Reading "Read Write Own": Constructing an Upgraded Network, Invention is the Mother of Demand
Reading "Read Write Own": Constructing an Upgraded Network, Invention is the Mother of Demand
#594
GM,
I'd like to announce a new update. During the Chinese New Year, I've changed the Blocktrend website to a new URL, blocktrend.today. In the future, browsers will automatically redirect, and the content has already been fully adapted. You don't need to adjust; everything will seamlessly transition.
Changing the website is a significant event. blocktrend.today is Blocktrend's "home" since 2017, and it was abandoned when we moved to Substack. Taking advantage of the New Year break, I've finally moved back. There won't be any more changes in the future. Even if Substack closes, the same URL will guide everyone to the new place. Now, let's get to the main topic.
I'm not sure if you've felt the atmosphere of a bull market recently. I haven't. It could be because I've been missing out on airdrop opportunities lately (OP, STRK), failing to catch the bull market vibe. However, objectively speaking, the market is currently lacking a theme to ignite the bull market, similar to the ICO craze in 2017 that led many people to buy and sell cryptocurrencies. In 2021, NFTs attracted new users who created wallets. But what's the theme this time? The answer is still unknown.
Not only you and I are exploring, but even Chris Dixon, the head of the world's largest crypto venture, a16z crypto, doesn't have an answer. Recently, I finished reading Chris Dixon's new book, "Read Write Own." I decided to introduce this book after reading just the first third and arranged to discuss it with a guest. The author starts with the history of internet development, calling blockchain the better "building material" for constructing the next era of the internet. This aligns with the book's subtitle, "Building the Next Era of the Internet."
Upgrade of the Internet
The internet needs an upgrade, and we find ourselves in a network where the old and new intertwine.
The earliest internet is like a familiar stranger to everyone — SMTP, HTTP — even though people send and receive emails daily and search for information using browsers, only a few can articulate how these protocols operate. To use internet protocols, one needs a set of software, now commonly referred to as apps. Gmail is the software enabling people to send and receive emails through SMTP, while Chrome is the software allowing people to browse web pages through HTTP.
The benefit of protocol networks is equality and decentralization. Every company can create its own software, as long as it complies with globally accepted internet protocols, facilitating seamless communication. Users can also switch between platforms effortlessly. For example, I used Brave browser for writing articles, but recently switched to Arc. Chris Dixon refers to this stage as the Protocol Network.
Protocols represent the internet in its most primitive state, but their competitiveness lags behind Corporate Networks. Taking online videos as an example, when Media RSS video transmission protocol was established, global developers could develop software based on this protocol for users to upload and watch videos. However, YouTube, representing the Corporate Network, developed faster, leaving Media RSS behind.
YouTube chose a centralized platform approach instead of going decentralized, acting as a custodian for users' files. This approach skipped the initial hassle of establishing standards, saving communication costs, and avoiding political maneuvering for power.
Though YouTube did not adhere to protocols like Media RSS, which would hinder content interoperability, it was more flexible than the step-by-step Protocol Network. For users, simplicity of operation, viewership, and a good experience mattered more than the underlying technology or decentralization.
When a platform becomes a small network, people have no reason to leave. Chris Dixon calls this phenomenon "Come for the tool, stay for the network." Closed systems progress faster than open ones, a trend evident in social platforms and instant messaging software. Users gradually shift from decentralized protocol networks towards centralized corporate networks.
However, Corporate Networks have their apparent issues. Platforms are not interoperable, and content is managed by each platform. Users cannot switch from LINE to WhatsApp, and even if they post popular content on Facebook or X, it is challenging to generate income.
Chris Dixon points out that Facebook takes a 100% cut from users. Initially, this might seem excessive, as most cuts have a percentage, like Apple's 30%, which many developers find excessive1. Yet, social media platforms almost universally follow the 100% cut standard, not sharing a penny with users. X requires payment for membership, meeting tracking thresholds to qualify for revenue-sharing with the platform.
The more stringent the conditions, the harder it is for people to realize they are being exploited. Awareness is crucial before understanding why the current internet needs an upgrade.
Blockchain Network
We live in a network where the old and new coexist. Sending and receiving emails, browsing web pages are handled by the oldest protocol network. Social interactions, video playback are dominated by corporate networks. Now, there's a group building a completely new blockchain network, and Chris Dixon considers this the third form of the internet. The differences between the three are illustrated in the diagram below.
Protocol networks are cumbersome, making it extremely challenging to coordinate the adoption of common standards. Corporate networks are more flexible, allowing everyone to develop services that meet market demands. Blockchain networks combine the strengths of both. In the example above, the commonly adopted standard is Ethereum, and various companies develop services based on this standard, balancing efficiency and interoperability. Therefore, Chris Dixon believes that blockchain is a better "building material" for constructing the internet.
So far, Chris Dixon has been narrating the significance of blockchain from a technological development perspective. Even tokens have new interpretations in terms of technology — ownership on the internet.
Contrasting with the past two types of networks makes the concept more palpable. Chris Dixon uses a rather abstract statement: "Money and power in the protocol network flow to the edge of the network, while money and power in the corporate network flow to the center of the network."
Browsers provide the best example. The fact that companies are willing to invest resources in developing new browsers like Brave and Arc demonstrates profitability. Resources do not flow towards the HTTP network protocol but towards the browser itself. Conversely, corporate networks, centered around platforms like Facebook, Twitter, or Reddit, have welcomed third-party developers2, but these efforts did not last long because they contradicted the "gravitational pull" of corporate networks.
Tokens on the blockchain network also represent money and power. However, they do not flow to the edge or the center but are dispersed within the community, theoretically creating a more balanced system. These tokens attract people to collectively build the blockchain network, but they also risk spiraling out of control, turning the blockchain into a large-scale casino. Chris Dixon dedicates an entire chapter to explain the tug-of-war between computer culture and casino culture that blockchain is currently facing:
There are two different cultures interested in blockchain. The first sees blockchain as a new way to build networks, which I call computer culture, as its essence lies in contemplating how blockchain becomes a new computing foundation. The second is interested in speculation and making money. These individuals view blockchain solely as a means to create tokens, buy, and sell for profit. I call it casino culture because its essence is gambling.
Vitalik Buterin, the founder of Ethereum, expressed concerns in a 2022 interview with Time magazine about cryptocurrencies being devoured by greed3. In the minds of many, blockchain = cryptocurrency = casino, and the media bears a significant responsibility. For example, there have been many recent projects announcing airdrops, and the sensational media immediately found high school airdrop hunters, extensively reporting on how they earned a significant fortune. Such stories are full of tension and easily attract attention.
However, these reports deepen people's misunderstandings of blockchain and cryptocurrencies, overlooking the underlying development context. Unfortunately, such media outlets often have the highest traffic on the internet. After leaving a wrong impression, they can publish an article to "correct perspectives," telling you that everyone has gone astray. Pot calling the kettle black.
I like the book "Read Write Own" because it approaches blockchain from a technological perspective, explaining its position and significance in the entire history of internet development. Additionally, the war between computer and casino cultures faithfully reflects the current state of blockchain development, which is not easy to convey. However, if I were to nitpick, my least agreement with Chris Dixon is in the last chapter regarding his predictions for the future.
Invention is the Mother of Demand
The entire book lays out a plethora of internet history and current developments, but what most people probably want to know is the concrete utility of blockchain. This part is the most challenging to write. The author of 2017 would likely write about ICOs, the author of 2021 would focus on DeFi and NFTs, and these predictions mostly turned out to be inaccurate in hindsight. Even in 2024, the author still cannot avoid this question.
While reading this chapter, one can sense that Chris Dixon's writing appears a bit strained, unlike the smooth flow of the earlier chapters. As the head of a16z crypto, should he cite projects he has invested in as examples, or should he try to avoid any appearance of bias for more persuasive writing? In the end, Chris Dixon reluctantly mentions one case, Helium Mobile, a decentralized telecommunications provider4 that Blocktrend has discussed before.
Helium is a company that a16z has invested in, but the book does not explicitly note the potential conflict of interest, leaving room for skepticism. I believe the correct answer to what specific utility blockchain has should be "I don't know." In fact, Chris Dixon wrote the following passage in the book:
When people get a new technology, there are usually two ways to use it. One is to do things that were already possible, just faster, cheaper, or with higher quality; the other is to do entirely new things that were previously impossible.
If the answer is the former, people usually think it's something already available, why reinvent the wheel? In 1995, when Bill Gates explained what the internet was on a talk show, he was criticized by the host for sounding like a radio function5. If the answer is the latter, and no one has seen anything yet, it's even harder to imagine. In the end, no matter how you answer, it's not right. The best answer should be, I don't know.
People often think that demand precedes invention. However, the book "Guns, Germs, and Steel" provides numerous examples, confirming that invention is indeed the mother of demand. Chris Dixon refers to such inventions as "Outside In," where innovations driven by the public on the blockchain fall into this category – innovations that are difficult to predict. But as the globally renowned head of cryptocurrency venture capital, managing assets worth billions of dollars, openly stating "I don't know" might be subjected to manipulation by sensational media.
Yet, who could accurately predict the future developments at the inception of the internet?
Blocktrend is an independent media platform sustained by reader subscription fees. If you find Blocktrend's articles valuable, we welcome you to share this piece. You can also join discussions on our member-created Discord or collect the Writing NFT to include this article in your Web3 records.
Furthermore, please consider recommending Blocktrend to your friends and family. If you successfully refer a friend who subscribes, you'll receive a complimentary one-month extension of your membership. You can find past issues in the article list. As readers often inquire about referral codes, I have compiled them on a dedicated page for your convenience. Feel free to make use of them.