The Internet of value

On digital assets and a new internet

The Internet has changed our lives. To a large extent to our benefit. It provides us access to information and allows us to connect and share ideas freely. However, it has also given unprecedented power to the platforms that act as gatekeepers to today’s Internet.

The Web is the best connector of information systems and communication chanels that exists today, but there is still much work that needs to be done when connecting value networks that span the world.

The recent events around the Robinhood investment app have made it clearer than ever that we use the Internet at the mercy of big corporations and their platforms. After a group of retail investors coordinated a targeted coup on Wall Street short-sellers, the investment platform has single-handedly halted trading on specific stocks for their users.

This incident highlights, once again, that consumers do not actually own any assets within a digital context. Rather, they depend on other entities acting in their interest and executing on their intentions.

So while users might own their stocks on Robinhood in a legal sense, they possess physical ownership over them. This may sound obvious, as we are not used to seeing digital goods as something that one can physically own. But this may be about to change…

A World Controlled by Gatekeepers

In the physical world, we are used to proprietary assets where ownership rights can be determined and exercised. As long as we physically control these so-called bearer assets, we retain ownership over them. For example, imagine a $5 bill. Given that you have the bill in your wallet, you own $5 and can exchange it for goods and services freely. However, once we enter the digital sphere, such provable digital ownership of assets does not exist.

To access and interact with assets via the internet today, we, therefore, rely on central parties to serve as custodians such as (central) banks, stock exchanges, patent offices, land registers, etc. But even beyond financial assets, we are dependent on platforms controlling our digital assets such as private data, content, digital identities, social graphs, etc.

These established gatekeepers have incentives to build closed platforms, which are difficult to integrate with as a competitor and artificially hard to leave for its users. These platforms can abuse their centralized power at any point with little to no accountability, such as Apple removing Fortnite from their App Store, Twitter and other platforms banning political figures at will, or Robinhood halting trading for their users.

So while the Internet has brought tremendous societal progress and unprecedented benefits for its users, it has also centralized power and created walled gardens. But consumers are waking up to this fact, paving the way for a new wave of the Internet.

The Internet of Value

The Internet has been a major catalyst of social change. Since the 1990s, the vision of the Internet as an open protocol through which information could flow freely has persisted. The development of Web 2.0 applications in the 2000s has created unprecedented opportunities for social connections and sharing of content and ideas.

We now see the foundations being built for a third wave of the Internet, supported by technological advancements in decentralized systems, cryptography, and public ledgers. Just as the initial vision of the Internet foresaw borderless knowledge exchange, decentralized networks allow not only information but also value to flow freely across the open network — the Internet of Value. For the most part, these new value networks leverage the Ethereum blockchain and its growing number of protocols and standards as their global settlement layer and as a means for decentralization.

The Internet of Value will drive substantial innovation in terms of how we interact with assets digitally, through facilitating the creation, ownership, and usage of digital assets such as currencies, stocks, certificates, data, and many more. For the first time, people can truly own and exchange these assets in a digital context, without giving away control to third-parties.

The full potential of value being represented and used on the Internet is yet to come. The “Internet of Value” is currently being built on the Ethereum blockchain, transforming our understanding of digital ownership and identity. As a result, interactions that involve value on the internet will become less dependent on centralized platforms, empowering people worldwide

The decentralized platforms being built today on Ethereum are really just the beginning. So while we already see decentralized asset exchanges, lending protocols, and currencies being built, we are still far from reaching the full potential of the Internet of Value.

Replicating traditional financial instruments in a decentralized is only the first step in re-inventing how we store, manage and exchange value online. We will see fundamental change in how we manage (private) data and digital identities. How intellectual property is conceived. How the authenticity of luxury goods and art is guaranteed. And how we exercise ownership rights.

Characteristics of the Internet of Value

In order for the Internet of Value to achieve its mission to empower users and foster innovation, we need to build it with some core values in mind. We build a global architecture for value networks. And we do so by building it open, secure by design, and accessible to all.

Open

The Internet of Value is a public good. These emerging value networks are built on open and transparent standards. Customers, merchants, financial institutions, and governments jointly benefit from a strong shared foundation. And innovators extending the system can leverage composable infrastructure and tools that are free to acquire, free to adopt, and not encumbered by patents.

Secure

The Internet of Value is built on decentralized technologies. Meaning, there is no single entity controlling critical systems. Rather, they are run, controlled, and governed by the users and contributors themselves. Additionally, through their open and transparent nature, these networks enable audits and verification by anyone, making these systems more resilient each day.

Accessible

The Internet of Value is accessible to everyone. Nobody is arbitrarily denied access or censored. It is distributed, global, and neutral, enabling value to be able to move as freely as information on the Web. Similar to how the Internet has increased efficiency and lowered costs of information exchange by many orders of magnitude, the Internet of Value will see efficiency gains related to the safekeeping and exchange of value, allowing everyone to partake.

Be part of it!

For everyone interested in learning more and contributing to the Internet of Value, here’s a good place to start your journey. Be part of a community that is shaping the future of the Internet.

I am personally really excited to be contributing to the scaffolding of this new wave of the internet with Gnosis Safe, building an account that lets users obtain true ownership over their digital assets and interact with the Internet of Value. But this piece is not meant as a promotion of Gnosis Safe, so I’ll leave this story for another time…

Thoughts / Feedback? Hit me up on Twitter.