The UK landscape with respect to technological innovation has always been, to some extent, world-beating. Though there is not the manufacturing infrastructure to support mass-production, design and ideation of new tech innovations are uniquely strong; tech start-up investment is high for good reason. One such good reason is the growing import of crypto-adjacent technologies, from decentralised finance to NFTs and beyond. But how are these technologies emerging?
Blockchain Innovations in the UK
The fundamental technological building blocks for the digital asset revolution are derived from blockchain technology. Blockchain describes, in essence, a node-based peer-to-peer system that allows immutability in asset sharing and generation. Put simply, the blockchain allows for the existence of digital items with rarity, and allows the transfer of unique digital assets with proof of ownership and transfer baked into a ‘ledger’.
The specific workings of blockchain technology have a great many practical applications within tech and fintech, as we are about to discover – making start-up businesses dedicated to harnessing or enabling access to the blockchain extremely hot property. One of the major applications is business and legal transparency, where smart contracts enable international collaboration without subterfuge or centralised oversight.
DeFi and Financial Innovation
The most valuable route by which blockchain has justified itself is through decentralised finance, or DeFi. The decentralised nature of blockchain transactions allows seamless exchange of assets and investments, with transparency and accountability stitched into each transaction. In tandem with the rise and rise of cryptocurrencies, DeFi is set to set a new standard for cybersecurity and for the interactivity of high-profile businesses.
NFTs and the Metaverse
The public face of the digital asset revolution takes the form of NFTs, or Non-Fungible Tokens. The concept takes the blockchain principle of uniqueness and rarity, and uses it to enable meaningful ownership of digital artworks or constructions. The blockchain basis for each ‘token’ means they can be bought, sold and otherwise traded as if tangible artworks or collectibles, with the immutable ledger tracking ownership and sale rates.
The upside potential of NFTs as direct investments has fallen significantly since the NFT trading bubble burst last year, but the essential principles of rare and unique digital assets remain valuable. Promising business concepts include the use of NFTs to enable the use of unique and valuable cosmetic items between different video games, or a fresh approach to ‘digital real estate’ – ideas also encompassed by the Metaverse.
The Metaverse is a loose concept that effectively describes a new era of the Internet, combining the World Wide Web’s essential properties with the principles of digital asset ownership and smart-contract-enabled markets. Rather than websites, brands can hold digital ‘land’ in a VR/AR-enabled virtual world that aims to recalibrate the way consumers interact ‘online’. This is a new frontier for tech, and a long way from fruition, despite Meta’s efforts to pioneer within it; still, there are investment opportunities and fresh business solutions aplenty within it.