The Architecture of Control
Web2 platforms operate on a simple principle: the company owns the algorithm, the user base, and the revenue model. A content creator on YouTube has no visibility into how the algorithm surfaces their work. They cannot negotiate terms. They accept whatever YouTube decides to pay. Technically, they are price takers in economics language. They get what they are offered or they leave.
Rasmus Risager Lindegaard, product manager at Lunar bank's Grow Colony, describes the current system plainly: "You create a lovely podcast or a video and then upload it to YouTube. YouTube then uses their proprietary algorithm, which I don't understand and I don't have access to find out how it works, and they place ads. Then YouTube takes all of the revenue from the ads, and then they pay for their own expenses, and then they take a bit of a profit, and then they give you what they believe is the right amount of value you have left."
Web3 proposes an inverted structure. Imagine a decentralized video platform owned collectively by the creators who use it. Creators own it not through shares or equity, but through purchasing cryptocurrency tokens and running servers that maintain the platform. When someone uploads a video and mints it as an NFT (a non-fungible token that records original ownership on the blockchain), the algorithm displays it. Advertisers still want to reach audiences, so they still bid for placement. But now the revenue decisions belong to the creators themselves.
Rather than a CEO and board deciding how to split revenue, the creators vote. Some money goes to server maintenance. Some goes to funding new features through open development contracts. The rest goes directly to creators. There are no shareholders to appease. There are no corporate profit margins. As Lindegaard notes, "You don't have any corporate profits. You don't need a return to shareholders because you are all of you the shareholders."
This model echoes cooperative movements in agriculture and housing, where members collectively own and operate the infrastructure. The difference is that blockchain technology makes coordination possible at scale, without the overhead of traditional governance structures.
Ownership That Travels With the Asset
NFTs are often dismissed as digital collectibles or hype. That misses their economic function. An NFT is a non-fungible token: a record on the blockchain that establishes unique ownership of something that cannot be divided without losing value.
Consider the difference between fungible and non-fungible assets. Money is fungible. Your hundred kroner is the same as my hundred kroner, and we swap without hesitation. Iron ore is fungible. Half a ton of iron ore is worth half of what a full ton is worth. A Picasso painting is not fungible. It cannot be exchanged for your four-year-old niece's drawing, and cutting it in half does not preserve half its value. Picassos are unique. They are non-fungible.
NFTs let creators attach rules to that uniqueness. An artist can stipulate that every time her work sells on the secondary market, she receives 10 percent of the sale price. Van Gogh never sold a painting during his lifetime. His family received nothing when his works later became worth millions. If Van Gogh had minted NFTs, Lindegaard observes, "his family could live well off that today." The smart contract ensures this royalty streams indefinitely, not as charity, but as built-in code.
Lindegaard explains the mechanism: "With NFTs, you can actually stipulate into contract every time this sells, I get 10 percent of the sales price. That can go up, that can go down, but I still have some revenue." This applies not just to art. Any creator, any artist, any intellectual property holder can encode ownership terms directly into the asset. The second-hand market, instead of excluding original creators, becomes a new revenue stream.
The Banking Paradox
If decentralized platforms challenge media companies, decentralized finance poses a more unsettling question to banks themselves. Traditional lending relies on human judgment and opaque systems. You meet with a loan officer. They review your finances, plug numbers into a computer, and the system calculates what you qualify for.
Rasmus describes this without romance: "You'll meet a lovely person in your bank, they'll look at all your finances and then they'll start putting a lot of numbers into a computer system. They'll look you in the eye. But that's not really going to count for anything, whether or not you get that mortgage. What counts is all the numbers they put into the system. Then the system does a calculation."
The entire process, he notes, is already algorithmic. The human interaction is theater. So why not put the algorithm on the blockchain, remove the intermediary, and let the code decide? This is decentralized finance, or DeFi.
The scale is real. In 2021, at its peak, there were 21 billion dollars in outstanding loans managed entirely by decentralized platforms. No human approved a single one. No one looked anyone in the eye. The code decided, and people received loans.
The theoretical advantage is obvious. You eliminate the cost of human staff. You eliminate the possibility of human bias. You make decisions transparent: the code that approves a loan is visible and auditable. Anyone can inspect why one borrower qualified while another did not. With traditional lending, this remains a black box.
But lending is not neutral. It is what Rasmus calls "a time machine." Banking works by moving money from people who have it today to people who need it today, creating a bridge across time. The borrower will repay later when they have earned more. Maintaining that bridge is delicate. What happens when a war erupts? What happens when the value of a cryptocurrency collapses overnight? What happens when hundreds of people default simultaneously?
Rasmus raises the tension directly: "Can you, in an algorithm, take account of all these variables? Can you manage liquidity when a war Ukraine comes on or when the value of a certain cryptocurrency falls massively?" Some protocols, like MakerDAO, handle these crises well. Others, like Luna-Terra, imploded catastrophically. The difference is not the code alone, but how well the code anticipated chaos.
The Friction of Adoption
Every technology faces what innovators call the "mom test." Would your mother use this? Would mainstream users understand it? Would they want to?
Today, the answer is no. The user experience of most blockchain applications is poor. Wallets are confusing. Transaction costs are opaque. Security is fragile. And there is an astonishing problem that reveals how user-unfriendly the space remains: 24 percent of all Bitcoin ever created is no longer accessible to its owners. They lost their private keys. They threw away hard drives with billions of dollars on them. They forgot passwords.
Lindegaard finds this telling: "That's a very good example of this just wasn't user friendly. 24% of all the Bitcoin that has been created isn't available to its rightful owners. They lost their key. They threw the USB out."
The other barrier is regulation. The Nordic countries rely on centralized identity verification systems that open doors to banking, healthcare, and government services. Is there a decentralized alternative that is trustworthy and easier to use? We do not yet know.
These are not ideological problems. They are engineering problems. But they are preventing mainstream adoption.
When Niche Markets Disrupt
Established platforms have enormous advantages. YouTube has billions of hours of content already uploaded. Instagram has years of social graphs. No one moves to a new platform that is empty. So how does disruption actually happen?
Clayton Christensen's research on disruptive innovation offers a pattern. Niche platforms start by serving one specific use case extremely well. They become dominant in that niche. Then they gradually expand. Lindegaard gives a hypothetical: "The next great global video platform might already exist today as a video platform for spear fishing and that's a niche thing and they solved that really well, and then maybe build from there."
Real examples exist. Running apps like Strava already track fitness activity. Lindegaard proposes that blockchain-based run-to-earn applications could layer ownership on top: "You can buy an NFT sneaker and then you can put that NFT sneaker on when you go for a run and then it registers and then you get paid out crypto for amount on sweat you've had, or distance you've done." The use case is tangible. The motivation is clear. The barrier to entry is low.
The incumbent platforms are not passive. They will co-opt the technology. Instagram is already testing NFT creation. They will attempt to compete on compensation. But they carry costs that decentralized platforms do not. They have shareholders who demand profit. They have organizational overhead. Rasmus observes: "They have costs that the others don't, and they have shareholders that expect profit revenues."
In 2022, Amazon stopped accepting Visa in the United Kingdom. Visa negotiated better terms, and the situation resolved. But the message was clear: if payment processors get too expensive, alternatives exist. That leverage did not exist before.
What Needs to Happen Next
Web3 is not a finished thing. It is a hypothesis about how the internet could work if ownership were distributed instead of concentrated. Some of the experiments will fail. Some will uncover unforeseen problems. Some will succeed and become invisible, the way internet protocols become invisible once they work.
The critical question is use case. Lindegaard returns to this repeatedly: "What is the use case that you can get your mom to use?" That is the real test. Not clever technology. Not libertarian ideals. Not even efficiency. Can an ordinary person see the point?
For DeFi, the point is lower cost and transparency. For content platforms, the point is ownership and fair payment. For identity, the point is control without intermediaries. These points matter. They matter enough that the largest companies on earth are watching, experimenting, and preparing to compete.
The previous two shifts in the web took decades to fully settle. The first shift from print to digital lasted through the 1990s and 2000s. The second shift from consumption to creation took the 2000s and 2010s. Web3, if it happens, will likely be measured in similar timescales. But the pieces are moving now. The code is live. And the incentives are real.