Some have compared NFTs to a 21st-century gold rush, where everybody is trying to get a bit of the wealth that they generate. Some plunge into the industry much earlier than others, optimistic about its value or perhaps a bit overconfident. While other investors or companies who have a more conservative and risk-averse approach wait until they are sure that this is a sound investment.
Perhaps this could explain why eBay has waited so long before joining the world of NFTs and crypto. The company must have felt the pressure from other smaller companies and even the giants of different industries who have begun to implement non-fungible token technology into their operations and have taken to social media to create campaigns revolving around NFT collections.
The plans of eBay so far include allowing customers to buy and sell NFTs on the platform and giving them the ability to provide crypto for transactions.
Some crypto experts in the field have their thoughts to share regarding Ebay’s decision. Rachel Warren says that the decision is “exciting and unexpected.”
“I guess I shouldn’t be surprised because we are seeing a lot of movement in the direction of a lot of companies you might not associate with being really friendly toward crypto and NFTs.” He says.
The pressure is undeniable since NFTs are giving unique technological mechanisms for companies to create new sources of value and potentially make their operations more successful. Furthermore, there is an element of perception, if eBay does not follow the trend, they risk being labeled as old-fashioned and falling behind.
“In a phone interview with thestreet.com, the head of eBay was saying, basically they want to be targeting as a marketplace for Gen Z and millennial consumers, specifically, which I thought was really interesting,” says Warren.
The CEO, Jamie Iannone, has commented that “We’re just completing our transition to managed payments, where we are now managing $85 billion of volume on our platform directly.” and “This gives us the ability to open up new forms of payment.”
This new way of paying through crypto is currently expected to launch as an announcement on the 10th of March since it is a dedicated day for discussion with investors in the company.
Jamie also remarks that eBay has been allowing for some sort of NFT trading long before this announcement “We did change our policies last year so that you could trade NFT on the platform. Essentially know, eBay is a place for people who have something to sell and people who have something by showing up. Even without announcing anything or doing anything, people started trading NFTs on the platform.”
Perhaps the reason why they are not one of the biggest platforms for NFTs has to do with the fact that other marketplaces were popularized early on. They also created a specific organizational, technological and structural approach to their platform and business operations that is unique to the needs of Web3 technology.
“I don’t know, it’s interesting because they obviously don’t currently accept cryptocurrency as a form of payment on the platform. But again, if they’re specifically targeting this consumer base of Gen Z users and millennials, it makes sense that they are trying to expand into these areas where maybe they wouldn’t automatically think eBay would expand to,” says Warren.
“It’ll be really interesting to see if they’re like a legacy company like this, is able to move into some of these new markets. As I follow-up crypto and NFTs more specifically, it’s been interesting to see who is trying to move into this market, and there’s some that makes sense, and there’s some, it’s like, what are we doing?” says Travis Hoium.
His remarks come at times when some business, even though NFTs are admittedly not suitable to be implemented into their structure, or at least the usage is very dubious, has taken active steps to use Web3 technology like non-fungible tokens have produced questionable results.
An example that comes to mind is AsRock which tried to design their motherboards around NFTs, but many in the community heavily criticized them as they saw no practical purpose. The technology was supposed to allow for the community to pick their favorite designs and to create designs of their own, but to many, the approach was so disorganized that it became very messy, and in turn, no valuable result could be produced.
Travis goes on to say, “As we have OpenSea and Magic Eden and these NFT native platforms. That’s where they are ultimately competing with, and I have a hard time seeing how they’re going to move projects that are growing in those platforms to a legacy platform like eBay.”
There is certainly some doubt about whether or not eBay will be able to take away investor confidence and projects from platforms like OpenSea and Magic Eden.
On the one hand, they have established NFT marketplaces where people can enjoy engaging with NFT communities and have the whole platform catering to their specific needs around blockchain technology. They also have a much more innovative approach to NFTs and experience in the field, and experience with blockchain technology.
On the other hand, many claim that OpenSea and other NFT platforms have many structural problems. For one, there is a massive lack of consumer protection and protection for artists when they get scammed, or their art gets stolen. The community has to come together and create their own software and mechanisms for accountability and tracking of ownership since OpenSea and other platforms either refuse to regulate, or the regulations come very slowly and are not enough.
The way eBay has established itself as a legacy platform and a giant in the industry could mean that they can take consumers away from those risky and volatile platforms by offering security to both consumers and artists. Furthermore, the game of who wins in the long term comes down to your financial opportunities.
eBay may be lacking in expertise and experience, but this is something they can easily catch up with enough financing on their part. They are likely to wish to invest heavily into crypto and NFTs as, even despite short-term dips in market revenue and trade volume, those technologies are likely here to stay and rise even more in popularity.
Demitri Kalogeropoulo offers some interesting analysis on Ebay’s current financial condition. He says that ” I know eBay’s payments and their advertising are two of the only areas that are growing at the moment because they’ve got so much merchandise volume through the pandemic, and now they’re having a growth hangover from that. I know the stock dropped, I think it was last week, I think they reported their earnings. Interestingly enough, it was a little bit different than, I think Rachel follows Etsy a bit which that stock was that they had some better numbers in terms of growth, more buyers are moving to the Etsy platform.”
He continues, “This could be one way that eBay is trying to get more people back on there if they can make it a more attractive program for sellers, it seems like they’re trying to entice buyers back on in that way, but it’s a little bit of a tough battle there.”
The move from eBay could make a lot of sense since the pandemic hit many companies pretty harshly, and not all of them have managed to recover the revenue that they enjoyed previously. When investors are uncertain of your potential for growth as a company, you have to make gestures to prove that you are up to date and attract new customers to your brand.
Warren comments that “I’m of the mind that any of these companies that have that digital-first aspect. I think that they can enter this space with NFTs and crypto a little bit more easily than perhaps some others.”
He’s right to point out that starting as a new company means you can build your structure, operations, and culture specifically around this new technology, while transition like eBay is trying to do is not guaranteed to be successful because they have had a vastly different business model and there may be internal opposition against experimenting too much with NFTs and crypto.
Many think that you should either stick to your conventional business operations or plunge fully into the world of crypto since you either take the risk fully or you shouldn’t bother altogether, a halfway approach won’t be sufficient to win on either side, and you just end up losing.
Warren comments that “The Street article noted that there wasn’t really any big announcement that they made. It almost sounded as if people recognized that ability on the platform and just started doing it. I would doubt it’s anywhere close to the volume you’re seeing on some of these specific platforms like OpenSea, for example, that is designed to be a place that’s a marketplace for NFTs.”
It’s essential to recognise that eBay did not have the best advertising and marketing campaign when they were introducing the earlier changes related to crypto and NFTs. Although customers can interact with the website and figure it out, it’s much more effective to make them aware of what is happening and to create a campaign that attracts new groups of consumers from other platforms.
Jose Najarro comments that “There are certain companies that are getting into the space that, hey, it makes sense, and there’s other companies that don’t make sense. For eBay, I think being an e-commerce store, in theory, it makes sense. You’re an e-commerce platform, you want to bring new people. But the last time I purchased something on eBay, I think it was a year ago, and it’s usually something that’s used or some form of collectible, my uncle, he is like a huge airplane fighter collector, the models, and I don’t think he would ever use a crypto way to purchase that product.”
Crypto may be a powerful and convenient way for you to conduct transactions, but eBay has to be mindful of the demographics that use their services and how they many dislike crypto, may not be familiar with it, or may prefer not to use it in comparison to other conventional methods.
Jose goes on to add that “Crypto has definitely seen better adoption in the younger generation; Gen Next, Gen Z, or whatever they were called. But I think maybe like Etsy, one that Rachel follows, Etsy for sure would make more sense because I feel that generation of consumers is already there and they are heavily adopted with this market. Definitely pretty interesting.”
Jose is right to point out that NFTs and crypto are fascinating to millennials and Gen Z, who are dissatisfied with the current financial institutions and wish to forge a system of their own through decentralized finance and community building.
NFTs also resonate strongly with many young artists who are not content to be dominated and artistically restricted by traditional art institutions and would much prefer to share and sell their pieces in NFT marketplaces, even if they may carry a higher risk.
Over the long-term many believe the markets will be stabilized, competition will ensure that only the best platforms that provide an efficient service to consumers and artists will survive, and the NFT and crypto world will become even better.
