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Forbes India – Internet, Virtual Reality: India Needs To Win The New Web3 Internet: Hemant Mohapatra

Forbes India - Internet, Virtual Reality: India Needs To Win The New Web3 Internet: Hemant Mohapatra
Written by publishing team

India-2022 is a far cry from 2018 when the co-founders of a cryptocurrency exchange were briefly in police custody for setting up a ‘Bitcoin ATM’ in a Bengaluru shopping mall.
Photo: Manjunath H Kiran / AFP

FOr over the course of a thousand years, technology has been the constant driving force of history. Nation-states, ruling parties, social and political ideologies have all come and gone, but technology and innovation have remained the bedrock of societal development. From gunpowder and naval supremacy that allowed Britain, Spain, and Portugal to gain much greater supremacy, to the steam engine, automobiles, nuclear power, space, satellites, and finally the Internet – the nations that were the first to benefit from these waves of industrialization have benefited enormously.

We may be halfway through the third industrial revolution initiated by the technologies that power the Internet in the 1990s. The globally dominant Internet companies are now the new superpowers, shaping and reshaping consumer behavior and opinions and amassing wealth that rival nation-states. Today, a fourth industrial revolution is underway. The nature of the old internet – “Web 2.0” – is itself changing.

This new internet is called “Web3”. When the West was inventing and shaping the ancient internet, India was a nascent country, a few decades old. By the time we edited in the ’90s, we could only be the back-office service for foreign tech giants. Web 3.0 presents India with a huge opportunity. Let me explain why, using the United States – an early proponent, innovator, and adopter of the Internet – as an example.

Until the Cold War, the United States relied heavily on a relatively centralized network of telecommunications lines and wires. As the Soviet threat grew, there was legitimate concern in the United States that only one Soviet missile could destroy the entire network. This is how ARPANet – an early form of the Internet – began in 1966: as a way to share information in the event of a nuclear attack.

Over the next three decades, Internet pioneers such as Vint Cerf, Tim Berners-Lee, my former boss Marc Andreessen, and hundreds of others transformed the rudimentary ARPANet into a content-rich, browsable global web. Things started accelerating in the 1990s when the US Congress allowed the web to be used for commercial purposes. Companies quickly set up their own websites. Entrepreneurs like Jeff Bezos have begun using the Internet to sell goods directly to customers.

The United States has benefited greatly through its adoption and innovation on the Internet. In 1990, of the 500 companies making up the S&P-500 Index, only one software/technology company was in the top seven: IBM. The index itself was more or less balanced: the Big Seven represented 14 percent of the total market capitalization of the S&P Index. Fast forward to 2021, roughly 30 percent of S&P’s $40 trillion market capitalization is in the top seven, all of which are software/technology companies.

At this juncture, let’s pause a moment to make some important notes. First, it is clear that the impact of these massive technological trends is disproportionately due to early adopters and innovators.

Second, the pace of technological advancement as well as its adoption is accelerating over time. It took the US 100 years to reach universal adoption of landlines, but only 15 years to put smartphones into everyone’s hands. In India, between 2010 and 2019, more than 500 million smartphone users came online – 1.5 times the US population in about half the time.

Third, there is a leap effect when latecomers adopt technology. India has moved from PC largely to smartphones, from dial-up to 4G, and from cash-only to UPI/digital. Mature markets elsewhere have gone through a much longer grind: from computers to laptops/tablets to smartphones, from dial-up to broadband to 2G/3G, then 4G, and from cash to cards to online banking to end-to-end. .. well … not more than that.

Finally, the government has played a pivotal role in promoting and participating in these intergenerational technological transformations. In the United States, the Internet and GPS alone have unlocked massive economic gains. Back home in India, UPI has put us at the forefront of the world in consumer fintech.

Actor Salman Khan during the launch of India’s first social crypto token by Chingari-Gari Coin in Mumbai
Photo: Vijay Bate / Hindustan Times / Getty Images

This history lesson is important for an appreciation of how Web 3.0 evolved using the building blocks of Web 2.0: (a) it transforms from a TCP/IP-based architecture to a decentralized blockchain-based architecture and (b) it transforms from a physical as well as a virtual experience to an Fully virtual pseudonym. Let’s peel this further, to understand why.

c. The Internet is decentralized: When the Internet began, individuals exchanged information directly with each other without an intermediary. Over time, for convenience, the Internet became centralized. For example, to send an email, we rely on Gmail; To share a file, we use Dropbox. However, the beauty and allure of decentralized applications has remained. BitTorrent and Napster found a way to decentralize data storage and sharing, but they couldn’t figure out how to track data ownership/copyright, thus paying the data owner for use. With blockchain and crypto, these problems are now solvable. guide? Audius is a decentralized Spotify app – artists sell/stream music directly to fans; BitClout is a decentralized Twitter site – creators and followers speak without intermediaries; FileCoin is a decentralized Dropbox – pay your peers in a network, not a cloud, to store your data. The new internet is already here.

B. The Internet has become completely virtual: the virtual world has become the real world for a whole new generation. The way we display Guccis on Instagram, young children have the same sense of pride in being the “owner” of a digital Gucci bag in games like Roblox. People buy “virtual” land in a virtual world called DecentraLand and pay a real price per square foot for it. Many of the controversies in payments, cross-border trade, exchange of valuable items, storage of goods, etc. that we encounter in the “physical” world are resolved in the virtual world using blockchain and crypto.

Once we align with this futuristic worldview, it becomes easier to understand the direction in which Web3/crypto adoption is headed: largely and to the right. The spoils of the Web 2.0 revolution have gone west. We have patiently waited for our time, and we are now uniquely positioned to shape the future of Web 3.0.

Our developer community was already the third largest community in the world a few years ago. During the pandemic, India has become a hotbed of blockchain talent. There are more than 10,000 “blockchain” jobs in India on LinkedIn, compared to 30,000 in the United States. The Indian Web3 ecosystem is coming together in surprising ways. We have founders as young as 14 to build NFT tools for artists, and we’ve built teams that group into Discord and Telegram groups to build and launch products for global users. Indian crypto companies such as Polygon, CoinDCX and CoinSwitch have attracted world-class investors and talent.

This is the perfect ‘apna time aayega’ moment for millions of developers and tens of millions of young Indians who belong to this new world and are eager to make their mark. If India has a chance to create a giant Google-like power, it is in Web 3.0. India-2022 is a far cry from 2018 when the co-founders of a cryptocurrency exchange were briefly in police custody for setting up a ‘Bitcoin ATM’ in a Bengaluru shopping mall. Today, the Indian government is working with industry experts and crypto founders to explore ways to regulate cryptocurrencies rather than ban them. These are all valid calls.

Shouldn’t the government be skeptical, too? When a major technology movement begins to accelerate, a brief moment occurs when critics see the full and horrific potential of anything coming into the world. History proves that when smart people and smart money start pouring into an emerging technology, resistance sweeps along with the rush of progress. So, first and foremost, the government must understand these technological shifts from the perspective of optimism, not pessimism or fear.

Second: a clear and comprehensive organization. We must offer customers exciting innovations while protecting their interests. Entrepreneurs must also have assurances that following the regulations will give them the freedom to innovate and serve consumers.

Being early in any technology wave has great benefits, but being early in this new internet will have benefits beyond money or power. It is about India’s importance in the new world order. The market capitalization of cryptocurrencies is now greater than the GDP of all but four countries on Earth.

We live in a world where, to paraphrase Balaji Srinivasan, the network and the state are intertwined. There is a digital citizenship emerging – it is global and only needs an internet-connected device such as a passport and visa. Ideas and people travel between countries more flexibly. Web 3.0 adoption is accelerating much faster than Web 2.0. We don’t have a choice. We have to jump now. If we get it right, we will attract both talent and high-quality capital towards us, creating a virtuous cycle. If it’s too late to act, we’ll watch talent leave for other markets and the world outrunning us.

The writer is a partner at Lightspeed India

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(This story appears in the January 14, 2022, issue of Forbes India. You can purchase the tablet version at Magzter.com. To visit the archive, click here.)

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