CoinWorld reported:
Author: Alana Levin, Partner at Variant Fund; Translation: xiaozou
Recently, I have noticed what appears to be two accelerating trends on the internet:
Existing applications are becoming increasingly isolated and self-contained.
New startups are striving to make the internet more open and interoperable.
I summarize the relationship between these two trends as follows: established companies are attempting to solidify and enhance their profit margins and moats, while new startups view these profit margins as opportunities.
The core premise of achieving a more interoperable internet is that one application should be able to read user data from another application. Consider this: SeatGeek prioritizes ticket purchases based on your past betting history on DraftKings; Resy recommends restaurants based on the types of food you’ve recently ordered from Amazon Fresh; Fila offers unique discount codes to those who watched Emma Navarro’s stellar performance at the US Open and are interested in purchasing gear from sponsors.
I have observed two categories of startups pursuing this interoperable internet opportunity.
The first category aligns with the current state of the internet, as it accepts the reality that the vast majority of existing user data is stored in closed applications. The underlying technology is known as web proofs, which are encrypted signature data from web servers that prove a user has taken a certain action online. Web proofs allow users to choose how their data is utilized. In the examples mentioned above, users can choose to prove to SeatGeek that they are active DraftKings users; consumers can choose to let Resy access details of their recent Amazon Fresh orders, but they are not obligated to do so.
The second category attempts to reconstruct core categories of internet applications using persistent, mandatory open-source data. A key distinction from the first category is that no one can control the data—therefore, third-party developers do not need to require users to prove they have taken a certain action (i.e., providing web proof); developers can verify user actions themselves. Farcaster is one of the leading companies in this field, emerging as a social network where everything from users’ social graphs to posts and likes is stored in a distributed hub. It has become a thriving center for developers, and we are starting to see its network attract some exciting applications.
I am interested in both approaches. Given that embedded crypto wallets are expected to gain increasing adoption, we can begin to envision how new economic flows may emerge.
Regarding the former: we can see microeconomics and emerging information markets riding this powerful wave of access. So far, a challenge for users selling data has been that individual data points are not inherently valuable. Micropayments could be a way for consumers to begin monetizing their data. Conversely, I can imagine a world where consumers are willing to pay for priority access to certain features (e.g., priority ticket purchasing), and this process of granting exclusive access cannot be separated from web proof.
Regarding the latter: advertising supports a significant portion of the economic flows on today’s internet. What if we could better match consumers with the products they want and ensure that the money spent by advertisers truly translates into consumer spending, thereby making the market more efficient? I previously wrote:
Companies could send coupons directly to target customers’ wallets (since each account is associated with a wallet).
The issuance of coupons could be based on a post (or posts being followed) from consumers that mention similar products.
Businesses could operate with confidence, assured that data would always remain open-source and accessible (i.e., without concerns over API shutdowns or price hikes), allowing them to invest in improving the effectiveness of distribution channels.
Budgets would only be spent once consumers take purchasing actions (i.e., when coupons are used).
An open-source data graph is central to realizing this vision.
Overall, both approaches appear promising, moving toward a similar ultimate vision: a more interoperable internet. The differing methods for data access, types of available data, and whether to meet user needs or lead users into the future seem to represent a positive development, no matter how one views it. The more internet experimentation, the better!
