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Is the crypto revolution similar to the internet revolution?
- The internet revolution has disrupted nearly every major industry
- The internet reached 1 billion users in 2005
- With 300 million users, crypto has as many users today as the Internet had in 1999
- Some applications give a glimpse of what the crypto revolution will look like
- Will the crypto revolution disrupt our lives, just as the internet did?
The Internet revolution has changed the way we live to such an extent that life without it has become unthinkable for most of us. Social media has changed the way we communicate and interact with each other, Spotify has turned the music industry on its head, Amazon is challenging brick-and-mortar retail, while Netflix upended traditional cable television services.
While the transformation of our society is still underway, is the next revolution already on our doorstep? Will the crypto revolution make banks obsolete and offices a thing of the past as we all meet our peers in the metaverse? Let's take a look at the past and the future of the digital revolution.
A journey back in time: the early stages
The 1st of January 1983 is often referred to as the birth of the internet, but it was not until the 1990s that the internet started to gain significant traction. The Internet quickly became fertile ground for innovation in the decades to come. In 1997, Google changed the way we search for information. At that time, the Internet consisted mainly of static websites and directories used by publishers, while email became the dominant communication channel in the early 2000s. Later, the advent of Web 2.0 brought even greater changes to the way we communicate.
As a species, we have a need to connect with others, share our stories, and build communities, and Web 2.0 gave us the tools to do just that. In 2004, Facebook was launched, followed by Google Maps and YouTube in 2005, the same year the Internet passed the one billion user mark. Just two years later, the iPhone would bring with it all the possibilities of mobile Internet. The Internet became more immersive as its users became creators. With the advent of the mobile and social Internet, it became our predominant medium of communication and the driving force behind the ongoing digitization of our lives. While almost every single industry in the world has been transformed, one area remained untouched – the system of money and value.
The emerging internet of value
While the Internet revolution was still in full swing, Bitcoin laid the foundation for Web 3.0 – the Internet of Value – in 2009. With the introduction of blockchain technology, permissionless peer-to-peer payments became possible for anyone with Internet access.
With the introduction of smart contracts in 2015, Ethereum established the foundation and infrastructure for the next wave of innovation. This new programmable layer gave rise to the first applications built on the Ethereum network, such as stablecoins, which incorporate traditional fiat money into the blockchain and create the ability to transfer money instantly at almost no cost. This was followed by decentralized financial applications (DeFi), which saw a surge in 2020, allowing users to access permissionless financial services.
The next innovation surge emerged with the rise of non-fungible-tokens (NFTs), which can be used to attach almost anything to the blockchain. From artworks to insurance policies or club memberships, the possibilities are nearly endless. So far, NFTs are mainly used for art and community identifiers like the Bored Apes Yacht Club. But they also represent real estate in virtual worlds, known as metaverses, such as The Sandbox. These virtual worlds are built by their users and offer a glimpse of what might lie ahead. Already today, people hang out together, build their own amusement parks, go to concerts and even marry their loved ones in the metaverse, of course not without minting (creating) an NFT marriage certificate, which - as of yet - is not legally binding.
However, compared to the Internet, crypto is still at a very early stage of its development. There is no doubt that it has dramatically changed the lives of some people. However, it may take many more years for the nascent technology to reach the mainstream. With 300 million users worldwide, crypto has only as many users as the Internet had in 1999, and we have yet to see a powerful application like Google or Facebook that would propel crypto technology into the mainstream.
While the crypto revolution could be seen as an independent movement, it is actually building new networks like Bitcoin and Ethereum on top of an already existing network, the Internet. In fact, crypto could be seen as the ongoing revolution of the Internet itself, enabling the digitization of everything that remained untouched during the Web 2.0 phase.
Yet blockchain technology also challenges some of the large oligopolies that emerged during the earlier phases of the Internet, such as Facebook, which recently rebranded itself as Meta as it makes its own foray into the burgeoning metaverse. Consequently, crypto could disrupt not only traditional industries but also the disruptors of the previous revolution.
How the crypto revolution will evolve is as hard to imagine as it was to imagine the experience of a smartwatch with mobile internet streaming music to our Bluetooth headphones in 1997. As the industry matures, crypto projects will likely enter a period of fierce competition, and industry leaders will emerge.
Could private payment networks like Visa and PayPal become a thing of the past due to their inefficiencies? Could social tokens create digital communities around fashion brands, local artists, or charities and allow us to own them as a stake in the respective community? Or could decentralized, autonomous organizations disrupt the very structure of corporations? Yes, of course they could, but only time will tell. All we can say is that if you’re reading this article right now, you’re probably one of the early adopters of what could become tomorrow's biggest technology.