If you believe the spin, the reason that Andreessen Horowitz — or a16z — is betting billions of dollars on the chimerical, crypto-powered idea of “Web3” is because the current version of the internet, “Web2”, gives too much money and power to Big Tech, and not enough to users.
You might wonder whether one of Silicon Valley’s biggest venture capital funds might themselves be trying to grab as much money and power as they can but no, really, it’s you they care about.
“My hope is through Web3, we can return to . . . a much more decentralised distribution of power and control,” Chris Dixon, head of the firm’s $7.6bn crypto fund, told the FT’s Tech Tonic podcast. “Facebook, Instagram . . . They figured out a way to have other people create their content and take basically all of the money,” he said.
This is bemusing. Isn’t a16z at the very heart of Big Tech, having massively profited from Web2? Is co-founder Marc Andreessen not still on the board of Meta — the company that owns both Facebook and Instagram — and doesn’t he still own millions of dollars’ worth of shares in it? And anyway, isn’t the whole point of venture capital to generate returns? Why does this company — and the tech sector more broadly — feel the need to insist that their raison d’être is saving the world, when in reality they are simply out to make as much money as they can? Shouldn’t it be OK to say that?
Dixon in fact went still further. Web3, he said, wouldn’t just follow the old Google mantra of “Don’t be evil” — which was quietly abandoned a few years ago — because this relies on fallible human beings sticking to it.
Making the internet run on blockchains instead, and introducing new financial incentives in the form of crypto tokens, would actually somehow mean this idea was built into the system: “That’s a very, very important concept in Web3: ‘can’t be evil’ instead of ‘don’t be evil’.”
Now this, of course, is a farcical idea, as a quick glance at some of the projects that a16z’s crypto fund has invested in can demonstrate. While Dixon insists that in this new vision of the internet, “data is controlled by users”, one of his investments, Worldcoin, has been collecting biometric data from people in developing countries in return for crypto tokens and has been accused of deceptive marketing. Worldcoin’s chief executive told BuzzFeed News that the company “will improve” communication and marketing.
The extractive practices of a more mainstream investment, Coinbase, helped the crypto exchange rake in $3.6bn of profits in 2021.
The truth is that the lofty claims made by a16z are part of a have-your-cake-and-eat-it culture that we have all helped create. We so demonised the “vampire squid” banks in the aftermath of the financial crisis that the business of making money became seen as ugly and immoral. Cue young business school graduates — the young are the most likely to demand a job with “purpose” — shunning investment banking for Silicon Valley, which offered them not only free beers and ping pong tables, but the chance to feel they were making a difference.
“Big Tech was saying ‘we’re better than finance’,” says Martin Walker, director of banking and finance at the Center for Evidence-Based Management. “They were more socially conscious and you could get all kinds of stuff for free . . . but what we have learnt is that Big Tech does not give away things for nothing. They’re either trying to build monopolies or they’re trying to extract value from people in some other way.”
Since the explosion of ESG, too, investors want to be told they are putting their money into projects that are doing good — whether or not that is true is somewhat beside the point.
What this all means is that companies are spending more of their resources on optics, leaving them with less time and money to focus on doing something that might actually be of value. We live in a society so obsessed with how things appear that in the US today there are more than six “flacks” — as my profession affectionately calls PRs — for every journalist.
Further, by creating the expectation that companies must tell us they exist to do good in the world rather than to turn a profit, we are making them better at telling us lies. That makes it harder to tell fact from fiction, and thus to hold these firms to account.
From the giants of Silicon Valley to the grifters of the crypto casino, the world of tech should try being a little more honest with itself and with the rest of us. We should allow them to tell it to us straight — if we don’t, we are complicit in building a culture that does not value the truth, and in which the critical line between reality and fakery become increasingly blurred.
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