Smart contract blockchains are clearly a powerful technology. Digital signatures, ledger databases, and public markets are all significant on their own, in combination they form a whole much greater than the parts. This whole has clear advantages in several areas: micropayments, loyalty points, virtual goods and other applications all benefit from the transparency and trust of blockchains. In other cases sober decisions have to be made about whether the whole is needed or if just one of the components provides the real value. Private ledgers or centralized markets can solve many problems.
A similar evaluation has to be made about business models. For example a social network built on a blockchain smart contract platform (let’s call that Web3 for short) gives users and developers more control and allows new models of sharing the value created. However, the dominant business model for centralized social networks is advertising and in a Web3 social network users often pay for the services they are using. For heavy users those penny transaction costs will add up and they are faced with a choice of whether to pay and deliberately choose the benefits of the Web3 app or continue on the path they are used to.
Everyone likes things that seem free so at first glance Web3 apps appear that they would stay a niche for those users who really care about portability of their data or other benefits or who contribute enough to the system to offset the value they receive.
AI assistants will change this calculus. In the next year you will start using an AI assistant to do more and more tasks for you. That work will get done through programatic interfaces rather than user interfaces. Even more impactful; AI assistants don’t watch ads; at least not in the same way we care about now.
Ok, there will be a transitional period where your assistant watches ads, an arms race between content providers and users, and a switch to a new paradigm. In this new paradigm the tradeoffs will be much clearer and Web3 more competitive. In fact the aspects that remain advertising oriented are likely to be tracked on a blockchain: prove you have engaged with this ad in order to earn.
Big changes are coming to how we interact with the digital world. It’s important to still be clear eyed about what will work and won’t but we should expect major shifts in some large economic systems.