The Future Of Web 3.0 Are Platforms

The Internet changed how companies do business. This was an evolutionary transformation. It started out with companies needing a website. Today, there is so much more to it.

What we are seeing in the markets is how investors value platforms. The top businesses, by market capitalization, are all platforms. They have taking the digital aspect of things and made it the foundation of their business models.

Probably the best at this, in my opinion, is Amazon. They have generated enormous growth over the last 25 years by continually expanding their network effects. With each new acquisition, they potentially grow the value of the network for every users.

Another company that I believe is following suit is Tesla.

The robotics industry is the bridge between the digital and physical. Here we see the "brains" being software while the hardware is made up of atoms. Over the next decade, we are likely to see an industry that skyrockets with a couple dozen companies churning out product. There is a good chance that, once they start reaching production, the numbers will be mind blowing.

With Tesla, all are tied to their platforms. It is not as advanced as Amazon but we can start to see the foundation forming. Over time, expect the different components (business divisions) to be integrated in a manner similar to Amazon and Apple.

Which brings us to Web 3.0.

Source

Web 3.0 Is Designed For Platform Businesses

One of the keys to all of this, in my opinion, is blockchain.

The reason platform businesses have so much value is due to the fact we see the ability to create value from data. With a strong digital foundation, these companies operate in ways that surpass their non-digital counterparts.

There is a big difference between adding technology to one's business and utilizing data versus being centered around that. It is the difficulty most companies face.

With this in mind, we start to realize the flow of information. With the entities mentioned, everything is tracked. Data is used in every aspect of the business. Naturally, as AI advances, this is embedded deeper into the organization.

Ultimately, these are microcosms for the larger economy. Another key point is this is all based upon information. Regardless of the platform, we are dealing with databases.

Blockchain is a new way to structure information. It is public meaning it alters the client-server architecture that we presently operate under. While not all data should end up on a blockchain, there is a lot that can be. Here is where the potential for massive growth occurs.

Removing Friction With Information

Information is now siloed.

It resides on the server of some institutions which controls it. That company benefits yet does minimal sharing. If the platform is large enough, other entities will help to enhance it by building. They will actually benefit the corporation to operate.

This happens each time a company creates an app and places it on Apple's App Store. Here is something that Apple can monetize. At worst, even if it is free, it adds value to the Apple platform since any user can download it.

Of course, all are under the umbrella of Apple's terms of service.

Platforms, in terms of their characteristics and effects, are not likely to change much. Where Web 3.0 can cause massive disruption is in the area of structure. Blockchain means we are already dealing with an altered model. This can also take place within the platforms that are built upon the network.

Tokenization offers a ton of potential in this area.

Accelerated Growth

Where things get interesting is with regards to the pace of growth.

Using Amazon as an example, we see how everything within their ecosystem was contingent upon them. Over time, the company kept adding to its offerings, improving transforming itself from an online book seller to one of the most developed digital platforms there is.

We can only imagine the information that Amazon generates. That said, it comes as a result of their efforts.

With Web 3.0, this is not the case.

Anyone has access to the data placed upon a blockchain. This means that anything in the database has a multiplier effect. This is a term most used by economists when talking about money. It basically tries to chart the economic impact of a single unit of currency input.

Here is where we can apply the same concept to data.

For Amazon, each piece of data generated has an impact upon the platform. Remember, platforms excel at capturing incremental value and spreading it to every user. This takes on new meaning with something like Claude, Amazon's LLM.

Even leaving that aside, anything created will appear on Amazon. Nowhere else are you going to find the data.

Web 3.0 has a different approach. Since the hardware is not driving things, but rather the software, we see how anything added has a multiplier effect.

For example, how many pages are created by this article? Here is a stark difference from Web 2.0.

It is possible that, one published, this article appears under 7 different URLs. With a Substack or Medium, it is one.

The next question: how many applications can use the data generated by this article? The answer is "virtually unlimited".

Whatever incremental value from this article and the associated activity with it can be spread to every application, if they want the data, tied to the ecosystem. As the number of applications grows, so does the impact.

Any business can utilize this data. Unlike most start ups which have an empty database, a Web 3.0 platform could have years of data available to anyone.

In Conclusion

The transition of business will continue.

Amazon is the best example I can think of to model this concept after. It is going to become commonplace. Of course, the debate still is whether it will be based upon the client-server infrastructure (Web 2.0) or will Web3 step up.

Personally, I think it will be the latter. For now, it is only a matter of getting people thinking in this direction.

Platforms are only going to expand as a percentage of the overall economy. Web 3.0 could be in a prime position to take advantage of that.

---

What is Hive

Posted Using InLeo Alpha