What you need to know:

• Web 3.0 is coming for our time, our creativity and our money. It feels like we haven’t learned anything from Web 1.0 or Web 2.0.
• SXSW hosted 102 sessions about NFTs this year, and more on crypto and metaverse – a common theme was interoperability.
• Marketers are jumping into NFTs but many prominent speakers, including futurist Amy Webb, argued they don’t have longevity.
• The metaverse is dopamine-friendly, but is it more reminiscent of a faster horse rather than a car? 

The evangelists at this year’s SXSW – the first in three years – heralded a decentralised, democratised and open web, but for those of us around for the first iteration it sounded achingly familiar. A slew of speakers taking to the stage argued Web 3.0 is righting the wrongs of Web 2.0 with its massive accumulation of data, eyeballs and revenue for the seemingly unassailable few – Alphabet, Meta et al.

Not everyone agreed, of course. In his keynote, Scott Galloway called it a ‘Re-centralisation’ (so far), with 72% of Bitcoin owned by 2% of accounts and 80% of the NFT market owned by 9% of accounts. His take on these evangelists was severe: “As a crypto bro, I want to tell everyone we are taking back control from the evil wealth-driven ultra-rich, so that I too may become ultra-rich.”

Business model discussions were pretty light on the ground, but something we have come to accept as nascent technologies find their feet. The difference this time is that there is more push (NFTs, crypto currencies) than Web 2.0, which was very pull (social).  

A common theme in the numerous crypto, metaverse and NFT sessions was interoperability, a key selling point of Web 3.0. While this is already available, businesses have yet to adopt it. But then again, as we’ve seen from the very recent history lessons on walled gardens, the App Store, Microsoft and telcos, it takes government action and the courts to get businesses to go against their own best interests for the common good.

In their session, Sebastien Borget, the co-founder of gaming-blockchain-NFT company The Sandbox, was asked a question from the audience as to whether the avatars created in Sandbox could be used in Roblox. His answer was to ask Roblox yourself. Case rested. 

The futurist Amy Webb, a crowd favourite speaking at SXSW for the fifteenth time, highlighted the inherent lack of scarcity of NFTs and argued they’re not a long-term play – bold given the crowd and the fact there were 102 NFT categorised sessions this year. In Webb’s view, NFTs are a distraction and it’s the underlying technology that allows the tracking of creators, owners and the ability to trade it over the blockchain, that is exciting – the disagreement is on the use cases, not the value it can bring.

Well, there was some constraint on NFTs. Shara Senderoff, of music/tech investment group Raised In Space, countered other panellists talking about how they get to one billion NFT traders, when there are only circa two million of them right now. She pointed out that 'the blockchain' is not scalable at present – you literally cannot add millions of new NFTs to it. Clarifying this point in another session Philip Rosedale (of Second Life fame) said the average transaction on Second Life is $2; putting each transaction on the blockchain would add an additional $30. Growing the base, with entry level NFTs linked to the block, is just not feasible presently. Amy might question why at all.

What about the metaverse? Having now explored some of the metaverse ‘worlds’ for myself, I can report they look scarily dopamine-friendly, but compared to what already exists they’re reminiscent of a faster horse rather than a car. The creativity, the games, the sociability and the avatars mean that people are going to spend inordinate amounts of time in them. 

Roblox and Fortnite are the two worlds most referred to as the advance guard of this new era, but the Mark Zuckerberg appearance (on video) at SXSW made clear the behemoths of Web 2.0 are entering the fray. Meta’s Horizon Worlds removing support for third-party game development software Unity gave clear notice on interoperability from Facebook’s owner. 

Reggie Fils-Aimé (ex-COO Nintendo USA) talked about Microsoft’s pending acquisition of Activision Blizzard catapulting them into the arena. He was clear that it is going to be a gaming-led revolution – not socially led – also calling out Epic, Take-Two and Sony.

Among all the sessions, Timmu Toke of Ready Player Me seems to have threaded the needle of interoperability with his cross-game avatar platform accepted by 1500+ companies – although not Roblox. This company feels like a new type of pick-and-shovel play that provides the common currency across gaming sites. 

There is also a strong business model here – gamers already spend their dollars kitting out their creations. According to Philip Rosedale, Second Life makes more per user than YouTube or Instagram or Facebook by selling digital goods, not advertising. Micro transactions are the other interoperability that’s missing given the immediate-term problems with blockchain costs.

On another note, I saw Henry Jenkins (of Convergence Culture fame) speak about dystopian futures, and after being water-boarded in the metaverse for days, this is where my gut went. These missionaries want to move us on from Web 2.0’s ‘surveillance capitalism’, but in my mind it could just as easily lead us to ‘digital servitude’. 

Web 3.0 wants to subsume us in endless hours playing, paying and creating inside these worlds, all the while working for meaningless tokens and worthless NFTs. This is not really new, the investment of creativity and time spent in Roblox, Fortnite and Minecraft is the use case. 

And as you’d expect, marketers are making an appearance – it is shiny after all – buying land next to Snoop Dogg’s mansion in Sandbox and trying their hardest to devalue the worth of NFTs by running promotions that give them away with each case of beer. 

Are you missing anything? If you are the Australian Open, then probably yes – you have a global following, passion and genuine scarcity to make it work. Otherwise, not much for now. If you’re happy to burn on test and learn, fire away. But if it’s the gaming audience you are seeking, there are many options across the 70:20:10 gambit before you start minting NFTs.