cdixon.eth Profile picture
Sep 26, 2021 25 tweets 3 min read
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 27
There’s a lot of talk lately about the possibility of a prolonged financial downturn, reminiscent of 2008. 2008 was a difficult time for many people.
But from a startup perspective, 2008 and the following 3 years turned out to be a golden age. Apple released the iPhone in 2007 and the app store in 2008. By 2009 talented founders were pouring in.
Most of today’s top mobile apps were created by companies founded between 2009 and 2011, including Uber, Venmo, Snap, and Instagram.
Read 16 tweets
Jun 7
I'm thrilled to announce that we're leading @adimverse's seed round. The all-star creative team, with leadership from @RMcElhenney, is building Adim, a network of storytellers creating characters & IP collectively owned by the communities who develop them
Adim will operate as a scaled-up writers room that creates characters, owned & governed by the community using web3 technology. While the group will start small, over time the rooms will grow, spin out, and reflect the unique perspectives & talents of the people who participate.
NFTs allow characters to exist across any imaginable medium. The characters developed by creatives in the Adim Creator Rooms will be part of a shared world called @adimverse, and could live in games, TV shows, films, books, or in genres that haven’t even been invented yet.
Read 6 tweets
May 31
Just launched our new web3 podcast
Episode 1: “Method to the madness”

@smc90 @eddylazzarin + me

“A conversation about the markets and recent events affect crypto and web3; mental models for thinking about crypto and web3, and the longer arc and evolution of technology history, open source, etc.“
Episode 2: “Blockchains / crypto / web3”

Sonal, @alive_eth , @Tim_Roughgarden & me

“We set some context into the connection between blockchains, crypto, and web3 – and offer some useful analogies, and mental models, for thinking about a blossoming area of computer science”
Read 5 tweets
May 18
1/ I’m excited to share that we’re leading @TallyLabsNFT’s Seed round. The team pioneered a new frontier of NFT-based character IP with @JenkinsTheValet. They’re on a mission to tell stories that will define web3 and create tools allowing anyone to decentralize their own content.
2/ Even before NFTs hit the mainstream zeitgeist, @seeapefollowape and @valetjones recognized that NFTs could be much more than PFPs and act as a medium for communal creativity and digital IP.
3/ Since then, the team has a book in the works with bestseller @NeilStrauss, signed with CAA, released @JenkinsMutated & @GoodboyNFT, and brought on award-winning storyteller @EmmaNeedell to craft their universe @Azurbala.
Read 6 tweets
May 17
A lot has changed since we started investing in crypto nearly a decade ago. We are long-term investors and here to support web3 founders regardless of market cycles.

Our initial State of Crypto report provides a broad view on where things stand today
This analysis of average creator revenue is my favorite slide in the report. The numbers are even more extraordinary when you consider how many more users web2 has than web3 at this stage.
Whether you’re a creator, builder, or user, it’s still very early in web3 and a great time to get involved.

Ethereum is one of the many groundbreaking technologies that were built during crypto downturns, and we expect the same to occur in the next downturn.
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May 12
“Mr. Market”
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