Chris Dixon: Crypto Networks and Why They Matter

Transcript

[Music] thank you [Music] welcome it's awesome to have everybody here um so this is going to be very high level and but don't worry there's I guess hopefully we're going to dig into a lot of it over the next seven weeks we have a lot of reading material we can answer questions so so if it's some of it seems too high level or too abstract I think that's probably okay maybe for some other people it'll be sort of obvious also this is obviously kind of our our perspective on what blockchains are

you'll hear different kind of views from different people and that's that's a great thing and this is just kind of one view on it so we're going to start this kind of a two-part talk the first part is um this this kind of interesting I think data analysis project that um I that we did here at the firm [Music] where uh so people have been in the space for a long time often talk about the different waves of crypto and so the the really old school people were sort of pre-2011 and and before sort of when you know Bitcoin was only among a very small group of people kind of known about and then there was sort of this price wave that led to sort of more interest and then 2013 happened and there's another kind of price wave and that led to more interest and then 2017

um and so we tried to kind of like look at that history and put some numbers behind it and I thought I would share that with a group uh because maybe not everybody has that kind of full context it's also helpful because right now if you read a lot of the press you'll see a lot of kind of negative stuff um uh the the kind of sentiment is among some crowds is you know there was this big run-up in 2017 and then it's a crash and it's all over and it's like it was a fad et cetera that's obviously not what we believe you know this is reinforced by this chart which is you know if you haven't been in the space for a long time looks like nothing happened and then a big price swing and then it kind of died we're not you know we're not

saying prices are everything but people sort of take this as a proxy for uh you know the general kind of excitement level in the space um what we think but actually the way this space works is there's just kind of this this kind of flywheel between the prices uh which which do kind of generate uh interest and awareness and kind of social media activity I bet you a lot of you every time we meet with entrepreneurs we always say how did you get in the space and almost invariably it's either 2011 2013 2017 you know their friends were buying these things and they started reading about it and but the price is like a hook right the price kind of got them into it but then hopefully they didn't stay because of that right they weren't I doubt many people here are in this just because

they want to see the prices go up there here because they actually believe in the technology right so so what what we've come to see is that people come in they they you know because whatever they're trading or something they start to get interested maybe they they start following people on Twitter or Reddit um they start to have new ideas maybe that is reflected in kind of GitHub activity and other things then there's new startups that come around and we did so we did this data analysis and this is some of the data that we had so this is wave one so this is uh 2010 through 2012 and you'll see what's interesting on the price thing is it's almost fractal-like where each wave looks very similar to last wave when you zoom in um for the ogs here you'll remember the

developer activity was this is primarily our you know the Bitcoin GitHub repo startup activity you started to see things like that's when coinbase was started and a lot of the you know crack in and I think I don't know exactly what you're a bit main but I think a lot of the miners and wallets Etc right we're at uh the Reddit activity and this is mostly we're using Reddit here but it's sort of a proxy for other things and you start to see like our Bitcoin things like that so that's wave one wave two 2013 I kind of got personally got interested around uh to 2012 made our first investment in 2013. you had that big price run up and then looking what's interesting there is the developer activity really started to take off startup activity social media activity and the developer activity was sustained

um even when the price kind of dropped back down right and this is when I think of it as so that first way the startups were kind of more you know wallet Bitcoin related wallets things like this here you had we have some icons on their show you know you had ethereum Monero you started seeing people playing around with kind of new blockchain new layer one designs kind of a wider kind of design space I think the each of these times like kind of the design aperture kept widening for those again for those who've been in it you kind of know this intuitively Wave 3 which is the recent one a lot more we just put some examples up there but there's you know I think 30 depending on you you can pick your favorite 2030 projects that kind of got started around that period

the developer activity you know continued to go up let me put this all together now because the axis kept growing and you can't see it all but like these these things actually go up really significantly in fact here's sort of the the even with the drop the you know kager is a financial term compounded annual growth rate even with the drop at the end here you still had significant growth rates year over year for each of those categories and so you know we think of price as a as a as in most startup markets price is a lagging indicator um you know we don't invest at education Horowitz and we invest in plenty of things that don't even have revenue or business models for that matter um and then only like 10 years later do you like sell it or something so

normally we don't think of price as the lead as a as a we think of as a lagging indicator in crypto it's weird right it's different like because you have this because these assets have prices and they fluctuate around and as a result you get this what I kind of have been calling the the price you know price interest activity kind of feedback loop where the price feeds back into the fundamentals um basically the way I think of it now is we've in 2017-ish planted a whole bunch of seeds which are now you know going to hopefully kind of Bloom in the next year or two and those will we hope will kind of drive another wave of innovation which in turn will kind of in this flywheel create you know more interest more ideas and just continue to kind of uh generate a pause

the feedback loop like that so this is our way of kind of trying to characterize like whenever I talk to people that have been in the space for a long time we always talk about the waves and the and they have people outside of the space are more new to the space sort of like what are you talking about and is aren't you just focusing on price we're not focusing on price we're focusing on interest and activity so that's that's just kind of the historical context um and that was a fun project because I thought that was going to be the case but we've never actually done the data analysis Eddie here who's on is Eddie here Eddie's our data scientist we finally have a data scientist so we did this is a very uh detailed thing at some point we'll probably put all this data

on on GitHub or something um okay so let me talk about kind of at least this is my own editorializing how kind of I think about blockchains um you'll hear different views from different people by the way when I say blockchains we're not blockchains not Bitcoin people here we think that architecture of like um a blockchain with a token it can be a can be uh generalized to a lot of different applications and this is kind of how we think about it so my sort of sort of Broad View I think you can take in the history of computing right you have you have the kind of early ideas behind computers developed pre-World War II and then World War II really accelerates things you have kind of the you know the eniac and all that kind of stuff and then and then you have the then you have these different eras

and they it's they uh it's it's pretty remarkable how regular these Euros are they're every 10 to 15 years you had you had a new era so you had mainframes mini computers PCS internet and then smartphones right and they were now I think of the real modern Advent of the smartphone Heroes 2007 you know the iPhone so we're 13 years into this cycle and sort of the way I think about it is there's kind of three logical possibilities at this point either this is the end of computing we're at the end of History the iPhone is it you know 400 years from now people are using iPhones and Instagram maybe all right that's not my that's where I'm not putting my bets um another view is there's going to be another one new thing you know and it's VR or ar self-driving cars or blockchains or whatever I I actually my

own view uh is that is sort of all the above I think there's a whole bunch of really exciting things happening a lot of these new devices are kind of AI power either kind of taking advantage of two trends of sort of Moore's law on the shrinking of computers you can get a two dollar you know a two dollar uh Linux powered computer now and you can get with Wi-Fi connectivity combined with AI and you know and all this kind of cool stuff happening on the device side which I'm not going to talk about today but it's very cool and it will mean there's many more devices embedded throughout the world um and then there's blockchains which I think of as a new type of computer and why do I call it a computer um it's a computer in the literal sense for those who do computer science so if

you have you you know if you look at a system like ethereum you have a way to store data keep State and you have a way to operate on that state you have a program in language right now Bitcoin you know is is what I would call an application specific computer it's a computer sort of like a calculator or an Xbox or some other kind of computer where it could do general purpose applications but for the various design reasons the designers decided to constrain that into a limited set of things so this is this is how I'd like to define a blockchain it's a virtual computer that runs on top of a network of physical computers so virtual computer meaning uh you know ethereum if you're a developer writing solidity it appears from that perspective of a developer to be a single computer with a

single you know memory space and you know a single instance computer of course underneath there's a network of physical computers in the case of the current ethereum miners or validators Bitcoin has miners you have physical computers underneath the key the key feature of this like why would you want to run all these things on on you know these virtual computers on the network of physical computers it's because uh by doing so you can provide guarantees that the computer will continue to operate as designed and if you write solidity code for ethereum you you know that unless you know more than x percent of the miners become evil that that code will continue to run as designed right so you're not depending now you think about

any other computer pre-blockchain uh you know I so two models either you own the computer you have a personal computer you have a phone or you're basically you're renting the computer or you're literally renting it from AWS or you're effectively renting it when you use Facebook and Google right but behind every computer outside of a blockchain there is a person or organization who can change their mind right and so if I went up and said I'm going to have if Google went up or Chris went up or anyone went up and said I'm going to have a new currency and there's only gonna be 21 million of them ever right Chris coins Google coins you name it right why would you ever believe that because the person who controls a computer can change their mind the hope the whole interesting thing with the blockchain is it subverts the governance

the the hardware is governed by software instead of the software being governed by Hardware right and that lets the software make guarantees that you can that users and developers and other network participants can trust in a way that they couldn't they couldn't trust a traditional computer that in the end is just sort of being puppet Mastered by a person who controls it right um and so specifically like in this case I I'd like to say my I'm always trying to think about these like simpler ways to explain this and the phrase I like lately is computers that can make commitments and so a computer you know in the past you couldn't really make a credible commitment but now you can and so like when you think about Bitcoin what commitments is it making um it's making the commitment to only be 21 million Bitcoins as an example now

that's not a sufficient condition for Value but it's a necessary condition for Value if you didn't have scarcity you couldn't potentially have ascribed value to it and believe it's sort of digital gold you may or may not believe it but you need that right um and and there's an interesting reason why the only examples of anything that ever kind of had store value properties before Bitcoin were either government-backed because people seem to believe that governments can make commitments although that is interestingly very you know depending on the interest rate of the government like it's the level of people believe the commitment or in the natural world you know scarcity of precious metals and things like this right but that's why you've never had a credible digital currency uh before I think is because you didn't have this architecture where you could truly make these commitments to things like

scarcity to protecting from double spends to true you know genuine ownership Etc right but the cool thing is I think what people have realized over the last five years is you don't have to stop there you can make commitments about other things and we're just beginning to understand and this is kind of one of the exciting things I think about why I wanted to have this school and have people like think about it our feeling is this is an incredibly Rich design space we have a friend of ours biology who'll be talking here biology of awesome he has a um idea he calls the idea Mas and the sort of the ideas when a new you have mobile phones it sort of like picture picture a person running through a maze and there's treasure and there's monsters there's all sorts of other things and and this is kind of the

life of a startup is you run in the Maze and I'm going to create the social app or something and you run into the Maze and then you realize oh God no one likes this app and I'm going to try this thing and you you're kind of running around and and then what happens is with technology particularly interesting because then every once in a while a new part of the maze just kind of opens up like mobile phones now you can do this and like it's a whole new kind of area of the maze our feeling is there's just very rich new maze the blockchain maze you can have computers that can make commitments what can you do in this design space it's it and our feeling is this is incredible new Maze and there's very few people running around that maze right now and so like we're hoping with

with for example this program to get more people to realize how exciting a maze it is and more people have run around it because this idea that computers can be agreements is such a profound new idea um okay a little bit about the architecture I won't try to pretend to like explain blockchains here Dan I think we'll talk a lot more detail and frankly a lot of the stuff you got to read about probably because it's a little if you want to get deep deep into it but this is kind of like very high level how I think about how you woman should think about a blockchain computer on that side if you're programming solidity as an example or whatever you might be you know it in the highest level the right level abstraction it just looks like a computer and it has various properties

it can do new things like wow a smart contract can have money in it and things that you couldn't do in kind of previous programming languages here are the kind of nodes and these as people probably know you know could be proof of work proof of stake and you can have all sorts of religious battles about what what the right architecture there is and then the middle you have a consensus mechanism these guys are voting on the state the state of the machine this one's tallying up the votes and then the output is the resultant virtual computer right um I I just in a the short thing I'll say here is uh if you think of this as a computer I think what's exciting is that there's just a ton of cool projects problems to solve here and there's a lot of opportunity for improvement um so

what is ethereum seven transactions a second you know or something I think it's very credible that you'll you know you're going to see thousand X kind of improvements if not more in the next year or two on on all sorts of all these kinds of Dimensions so Moore's Law is often thought of as just kind of packing more semiconductors onto a chip um Moore's Law actually if you look at it like the the semiconductor thing most of it ended in like 2005 and yet your mobile phone today I bet you is a lot better than what in 2007 Moore's Law is really about it it does matter that you can that Intel has come up with fabrication methods to pack more semiconductor so I'm not dismissing that but in general Moore's Law is I think better thought of more broadly as an economic principle that when a lot of really smart people

who know computer science start thinking about computer science problems and have an economic incentive to do so those computers tend to get a lot better and I think we're experiencing that right now in the around these kinds of blockchain designs and I think so that I think that's going to unlock all sorts of new things so you think about like what's worked on ethereum so far today most of it's been things like defy for those familiar with the decentralized finance lending things like that those because decentralized fine is one of the few things that can kind of be a good successful user experience with the constraints that some of the system like ethereum has which is it costs you know 10 cents whatever it is for for you know transaction and takes you know whatever 10 tens of seconds to resolve a transaction it's a great lending

experience it's not a great gaming experience as an example so as we see kind of better platforms come out we should also see kind of new unlocked you know application design spaces unlock as well there's a bunch of questions which I'll kind of gloss over maybe other people can talk about more but you know what what's the right incentive system for minors validators um uh you have blockchain designs which which rely on economic incentives you have ones which don't um uh there's Arguments for both we tend to We tend to bias towards blockchain designs which have economic incentives like Bitcoin like ethereum we like those because you can reason very precisely about the economic uh uh uh Pro you know incentives to attack you know attacking

those systems and um you can assume that people are greedy and capitalistic which you know and that the system will continue to run as design which tends to be a more robust assumption than that people you know are well intentioned um and so there's a bunch of interesting problems here around node design things which I'll I'll let other people talk about later um uh you know on the consensus side um there's a lot of really cool stuff happening people adding like you know if you've seen systems like dfinity and algorand they add Randomness into the consensus um uh there's a bunch of other you know people follow the ethereum 2.0 stuff there's a bunch of really interesting stuff there's a lot of great really interesting stuff happening um at that level and I'll let Dan and folks talk about that

um and so the kind of it's the way we think about it as a result you get these kind of trust guarantees and um and and then I guess kind of switching metaphors the way I think about it is you then have these that the output of that are these new Lego bricks and the Lego bricks are things like digital money um as an example like so you have on all of these sort of blockchain systems you have these concepts of tokens right and you have both the kind of system level tokens like ethereum and you have you know uh uh erc20 type thing sort of tokens on top um you have this idea of sort of digital Goods which is nfts which is the idea that you can have um uh you know sort of like digital money that's that's uh that's uh non-fungible you know they can represent

Goods physical Goods virtual Goods um you know I think of it as those Lego bricks then build up you have Smart contracts which are just you know longer term essentially code that runs which then sends money or Goods based on the conditions of the code um uh you know and then like another obvious kind of building block that comes out of that or decentralized organizations that's personally one of my favorite areas I feel like it's under explored um and you know decentral or as you look at like maker Dow or system like that you've got a you've got a uh really like I I feel like it's dramatically underappreciated how novel something like that system is right it's a and if you haven't read about it I encourage you to um so you know maker Dao is kind of a lending platform combined with a stable

coin it's a very interesting system but I think to me the most interesting part is a Dao it's an organization that is owned by the token holders who then vote in fact there's a vote today on like a major upgrade to the system um and you know to me it's it you know this is the way that 10 years from now a social network should be right like instead of having a opaque mysterious product management group at one of these large companies decide on like what the rules of the U.S election are maybe the community who who uses that Network should decide on it right so maybe there should be a vote on Twitter on Facebook as to what are the rules or who are the people that represent the rules uh or what are the rules around the privacy of the data

what are your what are your protections as a user uh you know in theory your protections are a 30 page I mean think about how it's ridiculous is a 30-page privacy policy or terms of like which no one of course the click-through agreements no one reads them that's in theory how you're protected on those networks it's a Preposterous system the right way to do it is to let users control the data to have encryption to have the proper governance built in this is also by the way the right way to do it is to let the users have own a piece of the network right why shouldn't the early Uber and Lyft drivers have been rewarded along with the entrepreneurs and employees and Founders and everything else as part of that Network right so so but that's all enabled by um these new these new Computing

Primitives which are in turn enabled by that new architecture right and so sort of you need each step along the way to kind of get to the final result um but the good news you don't have to uh you don't have to understand each level to to do stuff in the space like in fact in fact a very important thing I think will happen in the next couple years is that specifically that you won't have to do that you'll be able to build applications on top of these systems without understanding all the stuff right and in fact that was the key moment on mobile um was that uh you know prior to the iPhone if you wanted to build there were a smartphone I believe I know people were probably too young to remember they were smartphones before the iPhone there's the trio sidekick the Mobile

Windows mobile phone all the stuff but it was very very hard to build Instagram Snapchat Uber all these other things in fact you had to really be like if you wanted to do like a location-based thing you had to be like a GPS expert you had to do all sorts of low-level stuff the only real mainstream hit before the iPhone was a Blackberry and the Blackberry was a hit because the founders of blackberry said you know what we're going to build a system end to end that's going to optimize email and it's going to make it feel like basically a modern you know meth like WhatsApp experience today or something they said we're going to do that in 2003 we're going to build a WhatsApp experience but the way to do it back then you had to build a device you had to build the software you had to build

the network you had to build everything right you need to build all those things that's the way crypto is today like you want to build a killer app Unfortunately today you got to understand nodes the defense mechanism all this other stuff that won't always be true that I think that we're like couple years away from the from the point at which when mobile really took off when all you had to understand was hey I understand the college kids want to send ephemeral messages and I know how to write some Swift Code and I know how to you know use the abstractions that Apple provided in iOS and that's it right and you can just focus on what you're good at which is like the the business logic or the application logic and that will happen and that'll be a very important point when these two things kind of divide and

people can just think about the kind of the layer that they're good at they'll be infrastructure folks who will do the infrastructure just like the people that are building Qualcomm or whatever who are building like the chips inside the iPhone but then there'll be people building just applications but I think that's the way I kind of picture it is you got these building blocks so you've got the architecture designers shown before which then gives you the emerging properties of the blockchain lets you make commitments these commitments in turn let you create New Primitives probably see more Primitives invented in the next couple years I'm sure this is not an exhaustive list and then you see like people building these sort of houses and things out of those Primitives just a little bit about this is more like to respond to some of the kind of cynics we do here

a lot of uh not not not here but from other people's cynical stuff people talk you know about oh these systems are too slow they don't scale the user experience is bad um this is again something where if you've lived through different Computing Cycles you remember that like the early iPhone I hadn't really I got an iPhone the day it came out in 2007 and for two years I carried around two phones because the iPhone's connectivity was so bad it dropped calls all the time you know it was hard to type I wrote a blog post about it there's always back then if you go read the articles all the reviews were like this is ridiculous like how you're going to learn people are going to type with their thumbs like it's now everyone is revisionist and claims they loved it from the beginning um the uh the the actual if you have you

go if you have anyone have I have my first iPhone I still have it it's like this postage stamp so tiny and it's like so slow and it's so junky it's amazing how much better they got so early PCS you know the first Apple II was kind of the first PC it costs 5000 something dollars in today's dollars um all you could really do was program on it um they sold 500 000 units like that's it Apple II even it's a very famous computer but what happened of course is those weaknesses go away over time right people improve those things so like all of these things every one of those things goes away over time and then on the strength side you have these new strengths and at first they kind of like what are you going to do with GP what are you gonna do with a portable

computer in your pocket with GPS like again it sounds silly now but that was like a real question um and it took it usually takes once you have the right killer platform I think it takes three to five years for application Level entrepreneurs to fully explore the design space and figure out what is the best thing to do with GPS what is the best thing to do with a camera in your pocket right this used to take a while to figure out I need a lot of people a lot of smart people trying a lot of things is this a real live it and so I think a similar thing here like the school we're going to see over time usability and user experience and scalability everyone's chipping away at it with people every day working on it and then what are really the killer

features with with the you know the provable trust guarantees digital money digital Goods all these things we were talking about like what are the things because you know we've got a whole bunch of candidates right now and maybe it's something around tokens or governance or Dows or you know digital money or whatever maybe it's payments maybe it's video games a bunch of candidates probably something that we talk about in this course will be something that that is a killer app 10 years from now people talk about we don't know exactly what it is and hopefully people like you can go and explore and maybe figure it out one a couple other things to point out um you know PCS the history of that is we had Apple II in 1977 you had PCS before that you had spreadsheets starting to be created like it was like

79-ish if you look at the chart of PCS they didn't really start to take off until like the early 80s it took like five years and you think about it like now it seems obvious why wouldn't you have a word processor you want to type until you had desktop printers which took a long time until the late 80s it wasn't really useful you just sit there and type and what do you do you didn't have email you didn't have like you know what you do you know what do you do with it um so these things are the point is these things are ecosystems right like you need all these different parts to kind of come together um and it it just it takes time um similar thing here we need the regulation to be figured out we need the wallets to be figured out we need the

exchanges to be figured out we need the standards the interoperability standards we figured out we need to consider you know new but faster systems we just need all these different things and so hopefully we'll chip away at it and uh get there this last thing I want to say is you know I say these are computers and that may sound weird is Bitcoin a computer um this is just an important distinction is that there's sort of application specific and general purpose computers in general um XBox is a computer that's made just for video games and they decided to make a set of trade-offs for that you know uh the Blackberry was that Fitbit is a good example you know the Fitbit I'm sure is I don't know what ship it's running but it's running a general purpose computer just that they decided to optimize that

whole stack for that one application Apple took a different set of trade-offs and decided to be more expensive and et cetera et cetera but it's going to be more general purpose and sometimes it's good to make the set of trade-offs for application specific like I would argue Bitcoin has made the right decisions if you want to be a global store of value you know that's censorship resistant and high security I think they've made the right set of choices to be incredibly extremely conservative with respect to changing the system like I think that they've been a smart set of trade-offs by making it more General they would take more security risks which would which would degrade the core value proposition that's it I'll take questions yeah teams are really good for is Trust pragmatically choose what to trust what

do you think product developers need to do to convey that to their end users that's a great question um yeah no it's a great question so I think um I think I guess it depends on the application I do think it will take some time I guess I think of it like let's take the gaming example like um I think there's kind of an aha moment in gaming when you talk about like virtual Goods like so then they haven't gotten there yet just simply the products the right products are not released yet but to me there will be key moments when um you not only like earn some virtual good but you're then able to go like really take it over to like another game or

sell it or do something like that I think with most tell me if you're like this with me like for me the first time I transferred to bitcoin as an example I mean that's technical I know someone but like it's still it's like wow this is like there's no one doing this and it's just the network doing it and it was kind of this magical aha moment I think with most end users it will probably be um something I've assume like a less kind of nerdy context like that but but I do think that kind of like in gaming it'll be like the first time wow I bought this thing and I did it and no one stopped me and like it actually I actually had the sense of ownership I think we take it for Grant I think I sort of think of it as like we just take

it completely for granted in the real world that you can own stuff and we take it for granted in the digital world you can't own stuff right what do you own in the digital world besides the cryptocurrency right a domain name like I own cdixon.org and I like that a lot you know because like I've now been on so many different social media platforms over the years that like change the rules and added pop-ups and did all this other stuff and I really like to know that I own C Dixon I mean I know I realize this is like a like a legacy Behavior now and no one but I think it'll come back though because these networks always they always change I wrote this blog post about it they all networks follow this S curve um and and by the way like friends of

people that work at some of these companies I think they're great people like it's just it's just the logic of the business model right so what happens is they follow this s-curve they start off and they're at the beginning they're like come to my platform I'm your friend I'll like do all these nice things for you and then it starts to grow and then it's still good because you know what we're growing and everything's happy and like when a pie is growing everyone's generous and then it starts to get to this top of the you know now all the these networks have stopped growing and now you know and then they're public companies and they have to increase profits with respect to like social networking like we were just discussing this before that I was talking five years ago saying something like owning your data I think would have sounded

really eccentric you know it's like zuku Zuko and like five other people were saying yeah I probably was saying it but like not many were I think that's now become a relatively mainstream thing and I think it will continue to like that those issues are not getting those issues are going to get more dramatic right these issues of like who gets who gets to be on these platforms who gets verified uh what are the rules of like what content is allowed right these issues are not going away and they're going to get much more intense and so I think this idea like this I think there's always some aha moment of like wow I own this and I think that people will kind of start to assert their digital rights or something and like Say Hey I want to actually like if I'm going to spend time building your

network I'd like to own some of it right but it's just people haven't seen this yet it's and so it sounds very eccentric I think I feel like it'll be just sort of obvious at some point in the same way that in the real world you take it for granted like you can go own something I'm like you don't have to ask someone for me you know you buy a whatever uh you know the um you know what I don't know like a something for your house or something you're allowed to give it away or do whatever you let's sell a secondary market like why wouldn't you be but in the digital world we're just used to this thing where they can just change the rules and constrain you and so I think I don't know I guess and if you talk to I'm not a product designer but

if you talk to product designers there's always like a magic moment in every app when you kind of when they hook you and they see the numbers and they see it in the user Behavior so there'll be something like that for each of these products probably uh yeah I want iOS come up with all those abstractions that you can build on top of it especially for application but do you see that now that all the crypto like infrastructure have a lot a lot of Team a lot of um projects are like being built do you see that to be like a winner takes all kind of thing and then like application developers should just trying to find a good one or or it doesn't really matter as long as they figure out how to build crypto project on top of those

infrastructure yeah it's a great question um it's funny like when I start off in the space everyone thought like it was you know one network to rule them all Bitcoin will dominate like one of the big interesting things with ethereum to me was ethereum had multiple important things uh kind of lessons associated with it one was wow it's cool that you can have a you know a generalized programming language on a blockchain like that itself was cool but then the fact that it kind of got to scale like at least in terms of the number of minors and users relatively quickly was like wow maybe there could be more than one network like that was for me a kind of an interesting moment I think it's a great question I think we're really early for like having like a winner yet we didn't know where the winner is I

also think there's a there's a kind of a cool potential future where you have blockchains interoperate um I would love to see that like I would think it'd be really like if you guys know like tbtc the TBC that's a is like this uh kind of way to custody Bitcoin on ethereum like and then you could have Bitcoin you get like in my ideal world you have uh you know Bitcoin is a true kind of store value just sort of 20 years from now everyone thinks of it as like the digital gold and it's of course it has value and it maintains a value and then it's it's then custody on like something like ethereum which can then it can then be used as collateral for like stable coin which maybe ethereum is just the collateralization platform but then it's then it's um it's uh you have like a cross chain

interaction onto a high speed payment side chain you know you can imagine like this really like elegant kind of fabric which is actually kind of how the internet is you know and the internet like uh Ali just wrote this nice tweet storm about the history of Ip you know IP was kind of if you look back it was kind of this really kind of uh basic uh protocol that had competitors that were much more feature Rich had better security properties and quality of service properties and things like that but it ended up and and for years you go back and Google like all these people I won't name names but of 90 the 90s all these people like oh my God we're going to run our IP addresses the internet's going to break it was like all this stuff and then what kept happening is like you know uh DHCP came

along and uh you know and I don't know like DNS subdomains and just like all these different like like things hacked and then cdns like Akamai like oh it's gonna break but then you know you kept layering these kind of different things on none of which were like totally beautiful and elegant computer science ideas but they were pragmatic and they worked and if you actually look at the internet today it's much more of kind of this tapestry of all these different systems but together with this one unifying interoperability layer of IP and it works very well that way and so you can imagine a you know sort of an equivalent thing with the internet of value sort of all these different things and each one doing kind of what it's best at that would be the most elegant thing we're pretty far from it although

we're not like we're far we're not far like some of these things are like could happen in the next year and so that's a great question that's something we actually debate a lot I don't have an answer I mean it's just it's a really interesting question uh yeah as a startup founder how do I think about decentralization it's kind of a loaded question well I think low decentralizing your own startup yes this is one of these things where I think there's an emerging Playbook like with Jesse alluded to earlier and this is one of the reasons we want to do this thing because I feel like there's now best practices starting um that aren't fully propagated out into the world um great question like an idea like an Ideal World here's how a crypto startup works I think is you start off and

you're kind of more like a regular company maybe you're physically located together maybe you're partly remote but you're working you know on like a regular kind of project management schedule and you have you know like you have a repo and all this other stuff right and because that's probably how most just just from a practical point of view how you kind of get software off the ground um and maybe you have like a Delaware C Corp and like a traditional corporate structure maybe you have stock options and whatever but then over time ideally you become like Bitcoin or something right where it's just like it's a network and it's just part of the internet you've just added that's what's so cool is you've added a new feature to the internet the internet can now do lending the internet can now do ride sharing and it's just like part of the

internet and of course you should be financially rewarded the investor should be but you do it through the individuals right the individuals get some distribution of tokens those tokens you go off and you're happy you're living in wherever in Hawaii and you're hacking on your open source thing and you have your tokens and like it's all you know and like you may or may not like you may jump in and out a lot like the open source world like today I'm working on Linux tomorrow I'm working on Apache whatever you know and if you own some tokens in each and like that that should be the way it is ultimately but I think what we're seeing now these people start off kind of more conventional but then they do kind of progressive decentralization that's what people are calling it um and there actually is kind

of a whole kind of thinking around both the corporate structure the regulatory structure the kind of architecture of the systems how you govern those networks not all the problems are solved but a lot of them I think are a lot farther than we were a couple years ago um and I think that's like kind of the really exciting vision and I think if it works it really just that's just the new way startups are created like you just that's just how you know you do internet startups right you just have you have it or at least network based start startups that involve networks right that you would just you'd create as a as a protocol and you'd have tokens and you start off together and you'd have like more like a traditional cap table and then over time you'd you just kind of just disperse the tokens and the users

would have some of the developers would have some and people would come in and out of the community so but we'll get into more details and throughout the course yeah I think so one more one more question sorry can you talk a little bit about the future of identity versus anonymity on the blockchain yeah that's a good identity is like the most it's like the most overloaded for you know term and Technology it can mean so many it's a very I mean it's a very uh complicated it can mean a lot of different things do you mean real world identity um yeah it's a real I think there is a so one of the constraints right now when you design blockchain applications is you have to assume you don't have real world identity which means you have to assume you don't have sort of repeat players in a game and so

you kind of assume the worst case so you think about like how compound like a lending platform works you just have to assume everyone's evil you don't know who they are therefore they have to over collateralize like if you had identity you could assume they're repeat players and therefore you could do things like credit scores or sort of assign reputation you know like it would relax the design constraints a lot um I think if you talk to a lot of these protocol designers so I think it's an important thing um I think an ideal world it's probably like these standards that people are developing where it's kind of opt-in and facet based so opt-in meaning you choose when you want to reveal your identity and you can choose not to so the user has the power over that right and I think and then the facet base meaning I

can show I can reveal my credit identity facet today or I can reveal my educational facet or I can do whatever I mean to me that's the most user empowering way to do it and the right way to do it um you know getting there here to there I mean the thing is like identity is not an application someone has to create an application and sort of the you know that drives usage and demand for these things and so um there's a lot of interesting thinking going on I don't know what the actual kind of startup is that kind of drives us forward um but it's a great topic again okay I think we got a yes wrap up if you guys have more questions we encourage you to share them on the slack Channel yeah thanks thanks Chris presentation [Applause]

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