a16z has unveiled its comprehensive list of "big ideas" that tech builders may address in the coming year, drawing insights from domain partners in areas such as American Dynamism, bio, consumer tech, crypto, enterprise, fintech, games, infrastructure, and more. Crypto partners express excitement about several aspects, particularly the prospect of entering a new era of decentralization.
Decentralization is emphasized as a crucial tool to counteract the concentration of power in the hands of a few or a single leader, preventing encroachments on user freedoms. It enables the democratization of systems by fostering credibly neutral and composable internet infrastructure, encouraging competition and diversity within ecosystems, and providing users with more choices and ownership.
Despite the challenges of implementing decentralization at scale compared to the efficiency of centralized systems, recent years have seen the emergence of best practices in the "living laboratory" of web3. These practices include new models accommodating richer features for decentralization, as well as innovative approaches like DAOs incorporating Machiavellian principles to enhance decentralized governance effectiveness and leadership accountability. The evolution of these models is anticipated to bring about unprecedented levels of decentralized coordination, operational functionality, and innovations in the near future.
Revamping Crypto UX: Despite recognized complexities, the core user experience (UX) in crypto remains relatively unchanged since 2016. Developers are actively experimenting with tools like passkeys, embedded wallets, and more to reset frontend UX for crypto, enhancing security and mainstream adoption.
Modular Tech Stack: In the world of networks, open-source, modular tech stacks are gaining prominence for unlocking permissionless innovation, encouraging specialization, and fostering healthy competition. This approach offers valuable flexibility for the crypto space.
AI and Blockchains Convergence: Crypto introduces the potential to create multi-sided, global markets for AI resources, democratizing access and reducing costs. The synergy between AI and blockchains also addresses challenges like deep fakes through traceability and decentralized governance, with web3 serving as a testing ground for these innovations.
Play-to-Earn Transforms into Play-and-Earn: Play-to-earn (P2E) games, where players earn real-world money for playing, are evolving into "play-and-earn." This shift is a response to the changing dynamics of the gaming industry, driven by web3, aiming to ensure that users are compensated for their time and value generation on gaming platforms. While P2E initially faced challenges, it is becoming an integral part of gaming, blurring the lines between gaming and the workplace.
AI in Games Requires Crypto Guarantees: In the realm of web3 games, ensuring AI agents' credibility is crucial to maintain the integrity of the gaming experience. The procedural generation of lore, terrain, narrative, and logic by AI necessitates guarantees, and crypto provides the means to enforce and uphold these guarantees. The concept of "AI alignment" becomes an incentive design challenge, aligning with the core principles of crypto to address issues, diagnose problems, and impose penalties when necessary.
Accessible Formal Verification for Smart Contracts: Formal verification methods, often complex and costly, gain relevance in smart contract development due to the high stakes involved. The emergence of new tools with improved developer experience, leveraging the architectural simplicity of smart contracts, addresses the challenges of traditional formal systems. These tools, inspired by formal methods, enhance security, reduce vulnerabilities, and contribute to the development of more robust smart contract protocols, less susceptible to hacks.
NFTs Evolve into Essential Brand Assets: Prominent brands are increasingly leveraging NFTs to engage mainstream consumers. Starbucks, for instance, gamifies its loyalty program by offering digital assets tied to coffee exploration. Nike and Reddit have also embraced digital collectible NFTs for broad audiences. Beyond collectibles, brands can use NFTs to strengthen customer identity, connect physical goods with digital counterparts, and collaborate with enthusiasts on new products. The trend towards affordable NFTs managed through custodial wallets and "Layer 2" blockchains is growing, setting the stage for NFTs to become ubiquitous digital brand assets in 2024.
SNARKs Gain Popularity: Succinct Non-interactive ARguments of Knowledge (SNARKs) are revolutionizing computational workload verification. Traditionally, strategies involved re-execution on trusted machines, execution in a specialized machine (TEE), or execution on a blockchain. SNARKs offer a cryptographic receipt of compute workloads, making forgery impossible. Recent advancements are reducing the overhead from 10^9 to around 10^6, making SNARKs viable. This opens avenues for various use cases, from verifying upgrades in IoT devices to embedding authenticity in media editing software and ensuring unforgeable bank audits. SNARKs are set to play a pivotal role in enhancing consumer experiences across diverse applications.
