March 14, 2023
Buy something on eBay or Nextdoor or Offerup. I dare you. Is this seller trustworthy? Have they sold this item before? How do I know I’m going to get what they say they are selling?
Online marketplace platforms, while convenient, still have their shortcomings. Buyer scores and ratings are locked into each platform, and there's no portability. Once a transaction happens, the item's history is lost, along with its valuable provenance.
Now, if you're paying close attention, you might see we're having a breakthrough moment when it comes to the use of the blockchain. Unfortunately, that moment has been co-opted by scammers and bad actors that are finally getting washed out. With any new technological shift, we need to put it in the perspective of decades, not just quarters or years. Tech shifts are the stuff of geeks and tinkerers until, seemingly overnight, they become the default standard.
When smartphone point-of-sale payments hit in the late 2000s, they were cool and exciting, but also riddled with quirks that made them too annoying to use in real life. Will this trigger a fraud warning? Will the retailer accept it? Today, you can't go into a store without seeing Apple, Samsung, or Google Pay in action. We now have something that just works, and it makes life easier. The geeks and tinkerers worked out the baseline protocols to layer digital payments across the physical world, and the rest is just extra features; the platform you use is a simple preference choice.
It was a similar story with email back in the 90s. Email wasn’t the same as we have now; back then, it was quirky and messy. Companies clamored to try and be the solution and lock people in. Software like cc:Mail, Lotus Notes, and Microsoft Mail had far more features. But again, a set of basic email protocols that tech companies converged on turned out to be just good enough. Now, we trust that basic email just works, no matter which email provider we choose.
Almost 15 years ago, we tried to build an identity layer for the Internet, leveraging open protocols and passionate developer communities to build OpenID and OAuth. They were clunky, inconsistent, and tricky to use for non-techies, but thanks to consistent work in the space, these are now used for user ID in all sorts of organizations and apps. It’s the digital equivalent of flashing a pass to get backstage access at a show. An identity layer for the internet isn’t a thing (yet), but baseline protocols like OAuth just work.
When it comes to the physical world and being able to map that out digitally, we have had our share of fits-and-starts. While eBay and Amazon make life easier, they’re riddled with trust issues, and there’s no underlying shared protocols to make our trust equivalent cross-platform.
Just like with online identity, ownership in the physical world needs a digital counterpart that is done at the protocol level. It doesn’t have to be perfect or packed full of features; it just has to be good enough, it has to just work, and we have to trust it.
In my eyes, at scale, NFTs will serve this purpose. Right now, they aren’t perfect or widely accessible, and the original use cases of digital art and PFPs will look silly in hindsight. But there is something intrinsically valuable here, and the early momentum is very telling.
If we get the protocols correct, the platforms won’t matter. In fact, they will come-and-go over time and will force them to adapt and translate or fail into obsolescence.
We'll explore this potential further in the rest of our series. NFTs have the power to revolutionize digital ownership and bridge the gap between the physical and digital worlds. With the right protocols in place, we can establish a trustable, efficient, and portable system that transcends platforms, paving the way for a new era in ownership and asset management.