Discussing Web3 reshaping data value: Your online footprint is a traceable identity value without the need for proof.

In the past, I sporadically shared some perspectives on on-chain data on Twitter, and some friends asked me to elaborate through private messages, which led to this article, serving as a consolidation of my own thoughts. It has been exactly half a year since my last article, and I hope to increase the frequency of updates in the future.

Author: Vincent Niu, Founder of Dapp Review Vincent Niu

Original article: "Discussing the Reshaping of Data Value in Web3"

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TL;DR:

• In Web2.0, your data has value, but it does not belong to you, and the value is not shared with you.
• On-chain data is a gold mine; the more applications, the more data, the bigger the gold mine.
• In Web3.0, your valuable actions will eventually be rewarded, with your data as the carrier, belonging to you.

In the world of Web2.0, if you are the top-ranked Zhao Yun in Jing'an District, Shanghai in the game "King of Glory," with all the skins collected, and you start from scratch in other games like "Eternal Return" or "Harry Potter: Magic Awakened," no one knows you are a top player.

If you are a somewhat famous content creator on Bilibili, you may find someone re-uploading your videos on YouTube under your name. If you have 5000 RMB on WeChat and want to transfer it to Alipay, you may find it impossible and have to withdraw to a bank card first before recharging to Alipay.

Every time you use a new product on your phone or website, you have to go through the tedious process of entering your phone number/email/user+password/verification code, and often have to click "forgot password" when using the product the second time, even if you rarely use it.

In the world of Web2.0, every application goes to great lengths to lock in users, increase stickiness and retention, and establish moats between users and data, extracting the maximum value. As a user, although you get to use the product, you actually own nothing, and all your data can vanish overnight.

Formerly prominent Chinese blog communities like BlogCN, former campus networks, not to mention how many online games have been shut down. Essentially, users' actions and data are working for the company; when you checked the "Terms of Service" and "Privacy Policy" boxes during registration, you signed an extremely unequal contract where your data belongs to the company and can be used and monetized at will. If we cease operations one day, sorry, the right to explanation belongs to me, your account is gone, your data is gone.

Therefore, in Web2.0, your data has value, but it does not belong to you, and the value is not shared with you.

Under the Web3.0 framework based on blockchain technology, it seems to have taken a step forward. Blockchain is a public database where all applications read and write data. Due to current performance limitations and high interaction costs, applications tend to only put interactions of "high-value actions" on the chain, and this behavioral data is truly a gold mine.

Four years ago, during the ICO era and the grand competition of various public chains, the types of transactions on the chain were very single, mostly token transfers. In the past four years, the application layer has seen explosive growth in several tracks, from DeFi to NFT to GameFi, with a myriad of applications recording diverse forms of data on the chain. Filtering/analyzing/processing around this data can generate countless scenarios, from capturing trading opportunities to identifying precise user address groups, and forming on-chain identities and social relationships, each of which represents opportunities worth billions of dollars.

Ask Me Anything (AMA) with Myself

Q: What should I do with multiple addresses?

A: Many people switch to a new address each time they engage with DeFi. One feasible solution is to bundle your multiple wallet addresses under a DID framework and verify them through signatures. This way, your various wallet addresses can be tagged/analyzed/calculated based on your identity. Spectral is using this method for on-chain credit scoring.

Q: The user experience of these Web3.0 applications is not great right now. What should I do?

Indeed. The infrastructure is still not perfect. When we retrieve on-chain data, directly accessing data from the blockchain each time, or reading files through decentralized storage, cannot solve the issue of high concurrency. Although solutions like Ceramics exist, they are still in the early stages. CyberConnect's recent surge in user volume has even caused some disruption for Ceramics.

If you agree with the data value brought by blockchain as mentioned in my article, then it's only a matter of time.

Q: According to what you said, the moat of big companies in Web2.0—users and data, is no longer a moat. So what is the moat for Web3.0 companies? Is there a problem in terms of business?

A: This is a question I have been pondering over for the past few years, worthy of a separate article to explore. In short, if Web3.0 ultimately allows users to receive more reasonable value distribution and a better user experience, then everything has value, and it is the correct direction of development. The business model established in Web2.0 was based on the logic of acquiring users for free or even subsidizing them to monetize later. In Web3.0, there will be a different way to capture value and establish business moats.

Q: Should I go all-in on the projects you mentioned above?

A: This article does not constitute any investment advice. It is difficult to determine which of the projects mentioned above will succeed at this moment. Just like in 2018 when Jihoz, co-founder of Axie, excitedly told me that Axie had reached 160 DAU, at that time, neither of us could have imagined that three years later Axie would have millions of daily active users and a valuation of billions of dollars. At this moment, we can only bet on the right direction, rely on reliable and long-term teams, and continue to explore together on the path in the coming years.

Myself and the institution I am part of are very optimistic about the entire track derived from data. This is an important investment theme for us in the Web3.0 field, and we have laid out multiple ecological projects. We welcome fellow entrepreneurs in this track to come and exchange ideas.