Video source: EO
Compiler: Cikey, Sanzhi
Translator’s Note: The original video “Is Web 3.0 Dead?” was released in early September and was lectured by Chris Dixon, a partner of a16z and a leader in Crypto. Since joining a16z in 2013, Dixon has not only helped shape the company’s strategy, but also founded and led a16z crypto in 2018, which focuses on Web3 and blockchain technology. Today, he manages over US$7 billion in investment funds and promotes the rapid development of the next generation Internet. So what does he think of “Is Web 3.0 Dead?”
Currently, Crypto is indeed facing some challenges, especially with the FTX incident in the United States and the Terra Luna incident in South Korea.
Although a lot of bad things have happened in the past few years, I don’t think Crypto is dead.
Virtually every innovative technology goes through ups and downs. It is wrong to directly infer that “the use cases of certain technologies are inappropriate” to “the technology itself is bad”, because the technology itself is not good or bad.
Hello everyone, I am Chris Dixon, a partner of a16z, and the founder and director of the Crypto Foundation.
I have been closely connected with the Internet industry for the past 25 years, first as a software engineer and later as an entrepreneur. My first company focused on cybersecurity and was eventually acquired by McAfee; my second company focused on AI and was later acquired by eBay. “
Since 2006, I have also been involved in angel investing, investing in some well-known Internet startups, including Pinterest, Stripe, and Kickstarter.
In 2013, I joined Andreessen Horowitz to lead our investments in Coinbase. Five years ago, we acquired Oculus’ VR company. Since then, I have been responsible for the business development and strategic planning of our Crypto Fund.
In the nascent days of the Internet in the 1990s, most online services were one-way, what we call “read-only.” At that time, websites were more like electronic magazines or digital brochures. Users mainly went to obtain information, and the concept of social media almost did not exist.
In 2000, with the rise of Web 2.0, I also participated in it. The movement emphasized “literacy” and spawned many related conferences and blogs. The core idea is that the Internet should not be just a platform for passively receiving information, but an interactive platform where users can not only consume content, but also create content. The rise of social media platforms such as Facebook and Twitter is a reflection of this concept, making the Internet a truly participatory medium.
By the 2000s, web-based services became dominant on the Internet. Facebook, Uber, WhatsApp, etc. are all platforms that connect people. They have powerful “network effects” – the more users, the greater the value of the service. As these services expand, so does their influence.
However, we are facing a risk: the Internet may end up being dominated by a few large technology companies such as Google, Amazon, Apple, Facebook, etc. I think this is not a good thing for emerging companies and innovation in society as a whole.
The Internet was originally intended to create a decentralized network that would return power and wealth to ordinary users instead of concentrating it in the hands of a few large companies.
In the traditional media industry, especially television and radio in the United States, resources and revenue are highly concentrated and controlled by a few large channels. When I and many of my peers started getting involved with the Internet in the 1990s, we were incredibly excited about its potential—its promise to redistribute wealth and power back to the margins of the network, to ordinary users.
The Internet did achieve this to some extent in the 1990s, but by the 2000s this decentralization trend began to fade away.
Fast forward to today, the top five technology companies account for 50% of the market value of the Nasdaq 100 Index, and more than 95% of the traffic and revenue on the Internet are concentrated in the hands of these few companies. All trends indicate that this concentration will continue to grow. Continue to intensify.
The growth of AI at the same time is impressive, but if left unchecked, it will further accelerate this centralization. Because AI technology requires companies with large amounts of capital, data and powerful computing power, which are what large companies have.
In my book, I propose a solution: a new generation of Internet services based on blockchain.
Simply put, this type of service aims to eliminate middlemen, such as “gatekeepers” and “toll booths.” Take Facebook, Uber, Amazon, YouTube, and Twitter as examples. These platforms all have capital flows. Whether it is advertising fees or transaction fees, they all charge a certain percentage of commissions. This is called a “commission rate” in the Internet industry.
The “commission rate” of Internet services is very high, usually between 50% and 100%, and most of the flowing funds go into the pockets of these service providers.
In addition, these companies also control the entire network, deciding who can access the network, who will be blocked, and how the algorithm operates. They often change the rules. For example, the type of links or content you post may affect whether you are recommended or demoted. These algorithms are highly opaque and completely controlled by these companies, and the users and content creators who rely on these networks have no idea. But he has no right to speak.
These centralized service providers actually control the fate of users. This is why I value the potential of blockchain technology to bring a new attribute to the Internet – ownership.
Blockchain is a revolutionary invention that can achieve many functions. I regard it as a new type of Internet computer. They are cloud-based and capable of performing a variety of tasks, but the most critical of these is the ability to grant true ownership of digital assets.
Taking Bitcoin as an example, one of the most interesting features is that the owner of the private key is the real owner of the Bitcoin. This kind of ownership does not exist on Twitter or Facebook.
For example, I have accumulated followers on Twitter for many years, but if the owner of Twitter decides to close my account tomorrow, my account will be gone tomorrow. From this perspective, I am not the real owner of this account. . This has happened many times on the Internet, whether it’s virtual items in games, content on social media, or your account on PayPal. In the existing mainstream model of the Internet, users have almost no real ownership.
Bitcoin has introduced a new concept – users can own digital assets. Since the birth of Bitcoin, technologists have expanded this concept of ownership into broader areas such as NFTs. The core idea of NFT is that you can own a piece of art, a game prop, or even an NFT that represents a social media username. In this new model based on blockchain, users can truly own these assets, and these assets cannot be easily taken away.
Imagine if I had my own username and follower list on social media, and if I wasn’t happy with a certain service, I could move to another platform with my username and followers. In this new model of blockchain, I can own my username, follower list, data, and even a set of data that I provide to the AI algorithm. Under the current mainstream Internet model, only service providers or the companies behind them can own these data and resources.
Early Internet protocols, such as email, had similar properties. For example, the renaissance of newsletters is an example. Many journalists are choosing to leave traditional media and start their own newsletters through platforms such as Substack. This is because when you have your own newsletter, you actually own your subscriber list, you have their email addresses. The commission ratio of platforms such as Substack is only about 10%. This low commission also attracts many people to use it.
If these platforms change the rules, you can leave and switch to other services. Blockchain-based services are based on the same concept of ownership.
Now, we are at a critical juncture. Web 2.0 companies such as Facebook have billions of users, and the users of blockchain services, including Crypto people, are only a few hundred million. Although the number of users using emerging blockchain games and social media is approximately tens of millions, it is still a small proportion relative to the entire Internet user base. So we’re still relatively early in this stage of development, and I think that has to do with a couple of factors.
First, there is infrastructure. For example, if you play a blockchain-based game now, the experience will be different from non-blockchain games. At present, the underlying infrastructure of these services is still in its early stages, and it will take some time to reduce costs and improve user experience. But I’m excited about the breakthroughs that may come in the coming years.
In addition, I wrote in my book that there are two cultures in blockchain: one is the speculative “casino culture”, and the other is the “computer culture” that pays more attention to technological development.
Casino culture is more focused on the short-term buying and selling of tokens, while computer culture is committed to building a new generation of Internet services that return digital ownership to users, reduce intermediate fees, and are controlled by users. The latter is what we are more willing to promote and Investment, but unfortunately, casino culture seems to be dominant at the moment, which is not conducive to the healthy development of the industry. I expect smart policy and regulatory measures to curb speculation while promoting the positive development of technology. Unfortunately, some U.S. policy decisions in recent years have actually encouraged this unhealthy trend.
For example, the number of Meme coins created last month exceeded 500,000, a record high. At the same time, regulatory policies impose restrictions on those productive computer cultural behaviors, which is contrary to the wise regulatory policies we want to see. I expect this to change, and there have been some positive signs recently.
Although the Crypto field has encountered some challenges, such as the FTX incident in the United States and the Terra Luna incident in South Korea, this does not mean that the entire field has failed.
History tells us that every interesting technology will go through ups and downs. AI and neural networks have been around for nearly 80 years since 1943, and the concept of AI also has a long history. Alan Turing published his famous paper in 1950 describing what is now known as the Turing test. Although chess systems like Deep Blue had become the world’s best 20 years ago, other applications such as natural language processing have developed relatively slowly. However, over the past decade, machine learning algorithms have gradually approached and surpassed human-level performance in the ImageNet competition, and language systems have also gradually improved. Although development has been slow, a major breakthrough did occur two years ago. If you’ve been paying attention, you might think that AI is an emerging field, but it’s actually a field with a long history that has gone through many ups and downs. I think many technologies have this trajectory, including blockchain and Crypto.
Technology can be used for good purposes and for bad purposes. A hammer can be used to build or destroy houses; fertilizer can be used to grow crops or make explosives. AI can be used for fraud and scams, but it can also be used to enhance human creativity. Blockchain can also be used for nefarious purposes, but it can also be used to create a wave of new Internet services that return money and power to Internet users. The way to ensure that technology is used for good is to set rules for it. I think it’s a mistake to confuse the application of a particular technology with the technology itself. In Read Write Own, I strive to fully describe the productive uses of blockchain. It’s a mistake to jump from “this technology has bad uses” to “therefore this technology is bad.” Technology itself is neutral, the key lies in how people and governments steer the potential of this technology in a positive direction.
My book Read Write Own talks about the potential of blockchain and crypto. Over the years, I have had many conversations about the value and promise of blockchain, and in those conversations I found it difficult to explain in a single meeting because the knowledge involved was often shared by Internet entrepreneurs. , but not universally recognized by the wider community. Therefore, I believe there are several important values in writing a blog, an article, or a book.
First of all, I hope to promote entrepreneurs, share some ideas that may help them, promote their thinking, and hope to attract more people to pay attention to this technology and make them think in the right way, thereby creating more interesting entrepreneurs Come and chat with us. That way our conversations get deeper because they’ve read a lot of it and I want them to read my work so we can get into a higher level conversation. This is very effective in saving time. We want to work with the smartest people, and those people always want to read interesting content. Therefore, this approach helps build relationships, share knowledge, and accelerate the development of this field.
The key feature of blockchain is that you can build new Internet services, and these services can be anything we use on the Internet today, including social networks, games, marketplaces, and AI services. A distinctive feature of these services is that there are no thresholds or chargers. The services are completely controlled by the users, and the funds also flow to the users.
In my book, I explore these concepts and apply them to seven specific areas, trying to imagine what the future will look like once entrepreneurs build these services. For example, after a Google search, you need to click through to a website that relies on ads and paywalls to make money. In an AI-driven world, you won’t need these intermediate steps. We are rapidly entering a new era in which traditional monetization models for many creators may disappear. Why pay an illustrator if you can generate illustrations directly through an AI service such as MidJourney? These AI services learn from user data but are not paid for it, which is a frustrating result.
I worry that the Internet may become dominated by a few giants, which will crowd out many of the people currently making money on the Internet. Therefore, I predict that within the next 3 to 5 years, we will face an Internet crisis and many existing business models will disappear.
Therefore, the concept of story protocols brings many exciting possibilities and it brings an innovative business model to the field of digital creation. This model brings everyone’s creativity together. For example, one person is good at weaving the storyline, another is good at designing the characters, and still another is good at blending these elements, and someone may even fork the content and create a new version, similar to the way open source software projects do. Whether comics are drawn by hand or generated using AI technology, these creation methods are feasible as long as the creator sets the rules.
The essence of Story Protocol is that it allows you to define the content and terms of your creation and record them on the blockchain. Blockchain technology is excellent at ensuring that records are immutable and each record is linked to a legal agreement that can be legally enforced if necessary. This model not only relies on trust in the blockchain, but also connects with the existing copyright law system.
There will be no restrictions on the participation of AI. You can use AI to create or use these “Lego bricks”. As long as you follow the economic rules set in the blockchain, you can participate in it in any way. This system makes it possible for creative contribution and consumption on an Internet scale, ensuring that creative workers get the rewards they deserve. This is especially important today, when AI systems have the potential to disrupt or render obsolete many existing business models.
So, I hope this book will be an accessible guide for non-technical people, explaining in simple plain language how the Internet works, its history, the potential of blockchain, and why I’m excited about it all.
This book is also for policymakers, because I discovered early in my career that the best opportunities often lie just when people think a technology has reached its end.
I actually started my career when people were telling me the internet was dead, and building my first company in 2003 and 2004, I found that the best opportunities in my career were when people were saying something. When things are dead, my experience is that AI has its ups and downs, the internet has its ups and downs, Crypto has its ups and downs, and if you want to wait until things improve before you act, you’re going to find yourself doing that with a whole bunch of people Same thing.
Whether it’s AI, the Internet, or Crypto, they will all go through ups and downs, but the key to success is to maintain faith and dare to invest amid these fluctuations.
