Balaji Srinivasan: Applications: Today & 2025

Transcript

[Music] thank you [Music] this week we're going to hear about applications and first speaker is going to be apologies for New Boston who's joining us remotely from zoom and he's going to talk to us about applications today and some that we think are exciting on the near-term horizon okay so with that I'm gonna get straight into the presentation so we can turn it over to bawaji he's going to join us on the screen here foreign

there he is hello hey biology so uh my name is Balaji Supreme Austin I've got a new project um at nakamoto.com which you can check out basically like a crypto blog um but today I'm going to talk about uh crypto applications uh just to give a little overview of who I am so it's a rare photo of me in a suit um you know maybe like last time in a few years uh and uh my background um so you know Stanford uh grad um his PhD intellectual engineering Ms in chemical engineering I founded a genomics company which ended up selling to Myriad for 375. it was General partner at Anderson sold a crypto company to uh called earn.com to

coinbase and serve to CTO um and basically being an early crypto person and Venture investor an angel investor and so on and I met Twitter at biology yes so if you have any questions about the talk you can just DM me there or ask me so have happy to answer questions okay so just jumping in um say I want to talk about kind of crypto applications in uh you know in 2020 and then also Beyond like you know things are at scale in 2020 and then beyond that point before we we get to those applications I want to talk through a little bit of the history of how we got to the present moment um and some some kind of underpinning Concepts uh behind all crypto projects and then talk about the applications kind of with that with that mental framework

it's the first history um let's talk briefly about why Bitcoin is invented in the first place and this may be obvious to some of you uh but for those for whom it's not um let's go through this quickly so the idea is uh you know if you start with physical cash something you take for granted with physical cash is if I go and I hand Jesse a dollar bill then I no longer have that dollar bill and Jesse has it and we take for granted the fact that that dollar bill can't be in two places at the same time it's it's a physical object it can only be in one place at a time so if we try to translate that naively into the digital realm and we take the the serial numbers on that Federal Reserve Note and we say hey well that's a that's a unique identifier why don't

we email that why don't I email that to Jesse the issue is that I still have a copy of those serial numbers and I could go and email it to Kim or to Mark or to Ben and so there isn't an inherent form of scarcity in the digital realm um unlike in the Physical Realm where that that dollar bill is actually only in one spot at a time so so naive digital cash doesn't work this is called the so-called double spending problem because there isn't a native form of scarcity and the way that we solve this prior to the invention of Bitcoin and still used you know very very frequently today is to have a central trusted party um a bank or a financial institution which takes a debit from a and then goes

and credits B okay and um by by doing this we've now introduced a a third party into the equation and and we're trusting this this Central act we're trusting them to debit a into credit B and um with that trust comes power because they you know this this kind of institution can for example deny a payment or it can credit itself you know with quantitative easing you know via Central banking system but from a computer science topology it's generally inelegant to have a privileged node if you can avoid it and so what Satoshi Nakamoto did was he's able to come up with a decentralized data structure uh the blockchain and essentially had something over here where we're basically miners

um so so rather than having a centralized actor a bank that was debting and crediting Satoshi replaced it with a decentralized network of these miners who each compete to debit a and credit B and if any one of them decides for a reason not to try to mine a transaction the other ones will mind that transaction because anybody who Minds the transactions gets rewarded in Bitcoin for doing so and so a critical mass of them would have to collude in order to stop a from transmitting money to B and they're highly incentivized to to not do that um and so this is kind of the magic of Bitcoin is it replaced the centralized actor a bank with a bunch of competing um you know entities called miners that that carry out the same transaction

approval process and also the money money generation processes okay so that's that's kind of why Bitcoin was invented is to give in analog of physical cash that solves the presence of a a digital analog event visual cache that solves the presence of the central actor okay now this entity over here this blockchain uh is something that got abstracted out and uh you know basically once you've solved the problem of having a database of all the money in the world or all the Bitcoin in the world you can do lots of other things you can think of it blockchain as a tamper resistant database for storing things of value so of course you could use it to send and receive Bitcoin with the development of ethereum about five years after uh the the launch of Bitcoin

this is a new blockchain that essentially was more programmable than Bitcoin so writing a program in Bitcoin is like an assembly language like thing over here but to use um ethereum solidity uh you know it looks more like JavaScript and actually it's kind of like JavaScript in the sense if it's easy to shoot yourself in the foot with salinity but nevertheless it was more accessible to write programs with and why'd you why'd you want to write programs well so you know rather than just debit a and credit B you might want to debit a and then credit B today and see tomorrow and D next Thursday and E if some condition is hit and so on and so forth right that's what like smart contract programming is and so because you could write you know

more sophisticated contracts in ethereum that led to the Ico boom and you know the Ico boom in 2017-2018 was kind of like the.com boom where um startups raised millions in some cases billions of dollars and uh you know folks are able to raise you know 35 million dollars in 30 seconds all kinds of money flowed in um and like the.com boom there's a boom and bust and many of those you know coins that got funded it dropped like 90 percent or more and um this though was was something where if you're just looking from a technological standpoint the capital formation rails that were put in place were you know an Ico is like the simultaneous disruption of venture

capital Swift crowdfunding and cap tables because you're you know you're doing sharp investment you're doing all these International wires during large numbers of people do it at the same time and you have something called a capitalization table or cap table which is um the it's kind of the system of record which says who owns what stock that kind of thing was also pulled into the blockchain with these icos so it's actually a very important technologically even if not all of these companies are successful then after 2018 2019 to 2020 now we're in you know we're in the crypto winter in in 2019 um 2018 and now we're kind of maybe in the summer for Innovation where you know a lot of the the decentralized finance stuff which we'll get to is really starting to work

um you've got interest you've got loans you've got you've got all these applications uh and things are starting to work in crypto it's kind of potentially laying the ground for the maybe the next boom so um all right so that gets us to the present day so now let's talk about some Concepts and start with technological Concepts so you know one thing we touched on earlier is uh you know a blockchain is a database for storing things of value so uh you know digital gold and and you know cash but also tokens like in the Ico boom um digital assets as well so you know in-game items or real estate these are these are called non-fungible because you know one piece of real estate is not the same as another whereas one dollar bill is fungible it's equivalent to

another and then there's like identity right so present proof identity to demonstrate that you possess an asset so um you know cash you know Equity Alternatives digital assets identity these are all things where you can kind of store them in a blockchain because they're they're valuable things you know with the identity for example this is kind of a subroutine that was even required for Bitcoin or ethereum in the first place you had to present to effectively digital signature to show that you owned um Bitcoin or ethereum before you could move it uh and so um this is being factored out as its own thing just like if you can do identity theft well then identity is a valuable thing to steal so that's kind of thing that you might want to store in a blockchain in some fashion so so that's one way of thinking about

blockchains and you can also think of them from a different angle in terms of a protocol so you know Bitcoin is a protocol and these crypto protocols have turned payments into packets uh and I mean that in the most literal sense you know here is TCP transmission control protocol here's IP an interesting protocol and the Bitcoin call runs on top of that and you can actually see a block over here and it's basically fully packet driven transmission of value that reference to a bank because in these bytes you don't see um you know like the USA or the Netherlands you don't see Wells Fargo or HSBC you don't see countries you don't see Bank names you just see bytes um it's really an internet native way of sending money which is cool because once

we developed internet weight of native ways of sending um Books and Music and uh you know songs and things like that uh well we got the internet Revolution so so it's pretty impressive third concept once once you've turned you know payments into packets that means that machines can now hold and send money so you can paste in a string of bytes over here and voila now you can actually have a script that like sends money right and that's completely new um you know you can actually um have a script that makes money for you when you sleep this is like you know an intelligent agent uh that people have talked about for for 20 years it's actually there now um you can have these primitive

intelligent agents that go around or more sophisticated actually and do trades on dexes and are essentially you know decentralized changes they're essentially making money for you just by trading online it's a script that actually holds the money itself intrinsically so concept number four um you know one way to think about it is there's uh you know my friend Matt Huang has a has a great tweet which is um crypto is underrated from the outside and overrated from the inside okay so how is it underrated from the outside well um in many ways blockchains have actually already posted technological improvements 10xes in various areas for example 10x gold 10x Swift um satanx gold why because Bitcoin is lighter or faster cheaper to transport

um it's 10x Swift you know ethereum clears in minutes in any country pair where Swift takes days uh Swift being International wire transfers um tanks larger than Kickstarter so you know a large crowdfund in 2015 was like 10 or 15 million but in 2017 you know it's like four billion dollars um which is like 100x increase and regardless of what those things are that are being funded simply the mechanism to move that much money and and form that pool of capital is is remarkable and then in terms of you know like Delaware right um you know you can hit enter and salinity in seconds actually have it incorporated into the blockchain in in minutes and you can set up something that looks a lot like a corporation um in the sense of being able to receive money distribute it have quote binding

contracts at the blockchain enforces and and whatnot and um essentially this uh this is much better than Delaware in many ways because uh when people go to Delaware to incorporate a company um that can take days and in many ways you know people talk about a measure of economic freedom being the time to incorporate um with smart contracts you can 10x that too so this gives you a flavor blockchains of 10x mini Financial Primitives and 110x is a big deal but a lot of them you know 10xing gold and wire transfers and VC and crowdfunding and cap tables and incorporation that's actually a truly structural change and worth worth paying attention to even if it hasn't rippled out uh fully yet okay um Additionally you know the uh the the

crypto space has actually already created many millionaires and a few billionaires um so the founders of coins the miners who run you know large server Farms or the exchanges that this analogy is used frequently but I would compare the present moment to roughly 2000 in the internet because in the 90s there was this infrastructure phase and you had Yahoo and you had AOL um and people everybody had heard of the internet but not everybody used the internet in you know 2000 on a daily basis uh and that's very similar to kind of where crypto is everybody in finance everybody in Tech has has heard of you know blockchains most people have heard of Bitcoin even if you're non-financer Tech the infrastructure phase is there you've got the coins the miners and exchanges the applications are being developed which we'll come to

six concept so blockchains give you a choice of who to trust so before you had to store money at a bank you didn't really have a choice and afterwards you can still start a bank or add an exchange like coinbase or even locally on your computer and I think this is a better framework than saying trustless the goal is not to trust no one it's about having a greater choice of who to trust with custody of valuable assets so number seven blockchains enable internet scale cap tables so before um you'd have something like this like a spreadsheet basically which said what's a cap table it's a capitalization table it is essentially who owns what shares in the company so Emily Wilson owns 2.618 million shares of common stock

Jake Pappas here owns 180k of series seed A and B stock right so this is like what a cap table is and you know it can be said that a cap table is the most important data structure and Technology because it underpins every company right this you know modest looking Excel type spreadsheet is who owns what percentage of the company and right now that's basically held on you know Google drive or maybe a carta.com which is an improvement and uh and then it's like you know this this file is the basis for for millions of dollars being made in IPO that's how property rights are managed it is far superior alternative is what the blockchain offers where you can have fifty thousand hundred thousand millions of people um who are token holders and you can

actually see every transaction back and forth um you know your internationally tradable transparent liquid and so on around the clock from day Zero and the blockchain is keeping track of who holds what rather than you know someone making a scrivener's error uh you know locally with with an Excel file so that's that's a pretty big deal not just the automation of the scaling of it from a few hundred people to tens of thousands or Beyond so you know I think of blockchain first as like the the new mobile first um where you know blockchain competitors are rising for many Legacy businesses in P2P payments and messaging and crowdfunding all the payment type stuff um but also in um other areas like you know uh for example DNS you people wouldn't have thought that you could

um you know launch competitors to DNS but you can so handshake ens you know things like this are actually um competitors to the to the DNS system and um you know folks like uh um you know brave are using this to launch competitors to Chrome which have crypto built in and uh you're seeing like a flowering of innovation across many different verticals with crypto powered competitors and you know so that's why I'd say like you know blockchain first is kind of like the new new mobile first it's like a it's a technology that gives you balances it gives you encryption um it gives you a number of Primitives to work with so as a ninth concept um we think of blockchains as a tool that Founders and and Engineers can use to break Network

effects so if you take a network like Facebook it's at scale you know billion users or what have you it's got a present value over here and uh the thing about that is if you launch a new network well it's not Facebook no one's on it so why would you use it well now you've got a new tool which is you can issue your users tokens and those tokens have upside which declines as the network gets larger so now you actually give a financial upside to early adopters and this curve can offset this one so now you've given like some value to people for joining early that's a very important concept because this is kind of like giving Equity out to um your your employees uh or you know selling Equity to your investors except

you're issuing tokens to your users and while tokens aren't Equity um the upside of them is something where users can work and they can they can appreciate right so uh so this is really interesting and it's kind of turning your customers into investor like entities uh and and that's something I think will be a very big deal for breaking these Network effects like the the scaled social networks are two standard Marketplace I think blockchains are going to transform social networks in general you know before you know last 10 years have been liking and poking and messaging each other and afterwards we've been doing you know um paid messaging surveys tasks Etc and I think this is uh it's a major transition from just you know like

making friends to haha making money online right and uh I think that's that's important because it starts to actually increase the substance of what we're doing online it's not just not just wasting time or communicating we're just not wasting time but it's pure information goes to transactions as well finally this is an 11th point I think of the blockchain is a partial move away from the cloud towards privacy so um you know Ledger sold its million Hardware wallet for storing Bitcoin um you know this is something where um and anything that gets to like a million units like this I think will probably eventually get to a billion it might be bundled with phones like you have a phone you have a charger you might get a hardware wallet alongside it um and basically what is a hardware

wallet it keeps your private Keys locally it protects them and you can think of them as like an anchor uh that may lead to other data also being encrypted and moved locally like out of the cloud and you know onto devices and the way that would work is basically that your keys might be kept locally even if the the bulk of the data is remote it's only decrypted when you present your private keys and and for applications like Dropbox or Gmail that's actually very feasible to do for the most part because um you can have a relatively dumb data store in the cloud and then present your private key to decrypt it such as the cloud provider can't see it and it's decrypted you know for example client-side there's many modalities that are like that I think um you know Hardware wallets are going

to be a big part of pulling some data on some privacy locally um now let's talk about you know some some Concepts on the other side of things so we talked on the tech side let's talk on the community side so basically um you know building anything in crypto you have to really understand the communities whether it's Bitcoin maximalists or ethereum holders or the xrp Army um you know these are folks who um are uh you know that they have assuming part of their identity is bound up in holding this currency and it's actually kind of interesting it's like um you know the folks who live in the U.S value the dollar folks who live in Japan Valley the Yen um their geographic location is actually

more Salient for their identity formation but when you've got folks who are on the internet um it's actually sort of like currency first as the formation of their identity they're like bitcoiners or ethereumers or what have you and you know one way of thinking about what that does is if you just took three you know random people off the street each of them could win or lose on their own and so you know they have no inherent economic linkage if you have n people you have to the end possible win-loss combinations but three people you have two the third or eight possible been lost combinations however if they all hold Bitcoin um well suddenly they're economically aligned such they all lose together or they all win together and this is an important concept

um where basically you know if they're holders none of them can win unless they all win so blockchains take us from what I consider the slippery slope to the crypto Cliff uh you know before you'd have um like a registry like the Spain and Catalonia fight or the dot cat domain somebody could lose a lol.catch mean it can be shut down by the Spanish government you might still keep your.com domain so you don't really care if it happens to them it might you know you might feel bad but it's not really your problem however if someone's ens domain is C is that really means interfering with ethereum blockchain so it really is your problem as an ethereum holder and I think that's a really important Dynamic which turns us from you know the slippery slope where one individual's rights can be abrogated at a time to the

crypto Cliff where to seize one person's crypto is to seize everybody's that's a pretty big deal so blockchains allow for experiments in self-governance um and with blockchains any any sufficiently large group of people can now choose a monetary policy choose an economic policy um that suits them and so I think we're seeing this really amazing thing where rule of law is being actually encoded and one of the things this results in is that blockchains make macroeconomics and experimental science um so whatever your thesis on the economy whether inflationary deflationary demurrage or what have you before this had to be studied in the context of like video games with with virtual points like Edward castronova de la the pioneering work here but now

crypto has just taken that next level and you've got actual billion dollar or larger economies where you can just set the monetary policy and see what happens so macroeconomics is finally becoming an experimental science because people are opting in and you can quick run these experiments at large scale very important to think about these things as we get into the applications we'll come to so tens of millions of people and billions of dollars are now invested in these experiments the companies the wallets the percentage of folks the market cap right these these are things where um you know lots of folks are are you know the valuations are fairly High they're not trillions it's not hundreds of millions or billions using it but it's definitely tens of Millions and uh so what that's resulting in is you know there's this concept of the

laboratory of the States you know that different states in the US experiment with different um legal regimes like some will legalize medical marijuana and others will have you know different laws on right to try laws or things like that this is kind of like that where you have different coins with different monetary policies and they're like a laboratory of um laboratory of the states so that kind of you know brings us to Applications right so everything I just said is useful context differentiating what kinds of applications you'd build with crypto why was invent in the first place what has been done historically what can be done with it et cetera why don't we go into specific applications starting with the ones that are already at scale as of 2020. so the first group are the ones I already mentioned

exchanges Miners and you know like like issuers have made millions or billions of dollars right these are these are folks who are at a billion plus in in revenue or in equity sales or have you these are like the infrastructure parts of crypto the second group that is at reasonable scale are the hardware wallets so Ledger's at you know 100 million plus Revenue at least in 2017 and um that's about an order of magnitude less but it's still it's definitely Rising it's a curve to watch um and we'll probably be built into kind of Hardware devices over time uh third group that's already at scale in 2020 that's worth mentioning of is um or stable coins um so a stable coin is uh you know like what it sounds like unlike a uh you know

Bitcoin or ethereum it doesn't wobble doesn't have high volatility um a stablecoin is is flat pegged at 1.00 USD um and in theory it could be pegged to something else but usually it means stable in USD value and there's now a few different stable coins out there and they have different ways of doing that Peg some will say they um have bank account deposits of US dollars that will back the Peg and others uh will um you know have some asset on hand whether ethereum or something else which is volatile and oscillates but which where they say that their uh the net value of that is enough to support the pay so sales coins are at significant traction I mean five billion dollars nominal stored value is actually fairly

High and uh D5 so decentralized Finance is also at a reasonable scale so since you know late 2018 it's really been soaring it sounded like a billion dollars in stored assets um there's website D5 pulse uh which you know I screenshotted you know a little while ago and uh you know like all these things are just Rising relatively quietly but folks are you know doing well in the space there's bugs um there's a serious you know issue like a like a few days ago but but in general the vector is is up okay so those are things that are at scale in 2020 which are exchanges miners issuance uh Hardware wallets stable coins D5 okay so what's the stuff that is up and coming stuff that has you know Green shoots in 2020 and might be big by

2025. this is uh this is going to be a long list of things um and uh you know happy to answer questions but and I'm not saying every single one of these is successful um but some of them maybe okay so um privacy coins um oh and by the way just assume I'm an investor in everything on this and everything in crypto because I can I'll you know I I hold lots of privacy coins I hold I'm an investor in lots of these things um but you know trying to give a neutral neutral kind of thing so privacy coins um you know so Dash Monero Z cash these are trying to add a layer of privacy over Bitcoin um where uh essentially um

you know Bitcoin transactions are by their nature transparent in the blockchain um Dash uh Monero and Z cash in particular are using different Technologies to uh to obscure that so people have actual Financial privacy similar to the difference between HTTP versus https right uh number two lending and interest so compound and maker um you know compound is basically somewhere you can earn interest on on the blockchain maker um you can do lending and it's actually this interesting system where you can put down some ethereum and as long as the ethereum price doesn't go down you get some US dollar equivalent that you can go and do something called Dai Tai uh in terms of scaling there's a ton of stuff that's happening lots of companies um doing this some of these are Quasi applications in their own right like the

cosmos SDK but there's a bunch of different ways to try to scale blockchains and um you know these Technologies May stack on top of each other um you know some of them are exclusive but many of them are complementary so together these will allow for higher throughput blockchains and that's an important thing to think of as you're developing applications decentralized Cold Storage um so Casa Hotel um so basically they're gaining some traction uh interesting company where they're similar to coinbase in some ways but they basically resolve a paradox where you know thesis is people want to store at home the antithesis is um you know they uh they don't they don't know how to do that technologically it's like protocol

is not feasible the synthesis is you you know store at home um but uh you have a service that's helping you do that right so decentralized cold storage um another application stockware so you know this is SAS for gas right uh basically um you know smart contracts are on chain the charge for each API call so uh you know right now when you when you set up an API you have to set up a stripe billing layer and quite a lot of stuff but it might be the kind of thing where you just put a snippet of code there almost like a Lambda italyst Lambda function if you're familiar with that put a snippet of code on chain and just set up billing and ta-da you've got a function that can just execute and make you money um so that's what I call SAS for gas

another kind of thing so insurance so uh basically when smart contracts fail in theory you can get a payout now many of these things are themselves written in smart contracts so you don't know if that'll um that'll actually work but it's you know it's certainly an interesting concept multi-wallets right so this is something you know my crypto I think is one of the best of these but basically Beyond just send and receive there's Buy sell sign vote stake register and what have you and um these verbs uh you know and by a verb I mean action I think are going to come to all wallets so security so um Zengo is the first uh so it's like a like it's an innovation on security which uses face ID for Save

and restore and I think you're going to see this kind of innovation uh where it becomes easier and easier and crypto eventually becomes easier to use and harder to lose than than your traditional money over time new financial instruments so fomo 3D and pull together these are two examples fomo 3D was this interesting game theoretic thing um where if you were the last person to deposit money send money to this address you'd get the pot um but if somebody else sent it then they went ahead of you in in the queue and uh so the game theoretic thing is if nobody else is sending it then you should send some money but if other people are saying somebody then you shouldn't send some so it's kind of unstable equilibrium and eventually a guy won by just flooding the blockchain with transactions

um at the ethereum blockchain of transactions and then you know putting their transaction into to take the the rest of the money out was very clever uh pool together is kind of a different model where it takes folks Lottery like instincts where they want to quote gamble money um and instead what they do is they kind of give you Lottery like payouts uh for saving money um so you know you could win 1644 every week just by saving your money and uh it's clever because it's it's kind of something that takes Lottery like instincts and couples them to actually a pro-social behavior of saving money which is very clever so these are things that I think would be difficult to do in the traditional Financial system but that now we're starting to to see versions of this it's very promising area so blockchain games another promising

area so Forte will be talking about this but you know there's variants of this some you know that have micropayments built in some of them that merge Esports and crypto um others that you know have uh in-game potions or things like that and so you know maybe you it gives a new you know definition to Pro Gamer you're just racking up the crypto by playing these games right um crypto social networks like you know voice and twitch are two of these but there's a ton of them these are still under infancy there's lots of different theories on how decentralized they need to be uh should they be you know decentralized um at just the currency levels they'd be decentralized at the application Level we have to figure all this stuff out um but but some of these are things where the application centralized the

coin itself uh is decentralized and they just kind of go with that so then decentralized DNS so ens Unstoppable blocks Jack handshake these are essentially dominiums that you can programmatically register and then work with um and you don't have to go through DNS and that itself is actually kind of useful where boom you can deploy a website and actually get a custom domain just for that website it's actually fully deployed which is actually better for testing than the current Paradigm of staging and test domains um automated Market making now I'm actually kind of bearish on this uh but it's worth mention um you know things like uniswap or the concept of bonding curves uh you know they're trying to give liquidity to the long tail such that anybody can come up

to effectively a smart contract and and get a fair price from it back the tricky part with this is there's various kinds of market manipulations and theory that you can do outside of that smart contract and um you know we'll see if these survive long term I'm wishing them well um but and it's worth mentioning to understand the concept like an automated you know like like uh like Market maker um but but we'll see if these work decentralized identity so um you know three box is good there's like decentralized data density uh but these are essentially folks who are trying to um use uh you know ethereum or other cryptocurrencies for sign-on and not just payments

um and uh so I think this is something where you might need to see like the equivalent of a Fiat exchange which lets you exchange if you have currency for cryptocurrency you might need to see something similar which lets you exchange Fiat identity like driver's license or passport for crypto identity of some kind then you know personal tokenization so Reuben Robinson did something with cnsl Spencer Dinwiddie has launched a token um so folks are issuing tokens for their time or some function of your time like a consult I think this is actually a pretty important and big thing mutuals and Guild so mull it down and get coin so these allow people to vote with their funds for like the direction of protocol development and the attempt to incentivize like you know Collective action um and you know we'll see if these work

I think the fundamental issue is folks who are investing um you know their money in something they're you know to Simply improve the protocol there's always a free rider problem where the person who doesn't invest the money can still benefit from improvements to the protocol so we haven't yet solved that uh one possibility is your corporate entity or you're you know very interested individual and you want to steer the protocol in this Direction versus that direction and so like voting with your wallet for development is an interesting model like how Bitcoin is working um Founders rewards so just like scaling this is a it's kind of a technology or business model thing you should be aware of as designing applications so zcash pioneered this concept of founders award

where people get a cut of the Z cash Mining and other folks are getting this as well bch and others or they're they're trying something like this and uh this is a new business model for funding developers from Awards and it's interesting because it gives a model for example for Progressive decentralization you know you can have a founders award which you know in the first few years and it kind of draws off over time and after 10 years you don't get any more um without the community re-upping you and that's kind of like a 10-year vest but for a decentralized protocol uh and it's a clever way of making money um for the founders uh for for developing this thing but still having to be you know decentralized in many other ways so on-chain bounties um so tezos uh you know basically had this concept where

the developer Bounty concept like Bitcoin but putting it on chain which thing is a novel novel kind of concept um clients for dapps so like Instagram for example makes it you know easy uh to interface with with all these D5 applications kind of like a coinbase layer on top developer tools so Alchemy and bison Trails uh improved apis for Geth General performance improvements if you're you know just setting tons and tons of transactions down to you know the blockchain you might want some of these as as kind of an intermediary um oracles and prediction markets so Erasure auger um it's also like chain link and stuff like that basically uh right now you can only really bet on prices on you know ethereum blockchain directly but if

other kinds of data feeds are put in there then you can place bets on those and auger is live and folks are trying that out other folks are trying different kinds of oracles as well to place the data on chain so you can make bets on it um Dows so this is worth a mention kind of you know the simplest version of this are the intelligent agents we mentioned earlier but you could have um these organizations uh with you know the a in Dallas whether they're actually autonomous or what have you is TBD but but essentially it's something where you know trading money all these changes is kind of like pure internet Arbitrage um and I think you're going to see that with with intelligent agents and you're going to see more besides that come into your own organization so these

are collectives like cooperatives that are owned by their users and I think you're going to start seeing um that become a lot easier to do with crypto um like like a group it doesn't have to be like a normal Corporation it could be a thousand folks in a group decide to set up something that's producing Goods for the members and and that's kind of cool it's like a fusion of groups and capitalism and so on online so that kind of brings us to the close I you know I surveyed a ton of different kinds of applications there the goal was just to give a sense of how broad the space is um and I'm happy to answer any questions or take them maybe Jesse you can you can tell me yeah thanks boji I'm going to try and actually join the zoom meeting so that you can see folks during the Q a

let's see if that works oh wow lots of people there's lots of people okay cool um well thank you for that presentation that was great so yeah let's open it up to q a does anyone have questions and in order for biology to hear you we're gonna have to give you the mic so hold your question so you get a mic uh my name is America one of the Cyber Coates ones I'm really interested in the trend of D5 but I saw something very curious where an artist was um token was they were using her nft to collaterize for a loan do you see a trend of collateralized gaming instead

of just collateralized loans because I feel like one you must have money to like participate in D5 but if you have assets maybe that's a entry to get into the space yeah it's a great question fundamentally that depends upon uh the price for that asset and um the issue is that uh you know currently you know the way that make or something like that is working is with ethereum as collateral and there's a large and robust and Global liquid market for what one eth is worth um but if you have a painting or digital painting or something like that um your you can use this collateral if and only if uh you have a large enough market to give a price on it now that might be just one person

um but that person would have to have some kind of binding contract they'll buy it back at a certain amount um such that the the person will extend you credit I think it's possible I think these markets have to become deep enough to provide pricing for for non-fungible assets please hi uh in the you know past you know 15 years with internet companies a lot of value capture has come from either data monopolies or attention and I'm curious for the crypto applications coming up over the next five ten years do you see any like large themes of where value capture is going to come from question um so I'm actually very bullish on uh tasking in general So like

um you know what we did at earn uh you know earn has gotten to several hundred million dollars as in sales under coinbase earn where all of these crypto issuers are for example if you're a new user to coinbase you can get like 180 in free crypto at coinbase earn and the reason for that is all of these asset issuers are basically paying users to do tutorials and tasks and learn how their coin works like send a private transaction with Z cash or take out a loan would make or die and so on and so forth so that's cool because it's the better than free economy rather than just try to hack your attention people are actually paying you for it um and I think that's going to be a major area of tasking and I think that's going to go from hundreds of millions of

sales in the last few years to billions and eventually tens of billions so that's kind of one area and crypto uniquely enables that for a lot of reasons but one that I think is really underappreciated so if you think of stripe um you know stripe is a multi-billion dollar company like 30 billion dollar company because it improved over PayPal on pay-ins right you know setting up a form to just receive credit card payments people thought of as a solid problem it's actually a huge pain with PayPal and stripe you know made that much better and therefore improve pay ends but if pay ends on the internet were hard pay outs are even harder and one way of thinking about that is if you just think to yourselves okay how many websites have you put a credit card into it's probably dozens if not hundreds we

say how many websites have you put your bank account into to get paid that's actually much smaller right it's probably like you know maximum five to ten and usually not even that maybe if you're an Airbnb host an Uber driver maybe PayPal has it coinbase has it but not too many websites have your bank account information because a website with your bank information can debit rather than credit so improving payouts on the Internet is something crypto does since with earn for example we could pay out 10 000 people by hitting enter right so that's why I'm very bullish on tasking and earning and so on in general and I hope that actually helps make the internet more positive some because right now there's a lot of fighting um and it would be better if folks

accumulated you know ten thousand dollars rather than ten thousand likes you know I think um so that's like one major area I could give others but that's one hey Balaji thank you for the presentation I have a question for you with regards to social so I see sort of a lot of development on one side with signal and with uh organizations like Matrix but there's a version of the future where you'd imagine every email has you know an amount attached to it or every tweet has a stake to it and you can filter based off of some kind of economic incentive do you think that future will come definitely and here's why I think over the last several years um you know different parts of email

have been factored out right so you know emails between friends have gone to Facebook emails within companies have gone to Slack um emails kind of to strangers I mean they're sub stack and that's kind of coming back but there's Twitter and so on for that um so so really the primary use of email today is for two things first it's for things like receipts um password resets uh you know that type of stuff right and you know what people call transactional email um and uh second it's uh inter inter Corporate email so you are a sales rep contacting another person at a.com trying to get their attention now

um I think that channel because you're proposing a commercial transaction much of the time is something where legitimately you could put a dollar sign on the edge okay so because it's a commercial transaction you could put a dollar Cent on the edge and it's not unreasonable whereas with a friend you know paying them for their attention wouldn't seem right um you know for a co-worker paying them for their attention may not seem right unless it's a very very large company um you know where you know maybe there's some bonus or something you're doing um but for a stranger who you're proposing a business relationship with it's not an unreasonable thing to do uh and uh so moreover if you think about email your email inbox is a to-do list that

somebody else's writing so if they want something to go to the top of your to-do list simply paying you to get to the topic 2 list is actually good now of course there's tweaks to this many folks um who are wealthy enough may not actually care about it from a um from a money standpoint but they might care about it from a signaling standpoint and so they could just elect to donate all the money that they received to charity and maybe donate fifty thousand dollars a year to charity simply to sort messages by priority so that a stranger who really needs to reach them can do so uh and so that's some a way that you can use it for prioritization and still do good at the same time and that's actually what a bunch of Asics and Z Partners did with their own.com they donate to black girls

code donated to worthy causes people get to the top of their inbox so I do think we're going to see another version of that when deciding which apps to include on the 2025 list whether what were some criteria you were using was it mostly based on usage right now or kind of from first principles Etc oh um I think you know so 2025 is basically a grab bag of stuff I've been paying attention to um I was trying to be Broad and pick a bunch of different things everything from Hardware wallets to privacy coins defy new chains etc etc um I actually probably you know what I undercovered maybe is new chains but those are almost sometimes the most covered you know you can scroll down

Quinn market cap and take a look at them um basically I thought of them all as things that I could see some version of that concept working if not the specific company you know like I'm pretty sure crypto games for example are going to be a thing by 2025 just people want to make money on Esports crypto lets you monetize better you know that seems like like an obvious thing so yeah I'm bullish on most of those Trends but it was just kind of a grab bag of things I thought useful to mention like I could probably do another 20 slides frankly um but just it was just kind of a selection hey I'm just wondering what you think crypto is going to do for like the future of work and employment because I know you mentioned tasking um sounds kind of like you're thinking

that like employment will be sort of unbundled with like bounties and other things like that so um how do you think about that in terms of uh the way people are going to actually be employed by companies in the future yeah that's a great question so I mean the thing is that um so I do think that there's going to be a huge scaling up of microtasks for machine learning training and the reason I say that is uh we haven't yet you know so we've been using machine learning you know to train things like image recognition and and stuff like that what we haven't done is ask experience uh doctors and lawyers and I mean there's there's folks who have trained certainly

Medical Imaging machine learning but we haven't gotten all this information out of the brains of skilled people um and eventually you know for example a bunch of lawyers annotate a contract as that language is non-standard this language is standard um you know a number of uh let's say photographers say oh that photo is bad this photo is good there's actually a ton of stuff we still are going to be doing in terms of taking skilled information digitizing it and pulling it in um and and eventually what that does it allows you know the doctor to just focus on the really hard cases and the audience diagnosis can take care of other things kozlo has talked a lot about this uh so so I think there there will be an Avenue for that kind of like much much more in the way of training data

uh but you know it's it's hard to fully fully fully factor out a job into only micro tasks um because there's a lot of shared context right um it's it's something where uh you know I I think you could make it work for programming first where you'd have a GitHub repository you have 500 open bugs then you put 100 bucks on each of them and you put fifty thousand dollars out there and you let the Sharks devour it right that's to say on each of those like you know GitHub itself actually has GitHub um bounties now um or this bounties is called something else get a Rewards or what have you and the the concept would be you put fifty thousand dollars out there 100 bucks on

each ticket and you just let the Piranhas all the open source developers try and go and solve them and maybe that'll work but you're also going to need some kind of approval process so maybe you need another fifty thousand dollars to pay reviewers of those tasks and what have you so I think it might work in programming first it might work in books I think we need some real Innovations in kind of mapreduce or labor before that works and that's non-trivial I think it's feasible but non-trivial uh hi thanks for the talk my name is Jeff I guess my question is so blockchain offers a lot of really interesting possibilities for identity um and really in like a very different way that than real world identity works today and I was hoping maybe you can

just expand on what you think the opportunities there are um yeah so so I gave a talk on this called the pseudonymous economy and um the concept is that um in the pseudonymous economy um people earn under one name they speak under another name and their real name is yet a third name right so you treat your real name quote unquote you know and I put it in quotes because uh you know a real name is a state assigned name um you know you can't sequence somebody's genome and determine their real name um you can determine you know like like their blood type and other kinds of things by uh you know from the blood you cannot determine their real name so you know you're if you treat

your real name as a social security number uh and you might say well that's really atypical biology why would someone do that well and give you an environment where hundreds of millions of people do that every day and that's read it right like hundreds of millions of people are effectively pseudonymous all day on Reddit and they just use whatever name suits them they build up reputation under that name and they can switch other names and what have you and like the one convention all these people on Reddit go by is that doxing is bad right mapping the real name to physical person is bad and one of the reasons for this is you know a kind of half joke about this but I think by like 2040 or thereabouts docson will be like considered like one of the worst things you can do because um if you dock somebody you get their

address you get their address then you know you can like you know who they are you can cause harm to them in the physical world so I think that you're going to see a huge burgeoning of pseudonymous identities not just for communication which we've already had over the last 20 years but for earning and so people will live their entire lives for the most part pseudonymously and they will say nothing controversial under the pseudonym that's earning and then they'll have older controversial stuff for their pseudonym that's speaking and then they will file their forms on yet a third pseudonym which is just you know the or the real name which the government identity um and you know this is already actually happening among you know gen Z of which I'm sure some of you have either are or have uh uh you know siblings who are

where you know they have Instagram and Arista right so finsta is their like fake Instagram and rinsta is their real Instagram and on the fake Instagram uh they're under a fake name but they're being their real self um you know and on the rinsta they're under a real name um but they're being their fake self because they're posting photos in Sunday Best with Mom and Dad or whatever and they're not letting it all hang out so this kind of multiple identity order as opposed to multiple identity disorders kind of already there among you know younger kids um and and so I think that's basically where Society is going and I think crypto is going to help with that because it'll allow people to burn under those different identities which really closes okay great but thank you very much for watching we appreciate the presentation thank you

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