Opinion: The internet’s future investment opportunities are here now for the taking Every few decades, a set of technologies converge to reconfigure the global economy and the order of human affairs. We saw this with the internet, a convergence of content, computing, and telecommunications networks that took us everywhere, all at once. Before that, it was power generators, electrical grids, and the lightbulb that brought us 24/7 production. Today, several revolutionary technologies are emerging all at once: Generative AI and large language models like ChatGPT make people and companies more creative and industrious and unleash new capabilities in the economy. Blockchains help individuals and businesses to move and store value, automate complex business processes, and secure peer-to-peer transactions online without intermediaries. The Internet of Things connects everyday objects — from doorbells and thermostats to autonomous vehicles and roadway sensors — to data centers, forming an intelligent network for our connected world. Augmented and virtual realities take today’s two-dimensional Web and turn it into a spatial web integrated with our natural environment. Biotechnologies leverage living cells and biomolecular processes to augment human health through more targeted treatments and more nutritious foods. Advances in energy harvesting, batteries, and other storage technologies will revolutionize transport, energy grids, and public infrastructure with greener and cleaner options. The world is entering a new era — call it Web3. Let me explain: just as the term internet has expanded from its original internetworking definition to describe an era that comprises many technologies, business models, and social behaviors, so too is the term Web3 evolving to characterize an era composed of the group of technologies listed above, with new models and behaviors. These will define the next era of the internet. How you view them affects how you value them What does this new era mean for investors? In the mid-1990s, portfolio managers could choose among highly valued stocks such as America Online, Blockbuster, Borders, Compaq, Dell, JC Penny, Kodak, Nokia, Nortel, Palm, Polaroid, Sears, Sony, Tower Records, and Xerox, whose leaders failed to embrace the first two eras of the Web in time. If viewed through the lens of the internet, investors would have valued them differently. Web3 requires a new lens and a new field guide to help investors distinguish the firms best led, best-equipped, and most open to transform themselves under a new paradigm. As with prior eras of the Web, Web3 will become an integral technology for business. The companies that harness it will adapt to this next era of digital disruption and have a chance of thriving in it. The future is bright, but unclear To those who don’t follow new technologies, innovations can sometimes look like overnight success stories. More often, they are decades in the making. Artificial intelligence is a perfect example. Back in 1965, researchers promised that AI would fulfill all human tasks in the next 20 years. AI’s first winter came in the 1970s after 10 years of AI investment yielded precious few results. Research and development continued for decades through balmy AI summers and AI ice ages lasting decades. Investor sentiment is, after all, cyclical. Last year, the consensus was that, with the end of zero-interest rate policy, a long cycle of technology innovation and investment was coming to an end. Web3 got caught up in that — for a time. Some pointed to the 2022 collapse of FTX to justify their concerns about Web3: This new technology, while innovative and useful in the hands of central banks or big companies, was a net negative to society in the fray of the free market. To them, it gave speculators new instruments to bet on and criminals new tools for evading the law. By that logic, the collapse of FTX was not due to the technology but to the hubris or the incompetence of those wielding it. What Web3 means for investing in technology All industries have setbacks. Did the age of exploration end when John Cabot went missing in the Northwest Passage? Did the “Industrial Revolution” devolve amid the Panic of 1873, when John Cooke closed his doors and investors sold off their railroad securities? Did we call it quits on the web when dot-com stocks plummeted in 2001? Or, in each case, did we find ourselves at a beginning, and not the end, of an era of staggering upheaval, change, and progress? This historical frame is useful for investors. It helps investors to moderate whatever extreme views they may have, from exuberance or complacency to cynicism or dismissal. As businesses integrate Web3 technologies, tremendous value will accrue to enduring platforms such as ethereum ETHUSD, and bitcoin BTCUSD. The companies that have mapped their transition to these and other new technologies, and can weather the current market storm, will reap the long-term rewards. Alex Tapscott is an investor and adviser focused on the impact of emerging technologies — such as blockchain and cryptocurrencies — on business, society, and government. He is the author of “Web3: Charting the Internet’s Next Economic and Cultural Frontier” (Harper Business, Sept. 2023). 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By James TaylorSeptember 15, 2023Updated:September 15, 2023No Comments1 Min Read