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Ep.95 — Alex Danco — What is Web 3.0 All About?
38 segments available
About Our Guest: Our recurring guest Alex Danco of Spotify, err.. Shopify returns to Infinite Loops for his fifth appearance to discuss all things Web 3! Follow Alex on Twitter at https://twitter.com/Alex_Danco and read his essays at https://alexdanco.com/ Show Notes: - Was it un-Canadian for Canada to pass the Emergency Act? - Was the MAGA movement monarchist? - Social meaning of NFTs - What NFTs are not - Catholicism — The original blockchain - Code that can make commitments - Wallets are the new web browsers - What really is censorship - Blockchains tell you what to ignore - Porting from Web 2.0 to Web 3.0 - NFTs as human readable format of a smart contract - Why gamers end up as good decision makers - How to identify an extremely online person
Segments Timeline
Welcome to Infinite Loops
Jim O'Shaughnessy introduces the Infinite Loops podcast, emphasizing the goal of resetting thinking on various issues. He highlights the importance of understanding the complexities of markets and thought processes, aiming to help listeners become better investors and nuanced thinkers.
"they just put their seed phrases out in like vienna public they nailed their seed phrases to the vienna public square be like could somebody help me get my wallet fixed [Music]"
Introducing Alex Danco
Jim welcomes Alex Danco back to the podcast, marking his fifth appearance. They share a light-hearted exchange about their previous discussions and the anticipation of diving into the complexities of Web 3.0 and NFTs, setting the stage for a deeper conversation.
"[Music] hi i'm jim o'shaughnessy and welcome to infinite loops sometimes we get caught up in what feel like infinite loops when trying to figure things out markets go up and down research is presented..."
Canada's Emergency Act Controversy
Jim and Alex discuss the recent protests in Canada regarding vaccine mandates, leading to the government's controversial decision to invoke the Emergency Act. They analyze the implications of this reaction, questioning whether it was an appropriate response to the protests and how it was perceived in the U.S.
"never recurs hey there are you actually alex danko first first recurrence of 2022 yes indeed it's in the books how are you jim i'm well how are you i'm doing really well um it's really good to be back..."
American Perspectives on Canadian Actions
The conversation shifts to how Americans viewed Canada's Emergency Act and the freezing of bank accounts. Jim shares insights from U.S. allocators and the general sentiment that such actions would be unacceptable in the U.S., highlighting the differences in governance and public perception between the two countries.
"him or hate him either way what essentially went down was as follows if if a two-year-old throws a big giant tantrum and then their parent responds by locking them in a car for three hours what's the ..."
The Myth of Justin Trudeau
Jim and Alex delve into the persona of Justin Trudeau, discussing how his background and family legacy influence Canadian politics. They explore the concept of political dynasties in Canada and how Trudeau's leadership style reflects a departure from traditional meritocracy.
"they loved the story because of the as you put it the tantrum happened but then the adults didn't really act appropriately for the way that the adults should have acted and and i think that just in ge..."
Monarchist Tendencies in Politics
The discussion takes a provocative turn as Jim and Alex compare the MAGA movement to monarchist principles, questioning the implications of power dynamics in modern politics. They reflect on the nature of authority and the cultural narratives surrounding political figures.
"trudeau come in and become prime minister necessarily bookends a between the trudeau's period that was sort of started at the famous pierre trudeau line just watch me kind of you know in the october c..."
NFTs and the Pay-It-Forward Concept
Jim shares his experience creating an NFT that unlocks opportunities for collaboration on the podcast. He emphasizes the importance of community and the 'pay it forward' mentality, showcasing how the NFT's buyer chose to nominate someone else to join the conversation, highlighting the power of generosity in the digital age.
"you and me talking about your whole aim to be good at twitter is to not be it on twitter every day because every day on twitter there's one main character and you don't want it to be yet that's right ..."
NFTs: A New Way to Create Meaning
Danco reflects on the broader implications of NFTs, questioning their role and potential future. He emphasizes that while traditional methods could achieve similar outcomes, the unique nature of NFTs introduces new dynamics in creating meaning and community engagement.
"communist regime either let go to pot and or actively tried to bring down cool so that's really neat yeah it is neat but i want i want your take first off on just the concept of nfts and and then what..."
The Musician's Business Model
Danco draws parallels between musicians and their business models, explaining how artists often rely on merchandise sales rather than music sales for income. He highlights the importance of meaning and community in driving consumer behavior in the music industry.
"donated that money in regular fiat petro dollars to go rebuild those monuments right none of this in isolation required any of this that's correct but but but it did happen and you did choose it and t..."
Creating Meaning Through Merchandise
Continuing his discussion on musicians, Danco explains how the meaning behind merchandise, like band t-shirts, is created through shared experiences and community. He emphasizes that this meaning is what drives people to purchase, rather than the utility of the item itself.
"was in a band called fundamentals we were on a punk sky label out of montreal we toured around a bit we had a great time we tried to go make it um we we didn't make it big but you know artifacts of ou..."
The Grateful Dead: A Case Study in Meaning
Danco uses the Grateful Dead as an example of a band that successfully created a community around their music. He discusses how fans became advocates for the band, illustrating the power of interpersonal relationships in building brand loyalty and meaning.
"because that's what people do together it's a very very human thing to create meaning together and this is what bands do bands are in the business of creating meaning and then selling a merch that you..."
The Foundation of Meaning in Commerce
Danco argues that meaning is the foundation of commerce, challenging the conventional view that utility comes first. He posits that interpersonal relationships and shared experiences create the meaning that drives consumer behavior.
"but what i wanna i i wanna sort of get back to this simpler point around um meaning right and this idea that like meaning is one of the greatest things in the world because it's something that comes i..."
NFTs as a New Medium for Meaning
Danco discusses how NFTs represent a new way to express interpersonal relationships and social meaning in a digital format. He explains that public blockchains serve as a platform for these interactions, allowing for programmable and shared meaning.
"this is because this whole idea of these interpersonal relationships as the foundation of everything is a rather backwards way from i think how a lot of people from the outside think about commerce an..."
Understanding the Utility of NFTs
Danco addresses the misconception that NFTs are merely collectibles, emphasizing that their true value lies in the social meaning they convey. He argues that the utility of NFTs is rooted in the relationships and communities they foster.
"contract which is hooked onto a particular image effectively called a jpeg by everybody um that shows hey i am the owner quote-unquote of the set of meaning for which there is a handle that is very le..."
Debunking Myths About NFTs and Music
Danco critiques the notion that NFTs will revolutionize the music industry by providing new ways to manage rights and royalties. He argues that this perspective misses the deeper significance of NFTs and their role in creating meaning within the music community.
"the foundation of something that is new and interesting and we can pile things on top of that meaning like oh whoever is an owner of this bit of meaning can be associated with this cool clip of a lebr..."
The Value of Context in NFTs
Danco emphasizes the importance of context in understanding NFTs. He argues that the true value of NFTs comes from the social interactions and meanings they create, rather than the digital items themselves, highlighting the need for a deeper understanding of their role in society.
"like that's dumb right that like it's like look if you want to figure this out go to town that's not why nfts are going to be good for music nfps are going to be good for music because they're going t..."
Rethinking NFT Scarcity
Danco challenges the prevailing narrative that NFTs create scarcity in digital items. He argues that the real scarcity lies in the ability to prove ownership and social connections, rather than the digital assets themselves, prompting a reevaluation of how we perceive value in the NFT space.
"out of my team at shopify and some of our partners in the coming months for this by the way yeah and well just to to interject yeah uh we are completely sympotico i believe that entirely the thing abo..."
The Role of Provenance in Art
In this segment, Danco discusses the significance of provenance in the art world, using the example of a Rembrandt painting to illustrate how the value of art is tied to its authenticity and the social meaning it carries. He highlights how the collapse of perceived value can occur if authenticity is questioned.
"this huge idea around the i don't want to say the beginning of nfts because now these actually started like with cryptokitties a few years ago but like last year during the first big surge of like we'..."
Web 3.0 and Social Context
Danco connects the discussion of NFTs to the broader implications of Web 3.0, emphasizing that the technology is about creating social contexts and relationships rather than just digital transactions. He argues that understanding this context is crucial for leveraging the potential of NFTs and blockchain technology.
"like um is it you know what's it what's a little bit like it's like if you have um a let's say you have like a vinyl like a vinyl record of abbey road or something and i go write paul mccartney's sign..."
Rethinking NFT Scarcity
Alex Danco challenges the common narrative that NFTs are solely about scarcity. He argues that the true value of NFTs lies in the ability to prove association with meaning and identity, rather than the scarcity of the digital item itself. This segment explores the concept of 'scarcity of namespace' and how it relates to the social significance of NFTs.
"would love to change about all these nfc stuff is that entities are not about scarcity right this is whole ideas like nfts are a new way of creating scarce items that are just like absolutely scarce s..."
The Importance of Provenance
Danco discusses the significance of provenance in art and collectibles, illustrating how the value of an artwork can collapse if its authenticity is questioned. He emphasizes that the meaning attached to items, like a Rembrandt, is what truly matters, and how Web 3.0 can transform our understanding of value and community around art.
"yeah yeah what would it make possible like you know i'm a big art collector and and the provence is everything literally everything like if if it if this happened with a a museum that had this uh what..."
Web 3: Abundance Through Scarcity
In this segment, Danco explains how the concept of scarcity in Web 3.0 can lead to an abundance of meaning and creativity. He contrasts the traditional scarcity mindset with an abundance mindset, highlighting how Web 3.0 tools can amplify human creativity and community engagement.
"it right like yeah you can do something that's what web 3 is all about folks wag me right we're all going to make it folks well yeah it's this is the thing where it's like yes it's like there's an ele..."
The Role of Wallets in Web 3.0
Danco elaborates on the role of digital wallets as the new interface for Web 3.0, comparing them to web browsers. He discusses how wallets facilitate informed consent and personal agency in digital interactions, reshaping the dynamics of online engagement and ownership.
"is about right that's what this is about so hard work i i i completely agree and it's one of the things that i think underline the whole idea of the abundance mindset versus the zero someone right we ..."
Informed Consent and User Agency
This segment focuses on the concept of informed consent in Web 3.0, as Danco explains how wallets empower users to control their digital interactions. He emphasizes the importance of user agency and the ability to remove consent, drawing parallels to social media dynamics.
"it's not because we're smart people it's because when your whole life is working with merchants right it's like these are merchants whose job is not terribly dissimilar from musicians right it's creat..."
Blockchain as a Commitment Mechanism
Danco discusses the blockchain as a new type of networked computer that allows for shared state and commitments. He explains how this technology enables trust and reliability in digital interactions, setting the stage for innovative applications and community-driven projects.
"very eager to to hear you uh do a bit on on web 3. um it's like so much stuff is being written talked about blah blah blah blah blah what are your thoughts i mean i mean to some degree i think it's li..."
The Evolution of Web 3.0 Applications
In this segment, Danco outlines the evolution of applications in the Web 3.0 space, emphasizing the importance of wallets and shared state. He discusses how these elements create new opportunities for developers and users, transforming the landscape of digital applications.
"but ultimately you create this you know this this shared bit of state that can grow in ways that are very very constrained but are highly observable and agreed upon so what is the point of that who th..."
Understanding the Role of NFTs
Danco addresses the misconceptions surrounding NFTs, particularly in relation to their perceived value and ownership. He uses the example of the Board Ape Yacht Club to illustrate the complexities of NFT ownership and the implications of centralization in a decentralized world.
"of this is wallets right we had all these false starts with crypto about like how regular people could think about what the atomic unit of it was like is the atomic unit the coins it's like well yes b..."
Censorship and Control in Web 3.0
This segment delves into the challenges of censorship in Web 3.0, as Danco explains that decentralization does not equate to a lack of control. He discusses the nuances of how platforms can still exert influence over NFTs and digital assets, raising important questions about ownership and authority.
"informed consenting to things right and the wallets could do informed consent that has meaning because of the shared state that's in the blockchain right so pause for a second now what on earth is wha..."
The Illusion of NFT Ownership
Alex Danco discusses the complexities of NFT ownership, using the Board Ape Yacht Club as a case study. He explains how NFTs can be frozen or banned from marketplaces like OpenSea, highlighting the misconception that blockchain guarantees absolute ownership. This segment delves into the nuances of censorship in Web 3.0 and the shifting power dynamics in digital ownership.
"letters right it's just literally like a password like a seed phrase that you have right that is this big key to all of this that you can remove and add and remove and add and do what you like and it ..."
Web 3.0: Freedom to Move
Danco articulates the essence of Web 3.0 as a paradigm shift that enhances user freedom and mobility. He emphasizes the importance of wallets and blockchain as foundational elements that allow users to take their identities and assets across platforms, fundamentally changing how we interact with digital spaces.
"just means it is relatively different like like the power of what you have versus what you don't have is relatively shifted towards your ability to just move to another nft marketplace right you could..."
Censorship and Blockchain Ignorance
In this segment, Danco explains how blockchains operate on the principle of collective ignorance, where only the longest chain of blocks is recognized. He discusses the implications of this structure for censorship and the resilience of the network against attempts to manipulate or control it, underscoring the decentralized nature of blockchain technology.
"that's web3 bingo yeah it is exactly what i wanted because and put very very succinctly because that i wasn't succinct that took 10 minutes you just take the last 30 seconds get rid of all the crap at..."
The Challenge of Porting Web 2.0 to Web 3.0
Danco critiques the notion of simply transferring existing Web 2.0 platforms to Web 3.0, arguing that such attempts are likely to fail. He emphasizes the need for innovative thinking and world-building in the Web 3.0 space, suggesting that true value lies in creating new systems rather than replicating old ones.
"bitcoin if a miner minds that block right and it's correct and it's successfully mined and it goes in okay well how do you get into that it's like okay well in order to do that you have to successfull..."
NFTs: Human Readable Smart Contracts
Danco explores the concept of NFTs as human-readable formats for smart contracts, emphasizing their role in expressing identity and individuality within the digital realm. He discusses the cultural significance of NFTs and how they reflect fundamental human behaviors of fitting in and standing out.
"so yeah there's a reason why the twitter of web3 is twitter and not some new thing right right exactly but but but so my the question i'm asking is do you think that there are enough people who are ac..."
Gaming and Decision Making in Business
In this insightful segment, Danco draws parallels between gaming and business decision-making. He highlights how gaming environments allow for rapid decision-making and strategic thinking, providing valuable practice for entrepreneurs. This discussion underscores the importance of adaptability and learning in both gaming and business contexts.
"right i think there's like it it it sounds like almost flippant but it's true which is a sense that like the thing that's valuable is this existing graph of meaning that's starting and growing off of ..."
The Flynn Effect and Instant Feedback
The conversation shifts to the Flynn Effect, which describes the rise in IQ scores over the 20th century. Danco suggests that the instant feedback provided by gaming may contribute to this phenomenon, allowing individuals to learn and adapt more quickly than previous generations, thus enhancing cognitive abilities.
"say with poker players and investing or whatever but you say yeah you just get a lot of practice doing the thing and like you're gonna get good at it same thing with crypto and all these behavioral me..."
Practicing Investment Decisions Through Gaming
Danco discusses a concept of a gaming motif for investing that provides rapid feedback without the negative aspects of gambling. He emphasizes the importance of practicing investment choices in a simulated environment, allowing individuals to refine their decision-making skills significantly more than traditional career paths would allow.
"lines of everything that your parents said was bad for you is actually good for you and and the the the loop that i pick up here is the feedback so i did get pitched on something that i like really to..."
Identifying the 'Extremely Online' Person
In a light-hearted exchange, Danco and his co-host explore the characteristics of individuals who are deeply immersed in online culture. They discuss how language patterns and references can reveal someone's online habits, leading to humorous insights about the impact of digital life on social interactions.
"that's the incentive come work with us shopify.com careers i love the way you work that in there and i i of course will miss a tribute uh where you work to spotify that's right so just as is our ongoi..."
The Charm of Online Discourse
The episode concludes with a reflection on the nature of online conversations and their charm. Danco and his co-host humorously assert that regardless of the topics discussed, their engaging dialogue remains captivating, echoing Oscar Wilde's sentiment about the charm of conversation over its content.
"uh well do they have their phone with them no so no phone yeah like no no obvious thing no obvious things but like no there's no one so you tell me you tell me i don't know i i just thought i just tho..."