3 ms·

The “Hollow Abstraction” of Web3

34 points by thm 4y ago

xg15 4y ago
Couldn't you simplify that by asking what a blockchain can do that a traditional database solution can't? From what I understand, the one property a blockchain has that a centralized database hasn't is that it is effectively append-only for most of humanity: On a low level, a blockchain is a p2p network, so it can't easily be taken down as a whole, and on a higher level, the mining process ensures that data that is once added to a chain cannot erased by anyone - including companies, states or the developers themselves. The problem is that this property sort of competes with the monopoly of force of the state: Traditionally, the problem of immutable, globally visible records is solved through the state and the court system: You make a traditional contract and have the courts enforce it. The one difference between the traditional way and using a a blockchain is, that with traditional contracts, one party can modify records, which is the state: Contracts can be nullified, bank assets can be frozen or seized, etc. Which leaves the only set of usecases that exclusively a blockchain can satisfy in the realm where you want to work against the state itself: Create an untraceable, unseizable currency; create a trading exchange not constrained by protection laws, etc. - in short, do illegal stuff. This seems to me the core reason why the search for legitimate web3 usecases is so awkward: Web3 wants to build a legitimate, law-abiding business ecosystem all based on a technology which is fundamentally about disempowering the law. I don't want to imply laws are always without failure and should never be challanged, but the business proposition is paradoxical. It's like trying to advertise the non-combat uses of a tank. Sometimes, there may be legitimate defense reasons why you'd want to use tanks - but if you use tanks for anything other than destroying things that don't want to be destroyed, you are likely using the wrong tool.
SilverBirch 4y ago
I think this entire episode has highlighted that maybe the correct way to run early stage investing for the last decade or so is basically to more or less fund everything, and that the differentiator in terms of firm success is purely access to deals and no decision making at all. If you take the view that we really are in an everything bubble the most successful VC strategy over the last 10 years was simply to say yes. Everything was going up. You say yes, and you make sure everyone comes to you. And this strategy has worked so well that now you have a generation of leaders - such as Chris Dixon, who don't even go through the motions of what was previously thought of as the successful strategy for VC. It makes sense, if the correct strategy is to just say yes, the people who do due diligence and run the numbers and research the market before saying yes (a) lose out on deal flow to those who Just Say Yes and (b) find (good) reasons to say no which both is a losing strategy and damages your reputation. Of course the people who are investing in Crypto don't understand how the businesses would work and make money, if that was required they wouldn't be crypto investors. These grand visions and bold statements are a great way of covering for what's really behind the investment strategy - Just Say Yes.

34 points by thm 4y ago

xg15 4y ago

Couldn't you simplify that by asking what a blockchain can do that a traditional database solution can't? From what I understand, the one property a blockchain has that a centralized database hasn't is that it is effectively append-only for most of humanity: On a low level, a blockchain is a p2p network, so it can't easily be taken down as a whole, and on a higher level, the mining process ensures that data that is once added to a chain cannot erased by anyone - including companies, states or the developers themselves. The problem is that this property sort of competes with the monopoly of force of the state: Traditionally, the problem of immutable, globally visible records is solved through the state and the court system: You make a traditional contract and have the courts enforce it. The one difference between the traditional way and using a a blockchain is, that with traditional contracts, one party can modify records, which is the state: Contracts can be nullified, bank assets can be frozen or seized, etc. Which leaves the only set of usecases that exclusively a blockchain can satisfy in the realm where you want to work against the state itself: Create an untraceable, unseizable currency; create a trading exchange not constrained by protection laws, etc. - in short, do illegal stuff. This seems to me the core reason why the search for legitimate web3 usecases is so awkward: Web3 wants to build a legitimate, law-abiding business ecosystem all based on a technology which is fundamentally about disempowering the law. I don't want to imply laws are always without failure and should never be challanged, but the business proposition is paradoxical. It's like trying to advertise the non-combat uses of a tank. Sometimes, there may be legitimate defense reasons why you'd want to use tanks - but if you use tanks for anything other than destroying things that don't want to be destroyed, you are likely using the wrong tool.

SilverBirch 4y ago

I think this entire episode has highlighted that maybe the correct way to run early stage investing for the last decade or so is basically to more or less fund everything, and that the differentiator in terms of firm success is purely access to deals and no decision making at all. If you take the view that we really are in an everything bubble the most successful VC strategy over the last 10 years was simply to say yes. Everything was going up. You say yes, and you make sure everyone comes to you. And this strategy has worked so well that now you have a generation of leaders - such as Chris Dixon, who don't even go through the motions of what was previously thought of as the successful strategy for VC. It makes sense, if the correct strategy is to just say yes, the people who do due diligence and run the numbers and research the market before saying yes (a) lose out on deal flow to those who Just Say Yes and (b) find (good) reasons to say no which both is a losing strategy and damages your reputation. Of course the people who are investing in Crypto don't understand how the businesses would work and make money, if that was required they wouldn't be crypto investors. These grand visions and bold statements are a great way of covering for what's really behind the investment strategy - Just Say Yes.