The magic mix: Shopify x Web3
Shopify is investing big into Web3 for merchants and is capitalizing on the next big societal shift.
Co-Founder & CEO
February 13, 2023
The future of the Web = the future of commerce
Web3 is a term used to describe the next generation of the World Wide Web, also known as the "Semantic Web." It refers to the concept of a decentralized and distributed network of web-based applications and services that are connected and interoperable, enabling users to own and control their own data and digital assets.
Web3 technology is based on the use of blockchain and other decentralized technologies, which allow for a more open, transparent, and secure way of sharing and exchanging information and value online. This shift towards decentralization and ownership is a key aspect of the web3 vision, as it allows for greater control and autonomy for individuals and communities, as well as more equitable and sustainable forms of economic and social organization.
Besides the societal impact at large, these new principles also affect how people trade – not just information or financial values but physical goods as well. More specifically, we can observe how the lines between those areas are blurring: Information is turned into financial instruments, financial instruments are used to redeem physical goods, and physical goods increasingly contain rich information about their nature in digital form.
As the Internet has turned into a significant force behind global commerce, it is no surprise that merchants are increasingly experimenting with new ways to integrate these different pieces as part of their purchase experience. From the very first touch point to way beyond the last purchase, concepts that have been battle-tested in Web3 applications are explored by traditional businesses, starting with luxury brands (Prada, Gucci, Burberry) and quickly expanding into mass consumer markets (Starbucks, Nike).
Enter: Digital collectibles aka NFTs
Notwithstanding a (much needed!) recent cooldown, digital collectibles (technically referred to as NFTs = non-fungible tokens) are taking the world by storm. While the technology can be used in many different settings, it has become particularly important in forming and managing communities of all shapes and sizes.
As part of this development, these communities have proven to be powerful forces when it comes to building excitement and driving attention to events, ideas, – and products. Only recently, however, this has translated into physical products as well with RTFKT (a design studio owned by Nike) releasing their "forged" products exclusively to token holders and thus breaking the boundaries between digital-only objects and products with real-world use.
Alongside many other prominent examples, this pioneering work is reaching the masses.
Hindsight bias, or: Everything is strange until it is obvious
There are numerous examples of trends that seemed strange at first. The adoption of the Internet as we know it is such a case. When it all started, consumers used it merely as a reproduction of knowledge (Wikipedia style) or a more lively interpretation of paper catalogs. Ignoring loud and greedy side of NFTs, they are clearly following the same logic: Today, it may be exotic to base membership in a token rather than a subscription or email but it's increasingly becoming common practice.
Up until recently, there were major hurdles around user experience that made the adoption of Web3 principles not feasible for a wider audience. That has changed; Web3 user experience graduated from physical credit card to digital wallet on the phone. In the same way it was normal for people to pay with their phone nowadays, it will be common for people to shop preferably where they got "stake" or any preferential treatment.
The other factor driving adoption of token-enabled experiences lies in the human preference to differentiate and – undoubtedly – feel special. Communities are a way to express one's own beliefs and mind focus, thus, make it part of the unique identity that helps differentiating from others. And NFTs are the most efficient tool to accomplish that.
Why use Shopify to sell NFTs?
Now is a good time to bring Shopify into the picture. We believe that the ecosystem will play a major role in the mass adoption which is why we are continuing to invest our resources into it.
Let's discuss the why.
The company made big waves around the peak of the NFT craze in 2021 (at least in the crypto world) when they announced that they are entering the game as well. What seemed like a me-too move at that time quickly turned into a development to be taken seriously, for good reasons.
Shopify is a massive ecosystem with millions of users and a well-established brand.
Using Shopify as the technology backbone allows creators and merchants to on-board people into Web3 without them knowing. No crypto exchanges, no complex procedures, well-known and user-friendly interfaces. At most, customers had to be equipped with a wallet to obtain the desired digital collectible.
The staggering infrastructure outside of blockchain technology with countless integrations and tools to operate a whole business – from inventory management over payment processing to marketing and analytics tools.
Digital collectibles can be sold alongside (= standalone) or even as a n extension to physical products by existing and trusted brands. This largely adds to the legitimization, which again has a positive impact on not just NFTs but NFTs on Shopify.
Any pre-configured platform ultimately runs into limitations. However, the combination of reach, ease-of-use, and depth of integration puts Shopify into a unique position for creators, artists, and merchants who want to expand into new paradigms rather than combining tools on their own.
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