Sometimes the elephant in the room is hidden in plain sight.
Much of the world is going crazy about cryptocurrency. This is especially true when there are major moves in the market. That garners the media's attention which allow them to push their narrative.
Meanwhile, governments are focusing upon it. Depending upon the political leanings, the push for regulation makes headlines. Banks are talking about opening it up to their clients and taking steps to ensure their relevancy.
All of this is done because of crypto. What is ironic is that is not the elephant in the room. Web 3.0 is much bigger than crypto yet it is not required to cause massive disruption.
It is here where the banks are engaging in the wrong battle. Cryptocurrency is not the threat. Rather, it comes from digital platforms.
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Banks Will Lose Because They Are In The Wrong Fight
Elon Musk is very clear about incorporating payments into X. At the same time, he also announced that they plan on offering a host of financial services in roughly a year.
This should be a massive eye-opener for everyone. It also ought to alert everyone to where the transformation is.
We are not dealing with money, finance, or banks. Instead, the core of this is the digital platform. These are some of the most powerful entities on the planet, with the companies behind them achieving trillion dollar market caps. This is a drop in the bucket compared to what we will see over the next decade.
Banks are trying to engage in a battle over finance. This leads them into the crypto discussion, using their influence, in my opinion, to get the regulators to do their bidding.
However, this is not the fight. In fact, whether it is crypto, fiat, or some other form of monetary representation, this is a side discussion.
Web 3.0 is not cryptocurrency. This is where the view gets too narrow. If we step back, we can see that crypto is a part of Web 3.0. That means anything fighting it is only taking on a portion of the battle.
This is exactly what is happening.
Platform Economics
Our future is going to be based upon platform economics. This will become a new "science".
Perhaps this is the coining of a term but we are going to move beyond the Web 2.0 structure. This has utilized a business model for success. It is about to get much bigger.
We are going to see these platforms evolve into full blown economies. They will surpass many countries in this regard. There will be no distinction between finance, gaming, social media, entertainment, or education. It all will be encompassed in the same way.
Web 3.0 is likely to see financial services interwoven throughout everything. Most applications and games will offer this. It will either be directly built in or will be closely tied to these services. That means any assets can be utilized in a financial manner.
Yet the banks, along with many others, are trying to combat cryptocurrency. That is not where the threat lies. Elon is adanger with his moving into financial services. Sony bringing out its own stablecoin is a step in that direction. The Web 3.0 game that is under development right now is apt to cause disruption. A new DEX being built is an attack vector.
When we discuss the issues Hollywood is having, we are not dealing with entertainment. This is much bigger. The same is true when we mention gaming. It is key to understand they are the same. Certainly, they appeal to different people, although there will be crossover. Nevertheless, the separation is being eliminated.
It is all part of an economic system that more are missing. Cryptocurrency is just a tool. Digital assets will appear everywhere. This will be tied to both real world items along with the online counterparts.
At the core of this will be the platform.
Attention economy
What do banks offer?
In short, it is financial services. Unless you are conducting financial business, there is no need to engage with a bank. For example, one does not turn to a bank for entertainment or information.
Contrast that with X.
Do people open up that application for information? Certainly. Is there entertainment on there? Yes there is. People also find social engagement. There might be some games. We see podcasts. There is video.
What happens when these people can turn to X for a number of financial services?
The point is attention is key. It is the totality of the platform offering that makes the difference.
Those who still look at things in isolation (or separated) are missing the shift. Here is where Web 3.0 enters the picture.
It is X but on steroids.
To start, we have a completely different ownership model. There is also the ability to operate outside a siloed system. X is likely to always be standalone. The same is true for Google, Meta, and Amazon. These platforms will continued to be walled.
Web 3.0 is the opposite. While platforms can be separate depending upon their structure, they are ultimately tied to a blockchain (or a number of them). The generation of assets is going to have some type of smart contract or blockchain connection. They will likely be tied to DEX for swapping.
Please tell me where the banks stand in this?
What do you see them offering that competes? Are they going to offer entertainment and information services? Not likely. They are stuck in the old model.
Traditional companies will tell you what business they are in. Walmart is retail. Ford is automotive. Goldman Sachs is a bank. Disney is in entertainment.
What business is Amazon in? Here is where a technology company differs. The answer is whatever it wants.
Elon Musk is moving X into financial services. Others will likely follow suit. Web 3.0, due to blockchain and cryptocurrency, are already in the financial arena. It is only a matter of developing the services.
Web 3.0 is technology. This means the digital platforms constructed are in whatever business they want to be. In fact, the trend is likely that applications have to be in everything, either directly or closely tied.
This is platform economics at work.
It is also why the banks are done. They are not even in the proper fight.