[How about this book] Will Blockchain Reshape Internet Power?

$1.872 trillion (approximately 2,592 trillion won). As of the close of regular trading on the 26th (local time) on the New York Stock Exchange, this was Amazon's market capitalization. Amazon's stock price hit an all-time low in 2001, just before the dot-com bubble burst. Its market capitalization fell to $2.2 billion (about 3.0446 trillion won). At that time, few would have predicted Amazon's current stature.

In March 2000, during the height of the dot-com craze, the U.S. National Academy of Engineering (NAE) ranked the internet 13th on its list of the greatest engineering achievements of the 20th century. This was lower than the radio and telephone (6th) and air conditioning and refrigerators (10th). From today's perspective, might the internet have been underrated? We often encounter the reality of innovative technologies without realizing it. It is not easy to recognize the potential of innovative technologies from the start. The telephone, invented in the 1870s, could only transmit voice over short distances. Western Union, the leading telecommunications company at the time, did not purchase the telephone technology, failing to recognize its potential. IBM, which adopted Microsoft's (MS) DOS operating system (OS) in the 1980s, did not foresee that this decision would soon lead to MS dominating the explosively growing PC market.

Chris Dixon, author of Read Write Own, argues that blockchain technology is currently in a similar situation. "Many people acknowledge the potential of blockchain, but many of those leading the computing field today ignore it." Dixon is the founder of a16z Crypto, a firm specializing in cryptocurrency and blockchain technology investments. He predicts that blockchain technology will change the network environment and lead the Web 3.0 era, just as the iPhone changed the world.

The author explains that the internet era began in the early 1990s and can be divided into three periods based on network design methods.

In the 1990s, the internet mainly consisted of websites modeled after flyers, email as an extension of letter writing, and internet shopping reminiscent of mail-order catalogs. These were mostly digital versions of pre-internet concepts. Information flowed in one direction?from websites to users?and this period was called the "read-only era." It was also the era of protocol networks. Protocols are sets of rules for participating in networks via computers. Protocols enable communication between computers. Open protocols accessible to everyone drove internet development during this period. Examples include HTTP, the web communication protocol, and SMTP, the standardized email communication protocol. The defining feature and advantage of protocol networks, the early form of the internet, was openness and permissionless access. Without central intermediaries, no fees were charged on money moving through the network.

As users increased, the network's value rose, and from the mid-2000s, big tech companies began to dominate the networks. This marked the beginning of the era of corporate networks.

Corporate networks like Facebook, Twitter, and YouTube significantly increased users over the past 20 years, contributing to internet growth. Apple's 2007 release of the iPhone accelerated the growth of corporate networks. Facebook, Twitter, and others became killer apps for smartphones, helping smartphones gain popularity.

However, the harms of corporate networks began to emerge. Dixon points out that from the early 2010s, Facebook and Twitter blocked networks and restricted developer access. Because corporate networks tightly held onto their assets and did not share them, venture capital investment in apps built on social platforms sharply declined. Today, Dixon notes that the top 1% of social networks account for 95% of social network web traffic and 86% of mobile app usage. Recently, as the harms of excessive corporate network dominance have become apparent, calls for regulation have grown louder.

Dixon proposes blockchain networks as a new alternative to overcome the harms of corporate networks. According to him, blockchain networks combine the social benefits of protocol networks with the competitive advantages of corporate networks. He emphasizes that if blockchain technology forms the foundation of networks, it can create networks that are fairer, longer-lasting, and more resilient.

As widely known, blockchain technology was developed by Satoshi Nakamoto, who created Bitcoin to solve Bitcoin's problems. Blockchain is a security technology that encrypts transaction information into blocks and stores them distributedly like a chain among all network participants. In a 2008 paper on blockchain, Satoshi Nakamoto described Bitcoin, a new type of digital currency, as "an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly without a trusted third party." He developed blockchain technology to enable a transaction system without third-party intervention.

Satoshi Nakamoto allowed anyone with internet access to participate in the blockchain without permission. This was because Nakamoto believed that if there were a permission process, privileged intermediaries like those in traditional financial systems and banks would appear. Therefore, Dixon emphasizes that blockchain can restore the openness and permissionless nature of the early internet.

The book explains technical aspects of blockchain and network environments in detail. If you are not familiar with technical terms, it may be difficult to grasp the content. However, even without understanding the technical parts, it is interesting to observe the stages of internet development that have dominated our daily lives in just about 30 years.

Dixon predicts that blockchain will be a disruptive innovation. He adds a meaningful sentence: "Companies that fail to recognize disruptive innovation end up making that innovation disruptive."

Read Write Own | Chris Dixon | Translated by Kim Eui-seok | Across | 388 pages | 22,000 won