Over the last two years, I witnessed the abundance of rocketship NFT project launches, new web3 platforms, and a rise of protocols - all alongside a number of scams, failures, and incessant shilling on twitter and discord.
How was there so much noise in this space?
I was long a proponent of blockchain, having first dabbled with cryptocurrency in 2018 - by no means the earliest of adopters - and for the longest time, a curious bystander rather than a believer.
But recently, I went over the edge.
Going into 2022, I realized that people I trusted in my community were moving beyond just talking about the web3 future and immersing themselves into the entire blockchain, crypto, and web3 world. These were smart friends that had invested in some of the biggest crypto companies, left investing roles at venture capital funds to join as operators at new protocols, and contributed to a number of DAOs and web3 communities. And it led me to critically examine the space with really the only way possible - by fully submerging into web3.
I’ve spent the majority of my career in mission-driven, community-focused roles, working with (and struggling against) the bureaucracy and centralization across education, public policy, the military, and the US government (centralization which in certain cases can make sense…more to reflect on another day). In each of these roles, I’ve had the chance to build, implement, and utilize technology, constantly looking to increase efficiency and reduce costs.
But there was only ever so much change that could be made. Even the world of professional services and the millions of dollars spent on consultants still resulted in rinse-and-repeat solutions designed to keep power and influence within the same confines of the organization. The anachronistic institutions had years of baggage, an immovable mountain. As I kept reading, talking, and learning about web3, I quickly realized that while most of the noise was bullshit, there was a sliver of ingenuity that was going to shift power and ownership towards decentralization - not all was going to change in the world, but there were certainly elements of business and society that could be uplifted.
With web3, I’ve realized the speed at which individuals come together to to build a project is mind-blowing. With reference to the OODA loop, a decision-making cycle made famous by an Air Force fighter pilot John Boyd, not only are web3 natives able to observe, orient, decide, and act in record time, it’s done so with a momentum unseen before, outcycling web2 processes that depend on a centralized decision-making authority (see: ConstitutionDAO and how they tried to buy the Constitution ).
In recent months, I’ve seen this velocity touch the areas in which I’ve previously worked. The examples below are less of a deep dive for those familiar with the space, and more of a personal reflection on my journey into web3.
Economic Impact
DeFi, or decentralized finance, has long been a core component of crypto. Solutions that support the underbanked, which was unfortunately the situation for many of the rural communities I worked with as an educator, have the potential to materially impact these groups. Traditional banks require a physical presence, mostly ignoring the rural communities that need them the most. This also applies to many regions around the world where infrastructure beyond urban environments are limited. DeFi provides accessible (24/7), instantaneous, and transparent services for people in all geographies to participate in economies that many of us take for granted.
Belonging and community
In Sebastian Junger’s book Tribe, he writes about the importance of belonging - humans have always searched for a sense of belonging, the psychological safety and comfort that comes with having a tribe to come home to and share resources with. Web3 communities, some in the form of decentralized autonomous organizations (DAOs), have attempted to recreate these tribes - whether bringing people together around the love of NFTs, investment clubs (SeedClubDAO), or mission-driven organizations supporting life-changing research (VitaDAO). There still is a lot of work to be done regarding user experience, best practices around governance, and which use cases truly benefit from these structures but currently, the experimentation around social gathering has been energizing.
Physical safety and national security
Having served in the Marine Corps, I’ve always been bullish on dual-use technology and the application of private sector solutions for the government and military. Though I have to admit, I was not expecting how big a part cryptocurrency would play in global events when I first started learning about web3. On February 24, 2022, I watched the news of the Russian invasion of Ukraine. Since then, cryptocurrency has been a direct avenue for those outside the region to give directly to Ukraine. As of the beginning of March 2022, cryptocurrency donations have allowed the government to acquire a variety of gear and equipment for the Ukrainian army.
From these actions, I’ve begun to think about crypto’s impact on technology and grand strategy.
What other applications of blockchain will impact statecraft, and how could it affect how nation states exploit opportunities, shore up defenses, or conduct international negotiations?
https://twitter.com/abornyakov/status/1502231351273172992
Despite these exciting themes, there are still many unanswered questions such as:
Concerns around how decentralized operations could lead to increased societal and political polarization
Regulatory challenges and the collaboration opportunities with governments to build policy
And many more other ambiguous policy, technical, and ethical challenges that are certain to appear…
…but I’ll save these for future deep dives.
Across each of these three arenas, web3 has elements that are empowering individuals and their communities. As an investor, I’m excited to support endeavors that lift up our society, and one of the fastest ways I think we can get there is through the exciting world of web3.
If you’re building in web3, I’d love to chat - DM me on twitter @mrericshu.
I also host a bi-monthly blockchain breakfast/lunch for investors in NYC to meet and learn. If you’d like to join, follow and DM me on twitter @mrericshu.