I’m writing this in web2. I own this domain (rbucks.com, although someday that might change) but I don’t own the server hosting it. I don’t have absolute control over the data that I’m saving to it. I can delete it (more accurately, I can request that the host delete it) but it’s possible the host could refuse or comply but keep a backup copy that I don’t know about. More concerning, the host of this blog, wordpress.com, could accidentally erase this post and everything else I’ve written and saved on here. Then it would be gone. I don’t have a backup (edit: I do now).
But I trust. I’ve read enough about Matt Mullenweg, the founder of WordPress, to believe that his company will keep my content safe. Why? Because Capitalism. This is the social contract that makes WordPress worth billions of dollars. The software won’t spontaneously delete my blog posts, and even if it did, WordPress would keep a backup for me, because of the incentive to remain valuable. (That being said, after sweating the end of my the paragraph, I downloaded a backup of this entire blog and saved it to my Google Drive!)
This is the web2 world: cloud-based platforms. These are clusters of powerful servers strung together across timezones, a patchwork of nodes and entrypoints programmed to distribute traffic so as to not overburden any one cluster. If a server goes down, it’s simply removed from the cluster and another one is spun up. If a cluster goes down, traffic gets redirected somewhere else. Databases work the same way with writes synchronized almost instantaneously and reads distributed across a network.
It’s a good system. I like it. It works. I don’t want to own or maintain my own blogging server anyway.
My friend Jake shared this post by Moxie titled, “My first impressions of web3.” It’s a unique critique of the false promise of a completely decentralized web. That’s what web3 means to me. It’s the idea that we can shift those web2 clusters out of private control and into the hands of the public (or, really, the geeks and nerds who will be paid handsomely for hosting them). This way, everyone has a copy (or, really, everyone who wants one can get one) and we don’t have to worry about one company going down or acting badly. It’s a vision that means well, even if it’s currently and always will be reliant on web2 infrastructure to function properly.
Moxie takes aim at non-fungible tokens (NFTs) and gas fees, noting that NFTs simply point to a storage address on a web2 server. He also notes that web3, by being decentralized, is inefficient and upgrades much slower than a centralized organization would. Interestingly, when it comes to speeding up blockchain reads, centralization has emerged organically, with two services copying the Ethereum blockchain onto a developer-friendly web2 system.
Having just read The Evolution of Everything by Matt Ridley, with particular interest on his chapter, “The Evolution of Money,” which hails bitcoin as the most important technological development in our lifetimes, I can relate Moxie’s critique to Ridley’s compliment. What we’re witnessing is an evolution. Where Moxie dismisses the “early days” explanation of these hypocritical attributes of web3, Ridley would say the evolution is moving apace. Bitcoin was introduced ten years ago. For half that time it was completely obscure, known only to some fringe cryptology and technologists. As a technology, ten years is a long time, but as a cultural phenomenon, five years is nothing. When considering the promise of bitcoin and blockchain technology in general as a cultural shift, I think five years is too short. It is still very, very early and the impact has a long, long way to go.
I started paying attention to bitcoin when social media caught notice. In other words, I became interested years after the first debates about the origin of Satoshi Nakamoto and years before my mother-in-law created her Coinbase account. Somewhere in the middle, say around 2014 and 2015.
I bought my first Udemy course on Solidity (the programming language for Ethereum) in 2017. I got my first bit of bitcoin a year or two earlier, likely a gift from one of my avant-garde friends. Timing wasn’t right for me then to chase the scent. I rode the bull run in 2017 and did some gifting of cryptocurrencies myself, amazed by the free money flowing into my Coinbase account. I tripled and quadrupled my (meager) principal and shrugged when one of my friends told me he was going to quit Dropbox and start a new blockchain. I continued to shrug when my other friends joined and they changed the company name from Loom to Solana investors started taking notice, purchasing the promise of a token distribution for hundreds of thousands and then millions of dollars, even in the depths of “crypto winter” when the then-sky high bitcoin prices fell back down.
I never considered working full-time in crypto then. I got an offer to run MightySignal and took it. Across the bay from my new house and two young kids, Solana took off, and so did everything else. They couldn’t have timed their ICO better, launching the Solana token to the public just as the first drops of crytpo thaw began to emerge and accelerated into the incredible 2021 run that dwarfed the 2017 peaks ten-fold. My friends got rich! I did fine too, but felt weird about it.
I was engrossed in web2, a hired CEO struggling to get a foothold on the mountain of mobile data, feeling stuck. I managed to work my way to higher ground, selling MightySignal to Airnow in mid-2021. I’m there now, a modest web2 success. But when I’m not thinking about the next mountain to climb for MightySignal, I’m thinking about web3 and climate change. And here’s where I get really excited.
I don’t give a shit about today’s implementation of NFTs. I think it’s dumb. When I think about the promise of crypto, I think about public datasets. Which data, if made public, would make the world a better place? I had a weekly conversation with Jude Barry, a political strategist in the Bay Area, and my ideas and thinking evolved with these phone calls. I considered water rights, carbon offsets, energy bills, and philanthropic donations. Eventually I settled on campaign finance, and I couldn’t let it go. It seemed like the perfect application of blockchain technology: an immutable ledger of gifts to political entities. Money could be traced from place to place. The public would see it, own it, and be able to hold the donors and recipients accountable. If ever there was a private database that ought to be made completely public, this was it!
We pursued this idea for months. I started thinking about payments and payment processing, and how companies like MightySignal would benefit from not having to pay 3% of revenue in credit card processing fees. On blockchain, these transfers have flat charges. There’s no difference between a $10 or $10 million payment. Crypto disruption here makes perfect sense and I know people are working on it already. I turned back to politics.
I thought about building a crypto-based clone of ActBlue, helping political campaigns accept cryptocurrency donations, but instead of stopping there, we’d then track where the money goes and how much each campaign raised. It’s a noble idea but is flawed in that campaigns could opt-out. There’d be nothing preventing them from exiting web3, going back into the black box of web2, and taking their web3 money with them. I stuck with it for months, though, discovering a new curiosity in the actual technology itself. I dusted off that Solidity course I purchased in 2017 and actually completed it. Meanwhile, I discovered crypto communities on Twitter and Discord. I lurked and read and talked to Jude and others. I spoke to two political campaigns about their interests in crypto and got lukewarm responses. It wasn’t the crypto itself, they said, it’s the reporting and regulation around it. If we could solve that operational challenge, we’d have a business. The only problem was I didn’t want to build that. So I kept looking.
The year 2021 in California was a rough one. In the midst of a severe drought, with rampant wildfire smoke in the air, I watched my creek dry up. It scared me. My neighbors who lived here their entire lives said they’ve never seen it happen. Then in the fall, when the smoke cleared and rains returned, the COP 26 UN Climate Conference failed to reach consensus about what to do next. I read How to Avoid a Climate Disaster and did Al Gore’s Climate Reality training. Another idea began to emerge, a way to approach my political fundraising idea from the other side, creating an “activist investor”-type mechanism to influence the outcome, our outcome, in this race against a climate disaster. It was beginning to look a lot like a PAC.
This PAC would be different. It would be distributed, public, on a blockchain. It would collect funds from donors and place them into a smart contract. The contract would move the money if conditions where met, like a vote, an election, or any other trigger. I read about how to do this on blockchains using Chainlink oracles. It was starting to make sense, but then my wife, who used to track legislation for her job, poured a bit of cold water on the idea. Bills evolve, she said. You often can’t know exactly what’s going to be in the bill until after the votes are counted. Thus, a smart contract trigger might not really work. To trigger the transfer, we’d need a discussion and a vote. In crypto-speak, we’d need to make a distributed autonomous organization, or DAO.
This idea has become DAOPAC.
Our mission is to provide a counterweight to the dark money rampantly flowing into our political system by publicly pooling money from the people in order to win political fights for the common good.
Our vision is for the laws of the United States of America to accurately reflect the will of the people.– DAOPAC White Paper
The blockchain comes into the picture by allowing us to create a codified escrow with some creative triggers. A regular escrow allows for the trustless swap of goods (e.g. Person A and Person B want to transact, but neither once to move first, so they rely on a trusted escrow to collect the item from each person and then redistribute.) We used an escrow when we bought our house, putting funds into escrow that would only be released when the seller signed their forms. On a blockchain, this can be done with code, taking money or keys or anything else digital from one party and only releasing them to another party when a condition is met. The difference is the escrow is basically this wide open public computer. Both parties can trust the escrow equally, and, importantly, there’s no way that the escrow provider runs off with my down payment.
In political fundraising, the escrow concept gets very interesting. A donor could put money into an escrow account (DAOPAC calls this a campaign) that would be released if:
- An elected official votes a certain way
- An elected official gets a certain voter rating (e.g. League of Conservation Voters scorecard)
- A candidate gets a specific endorsement
- A candidate makes a specific statement on an issue
- A candidate wins the primary
- A candidate raises a certain amount of money
If the conditions aren’t met, the money goes back to the donor automatically. This doesn’t exist in the political world today. I think it should, because it’s better for donors.
I also think it can be better for humanity. Since most people care about environmental issues, I would like to see money being pooled and guaranteed for specific legislative outcomes. On the one hand, it’s bribery, but on the other, it’s how politics works. I give to politicians who vote the way I want them to vote. Does the cart push the horse? It’s impossible to say, but to the extent that it does, it might as well be put on a blockchain for all to see.
This is, in essence, the promise of web3. Data becomes publicly held. Sensitive private data can still be on a blockchain when it’s encrypted using a safely stored private key. It’s a really elegant way to think about the Internet.
2 thoughts on “My foray into web3”
Love this post Ryan.
Overall I agree with your assessment of Web2 vs Web3. Just few days ago I wrote a post about Handshake (HNS) and I would love to hear your take on the project.
[…] still working on the web3 project I previously wrote about. In November 2021 I wrote this description of a fundraising tool that I hoped could be used to […]