Is The Blockchain Delivering On The Promise of Web3?

Part one of a new conversation with one of the most interesting minds in the crypto world, Chris Dixon

I’ve been following Chris Dixon’s writing about the future of the Web for almost ten years now. While his day job is as a general partner at the legendary Silicon Valley venture firm, Andreessen Horowitz, he has also moonlit as one of the most persuasive explainers of the various emerging technologies generally called Web3: cryptocurrencies, blockchain, tokens, NFTs, and now DAOs. I was reminded of the range of Chris’ intellect the other day when I read a blog post announcing his firm’s investment in a new blockchain-based organization, FWB, which began with a discussion of the organizational innovation that made 13th-century Venice one of the wealthiest and most powerful cities in the world. Chris is right in the middle of some of the most interesting—and sometimes bewildering—technological movements of our time, but he has a gift for putting those new ideas in a longer-term context, which is of course one of my primary objectives here at Adjacent Possible.

I also wanted to invite him to do a conversation here because he had been a major influence on the cover story I did three years ago for the NY Times Magazine, “Beyond The Bitcoin Bubble,” which to this day is probably the widely-read piece of journalism I’ve ever written. My hunch lately had been that some of the developments that I had hoped would come out of the blockchain revolution had not yet come to pass, and I thought it would be good time to check in with Chris to see how he viewed the landscape.

As always with our Adjacent Possible guests, we begin with a short “playlist” of what I think of as some of their greatest hits, as an introduction to their work. These conversations are available only to paying subscribers, but I’m making my initial note to Chris available to everyone. If you’d like to read his response, and our next exchange, you’ll want to sign up for the (shockingly inexpensive) paid subscription.

“What the smartest people do on the weekend is what everyone else will do during the week in ten years.”

I love this short blog post from 2013 because it gets at something I’ve long argued about the roots of innovation, which is the importance of having hobbies in stumbling across new ideas. Also connects with a line I would later write in my book Wonderland: “You’ll find the future wherever people are having the most fun.” (Actually my brilliant editor Courtney Young wrote that line and I turned it into the tag line for the entire book.)

Crypto Tokens: A Breakthrough in Open Network Design

This was one of the key essays I read leading up to the Times Bitcoin piece, where for the first time I really came to understand that crypto tokens were not just a currency — in fact, they might turn out to be a terrible currency — but also a way of incentivizing the creation of open protocols, one of the core ingredients beyond the success of the original Internet and Web.

Chris Dixon and Naval Ravikant — The Wonders of Web3, How to Pick the Right Hill to Climb, Finding the Right Amount of Crypto Regulation, Friends with Benefits, and the Untapped Potential of NFTs

A typically wide-ranging (as you can see from the title) conversation with Tim Ferriss from last month.

Investing in Friends With Benefits (a DAO)

The post announcing the FWB investment. It begins as I mentioned with Venice, but quickly gets a more urgent issue for our current moment: “We have long believed the creative class is among the most under-monetized talent pools in web2, driving the vast majority of the cultural value and capturing little of it in return. The average American consumer spends a third of their waking hours streaming music, and yet only 1% of music artists are able to make a living through streaming. Crypto offers a dramatically more incentive-aligned way for creatives to monetize their passions”

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Now, here’s round one of our conversation:

Chris —

The idea for this conversation with you—which I’m really looking forward to, for a couple of reasons—really began one night this summer, when my nineteen-year-old son sat down at the dinner table and announced, “So I’m going to be investing in a virtual NFT horse. And also, Dad, you really need to learn more about DAOs—decentralized autonomous organizations. They’re your kind of thing.”

I confess there was a moment there, sparked primarily by the idea of putting money behind a blockchain-enabled virtual racehorse, where I thought: “Is this the point, at age fifty-three, where I just give up on trying to stay relatively informed about new tech developments, and just resign myself to the fact that I am a middle-aged person who probably shouldn’t understand what his kids are doing online?” I’d done a pretty good job staying current and maintaining reasonably interesting opinions for the last few decades; maybe NFT horses gave me an opportunity to just get off the emerging tech bullet train with some semblance of grace and self-respect.

But I’d known from following your work from afar that you’d been writing with your trademark enthusiasm and clarity about NFTs and—more recently—the new kinds of collaboration made possible by DAOs. Just last week, in fact, you wrote a very interesting post about the A16Z investment in the DAO Friends With Benefits or FWB, which I want to ask you about later in our conversation. So somewhere in the back of my mind I thought, “I need to ask Chris about this stuff before I totally surrender.”

One primary reason I thought of you that night is that about three years ago, I wrote a very long story for the NY Times Magazine called “Beyond The Bitcoin Bubble” that tried to make the argument that blockchain technologies should not just be seen as speculative currencies, but potentially as something much more profound and important: a way of correcting the underlying mistakes that had led to the dysfunctions of the social media age. As I said, it’s a long argument, but the basic premise was this: we had an early golden age of the Internet that was based largely on open standards, like TCP/IP and HTTP and HTML, followed by a second phase, generally called Web 2, where a new infrastructure developed on top of that earlier layer: the social graph controlled, almost exclusively, by the proprietary databases and algorithms of giant companies like Facebook. But the blockchain offered a way out of this impasse: using tokens like Filecoin or Ethereum, we could incentivize developers and early adopters to create new open protocols, where the value created would be shared by a much larger group of coders, designers, users — not just the shareholders of giant private corporations. We might even be able to fix the underlying flaw that made Web 2 possible in the first place: the lack of an open standard to describe identity and relationships online.  

As you probably know, a significant part of the framing of that piece had been inspired by things you’d written at the time—and by some related posts from Fred Wilson and Brad Burnham—on the relationship between tokens and open protocols. And so I guess my initial question for you is: it’s been almost three years since that essay was published—how do you think it’s going? Clearly people have made a lot of money from blockchain investments over that period, including your firm A16Z. So on a financial level it was a great call to take it seriously, and not just dismiss it as a 21st-century Tulipmania, as some were doing at the time. But part of what I was imagining in that piece is that within a few years, there would be massive numbers of people using blockchain-enabled software without even knowing it: just going about their business sharing photos with friends, or playing games, or signing up for some new service using a new identification system based on open protocols.

From where I sit, it feels like that kind of everyday use hasn’t quite happened yet. There are far more people involved in the creation of, say, NFTs or racing virtual horses, but it feels like most of them are still engaged with this new technology as speculative investors, not as people just using the tech to socialize or to do their work more effectively. But as that conversation with my son made clear, where I sit currently doesn’t always give me a great view of things. You’re right in the center of it all. Am I missing something?

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