Welcome To Child Labor Investments! Today we’re having more of a basic knowledge style post to cover a term that I mention often and what it means for you.
Hey all, Robin here. As we look towards Web 3 and the bright future of the internet something new is beginning to appear on the path. This thing is called Web 2.5 and in this letter I’ll cover a few things:
What is Web 2.5?
How will it shape the internet?
How important is to the future of tech companies?
What it means for creators
Why you should care
What it means for Web3
Let’s dive right into the thick of it.
What is Web 2.5?
Web 2.5 refers to the adoption of traditional Web 3 technologies (ex: NFTs) onto Web 2 platforms. The .5 refers the Web 3 technologies since they are different than the Web 2 platforms that host them while also inching towards Web 3.
Let me clear, these platforms are centralized and they can take away this feature with a few mouse clicks. It’s different to Web 2 since they do not incorporate technologies like NFTs.
Let’s take a look at one case study: Twitter.
Twitter is the best example of Web 2.5 since they are embracing these new technologies with open arms.
Why?
Well because the majority of the discussion regarding these technologies occurs on their platforms.
Twitter has integrated the Lightning Network and NFTs via QuickNode.
With the Lightning Network users can now tip content creators in Bitcoin. Not exactly critical to the function of Twitter since few people tip unless asked.
However, in countries like China tipping is extremely common with content creators and streamers.
The main thing everyone has been begging Twitter to adopt is NFT profile pictures.
This service is enabled by QuickNode’s NFT API and is a serious step in the right direction for Web 2.5.
Twitter just introduced the ability to show off your NFTs from all marketplaces and platforms and now everyone who has one can flex it is uniquely theirs.
However, this is what we know Twitter has already deployed and these rumors of these features have been going back for months off job posts.
Now, the rumors that we have right now are extremely interesting.
Off this job hiring you can infer that Twitter wants to further delve into “NFTs, NFT tooling, membership tokens DAOs, and MORE”.
This is huge for Web 2.5 and it is beginning to show its true potential.
Twitter has had lots of problems monetizing their platform in the past besides ads and it’s no wonder why they are exploring Web 2.5 so much.
They see it as a great way to boost revenues by taking fees and could follow a similar model to OpenSea in regards to minting NFTs and taking a small 2.5% cut for the service on Twitter’s platform.
How will it shape the internet?
Web 2.5 will shape the internet in a way that is more impactful than how Web 2 changed the internet.
We went from accessing the internet and viewing knowledge to creating it ourselves.
Understanding Web 2.5 should be best understood in a similar way to the blogging revolution of the early 2000s.
It wasn’t a radical idea but the concepts it created and the companies that managed to profit off it shaped Web 2 and helped usher in the social media revolution.
The same will be true for Web 2.5, Web 2.5 is the proving ground for key Web 3 concepts like Social Tokens, NFTs, and DAOs.
How important is to the future of tech companies?
Web 2.5 is extremely important to the future of tech.
Let me explain.
It’s a brand new revenue stream and a chance for these companies to completely reinvent themselves in the face of Web 3.
The old guard way of monetizing purely off ads has the potential to be less important than a way of helping creators monetize their content in the new and unique ways.
You can think of the addition of Web 2.5 features like NFTs as a first step for these companies to further introduce new technologies such as DAOs and Social Tokens.
In the case of Meta, they need Web 2.5 way more than Web 2.5 needs them. In the face of waning user growth on Facebook, Meta is desperate to find new ways to monetize content in new ways.
I’m predicting that Meta is going to soon be facing off against Twitter in a quiet war to see who could add the most Web 2.5 features for users.
Meta has officially said that they plan to allow users to showcase their NFTs on Instagram and Facebook and offer the internal memo in the NYT (assuming it is true) is a serious indicator that they are exploring Web 3.
What exactly their plans are unclear at this moment but it looks like they will probably follow an approach similar to Twitter.
What it means for creators
Creators and more broadly the creator economy are going to be in for real treats.
With the addition of these features to platforms like Instagram and Twitter creators will have a new way to monetize outside of advertising, merchandise, and influencer deals.
They can create new ways to intimately connect with their audience by creating a DAO or Social Tokens that can unlock exclusive perks.
This also gives them new streams of revenue that can elevate them further and allows them to create a community instead of an audience.
Why you should care
“Okay cool Robin, we all know about Web 2.5 and that’s just great but why does this matter?”
Well, it matters for the Social Media companies themselves.
And the potential revenue that they can make from these features along with the creators that you engage with on a daily basis with topics like Social Tokens.
What it means for Web 3
The rise of Web 2.5 is a clear indicator that Web 3 is here to stay and an indicator that some of the most powerful and valuable companies in media and tech see it as vital to their futures.
It’s also a sign that the overton window (ideas that are tolerable or relevant in public discussion) is shifting for Web 3 and crypto towards the mainstream.
And with the integration of the mainstream the full vision of Web 3 will finally be fulfilled.
Decentralized internet services that enable creators and consumers to connect in new ways and have profound impacts on each others lives.
But right now, we’ve got Web 2.5 to look at and its rise will either kill Web 3 with a lack of interest or add more fuel to the rocket ship.
Silicon Valley and Web 3 sitting in a tree
If Meta ends up integrating tips as Twitter, next stage could be an NFT marketplace as the current real world items/second hand marketplace they have. For RE an AirBnb competitor where users rent their space with digital access/locks.
If they were to create a gig/job marketplace a la Fiverr with crypto payments, and partner with Coinbase to onboard users + create a social investment platform a la eToro, they would win the game, at least for retail until a decentralized alternative gets there.