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1 Take ☝️
Programming note: I’ve decided to be more opinionated on all things crypto in 2022 so I’m changing this section to 1 Take (from 1 Concept). Some of my takes might be out there or downright controversial - but I think we’ll have more fun.
There’s been a ton of noise everywhere about web3 - in today’s edition, I wanna break down:
WTF is web3?
The debate around web3
The future of web3
WTF is web3?
It’s a good question. TBH, there isn’t a definitive answer that everyone agrees upon. In @cobie’s excellent piece appropriately titled “wtf is web3”, he shares two different Twitter polls where people can’t even agree if Bitcoin is part of web3.
My TLDR take on web3 is it’s really crypto with lipstick put on it. It’s a newly invented, more palatable brand than crypto - which tends to give off tech bro and speculative trader vibes. Now if Bloomberg asked me, my more polished take would look something more like this:
“Think of Web3 as an umbrella term (like social media) that enables new ways to form networks of people and capital using decentralized technologies such as blockchain. Examples include Bitcoin (or any cryptocurrency), NFTs and DAOs.
At the end of the day, web3 represents a new way to organize more than anything else. Communities of people can organize their capital and energy to share computing power (Bitcoin) or to try to buy the Constitution.
The debate around web3
The web3 debate atm is between two parties: let’s call them idealists and pragmatists (we’ll ignore the skeptics for now).
Idealists believe web3 represents a rightful return to the original intentions of the Internet. Decentralization means power gets restored back to the people — and not just away from centrally-owned, monolithic tech corporations, but also from governments, central banks, and any other middle-men that have traditionally been able to take a cut. They believe it’s inevitable that Web3 eats the world.
Pragmatists believe web3 has potential to be what idealists dream of, but in reality, it’s a wolf in sheep’s clothing. Jack Dorsey (ex-CEO of Twitter) — who started this debate with this tweet — asserts that if the same folks who have all the money & influence own all the web3 protocols and companies, is it really any different?
The future of web3
The truth is somewhere in the middle. As a reader of this newsletter, you know how strongly I believe crypto will re-design large swathes of society. Moreover, it will provide much more opportunity for people/users to participate in early company and community formation and receive ownership from day 1. This is a good thing.
However, I don’t believe it’s inevitable web3 will eat the world - rather, it’s a step in a better direction. As I write in this thread below, I ultimately view web3 experiences competing with (and not by default replacing) web2 ones, which will be tricky as web2 experiences optimize for user experience — whereas web3 hasn’t shown it can effectively do that yet.
To me, the fact that we’re even having this debate is progress in itself — I’m excited to contribute and participate in a better future.
Side note: I’d appreciate it if you could share with atleast 1 other person who might like this!
2 Things To Check Out 🤔
1. It’s ugly out there 📉. Crypto markets have been going mostly down and to the right over the past several weeks, and yesterday saw even more pain. It appears yesterday’s drawdown was mainly driven by the US Federal Reserve intimating they would raise rates and begin cutting their balance sheet as early as March 2022 (e.g. no more free money to buy assets). This typically affects risky assets as people like to move to safer assets during times of economic uncertainty.
My opinion on this has always been consistent: if you believe in crypto the asset class long-term, the macro economic environment in the short-term should mostly be ignored. It could even present opportunities to buy at discounts, although certainly not investment advice as we could see more pain moving forward.
@6529 offered excellent advice on how to make it investing in crypto for the normal person, great read in times like these!
2. We all need a laugh right now, this was great 😂
Until next week, always be learning
Karthik
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