a16z podcast here.
A few thoughts on the above-mentioned podcast:
Scarcity: digital/crypto goods vs DRM
The entire time that Chris Dixon talks about the idea of crypto goods (to borrow the a16z term) enabling scarcity in digital environments, I was waiting for a mention of DRM. Aside from a brief mention that gets talked over by Wilson, there seems to be no serious discussion about the difference between the digital goods model vs. more traditional prior attempts at DRM. There’s a snippet where Wilson talks about replicability being the reason why a number of digital business models have failed, but it seems to me that DRM was previously touted as that solution in the past.
To me, the nuance is that the central question is not of ownership, but of consumption–even if the crypto space provides an unambiguous record of who owns a specific song, what prevents other people from enjoying that song? The value for the consumer of a piece of music or art or movie is not that I have title to the work (because in some real sense I do not–the actual piece of music or movie is generally owned by a third party!) but whether or not I have the ability to enjoy it on demand. What is the value of digital goods (if not in resale) otherwise?
“Traditional” economist objection to cryptocurrencies
Wilson and Dixon make the simplifying assumption that there are a large number of traditional economists who have written off the fundamental value of bitcoin and other cryptocurrencies because “at the end of the day, they’re just electronic bytes”. This serves as a catalyst for a great discussion about the primacy of commerce vs. e-commerce, sports vs. e-sports, which resonated with me. However, the view that I hold wrt the fundamental value of cryptocurrencies is that there is no physical power that has a vested interest in the continuation of the monetary fiction. To paraphrase, how many legions has Bitcoin?
Another point that gets made is that the innovation in digital goods is spreading faster in the gaming arena than in other areas. There’s also another interesting corollary here, which is that there were a number of communities that have adopted these goods before even US gamers have (wrt Fornite et al). Line, lest we forget, became a contender in the messaging space due to a domination of Japanese online communication, and the reason why it was throwing off so much cash was due to online stickers.
This would seem to be a point in favor of the thesis that we’re converging recently on a normalization of the digital goods paradigm for the digital natives. The question that one then asks is if we believe that either a) the older generations will adapt to that mental model, or b) if the demographic shift will be rapid enough for these models to become the most important modality of consumption.
As a question of adoption, I suspect that (at least) millennials will be resistant to this idea of living as digital-first and digital-only. There’s already a tremendous industry focused on wellness, and it’s mature enough that we see features from major industry players (Apple in iOS, Google in Android) to help focus on things like screen time and (one suspects) to help minimize it.