Dear reader, before you start to read please be aware that I didn’t want to waste your time with a short blog post, so I wrote a long one instead.
This first blog post is about how we think about the status quo of Web 3.0, about the goals we want to achieve with Wombat (www.getwombat.io) and about my personal motivation for supporting the Wombat team. I have worked in technology-driven companies and startups and I am fascinated by the impact technology has on our lives. I learned that new technologies and its development have never been the problem. Instead, it seems to me that we often struggle to really understand the value of new technologies for our lives and as a consequence new technologies never reach mass market adoption. Thus I decided to write this post from a user perspective with the everyday user in mind. Maybe this helps the readers who are not familiar with the technical jargon and concepts to better understand the opportunities and challenges of the emerging Web 3.0.
I first heard about cryptocurrencies when a colleague asked me in 2015 if he could buy old servers from the company I worked for to start mining Bitcoin. I immediately started to do research on what this means but did not really follow-up on its potential. At that point in time, I perceived Bitcoin to be a virtual currency minted and used only by nerds and geeks for online payments of doubtful products and services. At the end of 2017, I revisited the topic when Bitcoin and Initial Coin Offerings (ICOs) were actively discussed by mainstream news and content producers. I quickly realized that a lot of fundamental developments took place in the meantime, for example, the introduction of Ethereum enabling truly decentralized applications (referred to as Web 3.0) for the first time.
Opportunities of the Web 3.0
Not really grasping the full consequences and possibilities of decentralized protocols and applications until today, I am fascinated by their potential. Technically, the new Web 3.0 is “stateful” and enables users to potentially own their data the first time without fearing that large online platforms who aggregate user data misuse or simply “lose” their data. Instead of having “Cookies” on your computer tracking your online behavior and instead of giving up our privacy to data aggregation platforms when interacting with your friends on social platforms, Web 3.0 provides all means to regain control of your digital life.
Additionally, Web 3.0 allows you (at least in theory) to safely produce, store and distribute digital contents like lyrics, music or videos without fearing manipulation, misuse or unrevealed copyright infringements. For example, I did not just steal my first sentence of this blog from Goethe without marking it as a quote, but also it is not clear who’s quote it actually is. The speculation and evidence online ranges from Johann Wolfgang von Goethe to Mark Twain and Blaise Pascal. If the original author would have digitized his quote 500 years ago with the help of Web 3.0 it would be clear who’s quote it is, who said it first and under which conditions it may be reused.
Furthermore, Web 3.0 allows capturing and securely transferring value of digital assets from one person to another without a middleman. This means that no central (financial) institutions are needed anymore to organize this value transfer resulting in fewer fees, decreased barriers for people to participate and no means for anyone to prohibit financial transactions. To be honest, it was somehow an eye-opening experience when I sent Ether token to a colleague for the first time to pay for lunch, realizing that this transaction went through without the traditional institutions and infrastructures. It would be close to impossible for a single entity like PayPal or a government to stop this transaction from being executed.
Apart from the technical innovation, Web 3.0 also has economic implications which I find remarkable. Web 3.0 allows you not just to consume online services but also to benefit from its consumption by owning the respective virtual currency. Typically, users of decentral Web 3.0 applications (dApps) do not pay with traditional FIAT money like the Euro or the US Dollar, but with the virtual currency of the respective application. As a consequence, users of dApps like EOS Knights or Steem Monsters have to buy the respective virtual currency and thereby become co-owner or the underlying protocol. The more users consume one particular service, the more users have to buy that token, the higher the price of that token. This mechanism potentially aligns interests and incentivizes cooperation to reach a common goal.
Additionally, the token and its consumption can be bound to certain conditions incentivizing short-term behavior in line with the long-term goals of the respective community. For example, Steem, a social protocol rewarding users for sharing good content, allows users to earn money based on the communities upvotes. The more upvotes a user gets for his content the higher the weight of the user’s voting power for other user’s contents. Thus, the more upvotes a user receives short-term, the more impact in the the community can the user have long-term. This simple example demonstrates the potential when applied to other behavioral problems of society, e.g. climate change or health care.
But what implications can be derived from these possibilities? How will large data aggregators like Facebook make money if user data is not exclusively available to one provider but to everyone? Do people even care about their data or lower fees for transferring assets? Will this lead to better products and services of online service providers who cannot compete on data anymore? What impact will external shocks like a crash of a leading currency (e.g. Euro or US Dollar), big data scandals (e.g. Cambridge Analytica) or online censorship by governments have on Web 3.0 technology in general and on cryptocurrency as a medium of exchange or store of value in particular?
I do not have answers yet and future will tell how Web 3.0 unfolds, but I find it intellectually stimulating to imagine that there are alternatives to the current paradigm of using the internet which would allow us to address some of society’s problems at large, allow us to use the internet with more autonomy and which would reshape today’s user dependency on only a few data aggregating platforms.
The chicken-egg dilemma of Web 3.0
As opposed to the romantic view about the Web 3.0 possibilities outlined above, I can assure you that the state of Web 3.0 is far from becoming mainstream. Today, you can buy hardly anything with cryptocurrencies like Bitcoin in the real world, there are no proven business models levering Web 3.0 technology and there are almost no kick-ass dApps available for users. Four years after the launch of Ethereum as the first blockchain enabling truly decentralized apps (dApps) “at scale”, roughly 2.000 dApps are active today, of which only less than 30 dApps attracted more than 1.000 daily users. These relatively little numbers are due to a lack of dApps with strong value propositions and due to high entry barriers for everyday people to enjoy those dApps today. For example, when I first tried to play the dApps Cryptokitties and EOS Knights, I spent a decade to find out how to open up blockchain accounts, where to convert my Euros into cryptocurrency, how to stake resources and which wallets and plugins to use for all of that. Even after overcoming those barriers, I realized that the UX for dApps is far from attractive, given that each transaction has to be signed and may take up to a couple of minutes to be processed. In other words, using dApps today is more complicated and less fun than traditional apps you find in your PlayStore. This leads to a chicken-egg dilemma: Without value adding dApps no user growth, without user growth no value-adding dApps.
Wombat — Overcoming the chicken-egg dilemma
This is the reason we are developing Wombat (www.getwombat.io). We want to minimize those entry barriers of the Web 3.0 and aim to empower you to regain control over your digital life by offering a browser which lets you interact with dApps seamlessly and without any prior blockchain knowledge. Our goal is that you simply have to download the app, register and start using dApps just like other Apps on your mobile device. Wombat will automatically create the respective blockchain accounts and stake resources on your behalf in the background without forcing you to deal with those technical topics initially. At the same time, we give you full control over your blockchain account and enable you to benefit from all Web 3.0 possibilities outlined above. In other words, we gently introduce you to the Web 3.0 world and take you on a journey with us. You decide how much comfort you need and when you want to take over full control.
I hope that we contribute to a better Web 3.0 adoption by users and that this increased adoption will motivate dApp developers to build better dApps with even stronger value propositions, better UX and to kickstart a reinforcing dynamic of growing user and dApp numbers to overcome the chicken-egg dilemma.
The road from Web 2.0 to Web 3.0: Neither impossible nor necessary
I understand that the transition from Web 2.0 to Web 3.0 will be a long journey, that the journey will unfold much different than I expect and that we all should not take the Web 3.0 adoption for granted. I expect that the “unknown unknown” will hit us as a reliable surprise when we at least expect it. Nevertheless, we founded Wombat to contribute to the adoption of Web 3.0, to learn how the above-mentioned opportunities materialize, to impact the way Web 3.0 unfolds and we are looking very forward to helping everyday users, like I am, to understand and enjoy the benefits of decentralized apps.
To support our users, to provoke constructive discussions with all interested stakeholders and to offer an additional source of intellectual friction, this blog will accompany us on our path and shed light upon various Web 3.0 topics ranging from challenging the status quo of the current market landscape to educating users on new dApps or the best way to interact with them. Anyway, I hope you are reading and enjoying our blog and I am curious about your thoughts, feedback, and criticism.
Author: Alexander Heckel (@playhood)