The Biggest Web3 Networks will be Bigger Than the Biggest Companies
One of my core hypotheses about web3: The biggest Networks will be bigger than the biggest Companies.
Imagine a startup where everyone on the internet gets stock… just by using it.
In fact, many networks are already bigger than companies – we just don’t measure them with Market Caps. We tend to forget about the unmeasurable. What are those huge “Networks”? A few examples:
Protocols (HTTP, SMTP)
Religions (Christianity, Islam)
Assets (Gold)
Gold’s Market Capitalization is $10 Trillion. If you had to guess – what’s the market cap of Christianity? What are HTTP or SMTP worth to the world, delivering every web page and every email? This pushes us in the direction of comparing apples to Apple ($3T Market Cap).
These networks are all built on shared technologies, narratives, communities, interests. Each of them encompass billions of people. In 2020, Christianity is the world’s most popular religion, with ~2.4 Billion adherents. Facebook had 1.9 Billion monthly active users.
As Facebook and HTTP over the past 20 years, technologies can form HUGE new Networks quickly. It’s difficult to imagine a new religion gaining Billions of adherents within a few decades, but new technologies and habits can grow fast where there is no incumbent to resist.
We can imagine a blockchain network fitting into this pattern. It’s part technology protocol (HTTP), part web platform (Apple), and part asset (like Gold). With the natural human territorial factors and incentives… there is also some zeal that borders on religious belief (Christianity).
This is why I beleive the next era of networks won’t just become giant companies – they will dwarf them.
Why will new web3 networks grow faster and bigger than current versions?
“We’ve found the native asset class of information networks… Tokens.” according to Brad Burnham, Union Square Ventures.
Tokens are a new technology for incentivizing and organizing people. A technology that will be a huge tailwind to the growth, structure, and size of networks.
Network Effects are already one of the strongest competitive advantages in business today. I believe Networks with Blockchain-enabled Tokens will see this effect get even stronger.
Tokens (unlike stock or salary) are: Fractional, Liquid, Permissionless, and Global.
Fractional: Shares and salaries aren’t divisible. You’re in or you’re out. Anyone on the internet could buy 0.0001 Eth or work on tasks to support the network. There’s no minimum requirement.
Liquid: If that ETH doubled, they could sell it (or buy more) anytime they wanted, 24/7/365.
Permissionless: No need for job applications, board approval, or pitching founders. Want to get aligned with a network’s growth? No one can stop you. Critical point—there’s less reason to compete when everyone can join the winning team.
Global: No employment laws, work visas, or citizenship requirements. Purchase or earn some tokens, then “win and help win.”
To receive equity in or benefit from the growth of the network called “Apple” you had to buy stock or build apps on their devices. Not universally accessible. Many people supported the growth of Apple as evangelists, influencers, open source developers, researchers, etc. But there was no technology for incentivizing smaller or part-time network participants.
Networks built with web3 technology will have more participants and more active participants. Global reach from day one. An independent influencer, a team developer, an app developer, and a simple task worker will all have the same alignment and incentive to care about their network winning.
We participate socially in supporting brands, products, and networks today, but in the networks of tomorrow everyone will have skin in the game.
Today, the biggest (public) company on earth is Apple, with a $3T market cap.
Bitcoin, the most valuable Blockchain Network today is around $1T.
Ethereum is at $500B (½ $T).
Given how early we are in the deployment stage of Web3, I expect both of those to still grow. Within 10 years, I expect both of those (and possibly more new networks yet to be created) will be larger than Apple.
(See below and note exponential Y-axis)
Blockchain networks in web3 also have the advantage of being built ON the platforms of web2 and web1.
Facebook had to grow through word-of-mouth and email invitations. Web3 networks can grow on top of Facebook and Twitter – a huge advantage.
I don’t know exactly what’s going to happen, what networks will win, and I certainly don’t know the timeframe. But I feel a lollapalooza in the wind.
Networks are still something we tend to underestimate in growth rate (viral spread) and strength (network effects). And we have a well-connected world with a new technology for incentive alignment which spends all damn day online. Let’s try not to underestimate this one by too much.