{PODCAST} In-Ear Insights: Introduction to Web3

{PODCAST} In-Ear Insights: Introduction to Web3

In this week’s In-Ear Insights, the Trust Insights podcast, Katie and Chris tackle the basics of blockchain, cryptocurrencies, and NFTs under the umbrella of “Web3”. What is it? How does it work? Why should you care? What are the business implications and strategies you should pursue? Tune in to find out!


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{PODCAST} In-Ear Insights: Introduction to Web3

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Machine-Generated Transcript

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Christopher Penn 0:17

In this week’s in In-Ear Insights, we’re talking about the fundamentals of this mysterious buzzword and it really is a buzzword called Web three, which incorporates things like blockchain, cryptocurrencies, creator coins, NFTS, all these fancy buzzword terms.

So, Katie, to start off, when you have this lovely buffet of buzzwords that come across as almost cult, like, what’s your take on it all?

Katie Robbert 0:48

Well, I mean, it’s my first question is always Why should I care about this thing? And then my second question is, why as a business owner, slash marketer, should I care about this thing? And I have yet to see.

I have yet to get a good answer to that question.

Um, you know, when I see terms like, web three, you know, my, you know, very ignorant understanding.

I’m like, So www and someone got lazy.

Like, it’s it.

It hasn’t been described to me in such a way that I’ve figured out why I should care about any of it yet.

And I guess that’s the purpose of today’s episode, is to help answer those questions of, why should you as a consumer, and why should you as a marketer care about any of these things? I know the basics of what an NFT is.

And I think it’s silly.

And I know the basics of what blockchain is, and I think it’s silly.

Um, and my very high level understanding of cryptocurrency is that it’s basically just, you know, a fancier wire transfer.

So that’s sort of where I’m at with it.

I’m guessing I, there’s a lot I don’t know.

And I’m okay with that.

I’m okay with not knowing until someone can convince me I need to know this thing.

So convinced me, Chris,

Christopher Penn 2:13

I’m not gonna be looking at you, I can tell you that.

Let’s let’s, let’s dig through the history first.

So Web 1.0 was literally the World Wide Web, the first HTML pages, we’re talking mid to late 90s.

Right? Web 2.0.

Really, it was the dawn of the social media age.

And that is when you start having really big tech companies come up and sort of centralize the internet experience, Google, Facebook, Twitter, and so on, and so forth to these really big tech companies, powered by really big ad tech.

And the revenue model was, we show ads we make and you make money from ADS is how they make their money.

And then for us, as businesses, we got access to data and to advertising tools that allowed us to scale a little more efficiently rather than, you know, punch the monkey banner ads, which was the all the rage in the early 2000s.

So that was web 2.0.

Web 3.0, in theory, is based on the idea that your transaction systems now move to the blockchain.

And instead of having a few big companies collecting money for everything, for all, essentially, for managing all content, you have the ability for people to issue assets of their own, using this decentralized transaction system, and, and sort of cut out the big tech company as the broker.

So if I create an ebook, instead of just trying to run ads to get attention to ebook, if I have my audience, I can use this system to sell essentially licensed copies of and then people can theoretically, trade it like baseball cards.

So that’s the general idea.

It is all based on blockchain technology, which the easiest way to explain it is if you think about a Google sheet, or any spreadsheet, and you think about a spreadsheet, everybody shares, and anytime one person makes a change to the spreadsheet, we all have to agree that change is okay that the transaction actually happened.

And then that cell that spreadsheet is locked, says this transaction has happened.

The idea being instead of needing a big financial institution to essentially do the accounting, you have this technology, this encryption that as long as everybody’s running on the same platform.

You are doing your accounting in public really is what it boils down to.

So that’s kind of the the general premise.

Why do we care about this? The most practical applications of blockchain technology are around things where a public audit trail is a good idea.

One of the users cases I thought was actually really good.

It was from entreprise IBM, who said that having sensors, for example of a shipping container that transmit their sensor data to a blockchain, that everybody can see, everybody involved in the transaction can see means that when that container arrives in Port, everybody can look at the audit log and agree, yes, this container was exposed to temperatures outside of the contract.

The contract says you have to keep it below, you know, 92 degrees Fahrenheit otherwise, you know, the constant damage.

This container sensor says it was 108 degrees, the shipping company and the receiver, then have a trail evidence.

So the shipping company can say, oh, no, no, no, we had refrigerated the whole time.

It wasn’t in breach of contract.

When you look at the blockchain, America, well, this data this to this date, their entries and say, the temperature to 108 117, and so on, so forth.

So we’re not gonna accept this container.

And you have to, you have to eat the cost of it.

That’s one of the more practical examples I’ve seen where this public encrypted spreadsheet essentially, might have some practical use.

Katie Robbert 6:12

I’m getting very vivid flashbacks to, you know, being in college and trying to show up for like, an at a math class, and having that struggle to like, stay focused and pay attention and not let your brain wander off.

Because it’s not you personally, Chris.

But as you’re describing this, I’m like, okay, so web three is literally a version number of the web.

Got it? So could it just said that not you just, you know, in general, and then blockchain is literally trying to get a whole bunch of disjointed people to agree on one single thing.

And when they do one tiny little speck of data changes amongst a whole large set of data.

Okay, cool.

I still don’t know why I need to care.

So let me ask you this question, Chris, as a consumer, as a regular forget about the business, forget about anything like that, as a regular person going about my everyday life, you know, going to the grocery store doing online banking, you know, walking my dog, is any of this relevant to me.

Christopher Penn 7:27

Today, no, out okay, not has no relevance today whatsoever.

Here’s the theoretical, this is pure theory.

If blockchains as technology became widely adopted, when you went to the grocery store, instead of there being a bank, brokering the transaction of transferring money from your account to somebody else’s account, if you are both on the same general blockchain system, you the grocery store could accept your payment directly.

It wouldn’t need a bank, it would need visa, it wouldn’t need any of these intermediaries.

To do the transaction, the money just go from your account straight to the grocery store account.

And there’d be no middleman taking a slice.

That’s the theoretical outcome.

And the it’s funny that nobody ever mentions this.

But in a lot of ways, it’s kind of almost going back to web 1.0.

And email, right? There is no central controlling authority for email, like there is for Facebook, for example, Facebook has a central controlling authority.

And there’s, there’s censorship.

And there’s all this other stuff, right? When you sign up for email, particularly if you are a technologically savvy company, you put your email server on the internet, you add your DNS records, and you’re good to go.

Now you can email somebody else and somebody else can email you.

Now, for example, Trust Insights, we host our email through Google, but we don’t have to, we could host it through Linode or disclosure one of our clients, we can host it on a box that I put, you know, plugged into my router in my basement.

And in that respect, it is very much a decentralized system you if, say the United Nations sanction Facebook out of existence I’m making just making this up.

Everybody’s Facebook page just gone like that.

No one can sanction email out of existence.

That’s one of the reasons why it’s lasted for 30 years and has never gone away even though every two years somebody says emails dead.

Because it is this decentralized system.

And so the way these blockchain slash web three folks are trying to go is replicate other systems of transactions to function like email.

But the reason why you need all this encryption fancy stuff is because obviously if money is changing hands, you need to have some authentication mechanisms built on top of that.

Katie Robbert 9:53

But it sounds like what you’re saying is that as an everyday consumer, the only thing that would really change for me Is I would just sign up maybe for a different, quote unquote bank versus the bank that I have now.

And I wouldn’t necessarily use a physical card, I might just scan something from my phone, which is kind of how a lot of banking works today.

Anyway, a lot of people do the touchless, banking.

And so while all of this technology is being built in the background, as the everyday consumer, I may not really see a change to my user experience, other than, you know, I’m switching from Hotmail to Gmail, kind of as an exactly.


Christopher Penn 10:38


And that is one of the biggest, credible critiques of this whole web 3.0 thing, which is, there’s nothing in it that is so revolutionary, that you can’t do the exact same things today.

Right? You Yes, you absolutely could, for example, set up your own node on say Desmo, or bid cloud or any of these other services, you could have set up your own Ethereum mine and forget, you know, for gas fees, and all this stuff.

All that’s doing is changing who the middleman is, right? When you look at Coinbase, for example, in you know, in the the Bitcoin market or open seat and the NFT market, it’s no different than working with Christie’s at the auction house, right, it’s just a differently named one with a different transaction system.

But it’s not better.

It’s not, you know, it doesn’t make things easy for the consumer.

In fact, for the consumer, it’s a hell of a lot harder to use these technologies, because you have to jump through all these hoops to get involved in the space, in order to be able to make use of it.

Today, if you want to buy something at the grocery store, you take out a little piece of plastic is sticking in the machine.

And the existing infrastructure handles it.

If you were to do assume, let’s say like, you know, Trader Joe’s accepted Bitcoin as a as an example, today, you would have to take your existing money, find a broker, transform that into Bitcoin, which is essentially like transforming, like, rubles was a bad example, because of rubles, not worth anything anymore.

euros, and then pay with a card that had us euros, essentially, to make the same transaction.

It’s an extra step.

And the thing that we’ve learned about e commerce over the last 20 years is fewer steps means bigger purchases, more purchases from servers, this ecosystem, right now has so many more steps, that for the average consumer, it’s not worth it.

Katie Robbert 12:39

Well, it sounds like it’s also not accessible.

And so, you know, the thing that I’ve, you know, so I do pay attention to these things, I always just try to think about it from sort of the, for lack of a better term, the every man like, is this accessible to every man? The answer right now is No, at least I from where I sit, it doesn’t seem like it because there’s first needs to be a level of understanding.

And then there needs to be a level of accessibility to the technology.

And I feel like those two things are not accessible to everyone from every economic status.

And that, to me is problematic.

I mean, just money in general jobs in general, is been always problematic when you have these different classes of wealth.

I don’t see this solving that problem.

And I don’t know that it’s meant to, but what I’m seeing is, it’s adding an extra layer of complication on top of it, because you almost kind of have to be on the inside crowd be in the club in order to participate in it in the first place, which means that it’s not accessible to the majority of people in the world.

Is that correct?

Christopher Penn 13:52

If cryptocurrencies in particular were national economies, they would have like this, I believe it was a recent report say that having the second or third highest income inequality of any economy on the planet, there is absolutely a substantial problem.

In that it is the best way to explain the economics behind law stuff is actually what true capitalism looks like, where a couple people get very, very rich and everybody else is poor.

That’s the outcome of what true capitalism looks like with no regulation, no restrictions, no oversight whatsoever.

There’s, for example, one of the mechanisms the nature of the blockchain technology is that you can’t claw back a transaction.

So like, if I go on eBay, and I sell something fraudulently right.

You can file a complaint with eBay right? And if the eBay views that that was a valid complaint, they will reverse the transaction say nope, you know, I sold I sold fraudulent goods.

With blockchain, you can’t do that.

Right, because that once that spreadsheet cell is locked, it can never be unlocked.

You cannot go back in time cannot theoretically, you could reverse that you could sue the person in court to have them give you the money, but you cannot with you cannot undo the transaction.

Because of the nature of the blockchain is a permanent entry in the ledger, there is no reversing it.

So there is there are some very substantial issues that all this has to be worked out before.

It’s even safe for consumers to use.

Katie Robbert 15:26

So, let’s go back to the fundamentals of web three, because I’ll be honest, I already forgot what you said web three was.

So let’s talk about that again.

Christopher Penn 15:35

So it’s it’s built, everything is built on the blockchain.

That’s the important part.

It’s all built on this, this public encrypted spreadsheet technology.

There are currencies on it, right? You heard of Bitcoin and Aetherium, and various alt coins and stuff, which is financial transactions on that encrypted spreadsheet, okay.

And then there are things like NFT is non fungible tokens, which are essentially contracts, licensed software licenses on an encrypted spreadsheet.

The easiest way to explain that is, if you’re familiar with when you open up an install a new piece of software, you get this big long notice on screen says, yeah, here’s your end user license agreement that essentially says you don’t own this software.

When you install Microsoft Word, you don’t own it, you would get a license from Microsoft to use it.


And then Microsoft at any point can revoke your license and make worried evaporate off your computer.

Katie Robbert 16:32

It’s like racking renting an apartment from a landlord got it.

Christopher Penn 16:35



And also, we’re familiar with collectibles, right? Like a a trinket or a David Ortiz baseball card, for example, is is a collectible, right.

But especially if it’s signed.

And that rarity has value right? There probably aren’t that many in the world.

And NFT is essentially a digital license for a piece of content that says this license is collectible.

So let’s say I draw a ridiculous picture, right.

And I issue an NFT on top of it.

If you are a super fan of mine, you might buy a license, which is essentially just authenticated bragging rights to say that you’re such a fan of mine that you bought this license, you can show it off to your friends as an example, or one of the more innovative uses I’ve seen is from Joe Pulizzi.

And the folks over tilt where they issue these smart contracts that allow you perpetual entrance to their conferences.

So as they have a conference, you show your license to that and then you know you you get into the conference, you have to pay any additional money for it, because it’s essentially just a digital contract.

The reason why people are, are creating these these NFT things is one of the challenges of the digital age is that scarcity is largely gone.

Right? If I publish the Trust Insights newsletter, a billion people can read it, we hope we do.

And so there’s no there’s no scarcity to it.

If I wanted to make money off of that, I would have to find some way to make it scarce, right? I can’t change the content itself, but it’s in digital form.

And anybody can do it.

But I could create, for example, a limited edition, you know, series, like if you are a painter, you might have the original and they have a million prints right of this of this painting.

The original is the the sort of this the scarce version, whereas the you know, the print that you can go buy it at Michaels, for example, not really scarce, it’s the same content, right? It looks the same on your wall, but one is essentially certified as being scarce while the others are not.

So that’s what an FTA is,

Katie Robbert 19:04

which is essentially the same thing that’s been happening for, you know, hundreds of years when you have the original and the reprints, but now they’re just taking it digital, which is correct.


I mean, that it’s, it’s interesting to me that people are making such a big deal out of these collectible NFT’s when, you know, it’s not a new concept.

It’s just a new platform.

So exactly what I’m still okay, so that so an NFT is something that if you’re interested in participating, it’s not necessarily going to be like cryptocurrency or Bitcoin or blockchain where eventually that may become the way of currency for example transactions, whereas an NFT sounds more like a hobby.

Is that correct? Are you feeling like an NFT will also So eventually replace how a consumer does every day living.

Christopher Penn 20:08

It won’t replace how consumers your everyday living.

But I see very strong theoretical potential, particularly for creators.

So right now, for example, if you are a musician, and you put your music on Spotify, and you’re gonna earn like one penny for every million plays, right? Spotify takes the lion’s share of the money, and you get very, very little in return.

Same for your super popular band on YouTube, right? Your video gets 100 million views, you might get a check for 1000 bucks from YouTube.

Certainly not enough to live on the idea of the NFT then says okay, yeah, the content is available, we’re gonna sell, you know, essentially signed copies of our YouTube video, right, which is, what the NFT is effectively is, everybody can still see the YouTube video, but you as the superfan can buy this digital asset, that is a collectible.

And then if you want to you can resell and trade it and stuff like that, but the band gets to make that asset scarce.

Again, it gets to add scarcity to it so they can earn some additional income on it.

Because right now, again, your video gets 100 million views, you don’t get a whole lot of money out of out of Google for your for your time and effort.

And if you’re a smaller band, you make pretty much nothing, right? Like if your video gets 1000 views, but you have 1000 true fans, unless you’ve got a Patreon or something set up, you are not making money on your music, right? You are not quitting your day job.

The mechanisms for NFT’s once they become easy to use.

And once frankly, you start using currencies other than cryptocurrencies to buy them could be a way for creators to be able to reintroduce scarcity to their medium, and make some money on it.

Katie Robbert 21:56

So I guess, again, it’s not anything different that hasn’t been happening over the past few 100 years.

It’s just it’s digital versus, you know, in person, Comic Con, for example.

So like, instead of Chris Penn sitting at a table signing, or writing, like little intros into his book specifically for, you know, Katie, or whatever the other super fans, so that then becomes the one unique thing.

Like, so let’s say you have 20,000 copies of your physical book, and then I show up at your table and you write a little inscription, that then becomes the only version of that that’s not a new concept.

And that again, only applies to people who care about being in that super club fan.

And so now it’s just digital.

Christopher Penn 22:44


I think the book example is a really great example.

Because today Yeah, and it’s something that actually I was thinking about during the pandemic, when we couldn’t go to conferences and couldn’t do, you know, book signings and things.

Yeah, you could issue an NFT.

For people who bought your book that, you know, personally, you could charge a higher fee for like this book comes with a, essentially a digital signature on it, and you have a digitally signed copy.

Now, here’s the really big challenge with this.

Because all the companies in this space like open sea and stuff like that are brand new.

They have not fixed the decentralization problem.


So even though it uses a blockchain, it is still administered by a company.

So if open seat, poof vanishes tomorrow, and the underlying infrastructure for that blockchain vanishes.

Your NFT is worth nothing.

Right? It physically stops existing.

And that is where a big difference is like if I vanished tomorrow, my book that I signed for you still exist, it’s still a tangible object in your hands.

And you can say, well, I have the I have the last signed copy of the late author, Chris.

Katie Robbert 23:56

Ah, you’re giving me ideas.

Christopher Penn 24:01

If the transaction processor vanishes, all the NFT’s issued by that on that blockchain are worthless, they’re inaccessible, they point to nothing.

And you suddenly have literally nothing to show for it.

And until NFT’s figure out how to federate their blockchains together, it’s basically act as failover for each other.

The entire enterprise is one big house of cards.

Katie Robbert 24:27

Okay, so to sum up, web three is the version number.

So web one was really kind of email.

Web two was really kind of social media.

Web three is all blockchain cryptocurrency and FTS, okay.

It’s really for content creators to find a way to make their content a little bit more exclusive.

Then, Blockchain is the underlying foundation of this but that in and of itself is still pretty fragile because the It needs to be a lot more agreement and less hoops.

And then NFT is essentially a personalized signed copy of a book, but digital, got it.

So as a consumer, as a regular, everyday person, unless this is a topic that interests me, there’s no action that I need to take.

So if I still want to get, you know, a signed poster of my favorite celebrity, I still have to figure out a way to get in touch with that celebrity, or whoever runs their fan club, and I can do that digitally, or I can do that in person.

So that hasn’t changed.

That’s my NFT.

The blockchain and the cryptocurrency and stuff is not mainstream, so there’s no action for me to take at this time.

Christopher Penn 25:46

cryptocurrencies are a speculative investment a lot of people have made and a lot of people have lost a lot of money on and you are starting to see more mainstream financial institutions trading in it, for example, PayPal, loves to do some trading in cryptocurrencies, a few other places.

So you’re starting to see people using it as a speculative investment.

So not something that like your mom would use, for example, but folks who are used to betting on like Penny stocks or other riskier investments are starting to look at cryptocurrencies and saying like, can I buy these kind of arbitrage these can I make some money, and there have been some people who have made a lot of money, and there have been some people may have lost a lot of money in the space, but that is a that is the more mainstream application of cryptocurrencies right now is as speculations, it’s no different than speculating in euros or rubles or yen.

Katie Robbert 26:36

Right? Well, and so that’s sort of my point is, again, it’s if you’re interested, then there are, you know, things available for you to participate in, it’s like the stock market.

You know, if you want to invest if you want to, you know, quote, unquote, play the stocks or bet on a sports team, you know, you can do those things, it’s, it’s, to me, it’s no different from doing those things.

And so as a consumer, again, it’s still all opt in, there’s no action for you to take as a marketer.

I think the couple of things that you could think about caring about, um, you know, if you decide that your business is going to start accepting bitcoin or cryptocurrency as a form of payment, that’s totally your call for what it’s worth Trust Insights will not be doing that anytime soon.

So please do not try to pay me in, you know, bitcoins or whatever, so don’t even try it.

As a content creator, the thing that sticks out to me is creating that exclusivity.

But again, that’s not a new concept.

And so whether it’s a, you know, gated newsletter that you have to pay to subscribe or, or, you know, a personalized piece of content that Chris writes, specifically for you.

Not a new concept, but thinking about it in those terms of creating that exclusivity.

So as we create content and put it out on the web, it’s just there anybody can view it.

And so how do we then personalize it a little bit more.

So that I think is really the takeaway action for marketers?

Christopher Penn 28:15

It is, and the bet the single best thing marketers can do to prepare for this stuff, if it does take off and to cover your butt, if it doesn’t take off is to build the strength of your brand, because everything particularly NFTS is contingent on you having a strong brand if you have enough people who believe in your brand who like you have a great reputation with, then if and when you do start to dabble in NFTS, you will have a ready audience of people who will see value in that collectible.


If you know, for example, today, I don’t think that there’s a you know, I know there’s not enough strength in my brand personally, to issue these things because the hoops are too high to jump through.

And while people may like the work I do, they don’t they’re not such raving fans that they would jump through those hoops.

So my mission and our mission as a company and our mission as marketers, is to build the strength of our brand to create as many rabid fans as possible so that as the barrier to entry goes down.

Wit will find a point where that credit kind of balances out.

And you’ll have those added people who like I don’t care if you write stuff on on a napkin or crayon, we will buy it from you like great.

Let me give you this NFT then because it’s it’s the digital equivalent of a crayon, a napkin, and you can buy it or you know, me reading you the phone book or something like that.

Something where it doesn’t matter what it is.

So someone is such a fan that they’ll take anything that they can get, that’s where you want your brand strength to be.

No matter what you publish, people love you so much.

They’ll take anything they can get from you.

Katie Robbert 29:53

Okay, let me ask you this one final question and then we can wrap up.

So, the way you’re describing it is It almost kind of sounds to me like the way that we operate with our services.

And so we created or Chris, you coded the algorithm for the Markov chain model that we use for our digital customer journey.

And so people clients can pay for their own version of that, which is the report the deliverable.

How is that any different from an NFT?

Christopher Penn 30:28

It’s different in that it cannot be resold is not a smart contract.

So got it.

The idea behind an NFT again, it’s like a baseball card.

I can resell a David Ortiz rookie card right to somebody else who’s a fan.

If you if you have a digital customer journey report for Katie robear.com.

That’s really not a value to anybody else, except you.

It has no resale value.

Katie Robbert 30:54

Okay, that’s helpful, because as you were describing it, it struck me as well, it sounds a lot like creating one product and then customizing it for each of the clients.

But that makes more sense, because you wouldn’t necessarily resell the Trust Insights customer journey report for Katy robear because I can’t do anything with it, other than look at it as a competitor, for example.

Now write

Christopher Penn 31:22

a book of mine that signed you can resell that book and that signature on it.

Katie Robbert 31:26

Even if it’s made out to me, somebody else might see value in that.

Christopher Penn 31:30

Exactly, just because it was signed by the person.

Okay, you know, somebody who’s a huge I don’t know, Billy Eilish, Stan, and Billy, I signed their cronut, right? It doesn’t matter.

They are legion of rabid fans will still want that thing.

Katie Robbert 31:48

Got it.

Alright, so TAKEAWAY NUMBER ONE, as a consumer, unless you’re interested in these things, you don’t have to participate as of today.

Number two, as a marketer, you need to think about how can you create some exclusivity with your content and number three as a brand? How can you create such rabid loyal fans that they will buy any piece of signed Crona that you put out there? So those are your three takeaways?

Christopher Penn 32:17


And I love those.

For marketers.

Number three is most important, and it’s the most universal, right? If you’ve got a strong brand, you can do anything if you don’t have a strong brand you it’s an uphill battle every single day for traditional marketing, like email marketing, for digital stuff for NFTS, whatever it is, if your brand is not strong.


If your brand is not strong.

You need to make it strong.

Katie Robbert 32:43

Got it? All right.

Well, I I feel like I learned a lot.

Um, and I did pay attention the whole time, I promise.

Christopher Penn 32:54

Oh, my goodness.

All right.

So if you have comments or questions about anything we’ve talked about today, feel free to stop by our free slack group that does not require an NFT dancer over at trust insights.ai/analytics for marketers for you over 2200 marketers are asking and answering each other’s questions every day and wherever it is that you watch or listen to the show.

If there’s a platform you’d rather have an on that, again does not require any cryptocurrencies to purchase.

You can find it at trust insights.ai/t AI podcast.

Thanks for tuning in, and we’ll talk to you next time.

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