Bloomberg: The unsolved mysteries of Web3’s huge potential

Chris Dixon, a partner at venture capital fund Andreessen Horowitz (a16z), sees multi-billion-dollar interests at stake in the future of the internet based on blockchain, the so-called web3 . But even as the venture capitalist captivates his investors with dreams of what this next phase of the internet (web3) will bring, his vision rests on an untested premise—that if You build web3 and everyone gets involved . But will people really come?

Bloomberg: The unsolved mysteries of Web3's huge potential

a16z partner Chris Dixon sees great potential in web3, but many mysteries remain.

If the first version of the Internet (web 1.0) was read-only, and the second version (web 2.0) allowed us to upload our daily lives to MySpace and Facebook, then web3 is where we take ownership of those results and make them Take it with you.Rather than letting tech giants make money from your data, web3 proponents like Chris Dixon believe in decentralizingthe power of tech giants through blockchain networks : everyone gets a share of the rewards, and everyone has a say in how the platform works rights, all of which are publicly recorded and irrefutable .

It sounds like progress, but even in its infancy, the digital utopian plan has been criticized for not yet achieving its goals . Major crypto and blockchain companies such as Coinbase and OpenSea have captured huge market shares and are poised to be the next Meta and Alphabet companies. Meanwhile, as Twitter co-founder and Bitcoin advocate Jack Dorsey points out, a handful of venture capital firms make up the majority of the web3 market, with a16z at the top of the list .

Last month, Chris Dixon offered an explanation for this paradoxical state . He said that web3 is not actually trying to decentralize everything . Instead, the main goal of web3 is to give back control of web2’s “network effects” to people : the value you gain from using a product diligently over time, such as building a friend list on Facebook, or curating a well-curated product on Spotify. Music library and more. Currently, these “network effects” are locked into specific platforms as an incentive to stick around and use these providers – a key strategy for most companies in the web2 tech industry.

Chris Dixon wrote on Twitter: “Blockchains provide a powerful new way to build networks in which network effectsaccumulate as public goods , just like in web1.” In web3, data Becoming portable reduces the stickiness that these big companies already have in their hands .

Bloomberg: The unsolved mysteries of Web3's huge potential

Again, this sounds like an improvement, at least from a user’s perspective. But the grand ideas surrounding web3 ignore some key concepts of business and even privacy . At the very least, these web3 concepts don’t take into account how different businesses attract new users and manage existing users. These are proprietary models that go straight to the heart of modern business economics: why should web2 companies give up resistance and turn their users to competitors?What is the motivation for businesses to embrace public blockchains and allow data to be transferred seamlessly? Chris Dixon’s answer is that in web3, large platforms have no choice but to achieve interoperability, either keep up with the times or be obsolete .

Catherine Flick , from De Montfort University, UK, said: “This is a typical technological push that caters to human reality.It’s a very idealistic technology. Good idea, theory It’s good, but in practice it’s rubbish .”

How will the web3 world as described by Chris Dixon work? Let’s assume Twitter turns into a web3 company, and you want to put your Twitter followers (fans) list on some blockchain. The reason you’re doing this is that you want to move to another new social media platform, but you don’t want to lose the followers you’ve worked so hard to build on Twitter.This is a key conundrum facing many online creators today who want to succeed on the hottest new app but have no control over their network effects — YouTube streamers, for example, are largely unrepeatable on TikTok your own fans.

And when the data is on the blockchain , you will be able to import the data into new applications . And it’s also made possible by the fact that in web3, users can connect their digital identities to their Twitter accounts through products likeMetaMask . At this point, your Twitter followers will follow you when you sign up for this new app , so you don’t lose your followers, making web3 something every creator dreams of. You can also extend this scenario to transfer a company’s customer list from one software to another, etc.

Bloomberg: The unsolved mysteries of Web3's huge potential

However, in this data transfer, where is the provision requiring users to opt-in to these new services? Such provisions have become an essential part of nearly all new privacy legislation. In the UK and Europe, for example, companies can be fined up to 4% of annual global turnover if they try to bring in new customers without their consent.

Perhaps this can be avoided by allowing each user to choose individually on web3 Twitter , and giving creators permission.But will this be achieved by requiring account-by-account consent ? For example, as a user, I want to give Jay-Z  (American rapper) the right (that is, allow Jay-Z to set me as a follower directly in the new app), but not Logan Paul  (American famous rapper) Internet video experts) this right. How many smart contracts will this require? Not to mention that if I follow thousands of accounts, the process will consume a lot of my time. And who will be responsible for this interoperability? Do all platforms bear the cost? These are many unanswered questions , and here’s one more: who can decide which blockchain is worth integrating without the high level of centralization? A company like Meta intentionally makes it difficult for you to move your data out of its network, and it’s unlikely that the company’s vision for the Metaverse will change that .

But perhaps of all the problems with decentralization rather than web3, the one that stands out is the one that every company has grappled with over the past decade. To illustrate: you bring all the users to the new application very simply through the blockchain, but why are these users using this new application? Of course, if the new app is like TikTok, then maybe you can rely on market effects to naturally push everyone to this new platform for a while; but if the new app doesn’t have the benefit of being so popular that everyone is Considering whether to make this transition? The reliance on the human side of Web3 theories like Chris Dixon is a thing of the past.

Catherine Flick said: “It’s like they got two halves of an orange and tried to glue them together. This whole thing totally ignores how people use the internet and how they interact with others on the internet.”

Beyonce and Jay-Z’s music royalties offer a cautionary tale. In 2016, Beyoncé limited the streaming release of her sixth album, Lemonade, to Tidal , her husband Jay-Z’s music streaming platform . Although the album stayed on the Tidal platform for three years before it was released more widely, even the influence of the star of one of the world’s best-selling recording artists couldn’t elevate Tidal to the same level as Spotify or Apple Music. ranking, even though the Tidal platform also offers millions of songs.

Bloomberg: The unsolved mysteries of Web3's huge potential

Beyoncé’s star power wasn’t enough to give Jay-Z’s Tidal platform the boost it needed to challenge other rival platforms.

If Beyonce fans could move their music library to the Tidal platform all at once, would they do it? I don’t think we’ll ever know. But influencing people to join a new network is difficult because of human nature, not technical failure . This is unlikely to be a problem that can be solved simply by transferring it through the blockchain .

Granted, the web2 network effect is annoying – I hardly look at my Facebook account, but I use it to remind me of other people’s birthdays. However, Web3 will only solve this problem if people are involved enough that people will collectively shift and fully embrace these platforms, which is very complicated at the moment .

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bloomberg-the-unsolved-mysteries-of-web3s-huge-potential/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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