10 Things Web3 Entrepreneurs and Investors Taught Us In 2022Dec 27, 2022
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By Josh Gordon, Host of The Unstoppable Podcast
Every week for the past year, I’ve interviewed entrepreneurs, creators, and investors about the role Web3 and NFTs will have in our future. This year has taken us through some of the highest highs and lowest lows this industry has seen. More than ever, the failures of crypto are public and brazen. But through my conversations, I’ve found that builders are still building, seeking ways to impact people’s lives through Web3 technology.
It’s become clear to me that every industry will be affected by the changes in ownership, identity, access, and community that NFTs empower. Achieving the future we want to see will take time, courage to believe in a future that's different then the present we live in, and creativity and curiosity to explore all the different possibilities that the next version of the internet will hold. Most importantly, we’ll need to collaborate, share ideas, and have conversations so we can build a brighter future together.
Here are 10 lessons about Web3 and NFTs that I learned through conversations on The Unstoppable Podcast in 2022.
1. Human readable names are needed: Episode 117, Matt Gould
I believe everyone will be using crypto one day. That means everyone will have wallets and public addresses with which they’ll need to use to send and receive anything from tokens to NFTs. But wallet addresses today present a major UX challenge: sending crypto to a public address like 0xB1326F48ec2f6B64DFE2d1E83B4d972A8c28899e is intimidating and cumbersome. If that is the starting point, we've already lost the battle with crypto skeptics.
In my very first episode as host of The Unstoppable Podcast, I spoke with Unstoppable Domains CEO Matt Gould about identity and I left with conviction that NFT domains are one of web3's most important use cases. Simplifying crypto isn’t the only use case, but it’s a major one: sending crypto to joshgordon.crypto is easier and it reduces the friction of transacting. Fixing these UX problems will reduce a major barrier to crypto adoption.
2. Asset ownership is a foundational pillar of democracy: Episode 122 - Michael Lazerow
Private property and how we protect assets are core parts of the US constitution. We create laws to protect land ownership, business ownership, home ownership, and as the internet evolves, now we need to consider digital ownership. Society is open to the concept of intellectual property, yet there is so much resistance to the idea of digital property.
What crypto gives us is scarcity on the internet. Bitcoin was the first to show us how this can be applied through blockchain technology, and NFTs have made it possible to own just about anything that is digital. You can create an asset, sell it, authenticate it, destroy it.
For a democracy to flourish in the internet age, we need to embrace ownership in the digital economy. Whether it's a collectible, an avatar, digital clothes or property, a membership club, rights to a home or car, a certificate of education – these items are property, and they’re already being distributed and owned on the internet in the form of NFTs.
3. The metaverse is a moment in time: Episode 125 - Shaan Puri
What is the metaverse? It was definitely one of the buzzwords of 2022. Shaan described it in a really interesting way: the metaverse is a moment in time. Communication, education, media, and relationships are all going digital and crypto brings your assets to the digital world.
Our attention used to be 100% on our physical environment. TVs dropped that to 85%, computers down to 70%, and phones to 50%. Our attention has been shifted from physical to digital and so will our resources and assets. If half of our attention is on our digital screen, then half of our energy will go to our digital life.
The metaverse is the shift over time where we care more about our digital lives than physical lives. Shaan thinks that if we stay on the trajectory we’re on for the next 10 to 20 years, - we will cross into the metaverse –- the moment in time where digital matters more to us than physical. Or does it already!?
4. The gaming industry is poised for disruption by NFTs: Episode 126 - Carra Wu
For as long as gaming has existed, people have used real money to secure in-game assets. Back in 2009 in Venezuela, people even used RuneScape gold because it was more stable than the Bolivar. We don’t have to imagine a world where we spend real fiat on digital collectables or currencies – we already do.
The principles of ownership and composability are what makes the technology and industry a great match. History has also shown us how open collaboration leads to innovation. Looking back at history, Venice became a central point for cultures to be combined, remixed, and explored, which led to a Cambrian explosion in product creation. This led to significantly more refined products and made Venice a trading hub. Just like Venice, in Web3, people come from all backgrounds and anyone can collaborate by building on top of smart contracts.
As Carra said, "Composability extends the work someone else has done and allows devs to extend the utility of a game asset to an infinite amount of use cases."
5. NFTs and washing machines have a lot in common: Episode 131 - Arthur Camara
NFTs and washing machines have a lot more in common than you think. The killer app for electricity was the lightbulb. Homes were even built with sockets on the ceiling just for them. But then appliances came about and their UX was terrible. Take washing machines as an example: The first ones were bulky, dangerous, spilled water, and had to be kept outside. To start them, you needed to unscrew your lightbulb and screw in the washing machine cord.
The washing machine V1 had bad UX and many problems. People could have eschewed washing machines entirely, but instead the world recognized their value and identified the problems that needed solving. Outlets were built. On/off switches were added. The appliance industry has since flourished!
NFTs are at the same point in the innovation cycle as washing machines were in 1908. There are lots of problems, but if we believe in the underlying technology, then those are problems to be solved. The UX is clunky, safety needs to be improved, and on-boarding people should be simpler. There is so much to be built, but just like washing machines, NFTs can become an integral part of our life.
6. Identity is crypto's biggest problem: Episode 136 - Haseeb Qureshi
When you interact on-chain, you’re identified by a crypto address. But an address provides very low dimensional data. Many applications are gated on having some robust notion of identity, like credit. It is impossible to have credit without identity. If you don’t repay your loan – who will be held responsible?
Most of the world operates on credit - auto loans, college loans, mortgage loans. For DeFi to be competitive with CeFi, we need to establish systems of credit. For on-chain credit to exist, on-chain identity is necessary.
7. NFTs will have a greater impact on society than the printing press: Episode 139 - Josh Rosenthal
The printing press is regarded as the most important invention of the second millennium. I interviewed PhD historian Josh Rosenthal, and he believes NFTs are even more important than that.
Renaissance means rebirth. The rebirth was focused around three pillars:
- Identity: your view of self was static
- Value: power was concentrated in the hands of few
- Communication: information was held in physical documents that required permission to access
Now we are going through a Crypto Renaissance. Pillars of society are shifting again:
- Identity: your view of self is fluid and digital self matters
- Value: access to power is open via internet networks to creators
- Communication: information lives on-chain with verifiable sources + owners
Crypto is following the same patterns as renaissance movements of the past. We lowered the bar to create from monks writing manuscripts, to the printing press, self web hosting, social media, and now user owned smart-contracts. This is the beginning of the Crypto Renaissance and NFTs are going to further open up global communication while also adding value, ownership, and identity to what we create and share!
8. Owning your digital identity is a paradigm shift: Episode 141 - Scott Kominers
Ownership of your digital identity means it’s:
- Persistent: it doesn't go away
- Portable: it moves around with you
- Linked to reputation: it’s not just “I am Josh”, now we can answer “who is Josh”
So much of our Web2 online activity is our identity, like posting photos on Instagram and updating resumes on LinkedIn. We’re creating these receptacles of identity, but they live online within the frame they are within - they are in silos and we can’t control it.
When you own your digital identity, you can take it with you to any new valuable platform. This increases competition amongst platforms (users need to want to use it) vs locking users in through network effects and algorithms. Web3 identity is persistent and not ephemeral – it will last as long as the blockchain exists. Each piece of content you post online would be permanently linked to you, unless you delete it. This persistence encourages long-term thinking around your online reputation and how you thoughtfully engage with and create digital content. With one true source for your full self online, the possibilities are endless for how we can associate our identity to our reputation.
9. Most NFTs will be free: Episode 154 - Adam Levy
Free NFTs are the ultimate Web3 creator strategy. It's more powerful to give than to take. Free NFTs can be thought of as a top level funnel. From there, you can provide more utility and have a group of people to build deeper relationships with.
Free NFTs can be given to fans, content can be made free and collectable, event registration RSVPs can be free. Free NFTs will be used to grow collector bases and from there creators can figure out paid promotions further down the funnel.
Ultimately, Web2 + Web3 tools can be used in tandem. Use Web2 for getting messaging out and use Web3 for capturing value. Web2 helps build your audience and Web3 allows for building interesting digital experiences.
10. The power of collection: Episode 161 - Jad Esper
Jad said it best – from shelf to self. He used an analogy comparing NFT collections to what we store on the shelves in our homes. The things we have on our shelves say a lot about us - they represent memories, they display certifications. The things that we accumulate and collect speak to who we are and how we want those closest to use to perceive us. These are intentional decisions.
Most NFT activity today is about collecting things, just like we do in real life. NFT collections provide an obvious evolution to typical human behavior. Some things we collect on our shelves will be free, some will be gifts, some will be expensive. Some we’ll hold forever and some just until the next time we do spring cleaning. Some items on our shelves we’ll use and put back. Some we’ll save for a special occasion.
So when people ask me, why NFTs? I’ll remind them that we’ve been collecting things on our shelves for years and this is no different.