#24: Josh Rosenthal, PhD - are we living in another Renaissance?

Good, good. I'm excited to have this conversation. I mean, you seem to be one of the most fascinating minds in crypto right now. Bankless is hyping you up like crazy for the July 4th podcast. It's super exciting.

Yeah, thanks. No, the Bankless guys are great. They do a good job, not just of crypto and protocol or thinking about it in terms of currency, but they're almost like cultural anthropologists and they're moonlighting 100%.

I really enjoy them and how much they understand the value of memes. They really get that.

So yeah, yeah. And I listened, I enjoyed your episode with Justin Murphy too. That was great.

Yeah, for sure. For sure. So if it's cool, let's just hop right into this. I'm really curious. I've had similar feelings, but why do you think we're in a bit of a digital crypto renaissance or just even a renaissance of sorts?

[Speaker:JASON_LEVIN] Yeah. Yeah. I mean, it definitely sounds like a crazy claim to make, but I think if you look at crypto through historical lenses, probably the best way to describe it is as a renaissance, not even a digital renaissance, but just like a fundamental renaissance, a recreation of society at every conceivable level. And kind of the the threads that I've tended to pull on in terms of history. I tend to look at complex systems or transformations between one structure to another by pulling on these threads of value and communication and identity, and I mean, the core question kind of gets down to what drives history, and different people have, you know, different ideas. They're all models, none of them are— you can't confuse the model with the thing itself, but every model has, you know, it issues and breaks down, but you're using it as like an explanatory rubric. And so this idea of Renaissance, a recreation, you know, kind of gets into history. And I see history as, is not just like conflict over means of production or great men having ideas and then people acting on them, but fundamentally as communities, you know, making history. And they tend to do so through technologies. And those technologies work along, you know, different lines for coordination. One would be value. How do you share money, share value? Incentivize others to do things. Another would be communication. How do you share an idea or a concept, either to do something or just even what people haven't thought of as possible at the time? And then finally, identity. You know, how do you— what do those two things fuse to form? How do you relate to others, and also how do you choose to perceive yourself and express that or retract that in different contexts? And so when I look at today, you know, I kind of see history ticking and talking as this pendulum. Between aggregation and decentralization. Maybe it just goes back and forth, or maybe it ratchets up like thesis, antithesis, synthesis. But regardless of how you frame it, the Middle Ages and what we call the Renaissance, or this recreation of, you know, the medieval society into the modern society— so Renaissance literally means rebirth, and what that meant was that medieval society was recreated as what we'd call a modern society. The period's actually, you know, early modern, you know, studies. And so kind of the society society we have. And so what was the nature of that transformation or rebirth? And it was communities using new types of technologies. One was around value and one was around communication. And they used those to fundamentally kind of recreate identity in ways that they couldn't have imagined previously. So the Middle Ages were fundamentally hierarchical and permissioned. And in terms of value, a very small percentage of people owned a very— or estates owned a great percentage of wealth, it was permissioned in terms of what you could do, how you could create value, what the value was, whether you had access to it, how you could spend money, things like that. The same thing with communication. It was very limited, not just in terms of literacy, but even an idea of creating and sharing ideas at scale, partially because it was manuscript technology and you'd have to hand copy things, which took a while. You'd do that in a location, which was proxied by power. You might not have access to get into those places or to get into those places that stored those documents or interpreted those documents. And then finally, your identity was, I mean, most of it was agricultural. If you don't like the word farmer, just think about it in terms of laboring for others. And that was primarily, you know, how you conceived of your world. That was your parents and their parents and their parents and their parents and their parents and their parents and their parents and about 4 more sets of those. And so if you had a new idea or wanted to change something, it probably wouldn't have occurred to you, but also it would have been very difficult to disseminate at speed. So there are little bubbling up, you know, attempts to recreate that hierarchical society, but they're always smashed down violently, partially because communities couldn't coordinate effectively. They couldn't share value to incentivize one another to open up different possibilities, nor could they share ideas at scale with speed. And so in the Renaissance, you call it Renaissance Reformation studies, you had the advent of double-entry bookkeeping, which had been around for a while in different areas globally, but really took off on the scene. And that meant debit and credit. And so that was essentially recreating financial primitives at scale and gave you access to capital. Historians will talk about that as the birth of modern or proto-capitalism. So you could do other things that essentially unlocked currency. It was a sandbox for them, a giant sandbox. The same thing with communication, what we call the printing press, and we tend to think of it in terms of like long disputations or texts or books, but most of it was really memes and images. The press could copy something, and so if you had to set type, you know, that took a while, and everyone might not be able to read with that level of, of, of, you know, literacy. It was far easier to actually set type through an image, so they'd carve out a woodblock or, you know, they'd etch a piece of copper and it would have an image, and then they would print that, and maybe they did some text on it, you know, huge font, kind of snappy taglines. And so those ideas basically were radical, not just in the nature that you could communicate something different, but the content, the semiotic load, the stuff they were talking about was radical, where your medieval world was hierarchical, you know, cosmically hierarchical, you can say church and state, historians will quibble with those words, but like power was centralized and you had a place in it, and it was safe and secure. The crazy thing is it wouldn't have occurred to like medieval you that you were permissioned at every level. It was like the air you breathe. It just wouldn't have occurred to you that there could have been something else. And so now with this communication, they were showing, you know, different possibilities that that hierarchical world was perhaps illegitimate and fundamentally illegitimate in certain ways, and that you could— there could be other worlds which are organized in different ways. And so that was just completely completely radical. And so people joined, essentially Luther, like Satoshi, split their world in the hierarchy, they forked it. And once you fork something, you can fork it again and again and again. So now you have different systems of power and authority and money and communication and different communities organizing for different goals, and you could actually choose. So the locus— medieval you was assigned an identity, Renaissance you could choose. And so now you have experiments and pluralism and how you're going to have different communities and political parties, you know, not just coexisting like on a VW bumper sticker, but how they would relate to one another and exercise governance. And so you have this massive recreation of society at every conceivable level. And so when I look today, I say, hey, you know, value, communication, and identity. Value, most of it is absolutely hierarchical and concentrated, and we tend not to think about it that way, but it really is. Communication, like the tools of communication, it's digital, so we have the internet, which allows you to publish, but that's kind of a false fork where ownership was divorced from publishing, and so, you know, you are subject to permission communication. You can not only get deplatformed, they can cut the cord, or in more sophisticated senses, they can shift the algorithm subtly, you know, with shadows and kind of medieval alchemy and only show you certain pieces and allow your communication only to hit other pieces, other people in other communities. So they're in control. You're going through these medieval mediators. Mediators around that. And so with crypto, I look and say, hey, here's decentralization again, in terms of value, which removes the need for these mediators. You can use them if you want to, but now you don't have to. And the same thing with communication, which is, you put these two things together, I think we start seeing, we have the tools for this recreation of society at scale. And again, this kind of pluralism construct, like, you know, flourishing out, we're seeing different experiments in governance that we couldn't have imagined. People talk about crypto in terms of just kind of spot stock trading, maybe a little bit of art, but if it follows the same pathway, it kind of goes along, you know, it starts in finance, these revolutions, because that's the most valuable. And then you move into art and identity. Are you going to choose to adhere to it? Who are you going to work with? And then you move into kind of coordination work and economic structures, not corporation this time, but maybe DAOs and things like that. Then into education, proof of not just attendance, but experience or expertise. And then finally into like crypto acting as a business model itself, not just for synthetic things, but for, uh, for things in the real world, like largely, you know, uh, instantiated through property rights and through contracts. And so when political theorists talk about, you know, nations, they say, hey, they're imagined communities instantiated by currency and contract. And so that's literally what we have going on in crypto. Um, and this sounds kind of obvious because you're in the middle of it. You're like, hey, ledgers, I get that. And Web3, that makes sense. Maybe, you know, Fang shouldn't own what I do. And identity, I can choose to not just have fiscal or social conservatism or liberalism, but there's this new Z-axis of self-sovereignty and how I work in community with other people. And maybe we can even pay for public goods and different things along those lines. Those are all the tools that we saw at the last kind of ticking and talking, we're now seeing literally as we speak. And I guess the only other thing I should say is that when we look back, when most people think of history, you think it's something static and you know the results, right? You call it a Renaissance because after the fact you can say, oh, everything was recreated, and that makes sense. And we kind of assume that there is a smooth transition, or we assume that it was always going to end up that way. But at the time, the participants, they didn't know that. It was super volatile. Their world was ending. It was literally being recreated. And so, excuse me, this idea of volatility and chaos at these fundamental structural transformations, that's kind of what tends to happen. That's a leading indicator that it's fundamentally meaningful in a structural sense. And so again, we see crypto, super volatile, and all that kind of like fits this pattern that we've seen historically previously. There's other lenses you can use to look at, but fundamentally I'd say communities now have technologies for social coordination, from value and communication, and, you know, they can use to recreate identity in a variety of ways where they control the sovereignty around that. So if it plays out— like, there are dozens of renaissances before the last one, it's just that the last one, like, worked, basically. It was so successful that it eclipsed all the others. And so now when we say Renaissance, we think about that last one. If this follows this pattern, I think, as crazy as it sounds, when future historians say Renaissance, they won't mean, you know, 15th century Florence. They'll mean like right here, right now, today, which is, which is pretty wild. Like, even back to your point on the digital piece, like, we've only had digitalization, which lets you do things at scale, for 50 years, maybe, in a meaningful way. It's like That's a little tick. And so now we're rectifying that and tying ownership and contract rights, property rights on it, instead of just currency, which is something new to this Renaissance. So you put all those things together, and if it follows the pattern, I would strongly predict that there's at least a good plausibility of it literally recreating our society in such a way that we'll say this is a Renaissance, and we won't even talk about it in terms of crypto anymore.

Yeah, long answer, but it makes sense. And you hit on so many things that I find are really important. You know, the idea of looking at things from the lens of value, communications, identity. I didn't really think about that, but— or think about that, but I have thought about it. You know, I didn't put it in those words, but it makes sense. You know, the other day I tweeted that, you know, we started digital identities the second we chose usernames. And what was that, years ago I chose my first email address or my username or whatever. And then the idea of the printing press opening up so many doors, it's just like minting an NFT in a way or uploading a meme onto Twitter or whatever. And it opens up this whole network effects of media and information and the traveling. And I love that idea of Luther and and forking society. That's really brilliant. And then algorithms as medieval alchemy, man, that hits. All this stuff that people didn't understand back then in biology and chemistry and everything. And most people like myself, we understand algorithms to some degree and we understand that they're responsible for our social media feeds, but we don't actually know how they work. They're an order of operations, but we don't know the black magic going on in the black box and, and, uh, you know, the social media feeds. And, and companies have power just like churches have power. And so I guess, uh, the next question I want to ask is—

let me drill down. Yeah, going into that. So it's like, let's, let's just touch on that for a bit because it's really good, um, in terms of— I'm glad you're— it's kind of resonating with you. So those are— yeah, so we had digital identity, we have the ability to create things, memes and images, but unlike but we didn't own it, right? So we're essentially like allowing someone else to own our identity through this mediation, right? Which is just like crazy. That's what we had to do at the time because we kind of made those choices around that. But so when you're saying what's different, you know, why do I say, you know, the history won't remember the internet when we'll always think of crypto, like the internet was this false fork. We're like rectifying now that we're tying ownership on top of that. And even if you're not into any of the Web3 stuff, you can say, hey, I actually, I own my user identity, right? I own my name, I own the thing. That's like super powerful, otherwise you're beholden to them. How am I going to switch my credentials and then I require them to use this platform? Like actually owning and controlling like your identity, even just in a simple like thought exercise of the things you choose like to have, not just your logins, but actually like how you choose to persist, much less like what chain or layer 2 you put it on is is fundamentally like really, really different. Like we didn't know enough to know that, hey, maybe we should like keep ownership on the identity, but we just kind of went along with it. And so like at that point, we essentially like gave up and made that trade. And what happened as a result of that was that the people who owned the things had conflicting, often, incentives than the users, right? And so now you have this great conflict in terms of, you know, the owners might want to do different things than the users, particularly they might want aggregate TAM, total addressable market, like maximize their value, right? And so on one hand, the algorithms are kind of, yeah, black magic for sure. And like, just full disclosure, like previous life, I did a couple successful startups. We took to exit. One was an MIT spinout where we did AI and NLP. And so I've written some of those algorithms, you know, myself. And at a certain point, you kind of lose predictive, you lose visibility into what's actually going to happen because you have multiple rules like interacting in ways that you can't predict, call it like goes to the machine or what have you. So there's this definite part where it goes opaque, but where it's not opaque, they're writing those algorithms to maximize their value, right? And so like, then you say like, well, what, what are, what are their values for their business models? Like time, attention. So they emotionally charge you up with, call it rage or incitation to max. So they're, they're showing you certain things and they're prioritizing other things to like, not just to, to take advantage of your identity, but to to put you in a very specific state of mind to harvest your fruits. They're essentially juicing up your time and attention. So they're like a medieval lord, just harvesting the fruits of your labors, which is not a way we tend to think about it, but like historically it really, it fits. The difference today is that it's much more subtle. You don't have someone, you know, absolutely demanding this. It'll just be like the easiest default of like choice architecture. So that idea of not just owning your identity and saying, hey, we're, self-sovereignty and blah, blah, blah, even if you're not into that, just like medieval you wasn't aware of how permissioned and the effects of that permissioned world had to their detriment, so too, Fang and Web2, where it isn't black box, they're using these for their own value creation through this communication construct. So yes, we have broad-based communication, mass media, but but we're actually— the ownership is conflicted with you. There's a whole series of like things you could say, hey, in terms of like history of media and McLuhan and those guys where the message is tied to the medium or inextricably linked, but at its core, they crafted the algorithms to produce a certain result and, you know, to more effectively harvest your time and attention. And so the interesting thing about crypto is like, yeah, there's an identity component too, but like by breaking the ownership, you break the business model and now say, if the Web2, you know, people say, hey, Web2, you know, you're the product and, you know, blah, and all that's true. But also if you really get into the mind of Web2, this total addressable market is a need to have a monopoly or duopoly, right? So your distribution curve goes like this and you essentially want to get rid of all the long tail interests and force everyone into this part of the distribution curve. And that might mean through content, might mean through time and our attention, and so they're essentially working to stifle esoteric ideas, like weird, odd interests, so part of that is like the social construction function, but then there's also where you just don't hear not just dissident voices, but just alternative voices with alternative ideas, and like historically, the long tail is what produces the most interesting things. Luther was out on the long tail, right? He would have He would have gotten squished in this construct. One of the really exciting things about crypto is not just giving ownership, but the impact of that, the consequences are by not crushing everything to this TAM, you essentially create business models for these esoteric and odd interests, which means you can work and follow your calling, call it vocation, do what you like and what you're good at. But societally, in terms of a Renaissance, you get very interesting ideas surfacing, which wouldn't have otherwise been possible in this economic model. I tend not to go into that like so much, but it's really worth kind of thinking through that. Like the idea of like Fang as a medieval lord harvesting your fruits, but doing it subtly, like in terms of kind of control and visibility in such a way that you won't even notice it if they're very good at it. So just wanted to double-click on that. Cause what you're saying is like super important. We tend not to think about so much.

No, that's, that's a beautiful metaphor. I really feel that, you know, I've had threads go viral many times, or I guess not many times, but a few times now. And it's not like I got paid for that, you know? I took people offline, off Twitter, and they paid for my newsletter and subscribed and whatnot, and I made money and grew my reputation and whatnot. But I did not see, I got 2 million impressions on one of them. I didn't receive a penny from Twitter on that, but I find it really—

Let's talk about that too, if you don't mind. I really want to— The stuff you're raising is so good. So it's like, so yeah, now because the ownership is divorced from publication, now we have to monetize in all these weird ways. So when we think of crypto, we're often thinking of these institutions and we want to disintermediate them for sure. But we're also like, this mediation is like, it's just like more difficult world to live in. Right. Everything's by proxy or by a mediator. And so if, if you create value, you know, measured by people looking at it and spending time and attention on it, like, how are you going to monetize that? You have to create something else over here. You have to build up this whole other structure. Right. So you're working over here and you're trying to just sift off a little part through these, through these like structures. Consulting, gating, blah, blah, blah, blah, blah. And so like your time is like managing these two things and trying to like effectively like work as your own sale, like work your own funnel for like value creation down. And it's just, it's just, it's not just like historically you get a lot of institutional cruft building over time, which is true, but like also a lot of our ideas are a lot of our activities and time and attention. The things we do day to day is like managing these two things. The one thing for communication, the other thing for value, and they're separate. And trying to like effectively create this connective tissue that works like a good funnel over here. And so crypto, where you say, no, no, the ownership can be just fused onto the communication. That seems like philosophical, but like practically it means like, as this unfolds, you might not have to do all this other stuff. Like even if you think about it in terms of like just being able to incentivize people directly, right? Instead of an advertising model where you have this funnel when you do that, right? I put this thing out there, I have a call to action, X percentage of people see it, X percentage of people do it, they do this secondary action, blah blah blah blah blah blah. Like, you're indirectly influencing people and it creates this like artificial construct, right? Because then you're reading stuff and you're like, wait, is this real? Like, I don't mind if someone's like— you don't mind if someone's like pumping something that they have value, that they're biased for because they helped create it and they're incentivized on it. But you just want to know, you want to have visibility into like, is it like, what is this? Is this real or I'm paying somebody else to hawk or shill this, like, but are they really? They aren't even the owner of that, right? So you're like, you're so far removed from like, I want to support the creators when they create stuff, like more than just through a gate. And so like our whole economic construct, even in the digital world, is around this like mediation and these layers through that. And so when you, when you put those two things together, like when you wed, you know, ownership back on communication, all of a sudden you get like, you get much more direct business models. You don't have to like rely on influencers. You can do direct incentivization. And as a participant in the community, like you have visibility, you actually know what's going on and whose incentives are where. That's at least the promise of it. So just to really drill down, 'cause I kind of said this before elsewhere, but it's like, the practical impact is like really, really powerful. And so that's why I think it could fundamentally recreate society and like what you do on a daily basis in a meaningful way.

Yeah, 100%. I think the idea of decentralized social media is just fascinating. I know there's been, multiple attempts with Lens and Bitcloud, now known as DSO as well. And I just love the idea of being able to have integrated with social media and being able to, like, I know SQL or SQL or whatever, and being able to organize my followers or search by who has New York in their bio or who works for A116Z or whatever. And I would just find that fascinating. And then another thing, Mark Andreessen said this during a Bankless podcast, but their original sin of the internet was not putting money on there or not allowing money. And now we're trying to fix that. And it's definitely fascinating. And then jumping on what you were also saying, just the idea of micro-communities popping up on the internet, and there's just so much room for that right now. And you're right, social media does stifle that at times. We talk about the popular things and that kind of grows, but there definitely are beautiful micro-communities. Do you have any thoughts on decentralized social media? And then also, why is there such a focus on public goods right now in crypto? And I find that really fascinating. I've never heard the word public goods until this year. I mean, maybe in AP Econ 5 years ago, but that's about it. And now I feel like it's everywhere.

Yeah, no, that's— so on that, so yeah, there's a bunch of things in there. So on the On the decentralized social media side, like, so one is like being able to tie the value to the content you create, right? So that's like helpful, but also even if you're just interacting or viewing, like, the data you create is actually the currency. It's the liquid gold. It's what makes, you know, the Web 2.0, the digital economy run, right? And so you're creating— it's not just your time and attention that's like transmuted or distilled down into this data, right? And so like, that's, uh, That's essentially what they mean when they say you're the product. You're generating this data for them. And so one, you have to, as a creator, have to kind of monetize extraneously and spend all this time. But just even as a participant or just watching, you're generating this data, but you're not getting any value for it. Oh, they're waving the, you know, a couple dollars in terms of platform access, but like you're creating like super valuable data and you and that ownership, it's not just you're taking— communication doesn't just take the ownership out from the creators, it takes ownership from the participants. And so you're creating this data stream you don't have any access to it. You've already given up your digital identity, so you can't control that or gate that anymore, right? And so like, what are you going to do? So the power of decentralized social media is the ability to actually like own your own data. So I think you're starting to see— you are starting to see these ideas of data DAOs popping up and people playing around with this in a meaningful way, where you basically, if you can own your data and your stream, whether it's social or even purchasing or a number of other streams as well, like That's the really interesting thing. The American economy has been driven by, you know, tech, social media, which is really like running off data. And so that data is stuff that you just give away because you've already given up your identity. So you being able to keep that, not just like the value capture for the people who create, but any type of participant, then you remove the structure of creator, consumer, and you start getting like a more fluid structure if you're participating in that at every level. So the promise of like decentralized social media is that is that you actually not only get to keep the value from creating, but even from viewing and interacting, right? And that, like, that sounds stupid, like, we're like, oh, it's just data, but you really have to look at it, like, economically in terms of, like, the businesses I've built, sold to public companies, like, it's been around, like, taking data and being able to do that, right? Like, the data is actually the most important piece around that, partially because it's around that influencing and that action, like, influence, like funnel. And so when you say, hey, crypto and decentralized social media lets us tie value to the action directly instead of through influence, and the participants actually like own the value they create through that, that's like super radical. And so then the question is like, how it happens. And so yeah, you mentioned like, you know, BitCloud, DeSo, and you're seeing Lend, like we're still super early in this. Like this is like what's really interesting, this like unfold. Like usually in these movements, you have the hardcore adopters who like it, and then you have the people who kind of come on later for, not for the tech or for the thing itself, but for the second order benefit of it. And so like right now there's, we're seeing like use your Web3 for ownership and use your Web2 for distribution, 'cause we haven't cracked distribution. Part of that is because it's technical in terms of size, speed, latency, like there's technical reasons for that, which we're working on. But part of it is just also like, that's where the aggregation is because we've like scrunched up all this long tail into different platforms and like topics and what have you. And so, so I think what's going to happen is you're going to start to see these like Web 2.5 in the crypto world that has like a dirty pejorative name on it, but I think it's like really important to say, hey, the people in Web 2 that were really good at building community and building content, and they labored all for the sake of someone else, or if you participated, you even not creating but just, you know, viewing and interacting, those people Now that we're building the core structure and we're getting the UI and UX in order, still kludgy right now, but there's good stuff coming. The next unlock is around largely the skills of Web2, the people that know how to create, you know, community around that. Even fundamentally, if you think about like, you know, in Web2, that was, this is my old business world, like your value is in your code and the data you've accrued, right? And so like now everything's open, you can fork the code largely, like Now the value is in the community, right? Like it drives the adoption cycle, Uniswap to SushiSwap, back to Uniswap again, right? You're like, you're cruising. So that gets like really interesting in terms of how we onboard the Web2 people into this. And so like if I have tens of millions of users or followers, like, and I don't wanna make 'em cold switch into a platform, how do I do that? And so we're starting to see like a lot of people working on this Web2.5 piece, like SDKs that move across threads and then, allow followers and community members to like create and own their own identity and be able to message to them directly, et cetera, et cetera. So like, I think there's kind of pure play decentralized social media, which is great. I think the adoption curve is going to come through something more, you know, kind of Web 2.5 where it's like SDK dominant with like different messaging we're pulling in there. And like, we're starting to see some of this stuff in the works, like come out, which is like really, really powerful. And for Web2 community people, like to say, hey, you, you're really, really good at this other thing, driving adoption. Why don't you do it over here where you actually get to like keep the— where you get to enjoy the fruits of like the— of your labors, right? It's a powerful message. So right now we're like very tribal where we don't like that and that's Web2, but like the real unlock for driving adoption at scale isn't just market cap, it's users. Users drive market cap. So being able to court those folks and like show them and make it easy for them. Part of it's technological, and then part of it's just like this next like onboarding crosswalk. And like, those are the two things I'm particularly interested in.

Yeah, 100%.

Is that helpful?

No, that makes sense. Uh, I like the idea of, uh, Web3 for ownership, Web2 for distribution. That really makes sense. I mean, I've seen so many people do that, you know, Balaji, you know, he's all over Twitter and whatnot and, and podcasts, but then he's also on DeSo and posting on there and focuses on that, and his coin goes up and et cetera. And so we're talking about network effects. Something I want to jump into as well is the idea of a network state and where we're at with the US government and what you think our lives will be like if there's anything meaningful change. Balaji's book is coming out in 4 or 5 days. I'm sure you're kind of familiar with his thesis. So curious what you think, where, where we're going.

Yeah, yeah. And just to, to go back and double-click, like, that, that's where we are now in this Web2 and Web3, but I think we're going to see this crosswalk walk forward. So we're not going to make this cold switch like he's doing because he's an early adopter. I think when we, when we onboard people in mass, there will be these crosswalks. And like, obviously Web2 will lock that down, like constraining APIs or doing whatever. But I think there's, there's some interesting ways around that, and people are working to do that, even a whole new group of founders that are working on things like that, like super successful in the Web 2.0 world. Somebody who's making like a trivia game or something like that, right? And get tens of millions of users and then they all go away, right? Like, well, what if you do that on Web3 and you're able to use not just ZK, but something like Octane where you pay the gas and you can create a wallet for them with one click with messaging and there's something in there and they have access to it. Then you've essentially disintermediated this. I think once we go past the early adopters, we'll start seeing that. And yeah, what it looks like, I think this does kind of tie to the other public goods question you asked where, what society looks like. So like really, if you think of, I mean, it's so interesting 'cause it gets down to like government theory. So like crypto, when crypto starts like on that, like that map, basically that kind of pathway or whatever, it starts with finance, then it goes to art and identity, then it goes into like work corporation DAO, and then you move into kind of education, and then into crypto as a business model, like things synthetic and IRL basically, right? Like solving cold start problems, building physical infrastructure and public goods. That fifth bucket is like the most, most interesting piece, but it tends to be the furthest out. So like, as we move towards that, like we'll have this greater and greater like emphasis on that. And like the way we get there is, you know, most of the disc— discourse, most of the discussion around crypto has been in this first bucket, this idea of finance, like, "Oh, crypto is new currency and it's a threat to the nation state because it's on fiat." True, true, true, true, but going back to this political theory, saying if you really believe at its core, a nation is an imagined— this is like political theorists, you get your PhD, you read Benedict Anderson, this is the first thing you learn. It's like a nation is a consensual community instantiated by currency and contract, right? And so like, so identity, currency, and contract, right? Like, and so that means, that means crypto isn't just a reworking or a renaissance of just currency or a threat to kind of current nation-state construct in terms of fiat. It like actually is a new form of nation. It meets that criteria, consensual community, like an imagined community where everyone's agreeing on, everyone's agreeing agreeing to join, right? That something has value, that these are the values or ideals instantiated by currency, like coins, tokens, whatever you want to call them, and contracts. This would be NFT rights, right? Like smart contracts. Like at the last Renaissance we did it, property was the great, like, chink in the armor. You couldn't— you could take an idea on a sheet, you could take currency in a ledger, but you couldn't take your property. Um, in crypto, we actually have that now synthesized, like, not just like pictures of pixelated cats or digital assets, but like physical assets, right? But on-chain. And so this meets all the criteria of like how we'd think of as a nation. So now, just like at the Renaissance where you fork reality and you have to say, hey, there's one nation, what if there's different communities? Do they become nations? Are they nations within different geographies? How do you like organize that politically? Like we're seeing like the same thing with crypto. I think this is how this plays out. These are the tools of like actually nation construction. And then we'll have the same series of questions pop up. How do you like deal with one nation laying on top of another nation? That's kind of what I was alluding to, like in the classical and like current political like formation, you say, hey, there's fiscal and there's social and there's conservative and there's liberal on each axis. And like right now that doesn't kind of— that kind of broke down in the '60s basically. Like if you're fiscally— I might be fiscally conservative and socially liberal, right? So what does that mean? It doesn't fit the grid, right? And so now just like at the Renaissance, there's this— not this not just the X and Y axis, but the Z axis that comes along and says, hey, what if you're fiscally conservative, socially liberal, but you're pro the self-sovereignty decentralized piece instead of this hierarchy, right? Like now it's a different concept of not just fiscal and social, but your relationship to authority and how you like organize like that, that essentially just shatters that. And so what happened last time was there's a lot of enemy, my enemy is my friend. I might not agree on this or that, but like my priority is on this self-sovereignty. And so I might waive my fiscal monetary policy or my social construct, because this is the most important thing to me. So you have this Balkanization and reconstruction. And I think that's, I think that's what we're seeing is the institutions like get unwound fundamentally for a variety of reasons. Like, and you have this new Z-axis, now you have different pieces and different communities layering on that. And the question then is, how do they relate to each other? And so last time we had this great, you know, unlock of governance, right? Like a thousand flowers blooming, like not just like US Constitution, but things before that, like, like Nantes, Edict of Nantes, revocation. How do we deal with different communities juxtaposed with rights, like in the same geography or in different areas? And so you could kind of stay and try to convert and persuade people. You could emigrate, you could go to a different land, you could carve out these islands. We had like all this generative creation in terms of governance. And so I think that's kind of what we're going to see again. So again, because we're only in box 1, we talk about crypto as a currency threatening fiat and speedrunning finance, fine. But as you move to these other boxes, all of a sudden you see the need to reimagine governance, right? If we're speedrunning finance, I mean, crypto speedruns governance in all these different ways, in ways that wouldn't have been possible previously. So not just like digitizing voting, but like the— in terms of like technological unlock, it tends to follow this pattern of like two folds, right? The first is the technology allows you to do the same thing you did last time, but it's better, faster, cheaper. And then the second unfold is like the technology allows me— allows us to do something that we wouldn't have otherwise been able to imagine just because medieval you couldn't have conceived of that, right? And so then you start experimenting not just with like pure voting or nomination or delegation, but you get into quadratic and semi-quadratic and proof of history is awaiting, or how long— you get into all these different things. So I think, yeah, very much in terms of what Balaji's sketching out, for sure, there's a couple fundamental questions we have to think about. What's the nature of representation in terms of juxtaposed political places? And then what's the political camps? And not just the way we think about it today, but Balkanization of that. And then also, how does that relate to physical space, cities, geographies, what have you? Those are like all open questions that were on the table last time. So I see it very much as like an unwinding. And like, there'll be— things never operate binary, like either/or. There's always this adoption, like, kind of continuum. And I actually like am very favor— I view that very favorably, like this idea of like pluralism, different design decisions for different use cases, right? So you might have CeFi and DeFi, you might have this layer 1 doing this, this layer 1 doing this, this layer 2 doing this, and like the lines of classification becoming much more, much more, uh, much more permeable. Instead of like right now we're like Victorians like living in a house, we're like, this is our eating parlor and this is our talking parlor and this is our listening. It's like all these rooms are like, they're just these historical constructs. And so like I think this will like fold and unwind. I think there'll be new emerging, like, different ideas and, like, implementations of them in this great experiment, honestly. And, like, a high degree of, like, pluralism around that. Not just, like, one thing to rule them all. Where do you fit on that continuum of, like, majority or, like, alternative? But, like, different— just, like, long-tail identity, long-tail, like, communal identity along that. And then there'll be a relationship to space for each one of those. This. So yeah, I actually think, and philosophically, I think that's like great. This idea of like pluralism is resilience. Like even if one thing is the best thing, form of government, chain, whatever, it's like, I don't want just that. Like I'd rather have like even less good things, like creating a bizarre patchwork. So I can't pull one thread and have the whole thing unravel. So like I would expect a return to the great experiment and like, We kind of forget about that. We look back even like American or recent history, we say, oh, this is the way it's always been. Right? It's like, that wasn't the case. So it's like this great experiment we went through, we experimented in public, right? Like we went through all this, like our first constitution lasts like, what, a decade? And then we redid it. We're like, no, that's not right. We didn't have anything on here. We created the federal bank. It was greatly hotly debated. We revoked the charter 20 years later. It's like, it was this great experiment. It wasn't static. It's just like, The weird thing for you and me is that we've been born in this particular age where we don't know anything else besides stasis. We're the historical outliers, right? We're born post-Bretton Woods where there's this like global construct, and we've basically like said there's, there's like these lines geopolitically, right? First world, second world, third world. It doesn't mean rich and poor, it means us, them, and everybody undecided. And we made this like, this trade like guns for butter, right? Join us and we'll support you so we can do anything else. But like, that's, that's like a weird outlier, right? Usually there's much more like things bubbling up all over the areas. And like, we're in a place where we've had this swing towards like massive, like, federalism in terms of like agency accrual and institutions. Like, you know, a third of our economic workforce is around establishing trust, right? Like, that's like a historical outlier that doesn't usually happen. And so like Now that this stuff gets unwound, like, the kind of weird chaos and volatility is much more a return to the norm. And so I think we'll, we'll see that in this great experiment. Rather than being scared by it, it's like, yeah, the volatility, not just on price, but on anything, it isn't pleasant, it's scary. But that's like, if you're not experiencing the volatility, if you're in a medieval or any other type of hierarchy, someone else doing that and arbitraging it for you. So I think we'll be like, pluralistic experimentation will be the future.

I agree with that completely. I've already seen some really good experiments, community kind of as a service. You know, DAOs like CityDAO and Cabin both offer communities, physical communities, or Cabin definitely does. CityDAO was trying to do that a bit. And you know, you get to be a part of it. You're incentivized by owning the tokens. You get to— that's actually how I started writing in Web3 was for Cabin and started getting paid. Yeah. So started getting paid in their token and that's how that worked. And, you know, kind of changed my life and the community that I met there. And so I guess I'm—

Tie that back to public goods, like public goods is an extension out of that.

Right.

And so like you say, hey, what's the need of government? The government, the need of government is like provide public goods for its citizens. Like you make this great exchange, right? You hand off authority to someone to like create some structure, because you have to have some balance between chaotic anarchy, supposedly, you have to have some balance between chaotic anarchy and top-down hierarchy, right? And the question is, what's the nature of the balance? What will be debated and changed? But one of the obligations of that, when you hand that authority off, is that they create public goods, things necessary for society, like roads, access to information, pieces of value. Crypto is undoing all of this and creating its own forms of this. It's starting to actually— the public goods thing is really interesting, even though on first glance, you may be like, "What is that? Something you put on your VW bus when you're camping out in the Sequoia?" It's like, no, you're literally saying communities are starting to help one another, members within the communities and members outside their own communities, society at large. That starts to take on like the form of what government does, aside from just the political theory we talked about, like the action for that. So that's like, that's like crazy from like this philosophical standpoint, but then also tactically, part of that is because they can build physical infrastructure through tokenomics now, which this is early, it's like fifth bucket stuff, but like, and I'm super biased, like disclaimer, not financial advice. I have relationships like, hey, blah, blah, blah with everybody, like I talk about. But, um, it's like, that's why, like, the Helium stuff is like super interesting, right? So it's like, not just how do we create platforms, but how do we build— even if you don't care about running IoT or 5G, if you just had a mental exercise and said, how can we get a million people to create and run physical infrastructure, or like physical goods for digital infrastructure, right? How would I coordinate them to do that? Like, how would I take on a telco and take me billions of dollars? How can I do it for like very little money and coordinate and have them build stuff. And that's like, that's that fifth bucket where we start using crypto as a business model for physical things. That's like, that's— it's early days, but like amazing they've been able to do that. And then like the first thing they do is start to carve out like that as physical goods for people. So like City of San Jose, they're giving broadband internet access to like citizens, right? Like that's something the city wasn't able to do, but they're doing that because I've now taken the economics out of that TAM aggregation, Verizon, AT&T, and what have you. I've redistributed it. And so people along the long tail using it for others and using it for everyone else, that's like, that's fascinating. And then the answer is, where does the money come from? It comes from that aggregation. I'm taking, you know, 0.01% out of, you know, Verizon, AT&T, and what have you. So that's like, that's something to like really think about. And there's obviously like Gitcoin, Kevin Iwaki, and all that. but the fundamental idea is I can do that and take the money out to pay for these things, not just for my community, but back to this pluralistic experiment for others. And then the other thing I should say is the crazy thing about crypto in terms of this Renaissance, or even how like, you know, post-Renaissance you would have thought about it, was this idea of like generation, right? This idea of, uh, the idea that all economics aren't zero-sum, that's a medieval worldview. I take from someone, I give it to someone else. This crazy part post-Renaissance, Weber and the spirit of capitalism and Protestant work ethic was that I can create value. I can magically create from nothing value for myself and value for my neighbor. And the market gives me feedback whether it is valuable or not, the product or service. And then like I'm actually generating, I'm creating like value instead of taking it out of someone else. And like, that's like we talk, we say generation and create and viral and mutually beneficial and virtuous loops. but like thinking about that, that was a revolutionary concept at the time. And so this unlock of being able to use the technology in the same sort of way to create value. Where's the revenue? Where does that value come from? It might come from taking from TAM, but it also might be generating out along the long tail and like funneling that back in a generative function. I create value for myself, but also by others using it. And so now it's not just pure altruism. Like I might want to give public goods, say broadband access to citizens, citizens of a city, you know, not just because it's a good and right thing to do, government isn't doing that, we're doing that as a community, but also because it benefits my community. I benefit when they benefit. And that sounds like so simple, but we haven't had the technological infrastructure to allow that economic, like, model to work at scale. So that's like, that's why I think like public goods, it's trendy right now, but like the real impact of that is, is kind of a bit further out, but like you really want to like noodle on that a bit, right? Create value, and when I give stuff away to people, public goods and other things, it actually makes more value for me and for them. That's like, that's transformative, right? Anyway, so just to drill down into that now that we have that content.

No, 100%. And you know, we talk about Twitter, Facebook, and stuff, us being the product, but at the same time, they are public goods as well. You know, they are free to use. Uh, you know, we pay for that with our attention, but Twitter's changed my life. It's changed my my career. It's improved my life drastically, made me friends, et cetera. It's a public good. I've never paid a dime to Twitter, maybe except for Twitter Blue, so I could have an NFT as my profile picture, but $3 a month, I consider that a public good. That's my tax for Twitter or whatever. But yeah, it's amazing to think about the community that they've built and the network effects that they've built and how much value they've built and how much money is floating around the Twitter atmosphere, the Twitter economy. Um, yeah, no, that's a great point.

It's like, we've seen this, like, we've done this in this hybrid model where you do it here and then you own and monetize here. It's like, if we— I mean, if you think about like the internet, and I don't mean to dismiss it and just say it's nothing, but if you think, hey, you're seeing this almost as like public digital goods, you know, what would have happened last time is it would have been Great Society and Johnson would have like nationalized it, right? And like, that would have been the thing. And we're not seeing that now. And so like, the other thing about this, this is like the last time we had like stock surpluses in a balanced budget, right? With this explosion of new technology, the idea of generation— digital generation is the thing that like got us out of like economic difficulty, right? And so we're seeing the same thing happen now. And if we did that all with kind of a half-baked, you know, a technology that only allows you to publish but divorces the ownership, like, just imagine how much the opportunity is that much bigger to be able to say, hey, when we finally do this with ownership tied on to publication not just public goods, but also value creation as a society and implications for deficit and what have you, tying that to generation is— I mean, that's a very much underappreciated concept. And then the last piece I'd put on that is now that you have those tools and you can do that generation across the long tail, now you don't need to live in this Victorian mansion of, here's my 501(c)(3), here's my nonprofit, and here's my business. Right? Right now, we're like, I communicate on this and I monetize on this, and then maybe I give over here if there's a cause I think about. If you say, well, these two things fold, like if I have this generative concept and like it actually benefits me when other people use and participate in this thing, even if I give it to them for free, then all of a sudden, like these causes that I might just be donating to can have generative business models, right? Carbon sequestration, pick whatever you're interested in, like the crypto, the next unfold is to say, How is that not just like a giant sucking sound? And you have to convince me there's good over here. Again, mediated good. I give you money, we do this thing, it creates good somehow I don't see. Like, what if all of this is visible and I have a generative business model on the nonprofit and the public good? Take carbon sequestration or whatever is like an idea. That like gets really interesting. Like you want to plant tree, you can use all these same mechanisms basically to like actually put a business model on something that wouldn't otherwise be profitable. That's like that fifth bucket. So an IRL business, I take all my cost centers and I run Web3 versions of them. And now that generates, I create secondary supplemental income that may be larger than my primary income, right? Like I have a coffee shop, I pay for music. You pay $10 for Spotify. If you're running a coffee shop, it's $15K to license BMI, right? I take that $15K, I'm running Audius. Audius actually creates tokens. The more I listen to it, now I'm generating. Same thing with payments. Same thing with rent and a mortgage on Proof of Space. I take all these things and now I have these supplemental business models that make kind of borderline profitable IRL businesses reasonable. You can do the same thing in digital, take your entire LAMP stack and like run it on Web3 where you're generating for the piece as well. But I can also do that with like these causes, like, and actually have them generate as well. So now all these things that I know are good, but I haven't been able to solve one layer of institutional gridlock politically. And then even within the nonprofit, like industry, it becomes an industrial complex where how much is actually going to the thing and does it actually create the thing? If I can see all that and those things generate, now it's not just public good giving back. Now they have a generative model. I actually have the ability to have these, like, these causes and public goods actually like be self-sustainable, which has not been the case before, largely. So it's like, it's a fundamental unlock in terms of this like pluralistic recreation. These are tools we have in our toolbox to play in this great experiment. So that's a little bit further out there, but I think that it's really worth considering over time.

100%. So I'm curious, what books have been very influential in your way of thinking?

Oh man, that's— I'm barely literate anymore. It's a good question. So like, this is going to be a panoply. So, and they're probably the stuff like, if I like lectured at Harvard on innovation, disruptive Technology and Social Impact, I do this like bibliography, which is like 10 books. And it's kind of crazy because it's like half science fiction, half philosophy, part philosophy, part a touch of political theory and history. But I definitely think like I would start with like a science fiction lens, as ridiculous as that is, like your standard, like Snow Crash, fine, like Neuromance. Snow Crash, because it gives you this like tangible visceral experience. And when you read them, you don't say, oh yeah, that's today. Imagine writing this when that as if the thing didn't yet exist, right? That's a tool you're trying to suspend disbelief and say, how would you imagine what it could have been before it was actually instantiated? So like Snowcraft and synthetic assets, and like what's really interesting about that book is how the synthetic value and actions interact with the real world. So you're having like NFTs act as these bidirectional doorways where you can create value in the real world and join the synthetic, or create value in the synthetic and then join the real world. So that's like a different model Also, you know, Neuromancer, like, obviously, because that's— it's almost like you just have to do that just to kind of suspend disbelief and get a lay of the land. Also, this isn't like a traditional pick, but even Retrotopia, which isn't like— which is kind of boring in parts, like super expositional, but the idea of like, where do you limit technology intentionally with unintended consequences, sociological and political, is like also one worth like checking out. And then like beyond that, there's like philosophical underpinnings of all those sorts of things. So like, I definitely check out like Marshall McLuhan in terms of like media meets message. Everybody talks about— he has better known books, but the one that's super interesting to me is Gutenberg Galaxy, where he starts it with like Renaissance, and then he layers in like Chardin, who's talking about this consensual, like technological rails of this new sphere we'd call the internet. And then finally Baudrillard, which is like hyperreal, like the image becomes more real than the thing itself, which gets a bad rap. Postmodern critique, but if you think about what if it's not just more real, what if it's mutually reinforcing in this generative construct where the image is being more real because it's actually tying the synthetic to the virtual is like one way to think about it. And then definitely checking out like if you're into any of these kind of bigger questions, it's like Benedict Anderson, like Imagined Communities in terms of political theory. If you read that through like crypto lenses, it's like of course you want to do sovereign individual, but like the Imagined Community isn't like crypto slant. It's like you kind of have to read it into it. Super, super interesting in terms of kind of thinking that through. Then there's some other historical stuff, but that would be the bibliography I'd start with.

Nice, nice. So I just bought Imagined Communities right before this call. I saw it. Yeah, yeah, I saw it on your Twitter.

It's not a novel, it's not like sci-fi, right? It's a textbook. It's a, it's a, it's a, it's not fiction, so you kind of have to sift through it. But it's like, it's, it's, it's read what you can, but it's like just once you get that core concept, you're like, oh frick, crypto is not This currency, is it?

Exactly. Exactly. I'm excited for that.

You're going to have to read it with your crypto glasses on.

Nice. I guess I got to ask, Cataclysmic Capital, so seem like quite the optimist. What's the deal there?

Yeah. So I was a historian, finished a PhD, did a Fulbright over at the Sorbonne Institute for Advanced Study. They call it the Supply. So it was like this interdisciplinary complex system thing, where you're doing things, you have with certain scientists doing string theory. I wrote a bit of software keeping track of some of this kind of long-term manuscript stuff. And then we did a couple startups. One was AI NLP, we sold an MIT spin-out. Did another one, we sold to public company, got out in '17, fully vested out, went all into crypto. And then at that point we were trying to figure out what to do, and then crypto came up. I was like, this looks like the Renaissance, it looks like the same thing to me. And then also just how it benefits people all along the, the long tail, like rather than power hierarchy concentrated in VC with this like power distribution curve. And so that was basically the, so yeah, did a couple funds. It's all our internal stuff. So we kind of play around with it and take the Web2 fruits that we worked for and put them into Web3. So it's kind of a, it's a little bit of a joke and a neat wink and a nod. There's Narwhal Ventures, which is this family fund, and then Cataclysmic, which is with our other partner. And the idea is there are, you know, kind of 5 cataclysmic events globally that wiped everything out and recreated them. And so we're saying this is the sixth event, and so that's why the dinosaur is looking kind of quizzically at this comet coming to him. So it's much more like an inside joke.

Nice, nice. Fair enough. Well, I've got a hard stop in a couple minutes, uh, but this has been an excellent conversation. I really, really enjoyed it, and I can't wait to look at my notes and write a bunch of essays. So I'm excited.

No, thanks. This is fun to go a bit further down the threads than I'd usually say this, and maybe he's like, okay. But it's like, no, it actually gets— the interesting thing about crypto is you're in this historical moment. People in these moments tend not to recognize it. It's like this anti-corollary. The structural changes are so deep, you always look at the ripples. The people who are in these structural transformations tend not to be aware of it until after the fact. And so we have this crazy opportunity to not only be aware of it and participate participate in it. And so being able to kind of like go down these threads— like, the crazy thing about crypto is like, as a historian, you kind of force things into a model. Like, this is natural, and like, the deeper you go, the like more significant it gets. I appreciate you taking a few minutes and going down these threads with me.

Oh, this is a great time. Thank you so much.

All right, take care now. Good time.

Have a good one.

Take care. Bye.