The full dialogue of Cai Wensheng, Feng Bo, and Zeng Ming at the Hong Kong Web3 Carnival: The evolution from Web1 to Web3

Author: 8BTC

From Web1 to the currently booming Web3, each evolution of the internet paradigm has triggered changes in social models. At the 2023 Hong Kong Web3 Carnival, co-hosted by Wanxiang Blockchain Lab and HashKey Group, and organized by W3ME, angel investor & Meitu Chairman Cai Wensheng, Dragonfly.xyz founder Feng Bo, and former Alibaba Chief Strategy Officer Zeng Ming gathered for a roundtable discussion to explore the opportunities and challenges brought by the evolution from Web1 to Web3 for society, enterprises, and individuals. The roundtable was hosted by Zeng Ming.

Here are some excerpts from the roundtable discussion:

Zeng Ming (Host):

Good afternoon, esteemed guests! After a day of heavy content, let's change the rhythm a bit. The common characteristic among the three of us is that the most important aspect of our careers and lives is that we have accompanied the internet since the early 1990s, whether as direct practitioners, investors, or researchers. We have witnessed the development of the internet to mobile internet and AI, and have also observed the development of Crypto over the past 7 to 8 years. I would like to take this opportunity to share with you various successful cases, failures, and "rumors" I have seen over the years, and share what we have learned from the past and the trends we see for future development.

Cai Wensheng:

As Zeng Ming mentioned, when Feng Bo and I appear, people often introduce us as "those who have worked from Web1 to Web3." This seems like a compliment, but it actually indicates that we have not succeeded from Web1 to Web3; we have been on the road all along. But I still want to give ourselves some credit; many people are no longer around from Web1 to Web3, but we are still here, which shows we are veterans. Veterans do not die; they just slowly fade away.

From over twenty years ago in Web1, to Web2, and now to Web3, the times have been changing, but Feng Bo, Zeng Ming, and I were involved from the very beginning. I happened to see online today, "Why is this summit called Web3 and not Web3.0?" There is actually a difference. Web1.0, Web2.0, and Web3.0 refer to Web1, Web2, and Web3 from a technical perspective. Why is it called Web3? It is also the third generation of the internet.

In my understanding, Web1 is the era of Yahoo and Sina, which was more centralized; the information we needed was provided by Sina, Yahoo, and others. Web2 is represented by Google, Baidu, WeChat, and Facebook, where interaction and choices became possible. However, the problem that Web2 did not solve is that registering an account requires approval from platforms like WeChat or even Twitter. One day, if Twitter is unhappy, even Trump's account can be suspended, and you have no way to sue them. The core of Web3 is that there will still be platforms in the future, but registering an account does not require approval from the platform.

Second, you can have control over your own data.

Third, the data you own can be monetized, have value, and make you a value owner of the platform. This is the most fundamental change.

Feng Bo:

From my observation, most attendees are entrepreneurs. Hong Kong is a great platform, and we welcome you to start your business here.

In the industry, we are still in the internet era today. Web3 is just a code name; the best internet products of the next generation are Bitcoin and Ethereum, not Toutiao or Meituan. The second half of the internet is beginning, using the internet to manage and interact with assets and valuable information.

There are currently no real Web3 companies emerging. Why are so many people sitting here? Because everyone is looking for direction. Today is just a glimpse of the direction; as for what Web3 is, no one really knows. Professor Zeng may know a bit more than us and can provide some insights.

Cai Wensheng (Host): Feng Bo, you invested in Sina in the early 90s and entered the mobile internet in the 2000s. What are the differences in mindset between then and now when investing in Web3?

Feng Bo:

The first company I invested in was AsiaInfo, which was involved in the overall internet infrastructure at that time. Ding Jian invented dial-up internet, and then there was ChinaNet, followed by Sichuan Online and Shanghai Online. Sina came later, from SSR Net. At that time, we invested in software companies that saw opportunities in the internet. There were BBS systems, and we aimed to transform BBS into something that society could use.

The historical stage back then was interesting; discussions were about SSS Net being used by professional software engineers, just like how DeFi is now used by trained professionals. Who would use BBS? General users might not. DeFi will go through a similar process; in the future, using DeFi will be as easy as using a refrigerator, microwave, or smartphone, without so many cumbersome steps. At that time, DeFi will become one of the most important financial means of human civilization.

When we reached Web2, the first company I invested in was Douban. When Wu Shichun was starting his business, he introduced me to Chen Hua, who was doing search, and we established Kuxin. But at that time, search was about crawling a lot of useless information, and we tried various things like train tickets, travel, and real estate information, but none had good information value, so we ended up selling the company. Later, Yi Ming tried to use it for real estate but did not succeed either.

At that time, the mobile internet was just starting. The small screens of mobile devices required news headlines, and everyone was looking at headlines, so it was named "Toutiao" as an entry point.

For the entrepreneurs here, think about it: the real methodology is not a 360-degree turn but fine-tuning. Fine-tuning can find significant opportunities; Web3 is a great opportunity for all entrepreneurs.

Cai Wensheng:

Feng Bo's insight is that it's better to invest wisely than to invest early. Dr. Feng invested in Sina as early as 1997, and after the bubble burst in 2000, he paused. When Zhang Yiming was starting Kuxin, he was the first to invest, but because he invested too early, he did not follow up later.

Feng Bo:

The Crypto industry is similar; we are experiencing a significant advancement in human civilization. Whether in infrastructure or application development, it is not localized. Just like the internet, although there is local adoption, the main focus is on the overall update of human infrastructure, technological updates, and social revolutions. During this process, do not rush; Crypto is too free. With one click, you can ruin a lifetime. When there is too much freedom, it can lead to many unnecessary sacrifices. Entrepreneurs should focus on the most fundamental and essential innovations, allowing the times to unfold slowly without rushing.

Cai Wensheng:

Actually, I feel the same way. My first entrepreneurial project was a navigation website in the Web1 era called 265, which I sold to Google in 2008 for 20 million USD, and I was very satisfied. But later, a good friend of mine, Pang Dongsheng, imitated 265 and created 2345, which later went public in A-shares, reaching a market cap of 40 billion RMB at its peak. So sometimes, cashing out too early is not right.

Later, I started Meitu in the mobile internet era, but it was also too early. The earliest short video was Meitu's Meipai, but because it was launched too early and without serious consideration, the subsequent opportunities went to Kuaishou and Douyin. The failures of Feng Bo and me inspire everyone that the entrepreneurial industry is a long-distance race. Sometimes, do not focus too much on short-term benefits; if you emphasize immediate value too much, you will miss out on the greatest development.

When I arrived at the venue today, I was very shocked; there were so many people outside. I am now afraid of attending such occasions because there are countless people wanting to take photos with you and exchange WeChat. I miss 20 years ago when I went to Beijing and did not know anyone; I could sit quietly in the audience and listen to others' sharing and actively seek out useful information. Everyone should cherish their time as an unknown person because that is the best opportunity for accumulation.

Feng Bo: I have a question for Professor Zeng. You have researched deeply; in the future technological revolution, with Web3 applications, Crypto, and AI, how do you see these three things developing in an intertwined manner over the next decade?

Zeng Ming:

Everyone uses slightly different terms. I discuss Web3 as a holistic concept representing a significant technological transformation of the future. It is driven by three major technological revolutions, but which one is the hot topic keeps changing. Three years ago, the hottest topic was the Metaverse, and the driving technologies behind it are AR and VR.

Speaking of "investing too early," I remember the first time I saw the demo of Magicleap's AR glasses. My first impression was that it wasn't about whether the effect was good or not; it was about not being able to distinguish what is real and what is virtual in the future. Later, this product had some issues with energy saving and portability, and ultimately, the product did not come out. However, if AR technology had broken through, it would have been a significant breakthrough in human-computer interaction, from the early keyboard to thumb input on mobile phones, and now moving towards voice, which has also taken 10 years.

The next step is if we can interact with AI or the internet through our eyes, that would be a creative breakthrough. Further down the line is brain-computer interaction. This is a breakthrough in human-computer interaction interfaces. In this sense, AR and VR are still very promising technologies. If Apple's products this year can amaze everyone, that would be a significant breakthrough; if not, it might take another two to three years of effort.

Second, we have been discussing the development of Blockchain and Crypto. From Bitcoin to now, it has only been a little over a decade. The successful aspect is the strong consensus around Bitcoin and the emergence of Ethereum as a new computing platform and smart contracts. The essence of Crypto is a revolution in production relations; it provides a decentralized network that can make the flow and transaction of assets more efficient. However, the current problem is that there are not enough digital assets to flow and trade.

I believe Crypto is in an awkward stage of transitioning from 1.0 to 2.0. On one hand, infrastructure needs to continue to break through, which is why Layer 2 has received so much attention in the past two years, with many breakthroughs in ZK technology. Because the Ethereum ecosystem or other supply chain ecosystems must solve issues of scalability, applicability, and cost based on security and privacy protection. On the foundation of infrastructure development, the next round of application innovation breakthroughs will emerge.

Originally, I was relatively pessimistic last year, thinking that the next wave of Crypto development would not come so quickly. However, in the past six months, the breakthroughs in AI have been quite shocking. I believe GPT represents a technological breakthrough in general artificial intelligence. Will ChatGPT be the ultimate winner? Is it the final form of this wave of intelligent AI products? There are still many uncertainties.

To summarize, I believe the three pillar technologies of Web3, AI has brought us surprises, and we are entering the next stage of development. We will see significant breakthroughs in the next two years. Personally, I believe breakthroughs in AI technology will bring tremendous value to the Crypto world. AI will create a large number of digital assets, and these assets can bring greater value to all participants through Blockchain and Crypto. The combination of these two may give rise to the future creator economy, which I see as a significant direction. In that sense, we will welcome Crypto 2.0.

If AR and VR glasses need two to three years to mature, I believe we will see the first major explosion of Web3 in about three years. Whether in applications or infrastructure, that time will be very exciting, and that explosion should drive the entire economy forward by about 10 years.

Feng Bo:

Today, Hong Kong welcomes everyone to participate in Web3, aiming to transform itself into a new city in the evolution of new civilization. Let's reflect on what stage of civilization we are currently in. I believe we are moving towards a software civilization, bidding farewell to industrial civilization. In the software civilization, we already have Bitcoin as a value anchor. The best product created by humanity using the internet is Bitcoin, because the previous business models changed local products like Meituan and Toutiao, but Bitcoin changed how people create currency and anchor value. This is the greatest product of the internet.

The second success is Ethereum. Ethereum is a genetic organism; it represents the trust mechanism of future software civilization. Based on this, as we enter this civilization, the explosion of Web3 will be based on this foundation, relying on the countless new applications created by everyone. Where do these applications come from? We do not know; this era and aesthetic are correct.

Cai Wensheng:

Why has Web3 and blockchain faced such difficulties? Because it involves changes in production relations, touching on organizational structures and even national structures, so it will inevitably face distrust and obstacles from traditional vested interests. The current development of AI signifies an increase in productivity, and any country and society must embrace it. AI can drive greater development for Web3, so I agree with Professor Zeng that there may be a significant explosion in the next three years.

The more than twenty years of internet development have primarily changed information without touching on value and redistribution levels, but now it has arrived. Just like the internet did not significantly change the banking system before, at most making it a bit more efficient. The recent collapse of Silicon Valley Bank in the U.S. may also be an opportunity for these traditional banks to rethink whether they should embrace Crypto and Web3.

Feng Bo:

Today, there is no economic crisis or financial crisis; it is a crisis of fiat currency. The crisis of fiat currency is about how the dollar is created, distributed, allocated, and stored; this entire system has completely failed. Bitcoin is the counterpart to the dollar. What has Bitcoin created? A decentralized governance structure, mining, and blockchain technology. Continuing this technology, humanity began the series of developments with Ethereum. This is a revolution in technology and social interaction, changing how humanity exchanges value, labor, and financial services. DeFi is like e-commerce facing traditional trade, so in the future, we want to move the entire financial service onto the chain, which requires a long infrastructure process.

Zeng Ming (Host):

I want to add two points. It's interesting that in previous technological revolutions, technology was neutral for society, but the technological revolution of blockchain is quite different. Starting from BTC, from the day it was born, it had a very clear value proposition, decentralization, leading to today's network society; it has a clear value proposition.

Feng Bo:

Individuals are the foundation; the more freedom, the more efficient. The two great engines of human civilization are freedom and efficiency. The internet is already very free and efficient, but Web2 companies have made it less free but very efficient. Now, Web3 is pure freedom and pure efficiency; freedom and efficiency are the most advanced systems, and human civilization will always evolve towards advanced systems.

Zeng Ming (Host):

There are two related questions that are quite interesting regarding user migration from Web2 to Web3. If everyone follows my definition of Web3, the fundamental issue is that applications with massive users cannot be created in the original Crypto environment. The so-called migration from Web2 to Web3 will reveal the question: what do I really want Crypto for? If we truly view everything from the perspective of Web3, we have breakthroughs in AI technology, and Crypto serves as the value network infrastructure, and in the future, there may also be breakthroughs in AR and VR technology.

We can imagine that maybe two to three years from now, there will be a stunning game that utilizes NFTs and all value exchange networks, and it will also leverage AIGC technology to bring experiential breakthroughs. If at that time, you can also watch it with VR glasses, it will be a fully immersive experience. That will be a product that achieves a qualitative leap from Web2, and naturally, user migration will occur.

The user migration from Web2 to Web3 over the past year has been a false proposition. When ChatGPT appeared, it reached 100 million users in two months, and no one discussed how to migrate from Google; everyone's first reaction was that Google was going to be finished. Everyone is thinking of countless ways to move so-called traditional Web2 users to Crypto and to the narrow sense of Web3, but I think that is the wrong direction. We certainly have not created enough user value to attract users directly.

Feng Bo:

I think the biggest difference between Web2 and Web3, or between Web3 and Web2, is the difference in aesthetic views. The great migration has already begun; as for which bridge the crowd will cross, no one may know.

The first victory of e-commerce was in 2002 with SaaS, when SaaS was first locked in homes. However, after SaaS, many people first tried e-commerce. In 2000, there was a group specifically discussing what kind of users were suitable for e-commerce, and the conclusion was all of humanity. At that time, we spent a long time discussing what kind of users were suitable for Crypto? All of humanity, but we still do not have many application systems due to infrastructure bottlenecks.

For example, when the first online World Cup penalty video was sent to Sina, we recorded it for four hours. From that time, how could we design TikTok? It was impossible to design TikTok. The same principle applies; human evolution and tool civilization follow a systematic approach. We are currently only in the early stages of the system.

Cai Wensheng:

I want to add that the widespread adoption of users may have a certain relationship with hardware and technology. Indeed, in 2003, the Chinese internet had only 20 million users. The SARS outbreak in 2003 pushed development, driven by games, with e-commerce following two years later. At that time, Shengda launched the game "Legend," which was a significant application. The second application was bandwidth; before 2003, China had almost no broadband users, but broadband entered in 2003.

The explosion of mobile internet was related to two things. In the early years, from 2004 to 2008, I was investing in mobile internet, focusing on the Symbian system. The technology was not comprehensive, and the HTC system was not good enough. The emergence of the iPhone in 2009 and Android in 2010 brought a massive revolution in operating systems.

Taking China as an example, the real popularization occurred around 2011 and 2012, with the emergence of Huawei and Xiaomi, successfully lowering the price of smartphones to below 2000 RMB. The first generation of Google phones was priced at seven or eight thousand RMB, which was hard to accept. We are discussing Crypto; currently, Ethereum fees have dropped to 1 or 2 USD, which is still equivalent to over ten RMB. Can it drop another tier? Can we reach a higher level of familiarity? The second condition, just like the games in 2003, games are the easiest to attract users. As Feng Bo mentioned, in 2004 and 2005, people made money by sending SMS through SP, which was somewhat related to game entertainment content.

Feng Bo:

I invested in OKEX, and Lao Xu once told me, "You know, in the future, deposits will be in Bitcoin and Ethereum." Today, everyone should think about it; the dollar banking system has collapsed. I believe that in three years, there will be 2 billion people globally holding digital currencies, whether earned from games, running, or playing 3D mahjong, it doesn't matter. What matters is that DeFi will become the financial system that the world relies on. NFTs are a tool; NFTs are the smallest economy for all humanity, just like TikTok is the smallest TV station in the world. We are currently experiencing a technological revolution, and this technological revolution is the first time in human civilization that considers everyone. Previous revolutions only benefited the rulers; this is a revolution for all.

Zeng Ming (Host):

In this sense, the three of us have discussed quite a bit and have many common understandings. I feel that Bitcoin is somewhat like a genius product that emerged out of nowhere, surpassing its era. We have spent a lot of time pushing forward the values and worldviews represented by Bitcoin through blockchain, Ethereum, and DeFi innovations.

Once, while chatting with a friend, he repeatedly asked a question: Will all Crypto companies ultimately be utopian? I said that even if it is a utopia, human civilization is driven by one utopian social practice after another. Each utopia will leave behind something valuable that pushes society forward.

Thanks to the development of AI, in the Web3 era, the following technological innovations will produce tremendous explosive power. We have previously mentioned that the entire Crypto ecosystem is more like a collaboration between machines rather than between people. If AI explodes, more tasks will be between machines.

Ethereum's smart contracts are the simplest commands, but simple commands that can be executed by machines may represent the smartest practices in the machine world. After so many years of efforts aimed at the future, we may soon welcome a true technological explosion, and my feeling is becoming stronger.

Cai Wensheng:

We know that technological development will bring a large number of unemployment, just like the emergence of cars and tractors led to many farmers losing their jobs. Over a hundred years ago, 95% of Americans were farmers; now it is less than 2%. Later, the development of the tertiary industry (information industry) caused industrial workers to lose their jobs. Will the development of AI lead to widespread unemployment? It certainly will.

I believe Web3 can solve this problem. How? What will the remaining 80% do? For example, when I was in my fifties, every time I returned to my hometown, I found that my classmates had not worked for twenty years and spent every day playing mahjong. My hometown is rural, and they do not do farm work. In the future, 80% may not find jobs, but they can still make money. In the future, playing games will pay you, watching movies will pay you, and things that should be entertainment can also make money through Web3, indirectly solving 80% of employment.

Zeng Ming (Host): We have a few minutes left; do you two have anything else you want to say?

Feng Bo:

I think Hong Kong has chosen a very good historical moment and welcomes entrepreneurs like you. Hong Kong has traditional finance and hardworking people. If Hong Kong continues its current momentum, it will surely become an important city in the future economy. I also wish Hong Kong and the many friends supporting it a new spring in finance and technology.

Cai Wensheng:

In fact, before every major reform, most people start with short-term blind optimism, thinking that the world will soon change in various aspects, but they are always too pessimistic in the medium to long term.

I remember in 2000, Wang Juntao, the CEO of 8848, held a 24-hour survival experiment, letting a few people observe a room to see if they could monetize it and survive. At that time, we could imagine that the internet would allow us not to eat, but we still need to eat. Looking back over the past 20 years, the internet has indeed changed everything around us: communication methods, shopping methods, and entertainment methods.

At lunch, Feng Bo asked his child, "In 200 years, will you still need to eat?" His child replied, "No." Both Zeng Ming and I criticized Feng Bo, saying he was too pessimistic. My and Zeng Ming's view is that in about 30 years, we may no longer need to eat.

Now many people practice intermittent fasting. One person has already experimented with it: Kurzweil, the author of "The Singularity Is Near," has been living on pills for the past few years. One day, he may not even need pills; just charging will suffice. We must dare to imagine.

Now we often encounter short-term difficulties. For example, I have encouraged many long-time friends to buy Bitcoin and Ethereum, and later I felt bad myself because they kept telling me it dropped again every few days. I said, "Why don't you look at this from a yearly perspective?" If you look at it daily or yearly, Bitcoin and Ethereum often appear to be in a downtrend. However, if you extend the timeline from 2009 to now, it has increased thousands of times. Ethereum, which appeared in 2014, was only a few cents, and now it has increased thousands of times.

If you extend the time frame to years, this industry is still developing rapidly. Similarly, AI may combine with Web3, and in the next 20 years, it is hard to imagine what the future will look like, but people must remain optimistic and actively look forward. There is a saying that goes well: because you believe, you will eventually see.

Zeng Ming (Host): Thank you both! I want to quickly add a point: the overall macro environment for entrepreneurship is challenging right now. I believe the fundamental reason is that after 2015, the dividends created by technological progress are insufficient to drive the global economy forward. Perhaps in the next three to five years, as various technological advancements converge, we will enter the next cycle of technological explosion, which may further drive the global economy and improve the overall environment. Thank you!