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Happiness vs. satisfaction

I have heard from some of you that you don’t like it when I write about crypto and NFTs. This personal blog is supposed to be largely about city building after all. So today I thought I would write about crypto and NFTs. More specifically, this podcast episode, which I watched last night.

It’s with Marc Andreessen and Chris Dixon of the venture firm a16z, and it’s actually less about specific things like NFTs and more about the reinvention of the internet in general. Why I found it particularly interesting is that Marc co-invented the first widely-used web browser. Anyone remember Netscape?

So he was around for what we are now calling web 1 and he is around for what we are today calling web 3. And there are lots of parallels between then and now. Similar to today with crypto, the early internet had lots of critics and lots of people who thought it was dumb and that it would never amount to much.

Oops.

Here are a few other thoughts and ideas from the podcast that I found interesting (some of them even relate to city building):

  • No matter how many times we have seen the same movie, humanity seems doomed to repeat the same mistakes when it comes to, among other things, embracing new ideas and innovations. I agree with Marc in that part of this is generational. Younger people are often more open to new ideas because they view it as a way for them to establish themselves and make their mark on the world. Whereas older people (established people) often view new ideas and change as a threat to their current position in the world.
  • Marc drops a number of books throughout the talk and one of them is The Mystery of Capital — Why Capitalism Succeeds in the West and Fails Everywhere Else. This is a well known book by Hernando De Soto and the big idea is that property ownership and property rights are really the fundamental ingredients in our modern world. People need to know that if they hold title and invest money into something, it’s not just going to get taken away by someone. And it is this underlying legal structure that has allowed people to leverage property into wealth.
  • This is a fascinating observation in its own right, but it also relates to crypto. Hear me out. Chris Dixon makes the argument in the episode that web1 democratized information (anyone can search for stuff), and that web2 democratized publishing (anyone can share stuff through platforms like Twitter or the blogging platform I’m writing on right now). He then goes on to argue that the promise of web3 and crypto is really to democratize ownership of the internet. Anyone can buy crypto tokens.
  • Why might this be a big deal? Well if property rights in our offline world are a fundamental ingredient to modern society, it seems logical to me that property rights in our digital world(s) might also be equally transformative. And this is precisely one of the things that blockchain technologies enable for the very first time.
  • Finally, on a mostly unrelated note, I liked Marc’s comparison of happiness vs. satisfaction in life. Happiness, he explains, is like getting an ice cream cone on a hot summer day. The first and second feel great, but after that you move on. Satisfaction on the other hand is enduring. It’s the feeling you get from working on something really challenging and then finally succeeding. And that’s exactly how I feel about real estate development. There are lots of shitty days and lots of grinding. But in the end, I do feel very satisfied.

3 Comments

  1. Jakob P

    Marc Andreessen has indeed been shaping the internet fundamentally, both with Netscape and with his VC money. There’s no denying this.

    However, whenever someone important makes value judgments, one has to look for and adjust for their biases before adopting their viewpoints. As a venture capitalist, Marc has intrinsic interests that necessarily shape his thinking:

    – He must always in search of the next best thing, so that the companies he invests in can disrupt existing ones. This means he has a bias for change, regardless of whether it’s more useful than the status quo. (As you’ve blogged previously, most people have a bias against change.)
    – Most VCs think they can do a better job than democratic decision-making. Often they’re right, but often it’s further on the scale somewhere between reasonable confidence and self-important god complex. I don’t know where Marc sits, but it’s a common thing for VCs to hype crypto things because they genuinely think that the world would be better off if they themselves decided the future instead of the people as a whole. And they do indeed get to shape a lot of it, but as lowly serfs this isn’t always in our best interest.

    So, listening to his arguments, yes, but with a bit of skepticism as what’s good for him isn’t necessarily what’s good for me, or the rest of us.

    But also the property rights thing is, in my opinion, among the weakest arguments for NFTs. The internet has reached its current scale and utility solely based on the fact that information can be freely copied and distributed. If you take that away, you take away its main appeal, its ability to scale.

    The music and movie/TV industries didn’t make much money off of the internet until they were willing to go from restrictive DRM to sharing their entire catalogue for a recurring subscription. And make no mistake, the companies who own valuable IP won’t be selling it outright to anyone. They’re going to charge for it again and again. And again. And then once more.

    And why should anyone with actually valuable good sell them to a single owner, as opposed to license them? If my art is any good, I’ll keep it for myself and charge a subscription fee for access. Access being not just access to what I have right now, but also to the promise of creating more. Take away the continued stream of new content and any YouTube channel or podcast, any public awareness and discussion, any continued income stream will die off really fast. What’s important is not just the stuff you own, but also maintaining your brand over time.

    And creators are making use of that. Twitch, YouTube and OnlyFans, Floatplane and Patreon, subscription fees for news sites and software. As a consumer I hate subscription models, but as a creator that’s how I can build a business as opposed to a one-off garage sale.

    So where does this leave NFTs? Status goods. Signaling. And only that. This is how it’s always been. A diamond-plated iPhone by Caviar isn’t any better or more useful than the regular iPhone, it’s the same that everyone else can get. Except it exploits certain people’s need for feeling special. That’s okay, let the dumb rich pay for overpriced signaling while people like Warren Buffett forego conspicuous spending and build real wealth from the ground up.

    NFTs are all signaling. Pepe and Jack Dorsey Twitter messages are bought purely to demonstrate the buyer’s commitment to the cause, as opposed to any real value. Video games can’t sell anything important as NFT because the important thing is the game itself, which has to be mad available to everyone or there is no audience for NFTs to begin with.

    There is no real value in digital property rights because there is no utility other than signaling. Real estate has real value because it provides utility *and* exclusivity. Exclusive access to useless stuff is always going to be a short-lived fad. Commodified access to useful stuff is mainstream technology, and the internet in particular. Technological assertion of offline property rights is a convenience, a means to an end, not a game changer. Where does this leave crypto?

    Show me a pixelated monkey face or a boxy virtual apartment, and I can show you another one just like it that I can get or make or copy for free. Show me how there is more utility than just the signaling factor, compared to a reasonable (perhaps still hypothetical) blockchain-free alternative, and I will consider the possibility that one day NFTs might be more than a fashion among early adopters of a certain mindset. Come up with the best possible non-crypto alternative and let the solutions battle it out.

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    • Jakob P

      I want to be entirely clear about my point. I think NFTs are great for art collectors. I do not think you can build a new internet on the premise of art collectors paying for status goods though. There has to be something more than that, and despite lots of hype and blogging, I fail to see the “killer app” that will provide the utility needed to make it mainstream.

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  2. I have to disagree about the value of things in the online vs. offline world. The former can be reproduced, perfectly, infinitely, while the latter is finite and differs in value depending on location, access to resources, and other natural advantages. It’s hard to imagine that there is value in an NFT just because of an unseen stamp that makes it unique and can’t be copied, while the part that people want is free for all to copy, perfectly.
    And being unique is meaningless unless it’s something people want. After all, not to get too graphic about it, but every pile of cow poop is unique, and aside from limited use as fertilizer, no one wants any of them more than another.

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