Users Will Vote With Their Wallets to Decide Who Wins Web3

There’s an awful lot of sunk cost fallacy on display across Web3 initiatives and companies that were sold on the NFT platform dream as a way to win the hearts and minds of the consumer and drag them kicking and screaming into the decentralised world.

They failed.

They failed because nobody really gives a crap about the tokenization of pictures and other such stuff or having a Coinbase account with their crypto betting slips in one place once the novelty wears off.

The stickiness isn’t there nor is the fabled utility that lasts beyond a brand’s attempt to ignite some kind of interest in its Web3 strategy.

But what people do care about is the convenience to pay and access services with the idea that their privacy is taken care of at the same time their identity is. Apple understands this and there were clues buried in the press releases centering on the unveiling of the Vision Pro headset.

Apple ID will become accepted by businesses as proof of age and identity.

“Present an ID to businesses using iPhone and Apple Wallet. Starting this fall, businesses will be able to accept IDs in Apple Wallet — no additional hardware needed. This will streamline their ability to securely check a customer’s age in person for things like alcohol purchases, or to verify a customer’s identity at checkout for car rentals, and more.”

Seems digital identity is moving forward with or without Web3 or blockchain. I fully expect Google to follow suit with an Android version later but this points to something far bigger that everyone seems to be missing the point of.

The wallet itself will become central to pretty much every Web2 and Web3 initiative for years to come but it’ll be more than just a folder for identity documents and credit cards.

Let’s take a deeper look why.

You can trust me, I’m your Telco

Vodafone is trialing what they call a ‘super cookie’ — carrier-level user tracking that takes place on the device for ad targeting. Apparently, it is intended to be impossible to bypass from within the web browser settings or through cookie blocking or IP address masking.

Vodafone assigns a fixed ID to a user based on someone’s phone number. Through an API, website operators would then be able to call up this identifier to exactly see what websites this user has visited and create a profile to display targeted ads.

“A unique ID would allow for monitoring our entire digital lives. These schemes are totally unacceptable, and the trials should be stopped. Democracy is not for sale.” — Patrick Breyer

Are you f*cking kidding me Vodafone?

Despite consumers wanting to try and claim back some semblance of data sovereignty pretty much everyone else is trying to find ways around this to continue to track and hoover up the information needed to sell advertising. There was and I guess still is a glimmer of hope from the originator of the web itself but the whole idea and marketing of it has been fumbled more than a drunk goalkeeper wearing Teflon gloves.

Do me a Solid, Tim

When Tim Berners-Lee announced a new protocol and project for the building blocks of a new web and foundation for privacy I rolled my eyes. A long time ago I wrote about how privacy was dead — we really need to move on from this conversation because that horse bolted long ago.

But when I looked at the Solid Project recently it sparked an idea and I’m not sure even Tim is aware of the potential here.

Solid describes itself as a specification that lets people store their data securely in decentralized data stores called Pods. Pods are like secure personal web servers for your data.

• Any kind of information can be stored in a Solid Pod.
• You control access to the data in your Pod. You decide what data to share and with whom (be it individuals, organizations, and/or applications). Furthermore, you can revoke access at any time.
• To store and access data in your Pod, applications use standard, open, and interoperable data formats and protocols.

Dearest Tim, it’s a fucking wallet mate.

This is literally what Web3 and digital identities are crying out for and you blew the marketing.

Apple’s idea of biometrics held at the device level tied to a digital wallet that not only holds identity but payment information is the start but imagine the wallet becoming a zero-knowledge proof (ZKP) enabler for the masses by stealth.

A wallet holding verified information about a user, including personal preferences, acts as the custodian between that data and any service accessing it. For example, if a user wants to access a product or service that has an age restriction then the wallet need only provide a ‘yes’ or ‘no’ when asked if the user meets the criteria — there is no longer a need to provide a date of birth and give away a piece of personal data.

Can the user afford to pay for the service — another ‘yes’ or ‘no’ question. There’s no need to actually pass across credit or debit card information anymore, the payment and transmission of money, whether via Fiat or Cryptocurrency, is the only important factor. In fact, the whole point of Open Banking should have been to avoid having to continually plug your financial information into every fucking website and app every time you want to buy something and then risk getting scammed, defrauded or having your credentials stolen because the provider has weak as piss security.

I find it incredibly odd and a prime example of sunk cost thinking that Mastercard wants to launch a dApp Store instead of building a trusted wallet. By 2022, it had 249 million credit cards in the U.S. and 725 million cards in the rest of the world and there’s some majorly flawed thinking that the consumers who use their services give a toss about decentralised applications to look at cryptocurrency exchanges and NFT collections all day long and yet here we are.

“The idea hinges upon selling developers on building on Mastercard’s permissioned blockchain, which the company has positioned as capable of transforming its payments capabilities.

The first round of such apps will be powered by “tokenized bank deposits.”

Granted this isn’t aimed at the end user but you can’t argue against a captive consumer audience that large that trusts its spending with a credit card provider as a missed opportunity to introduce them to the concept of a real digital wallet alternative to Apple or Google that can protect more than their money.

Who is this dApp store for? And who in their right mind actually asked for the fucking thing, it’s like the Mastercard execs went on an Ayahuasca retreat with the folks at Solana.

Non-Fungible Tokenism

NFT collections are garbage. They are useless as a brand concept especially if they carry a financialization element to them because it’s no longer about the brand but about making a speculative killing in the short term. That’s exactly what happened with Starbucks Odyssey which should have been a shining example of Web2 meets Web3 but ended up being a lame marketing exercise.

Imagine if Starbucks understood that its loyalty app is really a wallet solution in disguise. The fact that Starbucks holds more customer deposits than some banks should have smacked the exec in the face with a lukewarm coconut milk mocha.

Matthew Sweezey of Salesforce gets it in his latest LinkedIn post.

Not tokens as currency, or collectibles, but tokens as composable business services. Where your Insurance token isn’t just proof you have it, but a portable business service. Token goes into your Apple Wallet and you go to the token to get services, no app or website needed. No new log in or password needed. Beyond that they are composable.

Tokens are really just passports and verification that you own and have access to a particular product or service. They hold the required levels of information needed that slip into a wallet and the wallet as ultimate custodian acts as the ZKP arbiter of truth and trust. Biometrics will feature heavily which means that devices are key here. Apple’s new Iris biometric strategy for Vision Pro points to using that information in conjunction with Fingerprint ID, Face ID, Voice ID as a means of providing a total and consistent security strategy across its hardware ecosystem which will be attractive for wallet providers. If you have your device stolen then nobody is really getting access to that digital vault with all your credentials in it. Having a secondary or backup strategy for this is critical for identification, payments and access to services (I was with someone recently whose phone ran out of battery and they couldn’t open their bloody Tesla).

Anyone wanting to interact with a customer will call on the wallet for the verification and receive literally that ‘yes’ or ‘no’ back. The user finally has control, and Web3 has achieved not only data sovereignty but has denied access to data that are not necessary. It’s unfortunate for Matthew that looking over the current Salesforce Web3 NFT Cloud offering suffers greatly from that sunk cost platform decision.

Champagne Taste, Beer Wallet

In the end, it's going to come down to this — who do you trust with your wallet? Someone like Apple or Google? Someone like your bank? Starbucks? Your airline? A third party? Who wins in this space is the company that not only has your trust but the trust of the network.

And it’ll be a company that puts that front and centre of any strategy not the technology behind it.

Also published here.