The Web 3.0 PPPPrimer You've Been Waiting For (Four P's #170)
A guide to the coming era of communities, content, connection and commerce.
Much has already been written and said. Yet there is still so, so much more to come.
For years, marketers from brands and agencies to media platforms and technology companies have basked in the vagaries of “digital transformation.” It’s a term that means different things to different people, but make no mistake. Transformation is happening. From Web 1.0 to Web 2.0, and now Web 3.0, the rapid rate of acceleration in just the last few years… the last few MONTHS, even… has been absolutely staggering. The overwhelming volume of experimentation, innovation, and conversation is exhilarating. And often exhausting.
Web 3.0 is driven by blockchain technology, which is neither new nor going away. Blockchain continues to define new ways in which we engage in both digital and in real life, and has become the underlying framework behind cryptocurrency, smart contracts, NFTs, and more. Everything is changing so rapidly, however, that is has resulted in a great deal of confusion, uncertainty, even skepticism. Maybe you believe that cryptocurrency is just an inflationary hedge. Maybe you’re still figuring out social media, or think blockchains are for tech nerds. Maybe you think NFTs are a bubble about to burst.
Or maybe you’ve already “Aped” and “Punked” your way into a fun community AND financial gain. Maybe you saw the Ray Ban aviator NFTs and got sucked in. Maybe you are one of a new breed of experts and thought leaders that is emerging, some of who are unidentifiable behind anonymous, yet artistic, profile images. But make no mistake: this is a pivotal moment in digital. Lead, follow, or ultimately get run over, right? No matter how much you know, or even care to learn at this point, you can’t run from it or remain ignorant anymore. So considering that a VERY broad range of people will read this, from marketing leads at Fortune 500 companies to my parents, let’s break it down, Four P’s style:
Something Practical: Understanding How We Got Here
It’s hard to a remember a world without some degree of digital connectivity. Web 1.0 was born in the early 1990’s, establishing a broad, but limited, network where content creators and consumers engaged in very basic, 2-way interactions. Text, images and static HTML ruled the web until about 2004. Read this. See that. Search this. Buy that. Information previously only accessible at the library, in the newspaper, or on television was now available at the speed of 14.4, then 28.8 mps! Web 2.0 grew out of more complex databases, largely driven by innovations in social, mobile, and cloud technologies. Apps and monetization, "personalization at scale," behavioral retargeting, Google and Apple and Amazon and Facebook. Real-time, OTT streaming video, data breaches, and instant gratification.
Web 3.0 is fundamentally about decentralization. It is self-governing, yet verifiable. It is distributed and built on public data exchanges. We are now staking new technology that is more open (built by an open and accessible community of developers and executed in full view of the world), trustless (participants interact publicly or privately without a trusted third party), and permissionless (creators, users, merchants, coders, and suppliers can participate without approval from some overseeing body).
Decentralized applications run on blockchains, other peer-to-peer networks, and shared servers. Entities (brands, people, whoever…) are able to trade information, data, and valuable tokens with others around the world they may not know, without an intermediary. Web 3.0 is based on a model where merchants, creators, collectors, consumers, fans and other action-oriented community segments have a greater stake in the outcomes of their (and others’) actions. (Here’s another great thread for a great rant/guide/inspiration…)
New connections between individuals, corporations and machines have resulted in the rise of new markets and business models. Web 3.0 is a global village, a new digitally-led commune, a bazaar for the entire world. Ownership is spread out in different ways, and “control” doesn’t mean what it used to. Where you are and who you are matter less than what you can offer and how you exchange information. In this free market, competition and quality services will win out. And it’s literally minting new millionaires and billionaires.
Something Personal: So Am I Rich Yet?
The rise of Web 3.0 is becoming synonymous with two other trends: the rise of the creator economy (explained far better than I can do by our friend Zoey) and the increasing value + popularity of cryptocurrency.
Cryptocurrencies like BitCoin and Ethereum have grown not only as speculative investments, but as the underlying fuel for many of the Web 3 protocols. I first learned about BitCoin sometime early last decade thanks to a pesky UX coder who sat outside my office. That was about $55,000 in value ago. Now these coins of all kinds have become financial incentives for participation in creating, governing, contributing to, or improving both digital and IRL projects and experiences. They are even replacing some of the traditional services previously offered by those aging media and tech platforms from the previous generation.
So much more than just alternative currency, the proliferation of utility tokens govern how different applications and platforms function. Ethereum is probably the most widely known blockchain to operate based on utility, and many of these tokens can reward participants. They can be bought, sold, and traded like a commodity or speculative investment, but their value is also enhanced AND amplified by their practicality and multiple uses.
Most of the things you've bought online over the past decade have been "governed" by a centralized transaction model. While it did take some time for consumers to embrace digital transactions, but people have learned to trust Paypal and Venmo and Stripe. We show almost no reservation sharing sensitive information and personal data (bank accounts, credit card info, etc.). But these models are soooo Web 2.0. Now, non-custodial wallets like MetaMask, Nuri, and ZenGo allow users to hold and own their private key while having full control of their funds. These new financial tools enable holders to integrate easy, anonymous, and secure international payments and transactions into new applications. They have not yet achieved mainstream levels of acceptance (MetaMask has only 12MM MAUs), but once you get the hang of it, things really open up. You don't have to go through the traditional numerous, friction-filled steps in order to interact with, and participate in, the network.
Diversifying your assets must now include some amount of crypto and other tokens.
To get started, load up on crypto through any one of a number of exchanges sucj as Coinbase, Binance, Kraken… and soon enough, Public and Stash. (Personally, I own BitCoin, Ethereum, Amp, Algorand and small amounts of a few more).
Next, download and install a wallet (I really do like MetaMask’s Chrome extension). You’ll get a long, unique hex key, which you can then use to start sending and receiving payments without any gatekeeping. Some people will spread out between a few, including getting a personal hard wallet. I know some very smart, successful people who have invested as much as 20-30% of their wealth/savings in crypto. If you started even a few years ago, well, you've outperformed just about every conventional asset class, with no signs of slowing down.
Follow smart people on Twitter, or better yet, curated lists on Twitter. These will inform you about new advancements, projects, opportunities and areas in which to invest. Once you get the hang of the language, the differences between creators and merchants, fan communities and channels, that’s when you’ll want to join the Discord servers. But don’t rush this. It can be overwhelming.
Something Professional: What this Means for Brands and Marketers
Now you’re ready… and Welcome to the Token Economy, my friends! Forget everything you knew about social and ecommerce and digital and content and KPIs and ROI with respect to digital marketing. Well, maybe not everything, because this is still a fast-moving evolution, and not quite a revolution just yet. But it’s coming.
I’m all in. And while I still feel like I’m just starting to figure it out, I want to bring you all along as quickly as possible. So let’s start with the differences between “fungible” and “non-fungible.” Fungible assets and tokens are completely interchangeable with each other, and the best example is "fiat currencies," which you can transfer from one owner to another to make payments for certain A $5 bill holds the same value as every other $5 bill. Cryptocurrency is also an example of a fungible asset because having one BitCoin in your wallet is the same as any other BitCoin.
Non-fungible assets, most notably in the form of tokens (NFTs) are different from fungible tokens and cryptocurrencies as they don’t have any inherent value, but will have applied value based on demand, desire, rarity, scarcity, and the reputation of the creator in the same way that art or other collectibles have value in the marketplace. NFTs use different types of smart contracts and are typically bought and sold using cryptocurrency values. For marketers, this is where the fun comes in. Non-fungible tokens are considered as the new-age tools for developing creative, content, communities, experiences, utilities… basically an entire virtual economic ecosystem on the blockchain.
While brands have embraced and invested in content creation for marketing purposes over the past two decades, NFTs will absolutely be an essential tool in the brand marketing playbook for the next two decades. Even now, NFTs can be both a brand-building and a community-building enterprise for brands. But we're still in such an early phase that no one is doing it perfectly just yet. The ones that get in now are still early, whereas those with some initial work in the market have a leg up on their competition.
Fungible and non-fungible tokens and cryptocurrency still have a generally high barrier to entry at the moment, but that’s mostly the result of a lack of understanding. Technical terms such as “gas,” “minting,” “floor price,” “non-custodial wallet,” “seed phrase,” “private key,” and “ledger,” need to be simpler. As does the overall process for brands. But the potential is limitless, with multiple paths to pursue. One of the smartest, most curious, well-networked analysts of our time is the great Jeremiah Owyang, whose wisdom has both powered and buttressed Web 2.0 and now Web 3.0. (MUST LISTEN: Here’s a great podcast from Web3 experts ChrisDisnoa dn Naval Ravikant on with Tim Ferriss this week.)
During a Twitter Spaces chat a week or so ago, Owyang classified NFT communities and opportunities into three groups. I’ve given them names them here for purposes of clarity, but I hope I haven’t bastardized his brilliance:
Create and Innovative: These are the communities where creators who innovate (Bored Apes, CryptoPunks, RektRacoons, World of Women, etc.) are building their own IP, their own universes and expanding out even beyond the original vision. These are innovators who create and creators who innovate. Most of those original “10,000 drop” collections fall into this category.
Collect and Connect: These are fan communities that collect. NBA Top Shot, VeVe’s launch of Marvel and Disney and Star Wars. In these communities, neither merchant nor collector can create the world, but are falling into one that has already been crafted.
Buy to Enhance: As the metaverse becomes both more real and less clearly defined, NFTs can be used to enhance an experience, improve a game, or build onto an existing universe. This is where utility and creativity blur, but deliberately so. Think of the possibilities as NFTs can be used to unlock real experiences - like this one! And this one. And this one.
If this seems daunting, I promise you it’s really not. It may feel arduous for brands and marketers to re-think new ways of connecting with consumers and re-consider where and how budgets are divided up, but things just got much more interesting.
Something Political: The Battle for Ownership
In the early days of social media (way, way back in 2008 and 2009), people like me were pushing marketers to put a stake in the ground and establish presence on social media channels. For some, it was a no-brainer. Others required a bit more convincing. I’d often hear “Why? I already have a website.” Now more than a decade later, I’m having similar conversations with respect to Web 3.0 and NFTs. To which my response is the same: “Trust me.”
But let’s move on from “Should I or shouldn’t I” to the more practical, relevant, actionable questions that marketers must tackle TODAY:
What should we do? Who does it? And how do we do it?
WHAT? Determining what to create and make can and should follow the familiar process your team has spent years getting right: Inputs and insights rooted in consumer data, to build platform and content strategies, connected across a brand’s architecture, activating creative capabilities to drive business objectives. Specific tactics will be different for every brand, but we’re already seeing some good initial proofs of concept and opportunities come to life. AdAge is even keeping a running list! And whether you explore one, two, or all three of the models that Jeremiah outlined above, consider the long game. You may not see immediate returns on your bottom line, but working these tactics into your marketing mix will require a steadfast adherence to the overall mission and brand objectives, and ongoing optimization over time.
WHO? So who decides what to do? Who should actually own this new… thing... at your company? And this is where it becomes something political. Because anyone can really own it at the moment, but power dynamics and internal organization structures always play bigger roles. Remember when this same question sprung up a decade ago with respect to social media and marketing? “Which department inside a company should lead social?” Marketing? PR? Tech? With Web 3.0, the same consideration are happening now, with Digital, Marketing, Social, CRM, Creative, and Media teams all jockeying for position. For now, the right answer to the question “Who should own this?” is whoever is most comfortable and free to operate within increasingly decentralized ownership and lack of control. No matter who ultimately wins claims responsibility for these outputs and outcomes within the organization, agencies, platforms, and in-house leads must all collaborate to push acclimation and acceptance of the new technologies, currencies, content, communities, and distributed network models.
HOW? Fortunately, understanding how to do it may actually be the easiest question to answer. Whereas markets like OpenSea and Rarible are much more “wild west” (despite a high volume of peer-to-peer transactions), marketers working at large, established institutions (with even bigger Legal teams) will need some assurances that they are engaging in safe, secure, verifiable, data-friendly experiences. The good news is that there are already technology solutions that provide central controls that make implementation much simpler and safer.
Mint is an end-to-end NFT management system offering an integrated merchant storefront, consumer wallets, and transaction/commerce features. Mint makes it easy for brands to register and merchandise assets on the blockchain within a customizable, skinnable set of templates. Neat, simplified, and streamlined. Mint also helps reduce friction for brands, streamlines the process, and eliminates confusion… while improving accessibility and inclusivity that gets more people involved into this emerging world.
While it is unlikely that NFTs will become a leading source of revenue for most large, enterprise companies any time soon, engagement and awareness are certainly realistic and achievable goals RIGHT NOW. The emergence of the Metaverse and Web 3.0 will not replace social platforms or owned content, but will add on to the consumer/fan experience. They will further connect us to the real world… to each other. CEOs, CMOs, even CROs are asking for POVs. 2022 budgets are being defined. Innovation and curiosity are giving way to activation, entertainment, and utility.
Are you ready for it?