Big Tech killed the internet — blockchains can help revive it.

The early internet was a magical place because it was driven by people and their creativity. Builders knew that whatever they made, they owned — a simple promise that established the right incentives for the technology to flourish. But now, the internet is stagnating and it’s harder than ever for new apps to break through.

Consider the app stores: almost all 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 of the internet around 2010. Just a few gatekeepers now 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 that is creating new networks that cannot be easily usurped — ideally, those built on blockchains.

Early internet networks, like the web and email, provided a stable foundation upon which people could build businesses and establish a direct connection to their audience. This is no longer the case: networks controlled by the largest tech companies now reach billions, but entrepreneurs and creators have learned just how untrustworthy they can be. These businesses clamp down on application programming interfaces, meddle with mysterious algorithms, and rank content according to opaque and capricious policies. Worse, big tech companies claim most 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 perks and easy-to-use tools to draw in users — and then, once they are locked in, switch to extracting value from them. A corporate network that doesn’t make this switch will be outcompeted by one that does. It’s impossible to quantify how much innovation and consumer choice has been lost as a result.

Some clamor for regulation — though this risks cementing existing power structures. Others focus on reviving early internet protocols, such as plans for so-called federated networks (in which policies are enforced by a central framework), though these are not widely used.

A revitalized internet would require three properties. First, openness: being available to anyone, anywhere. Second, trust: the rules should be transparent, fair and dependable, so builders, creators and users know the network cannot yank the rug out from under them. Finally, all users — not just centralized gatekeepers — should have a say in the networks they contribute to.

Networks built on blockchains have all these attributes. While it’s easy to dismiss the technology because of its associations with casino-style gambling behavior — notably FTX and meme coins — it would be a mistake to ignore its potential. Progress towards greater scalability indicates this could be as transformative as the arrival of the PC.

Blockchains are a new class of virtual computer that can, for the first time ever, establish inviolable rules in software. Usually, whoever controls computer hardware can tell the software what to do. But blockchains invert this relationship, preventing those who control a centralized server from arbitrarily changing rules. Unlike traditional computers, blockchains can ensure that any code they run will continue to operate as designed. This could potentially revolutionize the internet’s power dynamics.

Networks built on blockchains combine the societal benefits of early internet protocol networks (open access, democratic governance, low take rates and user ownership rights) with the competitive advantages of corporate ones (sustainable sources of funding and advanced features). This provides the path to a freer and more vibrant internet that will reward us all.

This op-ed originally appeared as “Big tech killed the internet — blockchain can help revive it” on the Financial Times’s website on Thursday, February 1, 2024, and in the newspaper’s print edition on Friday, February 2, 2024. The article is based on ideas in the author’s new book, Read Write Own: Building the Next Era of the Internet.

***

The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities, digital assets, tokens, and/or cryptocurrencies are for illustrative purposes only and do not constitute a recommendation to invest in any such instrument nor do such references constitute an offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.

Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.