Tech
A desperate plan to save the cryptocurrency industry
The book traces the following thesis: In the beginning the Internet was open, but limited. Private companies brought interactivity to the web and grew fat on the proceeds, but that made it difficult for users to abandon their networks and for competitors to enter the market. The concentration of power in the hands of Big Tech has led to a process of enshittificationwhereby companies de-prioritize user interests and reduce revenue shared with content creators in favor of squeezing profits.
Building Internet platforms on blockchain, which enforces pre-coded rules that can only be changed by popular vote, Dixon writes, could “reverse the trend toward Internet consolidation and return communities to their rightful place as stewards of the future.” It might seem abstract, she admits, but as the Internet is “increasingly where we live,” it matters who gets to set the rules. If everyone had a say, less personal data could be collected, fewer creators could be banned, content feeds could be filled with fewer ads, product searches could produce the best-matching results rather than the most profitable ones, and so on.
Venture capitalist Chris Dixon argues that blockchain technology could usher in a creative new era of the Internet.
Photography: Michael Halsband
For a venture capital firm like a16z, of course, the possibility that blockchain could loosen the grip of dominant tech firms also represents a fresh bite of the internet cherry. With the way open to new competitors, there’s greater prospect of turning the next Internet startup into something big. “Keeping the Internet open,” as Dixon describes it, amounts to “smart capitalism” that benefits everyone by incentivizing experimentation that creates useful new technologies.
In practice, however, attempts to provide a blockchain version of the Internet have run into their own challenges. Take decentralized autonomous organizations: the token-based voting structures proposed by Dixon will allow users to “share control” over internet platforms by giving them the right to veto any changes. Since the idea was first tested in 2016, DAOs have proven to be inefficient and overly bureaucratic they function as democracies only in theory. In practice, participants struggle to agree on what changes to propose, fail to vote, or blindly follow someone else’s lead, defeating the purpose of the decentralized model. Democracy can turn into plutocracy if a single party accumulates enough vote credits, which becomes easier when voter turnout is low. a16z same applies large quantities of vote tokens in a number of blockchain projects.
The poor usability of blockchain-based software also weakens another pillar of Dixon’s thesis. He writes that the technology could enable more equitable revenue sharing between social platforms and the content creators who populate them, giving creators the power to observe and reject unfavorable changes to the terms of the relationship. However, as did the likes of Moxie Marlinspike, creator of the secure messaging app Signal supportedthe clumsiness of blockchain might simply push people towards new intermediaries who can make things easier, replacing the old rent-seeking gatekeepers with new ones.
Dixon acknowledges these and other shortcomings in his book. But he insists that the emergence of an alternative, even a crude one, to govern internet platforms is a step forward. Blockchain is “messy and imperfect,” he says, but the alternative is worse. “We will have an isolated Internet. This is a depressing and dystopian outcome, and we are heading towards this goal rapidly,” he says. “I think people should care.”
Restarting the Internet
By choosing to make his case for blockchain in the dangers of the status quo, rather than solely on the merits of the technology, Dixon takes a different approach than a16z founder Marc Andreessen. In an essay published in October, “The Techno-Optimist Manifesto,” Andreessen said that “technology is the glory of human ambition” and that those who hinder its development are complicit in a “campaign of mass demoralization” based on outmoded socialist ideas. The manifesto was applauded by some technologists as a “Breath of fresh air”, but criticized elsewhere, including the New York Times, the Financial Times, and WIRED– as exaggerated, with blinders and even dangerous.
Dixon says he and Andreessen are largely aligned, believing that “many of our problems can be solved by building, rather than being afraid of technology.” In the book, he reserves some barbs for the “establishment” and its “short-sighted” rejection of blockchain, and also lashes out at the press, which “by cherry-picking the worst examples of emerging technology” engages in a “false form of criticism ”. However, where Andreessen is adamant, Dixon leaves room for doubt: the Internet has been “hijacked”, he says, and blockchain may be the best way to “build our way out”.