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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The author is general partner at Andreessen Horowitz and author of ‘Read Write Own’
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 clamour 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 revitalised 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 centralised 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 behaviour — 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 centralised 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 revolutionise 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.