(This article originally appeared in The Guardian)
When you read about all the stories around small businesses in 2021 a few general themes quickly appear. Inflation. Supply chain. Labor shortages. Covid. All true. All relevant. All important. But all these stories are relatively short term. Inflation will, someday, be under control again. Shipping will catch up. Labor will come and go. Covid will always be around but we’ll just live with it.
The reality is that there was just one story about small businesses in 2021 that’s really going to have a long-term impact. It has received much less attention and yet it will be transformational. The small business story this year is about blockchain. Because in 2021, blockchain emerged as the next big thing for entrepreneurs. It’s real and it’s happening. And smart entrepreneurs know this.
Richerd, for example, knows this. According to his story in CNET, Richerd is an “affable” Canadian software developer who started building cryptocurrency software in 2013 and ultimately moved into buying and selling NFT (non-fungible token) art online. Richerd bought CryptoPunk #6046 — a digital art piece — in March for about $86,000 and the next day — he says — was offered more than $9.5m to take it off his hands. Given what I know about the digital art marketplace, this story is not unbelievable. And if you can believe it, he actually rejected the offer, calling his art “priceless” and saying it wasn’t for sale no matter what the price.
OK, so maybe Richerd isn’t the smartest blockchain entrepreneur around. Or maybe he is and will ultimately sell CryptoPunk #6046 for a billion. Regardless, he can certainly spot value. And he’s not alone. Quietly, a growing wave of new entrepreneurs — and big brands — are jumping into the blockchain world in what is fast becoming the next great American Gold Rush. Except that all the gold is virtual …and unlike the 1870s it actually exists and there’s plenty to go around.
For those not keeping up on the tech, here’s a quick recap. Blockchain is like an unbreakable, infinite, digital accounting ledger. It’s part of a secure, dispersed database that’s shared by many computers on a distributed network (many call this Web3, the next iteration of the internet) and stores its information in such a way that guarantees the security and individuality of each record of data.
Because of blockchain, cryptocurrencies such as bitcoin and Ether (and many others) can exist. NFTs are unique, inimitable and non-interchangeable units of data stored on a blockchain and can be associated with photos, videos, audio and other forms of art which then makes those assets uniquely and permanently identified. So just as there’s only one original Mona Lisa, by attaching an NFT to a digital drawing you can also make it one-of-a-kind.
This means that if you create your own piece of digital art or any other similar product on the blockchain, like the products sold by online companies such as the Bored Ape Yacht Club or through markets such as OpenSea, you can create your own business. Many smart entrepreneurs are realizing this. And cashing in. And attracting cash.
Which is why the cryptocurrency market is now worth more than $3tn and in 2021 venture capital firms have poured about $30bn into this universe, according to a recent Bloomberg report, which is more than all the previous years combined and quadruple the previous high mark hit in 2018. It’s why payment companies like PayPal, Block (formerly Square) and Coinbase are allowing their users to easily transfer digital currency like dollars and euros. It’s why the Staples Center in Los Angeles is now called Crypto.com Arena. It’s why big brands like Nike are buying digital art companies like RTFKT.
All this buying and selling is driving the need for new technologies and platforms in the digital world, and marketplaces like OpenSea, Nifty Gateway, SingularityNET, Syscoin, Dapp and bitFlyer are small businesses profiting by creating new entrepreneurs and artists eager to serve these hungry customers. And looming in the background is the soon-to-be overwhelming Metaverse, a virtual world of future interactions and digital transactions so great that the world’s largest social media platform changed its corporate brand to prepare for it.
Sure, the media will remember 2021 as the year of inflation, supply chain, labor unrest and Covid. But those types of challenges have been around forever and will always come and go. The real story this year is the explosion of a digital world of transactions that will, over the next few years, spawn a new economy of entrepreneurs and create trillions in wealth.