Chris Dixon on Read Write Own

Chris, welcome to the Network State podcast.

Hey, Biology. How are you? Great to be here.

You know, you and I have been talking crypto for like 10 years, and it's kind of like raising a child together. So you've got this new book and it's Read, Write, Own. You want to hold it up for the camera? Do you have. Do you have a copy?

Here you go, everyone. Read, Write on. Available January 30th. ReadWriteOwn.com has. You can of course buy it at Amazon, but also if you want to support other channels, smaller booksellers or whatever you prefer, it's there. And we have Audiobook and Kindle too, coming in the same day.

Wonderful. So going on Read, Write On. And, you know, it's funny, I'm glad you wrote this book because it's kind of like crypto101, 2024. I think if people ask me what this crypto thing is all about, I can just point them to this. And this will be sort of a onboarding manual. You said you wrote it for a smart high school student. You want to talk about that?

Yeah, yeah, yeah, yeah. So, I mean, it's exactly what I'm hoping that the book becomes is that it's the book that, like, you know, you join your employee who joins Coinbase and your family and friends are like, isn't crypto that thing that like FTX and a bunch of speculate. And I can't. I mean, I've literally heard this like a thousand times. And then I go to D.C. a lot, you know, and just meet with, you know, press and policymakers. Sort of part of my job is to, you know, to do that and kind of work on policy stuff. And literally almost every meeting there's like, what book should I read? And look, there's some great books on Bitcoin specifically, and there's some great books, like there's, you know, the history of Coinbase and the history of Ethereum. But there isn't sort of, as you said, like kind of a 2024 onboarding manual that sort of explains. What I wanted to do was to look. And I wrote it partly to test myself, frankly, because this, I wrote it during, you know, after RTX and this sort of downturn. And I was like, let me. You know, I think it's Richard Feynman who said, if you can't explain it to a Forgot, like a 10 year old, you don't understand it.

Right.

You know, and like, and like, I've always said, like, this is, you know, that, that, that blockchains and crypto are about kind of, you know, decentralizing various Internet services and returning power to users and software developers and creators and kind of the edges of the Internet, you know, as opposed to these big intermediaries. But like, can I really write it out in detail in a way that that could convince somebody who's a skeptic, open minded skeptic who doesn't have a background in technology and the Internet? And like, as I said, yeah, someone said a smart. Actually I think, I think I got it indirectly from Peter Thiel. Someone told me he wrote his like agent told me he wrote it for. He wrote 0 to 1, which I have a lot of respect for that book. He wrote that for smart high school students. And I, and I thought that kind of was a great kind of God guidance. So I thought about that a lot. And so I don't use. I avoid jargon and except when I absolutely need it. And then I define it actually in one rewrite too. I went through, you know, the very. For those who've written, obviously you've written a lot, including your book biology. It's easy to kind of slip into passive voice and kind of make assumptions that kind of jump over stuff. And so I was very like, if you notice there's very few like kind of superlatives in the book. There's very few, very little passive voice. Like every part of the discipline of it is like, who did this? You know, what did they do? And I'm going to show you, not tell you. I'm not going to claim something. I'm going to walk through the details. And I was. It actually took me, I mean it took me a year and a bunch of kind of rewrites and somewhat painful to like get it to that point where it was just really kind of broken down. So that's what I'm hoping is the sort of first principles. You're, you know, open minded but don't have a background in this. I do a brief history of the Internet in the beginning with a specific folk. I mean and it's very important. Like one thing I realized when speaking to people in the general public and like maybe like, why write a book? Like I'm of the sort of, I think probably the biology naval school of thought that why write a book when you can write a blog post, right? And I used to blog for years and I was like, there's no point in writing a book. You know, why? Why a book now? And a lot of business books are kind of like filler, you know, I've gotten. All these people ask me, like, did you write the book? Like, they think it's like this ghost. It's like a ghost. Because, you know, I run a fund, so they assume it's like ghost written. And it's like seven. Seven Habits of, you know, successful people or some kind of like inspirational thing, which is not. It's not at all.

Right.

And yes, I wrote it. And yes, and it's like, this is like a. You know, you may or may not agree with it, but it's like a. It's a book. It's not a. You know, I mean, you and I.

Are both academics, so no one would ghostwrite our papers.

Failed academic.

Yeah.

Reformed academic.

Reformed. Reformed. I think. I think we were. We were smart enough to leave at some point. We were dumb enough to stay too long and smart enough to leave or something like that.

But that's right. So anyway, so questions for you. Okay, sorry, I could go on. You go ahead and ask a question.

Just on that, actually. So just to digress on the topic of writing for a second, you know what I found hard about writing a book? And right now I'm doing the second edition of the network scene, actually. Network scene. Movie.

Movie. Wow.

Yeah. Okay. I guess I just broke some news there. Fine. That's coming. Okay. What I found hard about doing a book is if you're at a 10 or even 15 page essay, you can read and reread the whole thing.

Oh, God. I think I know where you're going here, but.

Exactly. But the moment it gets to like maybe 100 pages, let alone 200 or something, you can't reread the whole thing start to finish before you write page 201. And so you have to have. It's like. It's like a code base which becomes large enough that normally you'd factor it into functions and just import them. The only way you can get through something like that is with a really good outline that just sort of decompresses. And even then you kind of need either an editor or nowadays AI to find the redundancies and so on. I think I'm going to have a better tack on that, but I'd love to know what your approach was on that.

No, no, no, it was very interesting. You're right, because I'd done a lot of blogging, obviously, and it really does change when it's longer. And so I'd say a couple of things. Like one, one of the hardest things was, had I already explained that think this is what you're saying with redundancies. Like it's really annoying when you're reading a book and you're like, they explain something twice or they over explain it sort of the second time. Right? Like, has it been explained enough?

Right.

It's so hard when it's in this case 230 pages. Like when you get to this, you're reading chapter seven and you're like, wait a second, is this. Did I, did I already explain this enough or not? Right. And what I found is I had to take. If I didn't take, I had to take two week breaks sometimes to clear my head.

Yes.

If I didn't take a two week break, then I couldn't do a fresh read and read it as like, right? And I'd be like, oh wait, that feels silly. I didn't explain that or I over explained that. And I had to take these two week cycles. And then what I would do in the meantime is I would like work on small pieces of the code base, so to speak, right? And then I would say, okay, now my brain's fresh and I can do a full read. And then I would do like a two. And then that would take me like two weeks to do a full read or something. And at one point actually for my case, so I actually had. Also I had. The other thing I learned is that with. So with you think about, you're reading like a nonfiction book and let's say they make like three claims in a row. And let's say as you're, you know, when you're reading, it's really interactive process, right? You're kind of saying, I don't agree with that. And if they keep saying stuff and they don't address your concern, you'll probably quit reading because you'll be like, wait a second, right? Like it's kind of like the tree forked too far away from the reader or something. So I had like 20 people, really smart people, a lot of them work with me on my team read it, including like Dan Benet, Tim Roughgarden, like CS professors, Bill Hinman, law professor, you know, law experts. And they would give, it was amazing. They gave me like paragraph level comments, right? Like this doesn't make sense. This is a counter argument. And then I went and addressed them all and that took me four months or something and. But then the code base had to, I read it again. I was like, holy crap, this is just a mess. And it's a mess now. The code base was a mess. I then had to refactor the whole thing. Right, because it was like, just like all code. Right. It was just like had, you know, kind of metastasized or something in all these different weird ways. And so anyway, so. Yeah, but that, that. Yeah, go ahead.

Yeah, it's so. Sorry, finish your thought because I'll tell you.

No, but you're right. Like, I just had no idea that like the pure length of it, I guess it meant like I couldn't keep it in. In memory, onboard memory ram. I had to go. I had to page to the hard drive or something.

That's exactly how I felt. And I think you and I both have actually normally a pretty good memory for written text and whatnot. So this is like a buffer overflow. And the other thing is you can't just import. You mentioned. Oh, you know, people have explained it too much maybe by repeating a definition in the chapter seven. The opposite, of course, is you are very concise. In like a math textbook, you introduce five definitions and you use them all back to back to back. But then people are lost because you just use five keywords that you explain but not used together, you know, Anyway, so I think you did that pretty well. By the way, for what it's worth.

Thank you.

You know, hopefully this also gives like a verbal overview for people.

Yeah, I was very happy with like. So I sent it to like, for example, Kevin Kelly, who I have a lot of respect for, who's a founder of Wired, you know, great writer, written many books and he's sort of a real tech optimist. For those who don't follow him, you should. He's, he's brilliant. But he's actually, I know him and he's been always a crypto skeptic. And actually he's one quotes I have on the back of the book. And he's like. And he's the kind of guy, he's not going to bullshit me. Yeah, he, he like, he's like, this changed my mind. This is, I think the response I've been happy with overall. But I think it's actually been more positive the less into crypto they are. Yeah, so like some of the crypto, like on my team, they're like, well, I kind of knew the first, you know, two thirds of it. Chris. Well also they hear me, they're like, chris, I've been around you for six years. You've been saying it over and over, you know, but, but I think that, that, you know, that, that I'm hoping is sort of how it lands. Is it kind of like the Crypto. I hope the crypto people like it. I think particularly like in the token section, like, I have this framework, faucets and things, which I think is not my ideas, but I think I do a nice kind of crystallization of a lot of the best ideas. So I think crypto people will find some of that interesting. Some of the. I do have a treatment of the regulatory topics like securities laws. I have a bunch of application example application areas. So I think, I hope crypto people will find parts of it. You know, a lot of the younger crypto people won't know the Internet history stuff as much, so hopefully that will be helpful to them. But, but fundamentally I want them to. I really hope they like it, but I really want it to be the book they recommend to the kind of adjacent layer, which I just feel like. Because look, we have, you know, I think you're the. I think you invented the sort of phrase or. I think so, right. Like, kind of speculation is the bootstrap mechanism.

Speculation is insulation is insulate.

It's sort of. Yeah, it's sort of the. But like what? But like, the question then is, like what? What does that mean exactly? Like, how do we actually get there?

You have to value the thing on the other side. Installation. Installation of what? And then we'll get to that in a sec. Yeah, I do think, by the way, that you have something in the book for everybody, because I think you're right that junior crypto people who are in their twenties didn't live through Web one and Web two like we did. And that's just been around their whole life. So they'll learn something from it. And you know, Kevin Kelly is a good example of like the tech swing vote, who is like a rational actor, but just hasn't dug into this or what have you. And now, you know, he's smart enough, he understands it from your. Your description. There's something else, by the way. The teal writing 0 to 1 for a smart high school student probably helped him bring Vitalik to the Teal Fellowship. I'm not sure if the timing on that.

It's true. I forgot, I forgot. He has a program that recruits smart high school people. Right.

So there's a utility to it there as well. Okay, so why don't we, why don't we jump into the book itself? You know, crypto is a big enough area. People come at it from different schools of thought. Many come at it as a financial thing, I come at it as a primarily political thing, and you come at it as a Technological phenomenon. And of course those are interlinked. You know, your book is divided into five sections, which, you know, I'd roughly summarize. So you've got read, write. That's your brief history of web1 and web2. You have own, which is on the like the invention of blockchains and the concept of cryptographic ownership. A new era which I called maybe the basics of crypto economics, but in a. In a nice distilled way, which aggregates 50 different blog posts and heuristics into. Into a nice little chapter here and now the current controversies, which, you know, will be the most, in a sense timely section of the book. And then what's next? What we can build with crypto. So maybe, you know, tell me if you think that's a correct overview.

Yeah, that's perfect. Yeah.

Great. And you want to. Do you want to give your overview of like the book as a whole and maybe drill into those sections a bit? Go ahead.

Yeah. So. And maybe just to give a little bit of context, you know, I got into the Internet sort of late 90s, and have spent my entire career on the Internet. I was originally an entrepreneur and an investor. And as you mentioned earlier, I'm sort of a reformed academic and I actually think I wouldn't. I was attracted to the Internet because, I mean, it was an amazing promise of a network that was truly decentralized and owned by the users, right? This was the original Internet. And that happened for a variety of reasons. You know, its origins in academia and government and there were sort of political motivations. But to me, by the way, that was not a fait accompli. Like there were alternative visions like Bill Gates and Comcast and Disney had this information superhighway with sort of a centralized Internet, right? And like, you know, our friend Mark Andreessen was on the kind of the open Internet sort of open source side and of course, you know, Netscape and everything else. And to me, that was just a remarkable thing. I mean, that we would link all the computers in the world and we would do it in a way that there was no kind of intermediary, right. That was taking tolls money and power and control. And that this was actually sort of this thing owned by the people and the specific instance, the specific way that address. So you have. And that was kind of came so like, you know, you had the sort of base layer of the course of the Internet ip, but then you had these layers on top like email and the web and they respected ownership and they did it. I go through, in the book, a little bit through, you know, this mechanism of DNS. And you know, one of the key features just technically of DNS, right, is you have. The user has control of the mapping of the domain name to the hardware, which means if the hardware provider turns evil, you can exit. Right? DNS gives you the ability to exit.

Yes.

And this was, and this was a very, very. So this, I think this is an often overlooked but profound feature of the early Internet. That ability to exit meant that first of all, you know, creators, political dissidents, activists, whoever they might be, had the ability to go do something, right. And like, put up, have their own little plot of land. And as long as you obeyed the law, you could have your plot of land. Right. But it also enabled entrepreneurship. Right. Like that's why Larry Page and, and Jeff Bezos and others, they knew they could, if they built something on that plot of land and it was valuable that, that, that they would own it. Right. Or that they, they and their shareholders would own it, but like there wouldn't be sort of an apple in the middle taking 30% or something like it was, it was true ownership. Right.

An analogy that think we've probably both made. I mean, the auth code of DNS is very similar to a private key from crypto.

Yeah. It's because it's, it's all about that mapping. Right. It's like, right. It's that one layer. Do you control the layer of the virtual to the physical?

Yes.

Right. And who has control of that? Is it Twitter that has control or does the user have control?

Yes. Right. And actually, it's funny because I remember, you know, actually, I'm not sure if this in the book or not, but I think maybe we've both made this analogy different times. You know, somebody, you know, who's a Web2 person, I asked them, okay, you're doing a new company, are you going to buy the domain name or you're going to lease it? Because, you know, some, some of the really nice domain names, they want you to lease it or something like that. Right. And the problem with that is you're five years in and now suddenly they can jack up the cost on, you know, your domain name because you just.

Added, why, you know, every good restaurant in the world goes out of business is they always jack up the rent. Exactly. Just to the point where they built the neighborhood. Yeah. Because they just assume that they can put another restaurant in there because they don't own it.

That's right. And so the, you know, the. Right. The the smart entrepreneur says, oh, of course I'd want to buy the domain, I wouldn't want to just lease it. And I'm like, and now you understand crypto, that's digital ownership, right?

Whereas they don't own, of course, your social. Like you jump forward to Web two. You don't own your Twitter name, you don't own your Instagram name, you don't own like all of these different things. You don't own your, you know, PayPal or your Square Cash or any of these services. Right. You're just, you're just there at their discretion and their whimsical.

Yes. And yet your username is becoming as important, if not more important than your real name. I mean, most messages that come into you are coming into your C. Dixon, not your physical mail. Right. 99% of communications online. Okay, so good. So that's kind of. Go ahead, you were saying.

Yeah, so then, so then I sort of give a little bit of, you know, it's one chapter on the kind of Web one. And look, that's, and that's really why I got into this, for example, like I got into the Internet as I thought this was just amazing thing. And then, so then web2 comes along and I talk about the history of this a little bit. But the, you know, on the good side was, was this movement to make the web read and write. So in the 90s, the Internet was what I call skeuomorphic, right? So it was like a lot of new forms of media. It was sort of porting old media onto the new form. Right. Like early, early films were just like a camera on a play. And then later on they figured out that you could have a close up and establishing shot and kind of establish the grammar of film. Right. And the same way early Internet, you know, if you go back and look at these retro Internet archive things, you'll see they're just like brochures, magazines, you know, you did have like online shopping, but it was very primitive. And, and so the Web2 movement, which I, this is when I became an entrepreneur in the early 2000s, was it was saying, hey, the Internet actually has these sort of native two way possibilities. You can build, you don't need to make the user just a passive consumer. You can let the user publish, right? And so that was a social media. And it began the social media movement and that began with blogging and morphed into Facebook and Twitter and all these other things which everyone of course knows today. In the course of that happening, what happened is that in the 2000s kind of two architectures for how social networking would happen. One was an open architecture, most notably rss, which today still exists. People use it for podcasting, but in 2007, 8, it literally had the same number of users as Facebook, Twitter and everybody else combined. People forget this. It was a legitimate horse race in 2008 or so up until that point.

Which one, which one RS has.

Oh, yeah, yeah. RSS is a legit. Yeah. If you go back, like I was going back and looking at my early blogging, like my whole blogging career beginning was always this RSS versus proprietary social media debate. Yeah, yeah, this was a, this was a. And look, I would argue that this. People say, you know, Today the top five tech companies are 5, 50% of NASDAQ, up from 25% ten years ago. Top 1% of social networks is 99% of social networking traffic and revenue. Like, why did we get so consolidated? I would argue that was the pivotal point was the, was the fall of rss was the fact that rss, the fact that social networking is, you know, people spend seven hours a day on the Internet and like, it's like, I think four hours of that is social networking or something. Like it was a ma. Had a massive economic consequence.

Here's how I think about that. And then, you know, give me, give.

Me your thoughts or you were in bio at that time.

I was in bio. Right.

So I wasn't. You weren't in the, in this battle. That battle.

That's right. I'm a little bit like Kevin Kelly actually in reverse, where I actually tried to stay off of social media because just like, so Kevin Kelly, you know, I'm just saying because of his remark there, relatively late to crypto, but he's a smart guy and so on. He's just thinking about other things. I was in bio and I was actually trying to stay off the Internet and I actually only started tweeting in December, November, December 2013. Right. So like seven years after. Because I thought it was all tweeting breakfast and so on and so forth. And that's a power of. That's the equivalent of, oh, crypto scams and, and hacks or whatever. When someone's on the outside, that's basically all they hear. But I wanted to say, so web 1, web 2, web 3. At the time web 2.0 was thought of as Ajax and Google Maps and interactive stuff and what have you. But now in retrospect, we can say that there's a front end evolution. For example, going from login password web1, social login and OAuth and web2 and then like connect wallet with web3. And there's a backend evolution where you go from peer to peer, like P2P, then MVC and then what I call CBC. Client blockchain client. So like peer to peer, every node is equal. Right. Mvc, you know, like the Rails pioneering thing, but just the hub and spoke architecture around a center. And now client blockchain client, which combines aspects of both of them. You've got some of the peer to peer aspects and because open source and it's OpenState and it's programmable, but you also got the monetization and the single global hub of the MVC era. So this is like the best of both worlds. The reason I bring that up is that's why I was a little surprised when you mentioned rss, because RSS was certainly good for like static content distribution, but the moment you want a dynamic content, you had like a Facebook page or social networking, you kind of needed to have that hub, otherwise you'd be message passing social profiles back.

So you're exactly right. So no, I mean, I think we agree, but I'm just saying like historic. Like at the time, at the time.

It seemed like a horse race in the past. Yes.

And in fact I have a section, like a smaller section of the book the Fall of RSS where I try to diagnose why it failed. And so. And of course that leads to exactly your argument, which is I view blockchains as, as ameliorating the, the things, the things that. The reasons RSS failed, I believe are two things. Features and funding.

Yep.

Okay. The features is the ability to store, for example, your username. So RSS asked you to. It didn't have any storage. It was a stateless protocol as, as like HTTP and smtp, therefore. And like actually quote in this thing, there was a wired article from 2008 where they, they, they tried to build a social network and they said we can do everything except for the, except storing the usernames. We have no way to do that. And there were all these proposals at the time I was involved in these debates. It was like, should we create a nonprofit? The store is a social graph. It could be like Wikipedia, like how.

Do we store overload DNS?

And of course it was. What you needed was a blockchain. Right. You need a community owned decentralized database. Right. And so what? Yeah, so what? Yeah, what? Actually the way RSS works is you had to go pay $8 buy a domain, set it up. And that was just not a consumer value proposition. When, when Twitter and Facebook said just click a button and you get a name, it just, that was one thing and then the other is subsidization. So I think a lot of people that don't work on the Internet, that aren't Internet investors like me and things don't realize how much subsidization has gone into the building of social networks. And so the example I use in the book is YouTube. So when YouTube came out in 2005, it was actually originally a dating site. And then it pivot, I remember it came out, yes, it pivoted into a, you know, peer to like a social video site. And by the way, at the time there were all these video sites, but it was like much more of the kind of, you know, anyone can upload something. A lot of the other web ones were like taking CBS content and whatever.

And so that's why, that's why they beat Google video, because they're more risk tolerant. But anyway, go ahead. Yes.

So with YouTube, when it came out, they pursued this strategy called that I call come for the tool, stay for the network. So when YouTube came out, there was no, no one went to YouTube.com right? And everyone had their audience on their blog like I did, right? And I wanted to have video on my blog. Now to have video on my blog at the time, I would have to. Before YouTube, I would use RSS as the kind of protocol for people subscribe. But then I would actually have to host it, like fiddle with some software to host it on my site and then pay for the bandwidth costs, which are really expensive.

Right.

And so YouTube came along and said, you know what, you click a button, you upload stuff and we will pay for the hosting costs. And you can put, you can embed it. Their killer feature was you can embed it in your blog. They actually had. The first thing you saw on YouTube was these big HTML at the top that was like the embed codes, right? And they said, oh, and by the way, we'd like to also put it on YouTube.com no one comes here, but what the heck, why not? Right? Right. And so that was the strategy. And so all the people in the beginning used it as this sort of free video hosting thing to host on your blog. But then of course, over time, right, it was come for the tool. That's the tool, the free hosting, the single player, the network. Suddenly YouTube had all this great content. I'm not going to go to cdixon.org anymore I'm just going to go to YouTube and you know, fast forward. It's worth like Wall street analysts say $140 billion, probably more as part of Google. But they spent, you know, this. Why did Twitter and Facebook and all these gu. Tens of billions of dollars. A lot of it's subsidization. They spend tons and tons of money. What is a blockchain like? I think of it as sort of thesis, antithesis, synthesis. Thesis is protocol networks. Right. I mean you like these triangles like I do. The thesis is protocol networks. Antithesis is these what I call corporate networks, these kind of centralized networks. And then synthesis is blockchains. Right. Which is the best of both worlds. You get, you get the way I kind of characterize in the book. You get the societal benefits of protocol networks, but the competitive advantages of corporate networks.

Exactly.

You get the ability to do subsidization through toke tokens. You get the ability to store state right through the blockchain state. But you don't as part of that have four people in Palo Alto who get to decide the flow of global culture, business and economics. Which is the current state, which is the trade we make today with corporate networks. We've bizarrely, it's like as if AT and T got to decide who made phone calls and who gets to. And they get to take. Anytime you call somebody up, they get to take a bunch of the money.

And they're also asked to get in the middle of that and people want, want them to filter and so yeah, all this stuff. Yeah.

I mean, I don't care what your political views are like. The idea that we are going to outsource these incredibly important global communication systems to seemingly apparently arbitrary group. Like I just fundamentally against that idea. I think these.

I agree.

Decentralized community owned systems.

A couple of reactions or thoughts. So first is, you know, you had a good line a while back, which is every command line tool becomes an app. Right.

Like every UNIX command becomes a. Yeah, exactly right. So man becomes stack becomes stack overflow and.

And rsync is like Dropbox and grabbed his Google and.

Exactly right. Yeah.

So now, you know, one of the things I've thought is that you can revisit every protocol and then you say what does it look like when you can add global state?

Yep.

Right. So for example, what does BitTorrent look like with a blockchain? And for discovery so you don't have to go to Pirate Bay or whatever. There's 50 kinds of things like this where almost every protocol is a. Is Communicating with B. And so what does it look like? SCP with Discovery or SSH with Discovery? There's probably something interesting there in that space of things, right?

Yeah, I think you go both ways. You could start like I list some of them in the book, but they're. And I didn't do a bunch of research on this, but I mean there have been hundreds of serious attempts to create new protocols in the last 30 years. Everything from somewhat successful ones like Jabber and Secure Skull, but there was all these social attempts like Diaspora and there's a million status.net and there's 100 of them. So I think there's. And look like a lot of these things. There's probably a lot of good ideas. And as you say, because they were just limited, they had one arm tied behind their back because they couldn't keep the state and they didn't have money, they didn't have the protocol, had no funding. Right. I mean they could go and maybe raise a little venture capital or do this, but they couldn't. There was no. Like, the VCs wouldn't want to put a ton of money into an open protocol network because they're not going to get the prize at the end. The prize at the end of a Facebook is you control a network effect, right?

Yes.

If you're, if you're, if you're deliberately giving away the network effect to the community as you are in a protocol, why would the VCs put billions of dollars in?

It's actually important from another standpoint as well, which is one of the good consequences of all of that. You know, let's call it subsidization, build out and whatnot. Is the user interfaces for something like YouTube or Twitter or Facebook or what have you have actually now remained relatively Constant for about 10 years. Like, I mean, I'm not saying they don't add new features, but essentially it's kind of the same looking feed. Right. And why that's good is. Have you seen like the early history of like electrical power outlets? There was a lot of innovation until it settled on a few standardized. Yeah, yeah. Form factors. Right. And those form factors for like wall sockets, I mean, there's a few different. It's like Australians, Australia's model and like Britain's model and the US model. But there are just a few form factors in kind of the same way. I think of these sorts of feed formats as like form factors for our mind. You know, they just plug in, right. And they're sort of like natural fits like, like the Same with the handle of a cup. Is a natural fit. Once all of those billions of dollars have gone into just perfecting how Twitter looks, how how YouTube looks. Every new video site can copy YouTube's format basically, and then slightly innovate. We've now seen like 10 different twitters that basically copy Twitter's UX and swap out the community. And the other thing they can do is they can copy Twitter or, you know, YouTube's UX and swap out the backend. So that's actually something where a lot of web3things, I think are essentially taking the same user interface of Web2, adding balances and payments and adding global state. And now you actually have a transformatively new app like a. There's like Web3 WhatsApps, you know, that do this kind of thing now. You can have balances and other stuff. Go ahead.

No, I agree. I completely agree with you. Look, and I think, you know, I'm obviously somewhat critical of Web2 in some ways. I think there's also really strong things about it, and one of them is the user experience. Like, I think the Web2, WhatsApp, Facebook, Twitter are approaching the perfect or pinnacle of design and user experience. They've done a great job on that. Look, they've also done a great job just to give them all credit of getting free services to 5 billion people. I don't want to take that away. I think there's been a lot of positive things. And by the way, the other thing I'll just mention is I have a lot of friends at these companies. I think they're good people. My critique in the book is not of the people, it's of the system that inevitably leads to these kinds of issues. But I agree with you completely. I think that web3 needs feature parody at a minimum. With web2, it needs feature parity. And then it needs to have these advantages that benefit the users and the developers and the entrepreneurs through ownership.

I think that's right. And I think basically, you know, as you were also just saying in the early 2000s, the concept of free hosting, phenomenally easy to use interface, global reach, I mean, those were so many things all at once that were so transformative that Facebook and YouTube and Twitter and so on were giving people. And that was an absolutely amazing deal at the time. I mean, you know, one way I put it, you remember the Unabomber, you know, in the early 90s, right?

Yeah.

Okay, so Unabomber, he blew all these people up. But why did he blow these people up? He blew them up. So he could get an op ed in the Washington Post, in the New York Times. Okay, that's. How scared is that, right?

I don't know. Is that, is that actually what he did?

He wanted to get his manifesto out. That's literally, that's really. Why he did it. Right. So distribution was so scarce that he killed for the distribution. And so then distribution became so abundant that we kind of took it for, in like 20 years, 15 years. It became so abundant that we basically took for granted that you could tweet something out and anybody could see it anywhere in the world. It's actually a remarkable, remarkable shift.

Well, and by the way, that 5 billion people can do it and you can do it for, basically, I think it's $10 now is the going rate for a low end Android phone. And there were all these kind of talk about digital divide, et cetera in the 90s. Now the stat I heard recently is more people have access to the Internet than running water.

Right. It's more reliable.

Yeah. And it's just a remarkable thing, right, that anyone can plug in and participate and publish. And it's just amazing.

Right now the problem is screen time. It's too much time online, not enough.

Seven hours a day.

Coming back to what you were saying, and then let's go through the book and whatever. A couple of thoughts I've had and probably related to yours are that if you just take every web 2 app and you add a web 3 wallet that has a balance and that has the ability to do encrypted signing, you enable completely new things like a web 3 WhatsApp. You can now do, for example, pooling like crowdfunding within a WhatsApp group.

Right.

Like just in the same way you can just instantly attach a message or a video or something like that. So I'm seeing tools that do this or like, you know, Farcaster, which we, you know, we invest in, which is Dan, Dan Romero's thing. Now you have, you have Twitter, but you can have communities that are defined by like, you know, the crypto that they hold and they've got common interest. And so just taking those Web two things and adding Web three to them, I think, I think people are, are starting to see the value of that.

But let me come back, like, I would add to me, you just described one of the user facing kind of improvements. I think there's also like a very important developer facing improvement.

Yes.

Which is you take WhatsApp and you just, you can make, you can hack and make a different client, you can make A different interface, you can make a different, you can set up a different service that, you know, I don't know as a group chat thing, that it becomes this hackable Lego brick, which I think, look, if you look at the history, one of the case arguments I make in the book, if you look at the history of software development, there's kind of two great threads of software development. Like Eric Raymond calls it the cathedral and the bazaar. Right. It's the sort of the open movement of Unix. The web was open, obviously, Linux and the open source movement. And then there's sort of the Microsoft kind of the cathedral, the proprietary movement. And a lot of the history of the Internet of computing has been driven by these kind of decentralized communities of developers. I think I would argue the PC in many ways, you know, Wozniak and Jobs at the Homebrew Computer Club was sort of, I call it an outside in movement, a tech movement of kind of outsiders from the fringe. I think we've lived through this centralized era of sort of app store last 10 years. Everyone's got. And I believe people in tech have this kind of Stockholm syndrome where they're like, it's great to be controlled by this guy that takes all your money, right?

Yeah.

But when they get a taste of freedom, I think like, when they get a taste again of like, what does it mean for developers to be able to do what they want and not have to worry about getting rugged by the corporate overlords. I think that there will be, you know, this renaissance in, in kind of developer sort of hacking together these, you know, composable software. So I would just add to your point. Like, I think there's adding tokens and financial things, but I think there's also adding composability and developer features. And features.

It's like the Chinese, you know, the romance of three kingdoms. The empire long united must divide, long divided, must unite. Right. So the romance of the three webs, the technology long centralized, must decentralize. And then when it's decentralized, I mean.

I get accused a lot of like fanciful. I'm sure you do too, of like magical thinking fans. And then maybe. But like the other hand is like we're 30 years into something that's clearly as important as like the printing press and like.

Oh yeah.

Should we assume that the structure is locked in or that, you know, or that these historical forces, like you just said, of like the, you know, like the pendulum swing back and like, I think it will. I think we're very early in this development?

Oh, yeah, I think, I mean, basically what happens is, I don't think it's magical at all in the sense of if we go and just look at, you know, when any one of these gets too strong, then the other one, if you have a period of too much decentralization, then what happens is people want it to just work. Apple, an apple like thing to emerge where it all snaps together and they're willing to pay for that. And so amidst that anarchy, then one solution arises and then it becomes too powerful and then people want to decentralize and they want their freedom. And we've just seen like 10 cycles of that in computing from, you know, centralized, the centralized mainframes to personal computing to the cloud to, you know, local again to. And so on and so forth. Right.

I don't know if you followed this, but like the new thing social networks are doing now, so they've, they've moved from sort of all, you know, user growth and everything else to keeping you in the app the whole time. And so they've all now been punishing people for linking out.

Linking out, right? Yes.

So like you get, you know, if you put a link in your tweet, it will get demoted in terms of its reach. Right.

Like substack.

That's true.

The word that can't be said.

Well, you know, and like, what is, what is substack and Patreon, in a way. In a way what they are, right, is they're their escape hatches back to the open web. Right, Right. So like you, you put a link to substack and Substack of course is driven by email, Patreon by the Web. Those are web one protocols that don't charge you, you know, 100%, 90%, 30%, whatever, they charge you 0%. Now substack charges some fee on top. But the point is like it's, it flips the economics. Right. On Twitter you get nothing. On substack, you get 90% or Patreon, whatever. I don't know what the exact take rate on Patreon, but, but that's why they're devaluing the link. So I think you're going to see even more to your point of consolidation, I think you're about to see even more where there's a move to really, really keep people within one of five apps. And the occasional time that you click out and go to a website today, it's still a thing you do. And if you look at the data, it's still pretty common. People to use websites I think you're going to see further pushing back against that over the next couple of years to the point where, you know, I believe they'll overdo it and then there will be this counter movement. Right. As you described.

Right. And I think actually it's interesting because I think the Web1, Web2, Web3 also has some relevance to what you're saying there. Where Web1 is in a sense, another definition of it different, slightly different than the definition we've been using, is it's a web that Google can index, it's the web crawler accessible Web. And then Web2 is the social web, which is much better structured, but it lives on Facebook's database servers, it lives in Twitter databases, and they can SQL query it and they can get. It's much more clean than the open web, but it's much less accessible.

Right.

And then I actually think In a sense, Web3 also combines the best of both worlds because Block explorers are search engines. What's awesome about them is you just get all the updates pushed to you every, you know, block, and so you don't have to go and scrape and crawl a bunch of mess to find out what change. You get all the edits pushed to you. And it's really rich and so you can index it and so on. And it's open and it's public. So it's as structured as the Web two style databases. But it says open as a Web one style web. And so I think that's actually the new open web. And it's not a moment too soon because AI is making the old open web kind of under threat. Right. So these are two things that feedback on each other, you know.

Yeah, I was going to say AI has excelled. Like, so Reddit and Twitter just put greater restrictions on their API because they feel like these AI systems came and took their content and trained on them. And then like, look, Stack Overflow's traffic is way down because of Copilot. And yet Copilot was trained partly on Stack Overflow.

Right.

And so there's a sense in which these AI systems, like I'm pro AI, et cetera, et cetera, but there is this dynamic going on where these systems are essentially incentivizing further closing down of the web. By the way, if you're a graphic designer, do you want to still put your content on the open web or do you want to put it behind a paywall? I think we're going to see a move towards paywalls and siloization unless we figure out a good model for paying those people for keeping it open. And I think to your point, and I have a whole chapter on this at the end, I think blockchains not only do what you do, which is they commit to open systems, but they also provide business models.

Yes.

For creative people in an AI world. And that's important. You need a way to pay those people. I believe both sort of societally, but also to keep the Internet sustainable. Like you don't want an Internet where people don't want to put their stuff online. Like that's just not a good, good Internet.

Right, I agree with that. And I think what's interesting about it is like many of the things that AI is doing, crypto is like the counter force to it. Like for example, AI makes everything fake. Crypto is how you can make it real again. You know, with cryptographic signing, it's.

Yeah. Defect. It's the answer for deepfakes is the answer for counterfeit persons, is the answer for proof of personhood. Of course it is. Right. Like it's the only answer.

And you talk about this towards the end in, in chapter five and we'll come to that in a sec.

Yeah.

And then the. Another one is what you're just talking about. And we've, we've probably both, you know, we like I may have seen, invest in some of the same things. Attributability. Right. Micro NFTs allow artists to maybe, you know, if something is incorporated into a work, you can see that you get much more tracking and provenance on. On something if you, if you want to go that route.

And it's like how the offline world works, which is like you don't. Like an artist doesn't generally doesn't monetize through the photograph of a piece of art. They monetize through the authentic real piece of art and the photograph is just out there and they don't control that. Right. And so you have sort of a layer of. The layer that can be easily copied by technology is the free layer and the freemium, like the paid layer is the scarce layer. Right. By the way, video. I have some stuff on this in the book. The video game industry figured out this out a long time ago. It was a very interesting case study with. So video game industry has grown in annual revenue to 180 billion while all other forms of media have been flat to down in that.

Yeah, it's bigger than Hollywood. It flipped Hollywood a while back.

Significantly bigger. And like Grand Theft auto, the new want 6 or whatever it is, 56 will be bigger. Bigger than any Marvel movie. And, you know, it's. It's far bigger. And so, you know, why is that? I mean, there's a bunch of reasons, including graphics cards and just video games. Designers are great, but a big part of it is they were very. They essentially moved to what, like the dominant model now is a. Is free games with virtual goods, which are essentially NFTs. So you look at games like League of Legends and Fortnite, these are free games. And what they figured out was, look, you're not going to lock down the game. There's just a million people making games in the same way there's a million people making generative art and there's a million people writing stuff on social media. And news has become a commodity. The games industry said, look, the gameplay itself will be a commodity. Let's not fight that. Let's. Let's not try to fight the natural kind of pull of the Internet. Right? So let's let that be a commodity. Let's let it spread. By the way, streaming, that was very controversial in the beginning. Nintendo, actually, they could shut it down through copyright. Nintendo fought it in the beginning. Streaming came out in the late 2000s because they're like, it's cop. You're taking my content and copy. It's copyrighted.

Game streaming. Game streaming.

Sorry. Game streaming. Yeah. But then the game industry was very like, if you look at other industries, they fight it. Game industry finally was like, hey, this is good. The Net is, you know. And that led to twitch in attention. Yeah, but more attention is good. Let's monetize something else. And so then they said, let's lean into this. Let's let. The gameplay is going to be commoditized anyways. Let's make it free and let's monetize community. And of course, what. Virtual goods are our status signaling in the community. Right. But they're essentially monetizing the people and the status signaling within those. Within those communities.

It's actually good. It's actually good to push status signaling to virtual goods because it removes it from physical goods. And so then you decouple the dispensable online signaling from the. You know. Right.

Yeah. I mean, it's like it's the same behavior we see. I mean, does that Ferrari down the street actually worth $1 million or. It's probably $100,000 in car and $9,000 in status in brand. Right? I mean, yes. Almost every good you look at around anywhere you go is like a lot of it is status signaling. In the developed world. Right. I think similar stuff will move to the online world. And so, yeah, so in a world of abundant content where anyone can push a button and get any piece of text and any piece of art and a movie, you're just not going to probably monetize through the actual content. You're going to monetize through something else.

I think that's right. And so that actually brings to the title of your book. I mean, we're spending all this time online. One of the lines I've had for a while is ask people, how many hours a day are they looking at a screen? And then they'll say, six or something. I'm like, oh, so the majority of your waking hours are spent looking at a screen, which means most of the rest of your life is going to be in the matrix. Right. In some sense, Vision Pro and Oculus all make that real. Chris EARLY Oculus investor as well. And so you're living in these increasingly virtual worlds. We're spending a lot of time online. We're earning these digital tchotchkes, but we're not owning them. And so I think most people kind of understand what reading and writing on the Internet is. What does owning on the Internet mean? That third verb. What exactly does that mean?

Yeah, so I think, to go back to the kind of web, one example, like, you own your domain name, right? So you own that in the sense that, like, if I, you know, if I have my. If I'm hosting my website at Amazon or whatever, Rackspace, and they decide to jack up the prices, I can just leave, copy my files, and then I can redirect my domain name and I don't lose any of my followers, quote, unquote. Anyone can still send me an email. I'm still ranked in Google the same way. It all happens behind the scenes. And so imagine, just as this is one of many examples, but imagine a world where social networking worked that way and you had, I'm Dixon and I control that, and I choose, hey, I'm going to go and use this interface or that interface. But I own it now because I don't own it now. The most visible consequence of not owning my name, my social media name, is de platforming. Right? People talk about this of, you know, so and so was kicked off this network, and that's a real issue. But part of my point of my book is there's a lot of very common, subtler effects of not owning your name and not owning your digital presence, including, you know, the fact that at a whim, they can Change the way ranking works, right? So like hey now, now, substack links are, are demoted. And the fact that probably the most consequential in my mind that's overlooked is the fact that they control everything means they control the economics. And so, you know, every social network outside of YouTube makes money through advertising and has a basically effectively 0% revenue share with the users. So you know, you go to Instagram, you go to TikTok, you're not going for the Instagram and TikTok created content, you're going for the users. Right? And those users are outside of these little like kind of, you know, de minimis sub 1% of revenue creator funds that some of them create. Like, it's just really, just not material. They don't share revenue with the creators. And so the creators, I have a bunch of creator friends and they're off trying to do these weird sponsorships and they're selling, you know, you know, body lotion and doing other kinds of things because they can't get paid on the Internet. And the One exception being YouTube, which, which is pretty generous. It's like, you know, close to 50% of rev share. And that's, that's great. And YouTube, that's for historical reasons. There's a bunch of reasons why. But all the other social networks don't do that. So that's one.

What is a circle of reason on that? Actually? I don't know, is it because of adsense or something?

No, I have it in the book. Because they were competing. It was a competitive thing. There were other, there were other. I have a little thing about it in the, in the footnotes. But the, there were some other services out there that were, that were, that were giving out Rev shares and they just had to do it as a competitive thing. So it was just kind of video at that point for whatever reason. Like the entrepreneurs were viewing it more as like a marketplace because remember how social networking started, right? It was, it was not user created con. Like Facebook was just literally profiles. Right?

Right.

And then people started changing their profiles and then people started looking for the changes to the profiles. And then Facebook.

And then he saw the newsfeed was.

An emergency and then he created the newsfeed, which was just sort of the list of deltas, the diffs. Right. It was a, it was a grep of diffs. And that freaked out, by the way, for those who don't know, that was the most controversial thing in history of the Internet. Zuck doing that. And so, and so Facebook just kind of evolved much More like it was a profile system. And why would you share revenue? Whereas YouTube very much started off as like, this is a marketplace like Airbnb, right? And that we have a take rate and that was how all these video sites started. And you had to have a. So it's kind of a historical legacy mindset thing that they have a take rate that they share, but TikTok doesn't, for example. So, so anyway, so what does ownership mean? It's essentially that, you know, that users, developers, all the kind of participants, entrepreneurs have digital rights. Like you, you, you know, you use a service, you, you can own a name, you can own your money, you can own a virtual good, you can own an nft, you can own like some kind of item, like embodied in a token. A token is a way to kind of encapsulate ownership that gives you rights that can't be taken away. And that's one of the key things a blockchain enables, is a blockchain can make these strong commitments. It says once you own this, you really own it. And even though you're using this service, they can't remove it from you, right? So it's like, look, we're used to this concept in the offline world, like it's property rights, right? In the, imagine a world where instead of you owning your house and your car, every venue you went to, you had to go and get a new set of clothes and you leave and they own it. That's the Internet today. It's a very strange world that evolved and we're all kind of, I think, kind of, you know, numbed into thinking is normal, but it's not normal. It's not the way that something you spend seven hours a day should work. You should have the same kind of property rights that you do in the office. By the way, you don't own the Kindle book on your phone. You don't, you know that like they, they remove those things all the time, music disappears, like all these things. And like, what's your what, what commitment do these services give you? They give you a 50 page terms of Service privacy policy which nobody reads, no one negotiates. They can do whatever they want with their data. So you're just going to these services and giving them all of your data, all of the rights, all of the control, all the economics and the users and all the other participants just have no power and are disenfranchised. And the alternative web3vision is one where you actually have real kind of rights and you control data and you Control economics. And you can have money where you are in control and you don't have to. PayPal decides to change page 40 of their 80 page privacy policy. And you're, and you know, this line of businesses or this, this category of businesses are now banned. Like, is that the kind of Internet that we want to live in? I mean, I'm all for rule of law. And like we should have obviously, like with the web and email, there were laws govern it. You can't put up a website that does illegal stuff. You know, you get, you go to jail. And that's the way it should be. But we don't have a separate tribunal. That's a bunch of other people that aren't legally enforced that decide things. Right. We rely on democracy and that's what we should do. I think with other digital systems.

You know, I had this concept in 2018, this talk, I probably should have made it public, this talk at Coinbase on the nouns and the verbs. Yeah, you know, it's like, like miners and stakers and, and so on holders and the verbs buy, sell, send, receive, but also like mint, burn, et cetera. And one that we were just talking about is switch. And one, one issue currently with these Web2 services is your practical alternative is really just take it or leave it. Either you take this huge terms of service thing which you, you, you, you can't redline it and send it back and can, you know, you have no negotiating leverage as an individual or you just accept it in toto. But with, you know, Web3 profiles. And this is already true for crypto exchanges to some extent. You can just withdraw all of your funds or all of your assets and then move to a different exchange. So we know that already works at the asset level and it's starting to work at the username level with ENS where you can take your entire profile out and then bring it into another site. And so technology changes, microeconomic leverage. Right. And so that's, that's exactly what you're talking about where it's giving the individual more leverage against a giant company that otherwise, you know, everybody, they don't actually have a real option beyond just clicking yes in the terms of service. Now they do.

Yeah. Both users and creators. So example, TikTok, what happened is, you know, they kind of rose up in the last three years and, and a bunch of creators got to like 100 million followers. Like there was, it was driven by like 10 big, 10 big kind of influencers on TikTok. And then TikTok is. Yeah, the D' Amelios and a bunch of others.

KB LAME and so on.

Yeah.

Okay.

And so it was very power law, right? As. As a lot of things are. But then TikTok's like, we don't want to be dependent on these 10 because then they can go and negotiate. So they deliberately then turn the dial down on those 10 and turn the dial up on a bunch of new people so that what they want is 10,000 people with a million followers, not 10 people. Right. Because it's, it's. This is too constant. This is Porter's five forces. This is too much supplier power. But all the social networks are constantly doing this. They're constantly turning the dials. They're, you know, they're. And by the way, a lot of this is happening now through AI. And it's not some malicious thing. It's just profit maximization.

I'm not against them doing that. What I am against is when there isn't leverage on the other side as well.

Yeah, that's what I'm saying is because there's no leverage on the other side. These guys can't, like, look, you know, they can't switch, they can't leave. Like their entire thing is dependent on TikTok. And so there's no. Yeah, I'm not like, I'm for a free market and the company should do what they want. The problem is they're doing what they want with the strongest force in the history of business, namely network effects, giving them unlimited power over their dominion. Right, right. The network effects. Like, I'm all for businesses competing, but look how web hosts compete. They compete on features, service, price. AWS competes in my mind on good things. Right. It's like they're fighting Google and other web hosting providers through features and pricing and just all the things and they still make profits. And that's great, but they don't have, like AWS doesn't have lock in like you're hosting your website there because of network effects. Right. And network effects are just such a powerful lock in force that if you don't have a counterbalance like digital ownership for users, you just end up with these, I think what we have now, these five monopolies who run roughshod over everybody.

It is, it's definitely a pain to withdraw from aws, but it is also something where they know their customers are developers and developers, there's always new dev tools and stuff coming up.

So like they know you can. And then therefore they can't fuck, they can't fuck with you too. Much they're just not going to do it. I mean.

That's right. That's right.

And they know you'll pay some premium for convenience. But it's just, it's very different to have your moat, you know, Warren Buffett style moat be scale and quality and scope and all the kind of traditional moats. Network effects are just a very, are just in some ways an op moat. Right, right. Like it's just, it's just really, really powerful. And the only really counterbalance, I think credible counterbalance is to let users like to your point have new verbs. And switch would be a key verb there.

So you know, towards that end. Right. Like basically now let's say they've, they have the own of rewrite own. They've got their private keys locally.

Right.

That is interesting because own can be individual ownership, it can be developer ownership, it's community ownership, it's algorithmic ownership. Like an algorithm can now own property. Even a robot, like a physical robot can, you know, have ownership. So you know, talk about that. You touch on each of these things in the book. Right.

I have a section about machine to machine payments as an example that like.

Right, that's one thing. But basically like you have the community ownership where a crowd can buy things like you know, these. We just talked about how an individual who's dealing with a corporation now gets microeconomic leverage. They can get better negotiating power but you can now actually have a group of people that all move at once, for example. Right. Or you can have an algorithm. You know, go ahead.

Well, yeah, I guess another way to frame it maybe is there's like the way I like to think of it is when new computing platforms come along and I, I think of a blockchain as a computer. And I, and I know that's slightly controversial statement. I just when I say computer I mean ledger to me is not strong enough because ledger to me implies it's the hard drive where it's also the processor. It's both the nouns on the verbs. Right. So that's why I like to use computer because it's even stronger than ledger. Right. It's a. Because you can pro. Modern blockchains like Ethereum are fully, you know, semi turing complete programmable computers.

It's actually.

Yeah.

So what you're saying, I mean in fact just to compliment what you're saying is I think that they're like the third operating system because you had the operating system, you had the web browser, which is OS of web 2 and the blockchain is OS of web 3 because you have a developer environment, you have a compiler and you have all this stuff, right.

When you have new computing movements come along, like when you sort of look at it historically, and I go through some of this in the book is you generally have what I call skeuomorphic and native applications. And so skeuomorphic applications are kind of basically taking older existing applications and layering on kind of new functionality, new Web3 functionality. So it's a little bit what you were describing earlier. Like you take WhatsApp, you take messaging, but now you kind of reimagine it with. Once the users and developers and creators can have digital ownership. Right. There's a second category of. And so like YouTube is a good example. Kind of going back to 2005, there was a whole wave of video startups then venture backed video startups in 2005 because that was the moment where broadband had sort of crossed over narrowband in terms of penetration and everyone realized video was going to be a thing. Right. And there were broadly two approaches to doing video. One was take CBS and NFL and all these existing TV content and kind of port it over to the Internet. And the other was just put up a website and anyone can upload and it's, you know, and basically the bet. YouTube was of course YouTube. But YouTube was making in some sense was crazy because it was like there is no one doing that today. There are no video creators on the Internet.

The closest analog was like America's Funniest Home Videos or something.

Yeah, exactly. And you ask YouTube at the time, it's sort of a little bit like. I remember the Stripe founder said this too when they were raising money initially. Who are your customers? They said they don't exist yet. Right. Like who, who are your. Who's going to put video on there? They don't exist yet. Right. But that. So YouTube was the native video. Right. And the, and the ones that were doing like the CBS content like Bright Cove and stuff, that was, that was a skeuomorphic video. Right. So I think it's similar with blockchains. And by the way, I think skeuomorphic and native are both valuable. So I'm not, I'm not saying one's better.

There are two different turns in the idea maze, you know. Right. Like Netflix and First Party content also did really well and it just turned out to be a different branch.

Both can succeed. Right. And so I think that there will be sort of web3 social networks, web3 games, but then there'll also be these crazy new things that just couldn't exist before. And like one example I like is what I call collaborative story, people call collaborative storytelling. And so this is an idea that a crowd of people kind of Wikipedia style can get together and essentially do what Hollywood does today. They can get together and 1000 people all over the world get together and create the next Marvels, the next Harry Potter, the next Star Wars. So today you have these really excited fan communities if you go read Reddit and things, but they're just sort of passive observers and they're like, wouldn't it be cool if Obi Wan did this? Or whatever they say. But they're really enthusiastic. Now imagine if you actually had these fan created communities and then those, those creators were rewarded with tokens for their kind of proportional to their contribution. And then what's really cool is that they would then if you think about the power of meme coins like Dogecoin, you have these armies of people out evangelizing these coins. In the case of Dogecoin, it's kind of the silly meaningless coin. But now imagine it's sort of this Harry Potter universe, right? And they're out evangelizing it. And that's a very important thing because why is Hollywood stuck in a rut where everything's a sequel? It's stuck in a rut because it costs hundreds of millions of dollars to go market a new narrative world. So what if these communities, it both sort of opens the gateway, allows anyone to become, you know, it sort of globalizes and decentralizes Hollywood and solves the marketing problem of Hollywood because you have these organic communities who can just go out and evangelize it. Right? I love that idea. It's a really cool idea. We made a few investments. It's still early and like no one has proven it yet, but that's the kind of thing where you just have a brand new behavior that to your point, is sort of a crowd coming together. By the way, could some of those participants be machines? Why not? My view is if a machine is in all of these systems, there's no reason a machine shouldn't be. An AI shouldn't be part of that system. And if the AI is, you already have this on Wikipedia to some extent. You have bots that go fix commas and stuff like this, you know, like so like it's like if you look at a typical page on Wikipedia, like you know, on the planet Jupiter or something, there'll be some couple of astronomy aficionados who are editing it, but then there's like the comma guy and the, you know, and the, the split infinitive guy. And like there's a whole bunch of other people coming and messing with it. And I think a similar thing here with storytelling. You may have AIs that come in and say, I think that's a, you know, you should add a little more flourish to the third act. Or I don't know what they're going to do. Right. And if they're doing a good job, they should get paid. And then you can have like, like, you know, some programmer somewhere who's like, you know, prompt engineering and AI, who's then participating in some economic system and you know, and like, why not, right?

So it's funny because I, I have thought about this a lot from a slightly different angle, which is the class of tasks that you can improve crowdsourcing with with crypto online. So storytelling is one. There was something called the, it was like the Massively Math project or something like that where Terence Tao posted an unsolved problem and had his comment section try to go to work on it in math and they were able to make progress on it.

I'm not a math person, but my understanding is math overflow, Stack overflows, Math Thing is a very active and successful site. And so a lot of it is crowdsource math. I mean, crowd. Yeah.

The big thing I've been thinking about is something where right now crowdsourcing is low skill activities like a mechanic, mechanical turk, and something I've thought about for many years. And actually, you know, I've done iterations on this theme. Imagine if, for example, Elon could tweet out a task and limit it to that percentage of his user base that actually was qualified in rocket science and attach 10,000 bucks to it.

Right?

And so that would work if they had a crypto resume and they had like NFTs in there that proved that they had that skill, then it's kind of like, you know, the limit who can reply to this. You could limit it to those people, right? So that's kind of, you know, the version of that here would be, okay, here's all these people who are actually good writers and you source these 30, right.

Users would have what you're describing. Like they'd have sort of public NFT credentials. They'd probably also have private data that they could then choose to share with select providers, right? So all of these things would be, you know, you basically have this massive unlock of new applications you could create like the one you're describing, where the Elon is selectively crowdsourcing if you.

Maybe Elon isn't the guy, maybe he's not the guy, but it might be something like that where now you can. Because crypto helps another way. You can give small payments and all the kind of stuff.

I like to call it the missing primitives. Like I think of it as. Yes, one of the. It's wonderful that the Internet was sort of created in this bottoms up, open source way, but as one of the byproducts of that there were just kind of missing pieces. And like payments was one of the missing piece. Like search, index control, digital identity. Yeah, yep. Reputation systems were missing. And so. And what happens is if you don't step in and fill it with a public good, it gets filled with a private good. So like, in some ways Google, there was a gap which was we needed a reputation system for websites and. No. And it wasn't part of the open Internet. And so Google made that a private good and made, you know, a boatload of money off of that trillion dollars. Yep. And the same thing's going to happen with like all these systems. Like proof of person, like captchas don't work anymore. How are you going to prove your person. How are you going to prove like, you know, looking at the text of an email is not going to work anymore for detecting if something is phishing, listening to an audio, you know, that sounds like your voice. That's not going to work anymore. Right. That all of this stuff is going away very quickly. And so in that world, like, how do we fill the gap where we prove things are real? And I think that's. Look, I think the gap. My view is the gap's going to get filled. It's either going to get filled by like a company like Facebook or it's going to be filled by a public good, like a shared community service that's part of the open Internet. And that's like kind of one of the key questions right now is we need to build those things now before they get subsumed by these companies, because it will get filled in some way. Like it's not. The world's not going to let it be the case that you just, you know, get phished all the time. Right.

So I think that's right. And I think basically the crypto version is going to be a lot more secure. You know, there's, there's a chapter five that you wrote. There's, there's a lot that you're excited about in the next 10 years of crypto. And it's not just Crypto, it's becoming, it's. Now crypto is like a primitive that we can use for things. It's global state. It's, it's. It's signed messages, it's micropayments. It's all of this kind of stuff. What, what do you think is. Is. Is exciting to you? What, what kinds of things?

Yeah, and just if I can make one note about the book for the, for the listeners, is that I wrote the book. Although it's a book and it's meant to be read beginning to end. It's all chunked into three to four page chunks. And so what biology is describing is you can jump around, like, if you're an expert, you can jump to like the last part. Five is seven application areas that I picked just to, like, kind of. Because a lot of the critics will say, like, what problems does blockchain solve? Right now, of course, blockchain is a better way to build networks. It's like a building material. It's more like it's like asking, what problem does steel solve? Like, steel doesn't really solve a problem. It just makes it so you can build better buildings and unlocks new possibilities. It's just like a better building material. But I wanted to go really specific into some areas. So I talk about social networking because it's just such a big important category. I talk about finance, defi, Bitcoin payments. I talk about the thing I just described, the collaborative storytelling. I talk about AI. Well, specifically around AI, it's a little bit we were talking about with paywalls. But the Internet has operated on this implicit economic covenant between distribution, namely search engines and social networks and content like websites, you know, media sites, et cetera. Right? And the, and the implicit covenant is that like Google, the website says Google, you're allowed to index me, you're allowed to use a snippet on your page, but you got to send me some traffic back, right? You know, like, like I was on the board of Stack Overflow. And like one of the biggest fears you have as a content site is that you get one box, right? And so one boxing is when Google takes your content and just shows it without linking back, because suddenly your traffic drops off overnight. And so, you know, in the world of AI, you're going to have, it's. You're going to have these systems that you just say, tell me 10 restaurants to go to in New York. And it just gives you the answer and doesn't link. And that's how a lot of these systems work today. And even if they do link, why would you click through? Because you get the answer. And so what's the new economic covenant in that world? And that's. So that's one chapter of like, how do we, and this. How do we rethink business models for media, creative people, anyone? Putting content on the Internet in a world where you have infinite content generation and distributed search systems that just give you the answer. Right. And so you know that that needs to be rethought. I talk about sort of Metaverse and video games. Metaverse is one of these, you know, kind of jargony words.

Yeah. But you know what, it's. It's real. I mean, like, that's a funny thing. Both crypto and the Metaverse were kind of in the trough when you started work on this, and now with Vision Pro and Bitcoin etf, just around the.

Time of, I think, Metaverse. I mean, whether you call it Metaverse, Apple's calling it spatial computing.

Of course it's real. It's like all this time online. Of course it is.

No, no, it's. It's very real. And look, it's also like there's sort of two ways to look at it. There's the extreme thing of like Apple's Vision Pro, and then there's sort of this other thing which is this gradual immersive, greater, greater immersion of virtual experiences. So games, the graphics are getting better and better. People are spending more and more time. They're becoming more social, the worlds are becoming more persistent. It's becoming more like real life. And there's a question of like, in that world where most experiences 20 years from now. I think it's pretty credible to think a lot of Internet experiences are three dimensional experiences. It doesn't mean you always have a headset on, but they're in 3D worlds. How is that 3D spatial world organized? Is it organized like social networks today where five companies control everything? Or is it more like the open web where it's like a bunch of little areas that are all linked together in an open system and anyone can set up a storefront or, you know, content site or make a micro game or whatever it might be? And I think that's a critical question and it's interesting. I have a. I talk about it because Tim Sweeney, the founder of Epic and Fortnite, has a great podcast. I cite the podcast. It's in my endnotes on how to have an open Metaverse. Right. And he's using a lot of kind of web protocols and other things. And he actually is pro blockchain, which is somewhat unusual for the games folks, which is nice, but like, you know, how would we build? I think now would be the time we, if, if we open technology. Internet people want this to happen. Now is the time to start thinking about these standards and protocols and things. Because it's going to. The way tech works is like Hemingway, how'd you go bankrupt? Gradually. Then suddenly this is how these things are going to work. It's going to be like, oh, gradually the metaverse, it seems bigger and then one day, boom, it's happening. And we better be ready with the right standards and protocols if we want to see these new worlds be open or be open systems a la the web and not closed Systems a la Web. 2. So there's a whole bunch of, you know, like you and I just have one chapter on finance, but that's its own, you know, defi and everything is its own huge topic. So I think the, the broader implications are profound. I tried to keep the book manageable.

And readable, but it's good, it's good that you covered. I mean, there's obviously a lot of folks who have, I shouldn't say written. There's a lot of folks, they haven't written book length treatments, but there's a lot of coverage of the financial aspects of crypto. So I feel like it's good that you got into the technological aspects and, you know, kind of like me getting into the political aspects or what have you. Kind of, kind of a different lens, you know. Awesome. All right, so book comes out January 30th.

Yeah, January 30th.

Yep. Anything, any Easter eggs? There's the NFT thing, right. The COVID the NFT thing.

And actually I have a. I won't sell the whole thing, but there's. I'm doing some AI stuff around the book too, that I'll be releasing. It'll be some, some interesting tools. I hope people, you know, if they have a chance to read it, I might. My, my intention is to. Any good faith counter arguments, which I'm sure there are good faith, smart counter arguments. My intention is to kind of in long form respond to any of those. So I would love to see. I'm sure I'm not right about everything. I think I'm. I believe I'm mostly right, but I'm sure there are things I overlooked or, you know, critiques that can be made and I'm looking forward to that, you know, having that discussion. Look, I think part of why I wrote a book is I just think all the dunking on Twitter people dunk on me. It's ad hominem, it's appeals to authority. Like, I just would like to see, I don't know, I just would like to see the tech discussion elevated.

Sure.

And whether it's, you know, this topic or AI or whatever it might be and just have, like, these are. And this. Actually, we didn't really talk about the policy side, but if I could just briefly the.

Sure. Of course.

I think part of it is, you know, like, to me, the right way to do, to think about tech policy, whether it's AI or crypto, is, let's go examine what is this thing? Like, what is a blockchain and what is it useful for? And like any technology, you can use a hammer to destroy or to build nitrogen can be explosives or it can be fertilizer. Right. Like nuclear can be free clean energy, or it can be bombs, AI can create bioweapons, or it can enable a new golden age of creativity. Right. Crypto can empower users and shift power of the Internet back to the edges. Or it can be a gambling casino like ftx. Right. And so a smart policy view, I think instead of having the Twitter dunks and sort of everybody taking a side in this sort of food fight and oh, they're on the other side, let's fight them, why don't we go and really look at the technology, look at the. What is the actual kind of good case? And that's what I try to write on. I try to make the best case of like, what is the productive, positive use cases for blockchain? Right. We've seen the negative use cases, like we've read, we read about them in the news all the time. And now here's the positive, positive side. And in my view, the right policy approach would be then to say, how do we design a policy that maximizes the good and minimizes the bad as opposed to what's happening now, which I think is very reactive and very emotionally charged.

Right.

People are like, they're on the other team. Crypto people are on the other team. Therefore, let's dunk on them. Let's hate them, let's ban them, let's take laws from 100 years ago and use them to take them to court. Right. And is that, is that what a smart country that wants to get ahead of the future and design a policy should be doing? Or should it be doing what I would describe as more proactive and AI? Look, there's these very interesting questions of how do you balance? Obviously, we want AI to progress, but we also want creators to get paid. That's going to probably play out in the next five to ten years over the New York Times OpenAI lawsuit. It's going to be a series of lawsuits. You're going to have people reading laws from 200 years ago. And like, is there something implicit in 200 years ago laws about how you should treat copyright and AI? Like, I don't think so. Like, I mean, I'm sure you'll have some judgment or ruling, but in the end, is that the right way to do policy? Shouldn't we be saying what's good about this and how do we maximize the good and minimize the bad? Like, and let's have like a intelligent, honest conversation. Like, that's what I'm trying to begin. And I'm trying to commit myself going forward to do that and not dunk and not Right. And so I just say to your listeners, if anyone reads it and wants to respond, like, I'll be active on, you know, Twitter and things and blogging and I would love to have a discussion about.

Awesome. And Chris is actually quite responsive and smart and interesting on twitter. X x sorry. Xx.com right.

Yeah, but hard, hard to switch. Hard to switch the name.

Yeah, I will definitely get, and I will recommend read, write on to anybody who is just trying to figure out what this thing is in 2024. And that's, that's actually a lot of people. So it's a, it's an amazing thing to just kind of checkpoint and say, here's where the whole space is as of right now. It's a great thing to give out to all your employees or something like that.

Awesome. Thank. Thank you. Balaji.