Gen Z and Millennials are not likely to own as many things as Boomers do — and no meme or TikTok is likely to change that. This doesn’t go just for big purchases, like a house or a car, but even the little things, like music albums on records. We now live in a world run by Spotify, Netflix, Google, Steam and a whole array of subscription-based services, which stand in the way of actual ownership of assets, big and small.
Still, we want convenience and hassle-free user experiences, and Big Tech platforms, from music and video streamers to the endless line of SaaS solutions, want us to pay more and more for this. Web3 presents an opportunity to flip this model on its head and put ownership back in peoples’ hands — if only we’d take the chance.
Web1, Web2 and Web3
Web1, the early internet, was effectively read-only. Most sites did not have any interactive features and the web was also largely user-owned. Web1 was decentralized and peer-to-peer — that is to say, there were no Big Tech intermediaries charging fees and devouring our data. But Web1 lacked the advanced functionality we’ve come to know and depend on for our collective insanity.
Web2, the current iteration, is way more interactive, enabling users to be creators, not just consumers of information — but it lacks privacy. Everything you do, you do on the watch of a Big Tech firm. You can create but on someone else’s terms. You can earn, but you’ve got to pay exorbitant fees. Look no further than the App Store’s 30 percent fee slapped on any app that makes over $1 million a year. The music industry is another great example of how this can go wrong, from record labels owning the tracks artists create to streamers’ payout structure leaving musicians with a minor cut.
Web3 is the next stage in the evolution of the web, and it’s taking the best from both webs. It fuses Web1’s decentralized, community-governed ethos with Web2’s advanced functionality, which we’ve become so used to. In Web3, we can own physical or digital assets, via the web using blockchain technology. It offers consumers more privacy, enabling us to opt to sell our personal data to whomever we see fit at a profit or just keep it to ourselves.
As digital technologies continue to play more and more of a role in our daily lives, the question of digital ownership grows more urgent. Web2, with its pervasive user surveillance and reliance on the benevolence of the tech leaders of this world, is not the answer. Web3, with its emphasis on privacy, openness and individual empowerment, is the way forward.
Web3 enables people to own assets, either digital or physical, without having to rely on a centralized or corporate intermediary. This is what Web3 is all about. This is the giant leap forward that bitcoin made and what captured the early crypto community’s imagination.
Let’s Do It Right
Tokens can be fungible and non-fungible, and shorthand for non-fungible tokens is, you guessed it, NFTs. And that is where I believe we find the prime example of us missing the opportunity of Web3 in real time. An NFT works as a digital certificate confirming a user’s ownership over a specific asset in a secure and trustless way. As such, it can downright revolutionize ownership — but alas, the technology is still in its nascence, meaning it’s slow, complicated and cumbersome, causing some people to seek Web3 assets via Web2 means. Hint: It doesn’t work that way.
Too often, today’s NFTs still overly rely on Web2 technology to deliver on their core promise. For example, many NFTs are linked with digital assets sitting on traditional Web2 servers, which already makes their whole premise somewhat questionable. Nothing showcases the danger of such a design better than a literal rug pull by Neitherconfirm, who issued an NFT collection and then changed the images linked with tokens to pictures of rugs.
A similar argument largely applies to NFT games, another popular use case for the technology and also subject to a major controversy in the gaming industry and beyond. The whole idea here is that gamers can own and sell their in-game assets, but what difference does that make if their tokens will still be worthless if the game shuts down? How is that different from Steam’s marketplace for in-game cosmetics?
Despite these drawbacks, the NFT market blossomed into a billions-worth beast in terms of transaction volume in 2021. Yeah, growth is good, but there’s a trap to avoid there. Such figures can also lull the industry into a false sense of security that comes with knowing you’ve built what the market wanted, and there’s no need to innovate further.
The reality, as we just saw, is different — we do need to innovate further, experimenting with on-chain storage and other peer-to-peer solutions for handling digital assets. Web3 could revolutionize ownership — if we let it. It could enable Gen Z and Millennials to own things much as the Boomers do. For that to happen, we can’t settle on anything short of this fundamental shift.