Web3 And The End Of The Beginning
Two words, one momentous shift in perception
A year ago, this happened.
Thanks to a mix of memes and early stage utility, the second half of 2021 saw the rise of ‘web3’.
Ever changing Bitcoin narratives have been widely discussed for some time, both inside and outside of the space. A peer-to-peer cash, digital gold, uncorrelated asset etc, etc - mainstream media laps it up each time there’s a surge in speculation in the crypto markets. The last year, though, is the first time an expression of what ‘the rest of crypto’ is all about has caught on, and it marked an inflection point in crypto history.
Semantics and mental models
‘Web3' was coined in 2014 by co-founder of Ethereum, Gavin Wood — but it only really entered common usage in the last couple of years. It started cropping up more and more in 2021, often from the lips and keyboards of venture capitalists. For that reason, it was initially somewhat derided as a sort of gimmicky marketing term. Never-the-less, it quickly showed some stickiness, meme-ing its way into our consciousness by the end of the year.
The idea that this is the next iteration of the internet is a big change when you consider that most of the outside world previously thought everything in ‘crypto’ was a currency and crypto was purely one big financial market. Suddenly a mental model is created which communicates that this is going to have application beyond money and it’s going to be part of our everyday lives. It opens the door to understanding the potential of platforms like Ethereum, DApps and the sort of use cases we might start to see.
With ‘web3’ out in the universe, finding its definition, conversations around its value proposition started to flow. While Bitcoin is a reaction to centralisation of power in the financial system, web3 is a reaction to centralisation of power on the internet — the answer to the likes of Facebook and Google hoarding your data and selling you to advertisers. These kinds of easy to understand narratives can propel a movement forward. The fact that it caught on, matters.
Web3 started to get a feel about it - a culture. It had a look. It had principles. People identified with it. Crypto was starting to mean something beyond financial markets to the outside world. MicroStrategy might have been hoarding Bitcoin, but traditional brands wanted in on web3.
By the time the above ‘web2 me vs web3 me’ meme kicked off in January 2022, ‘web3’ was already being discussed in mainstream media outlets, although not always favourably, which is understandable given the over-hyped state of the crypto markets these past couple of years. Criticism aside, the term (and the ideas behind it) had gone mainstream and it happened phenomenally fast. The broader crypto narrative had transitioned with barely a moment to acknowledge the magnitude of the shift.
The end of the beginning.
So here we are - 2022 and we’re in a world where it’s not if but when3? The market is doing its work in weeding out the weak (and scammy) projects, but the hunger for web3 hasn’t gone away. Traditional brands are still testing the waters, whether it’s a Playboy mansion in the metaverse or $10,000 virtual Nikes. Regulators are working away, as are crypto lobbyists. Ethereum is heading for proof of stake. Solana is trying to conquer mobile. Web3 social is most certainly on its way. Creatives have made their way onto the blockchain - like gentrification, where artists go, money follows. In years to come, this period will be looked at as the end of the beginning for crypto. The en masse ‘aha’ moment where enough of the world understood crypto, both including and beyond currencies, that the train became unstoppable.
As for the term ‘web3’, in Toys, Secrets and Cycles, Chris Dixon talks about his time as an investor during the transition from web 1 to 2 and points out that ‘web2’ was used back then before being phased out in favour of ‘social media’. Web3 will possibly be a transient term too, either until something better/more specific comes along or it becomes so ingrained in our lives it’s just considered another part of the internet.
Whatever the future, it’s heads down and back to work. Web3 is still very much a work in progress and now faces new challenges if some of its ideals are going to become a reality and not succumb to commercial and regulatory pressures. The proverbial cat though, is out the bag.
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