Jill Carlson, a US-based cryptocurrency consultant at Juno LLC, recently published a blog post in which she noted that Bitcoin (BTC) and Ethereum (ETH) helped to “catalyze excitement for crypto” while also making industry participants think more about concepts related to “sound money”, “open finance”, and “web3.”
These three concepts, according to Carlson, “share the same ethos of disintermediation.”
Disintermediation Via Open Finance, Web 3.0
Web 3.0, which Carlson, a global governance and diplomacy postgraduate (from University of Oxford), is referring to is a loosely defined, or proposed, standard that is described by Techopedia as follows:
Web 3.0 is [a] new paradigm [currently being developed] in web interaction … [it] will mark a fundamental change in how developers create websites, ... how people interact with those websites … [Web 3.0 aims to] ... make people's online lives easier and more intuitive as smarter applications such as better search functions [built using artificial intelligence will] give users exactly what they are looking for.
Open finance, as explained by Carlson, refers to “trustless financial systems” that use cryptocurrency to develop “open software primitives.” These primitives include those designed for traditional equities, remittances, retiring or checking accounts, and advanced forms of crypto derivatives offered by leading trading platform BitMEX.
Carlson believes that leading ride hailing app, Uber, and Airbnb, a privately held San Francisco-based firm offering an online marketplace and hospitality service, are among the earlier and most successful decentralized “Web 3.0” type business models. However, both Airbnb and Uber do not appear to support the economic model of “open finance.”
As CryptoGlobe covered, Riggs Eckelberry, the CEO of OriginClear Inc., a technology licensing firm for the oil and gas industry, had proposed a business idea he described as “Beyond Uber.” Eckelberry had pointed out that Uber’s drivers were not being compensated fairly as the company, or “the middleman”, was taking a large percentage of what its customers pay for rides.
To create a fair system that would pay drivers higher wages, Eckelberry had recommended using blockchain technology. He explained that the distributed ledger could be used to create an autonomous system that would directly record transactions and dealings between drivers and those booking rides.
This, Eckleberry had argued would help eliminate the middleman, which is currently Uber, the company. What Eckleberry was proposing is described by Carlson as “the concept of decentralized digital money.”
While Carlson mainly refers to digital money as “a non-sovereign” currency - which is neither issued nor controlled by central banks - decentralized cryptos such as bitcoin may not only potentially help eliminate centralized financial institutions from transactions between two individuals, but they can also help business owners, or service providers, directly settle payments with their clients.
Eliminating the middleman from transactions, in order to reduce costs and increase transparency, has also been recommended as a legitimate use case for blockchain, the technology that underpins decentralized currencies, by crowdfunding platform CEO, Kendrick Nguyen.
At present, however, Web 3.0, open finance, and “sound money” are all in their early stages of development and these decentralized models for interaction may or may not evolve to a point where they achieve mainstream adoption - as suggested by Dr. Neha Narula, the director of MIT Media Lab’s Digital Currency Initiative.