The writer is an investor in technology start-ups at Samos Investments
Web3 — or the new internet — is edging into the mainstream. This new version of the web is built with blockchain technology, which is based on the concept of decentralization and allows for more transparency. Blockchain supports digital assets, such as cryptocurrencies and non-fungible tokens (NFTs).
The art, fashion, gaming and finance worlds are already exploring the potential of this new realm. From Starbucks’ plans to launch NFTs for coffee drinkers to gain access to “experiences” to Gucci auctioning an NFT to raise money for Unicef USA.
However, the complexity of the space and lack of engineering know-how to create tokens have been a barrier to participation — many people just don’t know where to start. I am a late adopter, but I am fascinated and decided I needed to learn much more.
A friend of mine told me about a community she was part of called Astro Girls Society. With a collection of 3,888 painted “Astro Girl” NFTs, it is an initiative to bring women into Web3 and is the perfect place to learn from other NFT owners. Of course, the first condition of joining was to purchase an Astro Girl NFT, which I did through NFT marketplace OpenSea.
As a member, I have access to learning sessions. More importantly, the artists who design the NFTs receive a portion of funds generated from their sale. But selecting an NFT is like picking out art — you won’t know if it will go up in value, so buy something you really like that grants you access to a community you value. Once I found the NFT I wanted (“Peaceful Saturn”, with purple hair and covered in stars), I bought it using MetaMask, a cryptocurrency wallet. I was then accepted into the Astro Girls Discord channel — an online group hangout. And so the learning began.
The gaming world’s transition to web3 is probably the easiest for beginners to understand. Sandbox, started in 2012, is a gaming metaverse where players can build, own and monetise their games. Sand, a utility token built on blockchain technology called Ethereum, is used for transactions and interactions.
For those struggling with the concept of owning real estate in the metaverse, Sandbox helps to put it into context. You need to own digital land in order to build digital assets. If you have experience of online gaming platforms Roblox or Minecraft, it is similar to being responsible for building up a patch of the game that others can experience.
Web3 is also changing approaches to recruitment. TechTree, a hiring marketplace, has built an online community for developers that incentivises them to refer the best developers for jobs using “bounties” as a reward. For anyone tired of recruiters pocketing commission, or referring friends for jobs and receiving no reward, this is a solution. The platform makes you feel as if you are in the “metaverse” and bounties can either be cashed in or given to a charity.
But the intersection between Web3 and finance is one that could really accelerate positive change, reducing inequality and increasing economic participation. For example, in Africa “the potential and importance of DeFi [decentralised finance] can’t be understated”, says Yele Bademosi, the co-founder of Nestcoin, a Nigerian start-up focused on making cryptocurrencies accessible.
Those in hard-to-reach communities lack access to bank accounts and other financial services, but Bademosi adds that anyone with an internet connection and a smartphone can access stablecoins and savings accounts. Stablecoins are less volatile cryptocurrencies pegged to an asset or to a fiat currency.
There are downsides, however. Some blockchains use algorithms that require enormous computing power and are therefore energy intensive. Further, while blockchain is considered highly secure, it is not impenetrable. High-profile hacks include the more than $300mn worth of ether, another cryptocurrency, stolen from Wormhole, a bridge that facilitates the movement of crypto from one blockchain to another.
These concerns are not to be taken lightly, but the opportunity to redistribute power and widen access to finance, and even job opportunities, is exciting.