web3.0: globalization of the Internet
TL;DR: The path to web3.0 is a transition from an inefficient economic model, where value stays behind the walls of isolated platforms, to a more efficient one where value flows freely from one platform to another.
Does the title sound absurd? After all, the Internet has been a global network since day 0. The globalization that crosses the geographical borders of nation states is already here. In this post, globalization means crossing the border of different platforms of the Internet to help value flow efficiently.
I hope this article points to an important problem. But it is NOT a design doc that solves this problem. For sure there will be some follow-up writings around this topic as my thoughts get mature, and they will look like parts of a design doc.
Platform is a self-growing closed loop of value
Speaking of platform, you may think of Facebook, Tiktok, Medium, etc. They are places where people do social, have fun, find goods to purchase or places to stay.
But thinking again, a better term to express “something that people use to do social/have fun” is “tool”. Indeed, in order to send you friend a message, all you need is a tool, instead of some weird “platform”. Then what the hell do we mean when we use the term “platform”? Here’s my definition.
platform: a place where producers make something valuable to consumers, and consumers get value by consuming it and then rewards producers with value.
The value here refers to everything that constitutes the social benefit in the ecosystem of an app. For example, the economic and psychological reward that a user receives, the ease of producing and consuming products/contents, etc.
As a tool, the app helps producers to produce efficiently, and helps consumers to find the desired contents. On top of that, the value generated by user activities are used to feed the ecosystem, making it easier to match demand and supply, thus grows the total value of the ecosystem — this is the self-growing closed loop of value. This way, a tool evolves to a platform.
Since you are consuming my content on Medium right now, let’s take Medium as an example. You may reward me by clapping this article or following me. If you do this, my future content will be more likely to be chosen by the recommendation system to show up in your and other people’s read list. This increases the ease of navigating consumers to the content they like. All of these form a self-growing closed loop of value on Medium.
What’s wrong with the platform?
Let’s continue with the Medium example.
When someone follows me here, he/she may also want to follow me on Linkedin or Twitter. Someone did search for my name on Linkedin and added me, but going to another platform and search is a big friction to consumers, it’s not scalable.
Moreover, if you clap my article on Medium, Twitter won’t know “hey this guy is getting more popular somewhere else, let’s push his post to more users”, unless I post my article everywhere. This is a friction to producers.
The last but not the least, on the consumer side, if he/she claps an article, it helps the recommendation system of Medium push better contents. However, Linkedin doesn’t know this action. The reader may still get contents that are no longer of interest.
Some of the examples above have case-by-case workarounds. However, if we can summarize the pain points with a big yet simple problem definition, we may have a one-off, scalable solution that makes things better at the paradigm level. The big problem is, it’s so hard for values to flow between platforms.
Where web is going: globalization of value
Think about the lifecycle of an iphone. We are quite familiar with how the value of real economy is produced and consumed in a globalized economy.
How could the same thing happen in the digital world? I’ve already seen some patterns of early stage international trading. For example, it often happens that a meme is created in Bilibili. It’s then spread to Kuaishou or Douyin(Tiktok), and got to know by a greater population. This is exactly an “international” cooperation in creating digital value.
However, I would say this is one of several examples that merely shows the early pattern of globalization. It’s not a norm yet. In terms of digital value, We still don’t have the most parts of the infrastructure that support scalable global manufacture. Where is the supply chain? Where are the accounting tools that distribute profit efficiently and trustfully? Where are the financial institutes that allocates liquidity to the most demanding industry?
When we have all of the components, and eventually build the globalized value network, the functionalities of the platforms nowadays may even degenerate a little and fulfill their original functionality — tool. This is just like in a global economy, many nation states more or less lose some sovereignty and just serve as a part of the supply chain.
Summary
In web2.0, platforms serve as closed loops where values can be generated, consumed, and used to generate more value. However, this is not efficient enough. The picture of web3.0 is a world where value no longer stays within a platform. There will be a universally recognized system that exchanges the values between different platforms. I’ll explain in more detail, and propose some options to build this system in follow up articles.
