Web3, consumer trust and the money layer of the internet

Transcript

thank you hello hello hello so this is the last talk um thank you for everyone who stuck it out this is uh one of my favorite conferences every year this is my fourth time coming to eat cc um my name is james beck i work at consensus which you may know metamask and fura diligence truffle we essentially build products for helping users and also developers build on ethereum and increasingly other evm compatible chains and you know layer ones like near um so i'm director of communications and content i've been at consensus for five years and with that perspective it's given me a lot of understanding of how

narratives around ethereum crypto web 3 have changed over time and while last year was really exciting i think we've sort of entered the first era where not only governments not only people in positions of power but everyday consumers now have a pretty strong opinion about nfts about dows about web 3 and crypto in general so the title of my talk is that web3 won't be the money layer of the internet if consumers think it's an earth destroying scam i'm using the language of the critics and so i have four ways to change that narrative so yeah ecc 2021 it was really fun it was the sort of end of d5 summer but the beginning of a whole new nft wave this

is just a basic chart showing uh google search interest in nfts and you can see it sort of follows the market cycle in november you had you know the highest amount of people researching on google what is an nft and trying to understand it and then it fell off likely due to people knowing now what an nft is but also it kind of followed the market in terms of you know volume on on marketplaces like openc but you also in 2021 saw record venture capital investment so there's now 47 web 3 unicorns which when i first joined at consensus that was pretty unthinkable and 40 of them came out of 2021 and so that's a company with a billion dollar

usd valuation and there were 1200 deals the crazy thing is is that web3 outpaced biotech as a sector and this is sort of a chart from cb insights showing where this investment was going you can see that way too much money entered the united states or was either dealed or deals or sourced in the united states and you also see you know asia with way more people but only representing 1.3 billion in deals and then europe with about half a billion in total venture capital funding so with all this money flooding into the space more than the biotech sector you start obviously getting a lot of mainstream interest you see all these celebrities becoming apes on

on twitter and other social media profiles and you see major outlets like the new york times trying to understand okay if all this is investment in the web 3 sector what is web3 we need to explain it to our readers so kevin russ the new york times did what is web3 explainer he did an explainer on nfts on daos and with that too comes general literate opinions on this on the space and then of course all big brands decided at some level of their strategic operations what is our web 3 plan what is our web 3 strategy some were very overt i mean these three examples i have on the screen square becomes block facebook we all remember became meta

that was their metaverse play but also cribbing some of the ideas from web 3. and then finally radio shack became i don't really know but like a you know a twitter posting company that's supposedly doing swaps in d5 it doesn't make any sense to me but anyone you know every company had to have a web 3 play even companies like you know salesforce that do basic crm they had to think okay what is our web 3 play however with any frenzy you start seeing sentiment turning so here i picked a few of our favorite crypto critics if you spend any you know too much time on twitter you have steven deal he and supposed like leading

technologists uh ended up drafting a letter to members of the u.s congress to essentially say you need to take action on crypto not just for the environmental effects of proof-of-work blockchains but because it represents a scam that you know those are pretty strong fighting words you have a washed up uh c-list actor ben mckenzie from uh the oc he's now devoted his entire online persona to teaming up with this guy who's a journalist jacob silverman and critiquing web 3 projects and then you have even you know really diligent researchers someone like molly white there's a profile on her in the washington post where you know she spends a lot of time as a wikipedia editor and is

increasingly um spending time writing about web three topics going even as deep as trying to understand the difference between you know verifiable credentials decentralized ids and writing long blog posts on it as a critic i think some of hers are actually really helpful and it's important to be open to criticism but if you've ever spent time trying to edit a a project page on wikipedia you're going to come across all of these folks uh there's this mr gerard is pretty famous for being a person who doesn't let you edit uh even the ethereum wikipedia page because they're so vociferously anti-crypto if you you know if you want to know all

the crypto critics that are kind of making their profession out of it in one place just check out this crypto policy symposium it's an i think it's in london or new york it's later this year these people have literally made their entire online persona and even their career based on being well-known cryptocritics um you know and see these are some of the people that you see on twitter they're the types of people that really are you know cautioning to the world of technologists and also regulators that crypto is one giant scam it doesn't solve any problems we need to shut it down now we need to protect consumers all right so what does that sort of mean though in terms of how do we understand the actual

real sentiment of people i i brought up a lot of the flashy headlines i brought up the really loud voices and critique i even brought up some examples of people who you know have made their entire living off of being a critic of crypto does it really matter so water and water and music is a pretty interesting research group they mostly focus on music nfts they did this whole report analyzing fan sentiment of music nft drops however they only use twitter to understand data as well as melt water which if anyone has ever worked in public relations it's a media sentiment tracking tool so this is interesting this is over the course of november 2020 to november 2021 they took pretty much every known

music nft drop and they ran it through some analysis tools using meltwater to understand was you know was sentiment overall positive was it overall negative um how does it compare to twitter sentiment and what they found is that you know there was a huge number of music nft drops in you know the march to may 2021 phase there were artists like grimes who were doing nft drops largely to fans who had never heard of nfts but then there were also artists like blau who clearly has a large crypto following and was pretty positive about his drops and so what they found though these are the two of the findings at the end of the report they found that there

was a lot more questions asked than answers so number one um sherry who and the rest of the water music team decided twitter is actually not an effective platform for artists to address fan concerns around nfts so if you remember during this phase around you know may to september you saw all these new projects saying okay we're going to do our nft drop on polygon polygon is proof of stake proof of stake is not as impactful to the environment as proof of work ethereum you also saw you know an artist like charlie xcx saying part of the proceeds of this is going to a charity it turns out according to their research though it didn't really address any of the fan concerns whether it's

environmental or financial concerns and as they put it it's because twitter is not actually the best platform for nuanced conversation the other thing they realized too is that even if you are using twitter as a way to push a narrative or challenge a perception that your audience has it's not actually a way to you know have your fans recognize that the most important thing is that you actually work with your community and understand your fans concerns initially and it's also very different if you're an established artist who is introducing it um you know i think i really love the pianist from berlin uh niels fromm he was going to do an nft his fans hated it he ended up not doing the nft drop so what we're seeing is in 2021 all of a

sudden everyone has an opinion about nfts everyone has an opinion about crypto and that those opinions start affecting actual consumer sentiment so this is a morning consult survey 83 of people now are aware of crypto and crypto is this really broad amorphous term at this point but only 26 have a positive opinion and this is also a chart showing like whether or not people think nfts are a good investment arguably i don't think nfts are solely for investing purposes but you know that that's the state of the question so even at the end of 2020 and the beginning of 2022 or 2021 and now this year you have platforms now responding to it with even the language they're choosing to describe what an nft is so

royal is now calling nfts limited digital assets fan play or fan pl fan apply is calling them digital collectibles which we've heard before and cirque is calling them fan passes so they're even trying to address the concerns around nfts and the stigma by renaming what they're doing i'm going to i'm going to take you to just a little aside because what we're talking about is opinions and sentiment and ultimately we're talking about aesthetics and so here we are in paris i couldn't help but drawing a parallel to these two famous cafes um so you know not too far away from us about a kilometer on san german is uh and forgive my pronunciation

my french is so there's les d'umego and cafe de flore and so le du mago was this famous cafe in the beginning of the 20th century you had you know preeminent thinkers people like simone de beauvoir that would sit there they would work they would talk they would host salons and increasingly you know the upper echelons of french society would say oh i just want to be there to be associated with it these are you know really important people and they started crowding this ledumago cafe just to you know be in the presence of these taste makers who are sort of shaping the world of art and uh and politics and women's rights back in the early 20th century literally just across the street is this other cafe cafe de flore

and for whatever reason the popularity of le du mego got so big that no one wanted to be there anymore especially the the uh simone de beauvoir and sartre they were just like okay all these people are crowding around so they just went to the other cafe and then since then the other cafe has been more popular arguably today both of them are taurus traps but the point being is that this is a this is a pretty interesting a take on it and it was written in 1996 but the fashionable only exists in relation to something that is not that way the relationship between modestness of the floor and the unmodestness of du mego isn't just possibly arbitrary it's

necessarily arbitrary if you place any two things side by side one will become fashionable and the other will not a world in which everything is fashionable is impossible to imagine because it implies that there would be nothing to provide a contrast the reason that when you place any two things side by side one becomes chic and the other does not is that it's the nature of desire to choose and choose absolutely so what does this have to do with what i was referring to earlier ultimately i think twitter is a bad place for understanding sentiment because it is a platform that prioritizes people's absolute choices or opinions on something not nuanced uh conversation so now here we're getting to the heart of my uh

going the wrong way so here we're getting to the heart of my uh talk which is uh why narratives matter and not i'm not here to give you like talking points to be able to go tell someone who's your neighbor who's skeptical of crypto i'm here to give you sort of the framework by which four approaches can be taken why do narratives matter i think we all know that anyone who's been in crypto understands how even the crypto narratives and ethereum have changed but when people hear a good story once they remember it for the rest of their lives you have this painting and there's a lot of great old dutch paintings of people just sitting around and talking in cafes because people and storytelling is a way that you know you are actually making choices

about the world and as uh that cafe comparison i made is you're making aesthetic reasons or aesthetic choices and reasons to believe something or or even live so the four that i've outlined and this is just kind of broad ideas that i think is the bare minimum for what we need to do as a community is we need to actually better understand the global sentiment a lot of the earlier stuff i was it was very american-centric and even western european-centric the actual use of web3 is global and so i'll talk about that in a bit we also need to celebrate the inspiring stories of web3 we've spent way too much time in this recent downturn talking about all the scammers and and it feels like in some

ways it's a bodily reaction to all the that's been happening that is scammy and so we we see three ro's capital we see all these c5 projects like voyager and celsius becoming bankrupt and i think that's actually good it's almost like an immune system response however the the problem is that people are alighting these stories with all of crypto it's become a condemnation on our space finally we need to win over the esg conscious consumers and companies and we need to inspire with knowledge that sparks action all right so how do we better understand global sentiment around web3 crypto polling is pretty limited right now we have gemini which in 2020 they did a state of u.s crypto

this year they actually expanded it they did you know 30 000 adults in 20 countries around the world here are some interesting findings so one they see it you know crypto as people around the world think of it as a store of value especially in an era of higher inflation they think that you know diversity diversification of your portfolio is important education and regulation though are still top barriers and then in indonesia and nigeria more than half of crypto investors are women all of this though i think is not as important for the ethereum and web 3 ecosystem because we're not telling people to just buy our token or invest in ethereum ethereum and web3 is a lot more than a speculative investment it's a place for commercial activity it's a place for

culture and so what we're doing now at consensus is my team we're working on a global perception survey similar in scale to this gemini report which came out after we had already started ours but we do you know we we survey 22 000 people in 15 countries um it's going to come out probably in september or october after we're done with our data analysis but the important thing that differentiates it from other polling is that we're actually trying to understand existing concerns of the web data privacy banking systems and also whether or not people understand web3 terms and if they think it's a solution to those concerns here i'm i'm just pulling out a bit of data just to show you what what already is is giving me some pretty interesting

things so these are people who answered the question like do you know what nfts are do you own any do you plan on buying any vietnam india and indonesia have the highest level of awareness of what nfts are and the highest percentage of ownership and then also in nigeria and south africa and several other asian countries you're seeing the highest likelihood for people to be interested in buying an nft over the next 12 months most of the nft major drops were yuga labs american companies this is actually a strong indication that the you know the next huge wave of crypto adoption is not going to be happening or led by the united states dow awareness similar similar ideas so a lot of people in in france germany the united states are not aware of what dows are look at vietnam over 50 of the

people that responded are aware of what dows are that's phenomenal in my opinion because i'm running out of time gonna move a little quicker okay so how do we celebrate the inspiring stories of web3 you often see this and this is like i can't stand this type of post but this is like a classic bitcoiner post you take a world event right now actually last night in ghanan province in china uh there was a sort of run on a bank and then uh military tanks moved in to sort of defend the people's bank of china from people trying to withdraw cash classic bitcoin response bitcoin fixes this that might be the case but it's not about what is possible it's about what's happening now and so i i really like to think that we need to be as a community and you know

the journalists in our space but also the storytellers highlighting that ethereum is this regenerative technology i think it sounds a bit cliche given that defy and refi are these new terms and refi seems to be a reaction of defy and degenerates and regenerates is this new reaction to all of that and you have you know people like kevin owaki green pilling people but i think it's really true and there's actually like the bitcoin grants around 13 had 88 different climate projects i i i i gave money to each of those and i had no idea what uh three-quarters were i'd never heard of them bitcoin grants is only one venue for knowing about all the creative that people are building on ethereum right now and look at these examples like there's uh you know there's already been attempts

at uh natural asset-backed stable coins but i'd never heard of kumo spark eco they're doing uh solar funding in emerging markets moon jelly dao never heard of that invested in it or or really gave them a grant they're decentralizing global ocean conservation and so there's all these projects that are actually providing you know real world good and it actually is actually starting to have an effect this was an op-ed written by a professor in in ireland and he said after going to eat barcelona which was two weeks ago it actually challenged the idea that crypto is is pretty chilly and scammy because it seems to him that it felt like a claim that the real purpose of ethereum is to act as a laboratory for broader political projects and site of economic experimentation and

then although you know everyone or typically you know when you talk about web 3 it's very pro-market the aim of web 3 according to him is not exploitation but regeneration i even got to meet another example i got to meet someone who started ethic hub they've been doing uh d5 staking since 2018 before staking and defy as a sector was even called defy and all the coffee at east barcelona was used or was from the farmers in mexico and central america where they've been providing financing through d5 protocols this is a fun one i mean i think it was like at the height of the market insanity but it's another example where you know you have something where people kind of create an internet flash mob and

that's where i see kind of daos being pretty effective and also capturing the creativity and interest ultimately it was it was futile and i think it's funny that they were also trying to bid their total amount they're raising in the open and maybe in some cases ethereum as a transparent technology isn't the greatest thing if you're trying to bid on a private sotheby's market but this takeaway from uh two writers for fwb drew miller and kevin munger was interesting um the implication of the gesture was profound here was a group of people staking a claim for web3 as a tool that could be used to build a world with new rules by purchasing the rules of the old world it's represented a super-sized version of something the world they created would be extremely good at mass mummified mobilization

and then finally you know i if anyone's heard me talk before at devcon i gave a talk at uh about susu's these are i think in my opinion the most impactful web3 projects we haven't seen yet and the reason why is that all the technology we're building and you know previous talks of this week are going to be used by people for use cases that we don't even really um imagine and one example is the existing lending circles that people have already been using to raise money they need a web 3 version of that because with a susu you essentially put in money into a pool you have to trust however many people are in the pool because each month or each week however you set it up they get to take the whole amount and any susu and any immigrant club will tell you a story where someone

took all the money and that really can't happen on chain uh and then finally you know proof of stake it was interesting that vitalik said does anyone not want proof of stake and i guess there was one person that raised their hand but it's it's absolutely essential if we're going to win the longer term narratives you have companies like salesforce that literally received a letter um signed by several hundred employees critiquing their nft plans even though they were building on polygon proof of stake because of their very limited understanding of uh or really they said you know nfts are a scam and they're destroying the environment you also have just a couple days ago new york state is banning crypto mining it's become a politically divisive issue in the united states where

really conservative states like texas are saying hey come here you know bring your mining we don't give a and then you have states like new york saying no we're actually going to band mining i imagine in continental europe that's also going to be a big issue as energy prices are increasing due to the war in ukraine so proof of work is not just something we need to get rid of it's something that actually is going to have political effects and in this story in the new york times it prove it was showing that the average consumer of electricity in upstate new york had to pay 70 more per energy bill so mining is actually having real effects on local economies and if you're trying to build sentiment around something like cryptocurrency you're not going to do so if people are having to pay more for

their energy bills again from the perception poll we're working on we did find though that the perception of uh you know cryptocurrency and its relationship to the environment differs by region um and so we are also going to be working on uh you know i think everyone has been or if you've ever had to defend proof of stake or talk about proof of stake and how it's going to improve we've been using the stat 99.95 better and it's still based on sort of like anecdotal uh evidence and and also like at-home staking setups but we are going to be working with um the crypto uh carbon ratings institution to be able to actually come up with sort of credibly

neutral statistics to prove to journalists that after proof of stake is implemented we're going to be reducing carbon output by almost you know 99 and then finally education is a challenge we all know that that there's a lot of great communities in the web 3 space that are working on education you know you have 101.xyz shify is an incredible group rabbit hole is fun but i think that you know if you look at all the polling a lot of people said they weren't involved in crypto because they don't have enough educational resources so these both come from the gemini state of crypto report and it's similar to what we're finding as well if there were more educational resources people in africa say 56 more would participate in or whether it's buy

cryptocurrency or participate in a tower by an nft and so what we're doing is we're building a new learn site for metamask i think is long overdue metamask has a number of known ux challenges and what we're thinking about while building this is what is the type of content that is not going to take you an hour to read and a lot of times when you give you know someone new to crypto you give them long onboarding guides a lot of people aren't going to take the time to read it so how can you make it engaging with short form text and a lot of visual examples the tone of voice needs to be accessible it also needs to define a lot of web3 vocabulary and finally how do you make it so that people are motivated to

action you're not just learning about metamasks metamask is not an end in itself metamask is supposed to inspire you to do things like buy an nft or join a dao or vote in a governance proposal and i'm going to leave you with one closing thought there's a tendency to treat technology as an agency as an agency that has some essential property rather than a site of struggle where people are fighting both internally and externally to it so there's nothing that we can do that's going to change the narrative of ethereum if we are not understanding it as a site for struggle everyone is going to have a different perspective of what ethereum should be and what it should be used for and i think that's fine but what we need to know is that there

will be consumers there will be people around the world that do associate web 3 or nfts as having some essential property it's a scam it's environmentally harmful and i think there's a lot we can do to shift their perceptions and and hopefully you know from this presentation you can get some of that um we have a few minutes left my name is james again you can follow me on twitter dm me on telegram or email me so um [Applause] [Music] [Applause] i run out of time yeah it's okay don't worry okay