Web3 is transformative. It is changing things in ways few imagine.
The unfortunate reality is most people do not see what is going to take place until it happens. Forecasting is difficult and the most trained of people get the majority of things wrong. None of us have a cryptal ball into the future.
That said, we can look at trends especially against the backdrop of history.
When it comes to Web3, how many discuss the scarcity model? How often have you found people talking about the shift from scarce to abundant? It is not something that is typically covered.
It is, however, a component to the equation which has a long history. Most industries operate upon this principle. When things are scarce, they carry a high price tag. Those entities that are in control of the resource (product, service) have enormous power.
As things shift and we see abundance forming, all this goes away.
This is the point we are rapidly moving toward with the digital realm. There is something that is occurring that few are discussing. It has a long history which means we can reasonable forecast what will take place.
Just like information 25 years ago, networks are not going to be scarce.
What Is Scarce In Web3
Right now, there are a few powerful entities that run the Internet. Another way of looking at it is there is scarcity in networks. We have a few major technology corporations that are household names.
To break this down even further, there are only a few major databases that most utilize. These are Twitter (X), Facebook, and Amazon. There are a handful in the world of finance which follows a similar pattern.
Web3 obliterates this. We see the potential for unlimited networks, changing the entire value proposition. As they stand now, the values of companies like Facebook (Meta) is going to diminish. The competitive advantage is dwindling.
Blockchain is a major Trojan Horse. The introduction of this technology means we are dealing with public networks which are permissionless. Developers are free to build on the network, utilizing whatever data is there. Try doing that with the major corporations.
This changes the entire architecture of the Internet. We go from a server/UI system to one of server with multiple UI. The latter is essentially unlimited since anyone with the talent can develop.
What this means is the equation regarding scarcity and abundance is changing. Thus, something else needs to step in.
To me, the scarcity mechanism in a Web3 world is loyalty.
Those networks with the most loyalty will end being the largest.
Low Barrier To Switching
One of the keys to understand is the fact the barrier to switching is minimal. Users have the ability to move from one application to another while still retaining access to their data. Of course, if they are unhappy with that ecosystem, the data could be left behind and a move to another network occurs with a few clicks.
People are going to be operating in a different manner as compared to the present moment. This means that, as options grow, loyalty is the defining characteristic.
Those networks that can foster an atmosphere which breeds loyalty will end up succeeding. It is something, of course, that applications and games have to look at also.
The goal is to make switching more difficult. By this, we are not talking about the idea of making it technically harder. Instead, we are referring to the idea that people will find it hard to leave since so much is being offered. When people are receiving what they need, the motivation to switch decreases.
Hence, we are entering a world where loyalty is even more important than it was before.
Are people really loyal to Facebook? Twitter? YouTube? For the most part, I would say no. The reason billions are there truly comes down to the Web 2.0 scarcity. The fact there are few viable alternatives has presented a problem.
Will this be the case in the future? In my estimation, it will not. People are going to have a ton of options outside these entities. Over time, as the features and offerings grow, people will see more is available on the newer networks as compared to the old ones.
Bear in mind, this is a process and is not going to happen next week. We still have people who receive the newspaper each morning at the end of their driveways.
Change with technology can often take a long time.
Hive Is Already Suited For This
We are Hivians. Or we are Hivers.
Whatever name we go by, the result is the same. There is a loyalty (dedication if you will) among a certain percentage of the user base. While it is miniscule compared to the rest of the Internet population, it does form a strong foundation leading us into the transformation.
Here is where the idea of the network-state can enter. While this is a concept that is larger in scope than what is being discussed in this article, it is a mental construct that does emphasize what we are dealing with.
The battle for Steem with Justin Sun shows how loyalty plays out. Essentially, the [network was not able to retain control of the users (and developers). A portion of the base decided to switch to another network.
It was a move that epitomizes Web3. A bunch of people who did not know each other joined together to battle an alien force. When that proved fruitless, those people left. They took their money, attention, and applications elsewhere.
This shows the power of loyalty in the new realm.
Now consider this same concept with 25 million people. What if Hive had that many people having their needs met? What kind of force would it be? Certainly there would be other options yet, for the most part, those people would not leave.
I do not believe this is something that traditional entities have. Sure, some might like Bank of America, Netflix, or Instagram. These centralized entities have enormous power in their realms and do a good job of ensuring their "moats". This, however, is going to break down.
What gets really exciting is value changes. One of the central tenets of Web3 is equity. tokenization means people have a financial stake in these networks (and possibly applications). When this happens, the ownership proposition is altered.
Here we see loyalty not only generating the value but it is also has a financial return for the individual giving it.
It is exactly how Hive is structured.
As the value of the database grows, it is captured in the base layer, value capture coin (HIVE). This impacts the wallet of each person who is holding it.
Hence, we see a digital cooperative forming where the entire network is distributed among the users. Those who are the most loyal will likely benefit the most.
This is going to be the new model. None of this exists with Web 2.0. The network effect is definitely there but we have to keep in mind this can work in reverse. Each person that leaves has a greater than 1:1 impact.
Web 2.0 will cannibalize itself. We are going to see the major entities fighting to pull users from the others platforms. This will extend past social media. PayPal, banks, and other entities will also be affected.
These entities simply do not have the loyalty necessary to withstand a world where options are much greater.
Over the last few years, we discussed adding many different layers to Hive, including the Hive Financial Network. This is all designed with this concept in mind.
As more is offered, the dedication and loyalty to Hive can grow. It essentially boils down to a greater number of people having more of their needs met via this network.
It is the true game changer of Web3.
Networks will become like information. And look at what happened to the traditional information companies pre-Internet.