Will Web3 succeed, or is it just a scam?
“Web3 will change the world.”
“Web3 is nothing more than a smart marketing angle for existing tech”
These are two of the most prevalent arguments around Web3 from either side of the aisle.
And both sides usually end with some version of “and you’re an idiot if you disagree.”
These sort of rage bait pieces are all well and good in marketing. They’ve been used for centuries to get people to read, open, and talk about the publication or author.
Publish one controversial opinion and watch the clicks roll in.
Check back in a day or two and see a half dozen opinion pieces that link back to you with a congratulatory or confrontational message.
Regardless of the reactionary pieces, you’ve accomplished your goal of getting people to speak about you and your thoughts.
The problem we have right now with Web3 is that there are some very believable arguments - both for and against - being created from influential people.
And it’s confusing people.
Those for Web3 are pointing towards the already accomplished financial enablement that’s helped individual creators generate more than they ever could when relying on centralised platforms.
Those against Web3 point toward the chief cheerleaders and how they have a majority control of key assets and gates into this world.
Personally, I fall somewhere in the middle.
I still believe that there is vast potential with the world of Web3, but I also see that there needs to be a change in the way things are organised.
Below, I’ve outlined what I’ve found to be great points from others, and then listed a number of potential long term potential Web3 businesses.
The potential negatives of Web3’s platforms
For 10 years I’ve made my living as a marketing writer - usually writing sales-focused copy for clients.
It’s been great. But it always bothered me that as soon as I was paid my reward from the copy I’d produced was done.
That copy often went on to help the client secure hundreds of thousands or millions of dollars.
And my cut was either a one-time contractor fee or small revenue-share agreement.
It’s one of the primary reasons I decided to build my own offers and sell them to my own audience.
Ownership is, after all, everything.
So when I found out that creators were being more fairly compensated in Web3, I was ecstatic.
I first checked out Mirror.XYZ and noticed how writers were making thousands for articles on their opinions.
For example, this piece from Linda Xie made over 2 ETH.
Seeing people getting directly compensated for their writing without giving up the back end is what drew me into Web3.
And yet, as I’ve dived deeper into the world of NFTs, Web3, and Crypto, there are elements that worry me.
The primary selling point of all of this in many people’s eyes is removing controlling centralised authorities and allowing individuals to own what they create.
However, it seems at odds with the way the industry is developing.
If you were to ask people where they’d go to take certain Web3 actions, they’d all say the same thing.
While there is an element of decentralisation to how the assets are stored, we’re all using the same handful of centralised marketplaces and platforms to access the decentralised web.
This doesn’t worry me too much.
We are - after all - at the start of the Web3 revolution. And there will be a few brands and people who have outsized influence and financial backing.
We have to be careful about letting these brands dominate the market for too long though.
I read an interesting analyses and experiment from Moxie Marlinspike recently that highlights my concerns with platforms like OpenSea.
The way I understand it, platforms like OpenSea are intended to be a window into the assets stored on the decentralised web.
It’s a single gate into a decentralised world.
If someone comes along and creates a more attractive, easier to use gate, OpenSea will lose market share.
The key thing though is that anything purchased through OpenSea is still owned by the buyer - even if they then move to a different primary platform.
Because OpenSea is simply a method of viewing them and exchanging ownership.
However, in Moxie’s analyses he created an NFT that changed depending on where it was viewed from.
This little stunt led to OpenSea removing the listing from their marketplace.
However, that NFT should have lived on the decentralised web and should still be able to be accessed through a crypto wallet.
Even after it’s been removed, you should still see the poop emoji in your MetaMask dashboard.
Unfortunately, that wasn’t the case.
Moxie explains it as below.
Moxie’s access to his NFT had disappeared because it was tied to OpenSea’s API. As soon as it was removed, he was no longer able to find it on any device.
This isn’t the Web3 we’re all hoping for.
A centralised entry point seems to have become a controlling entity for Web3.
It is worrying, and we have to be aware of this to prevent platforms from amassing and retaining control.
But it’s not all doom and gloom.
The positives of Web3 platforms
Problems with new tech are commonplace.
I would expect nothing less from a brand new platform in what is an as yet misunderstood area.
Every time there’s a new development, there are always a few major players who progress quickly and - often inadvertently - mess things up.
These are the brands that have the larger access to resources. Some persist (think Google), others die (think EventVue).
The brands with all of the funding aren’t to be chastised and chased out of town.
These brands often use those resources to figure out what will work. They pave the way for smaller, more scrappy competitors to come along and deliver on the promises the user wants.
One such example right now is LooksRare.
Another NFT marketplace that’s far more decentralised and is poised to be a major competitor for OpenSea after doing $100MM in sales on day 1.
LooksRare is far more community-focused and is believed to stick closer to the ideals of decentralised web and assets owned by individuals.
Will it fully play out that way? Only time will tell.
But I’m pretty positive LooksRare and whoever the next competitor will be would not exist were it not for OpenSea validating the space, and figuring out the initial kinks, and building hype.
Right now there’s an outsized focus on NFTs over the platforms that sell them.
You’ll also find that NFTs are the center of many Web3 arguments - both for and against. So let’s take a look at some fo these arguments. Let’s look briefly at the arguments over NFTs.
The argument against NFTs as they are right now
NFTs are a scam because all they are is a simple JPEG.
That is the core of most people’s argument. And is often followed with a condescending,
“I could just CTRL+C CTRL+V the image you paid $X for”.
All of which is true.
And while I don’t like to keep using this analogy, I could also buy a postcard with the Mona Lisa on it.
It doesn’t mean that I own the original.
I believe the actual owner of the painting is the nation of France.
But there are millions of replicas out there, none of which will contest their ownership of the original.
The second argument I often see is,
“the artwork is crap - who wants to buy a pixelated image of a head or a cartoon ape?”
This is a little easier to understand and counter.
Art is subjective.
I don’t understand nor value modern art. I simply don’t get it.
But images like the below are sold for staggering prices every single day. The below being sold for over $40MM.
If people want to pay $500,000+ for a picture of an ape, let them.
The art world has never made sense to most of us, and never will.
Don’t hate the player, hate the game.
The argument for NFTs as they are
If you head to OpenSea and look through some of the NFT collections, you’ll notice there’s a stark contrast between the big winners and the smaller projects.
Both in terms of the value of the images (perceived or real) and the number of sales.
Organising by price of low to high, you can see a stark difference in the quality of the art.
Some of these images are something I could put together in Canva.
But I don’t think that’s the true differentiator.
Personally I’m seeing 2 kinds of success with NFTs.
The first is simply a case of luck and timing.
CryptoPunks are still one of the largest NFT communities. And it’s largely because - like OpenSea themselves - they were among the first to the space.
Owning a Punk is proof you’ve been invested in NFTs from the beginning. Having one is a badge of honour for many NFT and Web3 entrepreneurs.
The second, and vastly more important element to a great NFT collection, is the community behind it.
Punks have a discord where they can all engage with one another so - in that sense - it’s a double threat. Great community with intrinsic perceived prestige.
One of the best approaches I’ve seen in recent months to build a community around an NFT collection is the great work being done over at Deadfellaz.
Their floor price and overall interest has skyrocketed in recent months.
All you have to do is head to their Twitter to see…
- How they’re engaging with their audience
- How they’re working with their audience
- How they bring that audience into the fold to create a real community
The NFT projects that survive are built around community over the art itself.
The art is simply a visual representation of who you’re allied with.
Much like the age-old actions of…
- Buying a sports team jersey
- Wearing a tie or pin to show membership to an elite club
- Being an insufferable git who purchases a Porsche key fob to show everyone you own one (even if you don’t)
The NFT isn’t just for the artwork (although it will be for some) but is rather a representation of some form of membership or belief set.
People aren’t necessarily buying the art, but are buying access to the community behind it.
Where do I stand on Web3?
Web3 as of right now isn’t perfect. Far from it.
It also may fail and we could realistically default to Web2 which is controlled by a handful of major brands like Google.
But Web3 is also in its infancy.
It’s going to take a while to iron out the kinks and get the full decentralised functionality into the apps, platforms, and marketplaces out there.
Think about the tools you rely on right now to run your business and life. Was it created as the perfect solution to your needs?
Is it perfect right now? Also no.
It’s a work in progress that gets better with each iteration.
The naysayers of Web3 are looking at it through the wrong lens. They’re expecting greatness frsh out the blocks. Which isn’t possible.
What I do truly believe is that the overall goal of Web3 tools - to give control back to the individual and allow them to control their assets without having to use one centralised entity - is laudable and should be pursued.
I would rather pursue the concept of giving ownership and control to creators and fail than continue handing over the lions share to multi-national brands and platforms.
The Future of Web3
As mentioned above, this could all fail incredibly.
I don’t think it will, but we have to be aware of the potential.
What I think is really exciting is the groundwork todays apps and platforms are laying and how it could improve life for many people down the line.
Whilst not a full list, below I’ve outlined a few of the ideas I’ve been mulling over for Web3 businesses.
Let me know if you like these and, if so, I can create a space on the site for business ideas.
Potential long-term business ideas for Web3 creators
I want to kick this section of by saying that these ideas are not yet (to my knowledge) possible or have been created in full.
I’m also staying clear of the well-trodden ground of “NFTs help artists”.
The below are where I see the tech today advancing to.
Also, if any of these sound interesting to you and you’d want to get my full thoughts for potential collaborations, let me know. I’d love to chat about them a little more.
Web3 business idea #1 - Videogame Skins by and for gamers
Free to play games like Fortnite make billions of dollars per year with paid cosmetic skins.
A lot of other games leverage skin systems as secondary revenue streams for their online games. The market is huge.
Most of the skins in-game are produced by the game devs. There is often zero option for fans to create skins or assets for the favourite game and profit from it.
Current skin marketplaces are very one-directional and only benefit the dev studio. By allowing fans and artists to create in-game assets, the interest and player base for these games should increase along with the lifetime playability of the game.
Getting past the dev studio and publisher’s control.
Convincing them that this would be a good idea for them to open up would be tough as this is a risk for them both financially and in terms of potential brand damage.
Also, have to consider EULA issues.
There are already a few NFT gaming marketplaces. Primarily Lootex and Fractal.
However, these platforms tend to focus on small digital games that are built around blockchain technologies.
They do great turnover (7 figs / month) but could be so much bigger if someone could break into the mainstream with this.
Web3 Business idea #2 - Better education (earn as you learn)
Institutional education is becoming increasingly expensive and teaching very little that’s applicable to real life. Some of the best education I’ve received has not been through a school, but from online sources.
Making that education more affordable and adding an incentive could help increase engagement and results as most online course completion is low.
Adapt the “Play to earn” model used by games like Axie Infinity to create a “Learn to earn” model. This will reward students who take certain actions with crypto, keeping them engaged and learning for longer.
Online education is hard to stay motivated with. Institutional education is overpriced and often out of date (esp. for digital topics).
Rewarding users means you’ll get better results for the students, which will benefit everyone. The students also get Crypto meaning they could - in theory - get their education for free.
Building this and figuring out incentive models that keep people engaged whilst providing a relevant challenge.
As far as I’m aware, nothing yet.
Web3 business idea #3 - Digital contracts for physical assets
The tech is already there for this. People have smart contracts denoting ownership of NFTs.
Rather than a contract that says you own Punk #XXXX, why not a contract that contains the deed to your house, car, or is even some form of ID?
Centralised record-keeping for things like property makes it very difficult for anyone to find the correct owner of certain assets.
As we move to a more digital world, these kind of assets are going to become increasingly outdated and hard to manage.
Thanks to blockchain’s transparency, it would be easy to quickly find the correct, current owner of assets and remove the potential for frauds and fakes. That and the owner could have a simple hardware wallet to keep their assets safe.
This would be a mammoth undertaking and require the buy-in of many established, entrenched, and slow to change industries and institutions.
As yet, I'm not aware of any.
In short, I don’t think Web3 is yet at the point where we’re all living the promises it’s made.
However, I do think the groundwork has been laid, and I am a firm believer that the world will change for the better with this technology.
Our job is to look beyond the current functionality and ensure that those who have control today don’t take it away from the people Web3 is supposed to help.
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