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Hi friends 👋,

Happy Monday! This is a cool one for me.

In April 2020, when Not Boring had 804 subscribers (I just checked), I reached out to one of my favorite bloggers about a piece I was writing based largely on something he wrote.

I was a complete nobody, and completely nervous about hitting send. But lo and behold, Alex Danco replied and linked to my piece in his newsletter.

I remember where I was when I got that email. I was so pumped. I told Puja and she was excited that I was excited but probably also thought I was a total nerd. I told Dan, and he was much more excited, because he was a Danco fanboy too.

This is going to be a cool one for you, too, I hope.

Since that first exchange, Alex slowed down the newsletter and joined Shopify, where he heads up the blockchain team. And he and Shopify have big plans for crypto, specifically for NFTs. This is a glimpse into their thought process, and, since they’re building both the platform and developer primitives, a glimpse into the near future. 

One of the yet-to-be-realized opportunities I’m most excited about in web3 is what happens when developers start building products and experiences that adapt to peoples’ wallet inventories. As an example, if I own ReFi NFTs, a site might offer me the option to offset the carbon footprint of my transaction at checkout. That’s a simple one. The real magic will come when developers, armed with new primitives, build millions of new experiences that treat users as both community members and individuals. That’s what Shopify’s helping to build. 

This is not a sponsored deep dive; I just jumped at the chance to hear from one of my favorite thinkers on one of my favorite topics, especially since Alex is in an important seat to turn thoughts into industry-wide action. Not investment advice, either.

We structured this as a back-and-forth — wherever it’s indented, bold, and italic, that’s me. The longer, more insightful, normal-text sections are Alex.

Let’s get to it.

Tokengated Commerce

(Click here 👆👆👆 to read the full thing online from the top)

Alex, thanks for coming to hang out in Not Boring. This is cool for me. I’ve been an “Alex Danco’s Newsletter” fan since before I started writing. In one of my first Not Boring essays, I wrote, “In Positional Scarcity, the essay that I cite the most, Alex Danco writes that ‘in conditions of abundance, relative position matters a great deal.’” So anyway, big fan. 

Thank you! I’m thrilled to be here, both 1) because I also have enjoyed so many of your pieces over the past few years (I think about The Great Online Game all the time, and now here we are, finding each other inside that game once again!) and also because 2) by the Law of Newsletters I’m pretty sure you’re my supervisor now:

Haha well perfect, I’ll put you to work and make you answer some questions then. 

We both worked for Canadians – you were at Social Capital, I was at Breather – and then we both wrote newsletters. We’ve gone in kind of different directions since – I’m doing a newsletter plus a fund, and you’ve put the newsletter on slow drip to become a full-time operator at Shopify. 

I remember when you took the job thinking, a) that’s so cool! and b) what’s he going to do at Shopify? And we’ll get there, but for those who haven’t been keeping up, can you define what Shopify is today and what you think it’s going to become over the next decade? 

Well, if you’d like a comprehensive answer about what Shopify is and does, I’ll refer you to this Colossus episode I did with Patrick O’Shaughnessy. But Shopify’s more simply stated purpose is to make commerce better for everyone, and specifically, we do that with software: we are the platform on which commerce is built. And our job is to build that platform in a way that offers merchants - and many others, like app developers, agencies, and now buyers - the very best version of what the internet can be. 

And what are you, Alex Danco, doing at Shopify? 

Making Shopify wallet-aware, of course.

Let’s go, diving right into web3. The first time you tweeted “gm” a few months ago, I thought you were being sarcastic. Then you changed your pfp. Now you’re running a blockchain team – you’re LinkedIn title is “Systems & Crypto person.” Have you been into crypto for a while? What interests you about it? 

Hah, that’s actually funny, because it hadn’t even occurred to me that it might draw anyone’s attention. I’ve been into crypto for a while; I’ve been writing about it on my newsletter for a few years now and I guess that just goes to show one of the big things that writers often struggle with - most people haven’t read most of the things you’ve said. (And, also, why there’s a high overlap between highly effective people & people who repeat their key messages, over and over. I’m working on that.) 

As far as, “What interests me about it?” Man, I dunno, everything? Here are some examples of my favourite things to think and write about, but I guess most importantly, crypto is in the middle of finding its purpose, and that’s where you want to be. There are three kinds of places you can spend time: 

1. Those without a purpose 

2. Those with an established, fixed purpose 

3. Those that are discovering their purpose. 

You tell me which sounds most fun. 

I’m going to start using that instead of, “We’re so early!” 

For a lot of people, “Discovering its purpose” means finding “Real use cases.” 

To that end, Shopify is one of the more interesting places in tradtech from a crypto perspective – crypto and commerce are very linked, your CEO Tobi seems genuinely interested in it, and there are over 1 million businesses running on Shopify. Given its size and reach, it feels like Shopify can lend its legitimacy to use cases i.e. if Shopify supports something, it is a real use case because Shopify supports it. 

With great power comes great responsibility. How did you start approaching whether to get involved and what to do in the space? 

I guess I’d say, “Gradually and then suddenly?” I joined Shopify two years ago and found this funny juxtaposition, which was, 1) a lot of people scattered around the company who were all quite crypto-fluent and really knew what they were talking about, but also 2) no driving force to align on what to do, aside from payments. Shopify merchants have been able to accept crypto payments for several years now, thanks to third-party app developers building payment gateways (we are the platform on which commerce is built!). 

But then last year when NFTs took off, it really lit a fire under us to go find an answer to that question: is this a part of “the best version of the internet,” that our platform must offer to merchants? And the answer was clearly yes, although it took us a minute to discover why. 

Indeed. The first crypto news out of the company was, I think, the Chicago Bulls NFT store. And when I thought about Shopify’s role starting there, I thought your big push into the space would be something along those lines but richer – NFT minting, drops, sales. You help businesses sell things – physical and digital - so help them sell sweet, sweet high-margin NFTs. That’s not the way you went. Why? 

Well, Packy, that’s the money question I want to talk to you about. (Although I’d be remiss if I didn’t mention that you can sell NFTs on Shopify, head here.) But back to our topic: instead of giving you a simple answer (“Because we think tokengated commerce is a 100x bigger opportunity than anyone else realizes, and it’s more inherently interesting to us than anything else”), I’m gonna give you a newsletter-length answer, cause that’s why we’re here, right? 

Anyway, let me start my answer with a question for you. It’s a very big question. You ready? Here it is:

When you make a bet on crypto, what is it you’re betting on? 

Oooo good one. This answer changes for me, but here’s my current thinking. 

There was a line in that big Jonathan Haidt article a couple weeks ago that immediately made me think of crypto: “There is a direction to history and it is toward cooperation at larger scales.” Crypto is a bet on cooperation at larger scales without needing to pay companies to sit in the middle and coordinate everything. What do you think? 

I specifically like the “coordination” part of this answer; let’s bookmark that idea. And for the record, I don’t think there’s one correct answer for this, of course - there are lots of different communities and schools of thought around what blockchains and cryptocurrency are here to do for us. That’s a good thing. But I’ll tell you mine, which I think covers a lot of what’s important.

When we bet on crypto “happening”, we’re betting on two things:

1. Wallets change how people behave, 

And:

1. Over time, this behaviour will win. 

Since you’re my guest here, I’m going to let you go with all the extra “u”’s. Behaviour. Classy. But yes, I like this answer because it incorporates both the social and the technical, and how computers and people interact. “First we shape our interfaces, and then our interfaces shape us.”

I think it covers it kinda nicely, don’t you think? It gives something for everyone. There’s something for the Sound Money folks (our wallets and cryptographic key pairs change the behaviour of how we save and spend, and that behaviour in the long run will outcompete the old behaviour), there’s something for the dapp builders (wallets change how people create and consume software), there’s something for communities (wallets change how people collect and present pieces of their identity). 

I like this starting point because it brings us together on something we can all agree on. Crypto is fundamentally a kind of behaviour, just as much or arguably even more than it is a kind of technology. 

There are many facets to this behaviour, but it starts from cryptography; and it starts in our wallets, when we sign something. And it starts at one moment, and that’s the magic moment where our wallets open a door into a new world and we step inside.

We’re working on some cool stuff inside that world. We call it tokengated commerce. 

To learn what tokengated commerce is, people with wallets can do, how NFTs let people fit in & stand out, what it means that Shopify is becoming wallet-aware, and why all of this needs a blockchain…

Continue Reading Online

Thanks to Alex for working on this with me, and to Dan for editing!

Thanks for reading, and see you next week,

Packy