Chris’ note: This week, we’ve been sharing our experts’ best insights on the metaverse. It’s a new kind of internet you step into.
Virtual reality and 3D graphics will bring the metaverse to life. But the lifeblood of the metaverse will be another recent tech breakthrough – crypto.
Currently, Big Tech companies such as Facebook/Meta and Google harvest their users’ data and hawk it to advertisers. The profits from this data mining flow straight into these companies’ coffers.
But that changes when you build the internet on top of decentralized blockchains. It’s what our tech expert, Jeff Brown, calls Web 3.0. In the conversation below, Jeff shares how blockchains – as part of Web 3.0 – will free us from Big Tech censorship.
Chris Lowe: In August, you launched a new advisory called Unchained Profits. It gives subscribers the chance to invest in the bleeding-edge businesses propelling the blockchain megatrend.
Many of our longer-term readers will know the answer to this. But for folks who are just joining the conversation, what is a blockchain?
Jeff: Your readers are likely familiar with bitcoin (BTC). It was the world’s first cryptocurrency. It’s based on blockchain technology.
A blockchain is a decentralized digital ledger that’s distributed across an online network. So instead of having one copy of records in one centralized ledger, there are thousands of perfect copies of the records across the network.
There’s no single point of failure. And it’s impossible to duplicate or forge records. So there’s no need for a third party, such as a bank, to vouch for the veracity of the records.
Blockchains are also cryptographically protected. This makes for extremely secure transactions.
And once you add the record of a transaction to a blockchain, it’s permanent. Some people compare it to how insects are preserved in amber over thousands of years. Without getting bogged down in the details, blockchains are the digital equivalent of that.
Chris: I’ve been spreading the word on bitcoin here at the Cut since we launched to all paid-up Legacy Research subscribers in 2018. Since then, the price of bitcoin has rocketed 646%. And the crypto has become mainstream news.
What are blockchains used for outside of bitcoin?
Jeff: First, it’s important your readers understand that blockchains solve real-world problems. We know from bitcoin that they solve how to make decentralized payments online.
Blockchains also help us reduce the costs of other financial transactions… speed up overseas transfers… and cut out middlemen in a variety of transactions, such as real estate ones.
Chris: Have any potential applications caught your eye recently?
Jeff: I’m especially interested in a blockchain patent Amazon (AMZN) filed. It’s designed to solve one of the e-commerce giant’s most pressing problems – identifying the origins of products it sells.
Amazon wants to track where the products it sells come from… and remove counterfeit and low-quality ones. The company doesn’t have a good way to police this right now. That’s where this new blockchain patent comes in.
It outlines a system that would allow Amazon to track the entire supply chain for each product – from raw materials to production to distribution. All parties in the supply chain would document and authenticate their activity on a blockchain.
This way, every step in the supply chain would be time-stamped. There would be a permanent, tamperproof, and verifiable record of where every product comes from.
Chris: It sounds like a game-changer.
Jeff: It is. And it’s not the only way blockchains are making an impact. Another project I’m keeping a close eye on is a new social media outfit called Aave. It plans to build a decentralized alternative to Twitter (TWTR). And it will run on blockchain technology.
Chris: I’ve never heard of it. But I love the idea of a social network that a Big Tech mogul such as Twitter founder Jack Dorsey can’t censor. How will Aave improve on today’s broken system?
Jeff: It aims to solve three problems…
The first is censorship. As your readers will no doubt be aware, Twitter has been actively removing posts and banning people who share opinions that are contrary to what it considers to be the “correct” political narrative.
Aave – because it’s decentralized – will protect speech against the threat from Big Tech censors.
The second problem is that, right now, all the profits from social media accrue to Big Tech companies in Silicon Valley. Let’s take Twitter as an example again…
It’s hard for content creators to make money from their posts on Twitter. They spend a lot of time and effort putting out content and building followings. This work has a dollar value. But there’s no way for those content creators to directly tap into it. Twitter users must send their followers to independent products or services to generate revenue from their social media work.
Aave hasn’t released specifics yet. But it says it will enable users to get paid – in crypto – for quality content. The technology that would allow this to happen already exists.
The third problem is that content creators on today’s social media platforms don’t own or control what they produce. Again using Twitter as an example, their content and all of their followers technically belong to Twitter. If they want to move to another platform, they must start all over again. Twitter doesn’t allow them to take their content or their followers with them.
Aave’s architecture will empower content creators to maintain control over their content and their follower bases. After all, on a decentralized social media network, all information pertaining to followers and posts is part of a public ledger.
Think of it as an online database of information you can bring to another platform if you want.
Chris: Censorship is a hot-button issue here at the Cut. We’ve gotten a lot of reader feedback about it. It seems to be on a lot of folks’ minds right now.
Jeff: Absolutely. The internet was meant to be decentralized, open, free, and censorship-resistant. It was supposed to be a place where anyone and everyone could share their thoughts and opinions.
It was also intended to democratize economic power and influence. The goal was to provide everyone with unfettered access to the internet and information.
But something happened after the internet bubble popped in the late 1990s. Companies that survived the crash continued to build their businesses. Only this time, the focus wasn’t decentralization and the development of open protocols that everyone could use freely. It was proprietary technology, centralized control, money, and power.
These Big Tech giants hid behind mottos such as, “Don’t be evil” [part of Google’s code of conduct], while grabbing as much control over the internet as they could. The financial rewards were simply too massive.
That’s why so much power and influence have gravitated toward Google (GOOG), Amazon (AMZN), and Facebook (now operating as Meta Platforms, which is set to have the ticker MVRS).
Want to search for information? You go to Google…
Want to search for a product? You go to Amazon….
Want to search for someone? You go to Facebook…
Google and Facebook, in particular, also spy on everything we do on their platforms. They then harvest our personal data to sell to advertisers. It’s nearly impossible to protect against this if you use these platforms.
These companies profit off your data – without sharing any of those profits with you.
But the faults of Web 2.0 – the version of the internet we use now – will be the catalyst for the third generation of internet. I call it Web 3.0. [Jeff broke down all three generations of internet here.]
Blockchain tech aims to return to the true mission of the internet. It will deliver on the promise of an open, decentralized internet.
Chris: Can you give me an example?
Jeff: Sure. One example is something called a security token. It’s a digital version of a real-world asset that exists on a blockchain. This will allow us to own, say, a portion of a natural gas refinery… or a piece of real estate property… via a digital asset.
We’ll also keep a close eye on the developing NFT space. NFTs – or non-fungible tokens – are in their infancy. But these digital representations of art and other collectibles promise to disrupt that industry.
Chris: For readers who might already have some bitcoin, can you recommend any specific investments in blockchain technology?
Jeff: First off, I recommend your readers take the time to educate themselves and invest in digital assets that are solving real-world problems. These will be your safest way to profit from the blockchain revolution.
Readers who want to add blockchain investments to their portfolios should consider ether (ETH). You can buy it directly on an online crypto exchange such as Coinbase (COIN).
I recommended ETH to paid-up subscribers of my Near Future Report tech investing advisory in November 2017. Already, folks who followed that recommendation are up 777%.
Ether is the token native to the Ethereum blockchain. And the Ethereum blockchain is the architecture for the next generation of decentralized apps. Aave, the decentralized social media project I mentioned, will run on Ethereum.
For folks who already own bitcoin, that’s a good next step in blockchain investing.
And I encourage anyone interested in investing in best-in-breed blockchain technology or cryptocurrencies to check out my new advisory, Unchained Profits. You can learn more about it here.
Chris: Thanks for chatting with me, Jeff.
Jeff: Same to you, Chris.