The content comes from the compilation of the interview column of “Not Boring”.
Conversation from hosts Packy McCormick and Alex Danco. Alex works at Shopify with the position of Systems & Crypto person.
Hope it can bring you new perspectives and inspirations.
Moderator : We all work for Canadians — you’re at Social Capital, I’m at Breather — and we both write newsletters. We’ve gone in different directions since then – I’m doing a newsletter and a fund, and you’ve slowed down the newsletter and become a full-time Shopify operator.
I remember when you took the job, I was thinking, a) how cool! b) What specific work will you be doing at Shopify? c) Where will Shopify go? For those who are not using Shopify, can you define what Shopify is today and what you think it will be in the next ten years?
Alex: Let me describe Shopify briefly: it makes commerce better for everyone, and specifically, we do it through software: we’re building an e-commerce platform. Our job is to build this platform in a unique way, serving merchants – and many others, such as app developers, agencies, and now buyers – with the best software on the Internet.
Moderator: Alex Danco, what do you do at Shopify? Except, of course, Shopify wallet-aware.
Let’s jump right into Web3. When you first tweeted “gm” a few months ago, I thought you were being sarcastic. Then you change your avatar. Now you’re running a blockchain team – your LinkedIn title is “Systems & Crypto person”. Have you been exposed to cryptocurrencies for a while? What’s your interest in it?
Alex: Ha, that’s really funny because I didn’t even think it might get anyone’s attention. I’ve been dabbling in cryptocurrencies for a while; I’ve been writing about it in my newsletter for several years.
As for, “What am I interested in?” I don’t know. Everything should be of interest. Here are some of my favorite examples of thinking and writing, but I guess the bottom line is that the crypto world is looking for its purpose, and that’s what you should want to know. There are generally three places you can spend your time:
- person without purpose
- people with set goals
- Those who are discovering their purpose.
You tell me which one sounds the funniest.
Moderator: I’ll start using it instead of “We’re too early!”
For many people, “discovering its purpose” means finding “real use cases”.
To that end, Shopify is one of the more interesting places in trade tech from a crypto world perspective – crypto and commerce are closely related and your CEO Tobi seems to be really interested in it, after all there are over a million businesses in run on Shopify. Given its size and scope, it feels like Shopify could borrow its legitimacy as a use case, i.e. if Shopify supports something, it’s a real use case because Shopify supports it.
With rights comes great responsibilities. How did you start thinking about getting involved and what to do in the field?
Alex: I joined Shopify two years ago and discovered an interesting phenomenon, namely
1) A lot of people who are very familiar with cryptocurrencies are scattered across the company, but they are also
2) Without the “alignment” drive, people don’t know what else to do besides trading cryptocurrencies.
For several years now, Shopify merchants have been able to accept crypto payments thanks to payment channels built by third-party app developers (and we just built the overall commerce platform!).
But when NFTs took off last year, we really ignited the search for an answer to the question: is this part of the “best version of the internet” our platform has to offer merchants? The answer is obviously yes, although it took us a minute to discover why.
Moderator: Indeed. In my opinion, the first crypto news from the company was the Chicago Bulls NFT store. When I think about Shopify’s role from there, I think your big forays into the space are going to be along these lines — NFT mint, drop, sale. You help businesses sell things — both physical and digital — so that includes helping them sell high-margin NFTs. That’s not the way you go. Why?
Alex: Well, Paki, that’s what I want to talk to you about money. Going back to our topic, rather than just giving you a simple answer (“Because we realize better than anyone that tokenized business will be a 100x greater opportunity than existing business models, it’s more for us than any other everything is more interesting”).
Moderator: A few weeks ago, Jonathan Haidt had a line in that great article that immediately came to my mind about cryptocurrencies: “History has a direction, it’s a move toward larger collaborations. Yes.” The crypto world is a bet on greater cooperation without paying for companies that think they are coordinating everything. What do you think?
Alex: I especially like the “coordination” part of this answer; for the record, I don’t think there’s a single right answer to this – there are many different communities and schools of thought about what blockchain and cryptocurrencies are doing for us here. This is a good thing. But I’ll tell you mine, I think that covers a lot of important things.
When we focus on the changes that are “happening” in the crypto world, we focus on two things:
- Wallets have changed the way people behave,
- Over time, this behavior wins.
Moderator: I like this answer because it blends social and technological, and how computers and people interact. “First we shape our interface, then our interface shapes us.”
Alex: I think it answers the question pretty well, don’t you think? It has something for everyone. There’s something for people who own Sound Money (our wallets and cryptographic key pairs have changed the behavior of our saving and spending that will outperform the old behavior in the long run), something for dapp builders (wallet changes the way people create and consume software), the community has something (wallets change the way people collect and present their identities).
I like this starting point because it brings us together on things we agree on. Encryption is fundamentally an act, as much, if not more, an attribute of a technology.
There are many aspects to this behavior, but it starts with cryptography; it starts with our wallet, when we sign something. It begins at a moment when our wallets open a door to a new world and step into it.
We’re working on some cool stuff in that world. We call it tokenized commerce.
Tokenized commerce started with an observation: There is a new kind of internet user in the world called the person with wallet.
Moderator: I like this framework: people with wallets. Descriptions of what encryption makes people do are common, but I haven’t seen any descriptions of what encryption makes people do.
Alex: That’s it. Forget what you can do for a moment, let’s talk about what kind of person you can be.
I will tell you the answer: you will be a person with a wallet.
Let’s talk about these people with wallets. who are they? They are the owners. Maybe they have some NFT that represents community membership, an ENS name, an ETH or USDC balance, maybe a smart contract associated with them. They can sign on the internet.
The way these people behave is interesting: they really want to associate wallets with things. They always connect their wallets to dapps, or connect their wallets to NFT marketplaces.
How could this be? Because what we own through our wallets means what we are. When we show up with a wallet, we show up as we are. When we connect our wallets and feel the magical moment when the world suddenly changes – it sees us, it opens – it’s a great feeling. It feels like this:
What’s going on in this photo? This was the Doodles event last March at SXSW, a pop-up world created by the Web3 community Doodles.
The event is open to everyone, but if you’re a Doodle holder, the various experiences in this world — from the entrance all the way to the Shopify-powered gift shop — “open up” to you in a delightful way. Lights flicker, bubbles blow, special passes are held in hand; a Doodle doodle you own appears on a giant screen, announcing to the world, “I’m Doodle NFT holder number 3125!” One after another, guests There was joy on their faces; everyone successfully entered this new world.
This moment is what tokenized business is all about. You realize, “Ah. I finally understand the relationship between NFTs and commerce now.” NFTs are not the output of commerce; they are the input of commerce. NFT is not a product. They are a status symbol for buyers.
Moderator: I like the two things you mentioned,
1. The experience can be open to anyone, but is more special for NFT holders. I think music NFTs are really representative: anyone can listen, a few can obviously be big supporters, and have access to special tracks and meetups, etc…
2. I said it again. Encryption makes people what they are.
Alex: It’s good to be an irreplaceable buyer. You arrive at the storefront, connect your wallet, and suddenly the storefront changes based on the NFTs you hold. Maybe a special product is unlocked, or you can get a drop early. Maybe you connected your wallet to unlock high-quality art prints or 3D models of your NFT counterparts. Maybe you can access a special collaboration: for this limited-edition drop, your NFT opens a new door for another community. The more you explore, the more doors you find.
Specifically, NFTs have been shown to be the perfect catalyst for this behavior. You know why? Think about what the most successful NFT brands look like. It looks like a theme and variation: that’s what you fit in, that’s how you stand out.
They’re a status symbol for that sense of accomplishment: I’m in the Doodle, and I have this Doodle. I’m on the Adam Bomb squad and I have this Adam Bomb. I’m in the Stapleverse and I have this hooded pigeon. NFTs are the new meaning of “fit in and stand out” on the internet.
Moderator: I think this is another cooperation in terms of scale. We are naturally irreplaceable buyers in the local community. You go to your favorite neighborhood stores and restaurants, and people there know you and know what you’re ordering before you even speak. You’re part of the local community (you “fit in”), but you are who you are, with your own preferences and obvious style, etc. (you “stand out”).
Alex: Yes. It turns out that the act of “fit in and stand out” is one of the most important raw materials for so many good things in the world – culture, community, business. Now we have a wallet with a list of NFTs that represent this precise atomic unit of behavior: adapt, then stand out.
Of course, this “fit in, then stand out” feeling isn’t unique to cryptocurrencies. It’s a general feeling, and when you give it back, it gets better.
My colleague Nicole has an anecdote about walking around the mall with a big Sephora bag (not a small bag, the big one you get when you buy too much to fit in a small bag) and realizing that others have a big bag. The two of them immediately thought of the same two things: 1. It’s great that you also carry the same style; 2. What’s in your bag? An engineer on our team had a similar feeling when she saw someone else wearing an engineer’s medal ring. I used to tour with a band and now I get that feeling every time I see someone on the street wearing a concert tee.
The recognition is contagious because you both feel good. It’s a feeling of mutual inclusion: I let you in, and you let me in. This is the challenge we do together: we all adapt and stand out. You can see it in every community: athletes, collectors, people who love bands and live music, and people who love comic books. Wherever you see this feeling, business is just around the corner.
Great brands understand this concept very well. When you shop at their flagship store, it’s evident how much care and craftsmanship has been put into creating this environment of mutual recognition of achievement: not only in the decor and aesthetics, but more importantly, in your interactions with the merchants. It can be as simple as the merchant sees your T-shirt and nods, yes.
Especially since that recognition qualified for some extra discounts, “What’s that hoodie? Spring ’18 collection? Okay. Hey, we’ve got something for you in the back that I think you’ll like. ”
Bobby Hundreds (from LA streetwear brand The Hundreds, and of course Adam Bomb Squad) wrote a book called This Is Not a T-Shirt, which I highly recommend, it really underscores the point.
Moderator: Yes! So I guess it’s a second level of meaning – in the real community you live in, people might recognize you as you. One level up, no matter where you go in the physical world, other people who enjoy what you do may recognize you as a like-minded person. But that’s hard to do online.
Alex: Yes. Before wallets, those magical moments of being seen were hard to create online. Online storefronts struggle to do a vibe check on buyers and respond to buyers in a way that recognizes and celebrates the social contract. Customer accounts and loyalty programs don’t cut it; they’re not you, not your wallet. Customer accounts are basically part of the store, not part of the buyer. In contrast, “connect your wallet and get recognized” is a special feeling. This is not the same.
Moderator: Okay, that makes sense, but there’s a big open question for me. When I read “tokengated commerce” or “x-gated commerce,” the first thing that comes to mind is, “Why on earth are you ending your business? If you’re selling something, why don’t you reach the widest possible audience? Why not just one-click checkout?”
I was about to ask you, you’ve talked a lot about the importance of keeping some barriers in place to build trust in what you classify as a “high trust business”. Tokenized commerce feels like a deliberate way to introduce a little friction into certain products. Is it right?
Alex: 100%, I think the solution to this problem is to replace the word “friction” with the word challenge: tokenization is all about adding challenges to certain products.
The default state of the world is not “everyone wants your product”. Creating demand is an art: you create a story and a challenge, and then you wrap the challenge in an adventure that buyers and merchants go on together. Consider flash sales or limited releases; these experiences are fun, and they’re all wrapped up in a story. You’ll be the one who successfully gets the drop, and that’s half the fun.
However, this is actually a good time to revisit your talk about encryption and “collaboration” because one of the things I’m most excited about in tokenized business is collaboration.
Collaboration is the lifeblood of creative work; ask anyone in music, streetwear, or any scene. But online, how do you organize a collaborative merchandise for a group of people: my fans and your fans? There is no traditional way to do this that is exclusive and not unwieldy. But tokenized commerce makes this so easy. Connect your wallet and use any of these NFTs to access the drop. I let you in, you let me in. It’s that simple.
I am particularly interested in the challenge of how tokenized commerce can help brands recognize each other. I see “endorsements” as a special subset of collaborations where an established artist will host or co-develop a brand with a budding artist. (The music industry does this particularly well.)
We should ask: How can one community support another up-and-coming community on the Internet? Partnering through Tokens: Turn exclusivity into reciprocal inclusion when two brands come together.
What is Token Cooperation? When The Hundreds team up with Deadfellaz, you can unlock limited-edition merchandise using NFTs from any of their collections, which is a Token collaboration. When Superplastic cooperated with Gucci, the cooperation was limited to the holders of the secret SUPERGUCCI NFT, which is the Token cooperation.
This is where the magic begins: I belong to my community, you belong to your community, but when we work together, I can invite you to join; you can invite me to join. Tokenized collaboration turns exclusivity into reciprocal inclusivity. A century-old brand like Gucci can speak for a very hot brand like Superplastic, and their fans are inviting each other to join this shared experience, and the shared community they now have.
Moderator: So there’s the obvious question, why does tokenization make commerce better, and why is this different from a brand loyalty program or promo code?
Alex: So, I can give you an evasive answer that re-emphasizes the idea of ”challenging feels good” — unlocking tokenized products with it when you’re spending more ETH on precious NFTs feels like an achievement. However, for tokenized commerce to truly reach its potential, we need the next generation of cheaper tokens (ultimately, negligibly cheap), many of which will be more practical and less “challenging” as a reward of its own.” ,do you know? Therefore, we need a better answer on how tokenization will succeed in the long run.
Loyalty programs, promo codes, or any other type of “account-based” threshold system can all be used for reciprocal inclusion mechanisms — of course — but there’s a catch. This is because your threshold rules will exist as dependencies that reference back to accounts and permissions, and if you try to introduce any kind of interesting multiplayer mechanics, they can get complicated very quickly.
Imagine having a pop-up storefront for fans of four different brands, with multiple levels of access, giving you early access to the drop. Where are you “logged in” and as what? What if you are a member of multiple communities – do I need code for each community? How do you prevent promo codes from being abused, the more variables you throw in, the more complicated it becomes? I mean, you can do it, but social threshold rules built on dependencies can quickly collapse under complexity, when the fourth wall is broken and the “exclusive community vibe” is broken by flawed software , which is not a good community experience at all.
In contrast, a token is a bearer tool—it’s more like a document, or a physical ticket you’re holding in your hand. (This file analogy will be important later.) The NFT doesn’t “link back” to anything, it’s not a reference to an account entry on one or more merchant databases; it’s the ticket itself.
In what we call the “single-player model” (a merchant’s threshold control over a single customer list), it’s hard to see the advantage of tokenization. But once you’re in multiplayer – where multiple merchants connect with multiple groups of fans through a set of social rules – the tickets are an anonymous tool that doesn’t link back to anything and therefore doesn’t create any dependencies – but Still being trusted by a “gate” even if it doesn’t link back to anything (more on this later, this is the “Why Blockchain” section) is a fundamentally simplified mechanism. Because now, the token threshold control rules may become super complicated, but they won’t collapse under the weight of dependencies because there is nothing to collapse.
Moderator: Talking about this, it is a small moment of inspiration for me. Some of the killer use cases for cryptocurrencies may be big, wild, and unimaginable, but some are just, “make the same thing so easy that more things will happen now.” Stablecoin track is here in the camp.
Alex: I feel like this actually preempts a feature I’d like to feature in the future, so I’m leaving it here. But for now – when we look back to 2022 ten years from now and ask, “What was the answer that was really obvious and that was in front of us during that time?” I think one answer is, the threshold for collaborative tokenization Control mechanisms will greatly simplify the way brands collaborate and recognize each other, and this simplification will mean more multiplayer opportunities for community commerce.
Furthermore, the cooperative tokenization threshold control mechanism is inherently a superior form of anything involving remixing that the community can endorse: in our Threshold control, but rather gating on a specific set of achievement-holders, a more flexible and remixable form.
I want to double down on this idea by emphasizing that NFTs are your list of achievements. NFTs represent you.
Today, we see Web3 brands and legacy brands that have tokenized their online stores well suited for this path, bringing these storefronts to life through tokenized app partners. The depth of collaboration with these app partners is incredible, and we’re building with them – more on that later. Meanwhile, we just released a demo of a new mobile app for tokenized commerce: Gated Merch Shop (“gm shop” for short), you should check it out. Over the past few months, we’ve really fallen in love with building incredible, mobile-first, single-purpose, tokenized commerce experiences. I’m so proud of the team that built this; it’s going to rule!
But all this is just a crack in the door of possibility. What happens in the backyard is more interesting.
Now that we’ve set footnotes on all the issues with the introduction of tokenized commerce, and the importance of this idea of getting in and out of business for commerce, we can now talk about why it matters why this all has to happen on Web3 wallets and public blockchains sex.
The phrase to remember here is: “We will make Shopify wallet-aware.”
To truly understand Shopify, the first thing to realize is that we’re not just an online store service for merchants; we’re also a developer platform.
Every storefront is unique; if you go to any good merchant’s storefront, it’s not just Shopify out of the box, they’re probably running a dozen or more from different developers (or built by themselves) Apps, all of which work together to create an accurate business experience (merchants want to represent their business). When you sign up for a subscription product, or browse cool content on a storefront, or connect your wallet to unlock a closed product, it’s all powered by agencies and app developers – just like you do on your iPhone Most things like apps are built by developers, not Apple.
Well, we want wallets to be the new input for developers building on the Shopify platform. The NFTs in your wallet are much more than “own or not own the NFT”. NFTs are information; it’s a smart contract, and that’s what matters.
This is what we mean by “making Shopify wallet-aware”.
When a buyer shows up at the store, if they show up with a wallet, their wallet can endorse everything, including all the public, social sense that the buyer wants to make, should be available to the buyer.
These developers can take all relevant state and build various applications and mechanisms that can take that state as input. There will be a version of the very successful Shopify-based app that will give new powers to storefronts in the future, and today we already have four amazing tokenized apps (PERC): Engage, Manifold, Shopthru and Lit Protocol – for merchants Provide tokenized business support.
The best Web3 brands don’t wait. They are creating an intricately intimate experience for token holders — new ways to make merchandise launches, new ways for brands and their buyers to collaborate in multiplayer. The beauty of having an app ecosystem is that developers can reuse, iterate, improve, and ultimately share these mechanisms with many merchants and brands.
Moderator: This is the best part of the new primitives: the crowd will think of uses that not even the creators of the primitives can think of.
Alex: To give you an idea of what is possible, I want to go back to the idea of NFTs as tokens of social achievement and social contract on the internet. NFTs are a bigger achievement than you might think because we’ve managed to pack this atomic unit of culture and community – fit and stand out – and capture it almost like a file format that both humans and computers can interpret and understand .
It’s a big idea, so let’s tear it down. What are the four things an NFT in your wallet has to say?
– what suits you [smart contracts; a community; context for social understanding],
– how you stand out [which NFT you signed in that set],
– who are you [the wallet address of your signature],
And then one more thing, such a simple but so important addition of genius:
– Human readable images, making them instantly recognizable.
I, alexdanco.eth, fit Adam Bomb Squad, and I stand out as the owner of Bomb #6233, a clean blue Disney-inspired trap design.
I know it sounds a bit ridiculous, but it’s actually an impressive achievement; like we have an accepted standard for file formats that create an atmosphere on a computer in a way that not only faithfully preserves and Carry on that vibe, and more importantly, now have access to computers and other things that can be done.
It might all seem a little silly, but something very powerful is going on here. We now have a way for computers to recognize and understand these units of social achievement; that’s what these little pieces are about, it’s almost like files (they’re a lot like files! That’s what I said before!) with this kind of human and computer Store social meaning in a persistent small format that is both readable. Through a small miracle of social coordination, it is gaining wide acceptance.
NFTs (and other smart contracts on blockchains) are an intermediary format – between the context in which this social meaning is built and another context in which it is deployed (wherever you connect your wallet) – which A fact is important. It’s almost a step backwards from web2, back to a world where one application talks to another directly through an API, back to an earlier time where we got a deeper level of correctness; what we’ve rediscovered is called composability sex.
The basic idea here is that if you want one app to successfully communicate with another, it’s easy; you just tell them how to do it. If you want one app to successfully talk to 100 apps, then you can write a nice API that says, “Hey, a hundred apps, here’s how to talk to me.”
But what if 100 apps want to talk to 100 apps? Many connections need to be maintained. So we can use something else: files. If I want to pass information from one application to another, I can pass it as a CSV file that everyone understands; no dependencies are created between who makes the file and who uses it.
So an important principle to understand here is this: Strictly speaking, for any task or any work to be done, having App 1 talk directly to App 99 would be “better” than going through an intermediate file. But over time, the power of documents manifests through the power of standards. Because they have a common format, they agree on how to read and write to each other, and that content exists in a common place; on disk, or on the network, or somewhere accessible and persistent.
Moderator: So why not pass it as a literal CSV file? I feel that as someone who is excited about Web3 but understands that some people are skeptical of many use cases, I always have a responsibility to ask: why do you need a blockchain? What does Web3 allow here that you can’t?
Alex: Aha! yes! So we finally get to the question of why you need a “blocker”!
This is because we need to solve the problem that blockchains are actually meant to solve, the provable scarcity and double spend problem. These “documents” need to exist somewhere in a public state, a code environment that can make promises, in order for their social meaning to really make sense. “Web3” is such an environment – made possible by a publicly agreed blockchain state – with sufficient group confidence in these “intermediate documents” to achieve social significance.
So if we go back to the present and ask, “What is Web3?”, the most practical way to think about it for me is that “Web3” is just as an environment to build consensus around a new set of standards: everything is a smart contract address, Everything is a tokenID, everything is a wallet address.
The re-emergence of these blockchain artifacts as intermediate “documents” means that interoperable, composable social mechanisms are now truly competitive — and, I think, starting to outperform — closed, “Web2”-style social A network mechanism where everything happens within one application, or as a cross-dependency between different applications.
I think that’s going to be pretty crazy for business. Especially the most special and meaningful community businesses, we are constantly creating and recombining new ways to express our identity: how we fit in and stand out. The best part is that the idea is so open and developable that no single company or single application can “solve” the problem on its own. it’s out of the question. Culture is so interesting; we need a lot of apps, a lot of developers, a lot of attempts to capture these community expressions – starting with tokenization and then expanding to “tokenization can actually mean a lot of things”.
So, that’s why I’m so happy working at Shopify – because we’re not alone in playing this game, we’re a platform, and tokenized commerce really shows the best reason we chose to build: Shopify as a platform, Everyone can join.
Moderator: So it reminds me of great online games, in part because we’re playing this infinite game where there are not necessarily winners and losers. I can see what that means to people, but Shopify is a company. In a corporate environment, what does it mean to win or lose? How do Web3 and “real world companies” mix?
Alex: I want to go back to our original idea; wallets change the way people behave, and in the long run, that behavior will win. I want to focus on one word in particular here: “win”. What does this behavior “win” mean?
It doesn’t mean that we win and everyone else loses. Winning means we can keep playing. We play so that others can play too.
Our Shopify tagline has always been “Making Business Better for Everyone” which is great and that’s what we’re here to do; but another purposeful tagline that I’ve really enjoyed over the past year Started to appear: “Win and help win.”
I think the game we’re playing has no boundaries, it has a pattern: when you go to the horizon and explore it, you can’t finish it. The horizon is always with you. I want everyone in the world to think this way: there is no Web2 and Web3, just “bring the best version of the Internet to the majority”. This is big-picture thinking. When you help others win, you win too.
Moderator: Do you have any suggestions for our audience?
Alex: Well, here are some suggestions:
Exploring the world for the first time? Bring your wallet and go on an adventure.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/reconstructing-nfts-philosophical-thinking-of-tokenized-business/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.