Overcoming Web3 Bias

Author’s Note: This was written in the Fall of 2021, near the height of the most recent crypto boom. The mood then was very different then than it is now, but the ideas are as interesting and important as ever (in my humble opinion, lol). In fact, it’s perhaps even more useful to revisit web3 hype now, since we have a bit more emotional distance from the price swings.

Enjoy!



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Lately I’ve been teetering between fascination and disgust with regard to web3.

Some days I feel like the holy trinity of NFTs, DAOs, and DeFi might replace the very foundation that society rests on. Other days it feels like 90% vaporware and Ponzi schemes that collectively emit more CO2 than a medium-sized country.

The challenge, as I see it, is to hold both of these ideas at once.

But this essay isn’t about web3. Instead, it’s about how to deal with things like web3: strange new paradigms that could change everything—unless they don’t.

Paradigms are models of the world. They tell us what’s out there, how it all fits together, how it works, what’s broken, and what to do next. New paradigms gain adherents when they promise a better future based on a different model of the world, and they grow as their models is proven to work—i.e. generate results for adherents. Religions, ideologies, technologies, and fads are all examples of paradigms.

Battles between new and old paradigms are like swamps where reason goes to die. They are the mind-killers. Snags in the universe destined to stymie our best efforts at linear, harmonious, predictable progress. They divide us into faith-based groups that disdain and even despise one another. Neutrality becomes nearly impossible as you approach the fray.

The reasons for this are as follows:

1. New paradigms don’t work that well at first (how could they?)
2. Sometimes they never become important (remember 360º video?)
3. Sometimes they end up changing everything (remember the internet?)
4. The bigger the shift, the harder it is to wrap your head around (e.g. did you know time is relative to speed??)
5. The more you learn about a new paradigm, the more likely you are to believe in it (thanks to the “mere-exposure effect” and “consistency bias”).
6. Also thanks to these cognitive biases, most new paradigms seem wacky at first, so you’ll resist taking them seriously (though this effect tends to be weaker if you’re younger).
7. If you wait to learn and act until the new paradigm is working perfectly, it’s probably too late (e.g. Nokia and smartphones).
8. On the other hand, if you go all-in on a paradigm that ends up failing, you could waste a lot of time and money (e.g. spending $600k on a beanie baby).
9. The stakes in the short-run of making a correct assessment of a new paradigm are often low, so we align ourselves based on social incentives—what’s best for our status with the ingroup—rather than accuracy (e.g. new paradigms can easily become crony beliefs).

In a paradigm culture war, it’s tempting for fence-sitters like me to quote Yeats and bemoan the best lacking all conviction, while the worst are full of passionate intensity. We get fixated on the hucksters and haters profiting off the disruption. But actually, I think attitude polarization is a necessary and inevitable part of any paradigm shift. And overall I’d rather live in a society capable of change than one that isn’t.

All innovation is based on faith. The motivation to start building a new way has to come from somewhere, and as any inventor will gladly tell you, it ain’t reason. It comes from a hunch. People within the bubble of the paradigm rely on shared faith and social rewards to keep going even when things get hard. This might look annoying from outside of the bubble, but from a macro perspective, I’m glad it happens. I’m glad there are millions of people pouring everything they’ve got into a new way of organizing society. Even if it might not live up to everything they hope it will be.

The problem is, what to do if you’re feeling anxious about your place in the paradigm culture wars.

If you’re excited to join the new paradigm but you’re worried you’ll look like a fool if it all comes to naught: don’t worry about it and dive in! My only advice would be to focus on building, and keep the “collecting” / “investing” to what you can easily afford to lose. (And, as always, don’t be a judgy jerk to people who think differently from you.)

If you honestly don’t care about the new paradigm, but you’re worried the world will pass you by and it could cost you dearly, I have good news: these things take a lot of time. If we look back at previous paradigm shifts like the PC, internet, and mobile, it’s clear that it created a lot of new opportunities and killed some old ones, but for the most part everyone ended up OK. People get new jobs. The only thing I would say is: don’t judge the new paradigm by the loudest voices. It’s far more interesting to learn about the fundamentals than it is to listen to the hype men. (And, as always, don’t be a judgy jerk to people who think differently from you.)

Whether you’re a believer or not, the root cause of most mistakes people make when dealing with new paradigms comes down to two things: fear and arrogance. We fear we’ll miss out, that we’ll fail, or that we’ll be judged and rejected. And when we’re not afraid, we’re arrogant. We think the new thing is obviously bullshit, or obviously amazing, and it decreases our attachment to the actual truth.

When dealing with a new paradigm, reason has its limits. The best strategy is to embrace curiosity, and don’t worry too much.