Blockchain Technology is Building a New Business Model for the Web 3.0: Trillion Dollar Protocols Will Replace Major Tech Companies

Olaf Carlson Wee, the founder of Polychain Capital, is a strong believer that trillion dollar protocols will replace many modern tech companies. Olaf was the first employee to be hired by Coinbase and in 2016 he founded Polychain Capital. Olaf launched his fund with 4 million dollars primarily derived from numerous small investments and angel investors. Today, Polychain Capital is a billion dollar fund.

Currently, web internet business models have consisted of massive centralized entities that exact value from services. This traditional business model manifests itself in the form of massive siloed-centralized platforms with huge user bases. These are the Facebooks, Etsys, Ebays, and Ubers of the world.

These companies collect revenue by building a massive network of users in which most of the value in the platform comes from the users. There is nothing uniquely valuable about Facebook other than the amount of users on its platform. If you could eliminate the centralized platform which owns the network and allow the users to interact with one another directly through a peer-to-peer decentralized network, it returns all of the wealth generation back to the users of the network rather than the centralized Facebook or Uber shareholders, employees, etc.

For example, in a decentralized business model, users of the Ethereum blockchain are essentially the owners of that blockchain. Owning an Ethereum token gives a user the right to interact with that protocol and access its utility.

Large tech companies were able to transition from minor disruptions in the past such as the transition from desktop to mobile. However, this disruption did not upend the companies’ revenue models. Now with a disruption of our current magnitude, large tech companies cannot seamlessly transition when their entire business model is upended. As a business, when you experience competition from a peer-to-peer decentralized protocol it is nearly impossible to compete due to the fact that these protocols have no cost structure.

It is important to understand blockchain technology is not simply currency. This is a misleading metaphor that underscores the true potential of this technology. Paying someone on the internet is merely a subset of what is possible.

With this new internet web 3.0 stack, a decentralized Twitter or Facebook are not the most interesting projects. The real question is ‘what unique applications can be built as a result of decentralization that were not previously possible?’ In actuality, these projects will yield the greatest ROI and have the ability to have the most societal impact.

In a presentation given earlier in June, Olaf Carlson Wee finished by saying,

“I really do view this as the largest technological megatrend of our lifetimes. I think we will all look back at the creation of bitcoin and cryptocurrencies as the single most defining technology on the internet, ever created. I do want to underscore how big this is and how quickly it is growing. To me, this is the single greatest investment opportunity I will ever see.”

Disclaimer: I am not a financial advisor, this is not financial advice. Please do your own research and make objective decisions. This article is intended to educate readers on the new Business Model for the Web 3.0. The author of the article owns cryptocurrency.