Web3 Needs Better User Stories
I enjoyed this post by Noahpinion on crypto generally. There is a particular point that strikes me:
Excludability is when you can sell a thing and be assured that only the people who pay for it will get it. Showing a movie inside a movie theatre makes the tickets exclusive. You can’t see the movie from outside the theatre and you can’t get inside without a ticket.
This is not a made up problem. People create software/art/rabbit photos and since it’s all just bits the consumers just make free copies of it and pass them around free as they please. Leaving the producers with nothing but the original copy of their rabbit photo.
Lots of pieces of the internet are attempts to make an end run around the fact digital information is not excludable in a straightforward sense. Facebook and Google use stored information to deliver better experiences on their platforms than a similar software would make, and then try to extract a tax through advertisements. Patreon lets creators just ask very to compensate them for having enriched your life, hopefully at more than a dollar per month.
But that’s just the downside. The upside on this is that you have zero marginal cost to produce extra copies of a thing. Think about how hard it is to make things! Zero marginal cost means if you make it once, it so easy to make a second. Further, it means that those things are abundant, which means those things are cheap, which means consumers get a lot of them without having to spend all of our money. Cheap, abundant things are usually good.
I think is why there is so much carnival barking around Web3. The negatives of the internet and technology are all there, but fundamentally non-excludability leads to pretty good deals for consumers. You can see why producers dislike it, as it limits their pricing power. So the producers have to spend a lot more energy trying to convince consumers that cheap abundance isn’t actually good.
Amazon Fire Phone Thinking
Do you remember the Amazon Fire Phone? It’s my favorite example of the sort of thinking that happens in software all of the time. Amazon saw all these great advantages that Apple was getting for its mediocre apps just by virtue of having a phone operating system, not to mention what Apple was extracting directly from Amazon in fees. Amazon thought to itself, “Wait … we also make mediocre software. Imagine how much more value we could extract if people used a phone we made?!” So they set out to make the Amazon Fire Phone.
What Amazon never really did was figure out a compelling reason why anyone would want to buy their phone. I mean they added features, but you could tell that the driving motivation of the project was “let’s solve a problem for Amazon” and not so much an attempt to figure out a way to make everyone’s smartphones better in a way that mattered to smart phone using humans.
Setting aside the people who are just in it for asset speculation, the crypto space feels like it has just loads of Amazon Fire Phone thinking at this point in time.
It makes sense for the holder of an NFT to want everyone else to think there’s something special about the version they have. But for everyone else, what’s the benefit? This problem seems like it is endemic in all parts of Web3.
Yes, I can see why you, the creator of FlorpCoin, would benefit from me buying your currency, but what do I get out of it other than some transaction costs and chance to maybe someday sell it to someone dumber than I am? People tell me I will get prestige if I buy the digital receipt to the garish ape drawing, but prestige from whom? Other people with receipts to garish ape drawings? Can I just have that without paying for it? Ah, no.
I never write off an entire technology, I know there are people out there spending more time trying to make something interesting than making bullshit claims on twitter. But a lot of people are selling solutions for themselves and not for the people that would actually pay for the stuff.
Further Reading
First Impressions of Web3 is everywhere right now, but that’s just because it is really good.