When you write with so many buzzwords rather then layperson explanations you hinder rather then help your case. Your writing on Braintrust is a great example. Again, you hawk out "user owned" as if everyone should nod their heads when you say it.
I still can't figure out the crypto angle.
By using and referring talent to the platform, users can earn tokens. It’s never clear, however, what these tokens gate or purchase. Users on the platform may price services in terms of the token, but they’d only do so if the token has purchasing power in real terms. You write that Braintrust may offer “hints at future benefits for token holders; these might be things like educational content, free software, or coaching.” If so, the token’s price reflects the value of these services. I find it excruciatingly difficult to believe these services are worth much, so, in turn, the token isn't worth much.
You're resting the web3 use case on a tradeable loyalty program?
Yes 1000% Tradable loyalty programs and token gated commerce powered by NFTs will bring masses into crypto. Then new financial ecosystems can take broader shape as more people adopt
1000% serious...every brand is looking into NFTs, and smart ones see them as supercharged Starbucks points & Costco Membership cards on steroids (Costco, the "OG" of token gated commerce!!). And thats a super interesting path for NFTs because it wedges them right into commerce, and how society effectively functions, and NFTs could perhaps unlock new/better? ways of functioning, coming together and collaborating. Smart brands will help drive those changes via tokens. Josh Rosenthal talks about how now is the beginning of a "Crypto Renaissance" and i think that's right. And the new "media" (printed word, radio, film, internet, social...NFTs) seem to always have an outsized impact on the future we build for ourselves
Thats what I got after reading all these + buzzwords as well. This whole synthesize into two words, loyalty program. I dont really see how this is creatively innovative. Its like fixing something thats not broken.
Good overview of use-cases, and looking forward to next chapter...
One big deficiency of Web3 though, as it stands right now, is that by definition, blockchain and all the associated Web3 infrastructure (including IPFS etc) are all based on publicly publishing the information to the entire world for transparency. In real-life, while this provides some benefits with data authenticity, etc, only some very limited use-cases can be realized on top of public information alone. Data privacy/confidentiality are necessary elements for realizing most of the use-cases with real-world utility value - with or without data authenticity.
In Web2, this data confidentiality for private information is always enforced through centralized services, and there is no equivalent model available in decentralized web3. No wonder that even Web3 services prefer centralized model for any kind of confidential or sensitive information. And in spite of degenerating to a hybrid web2/web3 model, they still suck at it, and are far worse than their web2 counterparts (including most of the wallets themselves - the supposed gateways to web3 world!).
If web3 wants to realize its true potential (which is indeed enormous!), and really get ahead of web2, this is the best time to address some of these foundational elements by adopting a decentralized model for data privacy/confidentiality (which is feasible, and even better for web2 itself). Web3 really needs to take the lead on data confidentiality in decentralized way, as its a necessity there due to its decentralization promise, rather than just a nice-to-have for centralized web2.
>all the associated Web3 infrastructure (including IPFS etc) are all based on publicly publishing the information to the entire world for transparency.
This statement is not quite correct. IPFS storage can store files in chunks on the network by encrypting them with private key that only your app has and no one else can decrypt or see the content of these files. Take a look on projects like Ceramic and Subspace. The only public info is that files belong to your app and how much space you own.
Thanks for the pointers Alex. I am aware of some of these projects, and will look at others. But AFAIK the burden of key-management in these cases is solely on the user or the dApp (LMK of any examples where this is not true). This is a huge burden IMHO if you want to enforce an arbitrary policy with multiple users having shared access to the underlying data, especially if you want to avoid relying on a centralized service.
In web2, there are several authorization solutions available where the user and/or the app can just specify the policy, without having to worry about how nitty-gritty of that policy is enforced (even though centralized nature of web2 makes it somewhat straightforward). E.g. the owner of a file on web2 cloud storage can specify which all users and/or groups should have access to it. When it is left completely to the dApp to translate this policy to underlying key-management, and that too in a decentralized manner, either the user experience gets too complicated, or it ends up being plainly insecure, or usually both. Wallets themselves are a good example, even though thats a much simpler use-case with no arbitrary sharing involved. No wonder that a lot of providers and users rely on centralized custodial wallets instead (which have their own security issues besides being against the ethos of web3). Am I making sense, or missing something?
Yes, I see your point, thanks for detailed explanation and I think your arguments are valid indeed. This was exactly my topic of conversation with Ceramic developers couple weeks ago and they assured me that there would be possibility to create granular level access to data, either based on things like view-only/edit etc or something even more sophisticated. I haven't got too deep into technical details, feel free to ask them.
> Braintrust won’t ultimately build up network effects and then charge more extractive fees because for that to happen, the users would have to vote to charge themselves higher fees.
Let’s consider this scenario
A fantastic and civic minded early user works hard to add value to Braintrust and gains lot of tokens for that effort over several years. Use of protocol has skyrocketed and lot of users have started using it, and most of them only accrue a much smaller portion of tokens by virtue of not adding as much value to the protocol. Now the initial user wants reduce his involvement for variety of reasons. What does he do with his tokens? What stops him from selling to a corporation that is willing to extract more value from the protocol by charging higher fees? Since they can extract more value they can pay higher value for the tokens so that our fair minded initial user will sell it to them.
Why will these protocols not degenerate to being owned by big extractive entities?
Such a long and convoluted article when the titles made me hope for a clear list. Yes uniswap, aave, compound are great but I'd put them in Defi not web3 if we're trying to classify them with buzzwords.
great information ... itsi like the definition of #TYMED I was looking into a few other sources and found this one and was happy to be able to see this good job on the teaching of ones thoughts when #TYMED =teaching young minds every day ...
The key is for more "real-life" things to get tokenized -- event tickets, deeds, titles, company shared, etc.... The ability to use, store, transfer, and trade those things will be awesome.
Fan Controlled Football is a nat example. You can join a team and vote to manage the draft and to call plays. Joining certain teams requires you to own an NFT. It is just the decentralized way that they are tracking who supports that team.
The system needs to mature to be easier to use and have less fraud, for sure, and it is not clear which (if any) of the current players/systems/coins will be long-term winners but the outlook for value creation is bright.
Many firms whose main business is value-extraction from centralizing trade (ticket merchants, real estate brokers, used car shops, etc) will likely have their margins squeezed over time.
I consider myself a skeptic who really wants to be conviced of real web3 technologies use cases. For me, a real web3 use case is something that can't be done with current web2 tech or can be done much in a much better/cheaper/easier way using web3 tech, and I don't get how any of the cases presented check this box.
Furthermore, some things that you call use cases are more of a "solution" for a use case than the case itself (exchanges for example). Some of them also just exist because of web3, so they don't seen valid to prove that web3 can have real use cases besides the ones created for the tech.
Wonderful and nuanced article and looking forward to part 2. I wish you write and stress more on the tech primitives in blockchain / crypto space and provide an analogy to existing ones. While providing analogies at application use case levels is good, there is a good chance it may not turn out the same as predicted.
I believe in the power of tech primitives. Once they are discovered or implemented, they have immense potential to create novel applications and value.
Even if you look at some recent tech primitives in mobility space such GPS, accelerometer, camera.. it has opened door to novel applications like ride sharing, delivery, social media, fashion..
There are so many evolving tech primitives in blockchain / crypto space such as native currency, decentralization, NFT, trustless transactions.. it is quite impossible to predict the future direction other than knowing it will transform entire landscape.
I think Alchemix falls into this category of uniquely crypto/DeFi use cases:
Loans that never liquidate, but change the time required to payoff the loan based on the value of the collateral. Oh and the loans repay themselves using DeFi yield farming. So after you post collateral and take out your loan, there's nothing else for you to do unless you need to take back the collateral before the loan is paid off.
When you write with so many buzzwords rather then layperson explanations you hinder rather then help your case. Your writing on Braintrust is a great example. Again, you hawk out "user owned" as if everyone should nod their heads when you say it.
I still can't figure out the crypto angle.
By using and referring talent to the platform, users can earn tokens. It’s never clear, however, what these tokens gate or purchase. Users on the platform may price services in terms of the token, but they’d only do so if the token has purchasing power in real terms. You write that Braintrust may offer “hints at future benefits for token holders; these might be things like educational content, free software, or coaching.” If so, the token’s price reflects the value of these services. I find it excruciatingly difficult to believe these services are worth much, so, in turn, the token isn't worth much.
You're resting the web3 use case on a tradeable loyalty program?
Yes 1000% Tradable loyalty programs and token gated commerce powered by NFTs will bring masses into crypto. Then new financial ecosystems can take broader shape as more people adopt
I am not sure if you are being sarcastic or serious?
1000% serious...every brand is looking into NFTs, and smart ones see them as supercharged Starbucks points & Costco Membership cards on steroids (Costco, the "OG" of token gated commerce!!). And thats a super interesting path for NFTs because it wedges them right into commerce, and how society effectively functions, and NFTs could perhaps unlock new/better? ways of functioning, coming together and collaborating. Smart brands will help drive those changes via tokens. Josh Rosenthal talks about how now is the beginning of a "Crypto Renaissance" and i think that's right. And the new "media" (printed word, radio, film, internet, social...NFTs) seem to always have an outsized impact on the future we build for ourselves
Good luck to the LPs of the $7b a16z web3 fund😅
Thats what I got after reading all these + buzzwords as well. This whole synthesize into two words, loyalty program. I dont really see how this is creatively innovative. Its like fixing something thats not broken.
Good overview of use-cases, and looking forward to next chapter...
One big deficiency of Web3 though, as it stands right now, is that by definition, blockchain and all the associated Web3 infrastructure (including IPFS etc) are all based on publicly publishing the information to the entire world for transparency. In real-life, while this provides some benefits with data authenticity, etc, only some very limited use-cases can be realized on top of public information alone. Data privacy/confidentiality are necessary elements for realizing most of the use-cases with real-world utility value - with or without data authenticity.
In Web2, this data confidentiality for private information is always enforced through centralized services, and there is no equivalent model available in decentralized web3. No wonder that even Web3 services prefer centralized model for any kind of confidential or sensitive information. And in spite of degenerating to a hybrid web2/web3 model, they still suck at it, and are far worse than their web2 counterparts (including most of the wallets themselves - the supposed gateways to web3 world!).
If web3 wants to realize its true potential (which is indeed enormous!), and really get ahead of web2, this is the best time to address some of these foundational elements by adopting a decentralized model for data privacy/confidentiality (which is feasible, and even better for web2 itself). Web3 really needs to take the lead on data confidentiality in decentralized way, as its a necessity there due to its decentralization promise, rather than just a nice-to-have for centralized web2.
>all the associated Web3 infrastructure (including IPFS etc) are all based on publicly publishing the information to the entire world for transparency.
This statement is not quite correct. IPFS storage can store files in chunks on the network by encrypting them with private key that only your app has and no one else can decrypt or see the content of these files. Take a look on projects like Ceramic and Subspace. The only public info is that files belong to your app and how much space you own.
Thanks for the pointers Alex. I am aware of some of these projects, and will look at others. But AFAIK the burden of key-management in these cases is solely on the user or the dApp (LMK of any examples where this is not true). This is a huge burden IMHO if you want to enforce an arbitrary policy with multiple users having shared access to the underlying data, especially if you want to avoid relying on a centralized service.
In web2, there are several authorization solutions available where the user and/or the app can just specify the policy, without having to worry about how nitty-gritty of that policy is enforced (even though centralized nature of web2 makes it somewhat straightforward). E.g. the owner of a file on web2 cloud storage can specify which all users and/or groups should have access to it. When it is left completely to the dApp to translate this policy to underlying key-management, and that too in a decentralized manner, either the user experience gets too complicated, or it ends up being plainly insecure, or usually both. Wallets themselves are a good example, even though thats a much simpler use-case with no arbitrary sharing involved. No wonder that a lot of providers and users rely on centralized custodial wallets instead (which have their own security issues besides being against the ethos of web3). Am I making sense, or missing something?
Yes, I see your point, thanks for detailed explanation and I think your arguments are valid indeed. This was exactly my topic of conversation with Ceramic developers couple weeks ago and they assured me that there would be possibility to create granular level access to data, either based on things like view-only/edit etc or something even more sophisticated. I haven't got too deep into technical details, feel free to ask them.
> Braintrust won’t ultimately build up network effects and then charge more extractive fees because for that to happen, the users would have to vote to charge themselves higher fees.
Let’s consider this scenario
A fantastic and civic minded early user works hard to add value to Braintrust and gains lot of tokens for that effort over several years. Use of protocol has skyrocketed and lot of users have started using it, and most of them only accrue a much smaller portion of tokens by virtue of not adding as much value to the protocol. Now the initial user wants reduce his involvement for variety of reasons. What does he do with his tokens? What stops him from selling to a corporation that is willing to extract more value from the protocol by charging higher fees? Since they can extract more value they can pay higher value for the tokens so that our fair minded initial user will sell it to them.
Why will these protocols not degenerate to being owned by big extractive entities?
How many protocols mentioned above have received. a16z funding ?
good question
Such a long and convoluted article when the titles made me hope for a clear list. Yes uniswap, aave, compound are great but I'd put them in Defi not web3 if we're trying to classify them with buzzwords.
great information ... itsi like the definition of #TYMED I was looking into a few other sources and found this one and was happy to be able to see this good job on the teaching of ones thoughts when #TYMED =teaching young minds every day ...
The key is for more "real-life" things to get tokenized -- event tickets, deeds, titles, company shared, etc.... The ability to use, store, transfer, and trade those things will be awesome.
Fan Controlled Football is a nat example. You can join a team and vote to manage the draft and to call plays. Joining certain teams requires you to own an NFT. It is just the decentralized way that they are tracking who supports that team.
The system needs to mature to be easier to use and have less fraud, for sure, and it is not clear which (if any) of the current players/systems/coins will be long-term winners but the outlook for value creation is bright.
Many firms whose main business is value-extraction from centralizing trade (ticket merchants, real estate brokers, used car shops, etc) will likely have their margins squeezed over time.
I consider myself a skeptic who really wants to be conviced of real web3 technologies use cases. For me, a real web3 use case is something that can't be done with current web2 tech or can be done much in a much better/cheaper/easier way using web3 tech, and I don't get how any of the cases presented check this box.
Furthermore, some things that you call use cases are more of a "solution" for a use case than the case itself (exchanges for example). Some of them also just exist because of web3, so they don't seen valid to prove that web3 can have real use cases besides the ones created for the tech.
Wonderful and nuanced article and looking forward to part 2. I wish you write and stress more on the tech primitives in blockchain / crypto space and provide an analogy to existing ones. While providing analogies at application use case levels is good, there is a good chance it may not turn out the same as predicted.
I believe in the power of tech primitives. Once they are discovered or implemented, they have immense potential to create novel applications and value.
Even if you look at some recent tech primitives in mobility space such GPS, accelerometer, camera.. it has opened door to novel applications like ride sharing, delivery, social media, fashion..
There are so many evolving tech primitives in blockchain / crypto space such as native currency, decentralization, NFT, trustless transactions.. it is quite impossible to predict the future direction other than knowing it will transform entire landscape.
I think Alchemix falls into this category of uniquely crypto/DeFi use cases:
Loans that never liquidate, but change the time required to payoff the loan based on the value of the collateral. Oh and the loans repay themselves using DeFi yield farming. So after you post collateral and take out your loan, there's nothing else for you to do unless you need to take back the collateral before the loan is paid off.
Just the kind of well balanced take on web3 use cases that we needed! Hadn't heard of Braintrust before, but going to check it out.
Looking forward to Monday's edition!