Letter 3: That's How the Light Gets In
On why we remain hopeful
The current web3 zeitgeist we find ourselves in is fraught with concerns. I’ve touched on a number of those issues in our second letter, Of Mice and Conmen—rather extensively, I must say. Although well received, I can’t help but think that it may have been a little dispiriting for some to read all that negative news without so much as an intermission.
But look, we can’t be all doom and gloom 24/7.
The truth is, everyone on our team is extremely optimistic about the technology, growth, and potential of web3. So let’s dispel those dark and myopic thoughts about the space for the next 10-15 minutes and take inventory of why we’re all here in the first place. Let’s also ignore the obvious: money was a major motivating factor for nearly everyone, at least at first. So let’s just skip past that and examine five additional reasons why we’re hopeful about this new technology.
1. Artist Recognition
Two words come to mind when I think of how artists can benefit from entering the world of web3: royalties and ownership. I believe both are groundbreaking and paradigm shifting—though in a just world where artists were properly valued, it wouldn’t be. The realization that this is actually a big deal for artists speaks volumes about their struggle and treatment until now.
What do I mean when I say ownership? At its most basic level, true ownership is the ability to go straight from the artist to the customer, fan, or collector with no intermediary necessary. This practice is sadly lacking and is not common in the art world today, remaining a luxury of only a fortunate few.
Left: Demons in the Mist by Vintage Mozart
Top Right: The Two Divs by Bahaar
Bottom Right: Pastel Girl 010 ✦ Sun by Tiffatronn
And what about royalties? How do they factor into things?
Well, consider this: in the traditional art world, once you sell an original, for all intents and purposes it is gone. If you have a painting and sell it for $100, and that person—perhaps with some connections to another gallery, or who just so happens to find the right person—manages to flip it for $10,000, well, lucky them!
But you still only made $100.
Is that fair? Maybe, maybe not. But if the original artist could further benefit from all future sales with absolutely no drawbacks, wouldn’t you want that for them?
This is the first time artists have a real, substantial ability to see continued returns on the resale of their work. At a 10% royalty rate, that same $10,000 would have netted the original artist $1000 in their pocket—much better than the onetime sale they made outside web3. Will most sales in web3 be that high, or flip so drastically? Of course not (I chose those numbers for the easy math). But whatever the value of the flip, the artist is now included in the deal. This can apply to literally every piece of work they ever make and release.
As I said, groundbreaking and paradigm shifting.
But royalties and ownership don’t just stand to improve the lives of painters and illustrators. There’s seemingly no facet of the arts that wouldn’t benefit from a transition to web3. For example:
Photographers, of whom I know a few, often lament the costs of gallery installations, and are additionally expected to give a certain percentage of their sales in a gallery or event to the gallery itself. Tack onto that the costs they often face with publishers, and sometimes even agents, and what’s left for the photographer shrinks and shrinks. In the web3 world, a photographer doesn’t need to pay any of those costs: they can display their art freely on one of numerous marketplaces, and even hold gallery events digitally. And installation costs? None.
Musicians today are, for the most part, almost incapable of making a living from producing and distributing music alone (especially with companies like Spotify paying roughly $0.003 to $0.005 per stream, and around only $4000 for one million streams — a feat only 1040 artists managed to achieve last year). This forces many musicians and bands into long and grueling tours simply so they can earn a living. Web3 presents the means to better distribute and compensate musicians for their work. Admittedly, music NFTs have not yet had their moment to shine—but they will. And when they do, they won’t be beholden to the tablescraps of billion dollar companies.
2. Decentralization
If we could reduce the entire philosophy of web3 into one word, that word would be decentralization. The practical application of decentralized technology backs blockchains (some more than others), many exchanges, applications, games, utilities, and more. Decentralized technology is at the heart of web3, and without it, we wouldn’t even be having this discussion right now.
The fundamental appeal to decentralization for many is—and it feels silly typing this but here I go—the absence of any centralized authority in the space. For better or worse, governing bodies are not present or required, and are in fact avoided. The amount of centralized exchanges and “stablecoins” that have collapsed as of late haven’t done the proponents of centralization much favors either.
One thing which goes hand in hand with a decentralized future is transparency. With a level playing field and no centralized authority to put their thumb on the scale, it’s considerably more difficult to conceal, well…just about anything.
The funny thing about people outside of the space right now is that nearly everything they believe about crypto or NFTs is objectively wrong. Take cryptocurrencies: the view of many people unfamiliar with crypto is that it’s either a Ponzi house built on sand, or that it’s just some sort of dark web illegal funnel of drugs, guns, and sex trafficking, whose entire purpose is to steal from others, conceal your earnings, and avoid paying taxes.
Everyone reading this article knows somebody like this. In all honesty, many of us probably had similar views before we educated ourselves on the space as well.
But we all know the saying, “The blockchain doesn’t lie”. And it’s true. There’s nothing on the blockchain that you can’t look at for yourself. One may, if you’re so inclined, look at each and every transaction of absolutely anyone you wish, and there’s nothing to stop you from doing so.
Our space isn’t one of concealment. It’s one of decentralized transparency, and a calling for people and businesses alike to operate more ethically.
3. Community
There’s a good chance that most of the people who came into the space between 2021-2022 came here under the buzz of a new digital gold rush: promises of getting in early on the next big thing, the value of apes, punks, and something called a Beeple? What’s a Beeple?!
What’s interesting to me is why so many people pushing half a year in the space or more still remain. I get even more intrigued if they haven’t made money, or especially if they’ve lost money. Were it as simple as the promise of a payout, lots of people would have already cut their losses and left. And yet they stay. Why is that?
Community.
A lot of people who have stuck around have discovered a surprisingly supportive and diverse network of friends that they never expected to meet. Many of these relationships developed on Discord and in Twitter Spaces, as passionate people—many of them entering the space around the same time—onboarded together and became fast friends. NFT collections stopped merely being assets they owned, and became a beacon of their digital identity, signaling to others who they are and what they identify with.
These communities are now shaping web3 in their own ways. Some projects have released followup collections or tools and utilities at drastically lower prices (or even free!) in order to provide relief to the community members who continue to stick by them in this market. In other cases, people who met in one community splinter off to form new communities of their own. This is the sort of wholesome organic growth that we should continue to enable, as embracing community in the space causes people to treat it less as cold, impartial numbers, but rather, gives a sense of empathy and a personal connection to the projects they support.
It’s communities that will weather the bear market, and it’s communities that’ll help onboard the next influx of curious individuals.
4. Technology
“There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.” - John F. Kennedy
So what is it that powers the new possibilities of artists, ensures transparent decentralization, and has already brought millions together in countless new communities? Technology. Specifically, blockchain technology.
The wild speculation, crazy NFT stories, VC funding, and angel investors are principally present in web3 because of the promises of blockchain technology.
The crowning feature of blockchain tech may be its inherently permissionless nature. Gate keepers are kept at bay as everyone is equally capable of participating and having a voice. It is this democratization of technology that so many are betting will yield lucrative results.
It’s interesting that we’ve yet to see a truly web3 social network take off (at least on the scale of any of the giants today). It’s likely that we’re simply still too early, and the numbers aren’t quite there yet to facilitate the interest of that complexity or scale. But the potential for people to speak their mind, unburdened by a centralized authority is extremely promising for people all over the world. It of course comes with caveats—everything does—as a world where everyone has a voice empowers those whom perhaps you’d rather not hear as well (bigots, conspiracy theorists, etc).
Your grandfather’s views on the last election aside, blockchain technology could be a boon to countries all over the world—with those who are in social upheaval or unrest potentially benefiting the most. A world with no centralization of your tech, apps, or platforms is one in which it is significantly more difficult to be silenced by a corporation or a government. Protestors fighting back against dictatorships or other forms of autocracy would have some of the most secure networks possible for building their resistance.
For those of us fortunate enough not to be embroiled in political upheaval or threats of revolution, blockchain technology still has a number of amazing uses. Smart contracts on the blockchain are seemingly limited by not much other than the imagination and talent of the team programming them.
As a small example of what smart contracts can facilitate, here at Curious Addys, we were the first to offer a 100 day refund function, baked straight into the code.
We’re also an extremely early example of providing Soulbound Tokens (SBT)—a non-transferable variety of NFTs which have a number of unique uses and are one of the things Ethereum founder Vitalik Buterin considers most promising about the future of the space.
We already use SBT on our web3 Q&A platform Curious, in which users can ask and answer questions and receive a certain amount of upvotes, at which point they are rewarded with a SBT of their Curious Credential (see our founder Mai Akiyoshi’s, for example). These represent their reputation on our platform and are dynamic, meaning that they update every time you check them on OpenSea.
We’ve also seen projects implement smart contracts which allow the lending of tokens from one wallet to another. Meta Angels are a clever and capable team which did exactly that: their lending program allows members to share additional tokens they hold with others, so that they may also take advantage of the benefits and utilities of the community, even if they might normally be priced out of the collection.
Gaming is another field in which blockchain technology shows incredible promise (although most everyone would agree that it’s still too nascent and hasn’t exploded in popularity as of yet).
Axie Infinty has shown the greatest success in that field, with over 2.7 million daily active users around last November — but that number has steadily shrunk over time, and the over $600M they lost in the Ronin hack certainly didn’t help things either.
I have a lot to say about web3 and gaming, and what sort of prerequisites and changes we need to see before it can see any level of mass adoption, but that’s a discussion for another time. Let’s revisit this in a later letter, shall we?
Frankly, there are a number of sectors which could stand to benefit from implementing blockchain technology, becoming proficient with smart contracts, and finding the right usage for NFTs.
Some areas of interest which are already exploring this or are in active development include:
DeFi
Ticketing & venue access
Membership passes
Gaming & VR
IP protection & patents
Power management
Proof of ownership (real estate, collectibles, etc.)
Record keeping (medical, financial, identity, voting, inheritance, domain names)
Travel
Charity & non-profit organizations
Credentials (degrees, skill-based certificates, and other notable achievements)
Fundraising/crowdfunding
Art galleries and exhibits
Supply chain logistics
Marketing and advertising
Token redemption (for clothing, or other merch)
And we are still discovering new applications of this technology on a daily basis.
5. A New Road
Still round the corner there may wait
A new road or a secret gate,
And though I oft have passed them by,
A day will come at last when I
Shall take the hidden paths that run
West of the Moon, East of the Sun.
- A Walking Song from The Fellowship of the Ring by J.R.R. Tolkien
This is the most abstract of the five reasons we’re talking about today, but to me, one of the most motivating factors for exploring the space and its possibilities is the mystery of it all, and doing it just because we can. I believe the space as it exists right now is made up of a large amount of similarly curious individuals who love the challenge of the unknown.
The same hopeful ambition that saw humanity scale the tallest peaks, develop intercontinental travel, and even leave our home planet to explore among the stars is an unquantifiable ethos that makes humanity so fascinating. We are not a species that rests on its laurels for very long.
This is a sea of unknowns and we won’t know what the future for this technology holds unless we pull a Schrödinger’s cat and peek inside. Or to put it more succinctly,
This is such an exciting time to be involved. We have identified something of great potential, and a certain segment of the population is going to explore all of its nooks and crannies because they believe in the promise of it, or at the very least want to see where this road leads.
Many people in the space today feel that they’re late to the party or missing out, just because they weren’t here in 2017 for the rise of CryptoPunks. We’ve seen a redux of that sentiment expressed again in 2021-2022 for people who missed out on a small handful of bluechip projects. Even now, more people are joining by the day, and I can only imagine that a large chunk of them are wistfully mourning the fact that they missed ETH’s all time high, and are witnessing the general malaise of the current bear market.
While I get that feeling, it’s completely inaccurate and we should all stop being so hard on ourselves. To make this clear, let’s examine another technology which changed every aspect of the world: the internet.
In 1996, there were only 45 million people using the Internet. By the year 2000—a span of four short years—that figure had ballooned up to over 400 million users. And four years after that it had hit somewhere in the vicinity of 600-800 million users.
Today we stand somewhere in the ballpark of 4.5 - 5 billion users, and that number continues to climb.
Technology has the ability to scale at almost unfathomable speeds once it gets going. Would we look to those folks in 1996 and say they were “too late” to the internet? Not a chance. In fact, many large companies like eBay, Amazon, and Netflix only saw their start in the mid to late 90s. But many of those early companies from the dot com bubble of 1995-2000 burst, and by the end of 2002, the field had completely changed—arguably for the better.
All of this is just to say that you’re still early.
If we were to apply where crypto and web3 is today using the internet metaphor we established above, it’s inarguable that we’re much closer to 1996 figures than 2002. Only 16% of Americans say they have invested or traded in crypto. Most countries outside of America would show results significantly lower than that, having little to no familiarity of the space at all.
Furthermore, Dune Analytics shows that there are roughly 2 million users on OpenSea who have made at least one transaction (in January of this year there were only 1 million). Still, hardly late to the party.
As bleak as it may seem to be in the midst of bubbles popping, marketplaces going bankrupt, companies becoming insolvent, and bear markets settling in, these are all necessary and familiar growing pains of a new tech coming into prominence and finding its valuation in the market.
To expert a perfectly smooth transition from brilliant, paradigm-shifting ideas to worldwide execution is laughable. Refinement is how we grow, how the space develops, and how we make way for the next great innovation.
“Ring the bells that still can ring,
Forget your perfect offering,
There is a crack, a crack in everything,
That’s how the light gets in.”
- Anthem by Leonard Cohen
Take a moment to reflect on why you came into the space, and why you remain now. At the very least, take a page from Leonard and remember the cracks and the purpose they serve.
Written by: Brad Jaeger
Director of Content @ Curious Addys (say hi on Twitter!)
Enjoyed it as always! :) TYSM for such an amazing article.
THIS is fantastic! Thanks Brad, Ben, Mai and team~