There has been much
about web3, “crypto”, and decentralization lately. I care about, study, and work
with the web, decentralization, and even a touch of cryptography - but I think
that recent trends hinge less on technological specifics and more on economics,
human behavior, and scarcity (or lack thereof).
Technology obviates scarcity, and computational technology especially so. Price
is driven by supply and demand, with effectively infinite supply making price
negligible. This makes the marginal cost of digital goods generally near zero,
with the barrier to create and share content lower than ever.
The result is a world that gives consumers unprecedented media options, and at
the same time makes it
challenging to compensate artists.
The blockchain enables a form of (artificial) scarcity, with
NFTs digitally embodying assets, which some
argue can address the above challenges. To form opinions on manufactured
scarcity like NFTs, I think it is useful to more generally consider what is good
about scarcity and what is not so good, economically and beyond.