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The Future of the Internet.
The Future Does Not Fit in the Containers of the Past. Edition 101.
There are four seminal dates in the history of the Internet:
October 29, 1969: On October 29, 1969, at 10:30 PM, a computer grad student named Charley Kline at UCLA sent a message to SRI (Stanford Research Institute.) It was the first connection between computer networks.
We set up a telephone connection between us and the guys at SRI…
We typed the L and we asked on the phone,
“Do you see the L?”
”Yes, we see the L,” came the response.
We typed the O, and we asked, “Do you see the O.”
”Yes, we see the O.”
Then we typed the G, and the system crashed…
Yet a revolution had begun…
1 January 1983: January 1, 1983, is considered the official birthday of the Internet. Prior to this, the various computer networks did not have a standard way to communicate with each other. A new communications protocol was established called Transfer Control Protocol/Internetwork Protocol (TCP/IP). This allowed different kinds of computers on different networks to "talk" to each other. ARPANET and the Defense Data Network officially changed to the TCP/IP standard on January 1, 1983, hence the birth of the Internet. All networks could now be connected by a universal language.
6 August 1991: Tim Berners-Lee published the first ever website while working at CERN, the huge particle physics lab in Switzerland.
30 August 1993: CERN puts the World Wide Web software in the public domain. Later CERN made a release available with an open license, a surer way to maximize its dissemination.
Until 1993 the Internet (and its predecessors like ARPANET) were both difficult and highly limited in their use.
Beginning in 1993 due to CERN’s decision to make the World Wide Web software available to all with an open license we entered The First Connected Age when the world began its 30-year migration into cyberspace.
The Three Connected Ages.
In 1993 with the advent of the World Wide Web we entered The First Connected Age where we connected to discover and connected to transact. This is today known as Search and E-Commerce which are forces that have given rise to companies like Amazon and Google.
In 2007 we entered The Second Connected Age (which built on and did not replace The First Connected Age) when we were connected all the time, connected to everybody, and connected to entertainment, due to smart phones, social networks and affordable and pervasive broad band. These three advances which we call Social, Mobile and Streaming, have re-ordered society, politics and culture while creating juggernauts like Apple, Facebook and Netflix but also enabling everything from Uber to Airbnb to Dollar Shave Club to Spotify.
The world we live in today is hard to describe to someone thirty years ago.
But we have not seen anything yet…
Four new forms of connection will re-order society, work, and the future much more in the next decade than the past three decades.
These are the four new connections that will drive The Third Connected Age:
Data connected to data which is machine learning the form of AI that is most scaled.
Much faster and resilient forms of connection via 5G.
New ways of connecting including Voice, Augmented Reality and Virtual Reality.
New Trust Connection built on the Blockchain.
Web 3, Metaverse, Tokens and DAO’s are connected but not the same.
The entire world of Web 3, Metaverse, Tokens/Wallets and DAO’s (all of which are different from each other but connected to each other) are just one subset of all the changes underway in The Third Connected Age.
Web 3 is as much an ideology as it is a set of technologies. The central tenets of Web 3 are Open, Decentralized and Composable. And a belief that the creators, builders, and users should have much ownership and benefits as investors and companies.
Tokens (NFT’s or Non-Fungible Tokens, are one type of many different types of tokens including Governance, Security and DeFi tokens. Tokens are often stored in wallets and this combination of tokens and wallets will help orchestrate ownership and value exchange.
Metaverse is a term that includes both Augmented Reality (AR) and Virtual Reality (VR). Augmented Reality layers the digital onto the physical (think of a head’s up display in a car) while Virtual Reality creates a simulacrum of the physical world in digital space. Just like Windows and MacOS were the operating systems of The First Connected Age joined by iOS and Android in The Second Connected Age there are billions being spent by Apple, Meta, Microsoft and others to create both hardware and software to operate between the physical and various manifestation of the digital world of The Third Connected Age.
DAO’s are mission driven communities with a treasury of tokens that enable ownership, governance and financial benefits that ideally will enable a more transparent, autonomous, efficient, and anonymous form of governance. It is the way the new world might be organized.
Web 3 Ideology.
The Internet was first designed to be decentralized enough to withstand a nuclear strike. By providing a free license to the World Wide Web CERN engendered a belief in openness. Composability accelerates innovation by enabling developers to build new use-cases on top of existing projects. The code of that new project, in turn, serves as yet another building block for someone else, leading to an ever-expanding library of code that developers can tap into to build their own ideas. Venture capitalist Chris Dixon describes it aptly when he wrote, “composability is the ability to mix and match software components like Lego bricks.”
While all of us have benefited from the Internet a significant part of the upside has gone to investors and some businesses but builders and particularly creators and users have shared very little of the wealth their content, their data, their networks, their attention, and time have enabled. Think of all the content, data, and time you give to Facebook. Zuckerberg buys islands in Hawaii, and you get to connect with other people and get likes!
The ideology of Web 3 is aligned with what most people want which is to be recognized and rewarded without being charged rents of 30 to 70 percent for the benefits of using a platform.
There will be middlemen and women in this new world. Consider them “enablers” who will make it easy for us to use the new technologies, to be discovered or provide other services but they are likely to charge a tenth of the total value created versus taking the large slices of todays “aggregators”.
Today most of the talk of tokens are one type of token which is the NFT but there are many other types of tokens. A way to think of tokens is that they provide some combination of four utilities: a) a currency, b) governance rights, c) membership and d) status.
An analogy to tokens that we may all be familiar with are airline miles. If you fly a lot, you get rewarded with airline miles which you can use as a currency. When you fly a lot, this currency gets you the status of a higher level and provides membership into lounges and clubs and the airlines pay more attention to what you think about how they govern themselves. Most tokens are like airline miles where one person’s airline mile on American is the same as another person’s airline mile on American and most tokens operate like this.
Non-Fungible tokens on the other hand add a form of uniqueness in that each one is different from each other and thus NFT’s have been particularly popular with the artist and creative communities. As the chart above shows NFT’s are significantly improving the rewards to people who create and their fans versus the platforms.
Tokens are usually collected and operated using wallets like Metamask. Increasingly many Web3 initiatives have a person signing in with their wallets and not their Facebook or Apple identities or their email.
Think of tokens and wallets as the future of identity and CRM (Customer Relationship Management) if you are a business leader or a marketer. This new age is dawning.
In one way the Metaverse is here in the Web 2.0 world ,and it is called gaming. Gaming is a 155-billion-dollar industry (bigger than TV, Movies, Music combined) and is seen as the gateway to the next generation of Virtual Reality. It is why Microsoft is willing to pay 67-billion-dollars for Activision Blizzard and both Disney and Comcast were rumored to be interested in Electronic Arts. Netflix is likely to regret that it did not leverage its once valuable stock to buy a major platform like Sony bought Bungee.
Skeptics may snort “in your dreams” and the answer to that is that 14.8 million people are dreaming.
These are the sales to date of Meta’s Oculus Quest 2. (Try one or if you can afford one the $30 get one). Now imagine the technology getting exponentially better and possibly cheaper as the next generation from Meta and the products that Apple and Microsoft have in development are released by early 2024 if not before!
Terry Kawaja, founder of leading digital investment bank Luma Partners, shared an insight that given the VR/AR nature of the Metaverse we may first experience elements of it at scale in automobiles! Step into a modern electric car, particularly an electric one and you are in a world of screens with AR and Voice already deeply linked to its functionality.
It is not just technology but the underlying human need that these new technologies will enable that makes one believe of their future potential.
First, Humans want to have God-Like power.
The companies that enable us to cross distance and time such as Google which allows us to find anything with Search or visit places with Google Earth, or Apple that allows us to connect everywhere projecting our images and videos or Meta that enables us to connect for free or Amazon that brings the worlds bazaars to us have become the most valuable companies in the world.
At one time it was the railroad companies and oil companies and telephone companies that allowed us to bridge distance and time. Pharmaceutical and medical companies allow us to live longer lives.
These new Third Connected Age technologies will give us amazing powers and we will gravitate towards them just as we have in the past.
Second, they allow us to have multiple identities.
Our minds are imagination machines, and it has far outstripped the physical carrier of our bodies. Avatars and virtual worlds allow us to be a range of us and constantly re-invent and try on new lives and live in multiple worlds.
Third, we are about to see the greatest unleashing of human creativity as more and more people gain access to new ways to express themselves, to project their presence and be rewarded for their work.
The Signal /The Noise.
There are many people who believe that the Web3/Token/Metaverse/DAO eco-system is some combination of BS, a Ponzi scheme promoted by a collection of hucksters, scammers and the delusion filled who are high on their own gas and maybe other substances!
Check out Molly White’s site that compiles many of these examples. Watch Dan Olson’s “The Line Goes Up Video” a brilliant take down of NFT’s. Read Scott Galloway. Monitor the headlines of Celsius and other companies going into bankruptcy. Measure the plunge in engagement of NFT markets or speak to anybody who invested in crypto for the first time beginning nine months ago.
The bubble has burst. Fake! Big balls of BS!
No practical use or problem solved.
An uncertain set of technologies in search of problems that do not exist.
There were and probably will still be many Ponzi schemes. Much of what is called Web 3 can be done without tokens, block chain or any of the new-fangled stuff. The Oculus Quest 2 while impressive is still rudimentary. Most coins will be and should always have been worthless.
Remember 2000 to 2002 when the Nasdaq crashed from 5048 to 1114?
That was the noise.
Internet usage almost doubled from one third of all households to two thirds of households during the 1999 to 2003 period with massive increases in broad band connections.
That was the signal.
The crashing price of crypto, NFT’s and the revealing of scam artists is the noise.
Be smart. Read about all the stuff that is going wrong. Be wary.
But learn by getting involved at minimum as an individual (a lot of future opportunities are likely to be available to people who are conversant with the new landscape) and ideally as a company (organizations and people tend to adjust slower than technology so it’s not too early to begin to build centers of excellence and explore partnerships) and you may see some signals that reveal the amazing potential of what is next.
This signal maybe discerned in the hundreds of billions of dollars companies like Microsoft, Apple and Meta are investing in the space even today. Or the $4.5 billion A16Z raised for their oversubscribed Crypto Fund.
The fact that the best talent from the highest rated universities is going to Web 3 companies even this year in the middle of what looks like a meltdown.
That many marketers are trying to understand the opportunities and challenges of tokens and wallets for the future of identity and CRM programs.
Or how companies like Nike recently having bought RTFKT and filed for several patents in Third Connected Age technologies.
Or how leaders everywhere are working to re-think their businesses such as Insurance companies wondering how to underwrite NFT losses or the purchase of Virtual Land.
There are a lot of signs that this is like 1993 and 2007 which marked The First and Second Connected ages which changed business, society a creating new opportunities and threats.
We are at the early days of what is likely to be the most compelling decade or more on the Internet.
Welcome to The Third Connected Age.
The Future of the Internet!
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Rishad Tobaccowala is an author, advisor, speaker, and educator who distills four decades of experience to help people see, think, and feel differently so they can grow their companies, their teams and themselves. More about Rishad’s advisory services, best-selling book, and the range of topics of 10 popular workshops can be found here…https://rishadtobaccowala.com/