Thread
Why build in web3? @Jad_AE and I explain in @HarvardBiz: hbr.org/2022/05/why-build-in-web3
The "web3 way" – building open platforms that directly share value with users – can create more value for everyone, including the platforms(!).
How so?
Thread 🧵👇
The "web3 way" – building open platforms that directly share value with users – can create more value for everyone, including the platforms(!).
How so?
Thread 🧵👇
(1) The ability to plug into open content networks and integrate pre-existing digital assets can help new platforms resolve the classic "cold-start problem" – and expand existing platforms' surface reach and content potential. hbr.org/2022/05/why-build-in-web3
(2) The infrastructure layer web3 runs on – public ledgers that make clear which digital assets exist and who owns what – significantly lowers the cost of creating user trust: hbr.org/2022/05/why-build-in-web3
If a digital artist, for example, asserts that a new artwork is limited to 489 editions, then prospective owners can verify that on the public ledger directly – without needing to trust the artist themself or having an intermediary like a gallery provide assurance.
(Of course, many users still have only a limited understanding of what a web3 app or platform can actually do, and are in no position to vet code. So there's a long way to go before web3 is broadly accessible and safe – and that's a big opportunity for innovation as well.)
(3) Trust in web3 extends to the software: by encoding key operations in "smart contracts," platform designers can commit upfront to certain features – for example locking in pricing rules, royalty agreements, or reward mechanics to be used in perpetuity. hbr.org/2022/05/why-build-in-web3
(4) Web3 platforms unlock a novel and especially powerful form of network effect through community engagement and social cohesion. hbr.org/2022/05/why-build-in-web3
The key premise of web3 – shared ownership – fosters a sense of "psychological ownership" that can make consumers feel so dedicated to a product that it becomes almost an extension of themselves. journals.sagepub.com/doi/10.1177/0022242920957007
(5) A platform's users literally become "fans" who form a bond through the shared platform experience – similar to how fans of a sports team or obscure band see themselves as a community. hbr.org/2022/05/why-build-in-web3
E.g. @thehundreds, a streetwear brand, partially decentralized itself through the sale of @AdamBombSquad NFTs, which grant access to exclusive events and merch – and even provide an opportunity to earn royalties (in store credit) on certain clothing lines.
This reinforced enthusiasm among @thehundreds's core community — leading them to go out of their way to promote the brand, with some people even getting @AdamBombSquad tattoos.
(6) More generally, sharing ownership allows for more incentive alignment between products and their derivatives, creating incentives for everyone to become a builder and contributor. hbr.org/2022/05/why-build-in-web3
(7) The blockchain technology standards underlying web3 also enable products to be built upon by others. This means the community around a platform can co-create – making the ecosystem even stronger. future.a16z.com/how-composability-unlocks-crypto-and-everything-else/
(8) In the short-run, the web3 model gives up some share of consumer surplus to the builder or creator. But because the builders get more, they're strongly incentivized to invest and grow the total pie for everyone… hbr.org/2022/05/why-build-in-web3
… meaning that in the long run, web3 should raise consumer surplus as well. hbr.org/2022/05/why-build-in-web3
In sum: New companies can build on web3 infrastructure to create communities around their brands and products much more easily than in previous iterations of the web... hbr.org/2022/05/why-build-in-web3
... and established platforms can leverage these forces, by plugging into blockchain-based content networks and giving their users some ownership over their data. hbr.org/2022/05/why-build-in-web3
All of this (👆) means that the next era of the web will likely look a lot different – and more open – than the one we're living with today.
Web3 has the potential to unlock a more valuable internet for everyone. hbr.org/2022/05/why-build-in-web3
QED.
Web3 has the potential to unlock a more valuable internet for everyone. hbr.org/2022/05/why-build-in-web3
QED.
// In addition to my incredible co-author @Jad_AE, shoutouts to our fantastic editors @tom_stackpole and @GretchenMarg (and @smc90!); to @lukeabc for the extraordinary header art; and to @bobbyhundreds both for his insights and for letting us include an @AdamBombSquad image.
Thanks also to the many, many people who shaped our thinking here. @Jad_AE will have his own list, and mine is too long to fully enumerate…
… but some key people who have taught me about web3 include @NFTbark, @ccatalini, @0xfar, @justlimp, @flashrekt, @ItsLucaWM, @niftypins, @seeapefollowape, @valetjones, @jessewldn, and @ljin18 – plus the whole @a16z crypto crew, esp. @alive_eth, @cdixon, and @Tim_Roughgarden.
And shoutouts also to the NFT communities I have the honor of being part of and learning from – e.g. @AdamBombSquad, @chain_runners, @FrenlyFlyz, @FrensWithBeNFTs, @MaisonDeGOAT, @_GRADIS_, @GutterCatGang, @HungryWolvesNFT, @infinites_ai, @RealSupDucks, @TwoBitBears, @thingdoms.
