Architectural practice in Web 3.0: NFTs and digital real estate
August 8, 2022
Nowadays, the title of an architect could refer to separate professions with physical and digital counterparts—architects are traditionally practitioners that deal with the physical built environment, but the same title has grown to be used by those crafting networks in information technology (IT), data systems or software.
As the divide between physical and virtual environments are blurring, traditional architects are also venturing into the realm of digital real estate through creation of objects such as NFTs (non-fungible tokens) and virtual property in the metaverse.
What is digital real estate?
As hinted by the name, digital real estate is any asset owned ‘inside’ the Internet. In the past iteration, this includes spaces such as websites/domain names, social media pages/usernames and other virtual assets, usually hosted on platforms that are provided by companies to individuals.
However, the virtual realm’s ongoing evolution (what is often called Web 3.0) seeks a more decentralised or distributed form of ownership, with its own form of payment (cryptocurrency) that does not rely on central banks’ infrastructure.
RELATED: The FuturArc Interview – Wendy W. Fok | The Utilities of Blockchain, NFTs for Design & Build
Instead of being subject to platforms, users could have direct ownership over digital assets by tokenising or minting them with a unique identifier on the blockchain. Beyond the existence of any specific platform, these assets could be traded on open markets to retain their value.
Where do architects come in?
The blockchain technology opens new opportunities for artists and designers to benefit from their work. Through sales and in-built royalty clauses in smart contracts, designers have an avenue to be paid for their creations each time these NFTs change hands.
Among the first wave of architects to explore the role of architects in Web 3.0 is PLP Architecture. Through its research group PLP Labs, they are collaborating with metaverse property platform VerseProp to launch a range of 5,000 NFTs, each with valuable commercial utilities. Beyond owning the digital artwork, buyers can gain access to exclusive content embedded into the tokens—from webinar tickets and physical artwork to getting their own PLP-designed building in the metaverse.
This collaboration explores the role of the architect by raising questions such as: Can design services be tokenised or distributed through smart contracts, and to what extent is the metaverse a space for real-world designers?
Richard Woolsgrove, Head of Digital Technology at PLP Architecture said: “More and more of our clients are establishing a presence in the metaverse as they see added value for their business, connecting their real estate products to a wider audience. It is important that we are able to support our clients in that context and bring real architectural design knowledge to the digital world.”
Architects could add value beyond their role in physical construction by making use of conceptual visualisations. “This NFT collection is an outgrowth of PLP Labs’s ongoing IUMO research project, exploring alternative forms of urban mobility both at an infrastructure scale and at the scale of a single building,” Woolsgrove told FuturArc. “The imagery reveals some of the possibilities that are under development for moving large numbers of people vertically in an efficient and enjoyable manner in our future cities.”
What is the ‘true cost’ of Web 3.0 systems?
In May 2022, cryptocurrency experienced what is called a ‘crypto winter’—a sudden and massive decrease in value (Bitcoin, the world’s biggest digital currency, plunged by approximately 70 per cent1). The fall has been described as owing to a combination of many factors, including the crash of an algorithmic stablecoin, rising global inflation and hyper-valuation of cryptocurrencies itself.
According to Joel Coren, Founder of VerseProp, the current downward trend is an inevitable part of crypto’s evolution: “We see this as an overdue rationalisation stage for the sector and something that is important for its long-term sustainability. The period leading up to it was reminiscent of the ‘dot-com hype’ in the late 90s—at the time, everyone knew that the internet was going to change the world and that created excitement.
“However, speculators came to understand that it was going to take more than a domain name to realise the internet’s full potential. Ultimately, it was the utility that underpinned the value and effectiveness of a domain. A bit like the early 2000s, we believe that we are at the beginning of a ‘super cycle’ and blockchain technology will change the world once more.”
Apart from economic valuation, another question that must not be ignored is the massive carbon footprint of blockchain technologies—and their true cost on the environment. Are there sustainability measures regarding the consumption of energy used by these technologies?
“It is a great question and one that has created many headlines and debates,” said Coren. “We are actively engaging with ESG experts to find ways in which we can positively impact the sector over the medium/long term.” By working with property companies that have ESG (environmental, social and governance) requirements at the forefront, they are looking at how the metaverse technologies can contribute to sustainability goals and improve their carbon footprint.
There are initiatives that push for the industry’s full decarbonisation, such as the Crypto Climate Accord, privately formed in 2021 and supported by climate, finance, NGO and energy sectors. Their aim is to achieve net zero carbon by 2040, starting by taking advantage of the digital ecosystem to help better tracking of blockchain’s total power consumption and associated emissions to assess their true impact. It will also work across sectors to accelerate the adoption of 100 per cent renewable power for blockchains by 2025—a highly ambitious goal, but one that will set promising precedents if successful.
“The sector is cognisant of the environmental challenges that exist and as blockchains evolve from a predominantly ‘Proof of Work’ concept to ‘Proof of Stake’ (PoS), we will start to see a more energy-efficient sector,” Coren said. The first example of a major blockchain that is making this evolution in protocol is Ethereum’s Merge, where the energy cost of each transaction could be cut by 99.95 per cent, as reported by the United Nations.2
“Like any industry, we believe that ESG will become an inherent part of Web 3.0 and there are many more initiatives that are being implemented.” said Coren.
Related stories on FuturArc:
The FuturArc Interview: Wendy W. Fok
RELATED: In Conversation | Next-Generation Technologies in Architectural Design
Read more stories from FuturArc 2Q 2022: New & Re-Emerging Architecture!
To read the complete article, get your hardcopy at our online shop/newsstands/major bookstores; subscribe to FuturArc or download the FuturArc App to read the issues.
Previously Published Commentary, Online Exclusive Feature
Contact us at https://www.futurarc.com/contact-us for older commentaries.