Web2 (the internet as we know it today), is a wonderful, chaotic, and familiar place for many of us. We’ve built careers, networks, and entire personas over the last 20+ years using it. It’s where many of us go for entertainment, news, work, and to socialize every day.
So, what does this have to do with crypto? Well, everything.
There are 4.9 billion people using the internet today, roughly 62% of the world’s population.
On the internet, the largest application categories used by far are Search Engines, Social Media, Email, and Video Streaming Entertainment. Each of these categories have their own litany of well-earned critiques. Two of the largest being User Privacy & Censorship originating from their centralized (aka trusted) nature.
“If you’re not paying for the product, you are the product” sums these services up perfectly, and at its core is why these dynamics won’t change under the current Web2 model.
Web3 (a user-owned internet), looks to change this.
How Crypto Plays a Role
The beauty of Distributed Ledger Technology (DLTs, also known as crypto) is that for the first time in history we can have trustless (aka decentralized) applications.
The importance of trustless vs. trusted / centralized applications CAN NOT be understated. It is the primary difference between Web2 & Web3.
Trustless systems by their nature flip the entire power dynamic of businesses as we know them today on their head. Instead of major companies like Google, Apple, Amazon, Facebook, etc. being the sole owners of these systems (with the power to extract as much data as they see fit), it’s now possible to have applications owned by their users.
This change in ownership dynamics has the potential to completely disrupt non-user-friendly incentive structures of businesses today, and eliminate many highly critiqued problems like data mining, censorship, and poor user privacy practices.
Web3 Enablers: What’s Possible On Web3 That Isn’t On Web2?
User-Based Ownership:
Akin to Digital Property Rights, distributed ledger technology allows users to truly own their digital assets (video games, art, books, etc.) just like physical products they buy at the store today.
Web2 ownership in its current form can be somewhat described as a form of digital communism — a system where no user truly owns any of their assets, but leases ownership rights from a central authority. Example: Steam, iTunes, Audible, et all, who can remove your ownership status of any past purchases at any time they choose.
Web3 and Distributed Ledger Technology have the ability to change that ownership relationship entirely, handing all rights over to the user, and storing their digital assets’ data across a decentralized network so they can’t be revoked.
True Privacy:
Concepts like zero-knowledge proofs allow users to prove a credential without ever having to disclose specifics to the person they are sharing that information with. This is extremely powerful, and means that a user’s data remains 100% confidential unless they choose to share it. The concept of true privacy is a complete 180 from the current Web2 model, where users’ data are owned by the company whose service they are using.
Censorship Resistant Speech:
With user-based ownership and decentralized applications, networks can exist where a user’s speech can never be censored. This is particularly important for people who live under the rule of authoritarian regimes where wrong-speak can be punishable as a criminal offense. Decentralized Applications and User-Based Ownership can’t be blocked if there is access to a non-centralized internet.
Compensation For Users:
Unlike current Web2 models, where middle-men service providers monetize user data, Web3 and the concept of User-Based Ownership allow users to monetize their own data and be paid directly for it. This means that users can be paid for their time browsing the internet or playing video games; concepts which were inconceivable in Web2.
How Web3 Will Get Its First 1 Billion Users
Now that we’re familiar with a few concepts Web3 can offer vs. Web2, how exactly does that lead to adoption?
It’s all about providing value to the user.
Simply put, your average user does not care what technology the application they’re using runs on. They care what they get out of it.
A common problem that exists in the crypto industry today is that we have a lot of crypto-first solutions looking for problems. Instead, what we need are problems solved by crypto-enabled solutions.
The ownership, compensation, and privacy perks that crypto can enable are perfect examples of unique differentiators that will give Web3 applications an edge over their Web2 counterparts.
As pioneers of this new industry, it’s our responsibility to build these solutions.
How To Build Great Products Enabled By DLT
For Existing Problems — Don’t Reinvent The Wheel:
There are a ton of successful products that exist today just waiting to be disrupted. When you’re looking to build your next crypto application, think of a product or service that you use today.
- Why do you use it?
- How does it provide value for you as a user?
- What is your biggest problem with it?
- Would crypto-enabled features fix that problem?
- Do these features offer significant value over the old model, or would they be considered gimmicky?
- On a scale from 1–5, how many times better is your new experience vs. what exists today (ex: 1.5x, 2x, 3x, etc.)?
If your crypto-enabled solution isn’t at least 2x better than what exists today, move on to the next idea. Users are more likely to migrate from a wooden wheel to a rubber one, not another wooden wheel with a slightly better finish.
For New Problems — Build New Solutions:
Just like the introduction of any new technology, Web3 comes with its own unique challenges. Identifying these challenges before they become mainstream and building a product that proactively addresses them can set you up as an early market leader.
Since the crypto industry has a few years of development under its belt, you can find any number of crypto-specific problems to improve. Take voting on DAOs as one example. Due to ETH’s high gas fees DAOs have difficulty encouraging voter turnout since each vote costs a user money. Free on-chain voting solutions built on IOTA let all users participate in any upcoming DAO votes, making the governance process more fair & democratic.
Keep It Simple:
If a user can’t immediately understand where the value is in your product, then it won’t get any adoption. Take the concept of play-to-earn games, it’s immediately obvious to a user who likes to play video games that one product pays them to use it while the other doesn’t.
DeFi is the same, a user can save hundreds of dollars in broker fees per transaction by simply using a crypto-enabled solution instead of their bank. These perks are amplified even further when DeFi applications are built on zero-fee networks, opening access to users with small amounts of capital as well.
The Zeitgeist Is Your Friend:
Don’t be afraid to look at the current zeitgeist and see if there are opportunities within it. For example, the world is much more “green energy” focused than it was years ago. Projects that can be enabled by low energy crypto solutions like IOTA, can immediately be branded as a green alternative vs. their Web2 counterparts.
Use Greed For Good:
Humans by our nature are greedy, whether we like to admit it or not. This instinct when harnessed for good has led to innovation and advancement under capitalist systems, and when used for bad has led to suffering, poverty, and death throughout history.
By creating an incentive system for users that channels greed into a positive outcome, you can reward them for doing good, creating a win-win situation for everyone. One example of this is paying users to train AI image recognition models, ultimately helping farmers increase their crop yields.
Create a Flywheel Effect:
The great thing about crypto and Web3 is that unlike most business models before it, there are nearly endless ways to reward users of your product. Remembering to always be user-centric, you can create highly incentivized reward systems, positive feedback loops, and favorable tokenomics that allow users to become owners of the very product they use.
These incentive systems and what you can do with them vary by jurisdiction, but the bottom line is that it’s now more possible than ever to create products & systems that enrich their users as owners.
Assess Effort:
How big of an undertaking is your project? For example, are you trying to build the next YouTube, (a very large and complex business that requires extensive capital and architecture capabilities) or a simple bookkeeping application that backs up ledger entries on a DLT?
The scope of your project will determine how many dependencies you’ll have in its architecture. The larger the scope the more likelihood you’ll need to build those sub-components yourself. This is extremely important when considering how much time and resources are needed to build your product.
Honest assessment efforts will help keep your project resourcing plans, capabilities, and timelines in check.
Use The Right Technology:
Aligning your tech stack with the needs of your project is key. Since nearly all crypto projects today have fees, they limit buildable use cases to high cashflow products like DeFi or overpriced NFTs.
If you’re looking to solve free or low-cost existing Web2 problems, you’ll likely want to consider feeless Layer 1 solutions like IOTA, and their smart contract network Assembly. By taking a user-first approach and limiting friction they encounter with other Web3 solutions, you’ll be able to give your project an edge over the competition.
Build The Future You Want:
With the introduction of Web3 there’s more opportunity than ever to break the cycle of entrenched Web2 monopolies. Users can finally be directly rewarded for using products, have their data rights respected, and cut out the middleman (or at least have one that’s much more transparent).
The future of the internet is what we make of it. It’s up to us to learn from the mistakes of the past and build for a more free, open, and transparent network. 1 Billion users is just the first step. We’re just getting started.
If you would like to donate you can do so with the following addresses:
BTC: bc1q55dyz63sp7jrumxe9a7thwn9etxvhn74mmevp6
ETH: 0x29bC45D01111E78442335439851a2B2bfcD57E90
IOTA: iota1qpgd6w6jh69rmkzadgr6a04r8qzephsscpdj3tsh49vqhazsl04tseevknv
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