The analogies to the Wild West for crypto were apt in the early days, and still are to a lesser degree, but now I think they’re more complimentary than intended.
Louis CK said on a podcast recently about the US presidents that clicked into place; The United States has always been run by cowboys and nerds. The cowboys are the brave ones that venture out into the unknown, while the nerds come in after to make things run. However, whats interesting in today’s age is that in Web 3, the nerds and cowboys went together, and they might be one and the same. It was the coders and entrepreneurs that have been building on ideas decades in the making, that culminated into a movement of crypto.
Similar to the American Frontier, it took several brave souls to venture out and settle land in unknown and dangerous conditions. Manifest Destiny.
The roads to Web 3 are getting smoother, but it still feels like a rough dirt road relative to the current asphalt paved highways of Web 2. This is an improvement from just a few years ago, where that was more rugged and uncertain, and certainly better than a decade ago (remember Mt. Gox and Silk Road?).
The difference in Web 3, and what is being built, is you have an opportunity to own part of the road, and with technologies like Zero Knowledge Proofs, you have more ability to control your valuable time, attention and energy. More importantly, the value capture of effort placed into the system is distributed proportionally (not equally, but proportional to capital invested or value added to the system).
It also opens the door for artists to capture the value of their work, which that alone is hard to fathom the knock-on effects. For all of human history, artists had a horrible time monetizing their work (in some cases for good reason, as it generally reflected a Pareto distribution, or the square root of a given creative population does half the work, aka the 80/20 principle). It’s interesting to think of what happens when artists across the economy are incentivized to create via NFTs or other vehicles, and what positive effects on society as a whole that results in. What could that positive reinforcement mechanism produce? And in Chainlink’s effort to eliminate the need for “trust” in agreements, you open the total addressable market for any programmable agreement to the modern world.
But thats for another post.
The years of work and effort has slowly lowered the difficulty curve on Web 3, similar to the American frontier attracting a greater population to build out new infrastructure. Remember the early days of the internet? The latency and hardware issues were rough, from slow processors to spotty internet service (that was expensive at most functional speeds) to ultimately have little to do once you did successfully connect. Yet within a span of maybe 7 years we all went from a 56k modem to the iPhone. Sometimes we forget how quickly things changed because it feels gradual, but its not.
Below reiterates this phenomenon from former Google Chairman & CEO Eric Schmidt (Chainlink’s advisor) where it seems we are in the early years of the internet, when everything felt slow:
Thanks to these modern day cowboys, and the ones before them who built out and invested in today’s internet, we have new frontiers to move into and thrive. This, from a16z’s 2022 State of Crypto1, shows the relative adoption of Web 3 (Ethereum specifically) to the internet:
I believe that since Web 3’s foundation is a widely available, cheap and reliable internet, the speed of adoption will be exponential. The pain points now, as Eric Schmidt alludes to, is attracting substantial capital and brainpower to solve. The most frightening part of Web 3, custody of your private keys, when solved will open the flood gates in my opinion.
Just like how early towns in the west were developed, there were the typical cast of characters; The snake oil salesmen (looking at you Luna), the cowboys, sheriffs and the craftsmen. But today I sense that those days are generally behind us. Today, the rest of us are making our way west, and to towns full of brilliant and motivated people who want great things. I’m one of those, and I’m excited to be here, risks and all.
Will
https://a16zcrypto.com/state-of-crypto-report-a16z-2022/