Thread by @MitchellJHammer

Next time someone tells you NFTs, DeFi, or DAOs are a newfangled scam, remind them that this tech is based on 30+ years of hard research and thinking 🧵:

0.0/ Back in 2013, @VitalikButerin imagined four major applications Ethereum could enable:

1) smart contracts 🧠
2) financial instruments 💸
3) non-fungible assets 🎨
4) DAOs 🤖

All of these have a long history of thought behind them.

1.0/ 🧠Smart Contracts:
Nick Szabo described smart contracts way back in 1994, ~15 years before #Bitcoin and 20+ years before @Ethereum 🤯 He saw smart contracts as digital promises executed via protocols.

1.1/ But in the 1990s, achieving digital consensus was still a problem. Any sort of smart contract would've required a trusted third party. Szabo talks a lot about ways this trust-based system is fragile in his paper.

1.2/ In 2008 the Bitcoin whitepaper drops. Now we have a way for trustless, digital consensus for money balances and transactions.

Devs soon realized Bitcoin can be used for more than just payments! They experiment with how to deploy smart contracts to the Bitcoin blockchain.

2.0/ 💸 Financial Instruments:
Colored coins (2012) is one example of smart contracts on Bitcoin, focused on financial assets. Devs assign a "color" to specific bitcoins, which can be tracked on chain. These colored coins can represent currencies, or ownership stakes in assets.

2.1/ Mastercoin (2012) took things one step further. It built a metaprotocol on top of Bitcoin, designed specifically for altcoins. Mastercoin devs could create stablecoins, derivatives, and synthetic assets using Bitcoin as a consensus layer.

2.2/ While both colored coins and Mastercoin were innovative, the Bitcoin network wasn't designed to encode arbitrary financial instruments.

Ethereum's innovation was making these financial instruments easy to implement with a built-in programming language.

2.3/ This flexibility + composability spawned DeFi. Today there are hundreds of DeFi projects with B$ of value!

OGs like @MakerDao & @compoundfinance pioneered DeFi primitives and liquidity mining ⛏ Newer protocols like @TokenReactor are experimenting with new incentives.

3.0/ 🎨NFTs:
In 2003,Mark Miller and Marc Stiegler propose using smart contracts for property titles in the developing world. Property rights are nonfungible, so they basically describe a protocol for a very specific type of NFT. This is ~15 years before NFTs on Ethereum.

3.1/ Eight years later Vincent Durham realizes Bitcoin's solution to the double spend problem is perfect for domain names. He forks Bitcoin and creates @Namecoin.

Again, this is a protocol for a very specific type of NFT: domain names.

3.2/ Vitalik teases the idea of a DNS built on Ethereum in his whitepaper, referencing Namecoin. In 2017, @ensdomains launches. In the same year, CryptoPunks and CryptoKitties launch.

3.3/ Four years later and NFTs have blown up on Ethereum. In 2021 we saw insane volumes, and we saw mainstream companies (@Nike, @adidas) and storied auction houses (@Sothebys, @ChristiesInc ) jump in.

This mania seems sudden but is the culmination of 20+ years of research.

4.0/ 🤖 DAOs:
Scifi has dreamed about autonomous software for ages. Think Daemon by @itsDanielSuarez or Skynet in Terminator. (This briefing by @Mariogabriele's has more of this history) readthegeneralist.com/briefing/dao#t…

4.1/ The idea of (benevolent!) autonomous software inspired devs like Gregory Maxwell. In 2011 he described the idea for autonomous storage service Storj. He saw Bitcoin as the "enabler" for this tech. The project never launched, but it painted a picture of what was possible.

4.2/ Two years later Mike Hearn imagined a future filled with autonomous agents. He saw them providing services, responding to markets, and managing their own maintenance. All through what he called "TradeNet." Functionally, Ethereum looks an awful lot like Hearn's TradeNet.

4.3/ Just a few months later, Vitalik dares someone to build a "full-scale Daemon or Skynet" in the first version of the Ethereum whitepaper. He saw how, using smart contracts, DAOs could be a new model for human organization.

4.4/ Fastfwd 8 years and hundreds of DAOs are on Ethereum. They control B$ in assets. They're buying cultural artifacts (@PleasrDAO) & historic documents (@ConstitutionDAO), launching IRL experiences (@LinksDAO, @FWBtweets), building (@developer_dao), and investing (@seedclubhq).

4.5/ Granted there's still uncertainty around DAO liability, governance, & best practices. Many of these are people problems vs tech problems. On the tech side, we are still a ways off from a (benevolent!) Daemon or Skynet. Lots of research is being done on both sets of problems!

5.0/ tl;dr, crypto and web3 seems scary and new. But really, the tech is backed by A LOT of smart research from A TON of smart people spanning several decades!