Tech
Big Tech Killed the Internet: Blockchain Can Help Revive It
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Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
The author is a general partner at Andreessen Horowitz and the author of “Read Write Own”
The early Internet was a magical place because it was driven by people and their creativity. The builders knew that whatever they built, they owned: a simple promise that established the right incentives for the technology to thrive. But now the Internet is stagnant, and it’s harder than ever for new apps to break through.
Consider app stores: Almost all of the products that consistently appear on leader lists were founded more than a decade ago: Facebook (2004), YouTube (2005), Twitter, now known as X (2006), WhatsApp (2009), Uber (2009), Instagram (2010), Snap (2011), and even Tiktok’s parent, ByteDance (2012).
Big Tech consolidated its control over the Internet around 2010. Today, only a few gatekeepers determine who or what will succeed online. Restoring a vibrant Internet means breaking this power and putting users back in the driver’s seat. The key to doing this is to create new networks that cannot be easily usurped – ideally, ones that can be built upon blockchain.
Early Internet networks, such as the web and email, provided a stable foundation on which people could build businesses and establish a direct connection with their audiences. This is no longer the case: networks controlled by the largest technology companies now reach billions, but entrepreneurs and creators have learned how unreliable they can be. These companies lock down application programming interfaces, meddle with mysterious algorithms, and classify content based on opaque and capricious policies. Worse, big tech companies claim the majority of the revenue that flows through their networks. This stifles creativity, making our online lives poorer.
This is the economics of network effects: companies provide benefits and easy-to-use tools to attract users, and then, once locked in, move on to extract value from them. An enterprise network that doesn’t make this step will be outperformed by one that does. It’s impossible to quantify how much innovation and consumer choice has been lost as a result.
Some are clamoring for regulation, even if this risks cementing existing power structures. Others focus on reviving early Internet protocols, such as plans for so-called federated networks (where policies are enforced by a central framework), although these are not widely used.
A revitalized Internet would require three properties. First, openness: being available to anyone, anywhere. Secondly, trust: the rules should be transparent, fair and reliable, so that builders, creators and users know that the network cannot take the ground away from them. Finally, all users – not just centralized gatekeepers – should have a say in the networks to which they contribute.
Networks built on blockchain have all of these attributes. While it is easy to ignore the technology due to its associations with casino-style gaming behavior – particularly FTX and meme coins – it would be a mistake to ignore its potential. Progress towards greater scalability means this could be as transformative as the arrival of the PC.
Blockchains are a new class of virtual computers that can, for the first time ever, establish unbreakable rules in software. Usually, whoever controls the computer hardware can tell the software what to do. But blockchains reverse this relationship, preventing those who control a centralized server from arbitrarily changing the rules. Unlike traditional computers, blockchains can ensure that any code you run continues to work as intended. This could potentially revolutionize the power dynamics of the Internet.
Networks built on blockchain combine the social benefits of early Internet protocol networks (open access, democratic governance, low acquisition rates, and user ownership rights) with the competitive advantages of enterprise ones (sustainable funding sources and advanced functionality). This provides the path to a freer and more vibrant Internet that will reward us all.