Purchasing the future with a $1,000,000 jpeg
9 min read

Purchasing the future with a $1,000,000 jpeg

A reality check.
Purchasing the future with a $1,000,000 jpeg

I've described with rare enthusiasm recently what is, to my untrained and somewhat dim mind, happening in that big wide world of web 3.0. Today, I'm going to try and temper that enthusiasm a little.

This is not because I've changed my mind about what Web 3.0 could offer, it is rather a response to the hype I'm seeing. When waves of popularity start appearing, it's too easy to be swept along and forget why you're there in the first place.

So today, I want to take a mental step back, mostly for my own good.

[As I was wrapping this article up, an email titled 'Don't Pander to the Zeitgeist' landed in my inbox. Uncanny timing.]

But before I bore you, let me start with talking about a British rock band called Muse.

Muse released their first album in 1999, and I liked it. Then I saw them live, and I liked them even more. Then a second album came, and I liked them even more.

I told everyone how great they were, implored them to listen and see them live. And then disaster struck: they got really famous.

They went from a band performing in fairly small sweaty venues to becoming stadium fillers creating stadium songs. I slowly lost interest.

Everyone was talking about them, telling me how good they were - even my mum. Their music connected with me less, their sound becoming more akin to a band haunted by a cyberpunk Freddie Mercury I thought. Not bad, just not quite my thing.

This seems to be the way life goes with all kinds of art and tech. This MacBook I'm writing on now used to signal that I 'Think Different'. Today, thinking different is using a PC with Windows.

Fame, of course, wasn't a disaster for Muse. On the most part it was good for them I suppose, and for their legions of fans. This morning I went back to listen to them and in fact they still release a lot of good stuff.

It made me think that it's the crowds, the maddening crowds, which affect your view of reality.

I went from bullish to bearish in large part because of the crowds. It's wasn't just about the music I could hear, which you'd think is the main thing you're analysing when deciding whether you like a band or not. It was the noise around the music. Got to be careful of the zeitgeist...

Web 3.0, I sense, offers a similar risk.

It's beginning to catch fire and there's a huge hype machine building up around it. Parts of that hype machine are great, such as the enthusiastic believers who are happy to share and help others learn.

But there's other parts that are full of aggressive, alpha shrillers chasing quick cash gains by selling false dreams.

Web 3.0 is on its way to become a stadium rock outfit, but there's a million people talking at each other in Wembley Stadium right now and it's difficult to hear what's on stage.

Let's see if we can turn the noise down for a second and listen...

Islands of computers

"How does one pronounce GIF?"

A few years ago, many people began to get excited about blockchain. Of the 100 people excited about blockchain, 20 perhaps understood what it actually was. Of that group, only one could actually explain it.

I am not that one, but what I did notice is that when people tried to explain blockchain, they missed out the entire context. They were describing what a car engine is without telling you what a car actually does.

So, let's start with the evolution of the internet, and the slow process that it was to build up a web-based network which now exists in all corners of life.

Twitter in the 70s. 

The internet is computers connecting together, and this map above was how it started in the 60s.

These were islands of computers, slowly increasing in number. The users, mainly in universities, then started to understand that by combining computers you could generate more computing power to do more fancy things like, um, science.

Email came about in 1972. Queen Elizabeth sent an email in 1976. Then, in 1978, a common language was created so that computers could talk to each other, and later in the 80s HTTP came about to make it possible to create webpages (thus the https:// thing at the start of URLs).

The internet begins.

All our stuff in one basket

Attorney General of the United States John W. Griggs in 1899: “With reference to these large combinations of capital which are now forming, my own judgment is that the danger is not so much to the community at large as it is to the people who are induced to put their money into the purchase of the stock.”

So we moved from just a few computers sitting on their own, to different computers talking to other computers in their own languages on different networks, to many computers all talking to each other in the same language. This created a large digital network, which grew into a massive one.

By the 90s, commercialisation of the internet began with tiny unknown start-ups such as Amazon.com.

Today, mega-companies like said Amazon and Facebook and Google gain huge wealth by how they manage, use, and store information in their ecosystems. All our details and much of the information on the internet are held together in servers somewhere under the ownership of companies like these.

If you pay with something on your Visa card for instance, that information will live on a server somewhere along with billions of other transactions. All the data goes to one place and we trust that nothing untoward will happen with the data such as using it to make us vote for questionable leaders.

The biggest companies in the world hold unimaginable wealth and power because of this system of control. Blockchain though could flip all of this on its head.

So, what's blockchain then?

Any excuse to include Chris Walken in a post is eagerly taken. 

The 'block' part of blockchain is basically a piece of data, such as 'Simon is a person'. The chain is the digital line upon which the data travels.

Now, instead of that data living in one place, such as a server in Iceland, it lives on many computers. The information 'Simon is a person' is delivered not to one place, but multiple computers. Whenever someone asks whether I am indeed a human or not, all these computers will be asked to confirm.

Even if one computer is hacked and says 'Simon is not a person', the others will not only confirm I am a person (because I am), they will also say that the hacked computer is not to be trusted. This chain of computers ensures information is always secure and verifiable, even if one part of the chain is attacked.

No longer do you have to 'trust' that a company will guarantee the information is safe in one place or that they won't do something dodgy with it. Instead, you create an environment that doesn't need to rely on trust at all.

This doesn't sound like much at first glance perhaps, and I admit it's taken me about three years to really understand the implications of this. But it is very important - the key words here are 'trust' and 'decentralisation'.

Planet of the apes

Trust in big organisations is at an all time low. I should know, I do communications for the UN.

And it's not just the UN, it's politics, big business, and media. At the same time, we are seeing wealth gaps widen - more money is being generated but it's getting into the hands of fewer and fewer people.

Blockchain and things like NFTs are starting to paint a picture of how trust could be rebuilt using blockchain, and create ecosystems in weird and wonderful ways. Let's look at some bored apes.

The Bored Ape Yacht Club is a collection of jpegs of different cartoon apes, started in April of this year. People bought these jpegs, as NFTs, and it is now a billion-dollar ecosystem (yes, billion). Sotheby's recently sold one jpeg from the collection for $24.4 million.

These NFTs became more than just a token - it's a key to a unique club, a key that becomes more converted as time goes on as more people desire to own one.

The club produced merchandise, live events headlined by the likes of The Strokes and Chris Rock, and even a virtual band. This ecosystem now has a GDP twice that of Bhutan.

Everyone who invested in the club benefits because more people want in, and with more investment comes more money and more cultural power to do more stuff. Jimmy Fallon purchased an ape last week for over $200,000.

It's crazy and ridiculous, but so is buying a Ferrari for $200,000 when a $5,000 car can get you from A to B. It's really not so different, it's all signalling. Except with the Bored Ape NFT it's a bit different, because it gets you free tickets to The Strokes.

See, writing the above I realise I'm making noise there.

It's easy to grab your attention if I talk about large sums of money and celebrities. But the real story is how blockchain changes the economics of the internet, and indeed our lives. Moving control and value from the big business  to users and small organisations.

Blockchain can help improve and in some cases flip industries on their heads. From health systems, civic participation, retail, banking, to music... It's a long long list and explaining how for any one of these is an essay in itself.

Right now there's a potential choice between living in a house built by someone else which is just like all the other houses no matter who or where you are, or having houses built to your own specifications.

That's why I believe people will move away from centralised to decentralised systems. The only confusion right now is which builders to call in.

Who's building?

Documentary footage of a builder in the metaverse. 

It's important to keep in mind that the blockchain party is still in its nascent stages. It's probably at the Queen Elizabeth sending an email stage. New things aren't born without tension and confusion, and it's no different here.

For a start, it's bloody expensive right now. Ethereum and Bitcoin are kind of old school and not able to deal with so many people using it. That's why fees to simply use a cryptocurrency like Ethereum can be astronomical.

The other issue is that there's a lot of coders trying to get in on this party and make their language the default one.

Bitcoin is popular as a store of value, or 'digital gold', because it's secure to use. But you can't do much more with it. Ethereum is the next most popular system because you can actually build stuff with it, which is why most of the NFT market is built with it. But it's not perfect, it's slow and expensive to use and a bit rigid. That's why the geeks are pushing the next big thing (see Solana and Polkadot for instance).

As I mentioned at the start, the current gold rush is creating a lot of noise, a lot of it being downright annoying and dumb. Some of it seems sensible, some of it is bewilderingly technical. It's really hard to figure out where to look and ideas are being fought over like diamonds.

I trust that the good stuff will ultimately float to the top. It's just important to not get too carried away by 'the next big thing' today and take a long view on this.

With all this in mind, I'm trying to slow myself down.

Each day I learn something new about blockchain and NFTs and get anxious about the mountain ahead. This essay is a reminder to myself to relax, there's time, and to keep focused on why I'm there in the first place, which is just to learn because at some point my day job - and probably yours - will be affected.

The bottom line is that Web 3.0 is important because it can and probably will cause huge disruption to business as usual. Or, put another way: cause huge disruption to the usual businesses.

[If you made it this far, thanks for putting up with me]

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