You're Early: Why Web3 Doesn't Make Sense

You're Early: Why Web3 Doesn't Make Sense

April 11th, 2022

Introduction

Web3 pundits highlight the graph below and say: “You are still early to Web3!” The problem is that they never justify it beyond user metrics similarities across their respective adoption timelines. Statements like these are reductive: graphs alone fail to explain why being early matters.

In 1991, the internet brought about the ability to create tremendous, read-only webpages. The functionality and tools available through the early years of the internet were optimized for those who took the time to develop hard-won, unpopular skills in web design. The low-grade user experience lent itself as a barrier to mass adoption, but at minimum, represented possibilities.

All in all, Web1’s revolution contribution was read-only.

It took an entire decade later for the world to move beyond online directories and forums into what we’ve coined as Web2: read-write. This epoch allowed trillions of dollars of value to be created in a comparatively short timeframe, allowing participants to spin up startups at record-low costs. With some time on your hands and a willingness to learn the language, even young teenagers played a significant role in shaping how Web2 has emerged. Even without the proper skills, platforms such as Facebook, Twitter, Shopify, et cetera permitted anyone with an internet connection to contribute to the abundance of information, resources, and interactions that make up Web2.

Web3

And now, we’ve come to the beginning stages of Web3, whose fundamental contribution to the way humans and machines interact is based upon read-write-own. What does ownership even mean, and why does it matter?

Web3 has allowed for ownership of digital goods in ways not possible prior. In Web2, a centralized platform facilitated ownership rights, and even then, ownership of digital goods was controlled principally by the platform as opposed to the user. The canonical example is the Bored Ape Yacht Club NFT Collection. Though anyone could right-click-save the image, the blockchain allows for verifiable ownership available to anyone who has access to an internet connection. Since the blockchain is a public ledger, anyone can verify ownership, and the usage of the NFT can be carried over to other mediums: it’s not locked into a single service. This is a marked difference from digital goods offered by gaming companies, as the skins or upgrades purchased by game players are more so rented than owned and are completely platform-specific, barring any interoperability with other games or platforms.

This shift is new, and understanding it makes you early to Web3. There’s a significant amount left to discover what Web3 makes possible, much like the unknowns of Facebook’s impact on culture, politics, and the global economy back in 2004. Across all domains, Web3 has the potential to make the same if not more of an impact than Web2, and we have little idea as to what that looks like or how they will shape human-machine interaction. You are early, so things still don’t make sense. 🙂

Beyond just “owning” digital goods, Web3 transforms the way people work together deliberately and even anonymously. A significant component of Web3 is tokens, which can act as incentives for developers, contributors, and community members. For a Decentralized Autonomous Organization (DAO), tokens that are paid out as incentives work similarly to unrestricted stock compensation in a traditional company. Though simple, it is significant. Let’s evaluate why.

Protocols or DApps (decentralized applications) can make something worthwhile for an individual working within a collective that wouldn’t be worthwhile for a centralized entity on its own. The example that comes to mind is Google Maps - the cars that allow us to zoom in on our childhood home cost roughly $500,000/year each. For less densely populated areas, the cost-benefit analysis discourages Google from continuing to build out mapping in those areas. However, a new startup in Web3 is making what is too costly and burdensome for a company enticing and worthwhile for an individual.

Enter Hivemapper. For Google, it is too expensive to operate a 3-D mapping car in low-population areas, but an individual with a dashcam can do just as good a job for significantly less cost as they go about their day-to-day routes. They operate as individuals, contribute through a collective, and receive rewards through a value-add token. This is the power of Web3 - the ability to inspire contribution from individuals who otherwise wouldn’t have the leverage or network to make such an impact possible on their own.

Everyone Wins

The best part about being at the forefront of new technology is that the sector’s ethos is win-for-all. There are very few instances of zero-sum interactions in blockchain networks, barring crypto trading. Everyone’s perspective and contributions are needed to take a nascent technology and allow it to thrive under the guidance of the collective. Web3 needs everyone to come together because no one person can contribute to the impact that Web3 will have on economics, politics, culture, education, et cetera 🙂

Large-reach mediums like the media and social media serve their audience’s bounded rationality: they take the evolving complexity of Web3 and reduce it to what makes sense for readers: cryptocurrencies and tokens. Web3 hasn’t “clicked” for the masses because mass-audience writers reduce concepts for understanding in the moment at the cost of foundational knowledge in the long term. It is easy to dismiss that which you do not understand.

You can be early to almost any technological epoch. Still, suppose you don’t put in the effort, time, and toil that evolves you as a thinker within the space. In that case, you are no better than Robert Metcalfe’s assessment of the internet in 1995: “The Internet...will soon go spectacularly supernova and in 1996 catastrophically collapse.”

It’s no wonder that everyday individuals dismiss the potential of blockchain networks when their principal source of trusted news reduces the technology to articles of speculation: cryptocurrencies. This comes at the cost of understanding the “own” aspect in “read-write-own.” Some examples of impact through ownership include:

• Control over private data instead of being sold in exchange for access to a service

• Verifiable intellectual property rights over digital assets (NFTs)

• Insight into the supply-chain of goods and services we receive, money transfer included

• Native payment settlement no longer requires third-party intermediation

Instead of being at the mercy of Web2 centralized platforms and their service providers, the users of blockchain networks now have ownership over how they interact with machines, instead of machine designers determining the rule book.

Conclusion

Things don’t make sense because Web3 is still early, and there are knowledge silos preventing ease of onboarding or proper breakdowns. I hope this post allowed you to glimpse into what Web3 means, why it is great to be early, and how everyone’s contribution to the space is needed now more than ever.

Special thanks to Zoe Enright and Sam Wheeler for their comments and guidance on this post.