Web3 works like web1 did. There will be centralized services built in web3 — and many will be quite useful — but their economic power and overall control will be limited by the lower switching costs due to data portability.
How web3 data portability reduces the power of centralized services 🧵
If you are used to web2, you might think OpenSea holds the data and NFTs displayed on my profile page.
In fact, the data and NFTs are held by me, and OpenSea is just providing a view into that data.
Why is data portability important?
It means that users can easily switch services if those services start charging too much, inserting ads and algorithmic feeds, throttling their traffic, or mistreating them in other ways.
And I can make this switch without losing the audience I’ve built up over time via inbound links, SEO, email subscribers, and so on.
Compare this to web2. Many people spend years building an audience on web2 services, but if those services decide to reduce your organic reach or otherwise misbehave it’s basically impossible to switch.
web3 works like web1 did. There will be centralized services built in web3 — and many will be quite useful — but their economic power and overall control will be limited by the lower switching costs due to data portability.
This is why web3 take rates are dramatically lower than web2 take rates. OpenSea, for example, charges 2.5% on transactions.
Compare this to web2 take rates. FB, Twitter, & Instagram take 100% of revenue. YouTube takes 45% of revenue. Apple and Google app stores take 30%.
Corollary to this:
wrong question: are there centralized services involved?
right question: are there centralized services *with high switching costs* involved?
