I’ve been doing a lot of reading about blockchain protocols and NFTs recently, mainly on Ethereum and OpenSea. It is interesting to observe the perceived technical complexity of these tools because they have names that are complicated, but the interest in them is because of the amount of money people have made. Most of my friends KNOW what cryptocurrencies or NFTs are, but they don’t know what to do with them other than speculating on the currencies.

Reading VC blogs, it seems like they are most excited about the potential to more directly monetize creations on the internet. In “Web2”, ads fund large companies, which pay out funds to the most popular creators. In “Web3”, blockchains provide a way to track the value of pieces of the internet and make them “ownable”. Andressen Horowitz has been particularly active in this space. In “Individual Before Community”, Alex Masmej describes tokenizing himself to enable people to buy “shares” in his future income.

https://future.a16z.com/creator-before-community/

It’s not that these arrangements weren’t possible before, but they become tremendously easier to enforce, track and market. If Web2 was about distribution costs going to zero, maybe Web3 is about contract costs going to zero. This means there is no need for a central authority to provide monetization or oversee enforcement. Obviously, there are still risks of fraud - services can go offline, the contracts are not easy to tie to real-world events now and many NFTs feel like pyramid schemes, where the value is in monetizing gett more people involved.

But in my mind, those seem like problems intrinsic with any early technology, before there are protections or many reputable companies that are incentivized to provide stable services. The value of being able to monetize through ownership rather than ads seems like it will be the next fundamental shift on the internet. Many questions arise in this world:

• How do you connect what happens in the real world with the underlying contracts backing them?

• What will prove valuable to own on the internet? Is it cheap digital art of a new way of purchasing companies?

• What if instead of IPO’ing a company could release a coin that is legally the same as owning shares in the company?

• What if instead of subscriptions, you had a monetization model where you paid only per use (read, view, etc.) of an asset. Would this be cheaper? Would this incentivize writers to go off on their own and create compelling content?

It’s cool to see all these tools popping up to address these needs. There is incredible energy around web3 and cryptocurrency -- some people are very excited and others are very angry or skeptical. Both parties probably are right - in the early stages, many may be wrong about what about web3 is successful, but it may be directionally correct.

I’ve been doing a lot of reading about blockchain protocols and NFTs recently, mainly on Ethereum and OpenSea. It is interesting to observe the perceived technical complexity of these tools because they have names that are complicated, but the interest in them is because of the amount of money people have made. Most of my friends KNOW what cryptocurrencies or NFTs are, but they don’t know what to do with them other than speculating on the currencies.

Reading VC blogs, it seems like they are most excited about the potential to more directly monetize creations on the internet. In “Web2”, ads fund large companies, which pay out funds to the most popular creators. In “Web3”, blockchains provide a way to track the value of pieces of the internet and make them “ownable”. Andressen Horowitz has been particularly active in this space. In “Individual Before Community”, Alex Masmej describes tokenizing himself to enable people to buy “shares” in his future income.

https://future.a16z.com/creator-before-community/

It’s not that these arrangements weren’t possible before, but they become tremendously easier to enforce, track and market. If Web2 was about distribution costs going to zero, maybe Web3 is about contract costs going to zero. This means there is no need for a central authority to provide monetization or oversee enforcement. Obviously, there are still risks of fraud - services can go offline, the contracts are not easy to tie to real-world events now and many NFTs feel like pyramid schemes, where the value is in monetizing gett more people involved.

But in my mind, those seem like problems intrinsic with any early technology, before there are protections or many reputable companies that are incentivized to provide stable services. The value of being able to monetize through ownership rather than ads seems like it will be the next fundamental shift on the internet. Many questions arise in this world:

• How do you connect what happens in the real world with the underlying contracts backing them?

• What will prove valuable to own on the internet? Is it cheap digital art of a new way of purchasing companies?

• What if instead of IPO’ing a company could release a coin that is legally the same as owning shares in the company?

• What if instead of subscriptions, you had a monetization model where you paid only per use (read, view, etc.) of an asset. Would this be cheaper? Would this incentivize writers to go off on their own and create compelling content?

It’s cool to see all these tools popping up to address these needs. There is incredible energy around web3 and cryptocurrency -- some people are very excited and others are very angry or skeptical. Both parties probably are right - in the early stages, many may be wrong about what about web3 is successful, but it may be directionally correct.