All the things we hate about the internet come from one decision: not to embed a payment system within browsers.
Wondering what that even means?
Let me explain…
It was not so much a decision as an inability. The leading payment systems were Visa/Mastercard/Discover, and they had no interest in exposing their secure payment networks to untested internet technologies.
Rightly so.
To quote Marc Andreessen, “It’s the “Original Sin of the Internet.” He should know – he and his team are the ones that made the decision.
Consequences of the Original Sin of the Internet
Web 1.0 entrepreneurs were desperate for revenues, but without direct payment systems they were forced to consider advertising business models which needed user data to be useful and successful. As a result, privacy and security concerns were pushed aside for user data collection.
Because of the original sin:
- you get a pop-up ad reflecting your searches, unsolicited phone calls, emails, and other annoyances.
- all our personal data is owned by large, networked companies.
And how much personal data do these large companies own? Too much.
Eric Schmidt, former CEO of Google, famously said that in the future Google will “predict a patient’s risk of experiencing a heart attack or stroke” – before the patient even knows it is occurring.
But the Original Sin did something unexpected:
It kept the government controlled financial systems out of the internet long enough to give financial technology (FinTech) companies enough time to gain a foothold.
Companies such as PayPal, eCash, and Cybercoin worked hard to fill the void. Interestingly, each of these founding internet payment companies had an express interest in creating an internet currency.
The FinTech industry owes its very existence to the Original Sin, without which it would have no reason to exist. Web 1.0 would have been dominated almost immediately by the rigid, fractional reserve banking system and its payment systems. Financial innovations would have ground to a halt in favor of incumbents.
Paradise Lost or Paradise Found?
Marc Andreessen laments the original sin and its paradise lost, but I believe it represents a paradise found, be it out of battles for privacy and financial freedom.
All the original attempts at cryptocurrencies were funded by the original payment companies. Innovative spinoffs from these companies lead to other companies creating a whole new industry that threatens the dominance banking. Satoshi Nakamoto’s blockchain Bitcoin and Web 3.0 may not have even come into existence without the Original Sin.
If it weren’t for the blatant disregard for our privacy and outright financial repression born out of the Original Sin, we may not have ever taken a chance on blockchain.
So perhaps the old saying has some truth: Sometimes, good things can happen from bad situations.
As foretold by George Gilder in “Life After Google,” Web 2.0 business models are coming under attack and their days of dominance are numbered.
As soon as we gain sovereignty over our personal data, the party is over for Web 2.0.
And that couldn’t come soon enough.
If you’re a bank, large or small, & need some guidance to improve your technology, I can help with that. See what Services I offer, and reach out anytime if you want to schedule an appointment to strategize.