Over the past year, the number of restaurants exploring digital engagement within the NFT area has continued to grow as blockchain technology became more lucrative. But what goes up must come down, and now industry analysts cite “cryptocurrency” in 2022 as a reason to sell instead of investing in this still trending industry. But do operators who have just started trying out blockchain-supported customer engagement need to worry? And exactly how will the crypto bubble burst affect ordinary entrepreneurs?
“There’s a natural cycle of markets: beef racing follows bear, rinse and repeat,” said Reggie Jarath, CEO of Gather Network and blockchain expert. “It’s survival of the fittest.”
But while crypto-investors in the financial world may need to keep a close eye on the growth and decline in the markets, restaurant operators do not need to follow as closely. Operators may want to know if they should take crypto as a currency and if they should list their restaurant NFTs on Ethereum, or if all these investments are just a big fad.
The hospitality industry’s engagement with blockchain and Web3 has run from Wendy’s launch of games in the meta version to Chipotle taking crypto from customers and Wings and Rings allowing franchisees to pay for the franchise fee with Bitcoin. Many of the NFT-supported hospitality projects have targeted 1%, offering NFT memberships sold for thousands of dollars in cryptocurrencies.
President Biden recently signed an order that would lead to federal regulation of cryptocurrency for the first time.
“For the NFT ecosystem to thrive, all transactions related to the NFT should be done with the original tokens of the relevant blockchain by nature,” Jarath said. “Brands, on the other hand, are developing user interfaces that make these cryptocurrencies more accessible to the less technically savvy users by pushing technical details into the background.”
One of the biggest obstacles for restaurants interested in operating with crypto-based assets is the steep learning curve for both employees and customers. There were rumors that the NFT-themed Bored & Hungry restaurant had stopped taking crypto, and while the rumors were unfounded, (it turned out that they only updated their systems and accepted Apecoin and Ethereum), founder Andy Nguyen said that he not only will be the NFT restaurant:
“Cryptocracy strengthens us even more, because we are not just an NFT brand. We bring a lot of benefit and experience to society,” Nguyen told the Nation’s Restaurant News. “The crash weeds out many bad brands. pay more attention to our brand. “
Josh Sigel, CEO of Shō hospitality Group and founder of NFT private club, Shō Club, recently started taking out regular credit cards in addition to cryptocurrency in an attempt to expand his customer base. If the crypto is down, customers can always use traditional currency.
“It’s not really a hard and fast rule that an NFT can not be bought with currencies other than crypto,” said Sigel. “Overall, we see tremendous value in the underlying technology of the Web 3.0 site.”
Sigel believes that cryptocurrency is more a “correction of the market” than a sign of being intimidated, and shows that the “get rich quick” schemes of people who invest in crypto and NFT just to jump on the trend will not last, especially since space becomes more regulated by the federal government.
But if cryptocurrency is a sign of survival of the best for the burgeoning industry, what Web 3.0 hospitality concepts will survive? It depends on who you ask.
“Cryptocracy is the best time in crypto,” said Peter Klamka, CEO of Cordia Corp. and the creator of the Crypto Food Hall NFT collection. “These periods provide the opportunity for experimentation, cheaper labor costs and faster time to market because more resources are available. What is gone for good is the NFT member restaurant of $ 10,000 or more.”
Klamka, which sells 1,000 unique chef NFTs as an entrance to the Cordia food hall for around $ 200 apiece, said that when we probably go into a recession, the number of people who can spend money on a very expensive NFT will shrink drastically.
“[People like us] invest in NFTs and you even have national chains participating in the action, but the successful ones will be the $ 25- $ 100 NFTs that give customers loyalty points, coupons and a free appetizer, “said Klamka.
Although he said that Cordia will always take cryptocurrency, none of his customers use it as a regular currency. People with a crypto wallet are much more likely to use their blockchain-supported currency on larger transactions.
But not all NFT investors in the hospitality industry agree. Stratis Morfogen, owner of Brooklyn Chop House and Brooklyn Dumpling Shop, strongly believes that crypto is the future of the hospitality industry and that interest in NFTs has not waned during cryptocurrency. He is taking a long-term commitment to crypto as he expects the opening of his NFT lounge this autumn, where membership will be sold for up to $ 100,000.
“You would not be the one to say ‘off, if only I had bought Apple for $ 5 in 2008,'” he said. “There is a lot of fear when it comes to this industry.”
Morfogen said that it is incredibly important for restaurant operators to see NFTs and crypto as a new way to engage with their guests. It’s the new must-have marketing feature for hospitality, much like websites and social media were when they were the “shiny, new object”.
“If you do not take NFTs seriously, you will miss out on the opportunity of a lifetime,” he said. “It’s not just about cryptocurrency, it’s about building relationships. If you have a relationship with this [crypto enthusiast] community, you will benefit for generations. ”
Contact Joanna Fantozzi at [email protected]
Follow her on Twitter: @JoannaFantozzi
