We all know the problems facing Web3. They were there before Terra collapsed, peeking out before FTX’s downfall. These catastrophes proved what critics already knew about Web3: It’s promulgated by scammers who want to get richer off the people who can least afford it.
But, contrary to what the critics say, crypto is an opportunity for everyone. Web3, like Web2 before it, opens up global possibilities. Digital creators from Azerbaijan can trade their wares with consumers from Zimbabwe, without intermediaries.
Therefore, it’s little surprise that everyone in crypto is thinking globally. But by focusing on the global landscape, we miss out on the local pathways to get there. We miss the potential to embed Web3 within the individual, existing communities that can champion and benefit from it. We should borrow from the environmentalism playbook and “think global, act local.”
What’s the problem?
There are at least three fundamental problems standing in the way of global crypto adoption:
First, it’s not very diverse. According to data compiled by TripleA, as of 2023, only 37% of cryptocurrency owners are female, 72% are under 34, and 71% have at least an undergraduate degree. Their incomes are also quite a bit higher than the average global citizen. As for the people making the actual Web3 protocols, those numbers skew even further toward well-educated men from high socioeconomic backgrounds.
Second, the industry is particularly vulnerable to fraud. Countries are still figuring out how to regulate it, developers have yet to foolproof smart contracts, and users are still learning how to navigate between protocols that don’t have centralized safeguards. All of this leaves the door open for various scams, including hacks, wash trading, insider trading and Ponzi schemes. Though Chainalysis found a drop in crypto scam revenue for 2022 (attributable, in part, to lower asset prices), scams still drained US$5.9 billion from the ecosystem last year.
Third, Web3 has generally poor user experience. That’s perhaps reflected in the outside world’s preoccupation with crypto prices. Can you imagine if we only ever talked about Alphabet’s share price, ignoring the Google search algorithm? Many future users (and current ones) only see crypto as an investment; they find it too convoluted to actually use.
These problems are all solvable if we shift Web3’s focus toward actual users at the local community level.
Local solutions, global impact
By placing more tools in the hands of local communities, we can mitigate many of the industry’s problems — from fraud to faulty front-ends.
For starters, local communities — whether in the urban hubs of Western economies or the most rural parts of the Global South — are collectively more diverse than crypto’s current demographic. A thriving local community comprises a mix of men and women, whereas crypto’s current usage skews overwhelmingly male. A local community also represents all ages as well as different professions, socioeconomic backgrounds and education levels.
Moreover, when neighbors share technology and tools, they’re less likely to scam each other and more likely to assist one another. Just look at the difference between how you might greet your politically opposite neighbor and how you act behind the veil of Twitter’s platform.
To achieve mass adoption, we need to focus on increasing the adoption of Web3 tools in small towns, cities and local communities worldwide. That doesn’t mean getting one or two people to use them; nor does it mean creating “local” crypto solutions in Silicon Valley and testing them in the real world. I’m talking about onboarding whole communities — with an increased focus on local people building out the user experiences they want to see.
What localizing Web3 looks like
Web3 is supposed to denote an internet owned by the people. This peer-to-peer ethos assumes individual agency. However, in practice, things are usually top-down: “Hey, we’ve got a new token. We’ll show you how to use it.”
There are several ways to turn this around.
The first is an increased focus on grants to inspire local entrepreneurs and creators to collaborate on new Web3 ideas. Gitcoin has helped mainstream grants within Ethereum, and crypto’s bull cycle led to a proliferation of grant programs encouraging people to build on blockchains ranging from Zilliqa to Solana. I fear these will dry up as projects continue to tighten their belts, which would be a mistake. There’s no better way to onboard users than by asking communities to create the online communities they want to see.
More importantly, we need to link physical and digital communities. Projects like Proof Collective have used NFTs as entryways to membership into massive, global online communities. Why not create NFT-based membership programs for local communities that allow them to access a shared co-working space? A place where they can gather, participate in educational workshops, network, collaborate, and then branch out into the larger world?
Sure, you could use a physical membership card instead. But when people have an NFT, they now have a digital wallet, which opens up other Web3 opportunities they can participate in. You’ve provided a new way for them to access something they already want — engagement within their local community — and the tools necessary to navigate beyond their immediate environs.
We can also use grant money to support existing local clubs or interest groups to use specific Web3 solutions that target pain points. These “local DAOs” needn’t look much different than clubs or interest groups with a few Web3 flourishes such as on-chain meeting minutes or a shared treasury. The idea is to expand Web3 from the local community outward rather than trying to break in from the outside.
It’s not too early
Many of us who haven’t been scared off by the frauds or the ensuing crypto winter continue to argue that “we’re so early.” Crypto, we say, is where the internet was in the 1990s. Never mind the horrible user experience, the lack of diversity in the industry, and the scams. It’s slowly taking shape, gaining adoption among various demographics, and improving user experience, all while expunging bad actors.
And that’s true. But we can also get to massive adoption faster — and it’s not via the clogged expressway we’ve been sitting on. Time to dust off the roadmap and take local routes.