Big Tech Companies Will Drive Web3 Adoption
They’ll wrestle control of a consumer’s economic identity away from banks, credit cards, traditional financial services, and perhaps even the App Store — and here’s why.
Web3 refers to services powered by the (Ethereum) blockchain. Web3 is going to do lots of cool stuff.
From an e-commerce perspective, Web3 is a toolkit for customer experience owners to expand that scope to a customer’s economic identity.
When facilitating a customer’s economic identity, a business may enjoy transaction fees, referral fees, the creation of network effects, and other benefits currently enjoyed by banks, credit card companies, and the App Store.
Businesses with a good moat around their customer experience, but that are currently distant from a customer’s economic identity, will benefit the most from adopting Web3.
Mozilla, Facebook, or Amazon — big tech companies, with big customer experiences, without App Stores — may realize great benefits from adopting Web3.
The average Western consumer is most likely to begin using Web3 services regularly because the controller of their customer experience has adopted Web3 on their behalf. This seems true despite the growth of awesome new Web3 experiences.
Web3 services will become preferred over traditional equivalent services by average Western consumers, because of businesses’ incentive to own, control, or mediate a customer’s economic identity, Web3’s power to enable this control, and Web3’s novel capabilities.
As a corollary, “banking the unbanked” will be extremely successful, because the “unbanked” will have permissionless access to financial services which are in fact preferred by “banked” consumers.
Convergence of web technologies, such as web assembly, and consumer preference of Web3 experiences will erode Apple and Google’s App Store duopoly and their 30% cut.
The winners of this transition will be consumers; all e-commerce merchants, particularly long-tail merchants and websites; advertisers; Amazon, who, owing to their track record of boldly leveraging new technologies to create new businesses, will be a major owner of Web3 customer experiences; and the host of new businesses and industries that will grow to support the Web3 ecosystem.
The most impactful benefit of blockchain will be self-sovereign identity and assets, not decentralization, which is a toolkit to give you these things. That’s why the adoption of Web3 by big tech companies is not fundamentally at odds with blockchain.
Apple and Google won’t lead Web3 adoption, but Facebook and Amazon might.
Will iOS or Android adopt Web3 technologies at the platform level?
iOS and Android currently have an incentive to minimize dollars spent on the internet (and portable customer experiences in general) and maximize dollars spent via the App Store, where they enjoy a 30% cut.
This 30% cut erodes the incentive for iOS or Android to adopt Web3, because they already substantially control a customer’s economic identity, and at 30%, which is exorbitant by internet standards (where transaction facilitators compete for 1–3%).
It seems likely that iOS and Android will not proactively adopt Web3 technologies, ie. not pursue the opportunity to control a customer’s economic identity on the web.
iOS and Android will sit back, make some blockchain prototypes, enjoy their 30% cut, and wait to see what happens.
As mentioned above, Amazon has a track record of capturing increasingly more of a customer’s economic identity by boldly leveraging new technologies in new contexts.
As an example approach enabled by Web3, Amazon might start a web browser — because now Amazon’s browser can be a payment method and financial services center across the entire web.
If the browser-y parts of Amazon’s browser are good enough, then the integration of economic identity could make Amazon’s browser preferred by consumers.
Amazon could then launch their own phone or Android-like mobile OS, with no App Store, where the Amazon Web3 browser is the operating system and provider of economic identity. That might be the beginning of the end of Apple and Google’s 30% cut.
Let’s talk about Web3’s specific technical innovation that underpins our predictions.
Web3 replaces a merchant’s “payment methods” with a magical “pay now” button
From an e-commerce perspective, Web3’s technological innovation is that a customer’s computer can “hand cash” to a merchant’s computer, without an intermediary such as a credit card company.
This technology is pure software, subject to permissionless adoption by any customer experience.
Services such as fraud protection and refunds are enormously valuable and won’t go away. Instead, these industries will increasingly reorient themselves around dominant customer experiences leveraging Web3.
Customer experiences, such as browsers, will directly integrate Web3 technology to become a cryptocurrency wallet and expand their scope to a customer’s economic identity.
Web3 wallet technology will take years to become “good enough” and be a source of major innovation and fierce competition.
Customer experiences will automatically, in concert with decentralized and centralized services, handle ecommerce protocols, hot wallet balances, identity, privacy, fraud protection, refunds, metered spending, borrowing, credit scores, insurance, wallet-to-wallet commercial relationships, and more.
If this sounds a lot like how Web2 works today — a browser working with services to deliver an overall experience — that’s because Web3 will look and feel a lot like Web2. But, with greater consumer protections, lower fees, new capabilities, and the Web3 customer experience will directly facilitate financial services previously offered by traditional parties.
So, ten years from now, a merchant won’t offer any payment methods, and instead will have a “Pay Now” button that magically works — just like in-app purchases today, except for <1% fee instead of 30%.
But that’s not all — Web3 will offer powerful new capabilities:
Web3 sites will blur the lines between user actions vs. transactions, and buyer vs seller, creating new business models and wonderful e-commerce experiences. We can’t wait! 😀
UPDATE — congratulations to Opera for adding Ethereum support.
