Breakthrough Ideas in Crypto
I was listening to a podcast recently with Ken Seiff from Blockchange Ventures with Anthony Pompliano, AKA Pomp. Seiff said he’s waiting to see the “Holy Sh*t ideas” from web3. He described this as products that cannot be done without the new blockchain technology. I touched on this topic a little in a prior post I wrote about skeuomorphic ideas. As it relates to web3, an idea is skeuomorphic if it simply takes a web1 or web2 concept and slaps it on the blockchain. Some of the big breakthroughs of these prior cycles were skeuomorphic, but they still were impossible without the basic concepts of the worldwide web (web1) and social networks (web2)
Web1 was basically two things. It was bringing news or information onto the internet, and it also allowed us to buy things on a website. These were definitely breakthrough ideas in that the new technology of the web allowed people to read about anything from anywhere and to buy products without going into a store. You simply couldn’t have done this type of thing without web technology.
Web2 was all about social media. The emergence of Facebook, Instagram, YouTube and more. These led to entirely new business models built around user generated content. Giant new media entities were created that couldn’t exist under the old web1 model. Gaming entities like Roblox and Minecraft got huge using this innovation as well.
The offshoot of web2 that spawned numerous breakthrough businesses was the iPhone. Without the GPS capabilities, we never would have had something like Uber. The power of these new generation phones also allowed for giant mobile phone gaming companies. And much, much more.
So, this brings us back to the power of the blockchain. Most of the early winners haven’t really embraced blockchain tech to create groundbreaking products. The Crypto exchanges are trading virtual tokens, but they basically look just like retail stockbrokers in most ways. While they had difficult execution problems to solve, they aren’t really doing anything too innovative. What about the big NFT players like OpenSea and Dapper Labs? I’ll say no major Crypto tech breakthroughs with those either. OpenSea trades digital collectibles using tech very similar to eBay. Dapper Labs effectively built their own database (the Flow blockchain) for people to collect their digital assets.
Would I consider some of the DeFi projects true blockchain innovations that were impossible without web3 tech? Probably not. Most of these are just Peer-to-Peer lending with a fancy new name and a different underlying collateral. This has existed for a decade. Stablecoins are just money market funds by a new name. Old tech for sure.
What will be the first major breakthrough hit in web3 that 100% couldn’t have been built without the new tech? Great question, and the company that gets this right will likely have a massive winner on their hands. I think it probably will have something to do with digital identity. Maybe it will be some type of ID card on the blockchain that evolves over time. Or some form of digital resume where all of the items are validated and verified onchain. Maybe you’ll be able to submit your personal info and get it independently checked. Then you’ll be able to attach your wallet somewhere and everything will be easily ready to go. This would be a huge breakthrough. Something like this would simplify anyplace you need to verify your identity from banks to government services to healthcare and much more.
Another concept I have been looking into are decentralized social networks. I covered this a few months ago, and even touched on the idea that Elon might buy Twitter. I listened to another great Pomp podcast with Nader Al-Naji, the Head of the DeSo (Decentralized Social) Foundation. Al-Naji took the idea of a DeSo a whole lot further than I discussed in my prior post. He described a world where everything you post is tied to your Crypto wallet and identity. Today when you post to Twitter or LinkedIn or Facebook, you are doing it under a login that those companies have issued to you. They have full use of the content you post, whether it is text, a picture, or a video. The posts can only be used on their platform, where they decide how to use them and how to monetize them, which they generally do with ads. In the DeSo world Al-Naji envisions, your posts will go to the blockchain and not a centralized server at TikTok or wherever. You will then connect you digital wallet to a new blockchain social network app, and then you’ll give that new app the permission to use some or all of your posts. You’ll own the content, and maybe these new networks will even pay you to use it. You’ll have way more control over how they monetize, since the content will be more distinctly yours. There may also be a way that users can directly subscribe to your content, making it easier to port your follower base from one social platform to the next. There is no way someone could build something like this without the blockchain.
The power of web3 is the ownership and portability of information and assets. It also allows for independent verification and provenance. When the best builders start creating new businesses utilizing these principals, we will see some crazy cool new products. Watch this space for more.
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