Internet vs Blockchain Revolution Series: Origins of Disruptive Companies (Part 2) | 8 Decimal Sharing
Author: Remi Gai @ 8 Decimal Capital
Editors: 8 Decimal Research
Introduction
Mark Twain once said, “History doesn’t repeat itself, but it does rhyme”. At 8 Decimal Capital, we are attempting to find similarities between the Internet and Blockchain revolutions, to help the community better understand technological life cycles and the future of the Blockchain industry. The Internet Revolution facts are based on the book “How the Internet Happened”, written by Brian McCullough. We will be releasing a series of articles over the next couple of weeks. Feel free to subscribe to our medium channel to stay up to date with our new posts, in which we will regularly share our findings and insights. To read it in Chinese, please follow us via Wechat official accounts (id:eightdecimal)
Article Series:
Internet vs Blockchain Revolution:
Early Successful Products (Part 1)
Origins of Disruptive Companies (Part 2)
Challenges in the Early Days (Part 3)
New Concepts, Valuations, and Timing (Part 4)
Are We in 1994? What to expect Next? (Part 5)
Internet vs Blockchain Revolution Series: Origins of Disruptive Companies (Part 2)
This article is the second part of the Internet vs Blockchain Revolution Series.
Looking back at the Internet revolution, the founders of a lot of disruptive companies didn’t necessarily had business in mind first but came from various backgrounds, such as hobbyists, researchers from universities, hacker channels, and ex-employees of successful companies. This list is not exhaustive, but we will go through some examples.
Hobbyist
The origin of Yahoo began as a hobby, in which Jerry Yang and David Filo, Ph.D. students at @Stanford at the time (1994), were collecting and trading new website links during the early time of the web. After discovering Mosaic, the first web browser, the two became obsessed with the World Wide Web. At the time, it was still possible to visit every single website in existence within a couple of hours, and a few websites appeared every day. Jerry and David’s goal was to find the best websites, sort them by category and compile them into a list. From word-to-mouth, their public website directory quickly became popular among the first users surfing the web. In a way, the first version of Yahoo was more of a “glorified list” rather than a technological company but provided tremendous value by aggregating otherwise scattered websites on the web, making them a first mover advantage in the space.
Similarly, Vitalik Buterin, Co-Founder and Chief Scientist of Ethereum, initially started writing forum posts as a hobby for a Bitcoin blog, which offered 5 BTC per piece (around 4 dollars at the time). Cryptocurrency quickly became an obsession for him, and he wrote for the site until it shut down soon due to Bitcoin’s lack of mainstream attention. Vitalik later co-founded Bitcoin Magazine and contributed as a leading writer. Along the way, he came up with the idea of going beyond the financial use cases allowed by Bitcoin and released a whitepaper of a system called ethereum in 2013. The rest is history.
Researches from Universities
Often, research projects in universities can turn out to become groundbreaking solutions compared to existing technologies. In 1995, the founders of @Google, Larry Page, and Sergey Brin, met at Stanford University and were looking for a dissertation topic. They had a realization that the web was built on links that linked one page to another. Inspired by the academic world, in which research papers often constructed their arguments by citing other reputable academic papers, you could rank the importance of a paper based on the number of citations. Inversely, a research paper would have more authority if more research papers are citing it. Larry and Sergey created the most powerful searching system that ranked web pages based on how important the world thought of them, surpassing any existing search engines such as Yahoo, Excite, Lycos, and AltaVista, etc. They were trying to solve interesting problems and came across some compelling ideas. In the blockchain space, some example of projects that came from academia includes Algorand (MIT — Silvo Micali), The Oasis Lab (University of California — Dawn Song), Thunder Core TW(Cornell — Elaine Shi and Rafael Pass), Conflux（Tsinghua University-Qizhi Yao）and many more.
Hacker Channels
It turns out that a lot of breakthrough ideas came from the tech communities, who were trading hacks and sharing new ideas. Sometime between 1997 or 1998, Shawn Fanning, the creator of Napster, the first peer-to-peer music file sharing Internet Service (which later inspired BitTorrent), was invited to join the private IRC channel called w00w00, an online meeting place for a hacking collective. Members of w00w00 were composed of kids who were anonymously trading hacks that later on formed dozens of technology companies ranging from WhatsApp to Arbor Networks. Blockchain also started similarly, in which in 2008, someone under the name of Satoshi Nakamoto sent an academic paper to a cryptography mailing list proposing a form of digital cash called Bitcoin. Another example was in 2016, an anonymous creator under the name of Tom Elvis Jedusor (name of Voldemort from Harry Potter) signed into a Bitcoin research IRC channel, and dropped a document titled Mimblewimble, providing a radically different approach to blockchain, which later on led to the creation of the projects Grin and Beam.
Ex－employees of Successful Companies
During the Internet revolution, the original crew of Paypal went on to create some of the successful companies and investment firms. Some examples include: Elon Musk with Tesla, Jeremy Stoppelman with Yelp, Max Levchin with Slide and other PayPal alumni had a hand in founding, funding or contributing to the development of many popular companies such as LinkedIn, YouTube, Yammer, Palantir, and Square etc. so that people in technology often refer to a “PayPal Mafia” that runs Silicon Valley today. In the same way in the cryptocurrency and blockchain industry, ex-employees of Coinbase went on to create some of the important projects and investment firms, such as Litecoin.Com, dYdX, Dharma, Polychain Capital, Scalar Capital, etc. Other examples are the co-founders of Ethereum, who also went on to create some of the popular projects in blockchain such as ConsenSys (Joseph Lubin), Cardano Foundation (Charles Hoskinson), Parity & Polkadot (Gavin Wood). Early employees of successful tech companies can have significant advantages in gaining hands-on experiences scaling a startup, having a strong existing industry network, as well as seeing new potential business models in an emergent industry.
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Mark Twain once said, “History doesn’t repeat itself, but it does rhyme”. We are attempting to draw some similarities between the Internet and Blockchain Revolutions, to help entrepreneurs and investors better understand technological life cycles. Please leave your thoughts and comments below, and hope this article series will have provided some valuable perspectives about the Blockchain industry.
Sources:
“How the Internet Happened”, written by Brian McCullough
8 Decimal Capital: Shape the Blockchain Future
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