Blockchain enables business models of companies in the metaverse

The corporate blockchain has come a long way since its inception in 2017. Enterprise blockchain originally began as a technology built on top of approved private networks and used primarily for supply chain management. As the blockchain matured, companies began using public, permissionless networks like Ethereum to do their business.

By 2021, companies will use decentralized concepts in order to create more efficient work processes in the Metaverse. William Herkelrath, director of business development at Chainlink Labs – a network of decentralized oracles – told Cointelegraph that while the metaverse is difficult to define, he believes it is a collection of ecosystems that grow naturally out of decentralized finance, or DeFi:

“Businesses need to interact with the outside world and will therefore be forced to have ecosystems in the metaverse. Consumers, for example, want to use loyalty programs outside of individual platforms so that they are more likely to choose brands that ensure that rewards are possible to be used within other ecosystems. The metaverse enables data, physical assets, and business and financial assets to be layered outside of a centralized environment. “

The metaverse for companies

While the concept may sound futuristic, several companies using the blockchain are starting to embrace the metaverse. This topic was discussed intensively last Wednesday at the virtual conference of the European Blockchain Convention as part of a panel entitled “Building the Enterprise Multiverse”.

Blockchain enables business models of companies in the metaverse
Blockchain enables business models of companies in the metaverse

David Palmer, Blockchain Leader at Vodafone Business, mentioned during the debate that he sees the Metaverse as much more than a virtual world in which digital experiences can take place through games or social networks. According to Palmer, the metaverse is now being applied to financial concepts based on blockchain technology, such as central bank digital currencies, non-fungible tokens or NFTs and DeFi.

However, Palmer pointed out that the missing layer in the metaverse is a way of bringing virtual transactions into the real world. Palmer pointed out that a cell phone can bridge these two worlds and act like a middleware. Additionally, he told Cointelegraph that Vodafone Business uses blockchain to create digital identities that can be applied in both the metaverse and real life:

“The digital identity will transcend the digital and the physical world. For example, a digital wallet will contain a bank account, mortgage information, tokens, NFTs, and more. But a decentralized identity will also have access to these credentials so that individuals can participate “in the metaverse and in the physical world”.

Palmer announced that Vodafone Business is working on building wallets in mobile devices to host virtual identities. The notion of self-sovereign identity in a multiverse was also mentioned in the recent Greyscale Research report entitled “The Metaverse, Web 3.0 Virtual Cloud Economies”. The document describes the self-sovereign identity as a “native Internet social reputation currency (Creators’ Coins)” and indicates that data from other platforms can be transferred to the Metaverse and used for identity or credit evaluations.

Ángel García, Director of Strategy and Transformation of Telefónica’s Global Supply Chain, also explained during the panel that a digital supply chain for the Metaverso could help telecommunications companies to become more efficient. According to García, Telefónica has taken the approach of creating a blockchain network to be used in a Metaverse ecosystem. He added that the company is currently in the process of gathering information to improve end-to-end processes. “The next step is to automate these business processes and centralize them for everyone,” he noted.

Rowan Fenn, co-founder of Rise X – an enterprise solution for companies that want to build autonomous digital organizations – also mentioned that companies can have a digital twin of their autonomous organization to control, operate and control analog processes: “These organizations will be able to interact and act with one another in real time in a multiverse. This will also enable autonomous digital organizations to work together in an analog world. “

Fenn stated that companies with a digital twin in a multiverse ecosystem will be able to produce more goods and services while using fewer environmental resources. Hence, he believes that this business model will allow the world to go from a finite economy to an infinite one.

Companies are already using blockchain to operate in the metaverse

Although companies are still exploring early use cases to apply business models within the metaverse, some industries are already leveraging these environments. For example, Herkelrath mentioned that blockchain networks used in the insurance industry represent a metaverse business model.

In concrete terms, Herkelrath explained that farmers around the world are offered hundreds of thousands of insurance contracts via virtual ecosystems. He added that smart contracts based on blockchain networks, along with decentralized oracles like Chainlink, have made it possible to solve transparency problems in the insurance sector. In addition, the entire insurance process has been streamlined so that it can also be accessed by undemanding customers around the world.

Although it may appear that this was only made possible by blockchain, Herkelrath noted that smart contracts generated by insurance agencies require data that would not have been collected without the existence of a metaverse:

“This is possible because you have an enterprise metaverse where data comes in and is verified by a wider network. The fact that this can happen in the Metaverse shows that business-to-consumer transactions can be cheap and accessible to anyone in the world “.

How likely are companies to adopt the metaverse?

Although some companies are starting to develop and leverage business models in the Metaverse, understanding the technology could make it difficult to adopt quickly. Rodolfo Quijano, director of blockchain at Henkel – a German chemical and consumer goods company – mentioned during the round table that the biggest challenge for adoption right now is understanding the value that the Metaverse company can offer:

“Technology is not an issue, but it will take longer for people to understand what blockchain does and how it compares to traditional enterprise resource planning systems. Finding evangelists can be a major challenge for acceptance in terms of applying the Metaverse “.

Palmer added that scalability within a Metaverse business environment is also an issue, along with an understanding of how organizations are transitioning and advocating for this new technology: “For a telecommunications company, the most important point it is to make consider how to connect people in the metaverse. People will have two identities, one virtual and one physical, so the question is whether we will have the bandwidth in terms of connectivity. “

Additionally, Palmer believes companies will question the role of blockchain in relation to Metaverse business models. However, he believes the technology is critical for these use cases. “Blockchain is the level of trust and exchange in a multiverse environment. It’s a huge opportunity, but it’s going to be a challenge for companies to make the transition. “

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