Tag: crypto

• Read, write, own

  

  I have been following Chris Dixon for many years and, yesterday, I learned that he has written a new book called, Read Write Own: Building the Next Era of the Internet. It is a book about web3 (crypto things) and the title is based on thinking about the evolution of the internet in terms of these three phases:

  The first act, called the “read era”, circa 1990-2005, democratized information. Anyone could type a few words into a browser and read about almost any topic through websites.

  The second act, the “read-write era”, roughly 2006-2020, democratized publishing. Anyone could write and publish to mass audiences on social networks and other services through posts.

  The third act, the “read-write-own era”, 2020-present, is democratizing ownership. Anyone can become a stakeholder in a digital service or network, gaining power, governance rights, and economic upside previously reserved for only a small number of corporate affiliates, like stockholders and employees.

  The book won’t be out until March 2024, but if you’re interested, maybe you want to pre-order it or at least get it on your radar. I immediately put this in my queue and I’m looking forward to welcoming it to the pile of books next to my bed.

  Full disclosure: I don’t get anything if you pre-order this book. I’m only putting this out there because I have a high degree of conviction about this coming shift and because, in the future, I want to be able to look back at posts like this one here. I think they’ll age well.

  2023.06.23

• Decentralization and public infrastructure

  

  Decentralization, in the crypto/blockchain/web3 sense of the word, is a crucial thing. Here is an excellent article talking about why it is the key innovation of blockchain technology and why it is a central feature in this new emerging web3 world.

  But of course, it can all get very complicated. So I thought this — and in particular the sentence in bold below — was a good way of describing the benefits:

  “…decentralization enables web3 systems to be credibly neutral (they cannot discriminate against any individual stakeholder or any group of stakeholders, which is critical to incentivize developers to build within ecosystems) and composable (to mix and match software components like Lego bricks). As a result, web3 systems function more like public infrastructure than proprietary technology platforms. In contrast to the gated software of Web2, web3 protocols provide decentralized internet infrastructure on which anybody can build and create an internet business. Crucially, in web3, this can be done without the permission of the original deployer of the protocol or the need to use a centrally controlled interface.“

  This resonated with me because think about how important public infrastructure is to our cities. Most of us take it for granted that, when we need it, we can just plug in and access electricity, water, sewer, and other public infrastructure.

  But throughout history, these services have been fundamental to the growth of our cities. They empowered scale and better health outcomes, among other things. So it’s exciting to think that we are now living through the creation of something kind of similar in tech.

  Image: a16z

  2023.06.12

• France’s luxury goods empire

  The US has tech and France has luxury goods:

  The roots of French dominance lie in a luxury ecosystem that dates to the court of Louis XIV, and a culture of corporate raiding that began with Bernard Arnault. After gaining control of LVMH in 1989, he set out to build the first house of luxury brands through serial acquisitions. Rivals followed his lead. Increasingly, the global luxury industry is based on goods that are still made by small Italian firms but sold by big French conglomerates. Gucci, Bulgari, Fendi — all are Italian brands now under French owners.

  While US tech firms overshadow all rivals, the same can be said of French luxury. Among the top luxury firms, the French have annual sales three times higher than the Swiss, more than four times the Americans and Chinese and 12 times the Italians.

  One of the most interesting things that LVMH is doing, though, is a combination of tech and luxury goods. In 2021, they announced, along with founding partners Prada and Cartier, a new luxury goods blockchain called Aura.

  The idea behind Aura (an appropriate name, in my opinion) is to create a kind of digital passport that proves authenticity and ownership, and also allows for traceability. So if you want to sell one of your luxury items or you need to service it, now someone can easily see the chain of ownership and determine that it’s real.

  This to me is a perfect use case for the blockchain technology and, as of March of this year, the group was reporting 24 brands on board. At the same time, they also announced a new feature that allows brands to participate through public chains such as Ethereum or Solana.

  All of this is probably still very esoteric to most. But eventually the tech will recede into the background and most will probably just see it as, “I’m buying this expensive purse and along with it I get this digital passport thingy that lives on my phone. I don’t know or care how the tech works, but it makes me feel even more special.”

  However, a big question remains: What does all of this innovation do to industry concentration? (Which is one of the main points of the above article.) One promise of crypto is that it will be a decentralizing force in our economy. And while I believe this to be directionally true, I obviously understand that LVMH has an empire to maintain here.

  For those of us who deal in real estate, it is also interesting to think about this topic of brands and authenticity when it comes to property. And so we will talk about that later this week on the blog.

  2023.06.04

• How disruptive is AI really going to be?

  AI is going to be very disruptive, right? At this point, I think it is pretty clear to most that the answer is yes, almost regardless of what industry you’re in. But is it going to be really disruptive? Like disruptive in the Clayton Christensen sense of the word. (Christensen is known for coining the term “disruptive innovation“, which he contrasted against “sustaining innovation.”)

  This is a good question, and I like how Ben Thompson thought about it in his newsletter this morning:

  I tend to believe that disruptive innovations are actually quite rare, but when they come, they are basically impossible for the incumbent company to respond to: their business models, shareholders, and most important customers make it impossible for management to respond. If that is true, though, then an incumbent responding is in fact evidence that an innovation is actually not disruptive, but sustaining.

  The point he is making is that given that the big tech companies (and of course everyone else) are all now responding to AI by incorporating it into their businesses, it, by definition, must not be a disruptive innovation. It’s a sustaining one. This doesn’t mean that AI won’t have significant impacts on our economy; it just means that maybe it won’t put a company like Alphabet out of business.

  I thought this was an interesting way of looking at things because it is a reminder that “disruptive innovations” often start out at the bottom of the market. They start in a way that can feel innocuous to incumbents; that is, until they move upmarket. But this is not at all how AI feels. As soon as you play around with ChatGPT you immediately think to yourself, “holy shit, this thing can do my job.”

  That is obviously something very meaningful. But is it going to shake up the big tech world order? I don’t know, if you follow Christensen’s definition, crypto sounds like the more disruptive innovation.

  2023.05.15

• The Centre Pompidou in Paris now owns NFT art

  Last week, the Centre Pompidou — which is Europe’s largest modern art museum — announced that it has acquired its very first NFTs (18 pieces by 13 artists) and that it will be exhibiting the collection this spring. This makes them the first museum in France to own NFT art and, I’m guessing, one of the first in the world. (The Los Angeles County Museum of Art recently got some as well.)

  This is fun for a few reasons. The obviously fun reason is that it’s good for NFT collectors and people who generally support this space. Big institutions bring legitimacy. It’s one thing to say that these JPEGs are stupid while sitting at home on your computer, but it’s an entirely different thing to travel to Paris, visit the Centre Pompidou, look at its white gallery walls, and then say that these JPEGs are stupid!

  The other fun thing about this is that it shows a continued openness to new ideas and new technologies. Here are some words from the Pompidou (that have been translated, by Google, from French):

  The idea was not to be the first, but to bring together a relevant collection, which could testify to a creative and critical appropriation of a new technology by artists, and how this disrupts and displaces the art ecosystem. From its creation, the Center Pompidou has relied on the idea that contemporary technological creation and creativity should be at the heart of the institution. From 1974-1975, therefore even before the opening of the Center, the National Museum of Modern Art acquired major works and installations by Dan Graham and Bruce Naumann. Video installations using real time, and it was the very first institution to do so.

  This wasn’t always the case in France. One of my favorite art history classes from university was one that covered Impressionism. Partly because I thought their work was cool, but mostly because Impressionist painters were, in a way, early modernists. They rejected the academic approaches to painting and instead decided to make up their own rules.

  At the time, in the 19th century, this was seen as entirely radical. And it meant harsh criticism from the established art world and an inability to meaningfully exhibit at the Salon (which was everything at the time). But history has a way of showing us that if something is inherently a good idea, you can only remain stubborn for so long.

  The Impressionist painters began hosting their own exhibitions starting in 1874 and, by 1881, the government had withdrawn its official sponsorship of the annual Salon. The jurors wanted to cling to only traditional painting styles and the world wanted to move on. And here it is doing that again, today.

  2023.02.14

• What happened in 2022 and how I did on my predictions

  It has become tradition around here that at the end of each year I write down my predictions for the following one. And in 2022, I did that here. The overarching point of writing something like this down publicly is not necessarily to be right (because you can do that through obvious predictions). The point is to dedicate time to thinking (which is oftentimes hard to do throughout the year), to search for non-obvious things, and to generally be okay with being wrong. So I plan to do this again in the coming weeks for 2023.

  But first, let’s see how I did with my 2022 predictions:

  1. COVID: I argued that 2022 would be the year that the pandemic becomes endemic and it reaches a point where it no longer factors into decision making in the same way that it has since 2020. Some of you may disagree whether this is a good thing, but I would still say that this happened, at least in this part of the world. I started the year in lockdown here in Toronto and I ended the year having taken multiple overseas trips where testing was no longer required. (Right)
  2. Return to office: I was kind of close. I thought that the majority of people would be back in their offices by September. I didn’t say that hybrid/flex work was going to disappear, but that we would see a great return. That did happen, according to my super scientific Jimmy the Greek Reopening Index. But if you look at the latest swipe card data for the 10 largest US cities, average occupancy is hovering just below 50%, which is not a majority. (Wrong)
  3. Recreational/fringe housing: I felt very strongly that we would see a pullback in residential real estate this year, specifically recreational properties and properties in tertiary markets. This 100% happened, but I’ll be honest in that I was not thinking about the interest rate hikes that we saw. I just saw it as a pandemic bubble. I also thought that apartment rents would do very well and surpass pre-pandemic levels. This happened in many markets. (Right)
  4. Return of travel: Yup. (Right, but maybe too obvious?)
  5. Intensification of single-family home neighborhoods: This continued to be an important topic in 2022. Did we see some a tipping point-like moment, like I had predicted? I think it depends on the market, but here in Toronto we did see things like Bill 23, as well as additional efforts on the part of Mayor John Tory. (Right)
  6. Autonomous vehicles: Progress was made this year. You can now hail an autonomous taxi in places like San Francisco. But I also thought that this would be a fantastic year for Uber as the world reopened, and that they’d finally become profitable. As of Q3 of this year, that had not happened. (Wrong)
  7. Public transit and micromobility: I got the public transit ridership piece correct. I assumed that ridership levels would remain depressed. Perhaps an obvious one. But I also figured that e-scooters would be one of the main beneficiaries. While it is true that e-scooters remain very popular, particularly with French people, we did see ridership decline in the US, as the availability of cheap capital waned. (Mostly right)
  8. NFTs and augmented reality: There’s a lot happening in this digital world and I continue to be incredibly bullish. But we are certainly in a “crypto winter.” I also thought that Apple would announce something big related to augmented reality this year, but supposedly that has been pushed to next year. (Wrong)
  9. Climate change and carbon prices: I thought that the price of carbon on the EU’s Emissions Trading System would surge this year. It did not. Right now it’s looking like it’ll end up being fairly flat for the year. Of course, I also had no idea that Russia would do terrible terrible things to Ukraine, which has had dramatic impact on energy markets. (Wrong)
  10. More crypto (Ethereum, Bitcoin, and Solana): Well, I got this last one really wrong. ETH is down ~70% over the last year relative to the US dollar. I was not predicting a “crypto winter.” And I did not know that Sam Bankman-Fried was operating a weird cult-like ponzi scheme out of a penthouse in the Bahamas. None of this changes my views on crypto, but I was still wrong in 2022. (Wrong)

  Looks like I’m somewhere around 5/10.

  Stay tuned for my predictions for 2023. In the meantime, if any of you have predictions of your own, I would love to hear from you in the comment section below or on Twitter.

  2022.12.23

• Money, identity, and ownership

  For those of you who are interested in crypto (and for those of you who aren’t but are open-minded), Vitalik has just published this post talking about what in the Ethereum application ecosystem currently excites him. A lot of it is pretty technical, but the 5 overarching categories he talks about are: (1) money, (2) decentralized finance, (3) identity, (4) decentralized autonomous organizations, and (5) hybrid applications.

  Money has always been considered the first and most important application of crypto. But there is no shortage of people who will tell you that it’ll never work and that fiat currencies backed by a government will always be superior. Today I already think the answer is: it depends. So lately, I have been responding to this comment by asking: Would you rather own the Argentine Peso or would you rather own someting like ETH?

  Here’s how Vitalik talks about this same point:

  When I first visited Argentina in December last year, one of the experiences I remember well was walking around on Christmas Day, when almost everything is closed, looking for a coffee shop. After passing by about five closed ones, we finally found one that was open. When we walked in, the owner recognized me, and immediately showed me that he has ETH and other crypto-assets on his Binance account. We ordered tea and snacks, and we asked if we could pay in ETH. The coffee shop owner obliged, and showed me the QR code for his Binance deposit address, to which I sent about $20 of ETH from my Status wallet on my phone.

  This was far from the most meaningful use of cryptocurrency that is taking place in the country. Others are using it to save money, transfer money internationally, make payments for large and important transactions, and much more. But even still, the fact that I randomly found a coffee shop and it happened to accept cryptocurrency showed the sheer reach of adoption. Unlike wealthy countries like the United States, where financial transactions are easy to make and 8% inflation is considered extreme, in Argentina and many other countries around the world, links to global financial systems are more limited and extreme inflation is a reality every day. Cryptocurrency often steps in as a lifeline.

  The other category that I find very interesting is that of identity. And it relates to a post that Fred Wilson also happened to share today where he talks about the importance of identity and the coming need for us to start cryptographically signing everything. In my mind, what this comes down to is proving things like who is who, who is doing what, and who owns what.

  This may sound counterintuitive since crypto is often held up by the media as a way to obfuscate identity and conceal nefarious activities. But the thing is, as soon as you link a real human to a blockchain, you can now have identity and ownership records that are institution-independent and fully interoperable. One use case that immediately comes to mind is property deeds, which is of course already being done in some places.

  For Vitalik’s full post, click here.

  2022.12.05

• Call to Hamilton artists

  

  Our team is looking to partner with local Hamilton, Ontario-based artists and creatives as part of a new project that we’re working on for next year. So this post is intended to be a call to artists. If you’re based in Hamilton and doing great work, we would love to hear from you. Please drop me an email (brandon@slateam.com).

  In my mind, art and culture is a fundamental ingredient in Hamilton’s ongoing renaissance. Each and every time I’m in the city, I feel like I meet someone who is an artist. And there are so many great examples that we can point to.

  Take Scott Martin (aka Burnt Toast). Scott is a Hamilton-based illustrator and co-creator of the fantastically popular Doodles NFT collection. I don’t have one in my wallet, but I can tell you that I want one. The current starting price for a Doodle is nearly US$9k. But as an alternative, you could also just go to downtown Hamilton and look at one of Scott’s public murals.

  Go Hamilton. Please show us what else you are creating.

  Photo by Abigail Chen on Unsplash

  2022.12.01

• A whole new internet

  I don’t exactly know what “metaverse” means, but what is clear is that nobody really does right now. Here is an excerpt from a recent article by Benedict Evans:

  If the narrow definition of ‘metaverse’ is that VR and AR will be the next smartphone, the broad definition is that there’s going to be a whole new internet. Our experience will be 3D, but much of that will be layered onto the real world as we see it through glasses. Games will become a much larger part of daily life – instead of the current split between a few hundred people playing deep and rich AAA PC and console games and several billion playing much lighter-weight smartphone games, Roblox and Fortnite point to a growing middle ground of persistent, open, accessible and expressive environments that are much more about social and identity than games per se, and that can become platforms and ecosystems for developers. Many of these experiences will blur into each other, and digital goods (skins, avatars and other models of self-expression in digital form) will be portable and interchangeable between these worlds, rather like the characters in Wreck-it Raph could pass between games.

  Some people, namely Mark Zuckerberg, believe that VR is going to be the next smartphone. But Benedict raises an interesting point: the direction of travel for tech seems to be toward less immersion, rather than greater immersion. We used to have giant computers that filled rooms. Then computers got smaller. And now we just carry one around in our pocket and pull it out when we’re standing in a line and bored. Portability and casual usage are what won out. And so is it reasonable to assume that billions of people are going to want to immerse themselves in VR goggles all day?

  I don’t see it. Here’s my working thesis:

  • I am an urbanist. I love cities. And I believe that our deep desire to interact meaningfully with other humans is not going to go away. For this reason, I believe in the less immersion over greater immersion argument.
  • At the same time, blockchain technologies have made it possible for us to own, collect, and trade digital assets — everything from digital fashion to digital art. I think this trend is only going to continue.
  • And as this trend continues, we are going to continually look for ways to display and experience these elements of our digital identity. So how do we make that happen? This is an important part of the conversation around “the next smartphone.”
  • My view is that it’s going to be some version of augmented reality, and that we are going to end up with a continuous blurring of the line between physical and digital.

  But hey, I could be wrong. Time will tell.

  2022.11.01

• Real estate marketplaces are not like NFT marketplaces

  A lot less people are buying NFTs today compared to last year. But that’s okay, everything will be fine. So let’s talk about some of the characteristics of NFT marketplaces and how they differ from real estate marketplaces today:

  • When you create or “mint” an NFT, you are doing so on a particular blockchain, such as on the Ethereum blockchain. You might do that minting through a marketplace like OpenSea, but at the end of the day, your NFT now lives on a public blockchain and not on private OpenSea.
  • What that means is that if OpenSea suddenly decides to do something bad that you don’t like (I am in no way picking on OpenSea), you can simply stop using them and just access and trade your NFTs from some other marketplace. As I understand it, there are also lots of smart people working on blockchain interoperability.
  • Once you have your NFT on a blockchain, you can choose, through various applications, to list it for sale, run auctions with a reserve price, or just hold it and do nothing, among other things. You can also set it up so that any proceeds from a future sale are automatically split with someone else — maybe they are a co-creator of the NFT that you minted.
  • Whether you’ve decided to list your NFT for sale or not, there is also the option for the market to make unsolicited offers on it. It is up to you whether or not you’d like to accept any of the offers, but in all cases the offers you receive are made fully public to the market. As a bidder, it’s easy to hide behind “burner” wallets, but you generally can’t hide real intent.
  • If/when you do sell, that sale becomes public record for all to see. The blockchain never forgets and it doesn’t matter which marketplace you decide to use.

  In some real estate markets, it’s fairly easy to see the sales history of a property. But in other markets, such as here in Toronto, it’s still fairly gated. Generally speaking, you are accessing a controlled database and so you need to abide by whatever rules might be in place. If you want to build a new application on top of your local real estate board’s database, that is going to be tricky and it will likely involve more than a few lawyers.

  It is, however, fun to imagine how this might all change with public blockchains. And I think that NFT marketplaces do offer some clues in terms of what could happen to our real estate markets.

  Consider this potentially unexpected scenario:

  In the world of NFTs, there is something known as creator royalties. And they function just as you might expect. As the creator of an NFT, you can set a royalty % that gets paid to you each and every time the NFT is sold. And because the blockchain never forgets, you never have to worry about enforcing and collecting your royalty fee. It just gets automatically distributed.

  Now imagine a world where people like the architect and the developer of a new property are able to attach their own creator royalties. This would be massively cumbersome to administer today, but it’s entirely straightforward once you’ve got everything on a blockchain. And it would be a huge boon for business models that today do not benefit from reoccurring revenues.

  In theory, it might also better align interests, because if you’re a “creator” who wants a good solid royalty fee stream, maybe you’re a little more motivated to do good long-term work. Who knows? This model might never actually happen, but I do think it is indicative of the kind of changes and innovations that we might see as crypto continues to filter through the economy.

  2022.10.19