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2 minute read / Feb 19, 2024 /

Nobody Knows : Steel & Blockchains

Asking “What problems do blockchains solve?” is like asking “What problems does steel solve over, say, wood?” Blockchain networks are a new construction material for building a better internet.

This section in Read Write Own, Chris Dixon’s book, has been bouncing in my brain for the last few weeks.

Very few people know whether today’s apps are built with, just as they don’t consider the construction materials of their office building.

Which database did PayPal use to enable internet payments? Nobody knows.1

Venmo surged with social & mobile payments in the 2010s. Which database did they use? Nobody knows.2

Tomorrow, apps & software will have web3 components to them. Nobody will know.3

The challenge today isn’t finding the applications for web3’s steel. If it works, developers will build with them.

Already stablecoins, which enable rapid money movement, process as much as Visa transaction volume. Some games’ marketplaces use web3 technology. Reddit’s profile pics do too. Web3 social networks have flared up. Billions are traded on exchanges.

Instead, the challenge with the analogy & reality web3’s steel isn’t as refined as it needs to be to replace the timber of most applications.

Unlike steel, Web3 systems have many novel attributes like guaranteeing data is secure.

But they remain 1000x more expensive than their web2 counterparts. They are slower (handle fewer transactions per second). They store less data. They are less well understood.

The pace of innovation is hard to overstate.

At the point that the benefits become clear, the pine trusses underpinning Instagram & Salesforce will be steel web3 infrastructure.

And no one will know.

1 They built it in house.

2Venmo started with MongoDB & then moved to Amazon Document DB.

3 The nobody knows refrain has its origin in “Washington’s Dream”

4’s a quote from Andy Grove, former CEO of Intel, quoted in the header of Chapter 12, which I wonder may be the genesis of the assertion :

Technology happens. It’s not good. It’s not bad. Is steel good or bad?

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