Being part of the social media oligopoly in 2021 is good business. Combined all social media companies generate 150 billion dollars a year. What is the business model? Mining and selling our information.
Once upon a time, the business model of music was selling records. The business model of blockbuster was renting physical VH’s and the business model of KODAK was printing photos.
SaaS didn’t exist as a business model before Salesforce. The digitization of physical servers (VM’s) and higher bandwidths allow for better distribution of software with almost 0 replication costs. This allowed to offer cheaper software in monthly installments instead of large upfront license costs.
In the book BOLD, Peter Diamandis explains how innovation always disrupts in terms of 6 steps called the 6 D’s. These innovations often create new entirely new economic models.
According to the 6 D’s one can think that technology is already democratized because it is free. But you know the saying, If it’s free, you are the product.
We have gone to 0 to 1 in the past during the Renaissance, with the creation of the Middle Class. Until then, the monarchies kept all economic benefits. But as soon as people started to have property and rights we saw the emergence of not only new business models, but of a new independent economy and social class.
This new economic paradigms are being called Decentralized Finance, Creator Economy, X to Earn, etc. For example, Axie Infinity generated several billions in 2021 and the vast majority of this was distributed among the community, They only take a 4.5% cut of each economic transaction.
Furthermore, after the Renaissance a whole new set of “professions” appeared. Merchants, painters, and writers. With Web3 we are seeing a new set of professions also emerge like Miners, Liquidity Providers, Breeders and new species of Content Creators (influencer is just a name they are forced to use because they can't monetize content directly).
Conclusion
What other models will emerge or who will succeed it’s still unclear as we saw centuries before, history doesn’t repeat itself but it often rhymes.
Web3 is generating a Digital Middle Class were wealth it’s shared among its users with more freedom and self sovereignty.
To learn more about web3 technology, refer to my other posts. For more information, feel free to reach out on Twitter
