Changes are coming that will make our experience online better in many ways. This is happening faster than I was expecting and is a result of the explosive growth of “Web3”, and make no doubt about it, Web3 is exploding.
According to Sarson Funds research team, community groups and businesses are being birthed on Web3 at the rate of hundreds per day around the world.
These communities are being built around artists (NFTs), gaming communities, professional networks, and everything in between (even our very own American Crypto Academy (ACA) is converting to a Web3 company).
People are spending more and more of our lives online. In the “Post-Covid-Post-Economic-Era” in which we all live, being online makes sense. Web3 technology brings us closer and can bring joy and connection. If you have ever shared a funny video with a friend or a relative, you are guilty of sharing digital joy, and of course, we are all seeking ways to deepen our connection with one another. Paradoxically the same technology that connects us, now is leaving many longing for deeper connection. In a meaningful way, Web3 is helping to solve this.
So, what is Web3? Here’s a timeline:
Web 1.0: You visited a webpage to learn about product or see some data such as hours or location.
Web 2.0: You visited a website to buy a product or perhaps to host photos for friends and family.
Web 3.0: You will visit a website that connects to your “Digital Identity”.
What’s your Digital Identity? At this moment in time, your digital identity could be any combination of your cryptocurrency holdings, social profiles, art collections, groups, medical records, contracts or anything else you choose to have in it. As you add dimensions to your Digital Identity (say a new set of preferences for recording your favorite sports teams) you can take comfort in the fact that this data can’t be misused or lost by a third-party tech company that is collecting it. It’s not stored on the application that you connected with at all, it’s not even stored on your own computer. Despite it feeling like your Digital Identity lives in your internet browser window with you, it actually is safely stored on dozens of independent yet coordinating blockchains. In the same way that Bitcoin takes power away from banks and governments and returns control to its users, Web3 takes back control of our personal information from big tech companies.
The blockchains themselves, beyond offering nearly impenetrable security, offer features and functions geared toward the specific user demands. High speed blockchains for high-speed applications, and ultra-flexible blockchains (like Ethereum) for simpler applications (like the ACA).
With Web3, your Digital Identity is completely in your control, accessible only to you and to those applications to which you give permission. This is all made possible through cryptography called Blockchain Technology, which is the same technology behind Bitcoin and all cryptocurrencies.
In the future, thanks to Web3, we won’t need to sign into a website or a social platform. Instead, we just connect, and all of our data comes with us. From one platform to the next. To the doctor’s office, the car dealership, our favorite gaming platform or metaverse, we grant each platform the permissions that we agree they need to provide us with the service we are requesting, and no additional permissions. When we leave the platform or service, our personal data comes with us, leaving nothing with the vendor to lose or misuse.
Web3 will greatly benefit companies that use this new technology correctly and many companies can see this clearly. How will Web3 benefit companies? Let’s take the ACA as an example. As a Web3 company the ACA will be able to execute any business process that a Web2 company could (such as selling lessons or subscriptions) but will also be able to issue digital certificates of membership level, certification level, professional vertical or other segmenting criteria to its users as NFTs. Only holders with the correct credential (NFT) will be able to access certain section of Academy content or attend certain events. This does not need to be limited to online events only. The process works just as well for Irl (in real life) events. Already tech savy entertainers are issuing digital tickets to their fans as NFTs.
Besides using NFTs to structure communities and manage membership roles, being a Web3 company, which requires being connected to your customer’s Crypto wallet, allows the ACA to reward its users with custom token giveaways (perhaps for passing a test or referring a friend) or any other promotion that the Academy dreams up. Being a Web3 enabled company or community allows for novel ways to build and maintain an active membership community while delivering more value for users.
Cryptocurrencies such as Bitcoin and Ethereum represent the birth of the “internet of value”. Now by traveling on blockchains, “value” can move as freely as data without risk of loss. For the first time a company (or artist) can not only bestow value on to their community members in the form of digital tokens while also allowing its members to participate in any value accretion that may come from being a part of that community. (In finance we would call this accrued membership value “Seigniorage” or value created related to the value of the community itself, to its members.)
We continue to find and invest in projects that are leading in the adoption and their ability to shape the development of this coming reality. We thank you for your continued belief in us to be able to effectively see and invest in this future! It has not been a fun experience for investors, and we completely understand that. Sometimes, we have watched our investment thesis be correct only to watch the prices of associated tokens fall 90%… Without a doubt, the market has done what markets typically do during times of panic and has sold good projects along with the bad. At the risk of being a month or two early, we at Sarson Funds believe that there are some early indicators of a shift in the risk adverse sentiment that has been dragging down the crypto markets.
First, it has become widely believed that all crypto assets are “risk assets” and that they can only rise during periods of other risk assets rising. Without agreeing or disagreeing with this characterization, we can find a reason to feel encouraged that the global macro backdrop against which this narrative is measured is starting to turn.
The bank of England resumed quantitative easing this month in the face of soaring bond yields and weakening economic conditions. Does this signal the end of monetarily tightening for the rest of the world? Maybe or maybe not. One thing that is clear is that if global tightening is bad for crypto prices, then the opposite is must also be true. Widespread global easing should certainly boost the appeal of crypto assets. Let’s not forget that Bitcoin was launched to combat the debasement of currencies and written permanently into its genesis block you will find this quote, ‘’Chancellor on Brink of Second Bailout for Banks”.
It’s fair to say that a lot has been happening behind the scenes when it comes to Web3. It may be seamless for many as companies begin to adopt. As a company that’s on the cutting edge of technology, it’s a race to the finish at this point.
Disclosures: Not investment advice. It should be assumed that Sarson Funds or its affiliated managers hold positions in all projects that are discussed. It is not possible to invest in any project directly through Sarson Funds, Inc. or its affiliated managers. Any investment product offered by managers affiliated with Sarson Funds should be assumed to be only available to Accredited Investors and subject to the individual terms and conditions of that offering including but not limited to those eligibility requirements associated with U.S. Securities Regulation D, section 506c. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at info@sarsonfunds.com
