While the Crypto, Fintech, and Web3 Lab—one of 13 labs contained within Harvard’s Digital Data Design Institute—might not have the Bunsen burners and test tubes found in science and engineering labs, it does share a philosophical construct: it is a sandbox—an intellectual space that enables faculty members to test out theories and analyze results that often lead to breakthrough ideas.

Scott Duke Kominers

Shai Bernstein

Scott Duke Kominers

Shai Bernstein

EVOLUTION OF THE WORLD WIDE WEB
Web 1.0 1990–2005	Web 2.0 2005–Present	Web 3.0/Web3 2020s–
"Read-only" web (Encyclopædia Britannica, home pages, web forms) Users mainly consumed information published on the web, but it was a one-way street Static web pages Content owned only by the creator Minimal online transactions No/very little user data collected Inception of World Wide Web	"Read-write" or "social" web (Wikipedia, blogs) Users went from being just consumers to also creators (publish posts on social media) Interactive web pages User-generated content; can be shared and customized Rise of social media, e-commerce, online services User data controlled by central authorities: Apple, Meta (Facebook), Google, Amazon Introduction of web applications	"Read-write-own" web (Livestream videos) Users can own digital assets and digital items (enabled by blockchain) Semantic Web, data-driven, more human-like interactivity powered by Al, machine learning Content consolidated by creators and users More intelligent and personal; metaverse Decentralized networks and applications; users control/monetize their data Smart applications

EVOLUTION OF THE WORLD WIDE WEB
Web 1.0 1990–2005	Web 2.0 2005–Present	Web 3.0/Web3 2020s–
"Read-only" web (Encyclopædia Britannica, home pages, web forms) Users mainly consumed information published on the web, but it was a one-way street Static web pages Content owned only by the creator Minimal online transactions No/very little user data collected Inception of World Wide Web	"Read-write" or "social" web (Wikipedia, blogs) Users went from being just consumers to also creators (publish posts on social media) Interactive web pages User-generated content; can be shared and customized Rise of social media, e-commerce, online services User data controlled by central authorities: Apple, Meta (Facebook), Google, Amazon Introduction of web applications	"Read-write-own" web (Livestream videos) Users can own digital assets and digital items (enabled by blockchain) Semantic Web, data-driven, more human-like interactivity powered by Al, machine learning Content consolidated by creators and users More intelligent and personal; metaverse Decentralized networks and applications; users control/monetize their data Smart applications

“The lab architecture is about supporting projects that crisscross between research and practitioner outreach and pedagogical design in a very rapid-fire way,” says Scott Duke Kominers, the Sarofim-Rock Professor of Business Administration, explaining this approach versus traditional research. As one of the two primary investigators in the lab, he collaborates with Shai Bernstein, the MBA Class of 1960 Professor of Business Administration, mainly on crypto- and Web3-related topics.

Through their research, the faculty members are examining the potential of Web3—encompassing a wide range of technologies, including blockchain networks, cryptocurrencies, non-fungible tokens (NFTs), and smart contracts—to give users more ownership of their data and content, reshape commerce and the internet, and revolutionize how digital currency and other assets are transmitted around the globe. It is a subject that Kominers explores in depth in the recently published book he coauthored with Steve Kaczynski, The Everything Token: How NFTs and Web3 Will Transform the Way We Buy, Sell, and Create.

Bernstein and Kominers, in their study of blockchain and Web3, aim to help business leaders navigate this rapidly evolving next frontier of the internet, build new ventures in it, and adapt existing business models so that companies and organizations can take advantage of opportunities that are emerging because of Web3.

“We’re working in an environment that’s like a miniature startup. Through our interactions with various practitioners, we’re trying to understand the exact problems that companies are facing, take them back to the lab, then do whiteboarding to examine what the fundamental underlying question is about a challenge they have,” Kominers says, describing the feedback loop that enables the faculty members to quickly investigate, iterate, and produce scholarly content. “Having a platform where we can meld these challenges with our ability to scale the intellectual problem-solving is a particularly useful dynamic in this research domain.”

One outgrowth of the lab’s work is the MBA elective that debuted this spring, Building Web3 Businesses. Created by Bernstein, Kominers, and Senior Researcher Liang Wu (MBA 2018), the course evolved from the Short Intensive Program on Web3 that Bernstein and Kominers led in January 2023. Through case discussions, it teaches second-year students what Web3 is and the business models it enables; how it creates value; its impact on business, competition, and consumer welfare; and its potential challenges and risks, and the associated regulatory complexities. The course also gives students hands-on experience to understand the technology by having them create crypto wallets and participate in exercises where they encounter different types of transactions and platform interactions.

In the course, both students and faculty approach Web3 with a critical eye. “We’re not trying to be evangelists. We want to train students to interrogate the topic as skeptics, address the pitfalls, and at the same time understand what new strategic opportunities there are that might be enabled by Web3 technology,” Kominers says. While acknowledging that the early engagement around blockchains has given rise to some flawed concepts and even instances of misconduct, he emphasizes that such difficulties are an inherent aspect of introducing novel technologies.

“Fundamentally, there is real societal demand for an internet that has an ownership layer, and such an architecture can generate tremendous amounts of social and productive value. Blockchain infrastructure layers create the possibility of having individually owned digital goods that can outlast the platforms that create them. Web3 is the enabling system for businesses to be built around that paradigm,” Kominers observes. “Looking at how the technology has survived and grown even in the midst of an economic downturn and the high-energy activity that was happening in 2021 and 2022, I think just reinforces my confidence that this is a big part of the future of business.”

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