Advantages of Constructing On-Chain Applications: A Deep Dive

• Integration of Cryptocurrency into Traditional Consumer Applications: A Long-term Perspective
• Traditional Applications Meet Blockchain
• Understanding Blockchain as Metagraphs
• The Power of Blockchain as an Information Network
• Making Sense of Metagraphs: A Practical Example
• Blockchain's Transformative Impact
• Expanding the Metagraph: Time as a New Element
• Why Does It Matter?

Integration of Cryptocurrency into Traditional Consumer Applications: A Long-term Perspective

At first glance, merging elements of cryptocurrency into traditional consumer applications might appear superfluous. The existing systems, such as purchasing movie tickets, work as expected by millions of people. However, this is short-term reasoning. The true potential lies in the long-term capabilities that come from aggregating data on-chain.

Traditional Applications Meet Blockchain

Applications that resemble traditional ones but carry selective on-chain elements offer new ways to map and understand user activity over time. This creates new data networks, dubbed metagraphs, that were not and could not exist in the Web2 era. These information networks may expand the design playground for developers aiming to create more engaging experiences for consumers.

Understanding Blockchain as Metagraphs

Envisioning a blockchain as an open, permissionless database gives a straightforward understanding of this technology. Users connect with applications through wallets, which exist above the data layer on-chain. This configuration allows blockchains to transport users between different blockchain-based applications, while the wallets provide interaction identifiers across these applications.

The Power of Blockchain as an Information Network

As users navigate different blockchain-based applications, the blockchain itself transforms into an information network. By deploying a unified identifier for a unique user's actions across applications, developers can construct a holistic view of user behaviors. Therefore, metagraphs become useful in segmenting customer behaviors, pinpointing superusers, and enabling deeper, more significant connections.

Making Sense of Metagraphs: A Practical Example

To understand the value of metagraphs, consider a musician and two of their fans. Fan A interacts with the artist's music in various ways, including Spotify streaming, Instagram activity, newsletter subscription, merchandise purchases, and concert attendance. Fan B, on the other hand, only streams the musician's music on Spotify for longer durations. While Fan A is clearly more engaged, these behaviors may often go unnoticed due to the lack of traceability in consumer behavior data.

Blockchain's Transformative Impact

Blockchain can alter this dynamic by bringing information and activities on-chain, thereby broadening the context for applications, creators, and consumers to think about behavior patterns. The aggregate metagraph thus forms a novel social map, which holds significant value.

Expanding the Metagraph: Time as a New Element

Besides application-driven context, metagraphs can expand context based on user behavior over time. Each on-chain action carries a timestamp, allowing developers to connect actions that occurred at the same time. This opens new doors to craft more compelling products. Emotional bonds form potent retention tools, and with Web3, time data is no longer confined to specific apps, democratizing access to information.

Why Does It Matter?

A minor modification, such as a 3% change, to an idea can generate something entirely novel. Incorporating select elements on-chain might be the exact amount of change needed to create more options around leveraging data. Most interesting metagraphs likely depend on identifying patterns across diverse applications and time frames.

While viewing blockchains as necessary might not be the correct perspective, seeing them as helpful certainly is. The ever-improving infrastructure of blockchains makes them increasingly beneficial, especially as they continue to become more secure and affordable.

Edited by Jonathan Stoker