“Read Write Own” by Chris Dixon – An Accessible Introduction to the Third Act of the Internet

All opinions herein are solely our own and do not express the views or opinions of our employer. We have no affiliation with the author of the book being reviewed.

If you want to explore the future of the Internet, we recommend checking out Read Write Own: Building the Next Era of the Internet by Chris Dixon.

According to this book, the Internet has undergone three distinct acts, each marked by its dominant features. The first act, “Read,” was characterized by protocol networks like the web and email, which were “egalitarian, democratic, and permissionless” (p. xxi). Users could access information freely without any barriers. The second act, “Read-Write,” saw the rise of corporate networks such as social media platforms. In this phase, users gained the ability to create content and share it. However, these corporate networks resemble “walled gardens with one groundskeeper” or “theme parks controlled by a single megacorp” (p. xxi). Users rely on these companies for access to their platforms and have limited control over their data. The third act, “Read-Write-Own,” represents the current evolution of the Internet, embodied by blockchain networks. In this phase, users consume, create, and share content and can own and control their digital assets through decentralized systems. Consequently, blockchain networks are “democratizing ownership” (p. xxii).

This idea that the blockchain democratizes ownership is one of the book’s core theses: “The history of economic participation is one of increasing inclusion thanks to a combination of tech and legal advances. Partnerships had small groups of owners that counted in the tens. The limited liability structure expanded ownership dramatically, to the point that public companies today have millions of shareholders. Blockchain networks . . . expand the circle once more.” (pp. 180-181; our underlining).

In blockchain literature, Read Write Own might not stand out for its vision of the future but rather for its insightful analysis of the past and present. The book offers a compelling mental model, making the blockchain networks some kind of Hegelian synthesis of the protocol and corporate networks.

Read Write Own takes a different approach than books like The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous in addressing the public perception of blockchain technology. Instead of focusing primarily on blockchains’ socio-economic strengths and potential benefits, Dixon emphasizes their technical evolution and historical context. Dixon acknowledges that “Tales of fortunes won and lost are dramatic, easy to explain, and attention grabbing. In contrast, the technology story is nuanced, slow to develop, and requires historical context to understand. (That’s a big reason why I wrote this book).” (pp. 171-172; our underlining). By focusing on the development of networks and their role in shaping the future of the Internet, Dixon offers a well-rounded perspective on blockchain technology that can help readers better understand its potential beyond the sensational headlines. In that sense, Read Write Own primarily targets novices to the blockchain.

However, even experienced blockchain enthusiasts can find value in this book, as Dixon presents several intriguing ideas that may offer fresh perspectives or deepen their understanding of the subject matter. Here are three interesting concepts we subjectively identified.

Faucet/Sink Duality—First, the idea of faucets and sinks in the context of token economies is a valuable extension of the commonly understood metaphor of tokens as water flowing through a house (pp. 143-147). Faucets are typically thought of as the sources that distribute tokens. However, Dixon uses the term “sink” to describe how tokens can be removed from circulation, including paying transaction fees, burning tokens, and voting with them. This concept sheds new light on how token economics are designed and can help better understand the role of incentives in the ecosystem. By recognizing the importance of faucets and sinks, it becomes clear that maintaining a balance between supply and demand is crucial for a healthy and thriving blockchain network. This balanced dynamic can increase stability and long-term success for decentralized projects.

Network Constitutions—Second, Dixon’s comparison of blockchains as “network constitutions” offers an intriguing perspective on their role in governing decentralized systems (p. 164). Traditionally, the analogy between blockchain and law has been focused on the contractual aspect, with smart contracts enabling automated and enforceable agreements between parties. However, Dixon’s argument extends beyond this view by considering the lower-level normative perspective that represents the governance rules of all participants in the network rather than just the terms agreed upon between specific parties. In other words, blockchains are transparent and robust rules that guide the behavior and interactions of all participants within the ecosystem. This interpretation emphasizes the importance of decentralization and consensus mechanisms in ensuring fairness, transparency, and security within the network. By recognizing the constitutional role of blockchains, it becomes clear that they have the potential to create more trustworthy and autonomous systems compared to traditional corporate networks, which are often subject to centralized control and opaque governance structures.

Logical v. Organizational Decentralization—Third, there is this idea that blockchain networks are logically centralized and organizationally decentralized (p. 92). Logical centralization refers to all participants on a blockchain network relying on a common codebase. On the other hand, organizational decentralization describes the lack of control or authoritativeness from a single entity over the network’s evolution and governance. This configuration raises questions about whether it is possible to create a logically and organizationally decentralized system. In other words, could communities of developers maintain their own blockchains, all interacting using a standard interface like cross-chain bridges (but inherent to such a system)? Such a configuration would resemble the Ricardian international trade theory, where each group would have its digital specialty and trade with other groups. This decentralized arrangement could result in increased flexibility, adaptability, and innovation within the ecosystem and foster better collaboration and cooperation among different blockchain communities.

Our recommendation was initially not obvious. At first, indeed, our initial reaction was one of skepticism. Upon reading an early passage in which the author reflected on his journey into blockchain networks, we were uncertain about his background: “My own path into blockchain networks began in the early 2010s after reflecting on the failure of protocol networks like RSS . . . against corporate-owned rivals like Facebook and Twitter. These experiences turned me toward a new model of investing, one that guides my philosophy today.” (pp. xxvi-xxvii). We interpreted this as a weak a posteriori legitimation. However, upon further investigation, we discovered that Dixon had indeed invested in Coinbase back in 2013, lending credibility to his experiences and expertise in the field. Although this information could have been more prominently disclosed within the book, it is an essential foundation for understanding Dixon’s perspective on token economics and blockchain technology. Additionally, our expectations were further tested by its concluding sections, which presented a seemingly obvious vision of the future. While this outlook might be familiar to seasoned professionals in the field, novices might find it less apparent or intriguing. Thus, while the book offers valuable insights and a comprehensive analysis of token economics, it may only partially cater to the needs of beginners who are just starting their blockchain journey.

In an era where blockchain technology continues to revolutionize industries and reshape the digital landscape, Read Write Own stands out as a must-read for those new to the subject. This accessible, nontechnical book presents a clear and insightful perspective on the future role of blockchains in our increasingly interconnected world. This book makes a compelling argument that the democratization of ownership through blockchains is the future of the Internet, making it an invaluable resource for anyone looking to gain a solid foundation in the field and understand its far-reaching implications.