Chris Dixon says decentralization and crypto are the new frontiers for a16z funding because it fuels entrepreneurship and offers energy again to the creator.
Andreessen Horowitz, a enterprise capital agency boasting investments in Instagram and Twitter, and whose name-partner Marc Andreessen has a seat in Meta’s boardroom, insists that it by no means envisioned an web with such a focus of energy as exists at the moment.
The firm, which has been criticized for its pivot to Web 3 even because it income from investments in Web 2 flagship corporations, makes the utopian case for a disintermediated web that crowns creators’ captains of their very own ships.
Concentration of energy is dangerous
Dixon believes that the focus of energy in the palms of 4 or 5 Web 2 behemoths is dangerous for enterprise capitalism and entrepreneurship as a result of it accrues the advantages of community results to a couple entities quite than creators. Network results happen when a product’s worth will increase the extra individuals use it.
Games like Fortnite promote digital items with non-public in-game economies the place all proceeds go to the firm behind the sport. Why can’t there be peer-to-peer economies, Dixon asks, the place customers and creators of a platform can profit? Dixon argues that economies of scale are much less vital when creators can monetize a modest fanbase via direct gross sales of non-fungible tokens quite than via intermediaries. So a creator doesn’t must have a big following on a platform like Spotify to earn first rate returns. Dixon believes that codifying anti-competitive practices into good contracts is essential to stopping monopolies, even in Web 3.
Crypto is the very best vacation spot for entrepreneurs and start-ups, as the Googles and Amazons of the world deal with rising applied sciences like synthetic intelligence and quantum computing, Dixon says.
Andreessen has invested $7.6 billion in cryptocurrency corporations, together with secondary NFT market OpenSea, cryptocurrency change Coinbase, and the Adam Neumann-led Flowcarbon, a challenge designed to tokenize carbon credit.
Decentralized fashions can coexist alongside centralized fashions, says Katie Haun
Not everyone seems to be shopping for Dixon’s and a16z’s decentralization thesis. One software program engineer, Molly White, says that Web 3 will turn out to be recentralized, as soon as once more concentrating energy in the palms of the similar traders that fueled Web 2 incumbents’ rise to energy.
Podcaster and journalist Ezra Klein additionally echoed a typical criticism of decentralization in a 2021 podcast interview with crypto investor Katie Haun, saying that just like how Web 2 customers commerce decentralization for comfort and value, Web 3 will beginning a brand new breed of centralized entities that make decentralized applied sciences extra accessible.
Haun admitted that whereas that is true, creators are nonetheless the beneficiaries. Companies like OpenSea take solely a small portion of transaction proceeds in comparison with Web 2 incumbents like YouTube, which take double-digit cuts. Creators of non-fungible tokens that promote on OpenSea can encode the NFTs they promote to obtain royalties each time their creation adjustments palms.
In different phrases, each centralized and decentralized enterprise fashions can peacefully coexist, Haun says.
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