A speaker explains how blockchain and tokens could disrupt social networks by rewarding early users with equity-like rewards instead of letting platforms capture all the value. Rather than giving away your time for free, users could earn in new digital economies built on crypto incentives.
Chapters
Blockchains break network effects. And they give a completely new tool, a can opener, for going after scaled social networks and two-sided marketplaces. One way of thinking about this is if you think about Metcalfe's Law, you think about network utility. Typically, the larger the network, the higher the value to the user. So Facebook got 2 billion people, supposedly, runaway advantage. You can't displace them. But there's something really interesting about crypto, which is that if you have a token whose value is associated with the startup, The token's upside is maximal when the size of the network is smallest. So for example, an early investor in Snapchat had more upside than somebody who invested in the Series D round where it already had 10 million+ users. So upside is itself valuable. And now you've got a second term in the equation which can balance out that first term, some kind of hypothetical future value that for the first time, you can programmatically issue to your users for sign-up and other kinds of actions that they take within your app, right? I mean, imagine if Facebook, like, had something where the folks who signed up for it, the first 100,000 or 200,000 or a million users or end users received some slice of Facebook's equity for doing that. Well, that'd be a very big deal. You'd actually start making money by signing up for all these dumb social apps, right? So that's actually something which I think is a very powerful tool for going after scaled social networks, two-sided marketplaces, and things like that, to split some of the upside with the user. 10th, and relatedly, blockchains, I believe, are going to transform social networks. So for the last 10 years, people have been liking and poking and messaging each other, wasting time. The next 10 years, well, we've done making friends. It's time to start making money. So basically, those edges, we think, are going to now have money on them, cryptocurrency. And you're going to have new kinds of social networks. What are we going to call them? Maybe digital economies or crypto economies, with the fundamental difference being that your time on them is not wasted. Your time on them is actually like a form of work where you're actually remunerated for it, right? And some of these, maybe existing social networks might be able to retrofit, but I think you're going to have to construct wholly new social networks that are based on these kinds of behaviors from the beginning, where earning is part of the equation.
