A Reflective Perspective on the Emerging elements of WEB3, Metaverse, NFTs & WEB2
The real value of what is being created & why it’s needed.
I think it’s important to think about the relationship with technology & how it shifts human behavior, thinking, interaction, etc Understanding this can guide us to both its value & best practices. Not to mention help design with foresight away from some of the possible unintended negative consequences that will emerge.
Web1 was write only. Web2 paved the way to read AND write. This paved the way to produce and share content with everyone, anywhere. Social media was the ability capture a network of users with specific prefences around the sharing of certain types of content & the interaction with it. This has had both positive and negative consequences on society, at large.
Many of the benefits were around the vast & limitless access to information and knowledge, at our fingertips. To experience an emerging world. Explore new frontiers and possibilities. The ability to engage with groups of people with specialized knowledge and interest.
Technology’s effect on humans, is hand & hand. Shaping & bringing about varying polarities of construction and destruction. Healthy and unhealthy outcomes. The internet was one of the most significant technologies to emerge through the advancements of both hardware and software. The way in which the internet has shaped human behavior is nothing short of spectacular. It was best encapsulated by Marshall McLuhan core thesis titled “the medium is the message” which came decades prior to the emergence of the internet.
“Once we have surrendered our senses and nervous systems to the private manipulation of those who would try to benefit from taking a lease on our eyes and ears and nerves, we don’t really have any rights left. Leasing our eyes and ears and nerves to commercial interests is like handing over the common speech to a private corporation, or like giving the earth’s atmosphere to a company as a monopoly.”
The emergence of WEB2 read AND write, cultivated communities that gave way to platforms we call social media. This increased collaboration and interaction via the digital world. Understand that the value capture was the communities, the people, the interactions. Networks sometimes measured by MetCalfe’s Law or other network models try to give a monetary value to this. Prior to Facebook, Instagram, Twitter, Snapchat, etc figuring out how to capture that value (sell your data to advertisers) in return for your attention, of which all marketing pays for.
Read the above again. The ability to capture that value didn’t come til later but the value was already there. Of course the value continued to grow with adoption, accelerating it in this trajectory but capturing something doesn’t make it magically appear if there was nothing to capture. This leads to the unintended consequences of WEB2. The monopolization, prioritization of profits over anything else & mis-aligned interest with its users is why WEB2 was always destined to turn out this way.
Many of these things could be considered normal based on how society, pre-internet was designed. Largely through bureaucratic and centralized instutions acting as gatekeepers of trust & the legal system enforcing anything outside these areas to reign them into these intersections.
When disruptive technology supersedes important incumbents value proposition, you get an emergence of a strong spotlight on the shortcomings of the existing system & its accompanying technology. Of course this is very different when it’s the core layer of the externalized world of human interaction. Not to mention when this layer (money) effects ALL other layers. Our Financial system as a whole has never been fully disrupted, make no mistake it has the strongest incumbents and gatekeepers who happily in bed with gatekeepers of the law via lobbying. A very socially accepted Quid-Pro-Quo. The revolving glass door relationship between the public and private sector. Conflict of Interest? Look away. “We must save the system that currently serves the few but do in the representation that it’s for the greater good”.
The ever increasing propaganda of mass media which no longer even tries to depict itself as “journalism” is one of the levers continually being used in “social engineering” to mitigate, slow or even try to stop the progression of disruptive technology. Make no mistake that when an individual such as Joe Rogan receives more viewers than many mass media outlets, humans are starting to recognize the propaganda. The incumbents are deep in, leveraging their power & desperate to maintain control despite no longer being ideal… leverage corruption at all costs to continue the old construct of society.
We have been in a continual disruption of society at large for a long time, since the emergence of the internet. The ability for platforms to exist, such as social media, to allow people to bring many of these things to the light will accelerate the transcendence of these things. Of course there is always the possibility of going back to the dark ages, unlikely but I am sure would make a great Netflix series.
The seismic shift of power (money & economics) is currently underway. There is a generational wealth re-distribution currently happening. Major demographics (Boomers I/II & GEN X) to Millennials & GEN Z . Investment preferences are different as well. Hmm.. I wonder why? With Millennial’s and GEN Z preferring crypto over stocks, despite being a nascent and early industry with its plethora of scams & soon to be failures. This is all normal for any new nascent industry, despite the constant yearning to exploit your mind & eyes through sensationalistic fear based headlines via Mass Media on anything crypto related.
Technology is accelerating its path as the priorities & familiarity of the younger generation is… wait for it… you guessed it technology. It’s as normal to them as the freshly printed newspaper at the front door was to the prior generation. With the emergence of the internet came about newfound knowledge. Discovery of wisdom from the past & emerging problems of uninhibited use of technology. The ability to now be exploited via analyzing of metrics & data of which is your own, but leveraged against you to further your attention, even if it’s at the cost of your well-being.
The incumbents always maximize profits to buy the best lawyers (bleed you dry), lobby the best politician (buy the legislation for your industry), & buy your attention (Mass Media & Centralized Social Media). Incumbents have massive control & influence over critically important infrastructure currently being serviced by them (i.e. the existing financial system architecture) you get a lot of exposure of what is really occurring beneath the surface in the background as emerging disruptive industry’s arise.
Incumbents always become exploiters if they prioritize profits over everything else & stop innovating (which sometimes is too difficult depending on the shift of business model). No one can logically tell me that Social Media and Commercial Banks aren’t the biggest exploiters of society at large at the current moment. Social Media currently uses all the VALUE you provide (DATA, TIME & ENGAGEMENT) & sells to advertisers. You receive nothing in economic value but get to use the platform for free. This is a problem when wealth inequality is at its highest (largely accelerated via the CANTILLON EFFECT via the 2008/09 crash & Covid 2020 with a justification to print massive amounts of money out of nothing). Big TECH is at its most valuable economically speaking. The ability to censor or de-platform anything that goes against what they (incumbents) want is just as dangerous as having ownership over all of the people’s data. It’s always a slippery slope down this path, even if cheered by the people it favors in the moment, be it to their eventual disapproval as they realize they were just a pawn. Is this a healthy power structure, considering that money & economics make the world go around.
Commercial Banks take all your deposits & lend them out. That’s wonderful. If in fact they gave you back some of the profits they received while lending it out. Instead they charge you more money for using accounts to increase their fee based income. Remember they will increase their profits at any corner despite its negative consequences on society. Even during Covid JP Morgan extracted 1.5 Billion in Late Fee’s from the most vulnerable in society. https://www.forbes.com/sites/jonathanponciano/2021/05/26/sen-warren-grills-billionaire-jpmorgan-ceo-for-collecting-15-billion-in-overdraft-fees-during-pandemic/?sh=3060a55842da Do you see a problem with this relationship? What if the FED had ability to pay the very highest levels of society yield while they avoided the need to pay the everyday people of society? We have a Reverse Repo & a Fed Funds target rate for that. Don’t worry it’s just necessary “monetary policy” for the great system we are running.
Few are educated enough to know about Bail-Ins which give the legal right for commercial banks to make themselves whole via your deposits if they end up needing too. Of course they are subordinated to derivative claims. These are “supposed” to hedge their portfolio. The top 25 largest banks hold $247 Trillion in derivatives https://www.investopedia.com/articles/markets-economy/090716/why-bank-bailins-will-be-new-bailouts.asp. Look up what subordinate means, unless you know what it’s like to be the last one in your family to receive food.
A question worth pondering. Is crypto the side effect of the existing system or its own intended effect? BTC did come about after the financial crisis but the likes of a similar technologies goes back decades prior. Thankfully incumbents could reign it in for their sake. Unfortunately, not this time, at least from their point of view.
People spend 8+ hours a day on a digital device much of it on different social media platforms. Anyone, anywhere has the ability to engage with the internet. Many careers of free lancing have emerged via centralized platforms. So why the need for crypto?
Remember when I mentioned that prior to any social media figuring out how to capture the value by receiving payment via advertisers for the access to your data, time & engagement that the VALUE was already present via the communities that were built. Read that again. The Value was already there.
So crypto and NFT’s encompass the economic value layer to it users. So you are saying the Users are the Owners? It also largely increases the commitment & engagement to these communities due to the Endowment Effect. Now you understand the conceptual framework of WEB 3. WEB1 = READ, WEB2 = READ & WRITE, WEB3 = READ, WRITE, OWN
The change in this relationship of allowing the users to be the owners in a seamless/organic way, where the interests are aligned is key so that it doesn’t turn exploitive due to mis-aligned interest. The health of the relationship of these networks (FB, Twitter, Instagram etc) are now exploitive…economically speaking & many would argue that the data is being used against its users for increased profits via furthering (Time & Engagement) be it pathological & exploitive in nature.
By Law you are supposed to serve your shareholders. The issue arises when the people you profit off of (users) are being exploited due to the imbalance in power structure. Of course they bring in smoke and mirrors of congress & politicians acting like they care to give a “voice” to the unheard but really it’s just another way for the system to extract more profits be it through the legal system. In the same way that the “Too Big Too Fail” and all the legislation that “was supposed to break up the banks” never happened, it will be no different with the hearings on Facebook. If you believe it will, welcome to your front row seat to deception.
Make no mistake the reason that Big TECH is so valuable is they own the keys to your data, your personal data. The most entrusted thoughts, behaviors & pathological tendencies. They didn’t have the ability to own that data prior to the emergence of social media corporate giants. We didn’t have the legislation to ensure that we should write into law inalienable rights of people owning their own data. This should be prioritized so that this power imbalance can’t continue. It’s an exploitive one. It will just get worst over time. This unimpeded power has led to corrupt interventions by Big TECH being leveraged to influence political outcomes. The DATA is the core to much of the decision making shaping society. The problem with a profit centric approach be it legally required for a network of people is that if the interests aren’t aligned (users are the owners) you will always end up in this scenario. You also end up here if your new system allows for the monopolistic control at any layer.
Disruptive technology reveals & exposes the unintended consequences of restraining technological progression. The financial industry is one of the few industry’s in which has not been fully disrupted. The disruption is already underway but this disruption is not an ordinary disruption.
This disruption is what gives way to seismic shifts in redistribution of wealth. Particularly because if there is one medium that everyone interacts with, it’s money. How that money is represented differs from country to country. There is no mistake that much of the control, corruption & incumbents doing everything possible to somehow maintain control.
The problem is much deeper though & can be summed up in one word, trust. When you have 50% + or — not able to trust the very authorities of these key societal industries like government, political, financial, legal, healthcare, etc. you have the most massive change in societal reorganization. Much of this is being shaped in real time by technology. The NOS, if you are into racing cars is the 100% certain FIAT debasement from individual country currency’s as they purposefully soft default due to their reckless & uninhibited printing of FIAT. Austerity will never win an election (even though that option was off the table eons ago) & the decisions by the country’s leaders are not on behalf of the people they are supposed to serve but rather the people they serve via lobbying of their campaigns, big corporate.
Our financial system with its associated police (regulators) designed to act as gatekeepers are largely just performers of regulatory capture https://www.cfainstitute.org/en/advocacy/issues/regulatory-capture at this juncture because what they are protecting is more outdated than the floppy disk that many only experienced for a transient time.
Fintech was the improvement of the front end of our financial system, it’s where most of the financial innovation has taken place. The limit to anything further has largely been do to the stronghold of incumbents & the need to collect everything for both money and power sake. DeFi is really on the backend with much of its mainstream adoption crippled by both scalability but equally important is UX/UI from this backend technology.
Delayed gratification & instant gratification. Technology & its impact on human behavior.
Human behavior is strongly shaped by convenience & accessibility or instant gratification, less so by the outcomes (healthy or unhealthy). This has had both negative and positive consequences. If you think our decision is shaped by long term outcomes, think again. The fast gratification from having it now outcome vs. the long term outcome is why many humans struggle immensely with delayed gratification. Why many will eat fast food, sure it’s about the reward but even more so it’s about the convenience & accessibility to that reward, not necessarily the magnitude of the reward. If humans can pull gratification to the here and now, be it of lesser real value, they will do so every time as long as convenience and accessibility are there.
The positive consequences of WEB2 is it allowed for an acceleration of exchanging of ideas. It allowed for an ability to connect in a public forum, among like minded people, who could expand the progression of the topic they were all interested in. It began to diversify the attention from a single source of truth to that of which anyone (including influencers) could actively participate in the industry without working for a mass media publication. It gave way to the voice of the people to challenge the very status quo narratives that have been pushed to people without real skepticism or questioning.
Some may call this propaganda others may feel more comfortable without questioning as to not destabilize their world view that authorities in position of power would leverage their position for increased profits, power and control. This leads to some of the unintended consequences of WEB2.
Despite endless access to information, at the ease of our fingertips, many people (the masses) are less intelligent than pre the Information Age (internet). Why? It’s much more convenient & accessible to hop on social media than to actually do research. Not to mention it pulls the “gratification of approval forward” which many humans are governed by. Yet due to people existing on both edges of the normal distribution bell cure, we have the outliers or rebels or critical thinkers.
The choice is always ours but we must understand the relationship & the abstract layer as to make a wiser decision. The ability for NFTs and Crypto to create communities is unlike any other technology or mechanism has been able too cultivate in the past. Maybe Social Scalability, is the most valuable element of all, so if this is the case should we be looking at not only the adoption but why it’s occurring?. With that in mind choose your communities wisely, money is just one delivery of value. The networks focused on building powerful communities should be the most valuable… I don’t think degenerate yield farming will last the test of time on this value front. If there has been anything to be learned, it’s that money & returns may buy you engagement but it won’t keep it… Values matter, especially in the light.