Start Selling Your Shares of This Tech Giant…
Today, we play in a different sandbox. Where the mean kids are. And I’m gonna be one of the mean kids.
Typically with these dispatches, I try to bring you opportunities to profit, or ways to shield your nest egg from economic dyspepsia.
Today: A story on how you might protect yourself from losses as one of the great American companies fails in its new mission.
It’s a story about Facebook, or Meta, as it’s now known. I’ll just call it Face/Meta.
It’s that “as now known” where our story begins.
Facebook’s aim in changing its name to Meta is to play off the rise of the “metaverse.”
The metaverse is the next evolution of the internet. It will be a vast collection of online, 3-D universes accessible through virtual reality and augmented reality technology.
Think: alternate, digital reality where all of us will interact, shop, play games, go to sporting events, attend school, or just hang out in spaces that will look like everything from a primordial jungle to one of the moons of Jupiter…to New York’s Central Park at Christmas.
Face/Meta wants to lead this revolution, but that’s not going to happen. Here’s why…
Back in early October, Face/Meta’s operations crashed for a while. The company alerted users with the rather perfunctory message: “Some people are having trouble accessing their Facebook app.”
I mean, technically that was correct. Although it does require us to define “some” as 3 billion Face/Meta users across the entirety of the planet.
This is Face/Meta’s problem: It is a highly centralized Web 2.0 application trying to make a go of it in the emerging and highly decentralized Web 3.0 world. It’s like your octogenarian grandmother showing up at a rave and trying to cut a rug to Swedish House Mafia or some other electronic dance music DJ. People watch and clap because it’s just so cringe.
But let’s back up and unpack that last paragraph, because that’s where Face/Meta’s ultimate demise exists.
First there was Web 1.0—the first iteration of the internet. It was basically a read-only version, an online trove of data to peruse… It was interesting to be sure, but essentially, the only thing it was useful for was plagiarizing info for homework assignments.
Then came Web 2.0—the interactive internet we’ve all been playing with for the last 20 years. We buy and sell and invest on Web 2.0. We contribute to Web 2.0 with blogs and videos on YouTube. We post “check-ins” from the In-and-Out Burger on Pacific Coast Highway in Long Beach, California, thinking someone actually cares that we just ordered a Double-Double.
Web 2.0 is where Face/Meta was born and grew into one of the largest social-media companies in the world.
Now, we’re moving into Web 3.0, and it’s an entirely different internet than the one where Face/Meta and other social-media apps exist.
See, Web 2.0 is highly centralized. All functions exist in one location, overseen by one set of tech overlords who get to decide what is and isn’t acceptable on their platform…even though their platforms have effectively become utilities that should be resistant to censorship.
Look at Donald Trump, for instance—banned from pretty much all outlets. I am neither condoning nor objecting to anything Trump has said. I’m just using it as a high-profile example of Web 2.0 centralization. A single, nongovernment body—be it Twitter or Face/Meta or whoever—can unilaterally lower the ban-hammer. Corporations shouldn’t have this much power.
Happened to me, too. I had an upstart YouTube channel on crypto. To make a point about a topic, I quoted a Chinese scientist who claimed bitcoin was going to lead to the death of civilization. YouTube permanently banned my channel simply because I used the word “death” in quoting the scientist. I mean, how ignorantly blind can you be as an organization? Censored by politically correct automatons for simply quoting someone.
Web 3.0 does away with all of that.
It’s decentralized. The operations for a particular service are spread across computers around the world, so there’s not a single point of failure that leads to outages across the entire network. Moreover, it’s censorship-resistant since every member of this vast network will have a say in its operations.
In short: No single point of centrality, no one ignoramus overlord imposing illogical rules, then refusing to engage with us plebians when we stick up our hand to say, “Hey, wait a minute—you’re wrong.”
Basically, it’s the internet, but using the same decentralized model as bitcoin.
Already, Web 3.0 doppelgängers of various social-media platforms are taking shape. They’re still quite young and small, no doubt, but they promise a much better user experience.
Moreover, they’re starting with Web 3.0 as their initial framework. They’re not trying to shoehorn a flip-top phone into a smartphone, which is analogous to what Web 2.0 applications seek to accomplish. (There’s a reason you don’t see many Blackberry, Motorola, or Nokia phones in the wild these days…)
Face/Meta, by its very nature as a public company with a narcissist holding the reigns, is pointedly centralized. It’s trying to remain hip and cool by morphing into a metaverse company—a Web 3.0 company.
But Face/Meta is never going to become a decentralized company. Its legacy systems aren’t built for that.
My bet: Face/Meta is ultimately the next America Online or Myspace. We will remember the name—but not much else. And if it does survive, it will do so as a mini version of its current self.
All in all, a good reason to gradually reduce to zero any Face/Meta shares you might own.
