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We're in the first phase of Web3

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In response to criticism that Web3 has too many speculators, Hoffman argues that greed as a driving force is part of socioeconomic progress.

Vices and ethic in Web3: What's Driving the Next Internet Age

Greylock

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With the rapid development of the next phase of the Internet, what are the core principles that make Web3 different from previous eras, and how is it influenced by deep human nature? And how do early lessons guide or hinder technological progress?

In this article, Reid Hoffman, co-founder of LinkedIn and a partner at Greylock, and Chris Yeh, co-author of "lightning expansion," discuss the current state of Web3.0.

In a previous paperThe article"Hoffman describes how the" savage idealism "of the era led to major advances that had a positive and negative impact on the world, and how the" seven SINS "of humanity underlie many technological pursuits. For example, while greed is arguably the best-known "sin" in the business world, in practice it is far more complex and subtle than simple basic desires.

"Just because you have something that we would describe as sinful or negative emotions, it doesn't in and of itself make you a bad person or anything else," Hoffman said. "It's how you deal with them."

With this in mind, Hoffman and Yeh discuss the ethical considerations that entrepreneurs and investors can bring to Web3; Core similarities and differences between Web3 and previous eras; And how human vices and virtues continue to provide a framework for innovation and investment.

"We're in phase one of Web3," Hoffman said. "So having wild idealism is a good thing, and of course you should always be aware of what can go wrong and try to channel positive outcomes away from negative ones."

Here is a full translation of the article by Chain Catcher:

Chris Yeh: Hi, I'm Chris Yeh, co-author of Blitzkrieg Expansion. I'm back with my co-author and old friend Reid Hoffman, co-founder of LinkedIn and an investor in Greylock Partners.

Reid, back in October, you wrote an article about your experience with Web 2.0. In it, extend your heuristic approach to the seven investing SINS.

I think it's a great philosophical essay, thinking about how we should rise to the challenge, in the words of Adam Smith's other great book, The Theory of Moral Sentiments, of harnessing deep-seated human desires for the good of society.

Later, bloomberg reporter Joshua Brustein read your article and got in touch with you to ask how some of the lessons of the old Internet era could be applied to the virtual world we see today, and the Web3.0 boom around it. I think Joshua raised some very smart and provocative questions that we should explore more deeply, so feel free to talk to us about them.

So, let's continue with the first question. Joshua observed that the basic tenets of Web 2.0 you describe are similar to the way people talk about the spirit of Web3. I think he was referring to your statement that "wild idealism is the lingua lingua of Web 2.0. There is widespread agreement that fewer regulators, freer flow of information and peer-to-peer connections are destined to produce positive results for individuals and society."

I wonder if you see any similarities. What do you think of these views?

Hoffman: Well, first of all, a little bit of history, I think even Web 1.0 had that kind of crazy idealism. And at one point, the view today is that all Web 1.0 was wrong, but I think it was right at the time.

The advantage of the Internet in its creation was to redefine the idea of Spaces where people could communicate and find each other, where information could flow.

I mean, for example, anyone have produced data connection phone now basically can access wikipedia, and in daily life is not easy to find a variety of other types of information resources, I think the problem is that we bring a series of positive change in society, such as exposure, blacks were not treated fairly It comes from being able to upload videos and other types of products. I think the wild idealism surrounding the Internet communication system offers an effective way to provide justice, equity and health for all of society.

And I think that's part of the reason why we moved from Web1.0 to Web 2.0 -- Web1.0 is where you enter the groundbreaking cyberspace, and you probably have a pseudonym because where you're going is unknown. So, I could be an anime fan, you could be a pop culture boy, and that's how we communicate with each other.

Then Web 2.0 brings your real identity and real relationships. Clearly, LinkedIn allows people to trust each other and help each other by verifying your real name and connecting with people with whom you have real connections -- not just browsing the Internet world, the online world -- but the real world as well.

To the idea that Web3.0 is affecting the world, I think the answer is positive and beautiful. It's like, "Hey, there's a lot of potential here that's really interesting, and there's a lot of stuff that can be done spectacularly. There's a lot of engineers and developers all over the world working on this."

You might ask, "Well, what kind of things? I haven't seen anything yet." Something has happened so far. There is something called being seen as gold. Or digital gold assets. It's a good thing to diversify our assets. Because in fact,Part of the reason we have stability in the modern financial system is that I have a lot of different diversified assets and other kinds of things to keep the financial system healthy and prosperous, because you have some balance between the assets.

I think you've seen that the protection of the banking system has a lot of identification procedures, and people who have very good banking systems in the West who are using these strong banking systems say, "Well, we don't need that." But venezuela, Argentina and elsewhere do need them, because Web3.0 provides a place where corrupt governments can't stifle your banking system, and the same diversification of assets can be a very good thing.

Eventually, we could create a cheaper banking system and then bring billions of people currently unbanked into its modern value. Today, if you want a cross-border cash solution, it's actually one of the best cross-border cash solutions. And I think as smart contracts evolve, you're going to see all kinds of new things.

The Web3.0 people talk about this theory, and I think it's interesting, that "internet-based technology has changed the way we think about how to activate dormant data and make it intrinsically valuable." As an article or a piece of information, or as a video or a song, they can have great value.

Web 2.0 introduces identity systems into this communication and collaboration, primarily through LinkedIn, social networks, and other types of real identities. Then Web 3.0 now introduces this open ecosystem where you can create platforms or develop asset value systems, like digital gold or currency, to pay for things or contracts, platforms for doing things or building new systems.

And I think what you're seeing is a Cambrian explosion, which takes a lot of effort. Much of it, by the way, will be cannon fodder just like Web 1.0. Because of the financial system, we have to be more careful about that. But some of them will persist in very interesting ways.

That's part of the reason why I gave a speech in Davos in 2015 and wrote an article for Wired in the UK, which is the fact that the world will want to have what I call a "crypto capital system" -- it uses currencies, asset platform caps, capital systems -- that will actually facilitate commerce and trade worldwide. I think this wild idealism is the right place to start.

Chris Yeh:If I hear you right, I think that in addition to believing that this wild idealism has real positive meaning, there's also revisionist influence on us, because we're used to the wild idealism of Web 1.0 or the Dotcom era, and the changes that the idea of Web 2.0 brings to us are, "Oh, It just brought us YouTube and Amazon, no big deal."

It's actually a very big challenge. It's just human nature to get used to all the good things and still focus on the things that I can't forget."

Hoffman: That's true, but human nature is also why we've made progress.

Because we are ignoring all the benefits we have already gained from Web 2.0. The fact that Black Lives Matter has succeeded, and the progress we've made on gay marriage, and all the other understanding and compassion and inner voice, "we're all just a bunch of normal people as part of a cultural change."

So, people say, "Because of this bad thing, we should turn back the clocks." The answer is no, we should always move forward, we should fix what's bad as we go.

That's the revisionist tendency to say, "That's wild idealism," as opposed to, "Look, that's wild idealism, but we didn't realize we'd have these problems later."

But by the way, you still have to have that idealism. Now it's a question of not looking back and saying, "Well, that shouldn't have been crazy idealism." And the answer is no, no, we should always be idealistic about how we're going to solve the problems that might arise in the future, and I think that's the key.

We are in the first phase of Web3.0. So having wild idealism is a good thing, although of course you should always focus on what could go wrong and try to steer towards positive outcomes and away from negative ones.

Chris Yeh: If you have an idealistic view that things can only get better, that everything will be 100% fine, you will be disappointed if you realize that there will be some problems that we can't foresee, but we find that we can improve, even though the future doesn't seem so bright.

Hoffman: Yes. And there are many challenges ahead. But the problem is, if you don't make an effort to make it better, you'll almost certainly end up with pessimistic results. It is naive and extreme to think that we can worship only the past. This does not mean that regulation will have a positive impact. I think it could have a very negative impact or a very limited impact on the future. The question is essentially how do we shape the future.

Chris Yeh: Now, as I think back to the dot-com era, the Web 2.0 era, and now the nascent Web3.0 era, one of the generalizations I hear people use is...The dotcom era was about reading, the Web 2.0 era was about writing, and the Web3 era was about ownership. I think it's very simplistic to say that, but it's a clever way of describing it.

And when I think about this, I think if I compare Web3.0 and the concept of ownership, and compare that to Web 2.0 and the creativity that it unleashes, then we have a lot of new user-generated content in it Web 2.0, It's almost as if we have user-generated assets or user-generated value in the Web 3.0 world.

Hoffman:Well, most of the Web3.0 stuff comes from what happens when you have an encrypted wallet, like NFT and other things that I think are really interesting. So what are the applications we can build on top of it?

That obviously includes assets, currency, banking, and it includes unique projects like NFT, which can really see more of the power of the creator or maker economy, which is seeing all kinds of efforts and companies that are doing everything -- from subscribing to platforms like Patreon, to new productivity software like Coda, Go to places like Pinata where NFT is being done, and you'll see all these things come into play.

I don't think of writing and reading as Web 1 and Web 2. I would say writing and reading, digital content like Web 1. Web 2 is real identity and relationships, and we merge and navigate to that. And then I think, at least in Web3, the concept of digital ownership was introduced.

I think the really interesting part is the various ways in which ownership, like we all tend to say ownership is I own this whole interest. In fact, I think as technology evolves, we realize that ownership is a complex relationship. If you find a song in digital goods, do you own a recording of that song? Do you own the written nature of the song? Do you own any of the people who recorded the songs, or sampled the songs? All of these are questions of ownership, and they start to loom large once you have more sophisticated technology. And I think more sophisticated technology will always surround it.

For example, if you own a piece of land and there's a stream running, can I poop in the stream? You say, "Sure, it's my creek." But the part of the stream above you, and the part of the stream below you, you don't own. Therefore, your ownership of the stream may not mean you can poop in the stream. Maybe it means that you can take some water or do something, it's a way of saying ownership. This is a detailed description of ownership.

I think the most interesting thing about Web3 is, "ok, now that we have ownership as part of this, how has the concept of ownership evolved?" How does this evolve over the course of our lives? Not only is it virtual cyberspace, there's no need to talk about equity.

Everything the digital space comes into our lives is only part of it. I think the ownership part of it makes up the arc of the three, the arc of the three-word story that you've drawn about vectors, and what's interesting about doing that.

I do think ownership is one of the keys. Eg. To be frank, however,I think what defines human society and progress is how we view our relationships with each other: how do we find each other, how do we define our identities? How do we form an alliance? How do we form communities in society, companies and teams? How do we work together, collaborate together, live together? All these types of things.

So one possibility is that I own X and how do we relate to each other?

If you see what I mean by ownership as a complicated [concept], it's because I think ownership affects our relationship with each other. So, from the point of view of the first book, two people together, I think of us as a way of looking at this concept. That's the nuances around Web3.0 ownership and the kind of innovation and experimentation and effort that I think will take place... We are only in the first phase of it.

Chris Yeh: Now, one aspect of the concept of ownership is the kind of innovation that you're talking about. On the other side is the phrase greed is an advantage. Obviously, greed is one of the seven crime investment frameworks you use to make you one of the most successful Web 2.0 investors. Joshua Brustein asked again about the seven deadly SINS and said, "using this framework, if we were to look back at mature Web3 in a decade's time it seems likely that the original sin would be greed."

Given the amount of financial speculation in and around this movement to date, do you think this is a problem?

Hoffman: Yes, but actually I think, in a more humanistic kind of entrepreneurship, how do you transform them? How do you take that initial opportunity and turn it into something better for society and for the individual? That's part of the moral sentiment theory, that even by using greed, we're doing each other a service.

Even if I want to make a large sum of money - and may even make more money than you, compete with you at the same time, I can through to provide you with voluntary purchase products and services to do this, and by doing so to create a new concept of both the society and the creation of value, also is my practice is how to better provide service for you, to get its development.

When I give these talks about the seven SINS to different students, I say, "What is LinkedIn?" I would say, "Greed, because it's economics." The question is, how do I double my salary? How can I make more money? Is there any way I can do this? Of course, I think most people approach LinkedIn out of "greed," they're looking for better things, have dollar signs on their heads and are looking for financial gratification.

In fact, this drive is part of socioeconomic progress.For example, how do you pay for your education? How do you pay for your medical bills? By creating productivity, we can afford to pay for some services.

That's why you don't have this affliction when humans are mostly working in the fields. The only people who could afford a doctor were nobles, or lavish merchant Kings. And with the development of the Web, we can now provide doctors to more people. It's part of social progress. So greed sets in, but it turns to how do we essentially build a nobler society.

So, to answer that question. You say, "Well, I do think, despite a lot of speculation, that one of the deepest SINS is how do you make a lot of money?" Now I think one of the interesting things when you look at Web3.0 is the ability to categorize projects. I've always been a proponent of entrepreneurship, like a missionary, who says, "The world is a better place this way, whether you agree with our particular mission or not, but it can still change them and maybe make them more money." Others ask more simply, "How do I make a lot of money?" .

Greed is not the judge of a man. There are different kinds of rhythms, goals, things and forms, as well as who is working on the project and what comes out of it. But I think all of these things create new infrastructure.

You say, "Well, is financial infrastructure good for workers in the modern world?" The answer is yes, "but just like a lot of people go into banking because they just think, 'I like to be close to money, money is my first love.'" That's clearly greedy.

When you get it, when you turn it into a force, when you turn moral sentiment theory into something else, that's a good thing.

Now our challenge is that it's very early days and there's a lot of wild speculation. Some may even be fraudulent, misleading or misbehaving in one direction or another. We want to get rid of it and promote the positive. But we also want to make sure that we always aim for good results.

Like when people say "stop developing," well, you might be correcting a wrong behavior. But by the way, if all you do is go around and say, "Stop that, you're not shaping a better future," that doesn't do any of us any good. The advice that should be given is "more of this, less of that". This is the future we should build."

So I think all of us as builders and shapers and critics and commentators have a moral obligation not only to say, "It's not like that," but to establish a conversation and say, "This is positive. This is where we should be heading."

So, there's a lot of speculation out there, some of it really bad, but there's also some of it that will allow us to build some new value instruments and banking systems that will help take the financial part of our society to the next level.

Chris Yeh: I think one of the things that struck me about your Knight Foundation paper is that it's not easy to do what you just said. Take these basic human emotions and turn them into something of value. I think one of the things that you write is really important is that it takes hard work.

You say, in retrospect, "What I didn't fully consider my seven SINS heuristic is that the seven SINS are long-term indicators of human behavior. Because behavior is so difficult to constrain, effectively transforming grassroots engagement and advocacy, jealousy and compassion is not an easy thing to do. It takes persistent effort."

It's hard work, which means there's risk. If you cater to, or even passively react to, people's negative emotions, then as a platform developer you will instinctively shy away from the job. Your financial return may be even lower.

So again, I think this goes back to the moral sentiment theory. It's a moral choice people need to make. This is not a purely economic choice. We will choose something that may be slightly negative economically, but is better for society.

Chris Yeh: It sounds like if you think about the Web3 transformation that's taking place, these technologists, entrepreneurs and investors, they may be using greed as this motivator. But if they think carefully about how to build based on more than just greedy outcomes, then negative emotions or desires can be used to drive positive outcomes.

Hoffman:Yes, that's right. It's a problem, just because you have desires, or just because you have something that we would describe as sinful or negative emotions, it doesn't mean you're a bad person per se, it's a matter of how you perceive them.

For example, if you are angry at society and you volunteer because you are angry at what is happening in society, then you are channeling that into kindness. If you get angry and you go out and break Windows and attack people, then you're leading it to a bad result.