Tokens: A New Digital Primitive

Chris Dixon

Major computing waves generally have two eras: the skeuomorphic era and the native era.

In the skeuomorphic era, the design thinking is largely adapted from older domains. For example, the early web was mostly digital adaptations of pre-internet activities like letter writing and mail-order shopping. Websites back then were mostly read-only.

It took about a decade for technologists to start seriously exploring the idea that websites could be read/write, where users generate the content. This led to the growth of web-native categories like social networking, crowdfunding, and social productivity apps.

This pattern is repeating itself with crypto/web3. There are some great native web3 products, but overall we are still in the skeuomorphic era. Many web3 products are adaptations from older domains.

Popular skeuomorphic web3 ideas include offline ticketing, supply chain management, and record-keeping for offline assets. These may be good ideas, just as read-only websites were a good idea, but they only scratch the surface of what web3 can be.

A lot of today’s NFTs are adaptations from the offline world of art and collectibles. This leads people to think that NFTs are limited to those domains, in the same way people once thought the web was limited to brochures and magazines.

Tokens — fungibles and NFTs — are better thought of as new digital primitives, similar in flexibility and generality to past digital primitives like the website.

Tokens give users property rights: the ability to own a piece of the internet.

Web2 left out digital property rights. When you use a site (or app), it would only let you borrow or rent things. Imagine if in the real world you had to buy everything from scratch every time you went to a new place. That’s web2.

Like websites, tokens are digital primitives that can be generalized to represent almost anything — money, art, photo, music, text, code, game items, control, access, and whatever people dream up in the future.

Users can now have a persistent inventory of objects in their wallet that they take from one app to another. If their objects increase in value, the user gets the upside. This is a big change from Web 2 where the upside was mostly captured by tech companies.

We are still very much in the skeuomorphic era of web3, but are starting to see a new wave of native applications that have no prior analogue and simply couldn’t have existed before.

For example, building on mechanism designs pioneered by DeFi entrepreneurs, a new wave of DAOs are exploring ways for groups to come together, pool resources, build things, and self-govern.

Composable NFT games like Loot incentivize the community to build an entire world around a single set of NFTs — an activity that would be impossible without the ownership and portability that web3 enables.

There is nothing intrinsic about fungible tokens that needs to be related to money and finance, and nothing intrinsic about NFTs that needs to be related to art and collectibles.

Those are great initial applications, and will likely remain very important, but tokens are better thought of as a new digital primitive, analogous to the website — the atomic unit around which a new era of the internet is organized.


This first appeared here.


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 current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.

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 or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or 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

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 for additional important information.