A personal look at the early days of Internet vs blockchain today
I had already played with HTML pretty early and thought it was cool as a way of publishing documents. I discovered it as early as 1993 when I first saw the mosaic executable in the /usr/local/bin directory of my workstation at University.
I only really started working seriously on web applications in 1994 when my university adviser told me to look at NCSA’s newly released CGI spec. Prior to that I had been deep into a hopeless project trying to build a complex networked multimedia front end in C++.
I have frequently compared the current state of blockchain to the state of the early days of the internet. From 2013–2015 I kept saying were at a similar state to 1994 for the web. Last years ICO craze was similar to 1995 when the Netscape IPO made everyone go collectively insane.
I think we are close to reaching 1996, where people are still insane but a lot of really cool stuff is also being built, yet is overshadowed by the crazyness.
Of course the comparison is not perfect and not at all linear.
So take these years as a grain of salt. But there are many good lessons to be had from the technological adoption of the internet back then.
Early fascination with the Solution, not the Problem
When new complex technology fascinates us nerds, we are often so enamored with the elegance and innovation of the solution that we end up having a really difficult time explaining it or selling it.
Me in 1994 explaining my fascination with the internet to people:
The Internet is a way of transmitting data that routes around censorship. It does this by taking data, splitting it into packets and sending them from one node to the next until they reach their final destination and assembles themselves again. It’s so cool!!!!
Me in 2013 explaining my fascination with Bitcoin to people:
Bitcoin is a way of sending money from anyone to anyone without censorship or gatekeepers. It does this by you holding a private key that transmits a transaction onto a peer to peer network, where thousands of computers compete to cryptographically include it in a block of transactions trusted by everyone else on the network.
The problem statement for both, were not really a problem for a lot of people. Yes for us paranoid anarcho libertarians, people living in dictatorships and in the developing world. But for most “normal” people in the developed world?
And that explanation of the solution? For the internet, no one cares today. For blockchain no one will care tomorrow.
Key with both of these stories is that they were factually correct, but way more fascinated with the solution than the actual problem.
Groundbreaking solution becomes industry
While the Internet was definitely a thing in 1994, there was no real concept of an internet industry or business. By August, 1995 after the Netscape IPO it was in full swing.
Louis Monier a researcher at Digital Equipment Corp’s (DEC) Palo Alto Research Labs had launched the AltaVista Search engine in December, 1995 and it became one of the first big overnight success stories for a web site and the most important search engine of its time as well.
The executives at the previously very innovative but now stuffy DEC realized that hey we are an Internet company and just as cool and valuable as Netscape.
DEC already had a huge portfolio of successful networking products, that they sold to enterprises, governments and universities. Everything from routers and network cards, to firewalls and email servers (supporting X.400).
These were almost over night moved into the hastily created Internet Business Unit and all rebranded with the name AltaVista.
By January, 1996 I was living in Kingston, Jamaica running CaribWeb and a series of somewhat successful tourism related web sites.
Anyone who could spell HTML, CGI and PERL were in great demand for all the new “Web Master” jobs being created. Recruiters had already been trying for months, but I was not crazy about leaving my business and enjoyed life in the Caribbean.
I finally accepted a job as Corporate Web Master for AltaVista as one of the first hires onto the team. Within weeks we had hired most of the disolutioned marketing execs from Lotus, who had just lost the office suite battle to Microsoft.
Our mantra was Internet, Internet, Internet and that no one was more experienced or had as wide a portfolio as we did. Our main target market was all other businesses who desperately wanted to relabel themselves as being Internet businesses.
Of course Internet being the solution, the problems were not quite as obvious yet for the Internet to solve. So just like many other early businesses in the space, we sold Internet solutions to other people building Internet solutions.
It was a Bubble, but we all won from it
It is quite understandable that sensible people back then also called the Internet industry a giant ponzi scheme.
You could easily say that the primary business model of the Internet industry from 1995 to 2000 was IPO’ing and raising stock price through press releases about partnerships with other internet startups.
I don’t want to fault this process though. We all benefit today from this crazy seemingly pointless innovation that came out of it. Most of the core technologies and developer knowledge we still use today was funded out of this .com frenzy.
While this happened there were still a few companies that stayed true to their vision, while benefiting from the crazyness. Amazon is the best and most well known example.
When the distractions of only operating to raise your stock price disappeared in 2000, Internet businesses focused on solving real problems were finally able to do so. Most of the big internet companies today were started around this time.
From a technological point of view after the 2000 crash, no one had money to pay Sun and Oracle license fees anymore. Apache, Linux, mysql, Java, PHP etc. took off.
I hope by now that people can see the similarities to my experiences at AltaVista to the Bitcoin and later Blockchain industry today.
Back then we were pushing all of these crazy ideas for how the internet can fix just about every industry. We have solutions, that we know are revolutionary and can change things up and are often frustrated of the lack of adoption of our amazing tech in these industries.
Attacking the wrong problem at the wrong time
In early 1995 a sales guy fascinated with the internet had sold a scientific conference web site to Reed Elsevier. He hired me while I was finishing off my degree at the University of Wales for my first paying web gig. Can’t remember how he found me, but probably via a news group.
The web site was a success so we pitched them on an ambitions site for their publications. The question was brought up at a board meeting, but we were told by our contact that the consensus on the board was “Why would people want to look up publications on the Internet”.
Granted I think this was before or around the time that netscape with SSL was released. There were no payment gateways. People would have to print out the publications as no one would want to read anything on a 640x480 VGA CRT screen. Also most high level executives in that period never touched a computer, so the idea itself was very foreign to them. Basically we were too early for the market.
A bunch of seemingly unrelated technologies, markets and industries had to be invented and built before Internet could solve actual problems the industry had.
I did start working on tourist web sites and later that year moved to the British Virgin Islands, literally the same week they got dial up internet service. I sold the BVI section of my site as an aqui-hire to a local publisher. I just checked and it still exists today 23 years later.
Within a month about 15% of the population had signed up for internet, primarily because phone/fax calls to the US were $3/minute, so e-mail solved a real need.
I was able to sell websites to about 10–20 hotels/restaurants etc. over the next couple of months before I moved on to Jamaica. This was because these businesses had a real need of marketing themselves to affluent tourists from the US.
Of course this is just an example, but these super simple problems were instantly solved by the internet:
- communicating with family and clients around the world
- marketing your small businesses to an international market
Bitcoin was created to solve 2 distinct yet related problems:
- A decentralized electronic store of value
- Quick cheap p2p payments without intermediaries or gatekeepers
By 2011 another important use case was unintentionally added:
- Speculative growth asset
By early 2013 I dropped all my other projects and focused on the cheap p2p payment aspect of Bitcoin. I launched Kipochi targeting payments for the developing world.
We were too early. People still preferred thinking in Kenyan Shilling than in BTC. Incumbent payment technologies were doing what they could to stop us translating from fiat currency to BTC and back.
In otherwords there were things that needed to be solved before it took off.
Bitcoin worked great for me and other people working internationally as a payment system for the last few years, but still hasn’t taken off for payments in the greater world.
Ironically Bitcoin has been so good at being a store of value and a speculative growth asset that fees have risen to the point as of late 2017 that Satoshi’s original solution for quick cheap p2p payments is not even really viable anymore. Hopefully Lightning Networks will bring this back.
There are still external problems to be solved in Bitcoin for Satoshi’s vision to come true. But in the meantime it is doing really well as a store of value and a speculative growth asset.
Ethereum promises an even more ground breaking technology. The maybe not so good early slogan was “The world’s computer”.
I was initially intrigued by Ethereum, but seeing slogans like the above turned me off (to my economic detrement today). It was only late 2015 that I started paying attention again, once I saw all the tools people were starting to build for it.
I have spent the last 2 years of my life on building a decentralized identity platform uPort ontop of Ethereum. So I am definitely a believer now.
There is definitely a lot of trying to fit blockchain into every industry stuff going on, just like in the early days of the Internet.
That said, we have managed to build up the largest group of developers and development tools in the blockchain space.
2017 was definitely the year where the technology proved itself and also the year when it proved that we need to focus on scaling solutions.
So while no one may be doing real production land registries yet. DAO’s replacing companies may be a year or two away. There are real applications being run on Ethereum today, solving real problems.
I’m as skeptical as anyone of the ICO craze, for example. But no one can deny that the simplicty of deploying ERC20 tokens on Ethereum, has been successful. Even CryptoKitties however laughable is a money making juggernaut and a real application.
Yes many (most?) of the ICO’s are built on the same silly get rich quick ideas that let the world go .com crazy in the 90s.
But at the same time (just like in the 90s) this money is funding all kinds of important infrastructure and tool development. On a human point we are building real knowledge and experience with an ever growing cadre of smart developers, lawyers and entrepreneurs. Go to the next Devcon conference and you will see what I mean.
In addition there are quite a few of the serious ICO backed (and privately funded) projects created by super smart people. They are actually hunkering down and really thinking through the economic models, mechanics and tools for what they’re doing.
This is where the Amazon’s, Google’s and PayPals of this generation are to be found.
Scalability, then and now
Everyone worries and complains about scalability with blockchains. It is a real issue as well, just like it was back in the day.
At AltaVista I wrote perl code in 1996 that started a new unix process on each http request. This in turn started a whole new unix process to connect to the database then generate HTML that was sent across the pipes from our data center in Palo Alto to everywhere in the world. Super inefficient.
Very quickly fast-cgi, nsapi, isapi and servlets improved this which also allowed us to have persistent connections to the DB. CDN’s started moving static data closer to the user and programming languages became faster.
Over the years, we wen’t from single process, to multi threaded, back to single process and finally to async. Developers became smarter, caching became your friend and now it was relatively trivial to support web apps at scale.
This same thing is happening in Ethereum. The first version is kind of like the early CGI version. There are currently several initiatives such as POS, Sharding, WebAsm, Plasma, Raiden, Truebit etc. that will likely improve performance dramatically as well.
As developers we also first wanted to put as much of the logic on-chain (as we say now a days). Now we have learnt that a lot of information can easily live off-chain, while retaining the benefits of on-chain consensus.
The great thing is that these are all mostly independent improvements. Even if one or two of them don’t work, we will still get the benefit of the rest.
Those of us embedded in this space are convinced that yes we will solve a lot of solutions around the world and in many industries.
These may not all come as easy and quick as people want. I think we should focus on building solutions to real problems that don’t require a bunch of other steps done first.
Also don’t worry on trying to sell blockchain businesses or industries that need too much persuasion.
Businesses with real problems that can be solved easily using blockchains are plenty and are already willing to listen. But spend time listening to their actual problems, before you push your magic solution.
Besides a few entrepreneurs like Jeff Bezos, Marc Andreesen and Peter Thiel the real heroes of the .com days were the people who built Apache, Mozilla, Linux, MySql, etc. as well as the engineers in IETF who tirelessly improved and scaled this crazy new world.
Seek out these same kinds of people in todays world. The people working tirelessly building the infrastructure, standards and tools for this technology.
Inspired by a thread in /r/ethereum.