The future of Web3 is not the present

Let us not mistake the present with the future. I just spent a few days in Seoul, South Korea, where - besides the worst flood in at least five decades - the Korea Blockchain Week took place at the Grand Intercontinental Paranas, in the middle of the very Gangnam that the famous song popularised.

If we stare at the present only, the common view might be that cryptocurrencies have crashed, thus the industry as a whole is in bad shape.

However, I might argue quite the opposite. True, most cryptocurrencies have lost significant value in the past few months. But so did the stock market as well as some of the major currencies like the Euro. It is an overall downturn. That is the trend for the time being. Yet, underneath the noise, things might be rosier than most observers might imagine.

For a start, during the 2021 crypto bull run, when the price of tokens grew significantly, a large number of new users became accustomed to the technology.

The popularisation of Non Fungible Tokens (NFT) was fuelled by large brands getting on board. The world renowned jewellery household Tiffany entered in the industry with an eight digits investment. Their partnership with Crypto Punk steamed up creativity and opportunities.

Sportswear brands have launched their own NFT collections and entered the Metaverse. Entertainment stars went full on Web3 with their shows. You see the difference?

In the previous bull to bear market (circa 2017-2018) it was all about finance. And finance we know, is win or lose. But this time around, it is a lot about economy. And economy is win/win.

Economy is all about purchasing something. In the largest majority of cases the prices of a product or a service reflect the market value. Almost always it is dictated by the meeting point of demand and supply. Web3 is mostly about ownership of digital assets, and what you buy is what you get.

Finance is different from that perspective, especially in crypto, where most users buy cryptocurrencies through centralised exchanges, which notoriously own the key to the funds.

In other words, we do not really own the cryptocurrencies that we buy through a centralised exchange, but - in theory - we own a digital or physical asset through a NFT.

In theory because some of the marketplaces still have a centralised approach, and we own the asset only as long as the intermediary platform exists.

Regardless of technicalities, the biggest shift in perspective in the Web3 scene is that we went from a purely speculative market with little or no use case in 2019, to a fully developed - or developing - ecosystem that promises ownership and interoperability.

At Korea Blockchain Week I had the opportunity to meet with many fellow Venture Capitals. The sentiments seems to be positive overall. The opinions that I gathered converge on the certainty that what is being built now is set to drive innovation in 2024 and 2025.

While the way of investing might have slightly changed, the determination of Web3 VCs as well as some Web2 more traditional VCs is stronger than ever.

VCs tend to invest for the future, while consumers look at the present. Cryptocurrencies will continue to go up and down, but the best of the new technologies are here to stay.