The Interface Phase - Not Boring

Created
Oct 23, 2021 10:57 AM
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Property

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Sprig is a long-time sponsor (you know it as UserLeap), but the team added so much to its products that it needed a new name: Sprig.

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Sprig is addictive. I check it at least once a day. I love reading what you write, even when it hurts. And teams at Opendoor, Loom, and Dropbox love UserLeap too. The Sprig team knows that once teams start using it, they don’t stop, so it’s offering a free onboarding and 30-day trial to any enterprise company (~100,000+ users).

Hi friends 👋,

Happy Monday! Football is back, it’s Fall in NYC, and life is good.

This one is a little shorter than the average Not Boring. Spend the extra 15 minutes enjoying a nice cup of coffee, hanging with your family, or outside taking a walk. I’m excited for richer digital spaces, but at the expense of less rich digital spaces, not good ol’ fashioned IRL time.

Let’s get to it.

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Horseshoe or rectangle?

In October 1943, two years after bombs destroyed the British Parliament’s Commons Chamber in the Blitz of 1941, the House of Lords debated how to rebuild. Some MPs and Lords wanted to take the opportunity to rearrange the Chamber in a horseshoe style, like the US Senate and House of Representatives.

United States House Chamber

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Others argued that they should retain the “adversarial rectangular pattern” from before the bombing. British Prime Minister Winston Churchill led team rectangle. Churchill believed that the layout of the space itself was responsible for the British two-party system. The confrontational design -- with the Conservative Party on one side and the Labour Party directly across from them -- kept debates “lively and robust.” The design left no space for equivocation. You’re with us, or you’re directly against us.

British Commons Chamber

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In his October 28, 1943 speech on the matter, Churchill delivered an all-time classic line:

We shape our buildings; thereafter, they shape us.

Churchill and his rectangle side won the day. To this day, Members of Parliament can only switch allegiances by physically crossing the floor in plain view.

We shape our buildings; thereafter, they shape us. The spaces in which we live, work, and play shape how we live, work, and play. Churchill was referring to physical buildings, of course. The state of the art computer at the time was Colossus, which Alan Turing and team used to break Axis codes during World War II. Its interface was a series of switches and dials. Only a few people in the world needed to, or knew how to, operate it.

Increasingly, though, the spaces in which we spend time are digital ones.

Each new phase of the internet -- Web 1.0, Web 2.0, and Mobile -- relied on new digital spaces to attract consumers. From text-based to graphical to interactive to mobile apps, new interfaces brought new adoption. Each phase was enabled by new infrastructure beneath the surface and pushed to popularity by the apps built on top, but each also required new interfaces to achieve broad adoption.

We shape our interfaces; thereafter, they shape us.

While web3 apps like NFTs, DAOs, and DeFi are gaining popularity, we’re still interacting with web3 through web2 interfaces. If history is a guide, we’re going to need new web3-native interfaces and spaces to bring hundreds of millions of people into the ecosystem.

It’s early, but there are clues of what new interfaces might look like. New digital spaces are springing up around the internet and evolving every day. Wallets like MetaMask, Phantom, and Rainbow are changing how we log in, and what we bring with us when we do. Web3 worlds like Decentraland, Somnium Space, The Sandbox, and Cyber are reimagining how we experience and interact online. They’re early components of the Metaverse, sure, but this isn’t necessarily a Metaverse piece. It’s a piece about the evolution of the way that we interact with, and on, the internet.

We’ve spent most of 2021 over here at Not Boring HQ exploring web3, and hopefully we all understand what’s happening a little bit better because of it, but it’s still hard to feel the potential impact of web3 in our bones while we’re still using web2 interfaces. For web3 to become a part of our daily life in the way that the internet or mobile is will require new spaces and interfaces.

Today, we’ll explore how those new interfaces and spaces might bring web3 mainstream:

  • The Apps-Infrastructure Cycle
  • An Incomplete History of Interface SuperCycles
  • Web3 Interfaces
  • Into the Future

The cheat code for studying new technologies is that they tend to follow old patterns. Let’s look back before we look forward.

The Apps-Infrastructure Cycle

A common narrative in the Web 3.0 community is that we are in an infrastructure phase and the right thing to be working on right now is building out that infrastructure: better base chains, better interchain interoperability, better clients, wallets and browsers. The rationale is: first we need tools that make it easy to build and use apps that run on blockchains, and once we have those tools, then we can get started building those apps.

- Dani Grant & Nick Grossman, The Myth of the Infrastructure Phase, USV, 2018

In 2018, Union Square Ventures’ Nick Grossman and Dani Grant wrote an essay called The Myth of the Infrastructure Phase. During 2018’s crypto winter, they kept hearing that crypto needed better infrastructure, and once that happened, then people would be able to build those killer apps. People building infrastructure, though, said that they were building the infrastructure, but that no one was building apps on top! Why the disconnect?

Instead of the commonly-accepted “infrastructure phase,” Grossman and Grant argued, crypto was in another turn of the apps-infrastructure-cycle. “The history of new technologies shows that apps beget infrastructure,” they wrote, “not the other way around.”

Source: Nick Grossman and Dani Grant, Union Square Ventures

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First, builders build apps, then other builders build the infrastructure to support those apps, then that infrastructure supports new apps, which in turn requires new supporting infrastructure, and so on. That’s how it worked historically, from the lightbulb to the airplane to the iPhone, and it’s exactly what was happening in web3.

Source: Nick Grossman and Dani Grant, Union Square Ventures

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Grant and Grossman’s 2018 classic has re-entered the conversation recently, as an explosion of new web3 apps has caused challenges:

  • Gas prices are too high!
  • DAOs coordinated across a mishmash of tools.
  • Delayed Eth2 and L2 confusion.
  • Scams abound.
  • Speculation reigns and the rich get richer.

Last week, Paxos Global and 6th Man Ventures’ Mike Dudas tweeted that the piece was very relevant to the current crypto environment. Blockchain Capital’s Kinjal Shah tweeted, “we’re in an app frenzy, about to enter a major infrastructure phase.”

The apps-infrastructure cycle is playing out in real-time. For example, Grant and Grossman mentioned ERC721 as the last piece of infrastructure built when they wrote the piece. The 2018 invention of ERC721, the non-fungible token standard (infrastructure), has powered the 2021 NFT craze (app). From February to July, $950 million worth of NFTs changed hands on OpenSea. In August and the first 12 days of September alone, $4.8 billion has passed through OpenSea.

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As a result of all this demand, cracks in the infrastructure are showing. Gas fees, the price someone needs to pay to Ethereum miners just to buy or mint an NFT, regularly cross into the $300+ price range during a hot drop. Already, builders are deploying new infrastructure to fix the problem.

New Layer 2 scaling solutions will continue to improve speeds and lower transaction costs. Arbitrum, a new L2, launched on Ethereum Mainnet in early September and its parent, Offchain Labs, announced a $120 million round led by Lightspeed. In the past 24 hours, 14,260 ETH have been bridged from Ethereum to Arbitrum. The bridges from Ethereum to L2s, like Polygon, Arbitrum, Fantom, and Optimism, and other L1s, like Solana, Avalanche, and Near are open and flowing. Polygon is leading the charge, with $2.4 billion in Total Value Locked (TVL), a proxy for volume.

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But while the infrastructure will continue to improve, the bigger challenge right now is the fact that we’re interacting with web3 products via Web 2.0 interfaces.

Some NFTs are already available on OpenSea via Polygon, on which transaction fees are much lower, but that requires “bridging” your ETH over to Polygon (which costs gas), waiting nervously for the deposit to go through, unlocking your Polygon ETH, then signing a message to complete the transaction.

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I am fairly comfortable with all of this, and it still gives me pause. (That said, 250k people have participated in at least one OpenSea Polygon transaction. Maybe I’m a luddite.) The infrastructure is getting there; the interfaces need a refresh.

This isn’t a knock on OpenSea. OpenSea is killing it, and I’m a big fan. It just crossed 400k total traders all-time. It’s made it possible for a large number of early adopters to buy and trade NFTs. But it still looks and behaves like a web2 product, as most web3 products do. People upload content, other people can interact with and transact that content. The infrastructure behind OpenSea is novel, and OpenSea abstracts away a bunch of complexity, but the OpenSea interface could have been built in 2015 or even 2010. eBay has been around since 1995.

OpenSea Marketplace

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It’s still so early. If web3 is going to be as big as the internet, which has 4.66 billion users, it’s only penetrated less than 1% of the market as judged by the number of people who have MetaMask wallets (which just passed 10 million). There’s still a lot of work to be done to attract a broader base of early adopters, and even “Cross the Chasm” to the early majority.

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We’ve discussed some of the things that will accelerate the adoption of web3 technology in the last few posts, and we’re adding another concept today:

  • L2s and other Layer 1 blockchains like Solana, which offer faster speeds and lower costs than Ethereum and Bitcoin, and feel more like the regular internet, will bring new developers onto the blockchain, who in turn will bring more users.
  • Corporates will bring their customers into web3 in more consumer-friendly and familiar ways, such as letting them buy NFTs with a credit card or using social tokens to reward loyalty and encourage certain behaviors like attending live events.
  • More entrepreneurs will choose to build their next thing in web3, and some early stage companies might pivot or figure out how to incorporate things like tokens and NFTs.
  • Apps-Infrastructure Cycle: Better apps will lead to better infrastructure will lead to better apps will lead to better infrastructure in the ongoing apps-infrastructure cycle.

But there’s still a missing ingredient, at least based on the last three major consumer internet paradigm shifts: new epochs need new interfaces.

An Incomplete History of Interface Cycles

What we think of as the internet dates back to the Cold War, when the US Department of Defense’s Advanced Research Projects Agency (ARPA) developed what would become ARPANET so that the US military could communicate over a connected, distributed network.

Source: Wikipedia

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Mike Murphy’s 2019 Quartz piece, From Dial-Up to 5G, a complete guide to logging on to the internet, describes the history of the internet from ARPANET to mobile, with a brief glimpse into the 5G future. Murphy explains that over the internet’s first three decades, it remained a tool for academics, the military, and some nerdy tinkerers. By the time I was born in 1987, schools in 25 countries were connected to ARPANET, and the military had branched off to its own version, MILNET.

Businesses and more technical civilians started coming online in the late 80s and early 90s (Internet Relay Chat, the predecessor to Slack and Discord launched in 1988), but it was tough to use. This 1993 video, The Computer Chronicles - The Internet, is a funny time capsule. It reminds me of my first interaction with computers via floppy disks, chunky keyboards, and blinking command-line interfaces.

Netscape Navigator in August 1995, Source: Quartz

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Source: Wikipedia

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Source: Station

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Yamuchi Family Office No. 10

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