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How do you think you would answer if I asked you the following question: “What do you own online?”
In real life, you own your house, the car you drive, the watch you wear, and everything else you’ve bought. But do you own your email address or your company’s website? What about the photos that fill your Instagram account? Or the in-game purchases on Fortnite or FIFA video games or whatever you play?
My best guess is that after throwing your mind to the things you use the internet for (which is pretty much everything to everyone, socially and professionally), you would struggle to come up with a solid answer.
Perhaps you would like to ask me to explain what I mean by ‘property’. But it doesn’t really matter. And while I don’t mean this as a trick question, it is. Because in the current version of the internet we don’t have any property rights online.
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Digital Ownership: Participants and Products
To understand why we don’t own anything online, we must first understand the evolution of the Internet and how it gave rise to the business model that dominates the current iteration.
In the 1990s – the decade of desktop computers and dial-up connections – the Internet was primarily a content delivery network consisting of simple static websites of information. What we call Web1 today was slow, silos, and disorganized.
Next came platforms, such as Facebook (now Meta) and Google, powered by wireless connectivity and the development of wearable devices such as laptops, smartphones and tablets, which gave us free-to-use services that let us edit, interact with, and generate content. These platforms centralized the web and provided a top-down structure where users were dependent on their systems and services.
This evolution of the internet took place in the mid 2000s and is the version we know today. We call it Web2. It is a model based on connectivity and user-generated content, made in the image and interests of companies such as Facebook, Twitter, Instagram and YouTube.
In this environment, netizens are both participant and product. We sign up for services in exchange for our data, which is sold to advertisers, and we create content that generates value and encourages engagement for these platforms. We do all this while we have no rights to anything online.
Our social media profiles may be deleted and our access to email accounts or messenger apps may be suspended. We do not own any of the digital assets we buy and have no autonomy over our data. Companies we build online often rely on platforms and are therefore vulnerable to algorithms, data breaches and shadow bans.
The deck is stacked against us. Because the option of not being involved, when so much of the commerce and communication in the world takes place online, is really not an option at all. And yet there is nothing we can point to and call our own. Nothing we actually have authority over.
And it is this dynamic that Web3 is determined to change.
Web3 and the “Internet of Value”
Right now, when most people hear the term “Web3”, they probably think “metavers”. But a better way to think about Web3 is like the evolution of the Internet.
Today, the digital experience is very corporate and very centralized. Web3 delivers the dynamic, app-driven user experience of today’s mobile web in a decentralized model, shifting the power of big tech back to the users. It will do this by spreading the data outwardly – putting it back in the hands of netizens who can then freely use, share and monetize it as they see fit – and scale and scope of interactions between users and to expand the internet.
Underpinning that extension will be guaranteed access, meaning anyone can use any service without permission and no one can block, restrict, or remove a user’s access.
The idea then is that Web3 will not only be more egalitarian, but also create an ‘internet of value’, as the value generated by the web will be distributed much more fairly between users, businesses and services, with much better interoperability . Users have full ownership, authority and control over both the content they create and their data. But how will this help us transition to true digital ownership?
NFTs are the key to digital ownership
The truth is that digital property is not at difficult problem to solve. And we already have the solution: NFTs.
In the public consciousness, NFTs are known for the projects that have received the most media attention, such as CryptoPunks and Bored Ape Yacht Club. While projects like this have catapulted the term into the zeitgeist, the usefulness of the underlying technology has been much less discussed.
Simply put, NFTs act as proof of ownership. The details of the holder of the NFT are recorded on the blockchain, all transactions and transfers are tracked and transparent and available to the public, and everything is controlled by the token’s unique ID and metadata.
So, how does this work in practice? Let’s say I make an NFT. Once I upload it, it creates a “smart contract” that keeps track of the creation, current owner, and royalties I receive. If someone decides to buy it, he/she owns that NFT and any additional benefits that come with ownership. Their data is registered on the blockchain and no one can change or delete them.
Now let’s say the market for my NFTs is starting to heat up, demand is growing and the value of my collection is starting to rise. If the owner decides to sell, they make a profit and I earn a small royalty from the resale. The change in ownership is tracked on-chain in real time and the smart contract ensures that my royalty fee is deposited directly into my wallet. This is the main value proposition of NFTs: verifiable ownership and the ability to liquidate digital assets.
What’s next for Web3?
This is what ownership looks like in Web3. It is the promise that netizens can own their digital assets in the same way as their home, car and watch. NFTs will usher in a more equitable digital economy and play a central role in the future of digital trading.
The fact is that we are currently still writing the Web3 rulebook. This is still a very new, very young space. And while few things are certain, we can say with certainty that the Internet is only moving in one direction: ownership.
The guiding principle in Web3 is to accelerate the transition to a more equitable digital environment. It’s very much opt-in, an internet built by the people for the people. It is one in which ownership is the foundation upon which new products, networks and experiences are built. And it is fundamental to create the internet of value.
In the coming years, Web3 will develop alongside Web2. The infrastructure that supports Web2 is very strong and I don’t see us deviating from that anytime soon. However, in the medium to long term, Web3 will completely reshape our relationship with the Internet.
Filip Martinsson is co-founder and chief operating officer of morals.
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