The recent launch of Reddit NFTs (sometimes referred to as ‘collectible avatars’) is a great case study on how to successfully onboard over 3 million users to web3 without ever using buzzwords like crypto and decentralization, and without requiring users to understand the technology that they are using is powered by a blockchain.
What was brilliant about Reddit’s rollout of collectible avatars is that it provided all those who purchase a collectible with an automatic non-custodial wallet to store their collectibles. In other words, instead of pushing self-custody and digital wallets as the selling point for users to jump into the crypto space, they pushed a product first that was already familiar to Reddit users (digital avatars) as the main selling point, and then used the digital wallet as a tool in the background for users to host their avatars.
We can almost think of this as a clever and positive sleight of hand, where users are given what they want in the short term; digital customizable avatars, while simultaneously adopting what they actually need long term; full ownership and digital assets and the ability to sell or transfer those assets across platforms if ones chooses.
The latter description has always been a difficult sell for crypto enthusiasts pitching web3 to a mainstream audience. The reason being is that (to use an analogy) it is hard to appreciate the value of a guaranteed parking spot without first owning a car, or the value of quality kitchenware if one never cooks their own food.
Simply put, having a certain attachment to an object or activity is the precursor to understanding the value of things that can help protect or enhance that object or activity.
For many Reddit users, status and reputation within the Reddit community are things that are held in high value. Therefore, anything that provides them with the ability to either protect or enhance their status and reputation will also naturally carry a high value.
Owning a rare digital collectible is something that is deemed important in the Reddit community. This not only translates to collectibles carrying a high monetary value but also to the need for the owners of these items to feel like they truly own them, which means they cannot be seized by the platform or any other authority.
This is where the value of blockchains and crypto becomes apparent. Even if the majority of Reddit collectible holders never understand the mechanisms that enable their sovereign ownership of these digital items, the true value is in the ownership and the choices that come with ownership of digital goods, regardless of whether they choose to act on those choices (meaning, as an owner of an avatar, the option to sell or transfer my avatar will always be there regardless of whether I want to sell it or keep it). This is something social media users have never experienced before.
What are some ways in which this strategy can be applied to decentralized digital identifiers?
One of the most commercially appealing use cases for ADIs is the ability to create verifiable credentials for industries where credentials are highly valued yet easily forgeable.
In many ways, post-high-school education is less about learning and more about acquiring credentials from credible institutions that will enable you to stand out from other candidates in the workforce. Many of the top universities in the world make their money not just from providing high-quality education but also from monetizing their reputation as a culturally significant institution of higher learning. A Harvard degree is a stamp of approval that says this person is competent enough to be associated with one of the oldest and most prestigious Universities in the world. The downstream effects of this are the ability for holders of those degrees to command higher salaries and gain access to more exclusive professional networks.
In a world where college degrees are increasingly becoming more commoditized, credentials from credible institutions become more important if one wishes to stand out from the crowd.
The value of these credentials is not only superficial but can also be critical for leveling the playing field for candidates who are highly skilled but do not live in developed countries and are therefore seen as less valuable. Or in industries like healthcare where professionals are in charge of human life and hospitals and insurance companies need to know that physicians are properly credentialed before treating patients.
The more important credentials become, and the more they are distributed digitally, the greater incentive there is to commit forgery, and the greater the consequences of forged credentials.
In this context, ADIs present a natural solution that can cut through all of the marketing buzzwords and misconceptions about blockchain and crypto that obfuscate the value of decentralized digital identifiers.
Now all of a sudden the conversation shifts from ‘blockchain technology’ or ‘decentralized and censorship-resistant protocols’ to simply ‘verifiable digital credentials’.
The former is abstract and unrelatable, while the latter is familiar and simple enough for those who value credentials to understand. Even though the former supports the latter, the latter is the only selling point that justifies the target groups’ further understanding of the latter (after all, why else should they care about blockchains unless it serves their immediate needs in ways that other alternatives cannot?).
This is the important lesson that Reddit likely took from observing the rise of NFTs in 2021, and the negative reaction from the gaming and broader tech community around NFTs.
Accumulates’ mission is to be the bridge that connects the traditional economy with the web3 ecosystem through decentralized identities. Taking a book out of the Reddit NFT playbook, we’re providing a suite of solutions that strike at the core of what mainstream users value; such as transparent and verifiable credentials, or business-to-business transactions between companies operating in different jurisdictions.
These are ultimately use cases where ADIs can serve a critical role in enhancing how individuals and entities interact online, without making blockchain technology a necessary part of the messaging to drive user adoption.