value in your wallet of your points. The program can be canceled tomorrow and there’s no liability that can change in term conditions. There’s no liability. They’re not accountable for that. And that is very, um, and we’ve seen devaluations of programs all the time. Yeah. And that is very anti, uh, crypto thinking because if it’s my value, I should be able to own it and I should be able to use it the way I want. Yeah. And again, the airBaltic press release says, if someone wants to earn gold status through this approach and have an NFT with the gold status, if they want to sell that, why shouldn’t they be able to sell that? they’ve earned it, their value, points are attached to that. Why can’t they sell that to somebody else? And I won’t go into the technicalities of it, but you think about an NFT being a single bucket. You can also have NFTs that actually have multiple buckets attached to one NFT so you can start to put different attributes behind it. And they could also have an NFT that also has value. So currency attached to an NFT. So what you can do through the NFT route effectively is to model remodel an entire membership and customer relationship, and have that all modular in a way that a customer can see it can control it, can use it the way they want to do it. They can permission the data. They have control over the value. They can share it with somebody else or send it to somebody else, sell it if they want. And this model is very anti- accountant, if I say the word .yes. Because I used to work in client side and I know how the accountants run programs and I have challenge community accountants. Yeah. About why airlines are hooked on the crack cocaine, which is breakage. Yeah. Um, um, but it is the way that customers want to engage with programs in this new mindset, and not everybody, but 55, 50 million people playing Roblox. This is what they expect Crypto natives. Yeah. Who are trading and they’re crypto curious who may get there. These are the people who will be engaging. And it’s a, it’s a, it’s a movement that will, um, I think become pervasive in some form, whatever thing, but sh shape or form in everything we do in course in loyalty as well. 

 

And that was exactly my next question, Stuart, because as you were talking through, you know, the NFT piece, um, I was wondering if I was keeping up, actually, if I’m honest, you know, with all of the, the potential, because again, it’s the first time I’m exploring this, and what I started to wonder is, you know, is this something that is purely for the, the highly educated, you know, um, risk savvy or, you know, investor types who are obviously the early adopters and we know that, um, like, do you genuinely believe that the mass market. Are going to understand all of these very complex concepts? And are going to want to engage at scale, let’s say, I’m gonna pick, you know, in the next 10 years, you know, is it, is it happening like that quickly? Would you say? 

 

Oh, Next three to four years. Uh, I can’t see it being 10 because, um, wow. I think Web 3 brings so many, um, advantages and opportunities with different experiences that people will want to take more control, want to take more, um, ownership of their data as we’ve seen with the Brave browser. Definitely. Yeah. Um, want to own their own points and their own value. Um, and. The big tipping point will be them having a Web 3 enabled wallet. Um, and today you have to have a web three wallet, like a Coinbase wallet that can hold your NFTs. It can hold your crypto. And it gets you into, um, Metaverse space and you can use it to browse and transact and be involved. And I think that the, you know, the, uh, the secret, um, project, I guess is the, is the wallet project, that’s the one that’s gonna be, um, different. And I think, you know, loyalty has an awful lot of opportunity to take wallets to market,  um, and, and be a partner in a vehicle for people getting Web 3 wallets. Um, you know, that’s the, that’s the, that’s the interesting strategy line. Probably shouldn’t say that. Cause I’m working on some of that stuff, but, uh, um, yeah, that’s the, that’s the, the very exciting piece where you think differently about DeFi, um, and where web three goes and all the different things you want to do with it. Whether it’s, as I said, you know, my identity, my data, my value, my vaccination certificates, my, you know, whatever it is, my university status. Yeah. That could all be held on blockchain, It can all be held securely and the individual can permission it out to different customers. And that’s the, um, yeah. And that’s the, that’s the vision for the, I think the, the, the near to long term, but, um, certainly, um, you know, if you looked at the 14-year-olds playing Roblox, they are, um, you know, 19 in five years time, The mainstream consumers in, in five to 10 years time. Um, and they expect a different way, of engaging and owning their own data and their own, um, value. 

 

And I guess then the other piece that I’m wondering is are they, you know, again, at scale willing to put the work in? Because, you know, I often talk about the, the principle of simplicity. And even yesterday I was having a wonderful conversation with another, you know, thought leader let’s say in loyalty. And we really talked about this importance of it might be time to strip back, you know, to your point about all the terms and conditions and the complexity and the, the way that, you know, we don’t own it and we don’t trust it, and whatever. So that principle of simplicity is something that I do think is critical for adoption of certainly any loyalty program I’ve worked on. So do you think that’s possible within these? Um? 

 

Potentially. I mean, um, again, the reason I didn’t buy, um, you know, 10 million dollars worth of the today at 54 cents was because, at the time you had to code a hard wallet, you had to literally code a hard wallet. Oh. Um, so know how to create one and set it up on the chain and everything else. Um, okay. Obviously now you can do soft wallets, which is just somebody else does all that work for you. And you can go into, to one of these environments and you can, you can trust them if you like. Um, and they’ll do the work for you. Um, I, I think that, um, taking away the complexity is still complex and what you’ve got at the moment is a, is a, is a myriad of different ways you can do things. There’s lots of different wallets and some, you know, um, NFTs and cryptos and exchanges ask for different wallets to different, have different things. So it’s all very diverse. Yeah. But I think that, um, You know, it will start to converge at some point in time. And I think loyalty programs with their huge numbers of members have an opportunity to be a trusted partner. Yeah. And to strip away that complexity and say that here’s something we’re gonna bring to you. Yeah. It’s great. It’s easy. And you can trust us because you’ve trusted us forever and you know who we are and everything else. And we’re a trusted brand. Yeah. So it’s trusted brands into this space. I think it’ll become a lot easier for people to get on board. Um, whether that’s with a wallet with crypto, with NFTs, or playing in the universe, I think it’ll make much easier. You don’t really, you can go and walk around decentral land. Um, as a guest, you don’t need to have anything in there. Um, yes, you could connect a wallet if you wanted to. We don’t need to. Um, so I think, yeah, we have an opportunity in the loyalty industry, in the loyalty space to be icebreakers for commerce. Yeah. And for engagement, and then in this new, new environment. 

 

Yeah. Well, I do think that’s an important point, uh, the power of the brand, Stuart. Yeah, I do think that’s something that, um, I hadn’t really thought about in the context of, uh, the trust piece. Um, so absolutely agree that, um, loyalty programs have that at scale, as we know. 

 

The other thing that I was thinking though, um, that, that I think needs to happen, um, is I’ve heard a lot about, you know, the fees being very high. I think the industry term is gas fees, Stuart. Am I right, In terms of kind of getting involved and playing the games? 

 

Yes.

 

Okay. Got my, got my first bit of jargon.  

 

Very good. If you, um, if you transact across a network, there are guest fees. So, um, Ethereum is the, is the main environment, um, which has guest fees. And a lot of people have spent built smart contracts and, and projects on Ethereum, mainly cuz it was an easy way of minting tokens, which they then put their projects on to try and make a lot of money. So Ethereum has a huge volume of, of transactions and Ethereum runs off the gas, um, ETH. ETH both has a volatility in its own price and the gas fee itself as a fee is also volatile in terms of the network. Um, so if, um, you have a lot of volume go through the network, the gas fee itself the, the charge couldn’t spike and you’ve got volatility in the actual currents you’re using to pay. So yeah, it’s actually, um, quite difficult, but that’s what they call layer one blockchain, which is the, the native core blockchain. What you can do with blockchain is what they call layer two, which sits on top of layer one. And it basically aggregates those transactions up, and there are many layer, two solutions, and people may have heard of something called Polygon, which is one of the, the leaders in that space. And basically, Polygon will take those gas fees down by a factor of sort take 90% off them. They aggregate the transactions up still, not, not free. Yeah. It’s a way of, um, It’s a way of reducing the fees and there are other, um, uh, networks that also run different. They’ll have a fee with different structures. Um, and I guess the other part of that, something you touched on earlier, Paula is, um, the environmentally friendly nature of blockchain, which it clearly isn’t. And I, I think I had, yeah, read somewhere to mint, a single NFT to mint one, which is to create one the first time round blockchain, takes the same energy as running a house for 24 days, which is crazy. And we all know that shouldn’t happen. So, yeah. Um, Ethereum itself originally, and getting back to 2015 minute launched has been running on a particular way of working. I won’t go to the detail of it.  um, but it’s called proof of, um, work, which means that the computers that are processing the network and are competing to win those gas fees and get rewarded for paying for, for doing the work, are basically solving a nonsensical computer, computer algorithm. There is no value in the algorithm they do. So all this computing power that’s been, that is a, basically a race to, to solve the problem, to get the right to post to the blockchain. Um, doesn’t do anything for anybody. So all that energy being consumed in, in this processing to earn the gas fees, doesn’t do anything for anybody, which is madness. Wow. Um, it’s just, it’s just, it’s the way blockchain’s set up to do certain things. So Ethereum itself is moving to something called proof of stake, which will be much lower processing requirement. It won’t have a nonsensical model. It will be about people staking their reputation, and they’ve been working on that and, and are still, um, trying to move to that particular model. So that will take away a large chunk of the, uh, environmental issues that sit behind the Ethereum blockchain. Okay. And being the major one people are using  and many other blockchains. So Cardano, Solano, Tezos, and other blockchains that are out there that are actually newer than Ethereum, the more built for purpose don’t use that algorithm. They don’t use the proof of, um, Work, which means that they don’t have the energy consumption. So it’s a bit like, I guess you’d say, you know, aren’t cars polluting. Yes. So if you’re looking at a, um, 1978 Ford called Tina, as I did have once, half , um, then yes, it’s polluting, but compared to a built modern hybrid or Tesla, it’s not politiced. So, um, you know, that has different challenge. But it’s just the evolution of the technology and the industry, um, as we, uh, evolve the capability and the way that these things work in the back end. Um, it’s still very nice and it’s still very emerging. Um, the capabilities improving all the time as people invest and try and do  Um, and solve the problems on the back end. 

 

Yeah. Well, I’m very pleased to hear about that. And I, I really like that idea of reputation, um, as, as a new solution, because, you know, given, you know, we’ve certainly spent a lot of shows here talking about, you know, environmental concerns and, you know, using loyalty to address them and, you know, all, and then greenwashing and honestly, it’s such a big topic that, you know, I can just imagine, you know, chief marketing officers going, Yes, I want to be the, the curious, experimenting, you know, type of brand. Uh, yet I have that potential backlash again from, you know, relatively, you know, lower informed consumers like myself who might just kinda go, oh my God, why are they doing an NFT? That’s outrageous, you know. 

 

That’s right. That’s right now, you. May have seen in the, in the press, actually that Salesforce, the large tech companies in the world. Yeah. Um, announced they’re gonna have an NFT marketplace. Um okay. And that whole bunch of Salesforce employees wrote to Salesforce and said, oh, we don’t like this. Oh, wow. And actually, they were flagging the environmental concerns of that. And, and Salesforce have gone ahead. Yeah. And they have moved it away from being an Ethereum-based solution to say, we will use an environmentally friendly blockchain solution underneath. So they’ve launched on that and Starbucks again on their own, um, NFT model. Yeah. And their announcements have said exactly the same thing. They will not use an environmentally unfriendly blockchain behind it. So that’s picking the hybrids or the testers, which is the right thing to do. Yeah. And really sensible with knowledge rather than following the herd and jumping onto Ethereum as it stands today until it, it changes. So, uh, you know, it’s, uh, the more knowledge you have, the better decisions you can make in this space. Um, but it is moving very, very quickly, um, and keeping up with it is very hard. 

 

Well, absolutely I can tell, which is why I love these kinds of conversations, cuz you’ve done all the hard work and the research and I just get to ask all the questions, but, um, but I really, I like that idea, Stewart that, you know, the prerequisite now I think for anybody listening to this can at least be to be aware that there are, um, very different versions of blockchain from a computing perspective and to go and make sure that they understand that piece even before they risk anything from a reputation perspective and start there with whatever problem it is. They’re they’re trying to solve.

 

Absolutely. I mean, a blockchain, uh, has two different types, you know, even in, in its own basic construct, which is private permissionless, so private and, uh, uh, permissioned, which is, um, through big companies working together as a network and public and permissionless, like an Ethereum network where it’s out there for everyone to see. And they two do two very different things, actually they’re there for different purposes. Um, so you gotta know what type of blockchain you want to use. Um, and according to the Dilbert cartoon it’s, uh, purple, cuz it has more Ram I think the manager quoted, which is actually a really useful example for happy people know that blockchain. Okay. Um, you know, even in crypto tokens, we can talk about a stablecoin. People have heard of that, which is brilliant for transferring value between companies and a network, so you could imagine, you know, a network of partners using a stablecoin, cause they all want to actually get the money they expect at the end of it if they do a blockchain transaction, not some sort of variable cause the rates changed versus a dynamic token, which is then super exciting to, um,  to individuals, cause it’s, cause it’s gonna be market priced. yAnd in NFTs, you have, have said three different types, at least, you know, you’ve got the static NFT, you’ve got the composable NFT, You’ve got the, um, the, what, the top of the heat, which is the one that allows you to put it all together as a membership thing. So we can see different types of NFTs. Um, and then you Metaverse, you know, what is.  is it 2d, flat screens? Is it 3d headsets? You know, when I read, uh, something about, you know, Metaverse, you know, 3d headsets, it starts with 3d headsets I’ve given up already because it’s not about 3d headsets, that will be part of it. But, um, 2d screens are just as good, you know, pulling out a mobile phone and waving it around is just as good using augmented approach. So, um, I think you know, with all these things, there’s so many levels of complexity that, um, I think the, as marketeers, all we can do is go, what customer needs do we see in the future and how might we address them? Yeah. And how we work backwards from Web 3 thinking in the way that customer wants it to be solved, um, and not trying to push existing tech or existing ideas forward into this Web 3 space. Again, I see customers say to, to me, great, we’re gonna go into Metaverse have another day. And he said, you know, we wanna, we wanna launch shop in the metaverse like, why would you do that? You already have a shop. Launch an experience, do something that you can’t do in physical world. Yeah. And, you know, create something completely different. You know, that is about your brand and about expressing what you are trying to do and who you want to be, um, more so than be bounded by replicating a, a, a web two model into Web 3.

 

And what about then? I suppose just the idea of, um, connection in the Metaverse, Stuart, you know, given that we know, um, there’s so much of this, I think, craving for connection, particularly post COVID, um, the idea of connecting in a digital world, um, sounds to me a bit like, you know, a, a poorer version dare I say it of the Facebook problems or the social media problems if I was more generous, I suppose, you know, Is, is there an appetite and is there a, a real opportunity to connect in the Metaverse in a way that’s not, you know, I suppose better in the real world, like that’s where I guess I’m struggling with, why would I meet somebody in the Metaverse versus down in the local pub or cafe?

 

Sure. Um, but here we are having a digital conversation. You could say the same thing. Um, you know, I think there is, um, lemme give you an example. So I read this somewhere, I quite like it. You know, if you offer a 13-year-old child who plays Roblox, you know, well done for your, um, well done for your, um, exams, here’s a hundred dollars to buy some new trainers, some cool new trainers. The kid will turn around and go, can I have it in Roblox please? Can I have it in Robux? Which is the currency in Roblox. Okay. Um, what gonna do with that? I’m gonna buy trainers. Why would they buy virtual trainers rather than physical trainers? Yeah. With the same money, because they can hang out with their friends anywhere in the world. You know where it doesn’t have to be in a location that they have to go to. They could be down the park in the pouring rain. Yeah. They can hang out with their friends. They can wear trainers, they can still look cool. Um, they can hang onto those trainers forever. They, don’t not gonna go smelly and dirty. I’m gonna clean them, do anything with them and they can sell them again for whatever value they’re gonna get in the future. Why would you want real trainers? And, and I think that for, um, a, a chunk of, of people in the world, you know, virtual is the new real, and, and, and not just for connection and for social environment, but also for assets and, and things they’re excited about, you know, in Gucci sold their Gucci handbags on, on Roblox. They sold for more than a real Gucci handbag. Wow. So people are excited about this stuff. If you look at what Nike are doing with crypto kicks and their shoes, they’re going for thousands of dollars, virtual trainers, not real trainers, never will be, um, there’s the fidgital, um, concept where I buy a, um, A physical item and I have its digital twin in the metaverse as well. So I can have the handbag in real. Yeah. And I can have the, um, virtual on the same thing. So I think the, um, the connection of thing’s really interesting because you know, who wants to be connected to who? For what, and how is down to them. And if they want to go and have a virtual experience and, you know, I, I’ll give you an example, you can’t laugh as Paula but I’m sure you will, But my, my, um, my decentral and avatar is me and a kilt. I to get married in a kilt. Oh, pair of got Martins on. Um, I think I’ve got yellow socks, um, can’t remember the jacket and a Mohawk. Oh my God. So that’s me. The metaverse be who you wanna be. Right? So, um, yeah, don’t have to see me, sitting by my computer as a picture. Yeah. You can see who I want to be, and I think that, that as you say, right to the beginning, the ability to be expressive and, and be who you want to be, and, and not be limited by physicality is something that’s very hard for people my generation particularly to understand, but it’s what these 13-year-olds are doing when they go and play Roblox or Fortnite or whatever else it is. And I think that as marketers, we have to be experimenting now and learning now because otherwise it’s gonna come up and smack us in the back of the head. We’re not gonna see it coming, um, in terms of what, the experience that and the value and the, and the value props that customers looking for in the future. 

 

Yeah. Yeah. And you don’t get to our age steward without looking back with some, you know, well, for me anyway, some little regrets, you know, in terms of professional opportunities, I kind of feel like I, I was aware of didn’t take action on, um, and you know, kind of watched the world move on and I wasn’t involved in certain things, you know, where, you know, I like to think of myself as somebody who’s curious enough to, to do the exploratory piece. Um, but then sometimes when it comes to dedicating time, attention, and maybe some money into something, it’s not been something I’ve been very good at in the past. Um, but I do, I, I agree, obviously now as a, you know, a content creator that there is something exceptional about creating, uh, whether it’s digital or physical or whatever, like, you know, to me, this is similar to, I guess what every business owner and certainly every loyalty program owner listening as well could probably relate to. There is something quite exhilarating about creating something in the world that didn’t exist before, I think. 

 

Absolutely. I think we all want to be heroes. Um, the account council tell us no, don’t, don’t do it cause there’s no money. I’ve heard people in marketing and advertising space say there’s no volume in the Metaverse, which there isn’t. Um, but now they’re actually getting their brands coming to saying, want to experiment. What they’re trying to do is to find new ways of doing new things, not new ways of doing old things and I think that’s a really important point. Yeah. Um, you know, do something different, Um, I said, hats off to airBaltic for being brave and they’re doing something, is there proven value behind it? No. Um, are other people thinking about it? Sure. I mean, I’m, I’m currently involved in projects in the middle east. Um, looking at crypto loyalty, we’re doing, um, NFTs in Asia, looking at, and actually what Metaverse and Web 3 can do for health in, in, in USA. there are a lot of projects out there that people are trying to find a way. And the only way to, to my view is to, to find it is to try and do it because there are no proof points, you know, people say to me all the time, so where’s the proof, this works, you know, who’s done it before who succeeded so far. Yeah. Nobody. So what’s your brave, right? So yeah. You know, and if you said, you know, with examples and experience, go ask Blockbuster what happens? We did with every shoulder, go ask Kodak what happens? We did a few shoulder. Yeah. There’s good examples in history where, um, people haven’t been aware of what’s coming up behind them. Yeah. Is this something I think it will be, will it take over the world? Not in the short term will be part of it. And I think, therefore we have to think it very hard. 

 

We definitely do. And when you said, you know, here we are in a digital environment, I was going to ask, well, what’s missing and clearly it’s your Mohawk and  you’re kilt  so I can see a multilayered, um, meeting in the future Stuart.  

 

Well, we make it exciting. And again, you can imagine in companies meeting in, in the Metaverse and people pitching up and, you know, They will turn the cameras on or will be their avatar if they want to be themselves and they don’t have to let themselves look smart for a, for a business meeting because they can be expressive and still be engaged. Yeah. It’s just a different, different thing and I think that, you know, there is a reason why these kids play Roblox because it’s engaging, because it’s engaging and that’s what businesses want to have in meetings. That’s what loyalty programs need to have the customers as well, that’s what, that’s what consumers and individuals crave, they want engagement, they want fun. And then I think that, you know, now’s the time to put the fun into loyalty and move some of this stuff forward. 

 

Well, I’m completely sold Stuart, as I said, I’ve literally come out of a conversation yesterday about how little’s been going on, um, in general, I suppose, with their mainstream programs. Um, so I do think, uh, it’s time to, to put the fun in and to try some, uh, radical concepts. I have no idea where it leaves me in terms of what I might try that, uh, might be radical, but you’ve certainly opened my, my eyes and my mind Stuart, So I think that’s all the questions I feel like, uh, I have for today. Do you think there’s anything else important that we haven’t touched on? That’s important for the audience to be thinking about? 

 

Um, I, I think we’ve covered a lot of the, the whys, um, and the theory, I think the only other thing to talk about really is the money. And, you know, when Adidas launched their NFTs, they did 44 million dollars of NFTs in an, a. Wow. Um, if you look at some of the numbers that go through Axie Infinity game and the, um, very small value transactions, the numbers are billions of dollars, I said, you know, the board eight yacht club, I think it’s a $1.6 billion franchise now based on people creating a whole bunch of pictures of apes in, in the first place. Yeah. So, um, you know, airBaltic haven’t got it with their current NFT set. They may have in the future, it becomes valuable, But I think that there is a new, um, it’s also thinking about commerce a different way, um, and thinking about how you can capture and, and create value, if you could imagine, um, again, if you look at what the sports companies have done with, socialism and, and the NFTs are done there, um, capturing a moment of a, of a match, you know, and the NFT that, and, and actually the good example is NBA Top Shot, which is one of the top, um, NFT, um, marketplace collections out there. So the NBA take moments from the game and they encapsulate them as an NFT and people buy those for three, $400,000. Wow. Um, and that’s a value that wasn’t there before. Um, so they’ve captured and, and they’ve captured and, and created that value. So, you know, in the loyalty space, know our magic as loyalty marketers is value creation. Yeah. Right. We know that we know that’s what we need to do, high perceive value, low cost. Yeah. All my word, you know, look at what we can do with not just blockchain, that makes things more efficient. Yeah. The crypto that makes things more exciting. NFTs that make things more valuable. A metaverse that adds a layer experience, and if you go. Two plus two plus two, you get 10, not just, uh, not just six. Yeah, because I think layering these things together makes it super exciting. And, you know, I think get the experience right. First, get the value prop, right. And hopefully the money will follow. 

 

Well, for sure. I mean, clearly there is explosive potential that the risk of overstating it, I mean, honestly, there is a lot of thinking to be done, as you said, a lot of experimenting to be done, um, a different mindset and a shift, I think for, for all of us that um, you know, are aware of this potential. Um, I think it’s, uh, a wonderfully exciting space. So I I’m guessing a lot of people listening as Stuart are going to want to connect with you. So where’s the best place for people to find you if they have questions about Web 3.0?

 

Uh, Stuart CG Evans on LinkedIn. Um, okay. Hit me through there. Um, you can find me and, uh, yeah. Have a question, have a point of view. Love to have a debate because there’s no right answers. And, um, yeah, I said, doing it is the way to find out.

 

For sure. Yes. And of course, I’ll make sure to, to link to your LinkedIn on the show notes as well. And if anybody’s listening and wants a direct introduction, of course, to Stuart, please just let me know and I’ll make sure to put you in touch. So I think it’s been wonderfully exciting. Uh, anything else you wanted to mention Stuart before we wrap up? 

 

And I enjoyed that very much, Paula, thank you very much. And, um, look forward to speaking to you again soon. It’s been fun. 

 

Wonderful. I enjoyed it too. So Stuart Evans talking all about web 3.0, thank you so much from Let’s Talk Loyalty.

 

This show is sponsored by The Wise Marketer. The world’s most popular source of loyalty marketing news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals. For more information, check out thewisemarketer.com and loyaltyacademy.org

 

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