Read Write Own

OceanofPDF .com Copyright © 2024 by Chris Dixon All rights reserved. Published in the United States by Random House, an imprint and division of Penguin Random House LLC, New York. RANDOM HOUSE and the H OUSE colophon are registered trademarks of Penguin Random House LLC. Image on page 151: Gartner , Hype Cycle. Gartner and Hype Cycle are registered trademarks of Gartner , Inc. and/or its af filiates and internationally and are used herein with permission. All rights reserved. Library of Congress Cataloging-in-Publication Data Names: Dixon, Chris. Title: Read write own: building the next era of the Internet / Chris Dixon. Description: First edition. | New York: Random House, 2024. | Includes bibliographical references and index. Identifiers: LCCN 2023041266 (print) | LCCN 2023041267 (ebook) | ISBN 9780593731383 (hardback; acid-free paper) | ebook ISBN 9780593731406 Subjects: LCSH: Internet industry—Popular works. | Internet—Forecasting—Popular works. | Blockchains (Databases)—Popular works. | Internet—Economic aspects—Popular works. Classification: LCC HD9696.8.A2 D59 2024 (print) | LCC HD9696.8.A2 (ebook) | DDC 338.4/7004678—dc23/eng/20231 127 LC record available at lccn.loc.gov/ 2023041266 LC ebook record available at lccn.loc.gov/ 2023041267 randomhousebooks.com Book design by Rodrigo Corral Studio, adapted for ebook Cover design: Rodrigo Corral Studio ep_prh_6.2_146088462_c0_r0 OceanofPDF .com When the great innovation appears, it will almost certainly be in a muddled, incomplete and confusing form. To the discoverer himself it will be only half understood; to everybody else it will be a mystery. For any speculation which does not at rst glance look crazy, there is no hope. —Freeman Dyson OceanofPDF .com Contents Introduction Three Eras of Networks A New Movement Seeing the Truth Determining the Internet’s Future Part One: Read. Write. 1 Why Networks Matter 2 Protocol Networks A Brief History of Protocol Networks The Benets of Protocol Networks The Fall of RSS 3 Corporate Networks Skeuomorphic and Native Technologies The Rise of Corporate Networks The Problem with Corporate Networks: The Attract-Extract Cycle Part Two: Own. 4 Blockchains Why Computers Are Special: The Platform-App Feedback Loop Two Paths to Adoption: “Inside Out” versus “Outside In” Blockchains Are a New Kind of Computer How Blockchains Work Why Blockchains Matter 5 Tokens Single-Player and Multiplayer Technologies Tokens Represent Ownership The Uses of Tokens The Importance of Digital Ownership The Next Big Thing Starts Out Looking Like a Toy 6 Blockchain Networks Part Three: A New Era 7 Community-Created Software Modding, Remixing, and Open Source Composability: Software as Lego Bricks The Cathedral and the Bazaar 8 Take Rates Network Effects Drive Take Rates Your Take Rate Is My Opportunity Squeezing the Balloon 9 Building Networks with Token Incentives Incentivizing Software Development Overcoming the Bootstrap Problem Tokens Are Self-Marketing Making Users Owners 10 Tokenomics Faucets and Token Supply Sinks and Token Demand Tokens Can Be Valued Using Traditional Financial Methods Financial Cycles 11 Network Governance The Nonprot Model Federated Networks Protocol Coups Blockchains as Network Constitutions Blockchain Governance Part Four: Here and Now 12 The Computer versus the Casino Regulating Tokens Ownership and Markets Are Inextricable Limited Liability Corporations: A Regulatory Success Story Part Five: What’s Next 13 The iPhone Moment: From Incubation to Growth 14 Some Promising Applications Social Networks: Millions of Protable Niches Games and the Metaverse: Who Will Own the Virtual World? NFTs: Scarce Value in an Era of Abundance Collaborative Storytelling: Unleashing Fantasy Hollywood Making Financial Infrastructure a Public Good Articial Intelligence: A New Economic Covenant for Creators Deepfakes: Moving Beyond the Turing Test Conclusion Reinventing the Internet Cause for Optimism Acknowledgments Notes Index OceanofPDF .

om Incubation to Growth 14 Some Promising Applications Social Networks: Millions of Protable Niches Games and the Metaverse: Who Will Own the Virtual World? NFTs: Scarce Value in an Era of Abundance Collaborative Storytelling: Unleashing Fantasy Hollywood Making Financial Infrastructure a Public Good Articial Intelligence: A New Economic Covenant for Creators Deepfakes: Moving Beyond the Turing Test Conclusion Reinventing the Internet Cause for Optimism Acknowledgments Notes Index OceanofPDF .com Introduction The internet is probably the most important invention of the twentieth century . It transformed the world much as earlier technological revolutions —the printing press, the steam engine, electricity—did before. Unlike many other inventions, the internet wasn’ t immediately monetized. Its early architects created the network not as a centralized organization but as an open platform that anyone—artists, users, developers, companies, and others—could access equally . At a relatively low cost and without needing approval, anyone anywhere could create and share code, art, writing, music, games, websites, startups, or whatever else could be dreamed up. And whatever you created, you owned. As long as you obeyed the law, no one could change the rules on you, extract more money from you, or take away what you built. The internet was designed to be permissionless and democratically governed, as were its original networks, email and the web. No participants would be privileged over others. Anyone could build on top of these networks and control their creative and economic destinies. This freedom and sense of ownership led to a golden period of creativity and innovation that drove the growth of the internet through the 1990s and 2000s, leading to countless applications that have transformed our world and the way we live, work, and play . And then everything changed. Starting in the mid-2000s, a small group of big companies wrenched control away . Today the top 1 percent of social networks account for 95 percent of social web traffic and 86 percent of social mobile app use. The top 1 percent of search engines account for 97 percent of search traffic, and the top 1 percen t of e-commerce sites account for 57 percent of e-commerce traffic. Outside of China, Apple and Google account for more than 95 percent of the mobile app store market. In the past decade, the five biggest tech companies grew from about 25 percent to nearly 50 perce nt of the market capitalization of the Nasdaq-100. Startups and creative people increasingly depend on networks run by megacorporations like Alphabet (parent of Google and YouTube), Amazon, Apple, Meta (parent of Facebook and Instagram), and Twitter (rebranded as X) to find customers, build audiences, and connect with peers. The internet got intermediated, in other words. The network went from permissionless to permissioned. The good news is that billio ns of people got access to amazing technologies, many of which were free to use. The bad news is that for those same billions, a centralized internet run by a handful of mostly ad- based services meant fewer software choices, weakened data privacy , and diminished control over their online lives. And it became much harder for startups, creator s, and other groups to grow their internet presen ces without worrying about centralized platforms changing the rules on them and taking away their audiences, profits, and power . Even though Big Tech companies deliver significant value, their services come with considerab le negative externalities. Widespread user surveillance is one issue. Meta, Google, and other ad-based companies run elaborate tracking systems that monitor every click, search, and social interaction. This has made the internet adversarial: an estim ated 40 percent of intern et users use ad blockers that protect against tracking . Apple has made privacy a centerpiece of its marketing—a thinly veiled dig at Meta and Google—while simultaneously exp