Pizza, mutant apes and a sea of NFTs: Web 3.0 is here

Like people, the internet can be classified into generations. Web 2.0 (or, Web 2) is the internet most are familiar with and is often referred to as “the social web.”

It’s an environment that emphasizes user-generated content, as opposed to content posted by others and in one expert’s definition is “dominated by companies that provide services in exchange for your personal data” — companies like Facebook and Twitter.

One tempestuous U.S. presidency and a pandemic later, the world also witnessed how easily Web 2 technology could be manipulated — bots, lack of granular moderation on social media and anonymity on social media platforms, all helped contribute.

Extremists and foreign actors used the applications that define Web 2, namely social media and messaging apps, to spread misinformation, disinformation and help sow unprecedented political polarization.

Now there is Web 3.0 (Web 3), the next generation of the internet dominated by apps that run on blockchains. Web 3 is designed to remove Big Tech from the equation, much of it be free and open-source, and provide transaction information that is unique and authentic.

It brings with it a frenzied hunger for NFTs (non-fungible tokens) — one-of-a-kind digital products, including art.

And there is optimism from some who say that Web 3 has the power to transform the internet and society for the better — musicians being able to be paid every time a song is played, cutting down on fraud and instantaneous credentialing, for instance.

However, there are naysayers who believe this is all part of the online world’s latest grift.

Web 3.0, NFTs and how they intertwine

One of the main components of Web 3 currently is cryptocurrency, said Christian Catalini, the founder of the MIT Cryptoeconomics Lab, and a research scientist at the MIT Sloan School.

Another technology under the umbrella of Web 3 is NFTs which are used mostly now for digital art and other digital content. The difference between any old JPG image and a JPG that is also an NFT, is that the JPG NFT has a digital token of ownership behind it. You own the JPG NFT unlike any regular JPG you download.

The NFT JPG is created on a blockchain — a public digital database that records unique and irrevocable cryptocurrency transactions and runs across many computers of which no one person or entity has ownership.

“Web 3 is really a suite of technologies that uses these tokens to create new types of digital platforms and new types of digital ecosystems,” Catalini said.

Enthusiasm for Web 3.0 may be most apparent on Twitter. You can see users who have added “eth” at the end of their Twitter profile names — signifying they are active on the Ethereum blockchain — a specific type of blockchain that uses security mechanisms that differ from other blockchains and is the main platform currently for buying, selling or creating NFTs.

Many of these accounts display the unique and often bizarre NFT art they have purchased as their account profile picture. There are images ranging from humanoid pizza slices, to grotesque, mutant apes to squishy-cute noodle characters.

Fity.eth, as he is known online, is an NFT enthusiast who asked his real name not disclosed for privacy reasons. He’s the founder of Apocalyptic Apes, a collage of digital artwork and virtual space made up of mutant cartoon apes and a storyline with an environmental message.

He says he collaborates with a digital artist who draws the ape characters who live in his apocalyptic online world “where food is hard to find, air is hard to breathe, and any sign of life is scarce.”

Fity.eth’s site recently released a crop of new digital art ape NFT characters. They are sold on the OpenSea NFT exchange, one of, if not the largest NFT marketplace. The asking bid price at the time of launch is a fraction of the value of 1 Ethereum digital coin (worth a little over $4,000 at publish) — which works out to about $271.

The ape NFTs sell out in days, the website shows.

But why would anyone pay that much money for an image of a cartoon ape?

“I think that’s the question that the whole world has,” Fity.eth said. He attempts to answer by saying he knows an artist who has always made a modest living with their art. “‘Think of what I have to go through to sell a piece of art,” Fity.eth recalls the artist saying. “I have to paint it, I have to put it on my wall, I have to display it, I have to go to a showroom … people take commission.” He said that for that artist, opening a virtual NFT gallery has been financially more beneficial.

But it’s also all much more than that, Fity.eth says.

“It’s about friendships, it’s about relationships,” he said. The owners of these ape NFTs are bonded now in a unique online community, he said.

Part of the appeal of NFTs is building exclusive online communities of these digital art holders and offering perks like real-life events and meetups or special offers from businesses. And, through promotions, word-of-mouth and influencers, NFTs can increase in value (like any artwork) with some willing to pay thousands (and sometimes millions) for the hottest NFTs at the moment (you can sell your NFT to another buyer for a higher price than what you paid for it, if the demand is there).

“We’re building a lifestyle and we’re making a movement,” Fity.eth says and adds that a big motivation to launch Apocalyptic Apes is to help raise awareness to reduce air pollution and plastic in the seas. He says he is partnering with another company that uses hemp to replace plastic in bottles, straws and other items.

Several of the Web 3 and NFT advocates who spoke with ABC News mentioned tying their personal causes to the emerging technologies.

For example, another NFT proprietor who also asked that his real name be withheld and goes by the online name Snax.eth, founded the group Pizza DAO which threw a global pizza party by selling NFTs — an event he claims was to bring awareness of the devastation the pandemic brought to the restaurant industry.

He says Web 3’s greatest potential is connecting people to do good in the world. “Pizza, like the internet and the blockchain, is a global phenomenon that unites us. Most of our problems on planet earth are distribution problems and NFTs and Web 3 are distribution technology. We can leverage digital scarcity to end real-world scarcity,” Snax.eth said.

Early-adopting celebrities and brands

Big brands and celebrities are also launching NFT-Web 3 projects, tying real-world services and products to digital tokens.

Companies including Nike, Taco Bell and Coca-Cola have launched NFTs (mostly tied to fundraising campaigns for social causes) or are making investments in blockchain technology.

But how can NFTs deliver more for brands than the social media channels and tools that already exist? And why on earth would anyone want to own a digital image of a Taco Bell taco?

Those are the types of questions surrounding NFTs and Web 3 that academics like Scott Duke Kominers delve into. Kominers is the MBA Class of 1960 Associate Professor of Business Administration in the Entrepreneurial Management Unit at Harvard Business School, and a faculty affiliate of the Harvard Department of Economics.

“In the short term, NFTs are transforming our ability to have ownership of, and thus markets in, digital goods and commodities … and that will start filtering into physical goods and commodities,” Kominers told ABC News. Kominers is involved in and advises several NFT projects and has written a paper for Harvard Business Review on how NFTs create value.

NFTs are intriguing not just for artists who have potentially new online marketspaces to display and sell their art, but for musicians as well. The hip hop community has been particularly receptive to NFTs.

Legendary hip hop producer Timbaland is offering his second online NFT auction. While Timbaland’s…