The fast Ride into the Metaverse

Interview with Tyler Benedict, founder of the NFT Bike Club

The bike industry thrives on the haptic experience, the wind in your hair, the sounds and smells. So far, digitization has mainly affected marketing and sales. But that could change, says Tyler Benedict, multiple founder and provocative bike blogger on Bikerumors.com.

The metaverse is coming into view, some experts say. Others think it's already here. And still others don't even know how to define it yet. The fact is that it will be about immersive experiences in a digital space, in which the user is ideally completely immersed because he is equipped with virtual reality glasses. He is represented in the digital universe by a game character, an avatar.

Some such applications already exist, with and without VR. And the idea of the Metaverse is to somehow make these smaller universes permeable and connect them. Fortnite, Roblox or Minecraft are considered representatives. All of them inspire millions of teenagers and young adults. And everywhere today, not only games but also, for example, digital pop concerts are taking place. Which proves: Digital can be entertaining and emotional. 

But what does all this have to do with one of the most analog industries around? Will we actually be pedaling on our Peloton bikes in our living rooms to steer a digital cyclist through a digital race? 

Hi Tyler, what brought you to the topic of NFT? It has little to do with the bicycle industry.

Like most people who have looked into NFT (non fungible tokens), I had a friend who just wouldn't stop talking about it. And then I looked into it, learned more and more about it, and now I'm fascinated by the technology.

I've been an entrepreneur for over 25 years and have always been interested in how people take new ideas and build a business model around them. The current NFT craze kind of started with the Bored Apes, which is kind of like digital art. And then the next ones came along and added a little bit more to their projects.

And I'm watching all these ideas. That's when I got the idea that I could start a bike NFT. At that point, in the summer of 2021, there wasn't one.

Then I talked to a few friends and we realized that some of us were working on something similar, but each of us brought unique talents to the table. So we got together and started the Bike Club.

I'm pursuing about 100 different NFT projects. I think that's what I enjoy the most, seeing what other people are doing and how that scene is evolving. And then figuring out how we can apply that to a bike project and deliver the kind of things that road, gravel, mountain bike, and commuter cyclists would appreciate.

The topic has evolved so incredibly quickly. Now every successful project provides not only great art, but something else of real value and benefit to the target audience. It's no longer enough to have cute art, there has to be substance.

With the Bike Club, we've gone from "just an NFT for cycling art" to building the world's largest cycling club and community. I also talk to all kinds of brands in the bike industry and help them leverage these new technologies for their own business.

How do you define NFTs?

In abstract terms, it is nothing more than a proof of ownership. In fact, of course, it's just a line of code in the blockchain, but it's verifiably your line of code. And what you can do with that proof of ownership is endless. You can think of it as a verifiable membership card that gives you access to all the services that the project offers.

Verifiable ownership is one of the most important aspects of this new technology. With traditional memberships or social media, you don't own your data or your account. If you stop paying, it's gone. If the company goes out of business, it's gone. With NFTs, you own it forever and can do so anonymously and even sell or transfer it at any time.

In abstract terms, it is nothing more than a proof of ownership. In fact, of course, it's just a line of code in the blockchain, but it's verifiably your line of code.

Property is worthless if no one monitors its proper observance. Do we need a metaverse police 

Ha! No, I don't think we need a police force for that. The first reason is decentralization. There is no central registry to tamper with or even steal. Thousands of computers around the world make up the blockchain, and it takes numerous auditors to update or create a transaction. No one company or person is in control, which helps preserve the integrity of the blockchain.

That doesn't mean it's perfect, and it's still a very new and rapidly changing technology that will have some growing pains. While the community is largely self-policing, there are many bad actors who try to deceive others. Total decentralization is close to anarchy, so we still need rules and safeguards, but how those work in a decentralized environment will be dramatically different from what we are used to.

I think we'll see further centralization of some aspects of it, especially as larger companies try to compete and governments impose regulations, but it's definitely going to be very different.

What would happen to me if I took some Bored Ape NFT and claimed it was mine?

Well, you can't. You could right-click the image, save it and say that it belongs to you. But - and this is the big advantage - others can prove in a few seconds that you don't really own this NFT.

And if you understand how the underlying technology works, then you know that just having that image doesn't give you any of the access that actually owning the NFT does. Just copying a digital image doesn't mean you own something worth a quarter of a million dollars.

Why do I need an NFT membership card as a company? I can also solve this quite classically via my CRM system.

To be perfectly honest, you could do a lot of this without the blockchain. However, there are some distinct advantages to creating it as an NFT.

In Bike Club, the avatar is yours and we can verify that and give you access to our Ride & Earn dashboard in a way that is far more secure than a username and password.

Second, you can be completely anonymous and still participate. I don't think it's so much about people really wanting to hide. It's about people getting really angry about how companies like Facebook or Google are abusing their data. Even with the cycling services that we love, like Strava or Zwift - both are great services and I use them all the time - but you can't really stay anonymous there. You don't know exactly what they're doing with the data.

Another aspect is so-called hidden traits. On the outside, you see something like an avatar, but there are many additional functions hidden in the code. We can design gamification elements that play with these traits, and since they are part of the NFT, you can't cheat.

Last but not least, we are able to create a system that allows owners to increase the value of their NFT simply by driving. You drive, we award points, and those points have value in our ecosystem. You can imagine a situation where a Bike Club NFT with a lot of points and good features could be very valuable. It's hard to build something like that on traditional CRM systems.

It's about people getting really angry about how companies like Facebook or Google are abusing their data. Even with the cycling services that we love, like Strava or Zwift - both are great services and I use them all the time - but you can't really stay anonymous there.

In German insurance there is the term "Schadenfreiheitsrabatt". You get this if you drive accident-free. And this no-claims bonus is transferable. 

True, and it's a good example of how some of the same things can be done without NFTs. I just think that NFT and blockchain are a way to future-proof it by using a more secure technology. And who knows how else we can use this technology in the future. So why not be ready?

One of your most important criteria was anonymity. I'm not sure, even in Germany, that there are that many people who really want to be more anonymous. And of course governments will also object.

We are so used to trading our privacy and data for convenience and services. We allow Google to analyze our emails and search history, Amazon and Apple to analyze our spoken commands and shopping history, all so we can provide better and cheaper services.

Most of us are okay with that, but it's getting creepier. And more and more rules and regulations are being put in place to give some of our privacy back, while other laws (especially currently in the U.S.) seem to be rolling back privacy protections in a thinly veiled attack on privacy rights.

Being able to participate in a community or marketplace without having to reveal personal information is becoming increasingly important, in my opinion, and there are many ways that blockchain technology is helping people remain anonymous.

Perhaps a better word instead of anonymity is control. It's about perceived privacy and our ability to control who can see our data and how it is used.

The way we construct this gives the user choice. Bike Club members can meet in real life, which of course makes it difficult to remain anonymous. But some will participate exclusively online behind a made-up username, and that's fine. No matter how people use it, we want to give them those options.

In addition, we're able to build a sustainable business model when mining user data, so we believe we're really building the business of the future.

Being able to participate in a community or marketplace without having to reveal personal information is becoming increasingly important, in my opinion, and there are many ways that blockchain technology is helping people remain anonymous.

The two topics of NFT and blockchain are very controversial because blockchain causes very high CO2 emissions. How does that feel for a passionate cyclist?

Yes, we are looking at that very closely. We haven't created our NFTs yet. And while we always hoped ETH 2.0 would be ready in time, it's unlikely. So we're doing research and probably going to Solana (SOL), where a transaction (like minting an NFT) is no worse for the environment than a few Google searches.

There is still a lot of education to be done. Many people hear the word "NFT" and immediately say it's bad for the environment. But you have to put that into perspective. Streaming music or movies? Using online banking? Driving a car? Charging your e-bike? All of it causes CO2.

It's easy to think NFTs are all evil and bad when all we read are clickbait headlines.

It's not that this reaction comes as a surprise. It was the same when the first snowboard came out, or when the telephone came out, or the first e-bike. But we all love these things now, right?

The reality is much more nuanced. And SOL is a CO2-neutral blockchain, which makes it an easy choice for a project that's about riding in the wild.

And I think the adoption of NFTs will develop very quickly. Whether they're talking about it now or not, I expect that in the near future almost every major outdoor brand will announce some kind of NFT or WEB3 activation... including the cycling industry.

The topics of metaverse and NFTs are often closely linked. Is that true or are they two fundamentally different topics?

They can be used separately, but combining the two is probably one of the best use cases for NFTs.

Look at games. Kids spend a fortune on cosmetic and weapon upgrades in games like Fortnite and Minecraft, but they don't actually own these things. They can't sell or trade them. So if they decide they don't like that skin or upgrade anymore, it was just wasted money.

If these items were NFTs, the owner would actually own them and could then sell them to someone else. Let's say one of the virtual bike worlds offers in-game upgrades as NFTs, such as faster bikes. But then you have an even higher quality wheelset to "ride," you could sell that intermediate upgrade to another rider in that world.

That's just the tip of the iceberg, and the real magic will come when an upgrade in one Metaverse world becomes available for use in other worlds. Interoperability and cross-platform compatibility will open up huge market opportunities, but it will require a complete rethink of how private companies create value for their customers.

That's just the tip of the iceberg, and the real magic will come when an upgrade in one Metaverse world becomes available for use in other worlds. Interoperability and cross-platform compatibility will open up huge market opportunities, but it will require a complete rethink of how private companies create value for their customers.

There is then a kind of secondary market for digital goods.

Absolutely. Take the music industry, for example. When digital music first came out, we bought songs, but we didn't really own them. They were copy-protected, so we couldn't sell them and sometimes we couldn't even play them on all our devices.

Streaming services killed music sales, but artists are learning that selling their work as NFT can not only provide copy protection, but also return ownership to the customer and allow them to create new, more amazing experiences for their customers.

And NFTs can be used for crowdfunding. Artists could ask fans to support a project in exchange for a share of that project. They could fund a film or a book. There are already projects for this.

How could this work in the bicycle industry?

Imagine Bianchi releases a new bike and there is a limited Bianchi Club Edition for those who pre-order the bike as NFT.

Bianchi sells the entire collection in advance, fans get something to prove their ownership, which can also give them access to private chats or events. Sure, you could do this with a username and password, but with an NFT it's faster, easier and more secure, and it gives customers a visual representation to show off.

Once they receive the bike, the NFT can serve as a certificate of ownership with all the specifications and details included in the code. If they ever want to sell the bike, they could simply sell the NFT and deliver the bike with it so the new owner has the history and access to it.

Peloton, Strava or Zwift would not exist without the Internet.

Last question: Doesn't it feel strange that so many things are being virtualized right now? Isn't the real world getting lost?

That's something everyone has to decide for themselves. For example, my screen time is used for work or entertainment, and the rest of the time I go outside and drive or play. Personally, I almost never ride indoors.

With Bike Club, we're building something that encourages people to ride the way they want or need to ride, and rewards them for doing so.

But you could also ask the question the other way around. Peloton, Strava or Zwift wouldn't exist without the Internet. So it gave us more opportunities to ride. And these platforms and Bike Club create new ways to connect with more riders in more places, making it easier than ever to explore new places and even make new friends to ride with!