The Real Web 3.0

When GenAI clients meet blockchain backends.

To quote the prophecy…

Every successful software company will have a free open source competitor.

Immortal Apps on the Blockchain

The internet is re-inventing itself again

We are approaching a world of *practically* free software.

When generative Ai is able to code apps on-demand for free, why even pay for developers? Save money on labor by generating.

But when quality, battle-tested, apps are already available to copy paste for free, why even generate apps? Save money on API tokens by copying.

It just keeps getting cheaper and cheaper.

Engineering is a race to the bottom because technology is about getting you more with less. Sometimes we forget — as humans with bottomless appetites.

But we also have limited budgets.

Imagine you earn $300 usd per month and you need business software.
Todays subscription pricing is as follows:
- Slack, $7/user
- Calendly, $15/user
- Loom, $8/user
- Docusign, $15/user

Thats $45/month many people cannot afford (>3 billion). Free plans aren’t as good as they used to be back in the 2010s (and theres no such thing as a free lunch anyways).

Now compare to a future “pay per use” pricing:
- Alt Slack, $0.01 per 100 messages
- Alt Calendly, $0.02 per 100 events
- Alt Loom, $0.10 per 100 mins
- Alt Docusign, $0.000001/doc

For just $1, you can fund your monthly business software. Thats more than 10x cheaper. Which would you pick as a small business?

This “pay per use” pricing is possible because its just software, referred to as a “zero marginal cost” business.

How is this possible? Computers cost money. Startups have fixed costs. What about profit margins?

1. Yes, computers cost money. The “pay per use” goes towards covering these costs (more on this later)
2. Startups have fixed costs. If its just utility software, it can live entirely on the cloud with no startup and no fixed costs (more on this later)
3. What about profit margins? If theres no company, theres no need for profits.

This is a concept called “code without corporations”. If its truly just code, an app can live exclusively on the cloud and users can “pay per use” to cover all computer costs.

Sounds great in theory, but not yet possible today because computer costs are tied to a Cloud Provider like AWS, Google Cloud or Alibaba Cloud. They demand to be paid in credit cards & bank accounts. This requires a corporation and humans, and thus they will seek profits.

Thankfully, the promise of a blockchain internet allows for a public cloud that doesn’t require credit cards — pay with Ethereum instead. This eliminates the need for a corporation or humans, which eliminates the need for profits.

The app can live forever on the blockchain internet as “code without corporations”. No need to host it yourself and pay server bills. It’s on the blockchain so the app can’t even be “turned off” — its always available as an “immortal app”.

App users only “pay for what you use” — which is just a gas fee (Ethereum).

Software that ends up here becomes a commodity and public utility.

Not all software, just the generic ones. “Nothing special”.

Billions of entrepreneurs & consumers will opt to use this “generic” software because its good enough, extremely affordable, and permissionless. Available 24/7 to anyone.

There will still be “premium apps” offered by Startups seeking profits, but they will face the Web3.0 prophecy:

Every successful software company will have a free open source competitor.

This is inevitable because of competition & generative Ai.

Soon even a high school student will be able to prompt an entire app, generated by Ai.

Complex apps can be built by a team. Open source developers have already been doing it for decades, it will only be accelerated by generative Ai.

Why give it away for free? As a lead magnet, for clout, for fun.

Someone will do it — it’s only a matter of time.

Competing startups will keep slashing prices in an engineering race towards the bottom, until they seppeku themselves into becoming open source as well.

There will always be “premium apps” but eventually they all become commoditized.

Because at the end of the day, its just code.

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Other Thoughts Not Articulated

• One of the biggest concerns in Ai is “centralization of power” to big tech companies & governments to forever stay in power. Open source Ai models have been essential in balancing the scales, making Ai technology available to anyone — this is decentralization. Ai & blockchain is a ying/yang — agent/environment.
• Ai Agents will be an increasing portion of internet activity overtaking humans. The new “real human behavior” is an Ai bot acting on your behalf. Centralized software services may be overwhelmed. Decentralized software has gas fees that naturally moderate bot activity to not be too excessive (too expensive).
• The trend towards “Bring your own client” frontend. Ai assistants will build better UI interfaces personalized to each person, taking into account disabilities and context. Content moderation can also be shifted from backend burden to frontend responsibility (choose your own moderation policy).
• Generic apps can still earn a profit. Theres no reason you can’t add a spread on top of gas fees. Utility tokens were an early iteration of this, but prev gen dapps had painful UX around this (requiring users to manually buy utility tokens ahead of time). This problem is overcome with “flash swaps” allowing gas money to pay for utility tokens on-the-fly. No need for manual token buying beforehand.
• Other dapp building blocks like Account Abstraction, rollups, and ZK privacy is coming, enabling dapps with greater robustness & complexity. Both Ethereum & Internet Computer Protocol is working towards this.
• Hybrid blockchain web2.0 architectures are possible. AztecJS is a zero knowledge proof client for frontend apps, enabling native end-to-end encryption. Data can be safely encrypted and stored in a web2.0 database, dicypherable only by end users.
• I mentioned “Alt Slack” and “Alt Docusign”. I really wanted to say “Open Slack” and “Open Docusign” but worried it might not be understandabe. But that is what the “Open” stands for — open source.
• Why can’t we just use regular money for this? Because regular money is “code with corporations”. The existing banking system is not set up to be immortal yet, but it will eventually become “code without corporations”.
• The real web3.0 will also likely be a fractured internet, with “zones” such as Chinese, Russian, American “Splinternets”.