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By Viroslava Novosylna, Guillaume Costet, and Yacov Kruger
Our digital and physical realities are converging faster than ever before, creating a wholly new "phygital" landscape thanks to advances in the Internet of Things (IoT) and Web3 technologies. We are now living in a time of paradigm shifts, with opportunities to transform the way humans interact with everything from art and business to education and each other.Â
A phygital world includes not just IoT but augmented reality (AR), virtual reality (VR) and mixed reality like headsets or lenses (MR). It even encompasses wearables, robotics and the smart devices integrated into our everyday lives.Â
Phygital means many things, and its evolution is allowing us to create brand-new communities of users, creators and brands, each shaping our world. SLOVA Tech PR founder and CEO Viroslava Novosylna, Guillaume Costet, founder of blockchain-based OVER THE LABEL and Yacov Kruger, CEO of NFT-NFC startup Boyo shares how this new intersection of real-world and the metaverse is changing the entire Web3 landscape.
Phygital Capabilities Give New Meaning to Immersive ExperiencesÂ
Personalization is now the standard for nearly every facet of our lives. Whether we're customizing our coffee orders, creating a one-of-a-kind online avatar or making unique design choices for a bespoke couch, all the best brand experiences are now only possible through personalization options.Â
However, Web3's phygital possibilities have opened up even more opportunities for brands and consumers to experience unprecedented levels of customization. Nike is one prominent example of this. Their flagship store offers customers the ability to fully customize Air Force 1 shoes in addition to their digital performance tracking sensors that allow employees to give real-time analysis and feedback to customers testing their stride on a treadmill or in-store basketball court. According to OVER THE LABEL, the brands go beyond simple personalization and actually give users the ability to own their custom creations through tokenization. This means users can not only own and exchange their personalized designs but even choose to co-create and collaborate with community members or artists.Â
Other brands like HYPERVSN leverage interactive and sophisticated holographic visuals to offer shoppers a more immersive and memorable experience when visiting a physical store. Many brands now offer virtual product try-ons and AR-powered placement of furniture or decor into the intended room before committing to a purchase, allowing users to experience a product before buying. In the PR realm, phygital is a tool that allows to help companies engage audiences by activating all five senses. It improves reputation management capabilities and gives customers a more personal and interactive experience, as Viroslava says.
In addition to offering more complete immersion in brand experiences, the introduction of phygital into Web3 also allows for better engagement, a more connected community and a more secure, absolute sense of ownership through tokenization.
Is Tokenization the Best Phygital Asset So Far?Â
Investors took serious notice of Web3’s potential in 2022, with startups in this space raising $7.1 billion across 616 deals. Despite intense debates surrounding creator royalties and market share in the NFT space, the future is still looking promising for Web3 as a whole. For instance, Ukrainian Web3 startup DressX, which sells digital-only fashions, has just recently raised $15 million in funding. One reason for this is the appeal of tokenization.
Tokenization refers to the act of attaching a digital, blockchain-based contract to a tangible, real-world object. This not only helps protect against fraud or counterfeits but also improves the buying, selling and trading experience for users, making it an attractive prospect for investment and innovation.
In our current world, people don't buy things like cars or luxury items without official papers or certifications. However, in the future, our phygital reality will allow us to shift this kind of protection to more secure blockchain contracts. There are also more benefits to tokenization beyond the ease of verifying authenticity, which is why it's arguably one of the best parts of this convergence between real-world and virtual reality.Â
Additionally, the shift from Web 2.0, which focuses on the quantity and quality of a creator’s content, to Web3, which focuses on community, means that brands now have new possibilities for offering unique, exclusive items that have either been designed by individual users or are limited-run, making them more desirable.
- Tokens to combat forgery and fraud
The enhanced ability to create verifiably unique assets, whether physical like designer handbags or digital like NFTs, also puts control back into the hands of artists and brands. Big brands like Ralph Lauren have begun adding QR codes to their clothing for quick, easy verification of authenticity, and Dior has begun embedding NFC chips into items like their B33 sneakers so that users can mint the NFT and add it to their digital wallet, assuring its provenance.
Before, there was no reliable way to manage resell markets and counterfeiting effectively. With phygital tokenization, anyone can quickly certify a product, meaning brands and creators will not have to worry about their designs being stolen and others profiting from their work.Â
The worldwide counterfeit market is estimated to be worth between $1.7-$4.5 trillion and has cost the global workforce 2.5 million jobs. However, utilizing near-field communications (NFC) tags like Boyo's MetaTag that are secured via blockchain, authentication is simple and can be done by anyone with a smartphone. These types of phygital solutions, alongside other blockchain methods, like NFT linking, can dramatically reduce fraud, saving buyers and manufacturers billions of dollars and helping creators recover huge amounts of lost revenue.Â
Through tokens, brands can not only foster trust and confidence with buyers; companies and creators alike can actually benefit from authorized secondary sales through automatic revenue sharing via smart contracts. In this way, everyone throughout the purchase cycle benefits and the fraud market is cut down significantly.
- Tokenization as a long-term sustainability solution
Using tokens also helps the global community reduce waste and limit resource use. For instance, users can turn to the metaverse instead, rather than making multiple online orders to post new looks on social media. Fashion is a resource-intensive industry, but phygital capabilities are turning it more sustainable by allowing for things like made-to-order pieces, bespoke purchases and even NFT fashion tokens.Â
The emerging trend of Wearables 3.0 is also possible through tokens. Web3 fashion tokens give holders access to unique fashion assets across multiple metaverse locations, in addition to having the physical item if the person desires. This can be seen with Tommy Hilfiger's participation in the 2022 Metaverse Fashion Week and Balenciaga’s collaborations with the popular online game Fortnite. It also drastically adds to the lifespan of a single fashion item, limiting the need to purchase replacements or variations as frequently.Â
According to SLOVA Tech PR, they used also phygital experience to hold and organize an event to unite people from different parts of the world, colleagues, clients, partners, that was a good solution according to the challenges not only gather people, but also because of the war in Ukraine a lot of team members spread around the world.
Through tokenization, the need for logistics, storage and manufacturing is also reduced, lowering resource use even further. This happens because digital tokens can be exchanged rather than physical products, taking the guesswork out of trying to create enough supply to meet demand, which often results in immense amounts of waste. This level of asset liquidity is ideal for not just reducing our global carbon footprint but expanding market reach and allowing for revenue generation without using up real-world resources at such a high rate. When goods can be traded and paid for virtually and then simply produced on demand, our entire global ecosystem becomes more interconnected, with the added benefit of minimizing our environmental impact.Â
Ultimately, phygital products and services are poised to become the new normal in our world. As we continue to see a paradigm shift toward the blockchain, the metaverse and digitalization, how and where we use Web3 technologies will change forever.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.