Thread by Conor Svensson
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- Mar 10, 2022
- #Web3 #Non-FungibleToken
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Are tokens are the new website? Like @cdixon I believe so, and here’s my take on why. 🧵👇
1/ In Web1, the primitive was the website. Anyone with the tech skills could create a website. This led to the mass democratisation of data, making information about almost any subject available to anyone with an internet connection.
2/ In #Web3, the narrative is that tokens are the new digital primitive that will serve as the key building blocks for many of the future products, services and innovations that will impact our society.
3/ Whilst the democratisation of information was profound in its impact on the world, most successful internet businesses didn’t emerge until Web2. In Web1 there was a technical barrier to entry, and it really remained the domain of specialists creating & publishing websites.
4/ In Web2, services started to emerge that allowed people to read and write data.
5/ Blogger, Wordpress, etc allowed you to easily write & publish on the web. Social networks like Facebook, Twitter & LinkedIn allowed you to share information with existing & new audiences. Google found new ways to catagorise the plethora of information that existed on the web.
6/ These Web2 services provided a catalyst for mainstream adoption of the internet. People started flocking to them, not just because information was more readily available thanks to better search services, but also it enabled them to connect with other people easily.
7/ This was technically possible prior to Web2, but it wasn’t straightforward enough for the average person. I remember when I first saw Facebook, I loved the ease with which it enabled me to relive fun times with friends and share photos with one another.
8/ Likewise with LinkedIn, the ability to stay connected with former colleagues was a game changer. I’m sure there’s hundreds of millions of people around the world who can relate to exactly this.
9/ It wasn’t until Web 2.0 that we started to really see mass adoption of the web as we know it, as the ability to easily share or write information to the web was what facilitated an explosion of activity driven by network effects.
10/ In Web3, the blockchain networks provides the decentralisation layer, which is a globally available, unstoppable utility. The execution environment, such as the #EVM provides the layer to execute logic defined in smart contracts, & is the key abstraction for Web3.
11/ This is the crucial layer for innovation that will lead to wider adoption of the technology, as the layers underneath it provide the platform and availability guarantees that are simply not possible with centralised platforms.
12/ Smart contracts have enabled the creation of various abstractions, none of these more powerful then the idea of tokens, first fungible, based on Ethereum’s ERC-20 standard, then non-fungible, based on the ERC-721 standard.
13/ Both types of tokens have already crossed the chasm into mainstream culture.
14/ In the case of fungible tokens, tokens are a way to speculate on projects & protocols. There are hundreds of platforms and exchanges that empower individuals to invest directly in these tokens with the hope of a 10x, 100x or even 1000x return on their investment.
15/ Whilst this was not the intent of many of the creators of these tokens, who envisage that they should be useful in their utility to pay for services, or reward participation on their platforms, the majority of mainstream users are using them for financial speculation.
16/ #NFTs, went from being fun collectables & profile pictures (#PFPs) within the Web3 community, to serious brand assets and forms of art.
17/ With many of the world's leading marketers, artists & galleries embracing NFTs to reach new audiences or create digital art that can be owned by individuals or communities equally. We’re also seeing this tipping into gaming & the metaverse.
18/ The barriers to creating an NFT are incredibly low, at its most minimal it can represent any unique asset, a JPEG image being the most common type of asset. But it can also represent a document such as a passport or legal agreement between companies, a real-world asset.
19/ This could be a house, a car, an insurance policy that you hold, or even a subscription service that you pay for. In being able to represent anything, be that physical or digital, the floodgates open in terms of opportunities for the individual consumer or business.
20/ All you have to do is use a token to demonstrate your membership of a community, use a service, or show residence of a jurisdiction.
21/ The issuer of the token can easily be verified as its backed by a blockchain, much like when you go to Apple’s website to look at their latest product launch you trust apple.com is their real website.
22/ It is this adaptability coupled with low barriers to entry that will ensure that NFT’s are the primary enabler for the tokenisation of everything.
23/ Fungible tokens still have their place, as they provide the accounting framework for these NFTs so that they can be grouped together, sliced and diced to create new investable or governable assets of assets that consist of NFTs.
24/ Much like in the real world financial markets are composed of all sorts of different buckets of assets (mortgage backed securities being a somewhat infamous example).
25/ The point is that the two types of token complement one another to provide opportunities for innovation that have not been seen in Web2.
26/ This is what makes Web3 so exciting, especially when you start to appreciate the implications of tokens as the core building block of this future.
27/ Like this thread? Please ❤️ & share. To get my latest thoughts on #Web3 and where we’re headed you can subscribe to my newsletter at www.getrevue.co/profile/conorsvensson
