Jack Dorsey’s Beef With Andreessen Horowitz Over Web3, Explained

It's always a spectacle when big names in the tech space get in an altercation. Apple and Microsoft had software beef back in the 90s. Today we're seeing a similar row between Elon Musk and Jeff Bezos.

Jack Dorsey’s Beef With Andreessen Horowitz Over Web3, Explained

Toward the end of 2021, a new feud blew up between Twitter founder and Block CEO Jack Dorsey and Andreessen Horowitz - perhaps the most notable venture capital firm in the world.

Software Eating the World

To tech insiders, Andreessen Horowitz (a16z) needs no introduction. The company is famous for early-stage investments, backing some of the world's biggest tech firms. Its portfolio includes shining names like Meta (formerly Facebook), Lyft, Airbnb, Slack, and DigitalOcean.

As part of its operations, a16z has invested in several Web3 products. The company is big on the development and evolution of technology and software. In August, it published a blog post explaining how it "invests in software eating the world" as it prepared to enter early next-generation software and technology investing.

To many, a16z is a future-forward investment giant looking to power the next generation of companies. To Dorsey, the company has ulterior motives. The former Twitter CEO spent weeks trolling a16z on Twitter, criticizing its "software eating the world" rhetoric and calling it "dark."

Dorsey's trolling spree continued for weeks, the billionaire claiming that most venture capital firms invest in these software companies to eventually control the direction of technology. It went off until Marc Andreessen, a16z's founder and general partner - blocked Dorsey.

Dorsey's Bitcoin Purism At Play

Putting aside the irony of Dorsey being blocked in an app he created, his argument resonated with many.

To Dorsey, a16z and its $2.2 billion crypto investment fund are perfect examples of what's wrong with crypto. Venture capital firms are positioning themselves to benefit from a system designed to distribute gains to users - not a collection of companies lucky enough to control it.

By funding Web3 software companies, venture capital firms can own the larger share of their governance tokens and use them to steer their products over time. As Dorsey said, Web3 will become centralized at the end of the day.

Dorsey's road to becoming a crypto purist came from a 2019 trip to Africa. The billionaire and his core Twitter team - including current Twitter CEO Parag Agrawal - visited several countries toward the end of the year, observing firsthand how cryptocurrencies helped people send money abroad.

Speaking at a conference with Elon Musk at Cathie Wood last year, Dorsey elaborated on his experience, how he returned with a newfound belief in Bitcoin as the best hope for an open economy.

Many African countries had centrally-controlled banking systems that excluded millions for some reason or the other. With Bitcoin, people could break free of these systems and access needed financial services.

Since then, Dorsey has stood firm in his belief in Bitcoin. He failed to support other cryptocurrencies, showing he doesn't have similar faith in other assets.

One of crypto's primary tenets is decentralization. But with more investment companies rushing into the space, crypto purists like Dorsey are concerned that decentralization might be a thing of the past.

Seeing Things From a16z's Perspective

This isn't to say that Dorsey is entirely correct. His payments company, Block (formerly Square), made millions off Bitcoin and continues to do so. One could argue that a16z is simply doing the same thing - looking for ways to make money and deliver top value to investors.

So far, a16z has failed to address Dorsey's attacks - save for Marc Andreessen's meme where he poked fun at Dorsey for complaining about the Twitter block.

Companies looking to change the world need crypto investments. So far, a16z has invested in over 20 crypto companies- including Coinbase, Solana Laba, Ava Laba, Meta's Diem stablecoin, and OpenSea. The company is positioning itself to benefit when crypto takes over and we move into Web3.

Now, it's a question of what a16z and other investment firms do with the influence they're "buying." Do we move back to centralization like Dorsey fears? Or do we evolve with tech?

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