1/ Tokens are a new digital primitive, analogous to the website 🧵
2/ Major computing waves generally have two eras: the skeuomorphic era and the native era.
3/ In the skeuomorphic era, the design thinking is largely adapted from older domains. For example, the early web was mostly digital adaptations of pre-internet activities like letter writing and mail-order shopping. Websites back then were mostly read only.
4/ It took about a decade for technologists to start seriously exploring the idea that websites could be read/write, where users generate the content. This led to the growth of web native categories like social networking, crowdfunding, and social productivity apps.
5/ This pattern is repeating itself with crypto/Web 3. There are some great native Web 3 products, but overall we are still in the skeuomorphic era. Many Web 3 products are adaptations from older domains.
6/ Popular skeuomorphic Web 3 ideas include offline ticketing, supply chain management, and record keeping for offline assets. These may be good ideas, just as read-only websites were a good idea, but they only scratch the surface of what Web 3 can be.
7/ A lot of today’s NFTs are adaptations from the offline world of art and collectibles. This leads people to think that NFTs are limited to those domains, in the same way people once thought the web was limited to brochures and magazines.
8/ Tokens—fungibles and NFTs— are better thought of as new digital primitives, similar in flexibility and generality to past digital primitives like the website.
9/ Tokens give users property rights: the ability to own a piece of the internet.
10/ Web 2 left out digital property rights. When you use a site (or app), it would only let you borrow or rent things. Imagine if in the real world you had to buy everything from scratch every time you went to a new place. That’s Web 2.
11/ Like websites, tokens are digital primitives that can be generalized to represent almost anything-- money, art, photo, music, text, code, game items, control, access, and whatever people dream up in the future.
12/ Users can now have a persistent inventory of objects in their wallet that they take from one app to another. If their objects increase in value, the user gets the upside. This is a big change from Web 2 where the upside was mostly captured by tech companies.
13/ We are still very much in the skeuomorphic era of Web 3, but are starting to see a new wave of native applications that have no prior analogue and simply couldn’t have existed before.
14/ For example, building on mechanism designs pioneered by DeFi entrepreneurs, a new wave of DAOs are exploring ways for groups to come together, pool resources, build things, and self-govern.
15/ Composable NFT games like Loot incentivize the community to build an entire world around a single set of NFTs— an activity that would be impossible without the ownership and portability that Web 3 enables.
16/ There is nothing intrinsic about fungible tokens that needs to be related to money and finance, and nothing intrinsic about NFTs that needs to be related to art and collectibles.
17/ Those are great initial applications, and will likely remain very important, but tokens are better thought of as a new digital primitive, analogous to the website— the atomic unit around which a new era of the internet is organized.
Originally published 9/20/21 on Twitter.