What does Instagram's NFT fever mean for you?
NFTs on Instagram, Web 2.5, and the impact on users and creators
- Instagram will allow creators and NFT collectors to display verified NFT collectibles
- Meta, Twitter, and Reddit are among the major Web 2 companies creating Web 3 products
- Web 2.5 is the link between Web 2 and Web 3, offering Web 3 services from a Web 2 company
- Web 3 products are utilizing Web 2 infrastructure for exposure and marketing
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NFTs are coming to Instagram thanks to Dapper Labs, the company behind famous sports NFT projects such as NBA Top Shot, NFL All Day, and UFC Strike.
Instagram, Meta’s photo sharing platform, announced that it would expand its integration, allowing creators to showcase verified Flow, Ethereum, and Polygon NFTs on their accounts in early August 2022.
Why are Web 2 companies so obsessed with Web 3 products? What does this new feature mean to normal Instagram users and creators? Now that I’ve piqued your interest, let’s dig in!
How we arrived here
Facebook’s decision to change its name to Meta opened up room for speculation. Meta's first major announcement after the name change was that it intended to make Instagram an NFT marketplace.
It wasn’t long before the first NFT initiative on Instagram was rolled out to select users in the US in May 2022. The NFT integration is now expanding to 100 countries in the Middle East, Asia, and Africa.
Even though the functionality of displaying NFTs is not yet available in Europe, users on the continent can still interact with the NFTs on their news feed.
The NFT integration allows users to connect a supported crypto wallet, such as Rainbow, MetaMask, and Trust Wallet, to verify ownership of NFT collectibles.
Users can also choose which collectibles to display, with both the original creator and owner attributed automatically with the NFT. As an Instagram user, you are likely to now come across an NFT collection on your IG feed with an official embed.
Instagram is not the only platform from Meta moving to Web 3; the company announced that Facebook will also support NFTs.
Web 2 platforms have been pressured to create avenues for creators to profit from their content.
Through a Facebook post in June, Meta's CEO, Mark Zuckerberg, highlighted that the company was looking for more ways for creators to earn from their content.
What does this mean to independent creators?
The creator economy is very broad, comprising influencers, recording artists, and producers, to mention a few.
Most creators have already created a fanbase on Web 2 platforms like Facebook, YouTube, Twitter, and Instagram. On the other hand, Web 3 products are publicized on Twitter, Telegram, and Discord, but not so much on Instagram.
When considering the mass adoption of NFTs, we cannot ignore the over 2 billion user audience of Instagram, the world’s third biggest social media platform. Meta is looking to tap into this userbase.
Someone like Beyoncé Knowles can now display her CryptoPunk NFT to her 272 million followers on Instagram instead of starting and growing an account on a Web 3 platform from scratch.
Web 1.0, Web 2.0 to Web 3.0
We have come a long way since the internet was introduced decades ago. The web has also been evolving, and every phase has been unique.
Web 1 possessed static, read-only pages, meaning that users were only allowed to read but could not interact or even change what was on the internet.
Web 2 was first mentioned in 1999 but was brought to life in 2004. It is the era that allows people to interact with web pages, order food, and post comments, tweets, and videos online.
The Web 2 era has also led to a monopolistic market that has seen various tech giants dominate the space.
We now have Web 3, where blockchain technology seeks to replace intermediaries, transferring control and power from tech giants to artists and creators.
Meta is not the only Web 2 company adopting Web 3 products
Even though Web 3 has challenges such as scalability, privacy, and security that need to be addressed, we can see ‘successful’ and centrally-governed organizations like @coinbase, @opensea, and @Meta still moving in that direction.
Meta is not the only Web 2 social platform embracing Web 3, as Reddit, Twitter, and Discord have also been mentioned:
- Reddit is known for its communities. For some of its largest communities, the platform has a blockchain-powered points system that is now live on Ethereum layer-2, Arbitrum.
- In Q4 2021, Twitter introduced the NFT Avatar Tool and expanded its tipping capabilities to include Bitcoin as one of the options. Twitter already has a team dedicated to Web 3 products.
Why not create new products?
The big question is, why can’t we just create new products for Web 3?
The benefits of the Web 3 world, such as transparency, easier sharing of knowledge, real-time reporting, easier control, and eliminating intermediaries, are a few reasons why this wave cannot be ignored.
Web 2.5 serves as a "bridge" or “link” for the current generation of Web 2 organizations to delve into Web 3 without disrupting their existing business models.
Based on our Twitter thread on Web 2.5, the following are some of the reasons why we need this bridge.
- Bringing a paradigm change and persuading people to adopt new technology is challenging. People are already used to Web 2 companies, and transitioning to new technology may not be that convincing.
- Web 2 companies already have systems in place that are helping them enter Web 3. The customer base, finances, and network effects of the existing Web 2 companies allow them to experiment with Web 3 products before ushering their customers to the promising Web 3.
- Web 3 can be technical. We still have a long way to go before seeing intuitive Web 3 platforms. Using the existing Web 2 platforms as a bridge sounds brilliant, as existing users will just treat the additions as regular UX improvements.
- Web 3 is a flawed model for Web 2 corporations. The Web 3 business model hasn’t been tested enough to allow Web 2 companies just to hop in. Web 2 companies are opting to try and adopt what works as the blockchain industry continues to mature.
- Web 3 governance systems might be slow. There are cases where quick decision-making may be needed. The preference for user-control through DAOs in Web 3 might not be efficient in such cases. Web 2 companies choose to maintain their decision-making processes.
- Organizations should be law-abiding. Legislation for Web 3 platforms is still a gray area in most regions. Web 2 companies can offer Web 3 products using Web 2.5 and still follow the country's laws.
- Web 2 companies have a more extensive reach and market. The current distribution platforms for Web 3 products may be unknown to potential users. On the other hand, Web 2 platforms have a good marketing and distribution center for Web 3 products.
The Web 3 wave is here to stay as we see Web 2 companies such as Facebook rebranding to Meta. We already have various Web 3 products that are already out and functioning. However, the industry is still in the early stages and most players are now laying out the foundation with Web 2.5.