cdixon.eth Profile picture
Sep 26, 2021 25 tweets 3 min read Read on X
Why Web 3 matters 🧵
Web 1 (roughly 1990-2005) was about open protocols that were decentralized and community-governed. Most of the value accrued to the edges of the network — users and builders.
Web 2 (roughly 2005-2020) was about siloed, centralized services run by corporations. Most of the value accrued to a handful of companies like Google, Apple, Amazon, and Facebook.
We are now at the beginning of the Web 3 era, which combines the decentralized, community-governed ethos of Web 1 with the advanced, modern functionality of Web 2.
Web 3 is the internet owned by the builders and users, orchestrated with tokens.
(Thanks to @packyM for this definition.)
Why does Web 3 matter?

First, let’s look at the problems with centralized platforms. (I wrote more about this back in 2018 here…)
Centralized platforms follow a predictable life cycle. At first, they do everything they can to recruit users and 3rd-party complements like creators, developers, and businesses.
They do this to strengthen their network effect. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows. Image
When they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. To continue growing requires extracting data from users and competing with (former) partners.
Famous examples of this are Microsoft vs. Netscape, Google vs. Yelp, Facebook vs. Zynga, Twitter vs. its 3rd-party clients, and Epic vs Apple.
For 3rd parties, the transition from cooperation to competition feels like a bait-and-switch. Over time, the best entrepreneurs, developers, and investors have learned to not build on top of centralized platforms. This has stifled innovation.
Now let’s talk about Web 3. In Web 3, ownership and control is decentralized. Users and builders can own pieces of internet services by owning tokens, both non-fungible (NFTs) and fungible.
Tokens give users property rights: the ability to own a piece of the internet.
NFTs give users the ability to own objects, which can be art, photos, code, music, text, game objects, credentials, governance rights, access passes, and whatever else people dream up next.
NFTs exist on top of blockchains like Ethereum. Ethereum is a decentralized global computer that is owned and operated by its users.
Blockchains are special computers that anyone can access but no one owns.
Ethereum is powered by a fungible token, ETH, which is used to incentivize the physical computers that underlie the system. ETH is also the system’s native currency for transactions, like NFT purchases.
There are many ways for users to acquire fungible and non-fungible tokens. You can buy them, but there are also ways to earn them.
Uniswap famously retroactively airdropped 15% of its governance tokens to early users of the protocol. Community grants like this have become common in Web 3 as a way to build goodwill and incentivize adoption.
You can also earn tokens through creative and entrepreneurial activities. For example, people are earning roughly $100M worth of ETH per day selling NFTs.
Tokens align network participants to work together toward a common goal — the growth of the network and the appreciation of the token.
This fixes the core problem of centralized networks, where the value is accumulated by one company, and the company ends up fighting its own users and partners.
Before Web 3, users and builders had to choose between the limited functionality of Web 1 or the corporate, centralized model of Web 2.
Web 3 offers a new way that combines the best aspects of the previous eras. It’s very early in this movement and a great time to get involved.

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More from @cdixon

Jun 11, 2023
Big news to share: @a16z is expanding to the UK 🇬🇧

We plan to open our first international office in London later this year, and will host the next Crypto Startup School there in 2024.

Why the UK? 👇…
Crypto/web3 is still in the early innings, and needs clear regulations to provide an open pathway for startups to build constructive solutions, while protecting consumers and stamping out the harmful “casino” culture that has developed around crypto.
The UK is on the right path for crypto regulation:
👉Working with industry on unique attributes of blockchain tech
👉Laying a foundation for future blockchain apps
👉Innovative sandbox approach to regulation
👉Outcomes-based regulation
👉Consumer protection front-and-center
Read 9 tweets
Apr 3, 2023
I’m happy to share that @jasonrosenthal has joined @a16zcrypto as an operating partner. He’ll be helping our founders advance beyond the idea maze and become their best professional selves.…
No matter how well a founder maps their idea maze, the road to product-market fit is difficult. Getting there brings new challenges: incumbents put a target on your back, recruiting and hiring needs to accelerate, prioritization becomes more complex, etc.…
Founders often need guidance from someone who’s personally navigated many of the abstract, harder-to-define, but nevertheless critical obstacles that inevitably arise in any startup. @jasonrosenthal is a prime example of that someone.
Read 6 tweets
Mar 21, 2023
I’ve long admired @EveOnline, one of the longest-running and most successful MMO games ever. So I’m thrilled to share that @a16z is leading a $40M investment in @CCPGames’ new AAA gaming project set in the EVE Universe. 🎮🪐…
Initially released 20 years ago, EVE Online has had a huge influence on multiple generations of gamers, and its community-driven approach laid the groundwork for many of web3’s core principles, such as open economies, player-driven social systems, and composability.
EVE players have always set their own narrative, self-organizing into guilds with a shared set of incentives. The community created 276 billion items just in the last 5 years, and built a rich ecosystem of 3rd-party tools supported by an API.
Read 7 tweets
Feb 8, 2023
It takes a special intellect to stand out among crypto technologists, and we’re fortunate to have one of those people on our team. I’m happy to share that @eddylazzarin has been promoted to Chief Technology Officer for @a16zcrypto.
Eddy will continue to lead the engineering and data science teams that he built from the ground up, and also now manage our world-class research and security teams.
Under his leadership, a16z crypto’s engineers have been continuously adding to our suite of open-source tools that benefit the entire ecosystem – including Helios, Halmos, privacy-protecting airdrops, a starter pack for NFT analysis, and more to come
Read 4 tweets
Oct 22, 2022
I sometimes get asked by people starting out for advice on professional development.

Here are a few things I tell them 👇🧵
Optimize for being around people with strong ethics who teach and challenge you.

For example, if you join a startup with great people, regardless of whether the startup works, you’ll learn a lot and develop relationships with people who go on to do interesting things.
Early in your career, it’s important to explore and experiment to avoid getting stuck in a local maximum trap.

Don’t climb the wrong hill:…
Read 18 tweets
Oct 13, 2022
We proudly contributed to the $165M Series B financing round that @Uniswap Labs announced today. It’s remarkable what @haydenzadams and the team have accomplished since we led the Series A round in 2020 🧵👇…
Uniswap Labs pioneered a new type of crypto exchange, as Coinbase did years before. They created the fully-automated & decentralized Uniswap Protocol, which includes an automated market maker (AMM), to easily trade assets.
The Uniswap Protocol is a model of productive decentralization: fully-programmatic, immutable on-chain trading with instant market creation. Users and automated services can deposit assets and let the protocol handle the rest. It’s now surpassed $1.2T in trading volume.
Read 7 tweets

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