Web 1.0 was about reading content. Web 2.0 is/was about creation and the broader ability to write and distribute content. The promise of Web3 is about ownership and the ability for any individual to own content and the data surrounding it. Web3 enables anyone and everyone to be properly compensated for their data, but only if the majority of people take advantage of and engage with the underlying systems that enable this ownership. Web3 is more a combination of the reality of Web 2.0 and the promise of Web3. I wonder whether that promise will ever truly be realized in a way that benefits everyone?
Much like the rest of the real world, you only get out of it what you put into it, and the majority of people are either lazy or not motivated enough to truly care about their privacy. If people truly cared about their privacy, Facebook and TikTok would cease to exist. If people cared about their privacy, Google would lose almost all of its services overnight. Docs and Drive would be a thing of the past. If people really cared about privacy, even Apple and Microsoft would struggle to succeed in the world of today.
All these solutions leverage personal data and the insights gleaned from them in order to operate their businesses -- and we haven’t even touched on advertising and marketing. The landscape of digital advertising would look dramatically different if people truly cared about their privacy. If consumers took control of monetizing their data, and owned its use, revenues would plummet for most ad-driven companies.
Web3 is setting up another broadening gap between the haves and the have-nots. Depending on what sources you look at, only about 6%-8% of the U.S. population owns cryptocurrency. I see that number as a leading indicator of the population who consider themselves early adopters and digital progressives. These are the people who lean forward looking for ways to demonstrate control or generate new wealth. These are the people who would lean in on a privacy-oriented model for owning and managing the use of their personal data.
This is not a new concept. People have been talking about arming the population with insight and access to their own data for years, but none of them have made any progress. There has been talk about marketplaces and data exchanges controlled by the users themselves, but the roadblock is always getting traction with said consumer. The concept of a marketplace is a simple one, but it requires consumers to burn calories in signing up, accessing, engaging and actually managing their data. This lines up to privacy -- people say they would do it, but they won’t.
There have been baby steps in this direction by companies like Google and Apple. Google does offer you the ability to access and review logs of your data, but what percentage of users actually take advantage of this info? Apple released an update to its iPhone that enabled users to deny apps access to their data. While 62% of users opted out of allowing access, this only stopped non-Apple apps from accessing your data. Apple still accesses the data and uses it for its advertising needs. This was a baby step towards privacy and one that satisfied the curiosity of a less-motivated audience. Apple’s solution was “easy” but not far-reaching.
Actual management of your data requires effort, and the ROI to date is low. I found one stat that suggested an average U.S. adult would make $35 a month off the monetization of their data, though some outliers could make more.
While the numbers in crypto will increase, so does the ROI – it’s simple supply and demand. On the management of your data, that number would not likely increase by much regardless of the volume who are engaged because the management parameters are finite. What it does suggest though is that the people who are engaged will benefit, while the majority still won’t dive in.
Consumer behavior would likely show some percentage of the audience would dive in at first, but the effort would decrease over time. My guess is the percentage who would jump in right away would mirror the percentage that are actively managing cryptocurrency in 2022.
Web3 has amazing promise and I believe we are inevitably headed towards it, but I worry that it simply serves to widen the gap between the active and the passive, or the haves and the have-nots.
I’m wondering if there’s a way to democratize the benefit of data ownership. My guess is the only way that happens is if Google or Apple enables it -- which seems like a far-fetched idea, since that would eat directly into their revenues. Those dollars are already being made, so the reallocation of those dollars has to come from somewhere, right?
What do you think about the implications of privacy and data ownership in Web3?