Celcius users lost funds, AWS partners with Avalance, Chris Dixon's (a16z) interview notes

[...] if Web3 works right — if we can do it the right way — it is the best of both worlds of Web1 and Web2. The advanced functionality that we have come to like from Web2 service is the slick user interfaces, the ability to read and write as we say, and to both consume and publish. We also have the predictability, reliability, and neutrality of Web1 protocols. Very importantly, we have the ability for creative people, businesses, and startups to reach audiences directly, and to truly have a relationship with those audiences that is not mediated by algorithms and advertising, which is where I think we are today.

The problem with RSS and with Mastodon is the internet right now has no publicly owned, common database; there is no place to store that follow graph. That is why companies stepped in and said, “We’ll store it for you.” Then once they stored it, they ended up having monopolistic network effects. One way to look at a blockchain is as a community-owned database. DNS and a blockchain are the only examples in the history of the internet where you had databases that a community owned, not a company. The other exception might be Wikipedia, as it is a nonprofit. [...]

That is basically my argument. We could take things like Mastodon and RSS and make them feature parity with Twitter and Facebook, if we are willing to use some of these new technologies like blockchains.

The way I look at a social network is that there is a two-sided market. You can do distribution, you can do monetization. With YouTube or Spotify, it is both acquiring an audience and it is monetizing those users. In Web2 those two things are bundled. I think that there is a really interesting opportunity right now to unbundle those two things.

I believe the musician keeps 95 percent, which is dramatically different. Contrast that with Spotify, who on their own site advertises they have 8 million musicians, and of that, only 14,000 make $50,000 or more per year. The rest make less. You talk to musicians and they will say streaming is not a very good option unless you are some mega artist. In fact, most musicians pre-Covid-19 would make most of their money offline in merch and touring. Why? You don’t have these giant Web2 machines sitting in the middle of you and your audience.

Kevin Kelly has a famous blog post from around 2002 where he mentions this great thing about the internet. For people like me, who were around for the first year of the internet, this was always the dream. You could now have someone who is into some kind of niche activity that most of the world does not love, but there are 1,000 people that really love it and are willing to patronize, buy books, and visit when there’s a talk. I believe that never happened in Web2. It did not happen because of the nature of the business models. They are very extractive — Facebook is well-known for this — and they will deliberately let you build a big organic reach, then change the algorithm to lower your reach and make you pay to get back there. They are incredibly sophisticated money extraction machines. This is why they are so profitable and so successful.

I think that we are going to show very quickly that musicians can make a lot more money through these methods than they can on Spotify. When they see that and they see it at scale, I think there is going to be a giant wave of a transition away from those other Web2 services. They may still use them for distribution — I don’t see Web3 replacing TikTok anytime soon — but I think we can replace a lot of these things in terms of monetization.

I view the internet today as millions of subcommunities. I think NFTs are a way for subcommunities to have cultural artifacts and create little economies within them.

I think the question is, do the network effects accrue to the company, or do they accrue to the protocol? In Web1, they accrue to the protocol, in Web2, they accrue to the company. In Web3, we are trying to architect it such that they will accrue to the protocol.

To me, NFTs are very similar. It is virtual goods for the rest of the internet. They are going to let musicians monetize the way Fortnite monetizes. So just give away your music, because I think ultimately that will be the dominant model. We are not pushing that on anybody, to be clear, but I think people will opt for that. Do all the things the video game world does: give it away, have it stream, have it remixed, have mods, make it as popular as possible, get it embedded in culture, and then monetize the status layer, the NFT layer, the virtual good layer. Video games figured this out; this is not that revolutionary. It just gives that technology to everybody else, so I think it will only make media more open.