In the annals of internet history, this week may very well signal an important inflection point of the transition from human driven platforms to machine driven protocols. What happened? Coinbase went public with a debut market cap north of $75B. It is the beginning of a new internet age. Web 3.0 is here.

Well, technically it’s been here for a few years. However things have really exploded over the past few months and particularly out of the application layer. NFTs, those newfangled blockchains that house digital art, music, collectibles and more are all the rage. People be trading these things! Beeple is mentioned alongside names like Picasso and Banksy. NBA TopShot is literally…on fire! Infrastructure companies like Protocol Labs, BlockFi and others have continued to grow rapidly. And the capstone for 2021 year to date is the Coinbase IPO on April 14th. It’s early, yes. But a new phase of the internet has really begun.

What does this all mean for us in the “management layer”? Ernest Hemingway wrote in his novel “The Sun Also Rises”:

• “How did you go bankrupt?” Bill asked
• “Two ways,” Mike said. “Gradually and then suddenly.”

Well the sun is rising on a new structure of digital value and information transfer on the internet. And we all need to pay attention because for the last decade this new transition has been happening gradually. Now, it’s suddenly here.

One theory, cobbled together from a number of podcasts like this one and articles like this one is that the closer companies and products are to “rights” the more likely they are to be displaced by Web 3.0. Fought over things like speech (social media) or property (assets) will have protocols to compete with companies (and governments) very very soon. Bitcoin been competin’ with currency for over a decade and doing pretty well!

Why?

Trusting the discretionary decision making of fellow humans is at an all time low. The hope would be that protocols, open sourced and “trustless”, would be visible to all in the consistency and unalienability of their decision making. Ideally the democratization of the earnings and accessibility of these blockchains would help disintermediate some inequality too. That argument is better made for another day..

Are protocols the solution to the trickiness of a world of gray? No. But change is coming and protocols will be a part of it. Likely, when all businesses are technology businesses there will be room for both. Some solutions will need trustless machines and some will need people run platforms.

So, in summary, if you work in tech and you manage teams it’s smart to know that the earth is moving under our feet and above us in the cloud. There is a new internet that has been created and it just might affect your future earnings..if you’re not paying attention.