Tim O'Reilly on Web3
cbsnews.com
cbsnews.com
Don't just repeat generic points on the topic—this is the most repeated and therefore the most boring flamewar topic that exists right now, so those sorts of comments are off topic. We want curious conversation here [1]. Curiosity withers under repetition [2] and thrives on diffs [3], so let's have the diffs, please.
[1] https://news.ycombinator.com/newsguidelines.html
[2] https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
[3] https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
This is a bit harsh but not wrong. What in my opinion is especially interesting is that we have so many eyes on it already... (this is not necessarily a good thing)
While a lot of people are hating on NFTs or laughing at scalability we need to keep in mind that most development is happening in an open source fashion. If you think about the banking sector in general it is quite secretive and speculative and I believe a fresh wind was necessary and banks got the memo.
Another big problem I see in web3 is that projects are just trying too hard; in this sense we are way more aligned with the Dot-Com bubble. While we are stuck in 1983 (for now) everyone is promising 2050 by yesterday and it gets tiring quickly.
However, the internet was also intended for the individual and was taken away from us as platforms took over... The road to hell is paved with good intentions.
I'm not sure the internet or the web was ever intended for the individual. The centralization of large platforms was probably unexpected, but an outcome where large numbers of "normal" people ran their own sites or servers was not expected either.
Early in the history of the web we did see a lot of personal sites and webrings etc. crop up, but that was a result of the enthusiasm of early adopters, many of whom were technical people, and it never would have had mass appeal for the vast majority of the population.
There seems to be a lot of nostalgia for the early days of the web, which misleads people into believing the web would have continued to work that way if not for the big platforms who took over. But the big platforms were introduced at a time when the web was still pretty decentralized, and they took over because average non-technical users prefer them for their ease of use and network effects.
That's like, the whole premise of yield farming, so I think that horse has fully escaped the barn.
He's probably right though, I have no idea what a "worst case" scenario looks like if all of the yield farmers lose their collaterals; feels like a negative feedback loop, but IDK, maybe it's not because the provider of the loan has guaranteed recourse on a default.
During the dot com bubble a very large number of retail investors (and hedge/mutual funds) were racking up huge gains during the run up due to margin leverage and got wiped out on the way down. During the housing bubble lots of people had 2nd and 3rd mortgages and sucked all of the equity out (or worse, kept trading up to more expensive properties to the point where they had no equity when the market crashed) of their homes and were underwater to the point where it made sense for them to walk away from the property and hurt their credit scores for a period of time.
So while they may not lose absolutely everything, they'll likely lose all of their gains and much of what they started with when the music stops.
Even with borrowing, you can enter a money market with just stablecoins and get returns in the range of 10-30% APY. The risks there are smart contract risk (obviously significant) as well as peg loss.
EDIT: I love the downvotes. Doesn't matter that I wrote an article explicitly calling out web3 as a scam. The article in question got over 100,000 views to date.[0]
In fact, I wish they’d pop already. I’m trying to learn what I need to build a useful product with them, and it’s been difficult to find resources that focus on the technical underpinnings instead of just “copy this code to create your generic NFT.”
On the other hand, the hype cycle is likely driving the tech to mature much more rapidly than it otherwise would. Hopefully, once the crash does come, we’ll be left with a solid platform to do real, novel work.
IMHO, federated networks are about the only promising tech in the web3 soup.
I don’t think that there have been “flame wars” here about it either, nor do I think it lowers the quality of the content here. The idea of NFTs holding value is debatable and naturally polarizing because of how humans form trust channels.
Some are OK in believing a brand new corporation, with little or no oversight, will always do the right thing when it comes to maintaining their records of things tokenized (such as providing legal guidance to courts in proving ownership status according to the software they wrote to color the object with a coin). Some don’t think that’s a thing, now or ever. When there is repeating behaviors from the discourse that tells us something about the divisiveness of the subject itself. When there are repeating behaviors from management about a particular topic, that’s something else entirely.
> I have to assume
You really don't have to assume—you can just ask. In this case your assumptions were wrong:
(1) This has zero to do with YC investments—it is is bog-standard, routine HN moderation. I have no idea what Web 3 investments YC has made (or what Web 3 means, for that matter). We don't moderate HN to promote YC's investments in any case—that would be an idiotic thing to do, as it would destroy the good faith of the community which is literally the only value that HN has. See https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so... for lots of past explanation.
(2) I didn't "nerf" this article off the front page—I turned off the automatic penalty that HN's software had put on this submission*, so that it could make the front page. It fell off later because it set off the flamewar detector.
* as described here: https://news.ycombinator.com/item?id=30305899
> "Get ready for the crash," he said bluntly of the grandest claims made for Web3.
The spirit is broader than most people think. A lot of discussion seems to focus around NFTs or the latest crypto scam but there is also a lot of great open source development towards sovereign data or decentralised identity for example.
I'm not entirely sold that web3 actually solves the problem or does so in a strictly better way[2]. The value proposition for web1 was, "invest your time and money for access". The value proposition of web2 was a response to the time and money investment in the form of "we'll make the web easy to use if you give us ownership."[3] The value proposition of web3 is what exactly? Is seems so far like it's "You'll regain ownership, but you have to accept these negative externalities." It's still early days. We may yet find a better lens of critique.
1. It was physically distributed intentionally of course, but the digital objects and relations were merely coincidentally structured as product of this physical form.
2. Even ignoring the decentralization of wealth extraction that is grifting and rugpulling.
2. Or more generally giving up power for access.
Tim is paraphrasing a famous quote by Upton Sinclair:
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
This quote was also widely thrown around during the financial crisis in '08. But look at home prices now compared to the peak of the "bubble" then. No one knows what the future will bring.
I suspect we're seeing another bubble and for mostly the same reasons.
In 2008 mortgages were handed out like free candy to people who were likely to default. Then they were securitized and a lot of financial institutions invested in them. When investors realized the mortgage securities were much more risky than had been originally believed, the whole thing came crashing down.
Today, people getting mortgages are scrutinized very heavily, and they can actually afford them. A lot of the offers are cash anyway.
The cause of increased house prices today is fundamentally a shortage of housing, compounded by high construction costs for new housing, low mortgage rates, and buyers’ increased preference for more space because of the pandemic.
None of those factors is suddenly going to disappear in a way that would cause housing prices to burst like a bubble. We may see a slow price decline as those factors get sorted out over the next few years, but that would not be a bubble bursting, it would just be an adjustment.
Any return to these spaces being open, especially any pullback from WFH, is likely to result in a reduction of this demand. The question is the extent to which this will happen, where it will happen, and whether it will be sudden. Something is certain to happen along these lines.
The other question is what happens if the Fed hikes interest rates and mortgages are much more expensive. Since most people still have mortgages and most mortgage owners are limited by a price-per-month expenditure, this could hurt demand as well too, and depress prices.
The average credit score in the US for those getting a mortgage dropped in the lead up to 2008:
* https://www.financialsamurai.com/the-average-credit-score-to...
The US is at about the same volume (by dollars) now as in 2003, but back then there was a pretty even split between those with a credit score of 660-719, 710-759, and >760. Now the vast majority of folks have scores >760.
I am under the impression that already by early 70s, political scientists were deeply considering the impact of information systems on society. The following are 1970 and 1971, and I can only assume the brain trusts at e.g. RAND were considering all these matters long before the pseudo-hippie public unveiling of these incredible tools for surveillance and social conditioning. I am not saying Cerf et al were aware of all this, but way above their pay grade there were clearly individuals and institutions considering the advent of the information society.
https://archive.org/details/betweentwoagesam00brze_0
https://www.jstor.org/stable/213404
p.s. the point being that the "closing it down" bit was possibly always in the cards. Effectively a bait and switch.
I don't think VR headsets will be as ubiquitous as phones, but it might get wide adoption. VR hardware would probably then become a moat in this situation - Meta has demonstrated they're more than willing to try that (Facebook accounts and Oculus). Access to the hardware means it's more likely to reach primetime. A moat and high sales are good business. Facebook might be floundering more recently, but they still built Facebook in the first place.
That's what gets me about a lot of these arguments against web3 and the metaverse: that it's just going to fail with nothing to show. There's non-trivial amounts of money flowing into this. Maybe it ends up being silly and smaller than planned, but it still may end up a profitable and ongoing industry sector.
We might have to live with it, even if it doesn't become the mainstream internet.
If the "metaverse" wants to really happen, the devices need to become much much more lightweight, like a normal pair of glasses almost.
It basically solves a lot of issues with other headsets around usability and made it cheap.
> Now, that was also a response that many people had to the world wide web. To existing software developers of the day, it seemed trivial. So even though the technology is slow and very expensive, and it's hard to use distributed databases, there's a lot of investment pouring into the space, and people are trying to figure out actual things that might actually be useful. And I think that it is certainly possible.
Reason is we have no data on other ideas or concepts that never made it that people said the same or similar things about. Reminds me of stories of how HP turned down Woz's idea out of context to other ideas Woz (or others) might have had (could have been thousands) that they were right about.
> You look at OpenSea the largest NFT marketplace, and it has 600,000 users. By the time the web got to these kinds of valuations, we were talking about hundreds of millions of users. So I believe that it really is a pretty serious speculative bubble on a very small foundation.
Again 'n=1' (which btw doesn't mean he isn't right but not sure you can just dig up a number in that way to prove a point).
Remember Amazon lost millions for so many years before becoming profitable but you can't use Amazon as a reason why another company losing money will succeed. 'Oh look they said that about Amazon so...'
> And even then, how much time will people spend in this VR online space? I don't really know. Financial, cultural and political norms are changing.
I think there is a way to figure out 'how much time' by comparing it to other ways that 'people waste time'. Look plenty of people 'waste' time at sports events. But even more waste it by watching tv because that's cheaper and easier and more comfortable. I think this could be modeled.
> I could be wrong about all of this. We're in a period of great fluidity around norms.
I think this weakens what he has said 'I could be wrong'. Implied is you could be wrong. Why weaken by saying that (to start your last thought) even though he more or less gives a reason why he could be wrong.
He could have said 'based on how things look today this is what I think but like with anything it's impossible to predict how future events will impact how successful or not this becomes.
If people keep posting generic yay-crypto-boo-crypto flamewar tropes and hopelessly generic comments—the most boring kind of comment there is—then obviously this thread is hopeless.
It also explains the most common response I hear from those invested in web3: “You don’t understand and it’s not something that can be explained. You need to be a part of it to grasp it.”
Has nothing to do with money.
Can you elaborate a claim that you think could be realistically implemented that in turn could prevent the financial gains of others?
So who's the greater fool?
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I suspect it will go the way of "Bluetooth 3".