The one thing you couldn’t own online until now is your own identity—which means you haven’t been able to be yourself. Data protocols like Ceramic are about to change that.
David Phelps is a 2x founder, a cocreator of ecodao and jokedao, and an investor in web3 projects through the angels collective he started, cowfund. Find him on Twitter at @divine_economy.
This is the first in a multipart series on how web3 data protocols will change the way we work—or rather, how all businesses work. This first piece was written for The Generalist’s “What to Watch in Crypto 2022,” which features a shorter version of this piece—as well as a lot of gigabrained suggestions for where the space will go by figures like Chase Chapman, Brian Flynn, Gaby Goldberg, Tina He, Li Jin, Annika Lewis (also on Ceramic!), Julia Lipton, Eshita Nandini, and… the list goes on. Check it here.
If you were a scholar in the years before the printing press, there is a decent chance that you were also a voyager—spending the bulk of your days neither reading nor lecturing, but traveling library-to-library to study and copy books. You moved, but the books did not. Their fables, dogmas, and treatises—their data—was siloed in grand, funereal libraries, and your job as a scholar was to transfer that data by hand. The printing press changed all that of course: now the books could move so you didn’t have to, and a few centuries of revolution would erupt accordingly.
But for all of technology’s advance, in today’s internet, we are mostly pre–printing-press. We can’t transfer the people we follow, the kind of media we like, the reputation and audience we’ve built—our data—from platform to platform unless, like ancient scribes, we try to do so manually. Like the scholars, we spend our time moving between platforms; the media on those platforms does not.
What would happen if our data were transportable? This is what we often mean by the metaverse: the ability for us—as data—to transverse apps and platforms as one identity we control and own for the first time in digital history. Of course, as popular vision holds, we might dress up as our beloved NFT to attend virtual meetings and concerts so that potential friends and dates can see us as we’d like to be seen (expensive jpegs). But that’s like saying that the printing press led more people to read the Bible, rather than to, say, forge the Protestant Reformation and new conceptions of democracy.
For the real value of data portability is in at least four major social consequences:
- giving us tools to track the impact of creative work as it’s shared, used, and monetized in the farthest reaches of the internet
- enabling us to share far more data with platforms to improve performance and recommendations
- incentivizing public data sets that will produce better analytics and social graphs for platforms to innovate on top of
- letting platforms compete for users who can port their audiences from one platform to another.
In other words, data portability represents a massive social shift in turning power from platforms to users, much as DAOs represent a transfer of power from companies to workers. Or rather, data portability represents a massive social shift in turning power from platforms to protocols, as users can only manage and transfer their data on top of universal rails that standardize, validate, and stream this data for different platforms competing over it. Platforms will have to build on top of universal data rails to draw on each other’s content and audiences, but as Joel Monegro suggested years ago, that opportunity also represents a loss. The platform moat dissipates as users port their tokens, NFTs, content, followers, and reputation across platforms—while the moat for data protocols grows huge in letting users port that data in the first place.
Meta has one vision for providing the rails that would enable data portability, and it is a terrifyingly compelling one. They will own the protocol on which platforms build, they will own their own platform to bring users onto the protocol, and they will own the users’ data to monetize as they like. It is an imperial approach, accommodating the strains of subcultures into the standards of the Facebook empire, its ethical grievances synonymous with financial conquest. But there is an alternative to lay the universal data rails for data portability, and it’s a fairly simple one.
Let users own their own data.
This is what Ceramic is enabling, in developing a data streaming blockchain, and its advantages compared to Meta are clear. When users own their online work, they can monetize their data, set automatic commissions whenever anyone makes use of it, and earn rewards from platforms competing to win them over. For that matter, they can also track and credential the impact of creative work: imagine writing a song and not only getting paid when others made money playing it at events, but enabling others to remix it permissionlessly with proceeds flowing back to you, all while collecting data on its usage that you could use to find professional opportunities while connecting to others with similar taste. Enabling that kind of data collection in web2 has been slightly terrifying because the data hasn’t been ours to use, to keep and share as we please; in web3, our ability to manage our data is what will enable us to manage our entire life online. NFTs are only the frontend of how we’ll be seen, in the metaverse, as data.
One reason that web3 as a term has become popularized over crypto recently is that we’re realizing financial rails are only the first step in developing distributed ledgers (DLTs) that can handle all kinds of data: social, political, ecological, and so on. If the 2010s were the decade that DLTs enabled sovereign finance, the 2020s will be the decade that offer sovereign data of all types. And we can return to our ancient scholar, wandering library to library in the vain pursuit of sharing and translating each other’s texts so that the libraries might eventually resemble one another, as a kind of meta-library featuring all texts in all languages, accessible to all. In the less poetic web3 data stack, Arweave is something like that library, hosting the books, while protocols like The Graph and Kyve serve like librarians helping to index and query the books we need.
But Ceramic is unique not only because it might be considered web3’s great competitor to Meta in developing universal rails for data—but because it’s what lets us write the books in the library in the first place. By giving us the tools to own and manage our data, it gives us incentives to collect and create new types of data that may even still be outside our imagination. And that’s the huge potential. Not simply that we can own our data online as individuals, but that we can be rewarded for sharing it, collectivizing it, and recomposing it in new communal social structures of which we haven’t fully conceived.
This article originally appeared on Three quarks – deep dives into crypto and web3: what does the past of tech, culture, and economics tell us about their future?