BLOCKCHAIN: Why Chris Dixon Still Thinks It Matters
Feb 8, 2024
01:05:41
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In this podcast, Chris Dixon argues that blockchains and web3 enable an open platform for creativity and entrepreneurship, despite the association with scams. The chapters cover ownership, blockchain's impact on the internet's evolution, security, timing, and AI vs. blockchain. It explores the potential future of blockchain technology in various industries and the need to guide its development.
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Quick takeaways
Blockchain technology can be used for good and has the potential to preserve ownership and compensate creators for their online contributions.
Blockchain technology offers a more energy-efficient alternative to traditional systems like Bitcoin, making it a viable option for sustainable digital solutions.
Blockchain technology has the potential to revolutionize various industries by combining the advantages of decentralized networks with the functionality of centralized corporate entities.
Deep dives
The Origin of the Internet and Decentralized Networks
The Internet's origin story begins with the US military's desire to create a communication system that could survive a nuclear attack. This led to the development of a decentralized network, connecting computers through telephone lines and utilizing hot potato routing (now known as packet switching). This decentralized system, unknowingly, became the foundation of the modern Internet.
The Faustian Bargain of Web 2.0
Web 2.0 brought about corporate-owned networks like Facebook and Twitter, offering free communication and a sophisticated interface in exchange for owning user data, connections, and ad revenue. However, the ownership and control of digital properties, identities, and relationships became a pressing issue as the internet influenced politics, culture, and business. The need for individuals to own their online presence and data is a crucial concern for the future.
The Potential of Blockchain Technology and NFTs
Blockchain technology, often associated with Bitcoin and NFTs, has the capacity to secure and track ownership of digital assets, including identities and content. These capabilities are essential in an era where AI-generated content proliferates, ensuring individuals have control over their online products and identities. Blockchain can potentially establish a new economic covenant between content providers and distribution systems, preserving ownership and compensating creators for their contributions.
Blockchain Technology and Energy Efficiency
Blockchain technology, particularly Proof of Stake used in modern blockchains like Ethereum, offers a more energy-efficient alternative to traditional Proof of Work systems like Bitcoin. By staking a small amount of money instead of performing energy-intensive computations, users can secure the blockchain. This move towards energy efficiency obviates the argument that blockchains are detrimental to the environment. While Bitcoin adheres to Proof of Work due to ideological reasons, the rest of the blockchain tech community, focused on the tech side rather than Bitcoin, has shifted towards greater energy efficiency.
The Potential of Blockchain Technology
Blockchain technology presents the potential to revolutionize various industries and create advanced internet services. By combining the advantages of decentralized networks with the functionality of centralized corporate entities, blockchain networks can provide internet services that benefit society while still offering powerful features. These services include social networks, online games, financial services, and more. The blockchain's ability to ensure ownership, grant economic leverage, and facilitate secure transactions opens up new possibilities for creating value and generating wealth. While there are fair objections and challenges, such as the need for broader adoption and usefulness beyond trading and speculation, the progress and potential of blockchain technology cannot be underestimated.
Seventy-two billion dollars. That, according to the Grifter Counter™, is the amount of money that's been swallowed up by crypto and blockchain scams and crashes. It's an enormous sum — but one that may not surprise you if you've kept up with the news. Bitcoin lost more than 60% of its value in 2022. FTX, once the world's third-largest crypto exchange, collapsed, and its founder, Sam Bankman-Fried, was later found guilty on seven counts of fraud and conspiracy. And it's not just crypto that has seen dark days. Remember NFTs? They were once touted as a revolutionary new form of digital ownership made possible by the blockchain. Today, however, 95% of them have lost all of their value. That's right. All of it.
So it would seem like a suboptimal time to publish a book arguing that "blockchains and the software movement around them — typically called crypto or web3 — provide the only plausible path to sustaining the original vision of the internet as an open platform that incentivizes creativity and entrepreneurship." But that's precisely what Chris Dixon, founder of a16z crypto, has done with "Read Write Own: Building the Next Era of the Internet." Chris, who spoke with Rufus in a live taping of this show last week, says that while blockchains have been "maligned and associated with grift, casino culture, and fraud," they are tools that can be used for good. Today on the show, he makes that case.
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