This is the first in a series of threads of "The Product thinkers guide to Web3". Please leave me feedback @viksit on Twitter!
1/ A thread on why blockchains are important for anyone thinking about building web based products. 🧵
— Viksit Gaur (@viksit) October 19, 2021
1/ A thread on why blockchains are important for anyone thinking about building web based products. 🧵
2/ In 2009, @Bitcoin's blockchain technology successfully solved a fundamental problem in finance — the ability to transfer a digital asset between two peers anywhere in the world in a trusted manner, but without intermediaries like banks.
3/ Why is this problem important to solve? Because a solution to it allows the internet itself to be used to transfer money between people, as opposed to via banks and financial payment networks like SWIFT or ACH. Think email vs a USPS owned "E-Letters" service.
4/ It makes financial transactions more accessible to the unbanked, more transparent for auditors, more secure, and also more efficient — ultimately showing us what a replacement of our 1960s era financial rails can look like.
5/ (It also has potential for misuse but that's a thread for another day.)
6/ As Bitcoin grew, so did the demand for doing common financial transactions (like issuing loans) on its blockchain.
7/ However, its single focus as an alternative payments network meant that this was not easily possible — the code needed to facilitate these would have to be written off the blockchain network, removing the very guarantees of trust and security that one would want to use it for.
8/ The @ethereum project was started in 2013 to evolve blockchain technology in a way that would allow any arbitrary financial primitive to be built on top of it, and solve the problem described above.
9/ Ethereum (and a slew of other blockchain projects) offer the ability to run any kind of code on top of them — not just finance — opening up all kinds of applications historically not possible on Bitcoin.
10/ Moreover, by also being open source, community focused, and open access, they allow anyone to build on top of them, compounding the rate of innovation.
Composability is to software as compounding interest is to finance.
— Chris Dixon (@cdixon) October 14, 2021
11/ "I think the big difference between Ethereum and Bitcoin is that Bitcoin is a platform where the value of the ecosystem comes from the value of the currency, but in Ethereum the value of the currency comes from the value of the ecosystem." - @VitalikButerin
12/ So why are blockchains important for someone thinking about building products on the internet? A simple analogy is that they do for our current payments infrastructure what email did for physical letters — makes it obsolete.
13/ As the latest in a line of fundamental innovations that supercharge people's interactions with each other, blockchains are going to have second order effects that we can't even imagine yet.
14/ For instance, In 1995, this newsweek article about the Internet couldn't even imagine the concept of "Cyberbusinesses" and attributed talk of the "obsolescence of physical stores" as part of "fawning techno-burble". https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirvana-185306
15/ Years later, the author, Cliff Stoll, wrote to The Next Web saying "Of my many mistakes, flubs, and howlers, few have been as public as my 1995 howler".
16/ Most importantly, blockchain based decentralized networks (also termed "web3"), offer new ways to re-imagine the internet without the control of large technology companies, banks and governments.
17/ They have come a long way from being only about speculative crypto currencies, and it is near impossible to truly fathom what can be built using them in the future.
18/ In the next thread, we'll dive deeper into the fundamental primitives of web3, and a framework for how they have the potential to transform the current version of the internet (termed web2) for the better.
1/A centerpiece of humanity's cultural evolution is our ability to preserve important artifacts like paintings and books in museums and libraries.Our archival techniques, however, haven't kept up with the pace at which we create digital content.
2/With Web 1.0, companies like Yahoo created content and earned money off it.With Web 2.0, people create content and companies like Instagram possess and earn off it by creating walled gardens and "charging" for access.
3/Companies like Youtube and Patreon allow people to create content AND earn off it, but own the underlying systems that facilitate this.Which means that creators legally "own" their content, but don't actually possess it.
4/The sheer volume of photos and videos has fundamentally changed what we perceive as being culturally significant.Creator communities are not "mass culture" but digital connectivity makes them widely accessible.
5/As creators increasingly rely on their content as primary sources of income, it becomes important for them to guard against being "de-platformed" due to political or policy reasons, even if in error.
6/Possessing their content rather than being at the mercy of any one platform is thus important.This is also true for their list of followers.
7/Web 3.0, powered by decentralized crypto networks, is emerging as an excellent solution for creators to possess their content and own their users and be free of platform tyranny.
8/Further, much of this content needs to be permanently archived for purposes of historical cultural record, much in the way we store paintings in museums.
9/Relying on centralized platforms not a good long term solution — the average of a fortune 500 company is 61 years, and their incentives are to shareholders not customers.
10/Blockchains are great to act as systems of record for actions, identities and other metadata, but are not built to store actual content like files and photos.
11/Decentralized, blockchain powered storage systems like Filecoin and Arweave allow for storage of content on their systems, but suffer from one major issue — permanence.
12/If content stored on these networks is not accessed at regular intervals up to a specific time, it gets "aged out" and becomes unavailable — not great for storing data for centuries.
13/This aging out happens for cost reasons - it is expensive to store data on disk and keep it accessible.Centralized storage providers solved for this by charging subscription fees.
14/But expecting this from creators to store their content for hundreds of years is to expect Van Gogh and his descendants be billed yearly for his paintings at the Museo D'Orsay.
15/Traditional museums acquire and keep paintings not just because they are culturally valuable, but because they are expected to appreciate in value over time.
16/What if creator content could similarly appreciate and offer incentives to a decentralized museum network to host it?
17/NFTs of creator content — videos, images, text, et al — by virtue of being tradable, offer economic semantics similar to traditional art.
18/By being able to offer secondary sale proceeds to not just the author but also to its patrons and possibly to the archive network itself, the NFT'd content can pay for itself over time.
19/We can imagine a system where the economics are designed to keep content that pays for itself on long term storage, thus aligning everyone's incentives.
20/For instance, an NFT owner could lend their NFT to a decentralized museum in the same way owners of physical art often lend it to traditional museums.
21/Decentralized Museums could also charge by impression, and offer a payment to the NFT owner.
22/Much like traditional museums, these decentralized museum networks must have governance structures that determine how much of their endowment is used for new acquisitions, vote on new streams of incomes, create contracts to lend NFTs out, and so on.
23/Decentralized Autonomous Organizations (DAOs) that allow stakeholders to vote on governance becomes quite relevant here.As their stakeholder membership can evolve over time, they can potentially exist for hundreds of years.
24/I imagine a MuseumDAO that issues MuseumTokens to members who are interested in being governing members.These tokens can be bought on DEXs like Uniswap, and used for votes et al.
25/MuseumDAO runs a gallery page which charges viewers, either as a one time fee or per impression.
26/Moreover, MuseumDAO can be integrated into the VR world for immersive virtual experiences as well.If anyone is working on something like this, would love to chat!
1/ As technology, standards, and incentives evolve, all software applications will eventually move to the web -- with the browser serving as the operating system. We are already almost there today. But there are some challenges.
2/ Software today is written in 2 parts - code that runs on your client (the browser), and code that runs on the cloud (the servers). Because of the way the internet has evolved, a lot of effort is spent in linking the two pieces together, since they're effectively mirroring the data model and functionality.
3/ As client side code has gotten more complex (imagine gmail or figma), it has pushed browsers to do more, and consume more resources on the local computer. And with the fragmentation of web applications, the number of tabs in use has ballooned too. It also means that more and more native OS functionality (like accessing the web cam) will eventually be available to the browser.
4/ What if we we could create a system where this code only had to be written once, on the cloud and streamed, much like how Netflix streams movies? (Assuming of course that it had parity with all the features we expect of such applications? It would have a ton of benefits.)
4a/ The browser would simply become a terminal used to access remote services, and perhaps start to serve more as a container of user data and a way to grant online applications permissions to use it, vs having them collect it by default.
5/ Code would only have to be written once, and deployed without worrying about the client side. This would make things much more secure and packaged. It would mean that app stores would not be as relevant in the long term, since every application would be available simply via a URL.
6/ Since there would be barely (if) any client side code, each website would be very secure, removing the spectre of cross side scripting attacks.
7/ Imagine needing to add on a background image to your camera feed - rather than doing it on the browser like today, the video would simply be sent to one location, filtered, and streamed to whoever needed it without causing any more resource usage on your laptop.
8/ Machine learning models that are today run in large cloud based systems could be run specifically for each user, in their own silos, without worrying about end user hardware capacity, or data privacy issues.
9/ Rather than building hacky client side integrations of other applications via chrome extensions, real APIs could be built that all run in clean silos and with access controls directly on the cloud. This means that integration between disparate apps can become much easier and help reduce some of the fragmentation that has crept up on us.
10/ All your content can be live indexed in your own silos - a whole new generation of search engines can come up where they request permission to index your data, putting you in control. They can then run powerful algorithms to give you a much more pleasant search experience that is integrated into your daily workflows.
11/ @suhail's @mightyapp that launched last week offers a peek into such a future. It's an impressive technical achievement, rooted not only in solving a real user need today, but shows that a future like this is only constrained by time.
11/ In the same way that NVIDIA CUDA like SDKs allow us to offload significant mathematical computation to dedicated GPUs, I expect @mightyapp to start offering libraries where developers can offload significant computing to the Mighty cloud.
12/ Since Mighty is centralized but does not own your data, their SDK in the future could complement OAuth and other identity systems to give more granular control of user data to applications.
13/ A final thought on pricing. While there is a lot of skepticism around a 30-50$ a month price point, the analog in my mind is this. Photoshop users invest in more RAM, a better Wacom tablet, better GPUs and other accessories to get their work done. These resources are fixed costs and need to be upgraded at regular intervals given the rate of innovation. Power users of web applications on the other hand don't have such resources available to them - the best they can do is RAM or a better laptop, but the browser is still a fundamental bottleneck. MightyApp offers them a way to get constant ugprades on all the things that matter, and prices itself in a SaaS model rather than a fixed "licensing" model. Over time, I expect this price to drop as economies of scale and efficiency start to play in the mix.
1/ Here’s a thought experiment about the future of the internet. Can we model it as a complex system in the same way we look at human societies and governments in real life?
2/ Humans began as individuals, who had the ability to form progressively larger organizations which became support networks that helped our species achieve the largest throughput from our lives.
3/ Over time, these organizations came to be controlled by those who had a monopoly on resources – wealth, armies and social power, but the members of these organizations didn’t have any say in how they were run.
4/ The concept of democracy was evolved as a system that could distribute social power in order to catalyze the wider involvement of its members in their own social and economic concerns.
5/ While this form of government is not without issues, it highlights a trend – by having an organization with representation by its members who have a say in how its run, we’ve had a wider ranges of stability, and its evolution is controlled in a (somewhat) scalable manner.
6/ As an analog, the internet started out as a decentralized network of computers where all the information was open – anyone could participate by simply putting up a node.
7/ Over time, centralized systems were created because they offered the benefits of an overarching “support network” – making technology and information accessible to their users because most individuals couldn’t do all this heavy lifting and plumbing on their own.
8/ These organizations, whose members can’t really control how they are run or what they make them do – are not that different from erstwhile kingdoms trying to maximize the profit of their sovereigns.
9/ And by virtue of who controls them or who can influence them – imagine wealthy courtiers and banks who financed kings [see game of thrones] – they dictate the price of admission and inclusion
10/ Monetarily of course, they may even be free – but members give up control over their privacy and data to get in. In turn, these organizations become monopolies and act as gatekeepers of the very information and data that belongs to its users.
11/ While they can empower members to have a voice in the global discourse, their scale implies control and filtering algorithms that evolve in the image of those who hold the most sway on these platforms – in some cases the loudest, the richest, or the most divisive.
12/ So what does this mean for the future of the biggest collaborative system that humanity has ever built together? One potential road could be to reason about how they can mirror the democratic model.
13/ I posit a thought that “It is in the nature of complex information systems to systematically distribute their functioning to sub-systems in order to perform at their peak.“
14/ In other words, a series of decentralized, shared ownership systems that come together to provide and replace the functionality that has today been built into the centralized networks described before. I’m going to call this the “W3b” – because, well, why not? (A moniker for Web 3.0)
15/ As Alexis De Tocqueville recognized in the study in which he coined the term, there is often more to decentralization than just the administrative benefits it brings. These networks will have properties beyond just the sum of the properties of their components.
16/ Scientifically, there are no complexity theories to analyze complex networks like there are for algorithms. But if we think about the latent, emergent properties of these networks – we likely cannot predict how they will affect our lives in 20 years, much in the same way we couldn’t have predicted the fake news problem in 1999.
17/ In order to get to such decentralized networks, we’re going to need new forms of technology which can offer interoperability without needing shared trust, since these networks will be just like the internet is today – they will span nation states and have messy real world constraints.
18/ Just like every nation in the world today connects their internal infrastructure to the internet and communication networks, they will buy in to these subnetworks because they will become irrelevant if they don’t – especially when they act as a conduit for international trade, payments, law and cooperation.
19/ What are the conceptual abstractions we need to think about in order to make these subnetworks a reality? We can take a leaf out of the Open Systems Interconnection model (OSI), which is a conceptual model that characterizes and standardizes the communication functions of a telecommunication or computing system without regard to its underlying internal structure and technology.
20/ Much like the seven layers of the OSI model. there are a few different kind of functions that the these subnetworks would need to provide without regard to how they are actually implemented underneath.
21/ These subnetworks will need to work in conjunction with each other, and transactions done by any entity, individual or organization will need to coordinate with one or more of them.
22/ But how would these be used? Let’s take the example of an autonomous entity which has a very simple need – they want to subscribe to a streaming movie provider and watch it.
23/ By decentralizing and sharing ownership of the most critical parts of the new w3b, new generations of software can be written that would allow scalable solutions to some of the most critical challenges we face today – from cyber security to fake news.
24/ In addition, large centralized network companies will no longer have the monopolies that they currently do, leading to a more equitable distribution of the wealth that is being created.
25/ By making micro transactions and payments tied to identity, content and services outside of centralized control, political machinations are less likely to influence w3b users.
26/ And further, having machine readable cryptographically verifiable audit streams of events, provenance of data, content, transactions, identities and finances will mean that tools and services can be built upon them in standard ways by anyone.
I grew up in New Delhi in the late 90s on a steady diet of 2600, phrack, BBSes and the EFF. Two of the people I’d read a lot about, and was subsequently very inspired by, were JPB and Mitch Kapor, as founders of the EFF – and I decided one day that I’d like to actually reach out and talk to Barlow (I didn’t actually have a goal in mind, now that I think about it).
Figuring that an email would never get a reply, I added him on AIM. To my utter surprise, he added me back – and after introducing myself as a high schooler who was a fan of the work he was doing, we communicated over the next year or so on a wide variety of topics that included open source, free software and the state of the internet in India at the time. For the next 10 years or so, when AIM was still active, he was one of the very few people still on my contacts list who would go “online” and “offline” with a regular cadence — one of the only reasons I ever even logged into AIM was to (rarely) say hello :).
Of course, I stopped using the service a long time ago, and lost touch with him – but his declaration of independence of cyberspace was something that I leaned on when researching about internet censorship and policies a few years ago. I never did reach back out to him, and there was no pressing need to either.
On hearing the news of his passing away, I’m reminded of how prescient and applicable his words have been to the issues and challenges that we see in the internet of today – but also how he personally upheld one beautifully phrased paragraph in particular, by virtue of his accepting a request from, and interacting with a random high schooler from half way across the world.
Cyberspace consists of transactions, relationships, and thought itself, arrayed like a standing wave in the web of our communications. Ours is a world that is both everywhere and nowhere, but it is not where bodies live.
(Cross posted from the original hackernews comment)