Category: Article

  • Web3 – learning from science fiction

    Web3 – learning from science fiction

    You cannot call yourself a futurist if you aren’t also a student of other great futurists. The best of them, in my opinion, are science fiction writers.

    The inspiration for much of my writing lies in science fiction, and how it connects back from the future to today’s innovation. It is a thread which connects my professional and personal interests in how technology and capital interact.

    credstick1

    A credstick is a small pen-like device which can be inserted into various machines to transfer funds, much like a credit card. In 2070, credsticks are a primary method of transferring funds with no paper trail.

    Shadowrun Wiki

    Shadowrun is a video game franchise that dates back to 1989. An original science fiction IP set in 2050 and beyond.

    Credsticks are used as the primary economic tool in the game, storing and tranferring digital currency. There are certified (tradeable) and non-certified (personal use) credsticks. There are grades which reflect the maximum credit level. There is detail about how they are used in a spectrum of cases and transaction types.2

    The way these devices fit into the world, the role the play in the economy, and the manner in which they influence behaviour, is fascinating. It’s a fleshed-out, believable and practical vision for what money might look like in the future.

    I’ve spent a lot of time listening to people in the financial technology industry (former bankers, consultants, cryptocurrency enthusiasts) talk about their vision for the future of money. It’s not usually quite as thought-provoking, or perhaps even as realistic, as the alternatives presented in fictional worlds like Shadowrun.

    Their vision tends to be constrained by the idea that today’s conditions (financial regulation, technical limitations, human preferences) will persist. Or that today’s agendas (promoting blockchain, disintermediation, globalism) will be tomorrow’s.

    We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.

    Bill Gates

    Sometimes you need to wipe the board clean and reimagine these systems and structures from scratch, to see what the future may hold. Change your context entirely.

    Start from somewhere else, with a different perspective.

    This is where science fiction comes in.

    It isn’t obvious if you look around at the moment, but the important conceptual work on what a metaverse might be, and how it may function, has been quietly going on for more than fifty years.

    If you read Tad William’s Otherland series, first published in 1996, you are likely to find the ideas profound, if not prophetic. Particularly on the cultural, social and personal influence of virtual worlds.

    The technology involved in Tad’s vision may seem a bit far-fetched, but ultimately that doesn’t really matter.

    In the end, if [science fiction] is any good, it’s never about the machine. It’s always about the human relationship with it.

    Simon Ings

    What matters is the people. What does their life look like? What’s the cost of this future to them personally, and to society, in contrast with our here-and-now?

    That focus on the human consequence over the specifics of the technology is precisely why there is so much we can learn from science fiction. It doesn’t matter if it’s a blockchain or a computer powered by ants3, what matters is the impact on people.

    Good science fiction is an incredibly powerful tool for making bets on what the future could look like4, by allowing you to step into the mind of a person whose day-job is to focus their creative energies on exactly that question. Free of agendas and preconceptions.

    It was of great interest to me when the Web3 and metaverse enthusiasm started to spin up. It’s a topic with mind-bending potential, and likely represents the next great technological leap we will take. Fertile ground for science fiction.

    Looking around at how people in adjacent industries were conceiving this new virtual world potential, two things became clear:

    1. There is very little familiarity with the history of the games industry. MUDs, MMOs, virtual worlds, etc. People are taking fairly routine ideas and presenting them as ‘the next big thing’.
    2. There is even less familiarity with what has been written about these ideas before. Virtual worlds, “metaverses”, have starred in science fiction IPs since around 1964.

    Both of these points are frustrating.

    The first represents the reality of the technology behind virtual worlds today, and our capability in the near future.5 It also covers the history, and the most sophsticated examples of online communities. Most of the great case-studies, and much of the learning about human behaviour online.

    The second represents the potential, and the consequences. The fully thought-through visions for what a virtual world might look like, how people might interact with it, the dangers, the opportunities, the broader consequences for society… everything. How people are likely to respond, long term, to the emergence of a genuine metaverse.

    In my previous entry I talked about the need for Web3 to find product-market fit. 90% of that work is understanding the human component. The needs and the priorities.

    The disregard of science fiction and the games industry feels like another example of Web3 enthusiasm bypassing the crucial human factors in the fervor for technological advance.

    What better way to design the internet of the future, and everything it entails, than to use great works of science fiction to look back on the present?

    Don’t forget that humans are at the centre of it. Not technology.

    1. If you’ve been wondering about the name of this blog, this is the connection – at the intersection of fintech, web3 and science fiction. [↩]
    2. There is even a comical difference, in this fictional world, between US credsticks and the European implementation, the Europäisches Bargeldloses Zahlungsmittel. [↩]
    3. I’ll give Sir Terry a nod wherever I can [↩]
    4. I have a long-term investment thesis which is basically ‘which of these companies would thrive in Otherland‘s vision of the 2080s’, which boils down to Meta, Apple, NVIDIA and Disney. [↩]
    5. Whether or not it exists on a blockchain is irrelevant, and any immersive, 3D virtual world certainly wont. [↩]

  • Making the case for Web3

    The Web3 market seems to move in waves of enthusiasm. A surge of ideas and optimism, followed by a slowdown, and then the cynics and skeptics beat it back.

    This happened first in fintech, where blockchain cut its teeth on DLT and cryptocurrencies. Decentralisation would sink the banks, smart contracts would make regulation irrelevant, and crypto would displace fiat.

    Except it didn’t, it isn’t, and it wont.

    Fintech moved on from decentralised finance to embedded finance. The new unicorns on the block were utterly dull consumer lending propositions. Life returned to normal.

    Left in the sand, as the water washed back out, were a few companies who had figured out how to apply this technology to a real problem: cross-border transactions in low-infrastructure environments like Africa. Eversend, Kotani Pay, Chipper Cash, and AZA Finance are a few examples.

    To this day, those companies are my go-to example when someone asks that all-too-easy question: “So, what’s a real world application of blockchain technology which actually makes sense?”

    Fortunately, not many people ask me for a second example, because that seems tricky.

    Those companies were left on the retreating edge of the fintech wave, and we’re now deep in yet another wave with NFTs.

    Again the sand is starting to slip out beneath our feet.

    The question is, which way is the tide heading? Which companies will survive the cycle? What’s left when it’s over?

    the tide is coming in

    Provided more progress is made than is lost, as long as the surviving companies have more impact than the lost capital, we can say that the tide still appears to be coming in. The momentum will sustain, and there will be another wave – even if it’s a little slower, and goes a little less far.

    Anh-Tho Chuong Degroote thinks that the next place to look is infrastructure. The ‘AWS and Microsofts’ of Web3, the Polygons and Alechemys. These are, theoritically, the platforms which may make Web3 a more accessible and fruitful environment for future entrepreneurs.

    I suspect she’s right, but it’s a bit of a ‘double or nothing’ bet.

    Do we pump capital into infrastructure in the hope that it solves the issues holding Web3 back? Or do we just discover that there were no problems to be solved in the first place?

    Is Web3 a land of solutions in search of problems?

    Let’s presume that the next wave for Web3 is infrastructure. It would unfortunate timing for NFTs, which would have benefitted from the infrastructure existing, but also they’ve helped to spur a significant amount innovation and new capital.

    In the most likely scenario, we end this wave with a few well-funded technology companies who have made building and operating on blockchain technology much easier. That’s not a bad outcome, but I don’t think it’s going to drive much energy back into the market either.

    There’s still the sword of Damoclese hanging over Web 3.

    the tide goes out again

    The more you pay attention to this ecosystem through the lens of value for end users, the clearer the problem seems: It is the macrocosm of a startup which has neglected product-market fit in favour of building exciting technology. The pursuit of traction through features and performance, with the blind-refusal of nay-sayers and false prophets.

    Each new major advance produces that dopamine hit. Companies are born, funded, and die. Millions are made and lost. But each time, the water goes back out, and takes all but a few with it.

    The truth is simple: Web3 needs to make sure that the tide keeps rising, and the only way to do that is to look at the lasting success stories – and produce more of them. The companies with sustainable, growing revenue, who are building their audience outside of the Web3 tent.

    Those companies all have one thing in common: they have adequetely identified and addressed a real-world customer need. The promotion and sale of their solution had everything to do with the outcome for the user, and nothing to do with the underlying technology.

    Something to consider, when evaluating Web3 projects: if you strip out all mentions of the technology, does it still seem attractive? Does it solve a problem?

    Through answering this question more often, with better answers, the case can start to be made for Web3.

    Eliminate the hype.

    Lucrative ideas are not always good ideas.