The Weirdness Beyond Web3's Bullshit
Tales From The Dork Web #35
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For many people, Web3 is a 4 letter word. Some fervently believe it’s the future. Some the most destructive thing ever. I’ve never seen something so divisive and I live on Brexit Island, so I had to dive in. This issue covers Web3, DeFi, DAOs, and NFTs. I don’t believe Cryptocurrencies will change everything. I'm mostly interested in exploring tech and weird communities, not shilling dog tokens.
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It’s easy with Web3 to fall foul of What You See Is All There Is. On first impression, the whole space looks like bullshit because the bullshit screams in all directions. Filter it out and there are interesting ideas worth exploring.
This issue’s Future Garage comes from Blackbird. Press play and read on.
Cartesian Security and Techno-Manifest Destiny
In 2018 Professor James Mickens’ delivered an amazing Usenix Security Keynote. Around 36:47, Mickens raises the, “Assumptions of Technological Manifest Destiny” dominating technology. These define the following often held assumptions:
Technology is VALUE-NEUTRAL, and will therefore automatically lead to good outcomes for everyone.
Thus, new kinds of technology should be deployed as quickly as possible, even if we lack a general idea of how the technology works, or what the societal impact will be.
History is generally uninteresting, because the past has nothing to teach us.
The reality is that technology is not value-neutral. If we don’t understand something it’s pretty obvious it shouldn’t be connected to the Internet. Furthermore, the past is littered with fallout from failed technology experiments.
Mickens’ highlighted Microsoft Tay and Google Glass as examples of failed technology experiments. I’d like to highlight two other examples we should learn from.
Historical Tech Failures: 1 - E-Gold
E-Gold was an early dot com Internet payments company founded in 1996 by Gold & Silver Reserve Inc. Users created E-Gold accounts, deposited currency, and exchanged it for gold grams. These were held at the firm’s local bank. Users could send digital 1:1 backed e-gold grams to other users.
E-Gold cofounder Dr Douglas Jackson discusses the E-Gold story above. Jackson built a system enabling anyone, anywhere to pay across the Internet. Unfortunately, this enabled anyone, anywhere to pay across the Internet. Court cases ensued. He discusses his libertarian influences on the podcast. That Mickens-esque technological manifest destiny is clearly evident. Jackson suggests Bitcoin’s founders misinterpreted the E-Gold judgement. We’ll never know if that’s true, but it’s worth a listen anyway.
This wasn’t the only 90s payment system beyond Paypal. The takeaway here is that there is a demand for online payment, but that it’s a hard problem to solve well.
Historical Tech Failures: 2 - The Internet
In 1995, Bill Gates appeared on the David Letterman show. David Letterman mocked the Internet. It’s common to mock complex, abstract things we don’t understand. Hat tip to Jay Pinho’s I have my DAOts for this excellent video.
Some knew of the Internet’s potential in the 90s. Bandwagons took off as the Internet crossed into the mainstream. Exuberance raced ahead of capability, taking share valuations with it. Anyone could start a web company without prior experience. All you needed was an idea, and the money would show up. There were enough suckers ready to buy into it, that hype got you rich. Delivering results was secondary.
Sound familiar?
By early 2000 it became clear the infrastructure was at least a decade away. Markets crashed. After many people lost lots of money, Letterman’s arguments became accepted orthodoxy. The Internet was over.
Web 2.0, The Cloud and Bullshit
Popularized at a 2004 O’Reilly conference, Darcy DiNucci first coined the term Web 2.0 in 1999. The term resolves to two distinct meanings: one technical, one marketing. At a technical level, Web 2.0 depended on always-on Internet connections. This enabled new ways of hosting, processing and presenting information.
The marketing meaning was completely different. To the marketers, Web 2.0 would change everything. But it was a lie. Marketers didn’t understand Web 2.0's technologies. They understood the market for Internet companies. The marketers needed to make it safe to buy tech shares after the dot-com bust.
Web 2.0’s claims were as grandiose as those of Web3 today. It promised Javascript meadows and decentralized skies, and rivers made of RSS feeds, where children danced and laughed and played with gumdrop smiles. The hype never matched the reality. But for a moment, Web 2.0 experimented with a lot of interesting ideas.
Web3: A New Hype
Like Web 2.0 before it, Web3 has technologies, ideas and marketing behind it. The marketing behind Web3 is as grandiose as that for Web 2.0. Web3 will fix everything wrong with Web 2.0 without having to regulate everyone that ruined it lacked the tools to fix it previously.
The Big Short is one of my favourite films. In the film, celebrities explain different aspects of the sub-prime mortgage system. Web3 doesn’t need Margot Robbie to explain it. Here’s Paypal Alumni David Sacks and former Facebook exec Chamath Palihapitiya to explain their vision of Web3, in this case on “Ethereum killer” Solana.
The future of Web3 is VCs like Chamath and David dumping tokens on retail investors and laughing about it. It’s the sequel to Web 2.0. The marketing side of Web3 is owned by VCs like those in the video above. That’s what the non-marketing side of Web3 is up against. It’ll probably lose in the long run.
So far, so horrible. What the hell am I doing here? The biggest trick the VCs do is convince people they’re needed. Web3 is no exception. There are technologies, applications, and communities that don’t want/need VCs. That’s what interests me.
Lettermanning Web3
When Gates told Letterman about listening to a baseball game online, he laughed. He already had a radio. Online audio streaming quality was similar to an AM radio at only several thousand dollars more in cost. If anyone picked up the phone during the game the connection dropped. It’s easy to see why Letterman laughed.
Today you can ask a cheap phone to play almost any game from history in HD audio and video. Until technology becomes mainstream-accessible it’s stuck in dialup mode.
Getting a USD-backed stablecoin loan is easier but less accessible than getting a bank loan. It’s possible but expensive. It's AM radio quality finance. Improved DeFi Infrastructure could see Bank loans competing and blending with DeFi loans. The same applies with other DeFi building blocks. Nothing will be replaced. It’s just integrating whatever’s good enough at the time.
I DAOn’t Believe It!
Many Web3 projects follow a DAO (Decentralized Autonomous Organisation) governance model. Decentralization doesn’t have to happen at every layer, only where it’s needed. In this case it’s decision-making. A DAO could resemble a cooperative, a group, or a single-purpose function. As ConstitutionDAO’s Jonah Erlich describes:
The definition of a DAO is a group of people that come together around a shared community and a shared resource. The most fun description I’ve heard is that a DAO is a group chat with a bank account.
ConstitutionDAO’s objective was to buy a copy of the US Constitution for the benefit of its members. It started as a meme, raising US$47 million to buy a copy at a Sotheby’s auction. Ultimately they lost, but this Verge interview is a brilliant deep dive into the motivations behind this and the general madness of it all.
David Gerard’s excellent writeup covers the story from an opposing viewpoint. In response to a comment on the DAO’s LLC location choice, Gerard writes:
I think they just did everything as fast as possible and didn’t think about the details.
The worst thing about Web3 isn’t the scams. It’s the Dunning-Kruger magnet. As with the dot com boom, exuberance exceeds understanding. But we shouldn’t conflate exuberance with malice.
A DAO is an organizational building block. It’s not the building. Like the US Senate, a DAO has no competence requirement. It’s just a structure meant to respect the wishes of its backers. The Other Internet’s Squad Wealth essay highlights different ways DAOs could be integrated into “squads”.
Away from the big hustles there’s a level of weird, wacky creativity, the likes of which I haven’t seen since the 90s. The Poolsuite NFT is one of those things.
Skin In The Game
Poolside FM was a music playlist site with a series of Classic MacOS inspired themes. It was built by Marty Bell and friends 8 years ago. Fed C’s video above provides a tour of the old site before it changed to Poolsuite for legal reasons.
Bell built a community around Poolsuite’s vibes but it was always a spare time project. After a successful sunscreen launch, he and friends wanted to take Poolsuite full-time. To do this they needed to raise cash. They looked at an equity raise but Bell wanted to keep 100% ownership. Bell didn’t want a membership model that would gatekeep access. Instead, he wanted to build things around an open membership model to engage members. Hence the Executive Member NFT, and a fairly wild ride.
I’m 100% disinterested in the art-related Windows Shortcut market. I am interested in unusual technology applications and endless Internet summer vibes.
My wallet had just enough ETH to buy the NFT. I set up Metamask, went to the NFT site and bought it. It only took a few clicks and a couple of minutes. This was faster than anything I’d tried with Bitcoin. In fact, this was smoother than any cryptocurrency-related experience I’d ever had. This wasn’t dial-up. This was ISDN.
Once bought I was redirected to the Poolsuite site where I saw this:
I closed my browser, opened it up and went back to the site. Secret hacker tools suggest the site gets an address from Metamask. It checks the address owns the NFT. If it does, it creates a session token using the wallet address. No user registration. No passwords. If I transfer the NFT to another wallet I lose my access. Honestly, I’m impressed with what they’ve built.
NFTs themselves are basically JSON files that reference a URL, not the content at the URL. You can interact with the Poolsuite NFT contract on Etherscan. Go to “14. tokenURI” and enter a number from 1 to 2500. Paste and decode the Base64 string that comes back and you’ll find the resulting JSON string. That’s it, that’s the NFT. Here’s NFT 2500:
{"name": "Poolsuite - Executive Member 2500/2500",
"description": "Holding the Poolsuite Executive Member card suggests your esteemed presence within the crème de la crème of internet high society, and says a lot about the way you live your life on the web. This NFT can be connected to your account at Poolsuite.net to unlock perks, including early access to all Poolsuite projects.",
"image": "ipfs://bafybeicnpwshfy2yrjmsniih456wxvq5t45y4zvbxrmshorzhues7b6z7e?id=2500",
"animation_url": "ipfs://bafybeia5tevogbog7fyzsaobhc7oont6fgqry5nqdtqoq4dsyanqv4nhjy?id=2500",
"properties": {"number": 2500, "name": "Poolsuite - Executive Member"}}
The value of the image and animation_url fields can be set to anything when an NFT is minted. Once set they can’t be changed. The monkey picture market is a fraction of what’s possible. An NFT referencing a dynamic public API could provide much more than online baseball cards.
Which brings me to something else.
Poolsuite has an official broadcast only Telegram Group. Within hours of the sale an Executive Members community sprung up, and built a members’ only Telegram group. Nobody asked for permission. Then it all got weirder:
A single top-tier “Patron of the Pool” NFT was being sold at auction. Poolsuite fans who missed out on the Executive Members NFT wanted access. SwimDAO had two objectives: Acquire the Patron of the Pool token and share benefits with members. Discussions mostly took place on Telegram with Twitter as an outlet and soon the DAO was building and bidding via PartyBid.
Poolsuite expected only one person to own the NFT and to tailor perks to that person. If the DAO won, how would that impact existing Executive Members? SwimDAO decided that future NFT drops would be collectively owned, but individual perks (such as the Executive Member login) would not be available to members.
Bidding continued and soon descended into a war between two parties; SwimDAO and a mysterious “Daniel” wallet. Around 35 ETH, people started to suggest letting “Daniel” win.
“Daniel” put in the final 45.5 ETH bid after selling off tokens elsewhere. The SwimDAO group joked that he’d run out of money after winning. Some suggested the real Pool Patrons were the friends they made in the chat. With the bid over, SwimDAO prepared drops of 5,000 $SWIM tokens to Partybid participants. One question remained. Who was “Daniel?”. Suspects included a "Daniel" Twitter account, Vajresh Balaji, and of course Elon Musk. At first, Balaji denied he was the Patron, but then the truth came out.
Everything died down. Poolsuite recruited developers to build new things for their community. On the 5th of January they dropped their Poolsuite Wallet Service. This connects the NFT to a mobile wallet on iOS or Android. Poolsuite’s NFT can now interact in the physical world. That’s way more interesting than a market for monkeys.
What The Hell Did I Just Read?
This is the emergent weirdness of the Internet. If Web3 is dialup, this is Gen Z’s Geocities. There is a lot wrong with this space, but you only get a say in how it’s built if you take part. VC-backed Web3 is bullshit, but nothing not seen in Web 2.0. Ignore the noise and you’ll find a world where VC funding is irrelevant.
Just because something can be done one way, doesn’t mean it’s not worth trying in other ways. There was a time horses and carts were better than cars. There was a time when AM radios were better than streaming audio. This is the time that spontaneously formed groups can raise funding and build new things without VCs or permission, slightly worse than doing it the old-fashioned way.
It’s not my ideal vision of the future but I’ll take what I can get. And those Web 2.0 VC vampires can prize RSS from my cold, dead hands.
Things You May Have Missed
IF50 Writes about the joy of universal paperclips. Magnus Kaarlonen, wrote about the much-loved Space Debris mod. I use quite a few of this seriously cool collection of alternative web service front-ends. Noah has a dose of Techno Optimism for 2022.
Ethereum’s merge scheduled for later this year moves Ethereum from Proof-of-Work to Proof-of-Stake. Paul Butler compares crypto gaming’s Play-to-Earn to David Graeber’s Bullshit Jobs. The New Stack shrugs at a VC’s interpretation of Web3 architecture. GitCoin is an interesting Web3 project funding platform.
0Data is a non-blockchain approach to building decentralized applications. Matt from Write.as has a more fediverse-oriented view of what might constitute a ‘real’ Web3.
I thought I’d leave you with Kevin Holliday’s Expensive Taste. It’s seems appropriate to end on a song about what happens when mixing money and lust. The crypto/web3 space seems full of that, and like the inspiration for Holliday’s song, it’s off the wall. I thought I’d end this issue with this quote from George Bernard Shaw:
Those who cannot change their minds cannot change anything.
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