A primer on web3 and why it’s about to totally flip how we market our businesses

You may already have heard of the term Web3 or it may be completely new to you, but chances are that you have already heard of some of the key Web3 concepts, things such as cryptocurrency, and we're going to dive into all of these and what they really mean because chances are that you probably don't have a great perception of these to date. They've been something that's been associated mainly with investing and especially with speculation.

In this blog, I'm talking about this rapid shift that we are making in the current online world. This is an overview of Web3 and if you want to learn more about it, there is a big rabbit hole you can go down.

I have just spent the last couple of weeks while I was on holiday doing fun, reading of all of the different concepts of Web3 and the potential applications that it's going to have for us as business owners and marketers, I'm really freaking excited. I haven't been this excited about something new in a long time, probably since I started really diving down the rabbit hole of launching now. 

What is Web3?

If we think about the different evolutions of the internet, this is probably the best way to start thinking about Web3.

First up: Web 1.0

That was when the internet first came out. You had your old windows 95 and you could dial into your dial-up internet and load a website very slowly. If you needed to get information on something, this was like the information economy. It was static websites that you would access for informational purposes.

There were maybe some blogs back then but we didn't have any social media. It was like, if you were researching some topic, you would go on there and search the topic and you would access a website and it would give you information but you couldn't communicate with other people through those websites. Then we think about the next evolution.

Web 2.0

It became read and write. This was where we started participating in the internet through social media and we started being able to contribute to the internet. It became a lot more dynamic but the problem was that it was a platform economy or currently is a platform economy and everything is owned by Facebook or now called Meta.

Google, Apple, etcetera, these big companies control and own most of the internet, and nowadays, when you go and post something on your Instagram account, you are essentially handing over ownership of your content to them. They can do whatever they want with it. They can show it to whomever they want.

They can monetize it by showing ads to people who are scrolling through the platform. Whilst they are also limiting your reach as a creator. They are in control of that algorithm that determines how many people your content reaches. So they are essentially exploiting your content to make money for their company.

And the way that algorithms work is the algorithm is designed to keep people on Instagram or whatever platform it is. But in the case of Instagram, the algorithm is designed to keep people scrolling and scrolling and scrolling on Instagram and that is why we have seen changes like Instagram, starting to prioritise reels, making it more like TikTok because they've realised, oh, If we can keep people scrolling, we can add more ads, we can make more money.

They don't care about you, the creator. There is also a lot of other stuff happening. So we've looked at your Instagram, they are collating a lot of data based on how we as individuals behave on their platforms. If you have an iPhone, if you have an Android, Google's collecting that information.

And it's no coincidence that they then show you an ad for exactly the pair of shoes that you were looking for. Sometimes it's convenient. Sometimes you're like, oh, I want a pair of shoes that are going to be really comfortable and look pretty. And then you get an ad for it. But other times it's a little bit creepy. Like we don't want them to have all that data because we now have less control over our privacy, our security, and our personal information. So then that brings me to Web3.

 Web3

Which is where we will read and own the internet. So web2 was read and write, and Web3 is read, write, and own. And instead of it being a platform economy where it's owned by Facebook Meta, Google, Apple, etcetera, it's going to become a token economy, but instead of essentially participating in and contributing to platforms that are owned and governed by Meta or Google.

Instead of that, these new platforms will be owned and governed by the users that are you and me and everybody else who is participating in them. So. we, the people who are using these platforms are owning them and governing them. That is what people mean when they talk about the decentralised internet.

When we often hear Web3, people say, oh, it's the decentralised internet. But that as a concept is actually really hard to grasp. So I'm going to try and explain it as simply as possible as you know, the people who are participating in it. They own it that's decentralisation rather than it being owned centrally by a couple of big corporations.

The token economy

Now, this is where the token economy comes into it all. So imagine a platform that is just like Instagram or TikTok, but let's call it token talk. Now, this doesn't exist and I apologise if there is already a company called that but let's just pretend this imaginary company is called token talk and it's similar to Instagram or TikTok but to sign up to token talk and be allowed to post content, you have to buy five talk tokens, and let's pretend that the price of a token talk token today is $1.

So, five tokens at $1 are $5. Now, as a member of token talk, you have skin in the game, you have $5 invested in the future of token talk. But if more and more people want to join the token talk, then the price of your talk token might go up to $2. In which case your skin in the game is now worth $10.

And it might sound a little bit like the point of this all is a financial game, but it's not, the point is that as somebody with skin in the game, you are now incentivised to make sure that token talk is a great place to be. Because if people no longer want to be on token talk and the price of the token drops to 1 cent, then you've effectively lost your investment.

Now the other amazing thing about the token economy is that people who are token holders, get to have a say. So as somebody who owns five tokens. Let's say you get to have five votes when they want to change the algorithm or five votes when they want to decide whose content should be featured. For example, you get to have a say in how it's run.

Now, this is all still future. It's not happening yet. But this is what is possible with the technology and what is most likely going to happen. Because if we think about Instagram. Who loves Instagram right now? I mean, my hands are not up. Nobody's loving Instagram right now.

The main point of Instagram is to keep Meta's shareholders happy, and creators like you and me, have been burned many, many times by the algorithm changes that prioritises the ads more than anything else because ads make Metta money and that keep their shareholders happy. And as a result, they keep changing the algorithm to make sure that they are getting the ads in front of more people.

And more and more of us as a result of that are starting to think of leaving the platform because we don't have any say in what the algorithm is going to be. We don't get to decide if we want the Instagram feed to be like TikTok or not. And that, as a creative, leaves us pretty powerless. We don't have any skin in the game.

Two things that keep us on Instagram

1. We've built our Instagram followers

Firstly, we've built our audience on Instagram and that is a rented audience. We don't own that audience. We can't suddenly move to Twitter and take our Instagram audience with us. This is one of the reasons why I always say you need to build an email list as well.

Because if Instagram were to shut down overnight, you own your email list. You can take that email list with you to different platforms if you move from one email marketing tool to a different email marketing tool, but you can't take your Instagram audience with you elsewhere.

2. The content we've shared

Yes, we can download that content, but to go and repost that content, we wouldn't have any of the existing engagement. And we would have to start from scratch. Essentially, we don't want to start from scratch. So we stick it out. We stay on Instagram, hoping that if we just post the right content, maybe we can make the algorithm happy again.

Maybe Instagram will love us and maybe they will show our content to the right people and we'll grow our audience and our business will market itself on Instagram. But that doesn't happen and instead, Instagram keeps profiting off our content, the content that we'd spend time creating, they are making a profit from.

Now imagine again that you are a creator on token talk and you want to move to another platform for whatever reason. In web3 , you own your audience and you own your content. You could hypothetically speak and take that audience and that content wherever you wish to take it because a platform will allow you to take your audience and your content with you.

The key concept of Web3

So the big thing that makes it all work, the big thing that underpins all of Web3 is blockchain technology. Now the technical definition of blockchain and I'm going to take a sip of tea before I read this one. Because it is long, it's quite an extended definition.

Blockchain is a shared immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible like a house, car, cash, or land, or intangible such as intellectual property, patents, copyright, and branding.

So when we think about assets, right, we can think about digital assets that might include your content. It might include your branding, your website, or your online courses. It also does include things like your house, your car, and cash. But it also at these digital assets, this is where the blockchain becomes really important because it's essentially creating a property rights system.

And something you may have heard about quite a lot is NFTs. NFTs are digital assets. Now, one particular blockchain is Ethereum. There are other ones, but Ethereum is probably the most popular one and that's where many of the most popular NFTs live.

How a blockchain works, is essentially it's a ledger. So it's recording these different transactions that are happening on the network and each transaction that happens. So each time an asset is sold or transferred or whatever that is recorded as a block and then each block is connected to the previous block and the next block connects to it.

And then together, these blocks form a chain of transactions that cannot be changed. So that chain is then called a blockchain. Now, blockchains have a couple of benefits.

Firstly, they cannot be changed. So once they have formed that chain, they cannot be changed. You can't go back and rewrite history essentially. Anyone can see that transaction history so transparency can really help if you want it to audit something, for example, or if you wanted to see how many times your house has been bought or sold and how much for. And it's tamper-proof so that kind of makes it safe from fraud.

Now the blockchain is maintained by a distributed network of miners and validators. And each of these people in the network essentially votes on how the next transaction or the next block will be recorded. You may have heard of Bitcoin mining. Those people who are mining Bitcoin, are on that blockchain. They are voting on how each transaction will be recorded. But we tend not to talk about Bitcoin so much in this kind of context because it's really inefficient and it's also not very environmentally friendly. So that's the broad overview of blockchain technology.

Smart contracts

Smart contracts are a piece of code that lives on the blockchain and a smart contract is triggered when certain conditions are met. A really simple analogy that helped me to understand this was like a vending machine. You put a dollar in and you press a button and a bottle of water spits out.

You know that when you put that money in and you press that button, that bottle of water is going to come out. Like there's that certainty that it's going to happen.

Now, your personal identity is still protected as well as your privacy. You are still anonymous. If we think of the smart contract is like a contract that lives on the blockchain and is triggered when certain conditions that are programmed into it are met.

The tokens are the assets that are being bought and sold and transferred on the blockchain. Now we have two types of tokens, fungible and non-fungible. Non-fungible token stands for a particular object. Fungible tokens, however, are not unique. Fungible tokens include cryptocurrencies like digital money. Whereas NFTs are more like digital objects.

But to really help you understand how this plays out. Let's talk about some ways that it's already happening. So, for example, I own an NFT that gives me access to a community called BFF. And as a holder of each NFT, you get access to perks. So perks like, I get 30% off certain brands. I get freebies. I get to win prizes. I'm eligible for all of these because I own an NFT of this. I'm part of this community and I'm incentivised to tell you about the community because the more desirable that the community becomes, the more the value of the NFT goes up.

And also the more that the value of the NFT goes up, the more they are incentivised to keep improving the community, put on more events, make it, provide more education, et cetera. And because I am incentivised to tell you about it. It also means that they don't have to spend as much marketing the community. Because everybody who's in that community has that incentive to talk about it. So we are marketing the community to them. We're all proud to be part of the community. That's one example of the utility, like the actual usefulness behind its NFT.

Web3 as a whole

Let's think about web3 as a whole, like, is this all legit or is it just some pie in the sky, a future thing that might one day happen, but isn't relevant to us right now? And this is a fair question because I get it. You don't want to waste that time deep diving into something that is never, ever going to eventuate.

When the internet first came out, people said it wasn't going to be a thing and then when smartphones came out, people said that we would never use our smartphones as our primary way of accessing the internet. But look at it. We're glued to our smartphones. We can't live without the internet.

And if we look at some of the key signals that this is actually going to be a real thing and it's happening quicker than we can imagine. We've got your VCs and investors pouring lots and lots of money into emerging apps and emerging web three technology. We've got influential people putting their names behind all of these projects that are coming up. We've got top developers who are investing time into building these things.

These people wouldn't be investing their time, their money, their energy into, and potentially their reputation, staking their reputation on these things if they didn't think it was going to be something legit and something that's going to happen sooner than we think. So let's think about most of these future use cases and future relevance but what can you start to do right now to make sure that you are ahead of the curve?

Firstly, keep learning and honestly, I have found that the best way to learn is to get involved, find some communities out there by the NFT, get involved in the community, and see what's happening.

But make sure you learn a little bit first because there are scams. That can happen. It's very easy to get caught up in a scam. So we want to make sure that we are participating in things that are legit, and we want to make sure that we are taking the necessary precautions.

 

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