why consumer crypto completely fucked up
(a mini-essay):
in retrospect, consumer crypto made a disasterous mistake in 2021: trying to oppose a 30-year trend towards democratizing free digital goods. after all, this *was* what the internet was always good for—making goods free and abundant.
but in 2021, we decided crypto should make it the opposite.
the clearest example of this, i think, is music NFTs. the past 30 years of the music industry moved definitively towards making music cheaper and events more expensive than ever. the digital goods (music) were democratized to the point of being nearly-free; the irl experiences (events) became the primary point of sale for artists.
music NFTs, however, decided they could buck a 30 year trend—often with the very good intention of getting artists paid and democratizing ownership of catalogues themselves. but it was an uphill battle for a simple reason:
there's no reason for people to buy music NFTs unless everyone else is buying music NFTs, at which point you find yourself in tulip mania. and this is especially true in the absence of enforceable royalties. if you want to hear music, you can do so for next-to-nothing online—including with music NFTs. and even if you want to hear a favorite experimental musician who depends on superfans to monetize, you can pay $20 on bandcamp.
the music nft has no intrinsic worth except as a memecoin for an artist's career, and memecoins are far more accessible to fans to buy. memecoins, in some ways, represent more democratized NFTs that actually can enable anyone to speculate on a creator's career—in theory, anyway.
regardless, this is a disaster for artists who have been continually undercut by internet democratization and struggled to find new ways to monetize—which is why i personally have hoped for years to see NFTs actually work. and why, frankly, i think was wrong.
but there are still so many ways that crypto *can* support artists and simply has not done so.
in music alone, the internet should have taught us that the financial opportunity is in events, not collectibles. @KYDLabs, for example, uses blockchain to disintermediate giant ticketing companies with their production fees to enable fans to get memberships to see artists. the artists and venues become their own ticketmaster, and get far better insight on their community by leveraging onchain data. this is a no-brainer, entirely in keeping *with* the trends of the internet to undercut middlemen by making experiences more accessible directly to users.
similarly, @MintStarsReal is seeing explosive growth right now by building an onchain only fans that abstract away crypto completely from the end user—letting the unbanked get paid for providing experiences, not digital goods, to users.
in retrospect, this begins to feel obvious because it's entirely in line with decades of internet history: people pay for online experiences, not online things, and the cost of media generally trends toward $0 as a near loss leader for theme parks, concerts, and sports events, as irl experiences become even more valuable.
nevertheless, i think we can forgive ourselves for fucking up. the common thesis for why we thought digital scarcity would work is simply that it's inherent to crypto—that famous hard cap of 21M $BTC—though there's no reason it needs to be. stablecoins alone, after all, are designed to inflate with the economy.
so the real reason we fucked up, i think, is simply because, well, the tech was only usable for whales. in an era of $100 gas fees, slow throughput, cumbersome UX, and crypto-natives pouring their recent fortunes back into the ecosystem, it made perfect sense that we could only find product market fit with luxury goods for crypto whales to celebrate their newfound status in the digital upper classes.
but building for whales is not, it turns out, how the internet works. we should have known this from web2. what the internet is actually good for is enabling the masses to participate in culture—both in producing and financing it. the tech just wasn't ready for that.
until now.
(a mini-essay):
in retrospect, consumer crypto made a disasterous mistake in 2021: trying to oppose a 30-year trend towards democratizing free digital goods. after all, this *was* what the internet was always good for—making goods free and abundant.
but in 2021, we decided crypto should make it the opposite.
the clearest example of this, i think, is music NFTs. the past 30 years of the music industry moved definitively towards making music cheaper and events more expensive than ever. the digital goods (music) were democratized to the point of being nearly-free; the irl experiences (events) became the primary point of sale for artists.
music NFTs, however, decided they could buck a 30 year trend—often with the very good intention of getting artists paid and democratizing ownership of catalogues themselves. but it was an uphill battle for a simple reason:
there's no reason for people to buy music NFTs unless everyone else is buying music NFTs, at which point you find yourself in tulip mania. and this is especially true in the absence of enforceable royalties. if you want to hear music, you can do so for next-to-nothing online—including with music NFTs. and even if you want to hear a favorite experimental musician who depends on superfans to monetize, you can pay $20 on bandcamp.
the music nft has no intrinsic worth except as a memecoin for an artist's career, and memecoins are far more accessible to fans to buy. memecoins, in some ways, represent more democratized NFTs that actually can enable anyone to speculate on a creator's career—in theory, anyway.
regardless, this is a disaster for artists who have been continually undercut by internet democratization and struggled to find new ways to monetize—which is why i personally have hoped for years to see NFTs actually work. and why, frankly, i think was wrong.
but there are still so many ways that crypto *can* support artists and simply has not done so.
in music alone, the internet should have taught us that the financial opportunity is in events, not collectibles. @KYDLabs, for example, uses blockchain to disintermediate giant ticketing companies with their production fees to enable fans to get memberships to see artists. the artists and venues become their own ticketmaster, and get far better insight on their community by leveraging onchain data. this is a no-brainer, entirely in keeping *with* the trends of the internet to undercut middlemen by making experiences more accessible directly to users.
similarly, @MintStarsReal is seeing explosive growth right now by building an onchain only fans that abstract away crypto completely from the end user—letting the unbanked get paid for providing experiences, not digital goods, to users.
in retrospect, this begins to feel obvious because it's entirely in line with decades of internet history: people pay for online experiences, not online things, and the cost of media generally trends toward $0 as a near loss leader for theme parks, concerts, and sports events, as irl experiences become even more valuable.
nevertheless, i think we can forgive ourselves for fucking up. the common thesis for why we thought digital scarcity would work is simply that it's inherent to crypto—that famous hard cap of 21M $BTC—though there's no reason it needs to be. stablecoins alone, after all, are designed to inflate with the economy.
so the real reason we fucked up, i think, is simply because, well, the tech was only usable for whales. in an era of $100 gas fees, slow throughput, cumbersome UX, and crypto-natives pouring their recent fortunes back into the ecosystem, it made perfect sense that we could only find product market fit with luxury goods for crypto whales to celebrate their newfound status in the digital upper classes.
but building for whales is not, it turns out, how the internet works. we should have known this from web2. what the internet is actually good for is enabling the masses to participate in culture—both in producing and financing it. the tech just wasn't ready for that.
until now.
from "against scarcity," a piece i published in june 2021, arguing that the actual scarcity to replicate was time
that didn't really happen... until @timedotfun
lots i got wrong, but stick by this all today
that didn't really happen... until @timedotfun
lots i got wrong, but stick by this all today
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