Future FWD

Web3: The New Age of Exploration

November 17, 2022
Michaella Toledo
Research Strategist

The year is 2175.

DC Studios is on their 24th Batman revamp, your house lease is an NFT, and children attend school in a Pearson sponsored metaverse classroom. Ok, maybe one of those is just paranoia (maybe they'll only be on their 18th revamp), but the rest are possibilities.

You might be wondering what implications these new and exciting changes have in store for our future.

And I’m here to tell you that we’ve been here before.

The landscape and means of competition have changed, but what we face down the line can parallel that of the past. Before smart homes and Marty the Grocery Store Robot, the peak of technology was guns, compasses, and mechanical clocks. These new inventions were the tools that set off the highly profitable (and highly destructive) Age of Exploration.

Between 1400 and 1600 AD, European countries set out to explore the edge of the map. Their geographical knowledge, technology, and finances were finally at a point where explorers could cross the Atlantic to “discover new lands.”

The ramifications from this time period had an immense impact on the Western Hemisphere that can still be felt today, 400 years later.

As Web3 gains more popularity, I would argue that a new Age of Exploration has begun. The new lands are digital and discovery lies with those who can access it.

With that being said, it is important to be mindful about the new digital world’s impact on the already complex physical world and – perhaps – address problems before they become too deeply rooted to dig out.

Expansion; the new gatekeepers for Web3 accessibility

Before The Age of Exploration, Europeans had no concept of the Western Hemisphere. With the “discovery” of “new lands” (it is important to acknowledge there were already people living in the Americas), Europe became an expansionist powerhouse. They were able to establish trade routes that opened up the rest of the world to Europe’s ambitions. Explorers and merchants experienced wealth and success as goods that were once unknown entered the Spanish, Portuguese, French, and English markets.

European explorer voyages that lead to the establishment of trade routes. Photo courtesy of Students of History

Europe dominated the trade routes. Thus, dominating the “new world.”

In 2022, Web3 is decentralizing the current web. Those accessing the web will no longer be at the mercy of tech giants, such as Google and Meta.

But in a decentralized digital world, does that mean equal access? My argument would be no.

Who controls the trade routes? Who is at their mercy? If not Google, then who?

Governments and telecommunication companies would represent Europe in this analysis. A person in rural Bolivia where wifi isn’t dependable (or doesn’t exist entirely) would not have equal access to Web3 when compared to a middle class American in New Haven, Connecticut. If the Indian government blocks cryptocurrency the same way they blocked TikTok, their citizens would lose access to “the new world.”

There is opportunity for companies to be a safe haven – a trade route – into Web3. For one, VPNs need to expand offerings internationally for access points into government blocked sites. Currently, only 31% of internet users worldwide have used a VPN service.

There is also an opportunity for Internet cafes to make a comeback as they are currently declining. An internet cafe chain that provides fast and secure wifi in areas where the internet is difficult to access can give underprivileged areas an opportunity to educate themselves on and participate in Web3.

Occupation; demographics will determine platform development

As European countries expanded westward, they hoisted their flags and imposed their rule in “undiscovered” regions of the world. They created colonies; settling their people in foreign lands as a means to expand. With the settlers came new religion, disease, and persecution for the populations already occupying the land.

The Torture Of Cuauhtémoc, by Leandro Izaguirre (c. 1867-1941). Photo courtesy of The Historian’s Hut.

The digital world presents itself as the new and undiscovered land in 2022. There are multiple “lands” that aren’t exactly “new,” but have gained popularity as they sophisticate. When we think of a metaverse, we think of Horizon Worlds; a product created by tech titan, Meta. But, there are more. A metaverse is defined as “a virtual environment where large numbers of people can get together and interact with each other, through avatars.” Roblox, Minecraft, Somnium Space, and Decentraland all fall under this definition.

Roblox is “free” as long as you can afford internet access and primarily targets young users. Compare that with Horizon Worlds, which requires the Meta Quest 2 – a $400 headset with controllers – to access. This sets apart which demographics are settling in each metaverse.

Right now, the majority of metaverse users are young men with an average age around 27.

Let’s take a look at Decentraland. As of now, their most prevalent user demographic is American (16.88%) men, (63.34%) between the ages of 25 and 34 (35.81%). They also participate in NFTs, which demonstrates their sophistication in other areas of Web3.

What will this mean in the long run?

We’ll use Latin America for comparison. During The Age of Exploration, Spain and Portugal colonized much of central and south America as well as parts of Caribbean. With them, they brought their culture in the form of food, beliefs, values, and language. Today, you can see Spanish and Portuguese influence in Latin American architecture, cuisine, religion and so on.

El Morro, a 16th century Spanish fortress, is a testament to Spain’s permanent influence in Puerto Rico. Photo courtesy of Peapix.com

If the current demographic continues to dominate Decentraland, what will it look like in 10 years? Will brands only valuable to previously mentioned demographics saturate the digital landscape? Will Decentraland culture parallel that of American culture (think slang and etiquette)? But more importantly, what will other metaverses with other demographics look like in comparison? And, are we creating 3D tunnel vision similar to that on social media; surrounding ourselves with only like minded people in our digital neighborhoods?

We see this taking place in Web2 with social media echo chambers; an environment where a person only encounters information or opinions that reflect and reinforce their own. A 2021 study found that Facebook and Twitter algorithms favor the emergence of echo chambers and that users online tend to prefer information adhering to their worldviews, ignore dissenting information, and form polarized groups around shared narratives.

The experience in Decentraland can easily slide to favor one demographic over another if one group dominates the platform. Every future feature Decentraland creates can be biased towards its top customer demographic.

Marshmello virtually performs in Fortnite. Photo courtesy of Marshmello.

What Decentraland and other metaverses can do to promote digital diversity is to create experiences many groups of people find valuable. For example, The Fortnite Marshmallow concert attracted 10.7 million users to the site. A virtual Bad Bunny or BTS concert could potentially drive more women and BIPOC members to Decentraland.

Extinction; education is the key to adoption and participation

When European explorers crossed the Atlantic, they brought disease to the populations that had already occupied the western lands. Diseases leveled communities; they ceased to exist.

It begs the question; who will cease to exist in Web3?

I’d argue the tech-illiterate and tech-resistant.

Even if every rural or underprivileged communities got wifi, that doesn’t mean they’d have the means to use it. What if they worked 15 hours a day or didn’t have a computer?

Shifting from an individual to a business point of view: think about a restaurant in your town that has embraced social media and online ordering. Now, think about one that has not. Reflect on those differences.

They digitally cease to exist.

When the pandemic hit, many mom and pop shops were forced to jump on the delivery app train in order to stay afloat. Nearly 80,000 restaurants who couldn’t succeed online perished.

A man passes a store that is closed due to the COVID-19 pandemic. Photo courtesy of CNN.

Let’s look at money. Physical currency is widely being replaced by digital payment. E-wallets such as ApplePay, CashApp, and Venmo require 1) a basic understanding of Fintech, 2) a compatible smart device, and 3) a linked bank account or debit card.

Now, take into account that the demographics most likely to be unbanked – those who lack a bank or credit union account – or underbanked are most likely to be low-income minorities. According to the FDIC, About 21.7% of unbanked households cite “don’t have enough money to meet minimum balance” as the main reason for not having an account. “Don’t trust banks” was the second-most cited main reason for not having an account.

If you do not have enough money to open a bank account, then how do you take your physical cash and place it into an e-wallet? You don’t.

Web3 presents a similar issue to e-wallets. Software wallets for cryptocurrency, although do not require a minimum balance or traditional bank account, require funds. Again, how do you get those initial funds when you do not digitally exist financially?

This kind of tech education disparity and financial barrier can hinder a person’s (or country’s) ability to compete in the job market, thus hindering economic growth.

The barriers to entry become more difficult as we rapidly digitize.

Closing the digital divide is a complex, global, socio-economic problem we’ve faced since telephones. Now, as digital becomes the new standard, the rush to find solutions is on.

I believe that to begin to conquer this divide, we need two things: better and more accessible education on Web3 and equitable resources.

Zero to Mint, an NFT onboarding experience, is an initiative that aims to close the educational gap between Web2 and Web3. It's an easy-to-follow resource accessible to all English speakers with internet access that walks a user through terminology, tech, and creating a wallet.

Nonprofits who aim to provide internet access and laptops to underprivileged communities should be supported by locals and government bodies.

A woman buys in a store that accepts bitcoins in El Zonte, La Libertad, El Salvador. Photo courtesy of Marketplace.

Businesses that the everyday person interacts with also need to embrace Web3 to propel value for crypto, thus igniting an appetite for people to learn about it. An example of this took place in El Salvador. In order to stay afloat in a rapidly changing economic landscape, El Salvador's town El Zonte became the first town in the world to use crypto currency as a form of payment for services, products and salaries. Thus, turning it into Bitcoin Beach. Although the Web3 education barrier was present in the beginning – the first patrons having to trust a system they didn’t fully understand yet – eventually 45 businesses jumped on the trend.

Although not everyone in El Zonte has signed on, it shows that Web3 can be accessible if there is education and access.

Landlords who provide gas, water, and electricity for low income families should also consider including wifi. Or, even more radically, local governments should provide wifi hotspots throughout their jurisdictions to give each citizen an equal opportunity to access the internet. Currently, there are about 57 cities in the United States that provide municipal wifi in some capacity, but globally, this is far less common.

In the end, there is nothing more important than educating people on the ethos of Web3; a decentralized web where users are in control of their data. There are currently companies (centralized entities) like Coinbase and Opensea that create access points to Web3, but ultimately their existence is a paradox to decentralization. If more people understood what Web3 can be, then, potentially, more decentralized applications will come about instead of saturating the market with centralized companies built on top of decentralized applications. This way, we as a community can maintain the integrity of Web3.

The new Age of Exploration is rife with opportunity. However, it is important to keep in mind what obstacles we might face as we enter the cyberverse. Getting giddy over the endless possibilities will only get us so far.

The key is to educate, provide access to all, and encourage diversity.

I encourage you to stay curious but lead with empathy. For a truly equal and open internet, we must remember to help each other out, share our knowledge, and find solutions together.

If you're interested in learning more about Web3 and what it means for your brand, we'd love to hear from you! Otherwise, you can stay in the loop on all things web3 and other emerging technology in business, marketing, and brand building by signing up for our ThinkFWD mailing list.

Thanks for reading.
Michaella Toledo
Research Strategist
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