Issue 7: Some reflections on the time I spent working in crypto

Dearest reader,

Between the months of August 2021 and February 2023, I had the experience of working in an ecosystem sometimes referred to by the label “web3 music”. I came in without any prior knowledge about crypto or any real first-hand experience in the space. What I’d like to attempt in today’s issue is to share with you some of my personal thoughts and opinions about the things I observed behind the label and, ultimately, why I’ve grown skeptical of its aims and the incentive structures that appear to drive it.

To begin, I’ll describe my recollection of (some of) the narratives I came across in 2021, which I found compelling enough to get me to quit my previous job and begin work in the space:

• This is going to be a world that’s “decentralized and free from platforms”.
• Art is meant to be simultaneously free and expensive. (Which I interpreted as meaning free to experience and expensive to purchase.)
• Artists have been getting the short end of the stick in the music industry for decades—it’s time to change that.
• Independent artists deserve more access to monetization channels and opportunities.
• Monoliths like Spotify and Apple Music exert far too much control (aka monopoly-like control) over the experience of artists and fans alike.
• And, of course: this is going to be “the future of music”.

Many of these narratives continue to resonate with me—they strike a chord of something visceral inside me that I imagine will be difficult to shake. It’s part of my DNA.

As someone who’s been passionate about ways to enable creative human expression for as long as I can remember, my default disposition is quite susceptible to these types of bold claims about a certain class of utopian artist-centric future. For the majority of the time I spent working in the space, I was passionately echoing these claims about such utopian futures to friends, family, and even casual acquaintances.

I was an NFT-hodling, proud member of the cause, dripping in the Crypto Kool-Aid.

However, I eventually grew weary and began to question whether I was being intellectually honest when I promoted such narratives to people around me who were curious to learn more about what I was investing so much time and effort into. In fact, it’s when recalling the instances where my words seemed to have held even some amount of influential weight where I feel the most amount of regret and ethical tension—which is part of what motivates me to share these notes publicly.

From the beginning of my involvement in the ecosystem, I noticed some things that seemed—awkward. Dynamics that didn’t appear in line with what I understood as the movement’s stated narratives. Examples:

• Centralized platforms appeared to proliferate, resulting in the same types of centralized control and risk the “movement” was supposedly trying to combat.
• Venture capital firms financed such centralized platforms, which implicitly suggests that people with access to lots of money were hoping these platforms would grow exponentially in adoption/earnings (or future financing rounds), generating massive financial upside for equity holders as a result.
• The platforms were successful in capturing a lot of attention and activity during the hype cycle of ‘21—but it wasn’t entirely clear they were providing utility or value for users beyond a way to “get in on the hype”.

Ultimately, I arrived at the disheartening assessment that the experiment didn’t seem to really be about the art or the artists after all. It appeared, to me, to have been more about a “secure the bag” effort on the part of people who’ve taken a financial gamble on something—even if it meant churning through (recall: independent) artists who, if they elected to participate in the ecosystem as I observed it, were far more likely to experience financial loss than the low-effort upside narrative they were sold. (To be explicit: I’ve personally been complicit in selling this narrative.)

From where I sat, it appeared there was a (very) small cabal of individuals who had amassed large amounts of wealth in crypto (way before my time) and thus held a disproportionately large amount of power in the ecosystem. And, the directional shift I observed did not seem to involve much power redistribution (as some e.g. mythical decentralized artist-centric future started to take form), but rather quite the opposite—the cabal’s power and influence seemed to grow increasingly entrenched as time progressed. If the experiment succeeds, they’ve secured their position as the “new elite”—the next generation of “behind-the-scenes” hands influencing how the next generation of platforms evolve and shape our collective experience.

Framed from the perspective of a new artist entering the space, these are the individuals who probably:

1. Invested in and have an equity stake in the platform you’re trying to get on in hopes of securing a sale.
2. Invested in many (or most) other platforms you may be considering getting involved with.
3. May be one of the few people capable of and—if you’re lucky—willing to back your work once you finally overcome all the onboarding hurdles and attempt to integrate with the broader “community”.

If you win, they benefit because your W is great marketing (recall: hype) for new prospective entrants into the space—if you lose, they probably don’t care (sorry).

When I first started formulating concerns like the ones I raise here, I remember coming across explanations that seemed to go something like:

This is how it works! You need a few people to ‘seed’ a market/movement if it’s going to have a chance at actually taking off and reaching mass adoption in the long run. If that involves a little wash/ambiguously-motivated trading here and there, some conflicts-of-interest, or other unpleasant things—remember that those are all just a means to a brilliant, exciting, revolutionary end! It may not seem like it, but these people are doing a huge public service! These are the early adopters that are going to enable this innovation to ‘cross the chasm’ and ensure the rest of the population gets to experience the benefits of what these technological advancements have to offer.

I want to be clear. I’m not attempting to claim that “web3” (however its semantics may drift between this time of writing and your time of reading) won’t deliver on its promises. I don’t know what is going to happen. What I’m saying is that, during the period of time I was exposed to the dynamics that appeared to exist behind the label, I was routinely faced with the challenge of 1) struggling to understand what the movement actually stood for, if anything (outside of financial upside); 2) observing narratives that served as “immutable pillars of the future” on Monday evaporate into “relics of the archaic past” by Wednesday—only to be revived (in some zombified form) in the (hangover hours) of Saturday afternoon; 3) a generalized lack of accountability to any real outcomes for the population we were supposedly in service of (e.g. how well have we actually been delivering on the claims we’ve been making towards artists?). My sense is that most developments don’t have the luxury of being able to exist in such a state for too long—the inconvenience of reality tends to kick in (at some point).

I realize this letter took quite a departure from the previous ones, but these reflections have been weighing somewhat heavily on my mind lately, and I can already feel part of that weight lifted.

Another important note—I formed new and beautiful friendships while working in this ecosystem. I’ve met individuals who I continue to admire, look up to, and hold dearly. In many ways, the experience I’m reflecting on here was perhaps the closest I’ve ever been to feeling like I found “my tribe” or “my people”. (As mentioned earlier, a lot of the claims I alluded to earlier resonate with me in a very deep way.) The opinions expressed here are my own, I take responsibility for sharing them, and I have respect for others who may see things (dramatically) differently.

That’s all I got for now. I hope you found some of these notes stimulating or thought-provoking.

Love,
Reef