Daily Brief - Crypto is changing in 2022 (Dec 23, 2021)
A lot is changing in crypto space. Starting with the name.
Crypto is a thing of yore. Today we talk about Web3.
Back in 2017, most people were in BTC for the trading opportunity - HODL and all that.
A different kind of trend is emerging now. People want to build real services on blockchain technology, and the best talent is migrating from other corners of Tech into Crypto.
VCs love the space too, because it gives them a respectable way to gain crypto beta. “I don’t like crypto but I like crypto infrastructure”. Yeah, right.
Whatever the reason, the result is the same: a lot is happening in Web3.
But what exactly is Web3?
Web3 is “a decentralized online ecosystem based on the blockchain” (source).
Web3 aims to reconstruct web services around blockchain tech, with the added benefit that monetization is easier thanks to tokens.
The monetization aspect is pivotal: if it is easier to pay people to take actions, then it’s easier to kick off new ventures.
Here’s the comparison of old and new incentives:
Before Web3: The utility of Facebook was low to you if your friends were not there already. Therefore adoption was slow to begin with.
With Web3: With tokens, you would join something from the beginning because you get paid when the token value is low, and you hope to reap the benefit (source).
Whilst this logic smells very much of tulip mania to us, it’s undeniable that the idea of decentralized internal logic is truly appealing.
Not everybody likes Web3
However, not everybody likes the idea.
Jack Dorsey for example dismisses the idea as a plaything for VCs.
Musk replied “has anybody seen Web3? I can’t find it”.
And Techcrunch chimed in “Bitcoin is religion, web3 is greed”.
Be it as it may, naysayers never changed the world. It’s quite remarkable that the innovators of yesterday diss the ventures of tomorrow - like Max Plank used to say, "science progresses one funeral at a time".
Yet money and talent are pouring in
Here’s a few examples of top professionals from “old” tech companies who left their jobs at these “old” tech companies to join new endeavours focused solely on web3:
the CFO of Lyft
the head of crypto at Meta
one of Google’s vice presidents
Companies focused on blockchain technologies have proliferated, including cryptocurrency exchanges like Bitpanda, Gemini and CoinList; NFT and art collectible companies like OpenSea and Dapper Labs; and infrastructure companies like Dfinity and Alchemy.
To understand the reach of this, take Dfinity which is trying to build the Internet Computer. The idea is to have a decentralized, open-source, general-purpose blockchain designed to host smart contracts. As the name says, a distributed computer.
Stuff that could change the world.