Digital Ownership

March 07, 2022

The debate around web3 and NFT is raging. Unfortunately, too often, it’s just engagement farming. Still, I see a regular criticism that (and I hope I rephrase correctly) goes like this:

The web is already too “capitalistic” why would adding more property rights to it be helpful?

Unfortunately, I think it’s rooted in a misunderstanding about the concept of “ownership”.

Let’s start with an aside. One of the most fascinating things about innovation is that, by definition, it is not conceptualized. The pre-existing words do not (cannot) describe these new ideas accurately. The same goes for laws, designs, and architectures. All of these get redefined as the new ideas get more widely adopted and new mental models get formed.

I think that’s what’s happening around “ownership” in the crypto and web3 worlds.

Ownership as control

It should be no surprise to anyone that ownership, as it is currently known, is itself a social construct. Some Primitive People did not necessarily have that concept, but in the XXIth century, and pretty much all around the world, ownership is a cornerstone of the social contract because it is in fact a legal concept, that is, eventually, enforced by force through the monopoly on violence that states enjoy.

However, even in the meat-space, we can easily see that ownership is not just about “property” but also about “control”. A car has financial value which means I can sell it, but it also has a usage value: I can drive it to go somewhere, and I can use it to carry my kids around… Etc. I can also decide to paint it in a different color or change some of its technical features. “I own it” means that I’m in control of it. My neighbor cannot arbitrarily take it and use it without my permission, and the company that made it cannot (or at least until recently, shouldn’t) repossess it or change the tires without asking my permission first.

The same concept already applies to many items in the digital world. The most obvious one is a domain name. Some of them are incredibly valuable, of course, but most of them are only valuable to their current owner because they allow them to have control over the content, the format, and software that runs when people visit a website at that specific domain or send an email to an address at that domain… Etc. One caveat is that in DNS, the owner has to pay a yearly tax to keep owning the domain, and that domain could in fact be seized in some cases (that’s because DNS is not fully decentralized…)

Several movements have, rightfully, preached for more ownership around someone’s presence online. I was long part of the indieweb movement, for example.

Finally, it is essential to note that it’s already common to use sentences like “you own this” about a situation to reflect that someone is responsible for the said situation, either because they caused it or are expected to solve it. The internet even has its slang about that concept: pwned, when someone takes over the ability to control a portion of your online presence.

Digital feudalism

Feudalism is an organization of society where most people do not own land (or anything, as a matter of fact). Still, they are gracefully offered to stay on some noblemen’s property in exchange for labor in the fields. The nobles had a moral obligation (noblesse oblige…) to defend their peasantry in conflicts, but of course, they had a strong incentive to do that to protect their lands and properties.

Today’s web is mostly digital feudalism. A small number of tech companies practically own the web. They farm our attention and our data to provide us with endless entertainment and connect us to one another. They do provide some content discovery mechanisms, but only really as much as it serves their need to capture our attention, or makes us stay a little longer on their platforms: we have all seen Google results pages where the content that links away from Google is reduced to a fraction of the screen. Facebook’s Instant Articles or Apple’s News apps have made it nearly impossible (or at least useless) to browse to a different website.

In some cases, users may believe that they own some username, or a large facebook group, but they only control them for as long as it does not conflict with the platform’s goals and ambitions.

Control in web3

Web3 can be seen as merging the crypto/blockchain with the technological web stack. From the world of cryptocurrencies, web3 is leveraging the concept of self-sovereign identity. Anyone can assert their identity through cryptography and knowledge of a secret private key. Smart contracts, like the NFT contracts (when they’re done right), can then enforce that only the “owner” of a record can modify that record. Ownership here is not so much about $ than it is about control. There’s a rumor that Vitalik Buterin started Ethereum because he was frustrated that Blizzard had arbitrarily changed the properties of one of his hard-earned (many hours played) game items.

In the NFT space, the ownership-ledger and rules around transfers, visual representation,… are all public (or should be… 👋 OpenSea), auditable and verifiable. Maybe the NFT has a market value, but maybe not. As a developer and as a founder, what’s interesting to me is that rules are known and that the owner of the NFT has control. The blockchain and its smart contract offer accountability and transparency.

Toward collective ownership

The web is our collective brain. This is how we collectively produce knowledge. The idea of production should immediately trigger questions about ownership of means of that production. There is little doubt that, until now, decoupling ownership and labor has been massively successful at fostering innovation and pushing progress forward, but this also has surfaced challenges such as unaccounted for externalities, or growing mis-alignments between owners, workers and consumers. The cryptocurrency space, as it is self-referential, has shown that the lines between these “classes” could in fact be a lot blurrier (arguably the corporate world has stock options, or even co-ops), and there is a point to be made that since we (finally) have a way to “assess” (if not enforce) digital ownership, we could see the emergence of collectively owned software and networks.

Continuing the NFT example above, you might rightfully argue that the contract itself is owned and that all the owners of the individual tokens are only “tenants” on the contract if they do not have at least a collective ownership of the contract. That’s right, and that’s usually where the concept of a DAO emerges. Some contracts can be “owned” by other smart contracts where participants can collectively decide on the contracts’ code… Etc.

The role of middlemen

Some have argued that ownership and control are meaningless because the middlemen are used to display the information served by a smart contract. I think it’s important to realize that every single interaction we have with a computer is happening through multiple middlemen: whether it’s the application, operating system of our own devices, but also the servers on the other side… In practice, it means that the middlemen are in charge of “enforcing” ownership by displaying the true state of the smart contracts.

We will always need middlemen and intermediates to turn bits (0s and 1s) into brain byte code (mental representations). However, once the data is coming from a smart contract, we can verify, if not always, at least through random sampling, that the middlemen are indeed providing us with accurate data and information.

If you create an NFT smart contract where you intentionally point to an external server for the metadata, you are breaking that chain of trust… So it’s kind of ironic to complain about the fact that the chain of trust is broken. However, the actual NFT, the line that says Jane Doe owns a specific token is still there for everyone to see and can’t be altered by anyone but Jane Doe.

More importantly, if any of the middlemen, frontend, or intermediates were to misbehave, or disappear, the openness of the underlying data means that anyone can build another middleman for themselves and others to use. This is not theoretical, check what happened to Hic Et Nunc.

I own this site… and its membership!

Lets close this with an example. This site is mine. I bought the domain name, and even though it could be seized, it’s unlikely that it will ever be. Similarly I own the content, and could publish it elsewhere if my current hosting provider decided to block it.

Publishing is obviously critical. Monetizing is also critical. Could I monetize in a way that would allow me to own the relationship with the readers? Without crypto-currencies, I doubt I could. If I decided to put ads, I would have to be massively large to actually have direct relationships with publishers. If I used platforms like Patreon, or Substack, I would not really be in control of the relationship, as, especually these relationship would only be possible on these platforms.

In practice, there is a membership on this blog. It’s defined by a smart contract that I, and I alone, control. Interestingly, this contract is standard. It’s been deployed from the Unlock Protocol factory contract. The Unlock Protocol itself is collectively owned by all people who, like me, decided to own the relationship with their members.

After nearly two years of a global pandemic, we can only be in awe at the wonders of the modern web. Despite massive lockdowns, many of us were able to keep working, have frequent communications with our loved ones, and consume food and order products without venturing outside… This is nothing short of amazing, and I’m deeply convinced that technology has helped avoid a much deeper crisis despite many of the challenges ahead.

However, it’s essential to realize that all much as this Operating System for mankind is powerful and valuable, it’s also profoundly problematic that it puts the vast majority of us in a position of servitude toward large empires and that it’s only by reclaiming the internet’s ownership that we can start becoming free(wo)men on the internet.

This post was made possible by support from our members including:

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Written by Julien Genestoux. Entrepreneur, Hacker, Investor & Advisor You should follow me on Twitter

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