I’m trying to make sense of all the distinct, yet interrelated, developments we’ve been seeing in Web3 in 2021. Some much has been happening. I am humbly going to attempt to connect some of the dots, by zooming out, looking at the very big picture, and make an educated guess on how the web3 developments might converge over a multi-decade horizon. Like any long term predictions I admit I will probably be wrong at least partially. Let me now paint the picture I see for 2030 and beyond.
What I see coming our way is a complete rebuilding of the global economy, powered by new the new internet primitives that are tokens, smart contracts, DAOs, NFTs. Together they will weave new economic fabric for generations to come.
First, an analogy is in order. Let’s take a look at how technology platforms are built.
[insert stack photo']
Technology platforms have different layers. The bottom layer is made of primitives. Primitives are the fundamental building blocks that power a platform and the ecosystem that lives on top of it.
Let’s take Shopify as an example. Shopify is famous for its suite of APIs that lets users and developers extend logic and functionalities. Shopify APIs provide external parties access to the commerce platform’s primitives. There are APIs for customers, orders, payments, shipments, inventory. These are the fundamentals of commerce.
Today, just like 1000 years ago, a merchant selling goods will have a customer, items in inventory, a form of payment, and a means of getting the items sold to the purchaser.
These are the commerce primitives; Shopify has extended the ability to add any logic or custom features to the basic commerce blocks. The endless combinations and re-combination of primitives (customer, order, payment, inventory) enable new and innovative applications such as
Now let’s take this analogy to the global economy. At the fundamental level, the economy has their own primitives and ca be viewed as platforms. The primitives are
- Money: store of value, means of exchange and unit of account.
- Financial services: lending, borrowing, saving, investing, trading, etc.
- Property: Assets that represent ownership such as real estate, stocks, bonds, etc. These can also be physical and intellectual assets that enable operating entities to offer goods and services.
- Entities: These represent a person from the legal standpoint: either individuals, corporations, partnerships, NGOs, governments, etc.
Today, just like 1000 years ago, the economy runs when money is exchange in return for property, delivered often via financial services, coordinated between entities.
Let’s say I acquire a house. I used money to be exchanged for real estate, a form of property, with a % of the value of the transaction coming from a new mortgage, a financial service. The transaction involves a number of entities: me as a person, the seller as a person, the bank as a company, the real estate brokerage agency as a partnership. the government as the tax collector.
[insert image]
Much has been written on the fact that the current economies open in a gated and mostly obscure manner. Much of the structure was built pre-internet, when information and transactions actually had a marginal cost.
Side note: trasnfer union (fee and time). No improvement to the actual participants.
Web3 holds the promise to build a more inclusive, transparent and frictionless economy. Low and behold, Web3 is currently re-writing economic primitives:
- Money = cryptocurrency
- Financial services = smart contracts
- Properties = NFTs
- Entities = DAOs
Each of these are potent innovations on a standalone basis. I believe that the real magic happens when they start combining and re-combining with endless permutations. They are purpose-built for the internet era. These primitives are not bound by geography, regulations and gatekeepers. They can and will keep evolving, unlike the old world economic primitives that have more or less stop innovating.
Where does that lead us? This new weaving of web3-native primitives will help a new platform emerge, with a thriving ecosystem of users and developers.
Web3 has the potential to replatform the entire global economy. The best case scenario is bigger than digital gold, bigger than disrupting banks and other entrenched oligopolies, bigger than replacing centralized entities. The best case combines all of these aspects and more, converging into a complete rebuilding of the way the economy works, from the ground up. Assuming this scenario prevails in the coming decades, no legacy institution will be spared.
Web3 might just weave a new fabric of the global economy, built with open, inclusive and flexible primitives being born right before our eyes.