Web 2.5: Abundance to Scarcity.
The Internet democratized information access. But now we have too much and are moving into the age of scarcity and redefining value. This is occurring in traditional media (Web 2.0) and innovated within the crypto industry (Web 3.0).
In 2017, I was working in the Web 3.0 industry but left to build more ‘tangible’ products. This has changed and I can’t stop thinking about the convergence of Web 2.0 and 3.0 media and community co-creation.
Web 2.0
Two decades ago, we did not care what we wore on our feet. Then the Jordans came out. It was the first version of influencer marketing. They sold out like crazy due to cultural fascination and admiration for Jordan.
Fast forward to 2015, the Yeezy’s came out. A shoe made by Kayne West but the limited production of this shoe made it different. The scarcity drove up demand and people started to see the value of the shoe appreciate. Buy an untouched pair for $150 retail and ‘flip’ it for $1000+.
Kayne’s valuation for Yeezy sits north of $1 Billion. 1/16 of what Adidas’ valuation of 16 Billion is.
Consumers were starting to see less value in mass production and wanted to be a part of culture + scarcity. Interesting marketplace companies that have captured this niche include Goat and StockX.
The recent hype of Logan Paul and limited edition Pokemon Cards also sensationalized the value of scarcity. It highlighted nostalgia and people's desire to go back to their childhoods.
The past two decades have demonstrated the shift from abundance to scarcity. Consumers no longer value common products but rare ones.
Web 3.0
Crypto has been associated with ICO hype and a short-term asset to flip. Buy $5 worth of Bitcoin (BTC) ten years ago and you will be a millionaire. However, this perception is changing. People understand the scarcity model in the Web 2.0 model and this is being re-invented in the Web 3.0 landscape.
Scarcity is a core concept to the crypto/blockchain landscape. BTC has a limited 21,000,000 supply and Ethereum (ETH) a somewhat similar model with adjustments.
The best starting example akin to Yeezy’s is CryptoKitties. Axiom Zen made Internet cats and used ETH as a store of value.
During the first week of the launch over $1.3 million worth of ETH transactions were made for the Genesis cats. These first-edition cats have appreciated since then. At an art auction in 2018, one crypto kitty was sold for 600ETH. At the time valued at $170,000 USD. This currently sits as a $360,000 valuation — a 211% return on investment.
Why buy digital cats?
Followed by the question why can’t I take a screenshot?
In response, isn’t that the same concept as the Mona Lisa. You can take a screenshot of it from Google Images but do you own it? No. Only one person/ collective owns that piece.
It comes down to access, permission, and ownership. You as the buyer of CryptoKitty #10 or Mona Lisa are the true owner of the asset. You have the power and permission to buy or sell it for its perceived value.
Web 2.5
This is where Web 2.5 comes in.
It’s the paradigm shift between Web 2.0 and Web 3.0.
It’s the innovative companies, communities, and creators that are redefining value. They are re-creating business models on scarcity and hitting the reset button. They are enabling everyone to be their own version of Kayne and create a Yeezy-like empire.
The paradigm shift between Web 2.0 → Web 3.0.
Why? Because you deserve it. It’s no longer reserved for the large media and consumer brand giants but accessible to all.
Otis
Otis is democratizing access to alternative asset classes. Although they are not using crypto, they are embracing scarcity and access.
Traditionally, it has been difficult to buy art from large artists. Works from Banksy, Virgil Abloh, KAWS, or Takashi Murakami have not been purchasable. Otis flips this model and opens access for anyone to buy these assets in fractional shares.
They are the Robinhood for cultural assets and allowing privatized scarcity to everyone.
Zora + RAC
Zora is redefining value through community, fairness, and independence in the crypto-economy. They allow creators to sell their work via cryptocurrency.
The most awesome example is their collaboration with RAC. I’ve followed him for a while and he makes awesome music 🙏. They partnered to sell exclusive and limited edition tapes of his recent album BOY.
As seen in the current pricing of $TAPE, it started at $20 and now sits at a much higher appreciation of $1972. RAC is able to receive more creative earnings for his work through a new model.
Zora unlocks new meaning to what value is and is doing with a reinvented distribution model.
SuperRare
SuperRare is the Etsy for “super rare” art collectibles. They allow artists to sell their art for a set price and take a small transaction fee for the facilitation.
This recent tweet demonstrates the impact Web 2.5 and Web 3.0 business have on creators. They are no longer limited on their creative earnings and are being rewarded for their work.
Other notable companies include
- Open Sea: Peer-to-peer marketplace for rare digital items and crypto collectibles
- Raribles: Create and sell digital collectibles secured with blockchain.
- Nifty Gateway: Premier marketplace digital item drops.
So what next?
Abundance is dead. We want to own our value.
These aforementioned companies are pushing the boundaries and redefining value. It’s breathtaking and liberating that creators can now earn what they deserve. It’s no longer controlled by the art galleries, production companies, and media giants.
What we can do as a collective is to participate.
We are still in the early stages of buying, purchasing, and holding digital products. These developments are only recognized in the art and crypto community so we must ask ourselves how do we reach a wider audience. How do we distribute to the main attention platforms such as Instagram or TikTok?
Look at how scarcity is being evaluated in modern society. Experiment and understand what these companies are doing. Then we can move into a more free world of equal distribution.
I like to build, read, and write. Let’s connect on Twitter to stay in touch.
Other great resources:
- The Playful Paradigm Shift By Jacob Horne
- Decentralizing the minting of Non-Fungible Tokens by Brian Flynn
- An Analysis of Token Curated Registries
