Every so often an event occurs that is so startling in its economic implications that it may reasonably be considered a water-shed in the way we do business. By watershed we mean an abrupt and irrevocable turning point, one that signals a shift in historical direction by obliterating an established set of business practices and replacing them with a new commercial paradigm. We are in the initial stages of such a watershed now, with the meteoric rise to prominence of the third web (web3).

The advent of web3 is an event only comparable to the initial rise of the internet, an event that has already begun to set us on a path that will radically alter how we interact not only online, but with one another in the physical space, with institutions both private and public, and with business associates and customers around the globe.

In the online world of the very near future, a blockchain will link every home, every business, every government agency, and every application layer together in a complex weave of information exchange. We will inhabit a world where distance no longer matters, and where communication and data transfer will be virtually instantaneous. This will so thoroughly transform the way that transactions are conducted that doing business without it will become unthinkable.

The Internet did the same thing. Now, with the coming of the blockchain as a catalyst for change, the speed with which it is reaching watershed magnitude gives it a possibly unique status in economic history. We're not speaking about the speed of data transmission — as it is not one of its rightful claims to fame — but the speed with which businesses have picked up on web3's potential, have adopted its technology, and are staking successful claims on this economic frontier.

That speed is causing investment counselors who were scoffing at blockchain businesses only two or three years ago to call them the current miracles of the world's financial exchange. No previous watershed has elicited such a rush to approval.

Although the concept of cryptography as a vehicle for decentralized exchange has been around for decades, its business potential was arguably only reached recently with the advent of monetary blockchains, non-fungible tokens and decentralized enterprises. That's only a few years ago and yet web3 has already made a quantum leap from a technological curiosity to the story of the century.

Thus the crypto movement is presenting itself as a watershed with virtually no lag time. It seems to have sprung, like Athena, from some cybergod's brow, fully clothed and fully armed. That perception is somewhat illusory, but it's a perception that has to be dealt with as if it were true, because it is generating a mind-boggling market revolution that is already dividing the world.

While venture capitalists continue to favor more traditional recipients—especially firms in the communications and general software sectors— web3 is fast becoming an arena of high drama. Beginning from a smidgen of support in recent years, “crypto” business is currently commanding the narrative as the future of venture capital.

So the growth of web3 business is improving, but it's got a long way to go. We are sitting, right now, on the edge of a vast gold-field, and the riches it will one day surrender are only beginning to be revealed.

We're using the goldfield analogy for a double purpose. It should make you justifiably excited—but also cautious. For while millions are there for the making in the field of DAOs, NFTs and Social Tokens; they are certainly not there for the taking, like picking nuggets off the ground. Anyone contemplating doing business on web3 might profit from remembering the lessons of that classic gold-hunting story The Treasure of the Sierra Madre.

In John Huston's great film, the novice prospector Fred C. Dobbs enters his field of dreams with unbridled optimism, imagining that gold will jump from the ground into his pockets. Once he's out in the digs, reality sets in and he discovers that making a fortune is not automatic, It demands a mixture of judgement, patience, and sweat — and, not least of all, cooperation with good partners to protect yourself from natural disasters and bandits.

According to the “law of plenitude" the value of every individual fax machine goes up each time another fax machine is plugged in, because of the enhanced synergistic effect of greater information flow. But this notion flatly contradicts the industrial age axiom that value comes from scarcity — the old 'supply-demand" mantra. The challenge of decentralized business is to reconcile such novel ideas to the established business principles that we've been using for generations.

The heart of this transformation is “virtuality”, or as many have come to call it: “The Metaverse”. The ability to conduct digital and physical transactions in an instantaneous manner without having to consider the boundary between the two realms. In this Metaverse, physical distance is irrelevant. This fact alone radically changes how customers are already having real-world connections in the digital sphere, how they will continue to interact, and how businesses must position themselves to keep their attention.

A Plot Twist

The former excerpt was taken directly from Thomas M. Siebel’s 1999 book “Cyber Rules: Strategies for Excelling at E-Business” with only a few tweaks to bring the buzzwords to our times.

The point of this article is to show you how we’ve already been here. Switch the word “Internet” for “Web3”, “DAO” or “Metaverse” and you’ll find that most of the predictions made 30 years ago will still ring true.

There’s no need for me to make any predictions for the new year, our industry has reached such a state of mass awareness, if not adoption, that every call you could feasibly make will end up becoming a reality in one way or another. Paraphrasing Jorge Luis Borges’ short story “The Immortal”:

Given enough time, you’ll become the greatest hero, the greatest villain, both rich and poor and everything in between. There’s no event under the sun that you won’t see happening.

My one and only prediction for the coming year is more of a warning: We’ve got the world’s attention, BIG players are going to make their first foray into our little corner of the industry. If we want to uphold the values of decentralization, community and curiosity that we’ve nurtured so brazenly for the past year, we must make our voices heard and let anyone trying to enter know that exploitation and greed have no place in web3.

As the closing days of the year have shown us, all it takes is the promise of free money to get people to jump ship on our core values without a second thought. This made me realize the importance of taking a step back, thinking if claiming that new token or airdrop is setting the right precedent for our industry’s future, and voting with your (metamask) wallet.

We’re entering a pivotal year for web3, and it’s up to us to determine how we’ll move forward once the masses come in droves. If we dream of a decentralized and open future, we must be the first to let go of the mindset that allowed for web2 to take hold of society. We must learn to be better, we can make it stick this time.