Venture capital firm Andreessen Horowitz (hereinafter referred to as a16z) participated in early investments in Web2 giants such as Twitter and Facebook, and later also participated in well-known startups such as Lyft, Airbnb, Pinterest, Slack, and Robinhood. It can be said that it has a unique vision. Since investing in Coinbase and Ripple in 2013, this well-known venture capital in Silicon Valley has also entered the field of Web 3. Chris Dixon, the head of a16z Web 3 department, published a book (Read Write One) this year, and last month he talked about the death of encryption and the trend of centralization in AI development on Youtube under the title "Is Web 3.0 Dead?". Warning that the Internet business model will face crisis within five years.

Web 2 is too centralized and business models will be reshuffled within five years

Chris Dixon first talked about the development of the Internet. He said: "The Internet in the 1990s was one-way, more like a read-only mode. Users mainly obtained information on it, and the concept of social media did not exist yet." And all this changed only after the turn of the millennium. "With the rise of Web 2, I also joined it. This movement emphasized literacy. The core idea was to replace passive reception of information with interaction. With the rise of social media such as Twitter and Facebook, The formal embodiment of this concept." He said. This is when users realize that they can not only consume online, they can also create content.

But since then, the development of the Internet has faced a risk. The Internet may eventually be dominated by a few large technology companies such as Google, Amazon, Apple, Facebook, etc. Chris Dixton said: "The Internet was originally intended to build a decentralized network to return power and wealth to ordinary users, rather than being concentrated in the hands of a few large companies." He believes that such centralization issues may have a negative impact on the new entrepreneurial community. Innovation is not a good thing for society as a whole.

The top five technology companies account for half of the market capitalization of the Nasdaq 100, and 95% of Internet-related earnings are concentrated in these companies, and all signs point to this phenomenon continuing to get worse.

This phenomenon reminds Chris Dixton of an industry that has declined, or its influence has been reduced. In the traditional media industry in the United States, the revenue and resources of television and radio channels are extremely concentrated and controlled by a few channels. As everyone knows about the subsequent results, these companies were either forced to transform or faced the reality of declining influence.

But this well-known venture capital partner who spans Web 2 and Web 3 also warned about the development of the Internet, not on technical issues, but on the business model. Once the phenomenon of giants monopolizing the market continues to worsen, it will crowd out other people currently in the industry. This is what he said before and is detrimental to innovation. He predicts that within the next 3 to 5 years, we will face a cyber crisis in which many existing business models will disappear.

Web2 and Web3 attract people all because they break the Matthew Effect

Chris Dixton said that when he and his colleagues entered the Internet industry in the 1990s, they were extremely excited about the potential of the Internet. Because it promises to redistribute wealth and power and return it to the edge of the network, which is the average user.

The author adds: The Matthew effect refers to the phenomenon that the strong become stronger and the weak become weaker. "To everyone who has, more will be given, so that he will have an abundance; and from everyone who does not have, even what he has will be taken away." This phenomenon illustrates the reality that under capitalism, it is more difficult for the ordinary class to stand up. Web 3 was so attractive a few years ago precisely because so many people used it to break ranks. And the same goes for Chris Dixton's entry into the Web 2 era.

Then he also expressed his views on the development of AI. He said: "The development of AI is impressive, but if it is not restricted, it will further accelerate this centralization. Because AI technology requires a large amount of funds, data and powerful computing power Enterprises, and these are what large companies own.” This view is consistent with Tether’s previous outlook. The stablecoin business giant invested in decentralized AI in order to solve the problem of excessive concentration of AI development resources on traditional giants.

(Tether enters AI! CEO says it is flush with cash and will challenge Microsoft and Amazon)

Point out the current status of blockchain: supervision suppresses technology but does not suppress speculation

Chris Dixto talks about blockchain technology in his book. He believes that there are two cultures in blockchain: one is the speculative "casino culture", and the other is the "computer culture" that pays more attention to technological development. However, the current status of the industry is that casino culture is the mainstream, which is not conducive to the healthy development of the industry. So he expects policies and regulations to curb speculation while promoting the positive development of technology.

Unfortunately, some U.S. policy decisions in recent years have actually encouraged this unhealthy trend. While Meme tokens continue to hit new highs, regulation continues to put pressure on those committed to technological innovation.

Advice from a16z partners: Dare to invest. When people say something is dead, it is often the point to add more positions.

He also talked about some points where traditional finance continues to question the currency circle, such as the FTX incident and Terra Luna. He gave the example that a hammer can be used to build houses, but it can also be used to destroy houses. This shows that the technology itself is neutral, it depends on how the user uses it. It is a mistake to link the application of a particular technology to the technology itself.

AI and neural networks have been around for 80 years since 1943, but they have only really experienced major technological advancements in recent years. Every technology will go through many ups and downs, and a16z has always been committed to long-term investment. Just like a16z has added Coinbase to financing many times over the decades and promoted incubators in the industry, because this is what the industry needs in the long term.

Finally, he also explained from the perspective of long-term participation in new innovations why now is the time to invest in the blockchain industry. He said: "I actually started my career with people telling me that the Internet was dead. I found that the best opportunities in my career were when people said that something was dead. My experience Yes, AI has its ups and downs, the Internet has its ups and downs, blockchain has its ups and downs, and if you wait until the situation improves, you will find yourself doing the same thing as a large group of people.”

This article Across Web2 and Web3: a16z partners talk about the death of encryption, AI centralization and the crisis of Web2 first appeared on Chain News ABMedia.