Crypto, Web3, And The Big Nothing
When I wrote my piece earlier this week about Web3 and Alexis Ohanian’s quest to turn gaming into a job, I got into a few spirited discussions about why he wants to do so. This isn’t just about money - Ohanian is worth hundreds of millions of dollars, as are many of the people investing in Web3 - and the answer isn’t as simple as “it’s a quick and easy way to extract money from people.”
Sidenote: I feel like sometimes I use terms like Web3, crypto, NFT, etc. a bit flippantly - I’d genuinely love to hear if I need to start explaining these things a little before going into one of my newsletters. Email (ez@substack.com) or comment below!
Okay, let me backtrack - yes, raw greed will always be a common thread. Web3 and crypto, in general are a quick way for venture capitalists to create quick liquidity from investments. A piece by Fais Khan showed that Coinbase Ventures-backed coins tend to underperform Bitcoin after an initial pop on crypto exchange Coinbase (IE: when the VCs cash out), and that VCs are taking advantage of retail investors:
Rather, I think this is a microcosm of how bad the incentives are in crypto - VCs and private investors that used to have to wait ten years for liquidity can now get it within one. The last time that happened was 1999, and we know how that ended. It’s a recipe for risk taking that is then quickly passed on to the public.
