*The purple ostrich - or “Nostrich” - has become Nostr’s emblem.*

A couple of weeks ago I attended "Nostrica" in Uvita, Costa Rica - the first ever conference bringing together people working on the Nostr protocol.

I went to Nostr with many questions. Will anyone other than Bitcoiners use Nostr? Who is building on Nostr and why? What types of businesses might be built? Is Nostr just a fad, or the start of a digital revolution? If Nostr takes off, what impact will it have on the world?

I left the Costa Rican jungle with many answers, many more questions - and a huge amount of excitement and hope for the future. In this article, I lay out a lot of my thinking around Nostr, and some of the conclusions I have come to. And yet, given the way Nostr works is so different to anything we have experienced before it is likely our understanding of it will constantly shift, change and expand. Some things I say in this article could well turn out to be wrong. This is a snapshot of how I view Nostr today which will inevitably change over time!

Part 1: Overview of Nostr

*Nostr: The foundation for a new information universe?*
**Nostr: a protocol for the decentralized transfer of information.**
If Bitcoin is a protocol for the decentralized transfer of value, Nostr is a protocol for the decentralized transfer of information.
Nostr stands for “Notes and Other Stuff Transmitted by Relays”. I’ll let Nostr tell you what it is in its own words…:
“The simplest open protocol that is able to create a censorship-resistant global "social" network once and for all. It doesn't rely on any trusted central server, hence it is resilient; it is based on cryptographic keys and signatures, so it is tamperproof; it does not rely on P2P techniques, and therefore it works.”
Nostr allows you to build any application (“client”) you want. The first clients to gain traction are Twitter-like clients such as Damus and Amethyst. All information is relayed by “relays” which anybody can read from. Data is stored in multiple relays, meaning there is no single person or entity that owns the data.
The protocol is very new, with development beginning a couple of years ago and led by the pseudonymous @fiatjaf. Nostr started to gain significant traction towards the end of last year after endorsement came from Edward Snowden and Jack Dorsey (Jack as I’ll refer to him for the rest of the article), and the release of the first easy-to-use client for iPhone, Damus.
Although Nostr is not a Bitcoin project per se, most of the early developers are “Bitcoiners”, and the general ethos and values of the protocol are very aligned. And now in addition to “liking” a post, you can also “zap” it by directly sending Satoshis to the creator. More on this later.
According to primal.net, there are now 459k users and 47mm public “notes” (i.e. posts), with 16.2mm reactions and 10.5mm reposts, and nearly 87 Bitcoin sent via zaps.

It's like the beginning of the internet, except the internet became monopolized. This time around, things could be different.

I didn't experience the start of the internet from the inside but I imagine it looked a little like how Nostr looks now. The internet is after all a protocol for the open transfer of information. However, what went wrong were the walled gardens of data storage that were a natural feature of the internet, a requirement given the available technology. These walled gardens of data allowed a single company or person to control the data generated by their app, website, or platform.

At the time, anyone who could write a bit of code was hacking away at creating "applications" for the internet - anything from chatrooms to dating websites to other early internet companies. It all started so innocently, with people coming up with ideas, building them, and getting them into the hands of users. But what happened next was perhaps beyond what anyone at the time could have predicted. Or could they have?

Did anyone at the time see the future of the internet? How these new American corporations, acting in their own self-interest, would one day force-feed people all over the world diets of junk-food content that were addictive and destructive? Did they foresee how the new ways of connecting would in fact only exacerbate and feed the suffering, loneliness and fear caused by the dislocation of social structures, so crucial to ensuring a positive human experience on this planet?

Power should be in the hands of the people - not governments or corporations.

Did anyone at the time have an idea that one day, the new internet corporations would know us better than we know ourselves? That data would become a commodity with such immense value? And that this data would be used to manipulate us - the people?

The internet was meant to be a way for people from all over the world to access any and all information. Jack's original vision for Twitter was to be the "town square" for the world. As Jack said in this Habla.news article recently:

“Of course governments want to shape and control the public conversation, and will use every method at their disposal to do so, including the media. And the power a corporation wields to do the same is only growing. It’s critical that the people have tools to resist this, and that those tools are ultimately owned by the people. Allowing a government or a few corporations to own the public conversation is a path towards centralized control.”

Nostr is hope.

It’s impossible to predict where Nostr could or will be in 5, 10, 50 years time. But we can learn from the past. We can and must build a digital ecosystem that puts human happiness, human peace, and human freedom - first.

As looming CBDCs and exponentially improving AI held by for-profit corporations seem to be rapidly ushering in a dystopian future of oppression and control, Nostr is a ray of hope. A bright light in a field of darkness that could be just what we need to ensure that human freedom prevails.

Perhaps Nostr is the solution. Perhaps it isn’t. But I certainly came away from the conference with a strong feeling that it very well could be. Or at the very least, it has a pretty good shot at it.

Part 2: The conference: Bitcoiners, “Nostriches” and hippies in the Costa Rican Jungle

*A pseudonymous (“nym”)-friendly photo of the Nostriches gathering in the jungle*

I knew there was a lot happening in Nostr but the conference really blew me away. The venue was a retreat centre in Uvita, a small town on the Pacific coast of Costa Rica, with tropical plants and even a river to swim in between talks. The heat was oppressive - humid and heavy. But it didn’t matter. We were all there with excitement and openness.

It was the openness that stood out. Everyone said hi to each other - all of us “Nostriches” who may have just not met each other yet. I had many fascinating and insightful conversations on topics including not just Nostr but open source development, human potential, spirituality and consciousness, and many more. I think to be a “Nostrich” you have to have a certain open-minded ness, a certain unquenchable curiosity.

And in fact, the venue, called “Awake”, was built by a Bitcoiner and with profits from Bitcoin. The town of Uvita is home to Bitcoin Jungle, a community of Bitcoiners. At many of the stores and restaurants in town we paid with Bitcoin via Lightning.

There were a lot of developers there, but I wasn’t out of place not being one. There were creators, journalists, entrepreneurs, general Bitcoiners - and even a few locals who were staying at the venue.

The format was unconference style - with speakers and panels but much more casual. Much more interactive. Much more fun and ultimately much more valuable. You can watch the replays of all of the talks here (day 1) and here (day 3) (I can’t seem to find day 2!). I highly recommend watching the second to last panel on day 3 with NVK from CoinKite, Jack, Will Casarin from Damus, and Keiran from Snort.Social. And of course, we owe a huge thank you to Jack for his vision and support for the conference.

Part 3: How does Nostr actually work?

*Midjourney’s interpretation of a “decentralized information network”*

A brief technical summary.

Information is sent to and received from a number of “relays”. Any application can access the information from the Relays

People connect to one or more Nostr apps, through which to obtain data from the Relays. Or, if they have the technical know-how, they could simply access the data from Relays directly
According to Nostr “Anyone can run a relay. A relay is very simple and dumb. It does nothing besides accepting posts from some people and forwarding to others. Relays don't have to be trusted. Signatures are verified on the client side”
There is no “consensus” - in fact you don’t know if a Relay is giving you all or the correct information. But you can pull the information from multiple relays, and compare what information you receive. If one relay is censoring or giving innacurate information, you can simply stop using it
Each relay and app adhere to a set of agreed protocols. There is a small number of “required” standards, and in addition there are numerous “Nostr Improvement Proposals” or “NIPs”, which allow additional features, and most of which are not required. So - there is a basis agreement to allow interoperability, and from there each application can decide what NIPs it implements

Yup, it’s that simple!

Nostr ensures censorship resistance via decentralization.

Just the same as Bitcoin. I think it’s really important to understand how, and Lyn described it very well in her recent article:

“The combination of public-key cryptography and distributed servers means that no central entity can censor anyone or ban anyone from the protocol, in a similar way that nobody can be “banned from email”. A government can target and shut down individual relays in their jurisdictions, but there could be quite a number of them, and individuals around the world can run relays, and users can connect to relays in other jurisdictions. Individual relay operators can choose to exclude things, and if users want to exclude certain things they can stick with those more exclusive relays. Some relays can operate for free and other ones can charge a small fee. Different client applications can configure different settings or appearances, and users can determine which clients to use, and use multiple different clients.”

It’s so easy to build on.

According to Pablo Fernandez, our fund's technical advisor who is deeply involved with Nostr, what sets the protocol apart is not only its true decentralization but also its incredible ease of use for building applications. Pablo has been able to develop applications for Nostr in just a couple of hours, and the open-source nature of the protocol has led to exponential growth in its development.

Part 4: Where did Web2.0 go wrong, and how does a decentralized protocol fix this?

The centralized data storage of Social Media 1.0 created natural monopolies.

Let's take a closer look at Web2.0 and what went wrong with the first iterations of social media - the centralized ones. Because data was held centrally on servers owned by the corporation that owned the social network, the network was, by definition, centralized. This led to what is called a "natural monopoly" - i.e. there is only one Twitter, one Instagram, one Facebook, etc., one network for each "type" of network. Let's examine why.

When data is centralized, creating a competitor is incredibly costly. You would need to seed an entirely new network from scratch, get everyone to switch over, which is a daunting task. It would require a significant amount of resources.

For example, let's consider Facebook. We all created accounts back in the day and connected with our friends. The code itself to replicate the Facebook website is incredibly simple, but the network is not. As a person, what value would I derive from switching to a new version of Facebook unless all of my friends were already on that platform? That's precisely why I'm on Facebook - it's where my friends are. So I wouldn't want to switch. It's challenging to persuade users to move to a new network. There are significant barriers to entry for anyone looking to compete with existing social networks.

The same applies to Twitter - I'm on Twitter because I want to see posts from all the people I follow. If I switched to a Twitter alternative, I wouldn't be able to see the posts from people I follow on Twitter, so why would I move?

It can only happen very occasionally and only when there is a significant change in the product offered, such as Facebook to Instagram, or Instagram to Tik-Tok (which was enabled by increases in data speed allowing for mobile streaming of video, and an "innovator's dilemma" at Instagram).

Social Media 1.0 benefits from "network effects." According to Wikipedia, "a network effect is the phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products." In other words, the more people who are on a platform, the more valuable it is. The value of Facebook to me is all the other people on it. Otherwise, it would be useless.

This creates significant barriers to entry and high switching costs, leaving users stuck with their current platform. Over time, the app gains power over the user, rather than the other way around. Because no other app can access the data, the only way to see posts from people I'm interested in is on that specific app, leaving me completely stuck.

Natural monopolies exploit people.

The app now has the freedom to do as it pleases, leaving me feeling trapped because I am unable to freely view the content I want. The algorithm, which determines how and what content I see, is solely in the hands of the app. Unfortunately, in the current state of social media, there is only one algorithm implemented.

But how is this algorithm determined? As seen in "The Social Dilemma" on Netflix, algorithms are designed to extract as much value as possible from users. Once the initial network effect is achieved, companies no longer need to provide users with an enjoyable experience or innovate. They become monopolistic extractors, no longer providing any real value to their users.

As Jack said in his recent article, linked above, “if we had focused more on tools for the people using the service rather than tools for us, and moved much faster towards absolute transparency, we probably wouldn’t be in this situation of needing a fresh reset (which I am supportive of)”.

Regulation is not the answer.

Like railroads, power transmission networks, and other natural monopolies, social media 1.0 also has a natural monopoly. When a company has a monopoly, they can extract money from customers without providing a good product or service. Over time, governments realized this was the case for companies in the physical world and began to regulate them, resulting in the environment we have today around railroads and power distribution networks.

However, regulation is not the answer to the problems we face in social media. Regulation lags behind innovation and is an imperfect approach to solving problems. Unlike railroads, where the government's interests align with those of the population, in the case of information and social networks, the government or a self-regulating body may have incentives that are not aligned with the general population. Therefore, regulation is not the answer.

Instead, we need to build self-healing solutions. We should design protocols and systems that naturally evolve to the desired outcome, rather than having to regulate to achieve it.

It’s a new world with zero switching cost.

It's seriously cool and a bit mind-blowing. I can switch between clients and see the same information presented in different ways. I'm already having a much better user experience than on Twitter, and it's only been a few months since I started using it.

For instance, I love using primal.net to get different feeds. I can view "Jack Dorsey's feed" or sort the network by top zapped, top liked, and more. It makes it easy to surface new and interesting content, and I don't feel trapped in a horrible algorithm that I have no input or control over.

Then, I can go to Damus to zap posts, update my profile to a silly purple Midjourney cat, and more (as these features are not yet available on primal.net). It all seamlessly shows up no matter which platform I use. I created my profile on Damus and easily ported it to primal.net using the Alby web extension.

So, I can easily go to whichever client gives me the experience I want at that moment. There is literally zero switching cost.

A decentralized protocol allows network effects to accrue at the protocol level, rather than the client level, eliminating natural monopolies.

So with an open protocol anyone can build a client and get access to the same data. This not only encourages healthy competition, but also keeps the costs of switching to a minimum. Plus, the low barriers to entry mean that even small players can get into the game and make a name for themselves. This means that there can't be a natural monopoly at the app level since the network effect is present in the protocol level, kind of like how it works on the internet.

A decentralized protocol ensures much better user experience and better value for people.

How will companies keep people on their platform if users aren’t stuck? They’ll have to actually build products that people love. To keep people coming back, they’ll have to constantly innovate. Constantly improve, constantly providing a great product or service.

Platforms and apps will have to allow users to receive value for the value that they create - this is the entire premise of Web3 that has not yet come to fruition. Value generated should be split between those who create content for the platform, and the creators of the platform. It should not all go to the platform, as is the case with Web2.0.

True decentralization is the only way to ensure censorship resistance and freedom - because, as Jeff Booth says “If something can be manipulated, it will be”

Even though Twitter started with an open and decentralized ethos - the fact that it was owned by a corporation and the data sat within a walled garden meant that it was inevitable it would become corrupted - and this did indeed happen. Firstly, as Rabble spoke about in his talk at Nostrica, Twitter began with the idea of an open protocol that anyone could use, and there as an open API to go with it. But a new owner came in, and that was shut down.

Even still, with Jack at its helm and his views on openness, could Twitter have remained free and open?

In his recent article, Jack stated that he has come to believe the following principles:

“Social media must be resilient to corporate and government control.
Only the original author may remove content they produce.
Moderation is best implemented by algorithmic choice.”

But “The Twitter when I led it and the Twitter of today do not meet any of these principles . This is my fault alone, as I completely gave up pushing for them when an activist entered our stock in 2020. I no longer had hope of achieving any of it as a public company with no defense mechanisms (lack of dual-class shares being a key one). I planned my exit at that moment knowing I was no longer right for the company.”

Even when the CEO of a company is strongly in favour of certain values - if that company exists within the existing economic system, it will eventually be co-opted by the only value which can survive inside that system - profit maximization. At the expense of pretty much everything else.

The only way to ensure that something remains free and open is by building it on a free and open protocol, like Nostr.

Part 5: Apart from us crazy Bitcoiners who actually care about decentralisation - will anyone actually move to Nostr?

*Nostr could be a lot of fun for all sorts of people.*

There are many things “normal” people don’t like about current social media platforms.

These include:

Privacy concerns
Mental health and addiction - in large part thanks to algorithms designed to keep attention
Cyberbullying and harassment
Advertising and commercialization
Censorship and content moderation
Spam + bots
Lack of control over what is displayed and how
Lack of innovation in features

Nostr is the real Web3.0 we’ve all been waiting for.

There has been a lot of talk about Web3, but most of it has been co-opted and controlled. Nostr could be the true Web3, the next iteration of the internet that is decentralized and open.

Before we move on, here's a point of clarification. Nostr is not Web5. Nostr prioritizes simplicity, and one of the tradeoffs is that it does not incorporate decentralized identity or what Square’s division TBD calls "Web5."

There are many reasons “ordinary” people will want to use Nostr - you don’t need to care about decentralization and censorship-resistance.

Many people may not care about whether their social media platform is centralized or decentralized. Most probably don't even know what that means. So why would anyone move from apps like Twitter to Nostr? Will it really provide a "10x better" user experience, as some suggest? Let's look at some of the problems it solves and benefits.

Zaps. Imagine being able to send and receive value instantly for content, instead of the platform getting all the profits. Currently, most creators receive little to no value for the content they create on a platform. For example, someone like Lyn Alden on Twitter generates a huge amount of engagement, but all the value from her content goes to Twitter, not to her. But with zaps, value goes directly to the creator. So where would a creator choose to post?

And you know what? Zapping is seriously fun. It's pretty incredible to send and receive small bits of Bitcoin back and forth! Want to say thanks to someone for a great article, quote, or funny meme? Just send a zap. I've been pleasantly surprised by how active zapping is!

Content surfacing. Tired of mindlessly scrolling through your Twitter or Instagram feed? Want a more active way to find and engage with content? It's already emerging on Nostr. As I mentioned before, I get to look at different feeds on primal.net. There's already talk of an algorithm app store and a host of ways to help people find and engage with great content. This makes the user experience much more enjoyable!

"User-chooses" algorithm. Tired of not having control over what you see and how? Whose posts get prioritized, how much of your feed is people you follow vs. new suggestions, etc.? What about being able to choose what you see? To choose how your feed looks? To curate different feeds for different moods or interests? These are the sorts of ideas being thrown around, including an "algorithm store" for you to select from!

Innovation + improvement. Now with competition, apps will constantly need to delight people, and they'll get constantly better interfaces, features, and general user experiences.

Nostr apps all work together to grow the Nostr network.

Users will access Nostr through various apps. For example, one person may be drawn to Damus, while another may read an article on habla.news or use a music application that has not yet been released. This is similar to the internet, where people might have initially wanted to look at cat pictures, buy items on Craigslist, or chat in forums. Each application brought new users to the internet, who then began using it for a variety of purposes.

With Nostr, instead of each app or company bringing users into their own network, each app contributes to the network of the protocol itself. This means that there is not just a single "go-to-market" strategy, but rather a whole salesforce out there, each targeting their own little niche and bringing in more and more users. All of the apps are effectively working towards the same goal of building the Nostr network.

It is this network effect that makes Nostr so powerful and why adoption could potentially occur rapidly among a broad range of people.

Part 6: What will the Nostr ecosystem look like?

Just as it was difficult to envision what the internet would look like, it is also difficult to envision what the ecosystem around Nostr will look like.

There are many things that are different on Nostr to prior tech ecosystems that make it hard to predict. There are some analogies to the Bitcoin ecosystem. For instance, most applications being developed are open source, or at least have their foundation being open source.

AI is making it increasingly easy to build - could there be a broader range of non-technical founders who can bring their applications to life?

We’re spending a lot of time here at ego death capital thinking about what the ecosystem will look, and what types of companies could be “investible”. But more than that, we’re also thinking about what we as humans want to see. Not just how will the ecosystem look, but how do we want it to look, and how can we do what we can to help?

We need to ensure the network remains decentralized and censorship-resistant. We want a thriving ecosystem of applications.

All sorts of clients will be built - “Twitters” are only the beginning.

It’s not only Twitter - or even social media applications - that Nostr could be extraordinarily helpful for.

Twitter-like clients were probably the first to be built because it was Bitcoiners who first got involved in the protocol, and the conversation around Bitcoin lives on Twitter. Additionally, many of the highest profile controversies around censorship have occurred on Twitter.

Yet Instagram users too have become very frustrated with how the platform displays content. Instagram too shadow-bans accounts. The feed is more and more focussed on extracting value - prioritising paid posts and and burying posts from accounts people actually follow and want to see. And now, as there are pushes by the US government to shut down Tik Tok, it’s becoming clear why it’s so important that a protocol like Nostr exists.

But beyond social media there are so many applications which clearly need decentralization for one reason or another.

One very important project is to build is a decentralized version of Github. In fact, Jack has a bounty out for it which he has just increased to 10 Bitcoin. This is crucial for instance for Bitcoin which at the moment relies on Github as a code repository - a potential single point of failure.

Other ideas being developed include music streaming, long-form publishing, marketplaces, community platforms, and more.

Although the platform is excellent for open + public communication channels - like a Twitter-style post or “note” that anyone can see - it also provides a platform for censorship resistant private communication. Right now, it is possible to “direct message” someone, and you can access that private message by signing using your private key across any client.

An explosion of development is underway.

In just a few months, hundreds of clients, tools, bridges, relays, code libraries, and more have sprung up around Nostr. You can find a comprehensive list of these on this “Awesome Nostr” GitHub page.

Anyone with an idea and the desire to build it can do so with ease. And indeed, many do. Builders are simply out there building. They don’t need to each individually build a network - they can just hack away at some code and plug it in.

It really is awesome!

Openness and open-source maximizes human potential.

This is the true beauty of open-source and open protocols. Whether it's contributing to the open-source Bitcoin code or creating apps on the open Nostr protocol, anyone with an idea and technical knowledge can simply join in and contribute. According to GSovereignty, a longtime Bitcoin/crypto developer, open-sourcing anything is the fastest and most efficient way to build any piece of software, and potentially, anything at all, if you can get the incentive structures right.

I think this is what makes Nostr so awesome. There's an explosion of creativity that simply couldn't happen in a closed protocol or inside a company. It's certainly unlike anything I've experienced in my lifetime, and I'm personally thrilled to be here pretty close to the beginning.

Will one or a few “super-apps” come to dominate Nostr? Or will there be a proliferation of micro-apps?

This was a big topic of discussion at the conference. Everyone was hoping that we would not just end up on some re-centralized platform. There may not be natural monopolies, but that doesn’t preclude winner(s) takes most.

One of the books we recommend to all founders and potential founders - one of Jeff’s all time favourite books - is “Play Bigger, How Pirates, Dreamers, and Innovators Create and Dominate Markets”. The central thesis of this book is that every product category has one company that dominates that market and takes the lions share - 90%+ - of its profits. The logical conclusion from this is that the only way to build a successful - i.e. profitable - company, is to create and then dominate a category.

Barriers to entry and switching costs are significantly lower on Nostr than on many other technologies. It's an open protocol, with most apps using open-source code, and code can now be written using AI. This could change everything. Will products ultimately become commoditized?

I believe there is still potential to build an app that takes a large market share. Even if it’s easy to replicate and all of the data is freely available, someone would need to have an idea and ability to execute for a product improvement that’s multiples better than an existing app, in order to be able to take a meaningful amount of market share to make it worthwhile investing the time and money into building that. First mover advantage still exists.

Even with email, yes, you could copy Gmail, and you wouldn't need to create a network to do so, just a go-to-market/marketing campaign. But getting a product up to the quality of Gmail is not easy. And then, you'd have to be multiples better than Gmail to get people to switch. Moreover, you'd need to make money to make this whole endeavor worthwhile. So, the product needs to be so much better that people would want to pay for it.

This is exactly what Superhuman did by building a better email client and generating around $20 million per year in just a few years. But that's just one example - and it’s really just a “wrapper” around gmail and other clients. After all, changing email addresses is huge switching cost!

With zero switching cost, we won’t get stuck using products we would really prefer not to be using.

I do expect that there will still be a high degree of concentration in apps - say 2-3 taking 90% of each market segment. But there is a constant threat that if you drop your game, if you stop innovating and get complacent - someone will be there to step in and eat your cake. And that is a fantastic outcome for us, the people.

And, people can carve out new categories, and micro-categories, that each can have its own market and its own winner or winners. So even if you see winner takes most in each category, there still could be a collection of micro-apps in micro-categories.

In fact, Rabble in a recent note shared a view that perhaps Nostr itself is the super app, with each client being a feature of that superapp.

I fully expect that the Nostr ecosystem will be diverse, vibrant and thriving.

Currently there are a few apps that dominate each market segment.

Right now, it is the case that one or two key apps in each “segment” or “category”. A few of the key ones are listed below (this is not intended to be a comprehensive list).

Twitter-like clients:

Web: Iris & snort.social

Android: Amethyst

iPhone: Damus

Full data view: Primal

Substack-like: Habla.news

But - it is very very early. The landscape is changing rapidly as more and more people start building, and this could look very different very quickly. Remember, this ecosystem has existed really for less than 6 months. And what’s more, with AI including GPT, it’s only becoming easier and easier to write code. Soon enough anyone might be able to build the client they want using ChatGPT. Barriers to entry are coming down everywhere, and it’s very difficult to predict how that will affect businesses building in the ecosystem.

Can email give us an idea of how the landscape on Nostr might look?

Anyone can create an email client to receive and send emails. You don’t need to create a network to build a successful email client - you just need one that works within the system and can send and receive. So perhaps we can look at email to get a bit of an idea what the Nostr ecosystem of clients might look like.

And in fact we do find that email clients look more like a Pareto distribution - where 2-3 companies take the lions share of the category. For email, the leading clients are gmail and apple-based clients. Gmail was able to win market share from earlier popular email clients like Hotmail by providing a better user experience, including providing significant free data storage, and a better UI with search and tagging to remove the need for always filing in the right folder. In addition, they constantly improved the service, increased storage allowances, and built tools for businesses (which were paid services). The dynamic whereby applications that provide a better user experience will win customers is very similar to what we will see in Nostr.

But in many ways email is not a good comparison, as there are some major differences:

Switching cost is even lower. There is some switching cost for email. In fact, in a way it’s a huge switching cost - needing to change email address. So this makes you just stay where you are. And even if I can move to a new client with the same address (e.g. using Superhuman for gmail), there is some login, setup and configuration time required. With Nostr, I simply login using something like the Alby browser extension, it’s just so quick and easy
Data is freely available. Gmail is free for most personal users because, like much of Google's business, its value lies in the data and advertising. Since email is not public or open to anyone, only the email client itself has the data for that email address. With Nostr, anyone can extract data from the relays. While data analytics may be valuable, the data itself has very little inherent value. This is important to ensure that the product remains the product, and that the person does not become the product, as has happened with so many current internet applications.
There are many more types of applications that can be built. Email is just a protocol for electronic mails. Nostr is so much more!

An open protocol will require - and drive - innovation in business models.

Not only does an open protocol drive innovation in user experience, it will also require innovation in business models. No longer can the strategy be to build network effects and then monetize the monopoly power. Now, businesses will need to make revenues as a function of the value they provide to a user. If they create value for a user, they will be able to capture a small portion of that value in the form of revenue. If they try to take too much, people will switch to another app. If they don’t provide enough value to a person, that person will simply switch.

I don’t think this means there can’t be profitable companies built in Nostr. Quite the opposite. What it does mean is that the incentive of companies is aligned with its customers. This is very different from the existing social media.

There are several potential monetisation options being discussed including taking a small fee on any zaps (a fraction of a percent), a “freemium” mode where people can get premium features for a fee, and subscriptions or payments for items such as badges. In addition, akin to Gmail, there will be a wide range of integrations and business tooling that could be additional sources of revenue.

One thing is clear - any successful business on Nostr will need to not only develop code, but will also need to innovate in business models.

Just like with the internet, there’s a huge range of applications and businesses that will need to be built on Nostr - not just apps / clients

Imagine you’re at the internet in the mid-1990s - you would not have had any idea of the companies that would be built. You would not have been able to imagine the Netflix, the Uber, the AirBnB. And then all of the services behind the scenes - B2B SAAS, security services. The number of products and services that exist within the internet is simply mindblowing.

There is a huge number of businesses which provide services to social media and emails. Even just within email there are companies including MailChimp, Campaign Monitor and Superhuman. Within social media more broadly there are marketing services, social media management tools (e.g. Hootsuite), analytics, advertising tools, content creation tools, influencer marketing platforms, and integration tools.

We don’t know exactly how the Nostr ecosystem will look, but a suite of businesses which may be analogous to some of those in regular media and social media will no doubt be required, and built.

It’s difficult to predict how fast Nostr will be adopted, and by whom.

Waves of people have come so far from Bitcoiners, from people in China, Hong Kong, and Japan. But it’s very hard to predict where the next waves will come from. There is a lot of excitement amongst creators including musicians who have been looking for real “value for value” or Web3 for their songs. Organizations such as the BBC are disgruntled with Twitter. Even Forbes is writing about how to use Nostr. It’s going to be a fun ride to be on and watch it all unfold!

Part 7: What are the potential challenges?

*Nostriches will face the challenges together. Including those with 3 or 4 legs.*

Is this any different from other attempts to create decentralized social media?

Rabble was an early employee at the company which became Twitter, and has been involved in open social media protocols ever since. He gave one of the most discussed talks a Nostrica, linked to earlier and again here, about the history of open information protocols and how they have gone right and wrong. And indeed even today, there are other protocols out there that people are using and excited about like Mastadon, Bluesky, and Scuttlebutt.

There are many current problems with Nostr - but solutions are rapidly being created.

I won’t spend a huge amount of time on the various issues and problems with Nostr today - because the community is building so rapidly that it will very quickly be out of date. We can’t say “Nostr won’t work because of [x problem]” because innovation is happening so rapidly and addressing problems as they arise.

As an example, one of the current issues with clients such as Damus is how slow and inaccurate they are. It’s almost impossible to see how many followers a person has - click the button to view and it will move slowly, stop and start, as it pulls the data. This type of query is very “expensive” for relays. But, smart entrepreneurs in the ecosystem have already implemented solutions.

The onboarding experience still isn’t great, with people needing to understand, create and store private keys for their login credentials. This will all be improved very rapidly.

Then there are the issues of spam, with apparently large volumes of spam coming from China and clogging up relays. The volume of data required to be stored on relays is increasing rapidly - one solution to this is pruning, i.e. removing data gradually over time. Another challenge is the inefficient use of relays by clients because there is currently no cost to call information from relays, so they are not incentivised to optimize their use.

Some of these issues will likely be fixed and/or improved by the development of the Nostr Development Kit, currently underway by a group of developers including Pablo.

Decentralization of content moderation.

I’ll let Jack do the talking here: “I don’t believe a centralized system can do content moderation globally. It can only be done through ranking and relevance algorithms, the more localized the better. But instead of a company or government building and controlling these solely, people should be able to build and choose from algorithms that best match their criteria, or not have to use any at all. A “follow” action should always deliver every bit of content from the corresponding account, and the algorithms should be able to comb through everything else through a relevance lens that an individual determines.”

Content moderation is one of the biggest issues facing social media platforms. This problem has led to censorship and the need to build something censorship-resistant. Twitter did not necessarily intend to censor people, but concerns of harassment and incitement to violence led to this approach. It's a challenging consideration of what constitutes freedom of speech and what crosses the line to infringe on the freedom of others.

Centralized content moderation is a paternalistic approach. Instead, we could develop tools that allow users to decide what content they do and don't see based on their own values. With natural language processing (i.e. AI) now easy to use and integrate, users could select what they do and don't want to see. This approach empowers people to make their own decisions.

Regarding harassment, community moderation could be implemented, for instance, for comments. Individuals should not have to be solely responsible for protecting themself from being harassed.

A big question is whether people involved in Nostr should work together to create common standards and approaches towards content moderation, rather than each application having to figure it out for themselves. This seems sensible, as app builders shouldn't need to be experts on content moderation, and it's an area that could benefit from group wisdom to get to the best possible solution.

Even with "content moderation" or some sort of agreed principles, it's different from how it works on Twitter. If someone becomes disgruntled with the agreed approach to content moderation, they can build a new client to pull and display that information. This is the beauty of a decentralized protocol. It can only ever be content moderation, and there will always be a way to see everything that is said by everyone.

Nostr is still very young, and could get “captured” and become centralized, if the right steps are not taken now.

One of the true bigger and possibly more existential challenges for Nostr is centralisation. Similar to Bitcoin, there are many places that centralisation may happen that may not be immediately obvious. For instance in Bitcoin, there is centralisation of mining, of core developers, of on/off-ramps, even the repository being hosted on GitHub. All of these have proven over time to not ultimately affect the decentralization of Bitcoin the network, which has strengthened over time and been battle tested, for example during the blocksize war.

Nostr has some characteristics similar to Lightning, and one of those is a degree of centralization happening in Relays - akin in some ways to centralization in Lightning nodes & channels. With Lightning, what keeps the network decentralized is the fact that anyone can open a channel with anyone else at any time - you are never required to go through a “trusted” third party.

Nostr is a little different. There is no consensus mechanism on Nostr. Instead, clients connect to multiple relays, reading and writing from multiple. They can check one against the other. And if one relay starts censoring imformation, you can get it from somewhere else. So you do need decentralization and variety in relays to ensure that the network can’t be co-opted.

Nostr faces many challenges to adoption.

The major challenge Nostr faces is how to build the network, even if there are many advantages to building an open network with multiple apps all helping out. Below are some of the key challenges

How to attract users beyond the initial Bitcoin community?
How to make the experience sticky and engaging, when there are less people on Nostr?
How to attract creators and influencers to the platform, when they get less engagement there than on other existing platforms?
Will the open nature of the protocol and difficulty in building a competitive moat dissuade major investment into the ecosystem, and hence limit product development?
Will the experience really be 10x better?
Identity - with decentralization and AI, how will identity verification work?

Part 8: Nostr - the next “killer app” for Bitcoin ?

*Nostr & Bitcoin - a love affair that is just beginning?*

Nostr - it’s like Bitcoin, and it also uses Bitcoin.

Nostr has clear similarities in terms of ethos as Bitcoin. It’s about decentralization, censorship resistance, to name a few. Of course, many early people involved in the space are Bitcoiners. But what really links the two concretely is zaps.

Just as zaps may well be the killer feature of Nostr, Nostr may be the next killer app for Bitcoin.

Zaps could be very meaningful - not just a gimmick.

One question I asked from the start was whether the value from zaps would be meaningful enough to make a difference. But so far indications are zaps could be huge.

Lyn’s recent note starting “Too many people have given Elon a pass. Don't give him a pass.” received 3k likes, and 665k sats in zaps - that’s around US$200.

Will Casarin, founder of Damus, has raised around $5k from single posts to support his effort. And Lina Seiche, creator of those very cute Bitcoin comics, has so far received around US$80 equivalent in zaps for this one:

Zaps open an extraordinary array of possibilities.

Already we’ve seen notes + zaps used as value for value, tipping, and improvised crowdfunding. It’s just the beginning. One use case I’m personally really excited about is for musicians - being able to zap whenever I listen to music. At the moment, I subscribe to Spotify and get access to the most incredible selection of music from musicians all around the world. But I’m very aware that they receive basically zero value from me, in return for the value their music is adding to my life. It’s not fair.

I can’t wait for the time when I can simply zap a few sats over to musicians whenever I listen to their music - and I listen to a lot of music, a lot of the time. I’m so grateful to all of the musicians and the time and effort they put into making the music that makes my life richer, more beautiful, and more enjoyable. But at the moment, it’s very hard for me to express that gratitude other than a few follows or likes on instagram.

I hope this will help musicians to create even more music - and all sorts of content - for all of us.

And, as Lyn said in a recent tweet - the experience of zapping someone, of sending and receiving value that is completely in my wallet instantaneously, is so much better than accruing some token, or being able to withdraw it at a later date. It’s really not the same.

Nostr could drive Bitcoin adoption.

It starts with using this cool new social media platform. Then you start sending and receiving zaps. Soon you’re buying Bitcoin, and maybe, just maybe, you end up down the Bitcoin rabbit hole.

Even if people who use zaps don’t know what Bitcoin is, they’ll likely start learning how to buy some Bitcoin to load their Lightning wallet. And the thing is - it will just work. They don’t need to understand Bitcoin, they don’t need to understand the Lightning Network - all they need to know is that you can send and receive Bitcoin instantly and easily and it just works.

And when a technology helps someone do something they want to do, and it just works (without needing to listen to 100 hours of podcasts to understand it) - that’s when real adoption of that technology can happen.

Is this Bitcoin’s next big moment?

Part 9: How can you get involved + learn more?

*The new, beautiful universe of Nostriches (*if anyone can help me to get Midjourney to remove the Nostrich’s extra legs - please let me know!)*

Here’s how:

Go to nostr.how for lots of helpful information, including step-by-step guides to getting on Nostr
Read Lyn’s article “Implications of Open Monetary and Information Networks”
Forbes recently published a great article on how to get onto Nostr
Check out feeds on primal.net, you can view content (like Jack Dorsey’s feed!) even before going through the steps creating an account and logging in

We’d love to hear from you!

You can find me on Nostr via my npub (or “public key”) npub1tlvvdgm4csch9x3m0r3qsrll7zsaccl49c4gdz5qz9g3jz33l92ss4gp7z, Twitter @1andipitt

Want to hear more from us? Subscribe to our newsletter here

Want to learn more about the fund? Send an email to contact@egodeath.capital.

Thank you!

Thank you to Pablo Fernandez, NVK, Miljan (from Primal), Rockstar, GSovereignty, Rabble, Keiran (from snort.social), Will (from Damus) and many more for your conversations and input at Nostrica as well as before and after the conference.

Thanks to Pablo, Miljan, and Jeff Booth for input into this article, and to the great articles from Jack, Rabble, Lyn + Max Webster that have come before. And thanks to Lisa Hough for being my travel buddy on the Costa Rican adventure!

Thanks to Midjourney for all the fun creating images.

View this article on ego death capital’s website.

Disclaimer: ego death capital is considering making investments in the Nostr ecosystem, including in some of the companies mentioned in this article.

Nostrica, the start of something big?

How FinCEN May Be Violating Your Rights

Welcome: Relai

ego death capital