Network Effects In A Web3 World: Thinking Outloud
How are network effects going to be affected by Web3?
What happens when we are dealing with digital platforms that users have stake in? To compound it, where do things go when people can also have stake in the network that the platform is connected to?
In this video I ponder these questions along with the fact that we might be seeing the impact of each action even greater than with Web 2.0. We know network effects mean we are dealing with a greater than 1:1 on social media. What happens when your activity also flows through to the network (blockchain)?
▶️ 3Speak
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I liked the part where you were saying that we can change the outcome of the tokens by holding stakes there. It made me realize that it is similar to being an owner of the shares of stock of a company. I haven't really looked at holding tokens that way. I guess with the decentralized nature of Web3, this makes more sense, and I can see it already happen with the SPL DAO. I haven't been selling my tokens, but this makes me want to hold more of the ones I am interested/invested in.
Summary:
In this video, the speaker delves into the concept of network effects in a Web 3 world. He starts by emphasizing the importance of networks, particularly blockchain networks, as the foundational level. He explains how digital platforms are built on these networks, acting as businesses, and how they operate within a public and permissionless ecosystem. The speaker discusses the significance of tokenization and ownership in Web 3, highlighting the common focus on price rather than value creation. He explores the interconnected relationship between platforms, blockchain, and user stake, illustrating how active participation can drive value within these networks. The speaker stresses the need to shift focus towards building and creating value rather than solely on token prices.
Detailed Article:
The speaker initiates the discussion by positioning networks, especially blockchain networks, as the essential foundation in a Web 3 environment. He draws parallels between these networks and a nation-state, framing them as the structural basis upon which digital platforms are constructed. These platforms, whether technology, finance, or commerce-based, exist within a public and permissionless ecosystem, allowing for unrestricted participation and API utilization. The speaker underscores the concept that these digital platforms inherently operate similarly to traditional digital giants like Uber, Google, and Facebook, highlighting the necessity for them to be structured as digital platforms.
Transitioning into the discussion on tokenization, the speaker remarks on the prevalent issue of the industry's fixation on token prices rather than value creation. He emphasizes that tokenization essentially equates to digital ownership or real estate within these networks. The speaker outlines how individuals with stakes in these platforms or blockchain networks are incentivized to actively engage and contribute, ultimately driving value within those networks. Furthermore, he unpacks the idea that every action within these platforms has a ripple effect, impacting both the platform and the underlying blockchain.
The speaker elaborates on how the interplay between platforms and blockchain networks in Web 3 catalyzes a greater impact compared to Web 2 platforms due to their interconnected nature. He analogizes the relationship between applications on blockchains to operating systems like iOS and Android, illustrating how building on a blockchain or introducing an application can enhance the entire network. Moreover, the speaker discusses how user stake in these networks influences their engagement with various applications, underscoring the importance of understanding the broader ecosystem dynamics.
In conclusion, the speaker stresses the significance of creating value within these networks through active participation and engagement. He contrasts this approach with conventional assets like stocks or real estate, highlighting the unique ability individuals have in Web 3 networks to influence and enhance the value of their holdings. Overall, the speaker prompts viewers to consider the impact of their actions within these digital ecosystems and shift focus towards building and creating value rather than merely speculating on token prices.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.