What will be the first native app that taps into the power of the blockchain, cryptocurrencies and tokens?
That's the provocative question posed last week by venture capital investor Chris Dixon and Coinbase co-founder Fred Ehrsam in Andreessen Horowitz's tech podcast "Why Crypto Tokens Matter."
Although the extreme hype around blockchain and cryptocurrency today attracts hucksters and scammers, Dixon and Ehrsam argue that the significance of the rise of cryptocurrencies is undeniable.
The analogy they use to explain the significance is this: in the way that the web allowed for the programmability of information for the first time, cryptocurrencies and tokens allow for the programmability of money or value for the first time.
The development of the web allowed for new businesses operating at a global scale which the world had never seen before. They believe cryptocurrencies will offer the same potential.
However, Amazon didn't become a $500 billion business overnight. It's taken over 20 years to get to its current size. Dixon and Ehrsam argue that it required the development of a whole ecosystem around Amazon and other web companies – including web servers, databases, logistics, and payment systems – for them to maximize their potential. There will be the same need for a massive build out in infrastructure for cryptocurrencies and tokens to reach the same potential.
But the most intriguing idea in the podcast is how both Dixon and Ehrsam agree that the companies which have the greatest chance to capture the most value with every big wave of technology – such as web, mobile, and now crypto – are the ones who "burn the boats" to yesterday's technology and go all-in on being the first native app for the new wave.
For instance, Amazon set the example when it came to native web apps for e-commerce. Unlike Barnes & Noble, they didn't try to keep one foot in traditional retail with their brick-and-mortar stores and one in the web world. They showed the world what a total focus on e-commerce looked like.
The mobile-only world arrived 10 years ago with the unveiling of the Apple iPhone. However, the initial mobile apps were modeled after websites – cramming a large amount of data fit for a web page on to a tinier mobile screen. Flickr was the dominant photo site in 2007. It created a mobile app for itself but still was geared to you going to your computer and uploading photos.
It wasn't until Instagram came along when the world saw what a mobile-only photo app looked like. For a long time, there wasn't even a webpage for Instagram. Users flocked to it, and Facebook bought it for what seems like a bargain price of $1 billion in 2012. It's still the dominant photo-sharing app today