Citi Perspectives 2024 E-commerce Edition

42 | Services Citi Perspectives The Evolving Internet: Microtransactions for Web3 President! When the internet first came into being, it was probably hard to imagine how this nascent technology would eventually become deeply ingrained in nearly every aspect of our personal lives and business interactions. It’s a fun trip down memory lane to look at headlines from the mid-90s to see howmany popular news publications were describing the internet and the guesses on how it would turn out. There’s one article from a leading magazine at the time that noted how no computer network will replace your daily newspaper, book, or music…whoops! Today, it would be truly difficult to live or work without the internet. As the internet has continued to evolve, so too has the economic model that underpins howmonetization and business growth are achieved. At the very infancy of the web, two models were debated — an ad-supported model and a microtransaction-supported model. When the foundation of the modern internet was established, formal search engines, as we know them today did not yet exist. This meant the only way to find websites was through aggregated lists of links, which were cultivated carefully by the pioneers of the internet era. This led early designers to contemplate whether future monetization of the web should be through ads on those sites that received the most traffic, or through a microtransaction generated every time someone clicked a link, thus delivering a payment to that website. To serve ads or not to serve ads, that is the question At the time, the monetization of the internet was a distant concept, but the leads of web development at the time recognized the backbone that was being put in place would have to support this future evolution. Microtransactions were not viable in the late 1980s, so it’s not surprising the ad-supported model won out. However, the remnants of both approaches can still be found in the early foundational source code. One of the most common error messages one can encounter is — “Error 404, link not found” —which indicates a web page that no longer exists. There is another code, “Error 402, payment required” that is also embedded in the code, which would have indicated that a microtransaction was needed. This can be seen as