Viewpoint: Climb on the cryptocurrency rollercoaster
Sure, there are challenges, but they are being overcome, and the crypto opportunity is a huge one for the hospitality sector, says Tony Levine
Cryptocurrency has taken us on a roller-coaster ride since its inception, but as things start to stabilise, we are set to see it having huge short-term and long-term impacts on the hospitality industry.
Although 95% of the non-fungible token (NFT) concepts currently being mooted are unlikely to progress, the development of cryptocurrency is a very collaborative process among users, creators and ‘prosumers' (individuals who both produce and consume). Cryptocurrency and NFTs have the potential to revolutionise the way we do business, generally for the better.
In the short term, there are some serious challenges to overcome. For example, Ethereum, seen by many as the most trusted platform for NFT creation, isn't sustainable. It costs an extortionate $20-$40 (£16-£32) per NFT in gas fees (paid to execute a transaction on the blockchain). It will take at least two years for the NFT creation process to evolve, allowing more people to mint NFTs sustainably, and more restaurants to incorporate them in their business strategies.
FlyFish Club in New York is a great example of where things could be. It has pioneered the tokenisation of its digital membership to offer exclusive access to the restaurant (set to open in 2023) and allow members to experience special culinary services. The exchange of such NFT-driven memberships creates room for a selling fee, providing an extra source of revenue for participating restaurants.
Education around cryptocurrency and NFTs is also a barrier to entry. Many people, including hospitality professionals, don't understand them and don't yet want to. As with any form of innovation, onboarding new users and facilitators is complicated.
What will this look like? Think Deliveroo in the metaverse, purely digital wallets, and NFT fan clubs
NFTs are also risky (currently unregulated) assets, with the likes of bitcoin and ethereum plunging steadily in value since the beginning of the year. But don't start thinking they're on a helterskelter – cryptocurrency will evolve for everyone's benefit, particularly the hospitality industry.
In the long term, the development of cryptocurrency will support the exponential rise of the metaverse (cyberspace combined with virtual reality) (see page 14), branching past specific NFTs to a new hybrid hospitality reality. What will this look like? Think Deliveroo in the metaverse, purely digital wallets, and NFT fan clubs.
Steps have already been taken in this direction by the likes of McDonald's, which has made trademark applications in the metaverse, and Chipotle Mexican Grill, which has created a virtual restaurant on Roblox. This will evolve further into a pure intersection of both the virtual and the physical (AR/VR goggle technology), which the hospitality industry will always require to keep consumers in touch with reality.
In the long term, most restaurants also expect a hyperstable cryptocurrency, such as the ‘digital pound', also known as a ‘stablecoin'. This will negate the unstable value elements of NFTs as we know them today. The development of cryptocurrency and an evolved metaverse is also intrinsically community-driven; prosumers can shape digitally influenced hospitality for good.
It's important to remember that while change can be scary, NFTs, cryptocurrency and the metaverse aren't going away. Hospitality professionals and customers ought to jump on the rollercoaster ride now, and be part of the innovation vanguard.
Tony Levine is director of leasing at hospitality property consultancy Shelley Sandzer
Image: Shutterstock
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