Here's a cogent argument by Dror Poleg about how urban economics can be used to explain the evolution of Web3, and also why it's all a bit of a ponzi scheme, but that when it works, it works.

His argument revolves around ownership and participation. If you own real estate in a city, you could say that you are both a part owner of said city and a participant. You participate by virtue of living and/or doing other things there, but beyond that you also have a vested interest in the city doing well. Because if the city continues to do well and grow, there should be more demand for real estate, including yours, and that likely means your wealth will increase over time.

This same force could be said to apply when existing property owners oppose new development. It restricts supply and increases the value of people's existing "ownership" in a city. It's kind of like being a company and not issuing new shares so as to not dilute your existing shareholders.

This connection between ownership and participation is similarly a hallmark of Web3. In the world of crypto, users buy tokens (some fungible and some non-fungible) and those tokens provide access and rights to various things.

For example, owning tokens might allow you to vote on key decisions affecting the overall organization. And if the organization does well and continues to grow, all token holders should, in theory at least, see their wealth increase. More people will want those same tokens. Ownership and participation.

Web2 companies, on the other hand, do not typically offer this automatic connection between ownership and participation. That is, of course, unless you're a shareholder. If you're just a regular user of a platform like Instagram (which I am), but you don't own any shares in Meta (I do not), then you're only a participant.

If you happen to be a widely followed influencer then you can certainly benefit indirectly from the platform, but you do not benefit from any sort of direct ownership in the organization. Pretty much everything accrues to the house.

In fact, you also don't own your followers, from which you derive your indirect benefit. Not to pick on Meta, but if Meta decided that your content was suddenly inappropriate for the platform, perhaps too salacious, then it could choose to close you down and your indirect benefits.

This, of course, is one of the great promises of crypto and Web3. If you're a part owner and you have some say in the way things are being run, you can maybe avoid this kind of outcome. And if things really aren't working out, one should have the flexibility to take their followers and be extra salacious somewhere else.

We shall see if this is ultimately how Web3 plays out, but the connection between ownership and participation is an interesting one and, if things do end up working out as planned, maybe it can be harnessed to improve our cities. Because we know the problems: inequality, housing supply and affordability, and many others. The system is clearly far from perfect.

Photo by Adrian Schwarz on Unsplash

I was reading this morning about how Meta is working on features that will allow users to display their NFTs on their social media profiles, and to possibly even buy and sell them from within Facebook and/or Instagram. I thought this was kind of newsworthy and so, after the reading the article, I opened up Twitter to share the story. This is then what popped up:

It is an invitation to use an NFT as my profile picture. Now, I am already doing this (it's a CryptoBabyPunk), except that it would take someone a bit of work to determine if I truly owned the NFT or if I was just posing as a proud CryptoBabyPunk owner for the purposes of trying to increase my internet stature.

So what this new feature is intended to be is a way to easily demonstrate proof of ownership. Once you connect your crypto wallet and select your NFT, your profile picture changes to a "special hexagonal shape." This is the marker. Though you have to be a paying Twitter customer to do it (currently a few dollars a month).

Some or many of you may be wondering why this is even worth talking about. Maybe you like your circular Twitter profile picture just the way it is. But these moves and announcements by large companies are both a vote of confidence for the crypto space and greater "utility" for NFTs.

The value that somebody might derive from an NFT is wide ranging. In some cases it might just be something to look at (which is generally how art works). And in some cases the NFT might grant access to exclusive events or provide other perks, some real and some alleged. It's all very much evolving as we speak. But in every case, you really need to be able to differentiate real from fake. What Twitter just did is a step in that direction.

Broadly speaking, the more infrastructure that gets built out around NFTs, the more value they will have. I think bringing NFT collections to our social media profiles is, for example, a perfectly obvious extension. Here are my photos. Here are my videos. Here's the stuff I'm tagged in. And here's my beautiful and wonderful NFT art collection.

You can bet that the NFTs will become just as curated and carefully managed as the rest of the profile.