The Story of the Internet, Emergent Networks, and Their Effects with Steven Johnson and Chris Dixon

Transcript

hello everyone we're really excited to have this conversation I am Stephen Johnson author of a number of books about technology and Innovation and uh co-creator of a couple of podcasts and now uh working on a project at Google called notebook LM and I happen to be a longtime admirer of the work of Chris Dixon I remember reading his blog posts in the early 2010s about a number of themes that he and I have a shared fascination with and I wrote about Chris's thinking on blockchain and Bitcoin in a Times magazine piece about five or six years ago deeply influenced by his work and so I am delighted that he has taken all this insight and transformed it into a book rewrite on

but uh we're going to have a conversation here for about an hour I'm going to kind of leave lead the discussion talking a little bit about the history Christmas history our shared interests over the years get into some of the arguments in the book talk a little bit about the future obviously and then about halfway through we're going to open it up to questions to everybody in this webinar so let's get started so let me just say Stephen I just want to thank you for doing this by the way and you've been a big influence on me and I think I think I've read every one of your books I believe and for those who don't haven't you should and I think my favorites are how we got to now which is is amazing which is sort of like five Technologies and sort of the history and all the crazy stuff that

happens enemy of mankind enemy of all mankind yeah Pate book is amazing emergence is sort of a I think a lot of ways a precursor to a lot of my thinking at least of sort of Bottoms Up systems and how the internet works anyway so just a little plug there I think most people probably know your work but if you haven't you need to read it because it's some of the best technology and history books you can find oh that's very kind of you to say but let's focus on your book I want to talk a little bit about the connection to emergency we'll get to that I first want to start off just with your public role as a writer it's been a big part of you you were an entrepreneur now you're kind of the founder of a16z crypto so you know your

kind of day job for the last whatever 12 years has been as an investor as VC but you've always written you always had a Blog and you've written a number of kind of interesting think pieces you know the piece that I that I wrote for the Times magazine by blockchain was heavily influenced by things that you had written at the time a bunch of would show up in this book as well tell me about that process like why was that writing arm of your why didn't and and how would that compared to writing an actual book I think yeah well I mean I'd written a little you know in college I'd studied philosophy and written and stuff like this so I had some back I wasn't like brand new to it but um I started blogging I think 2008 is or something like this and it was sort of early

social media time and I thought it would just be kind of fun and interesting and for the first year I don't think anyone read my blog I think you know it's just like doing it uh I don't know why because it was fun and then I used it kind of as a um I used to have it as like a personal challenge like every week like what did I learn sort of like a learning in public kind of thing and I will say you know like I attribute a lot of good things happen in my career to having blogged and written publicly I think in some ways I thought I was at the kind of Frontier of what would be inevitably just like everyone would do it because it's such a good career hack like because you just can immediately build your profile and I think for some

reason like people obviously tweet and everything else but I I think people should be writing I think there's a lot of really smart people in lots of Industries and Fields and they just probably have a lot more to say that would be interesting and sort of medium form long form blogging so anyway so I did that for a long time and then I got kind of just you know whatever life life distracts you and work and everything else and and so I sort of slowed down and then you know I've always been of the school of thought that like the stuff you write like has to be a book it's a narrative history there's a lot of detail I think a lot of business books don't need to be books and they're done for kind of status or something else right I mean like sort of like

seven pieces of Life advice this kind of stuff right and so I always just didn't think about writing a book for that reason I was like why why write a book when it can be a blog post and just be much more economical I think with this topic I finally came to the conclusion after spending years and years trying to evangelize it and convince people and having mixed success that it just required context and so you know You' read the book like I would say the first third of the book is sort of the history of the internet with a specific focus on like how the power and money flows on the internet and I would call that part uncontroversial among Tech veterans among internet veterans but not widely known in the general public but you need to know that that like the internet's a

network of networks and the thing we do as entrepreneurs and investors on the Internet is we build networks and that there were sort of two great ways to build sort of grand designs for building networks there were protocols like the web and email and then there were kind of corporate own networks like Facebook and Twitter and so you need that background knowledge because what block chains in my argument is blockchains are a new way to build networks yeah and if you don't have that context of that historical context you would sort of say well why does that matter right and so I just found that I just finally came to the conclusion that there's just no way to kind of properly do a treatment of this without writing a book and so hence the book the thing you're GNA find I think which is really striking once you

start having that experience of talking to strangers who have read your book is that the commitment of time and commitment to read you know you just don't get to like have uninterrupted oneway conversations with people for 12 hours or however long it takes to read a book in any other context and so they have this enormous you're just able to develop an argument and build the supporting infrastructure for the argument the way you do so effortlessly in this book I think but you know it requires a lot of time to make that kind of case but then if it works and if they really read it an amazing must be yeah you tell me you were telling me the the day that sometimes you have people read a book from 20 years years ago and it's like they're mind melding with you from 20 years ago which must be kind of an

interesting experience right it's interesting because they remember more about the book than I do that's the weird thing did in chapter three chapter three so think about books that that I wrote 20 years ago one really fascinating theme of WR own that connects to this book emergence that I wrote in 2001 that's a something we both thought about a lot is the connection between those networks particularly decentralized networks and cities and that metant for you've got a bunch of quotes from Jane Jacobs in this book which I loved and she's a major F convergence when I kind of first got on the web in the mid90s everybody's kind of looking for the metaphor and it was kind of this battle between like is it a

super highway is it a library or is it a shopping mall like those were the competing things and so the element that I tried to do in in emerg say let's think about like a city and think about like what are the things that make City work and how can we apply those lessons to the web as we build it out and clearly that way of thinking has been very helpful and it's been kind of re-energized by the developments around blockchain what is it metaphor that's generative to you yeah it's interesting you know I do quote Jane Jacobs I didn't go too far I thought it might be kind of pretentious to do too much Jane jaob but that but but no no I mean you maybe for me to do it I don't know but not for you but I did at one point read I remember

reading life and death of American cities which is you know one of her great books and then I read power broker which is a great book too Robert Caro about Robert Moses and I think it's a good pairing because they're kind of two polls right Robert Moses is top down it's sort of like let's demolish this part of New York City and put a highway in and then Jane Jacob is actually for those who haven't read it it really is just worth going back and reading especially I think the first couple chapters of her book it's great because she builds up the life of a city from first principles from a street you remember this eyes on the street concept Stephen yeah yeah so it's like the the whole thing of like you kind of walking down New York City street and you have this intuitive sense it's a good Street

or a bad street and that intuitive sense is based on eyes on the street there's some people sitting on a on a stop there's a restaurant you know with glass windows there's a barber shop right and that there's sort of this network effect on the street where you have you know the public sidewalk encourages the barber shop to open and she has this whole argument about why then you want mixed use neighborhoods right because you want residential mixed with commercial because then like at night time you have the nightclub that has eyes on the street in the daytime you have the people it's a very elegant kind of Bottoms Up argument for how you get these emergent properties of cities and like what makes it great so like it for me at least like kind of maybe coming from an engineering mindset it was like

wow that's a really interesting strong first principles argument for all of these different Urban Design principles right now of course there's another great tradition you do need highways you do need the BQE at some point maybe and that's where Robert MOS is coming may not all of it maybe not all of it but but like he just bulldozes and like you know there's all this controversy around it and the other neat thing about cities right is there's a public private Dynamic right so you have the park and the sidewalk like I think we all intuitively people that live in cities get that you need both right that like we probably wouldn't want the city to create the pizza shops right it's nice to have the variety of entrepreneurs that create different restaurants and all the things that entrepreneurs do right with the kind of creative

Innovation but you wouldn't want entrepreneurs to run the streets and the parks maybe right like grammar C Park is always this controversy in New York City because it's locked right and like you feel like Park should be open but they encourage each other right because open Street then gives the entrepreneur foot traffic then they pay taxes and so there's this interesting symbiosis between public and private and I do think of that very much like in the case of the internet where I think now we have these five giant internet companies that have crowded out a lot of the public life whereas to me the web and email and a lot of the early internet Protocols are much more like public goods much more like Parks or something and I'm not like antire obviously corporations and Entrepreneurship but I think balance has gotten way out of

whack that's why I use this analogy of theme parks in the city in the thing because it sort of feels like it's this big controlled you know we're in Facebook land and not in you know on the web anymore that's what concerns me directionally from in terms of how the internet's evolving yeah I think that was the thing that people who are younger than certainly than than I am and even younger than you probably don't realize is that there was this extraordinary feeling when the internet come Emer particularly when the webs on top of the internet of like wow there's this like global technology that on some fundamental level it's a public space that nobody really owns supporting all these things and it was the first thing that felt like the sidewalk of a city or a public park of a city that that had

come in the form of high technology everything else had been kind of like well here's a box that I bought here's my radio I own it or some company made it and so that was it was very liberating and I think it's important just to get our definitions right in this conversation like you talk about these protocol networks as being foundational as opposed to corporate networks and you kind of alluded to that and what you were just saying but a lot of this whole book and the argument you've been making for a long time revolves around like the transition from the protocol network age to the corporate network age just give us a kind of quick overview what that transition really meant yeah I mean so you know if you were using the internet in let's say the year 2000 90% of the time you spent would have been on these

protocols like the web and email I mean that's what people did you might have been using something like eBay you know or some other kind of you know geoc cities or whatever was the popular kind of quote social network at the time but most of your time was on this public space on the open internet which meant that if you went to a website for example and the website built an audience that the website had a direct relationship with that audience they could choose to make the website free they could choose to charge they could choose to run ads they could do whatever they want and that created the conditions under which you know entrepreneurs had incentives to build things on top and kind of planted the seeds in some ways of its own demise right so it it created the conditions under which Mark Zuckerberg and all

these other entrepreneurs were incentivized to go create companies because they could build a direct relationship because they could own their little plot of land their domain name their website but then of course that architecture of having these networks be owned became the dominant way so fast forward today probably it's close to 90% of people's time now is spent in Twitter and Tik Tok and Facebook and very little is actually now clicking out to the browser and in fact I think it's a little bit frightening but like all of the social networks now are actually punishing you for putting links in your tweets and your posts and I think we're going to see kind of further Silo isation of the internet and so to your point like look I think it was a wonderful kind of I don't call accident of history there was planning and things but that the internet evolved

in that open way and there were by the way alternative versions of it there was you know AOL there was Microsoft and Comcast had their sort of information super high like I think of it is it was inevitable that we'd link computers up it wasn't inevitable that we'd linked them up in this open way that that happened and if you remember Stephen folks on the call might be too young but there were all of these books man clran Manifesto and like a hundred other you know John Perry Barlo the Declaration of Independence of cyberspace there was this whole kind of feeling of like almost like a 60s counterculture revivalism of like this is going to usher in a new er of freedom and creativity and create you know direct relationship with your audience and Kevin Kelly's thousand true fans and look I I those were the days that was

stuck I bought I bought into it maybe I'm just like nostalgic for the old days but I thought that was a great vision and I think we've lost a lot of that Vision I think one of the key questions today as we sit here is is it over is it just like the internet's Consolidated you know and this is it and like other forms of media like broadcast TV you know you end up with four channels or something or and I believe this I think the internet is designed to be it's a software-based network that can be reinvented new software can propagate and software is a very plastic malleable medium I think it's more like an art form than a engineering discipline I think the optimistic view is look we're 30 years into something that's probably of the import of something like the printing press and there's a long way to

go and we can affect that outcome and shouldn't we have that conversation I mean that's sort of what I'm trying to conversation I'm trying to participate in through the book yeah I love it the story I always love about the printing press is that it took them a hundred years to figure out they could build an index is that right right like in 100 years with the book and they're like oh actually it's really useful if you have a you can look up in page numbers and stuff imagine that 100 years a long time so you the kind of lovely way of encapsulating the the different phases that we've lived through and I I want to turn to the to the phase maybe we're on the cusa of involving the blockchain you talk about the read era which you said

was kind of defined by the website for exactly the reasons you said you had your own website and you could do whatever you want with it the read write era which is the kind of social media post where you're posting something but it's on somebody else's corporate Network that is controlled by someone else and the entity extracting value from that osed financially is this corporate structure that you're not playing a part of and then this new era the read right own Hera coincidentally the same title as your book which is defined by the token you say so what does that mean first the read and read write part in fact those are not my terms in fact there was during the 2000 sort of two competing terms for what was

going on one was web 2 one was read write and there was in fact there was like a very popular blog called the read write web there were conferences just so people know and the idea was that in the 90s this is other people's ideas in the 90s the internet was sort of I call skoric which whenever a new form of media comes along it often starts off kind of mimicking an older form of media right so early films were just sort of film plays right and then they established kind of a native grammar of films with close-ups and establishing shots and all that so the early web if you go back and look at internet archive or something you'll see they were like brochures and cataloges they they were read in the sense of like for the most part it was about consuming information

occasionally there's like a submit button or a buy button but basically it was a the big impact on society in the 90s of the internet was democratizing consumption of information you could type in Abraham Lincoln and immediately read about Abraham Lincoln or something whatever in the 2000s the sort of the movement became how can we democratize publishing and so that was the rise of social networking and blogging and all the other and that of course worked and now we have five billion people who post and everything else and then of course argument is I believe and I hope we're on the cusp of a new era where using blockchains and networks designed on top of blockchains we can now have read and write and also introduce this idea of kind of digital ownership that blockchains enable each of those Visions is very like think about the vision of

the web very ambitious so the vision of the web the original vision of the web is we're gonna have all the information in the world connected together okay like that's overwhelming how does that not become a jumbled mess so one of the many genius ideas behind the worldwide web was the website was let's have a little unit of information right let's bundle it I call it's encapsulation I have a section about this so you encapsulate this complex idea in a simple concept I I liken it to the plug socket right so you had power going through all the houses and buildings and you have this very simple interface and that interface you initially you could just plug in lights but eventually you could plug in washing machines and everything else right and so this idea so you encapsulated in the website and the website made this otherwise

unmanageable unwieldly overwhelming idea into something that was sort of manageable in the social era we have the concept of a post right that post is the unit of publishing and then my argument is in the blockchain era if it evolves the way I hope it does the token plays a similar role it's a unit a simplifying unit of encapsulation I make that point because I think there's a tendency when Technologies start off for people to confuse the 90s you go look at websites so you're like oh that's that thing you have for brochures but really you're not looking at it abstractly enough if you look at it abstractly it's a container of information and code you could then start to see what might happen 20 years from now in the same way I think with tokens like right now people look at them they say oh that's a pfp avatar

that's some silly thing that's a Bitcoin that's whatever but actually it's a very general abstract concept which to me makes it exciting for entrepreneurs and others who want to take that what can you do with this you've got this website like imagine all the cool things you can do with this Atomic unit of ownership right that's what gets me excited about this you know is the idea that this is now a new kind of canvas right for creativity I think your explanation like a lot of people when I was kind of observing Bitcoin kind of taking off I interpreted it entirely as a digital currency was just a way of buying things and you know without some kind of Fiat authorization of it and then I saw it as like a zone of speculation and people

were just you know was tulip Mania kind of thing and it was really your writing and and a few other folks like Fred Wilson and Brad Burman folks like that who who were in that Times magazine piece that I wrote it made me realize that there's something more profound at stake or possible here and it's not just a kind of currency but it's really a whole platform that might enable us to reconstruct some of the great things about that brly open protocol era Network protocol era could you describe what you would say like the kind of core technological advances that we get out of blockchains and tokens that could help us get back to that to that I think of a blockchain the key thing that we do

with blockchains what is bitcoin real Bitcoin you can look as a financial service you can look at digital gold but I look at it as a network it's a network it's a financial Network right a network in the sense of like there are bitcoins there are people that have the Bitcoins it connects them all through this network and it's a Network that has no company behind it there's no intermediary it's a community-owned financial service right and to me what a blockchain enables is community-owned Digital Services essentially and of course that you know as we were just speaking about before connects back to the early internet because that was the original promise of the internet that you remove these intermediaries I think it turned out that the network designs of the 90s just simply weren't powerful enough to keep up with the needs of the you the users wanted more features and

they wanted more things and the corporate Network stepped in and gave it to them and I have this whole kind of chapter on RSS RSS was a very important protocol because it was the kind of last attempt to keep the web open and specifically social networking right if RSS RSS is still around people for podcast things like this but it's in the you know maybe Millions tens of millions of users not billions of users and that's very important because had it succeeded social networking would have a very different architecture very different economic system and so to me what blockchains enable is a new wave of Digital Services that allow communities to own sort of get the upside own pieces of it control them and those Services can be Financial Services or they can be games or they can be social social

networks or they can be new things we haven't thought of and that's actually in the last section of the book I take seven areas and try to go deeply into those seven areas or pretty deeply it's a you know limited pages and things but go in and very specifically talk about those kind of application areas but I I see it as a very generalized new technology for building new networks that are owned and operated by communities and remove those intermediaries like companies and the the token is the you can't have Community ownership without a way for communities to own right they need a way a mechanism and the token that mechanism yeah one of the things that I always found so captivating about this vision is this idea that when you create a new network that starts to take off if the

network is a kind of corporate control Network let's say the Facebook model the value created by it in terms of the financial value is captured by the founders and the early investors basically the vast amount of it is captured by them you know users get presumably other kinds of value out of it but they don't see any upside in terms of actually dollars that they get for being a part of it and in in the vision that you know you've put out over the years and you talking about in this book is is this kind of this more kind of blurring the edges of the people who get to stake in a sense in the firm and I know proof of stake is an actual term of Art in this world and so it's not yeah the people who come up with the idea in the first place are gonna

succeed but it's early people who build on top of the platform are compensated in tokens and those tokens go up in value but also early users like just people who are using the service so you kind of imagine this world I think sometimes use the example of uber a world where like both the founders of uber the the investors in Uber but also the first drivers in Uber the first customers of uber like all those people if Uber really took off they would all benefit from this and have some Financial incentive for it taking off and that that feels like a very appealing way to do these things and I guess my question has always been like couldn't you do that somehow with existing shareholder architectures like what is it about blockchain that makes

that easier to do yeah sh first point it seems fair and reasonable that most of these Digital Services that we use today are networks and most of these networks are built by communities and it seems reasonable that the value that's created would go to those communities you could in theory like there have been moves to do this like why could you just without blockchains there have been moves to do this so and I talk about this the book like Airbnb and lift did programs where they gave some stock out to some of the drivers I think that's great that they do that it was a matter of scale I believe those were all like in low single digits percentages and if they were to do like maybe there's a mechanism you'd probably need some regulatory changes and tweaks if they could do that I'd be all for that I

think it'd be great so I'm not like opposed to that but I think first of all there's a very different ethos in the blockchain world where like the norm is greater than 50% of the tokens go to the community and if not significantly more so there's just like different kind of mindset there's other very important features that I go through you know in each chapter in in the book that's not just about the sort of token distribution but it's also about take rates so like what percentage of the revenue that goes through the network is kept by the network operator the sort of the central entity versus go to the edges so there are ways you could probably mimic some of like basically I argue in the book there's like four or five really important positive benefits of blockchain networks and there probably are ways to your point where

you could have a law that says no social network can charge more than 1% I mean you could do things through legal mechanisms that might mimic some of these things I don't see much political momentum there and maybe you could sort of try to mimic it and like if they did maybe that would work so I just want to ask you two last questions on my one of the things you talk about in terms of uses at the end of the book is how kind of blockchain intersects with AI which is obviously I don't know if you've heard but it's an interesting new technology that seems I he I hear it might be big it's be big they really into it apparently tell me how you think about that I thought that was very I have two I have two sections in the book on AI maybe I'll do the first one more

quickly which is deep fakes so I think you have all these problems now that are going to arise where you have problems verifying that people are real that videos are real right because you can now I think it's probably obvious use AIS to create big videos to emulate people and so the obvious natural way to solve this is through some kind of cryptographic audit Trail then the question becomes where do you store that audit Trail you really need a reputation system so like it's not just enough to say this video is real you need to say something like the New York Times attests to the fact that it's real you need somewhere to store those attestations and is that going to be stored by Facebook or is that going to be stored on some kind of community shared database which is in other words for a blockchain so it just seems to me

like a pretty obvious thing to do would be to have Community owned records of the provenance of various pieces of media and some kind of certification system for authenticating people and just all that kind of stuff right so that's just for people that there's a lot of emotion attached to blockchains and a lot of people like just won't consider them for their emotion but I think if you just step back and look at it just passionately it's an obviously better way to to do that the second one i' talk about in AI is a little more nuanced which is you know I think of the web as having there's sort of a implicit economic Covenant on the internet between content and distribution meaning websites graphic designers news websites Etc and distribution meaning social networks and search engines and that implicit Covenant is that the

distribution is allowed to take that content chop it up index it and Show snippets of it let's say in search results but the trade is they're going to send traffic back right that's the sort of Covenant that's developed over 30 years implicit Covenant developed over 30 years it's the potential of new AI systems is to break that Covenant by simply giving the answer right if you take the data the information process it and then just tell me where 10 good restaurants are maybe you provide a link back but no one leads a link because and no one clicks through it because they get the answer and by the way I'm that world I think it's it's a better solution for the users AI is wonderful thing I'm Pro AI but like in that world we need to think about what is the New Covenant between content and

distribution because I presume we don't want people to stop creating things and we don't want people to stop getting paid for creating things and by the way I don't think the AI wants that either because the AI needs that you know new programming languages come along new genres of Art New genres of music like you want all of that stuff to be input so we need to rethink the Covenant and my argument is that the perfect way to establish that Covenant as a blockchain one way to look at a blockchain is it's a economic negotiating machine it's a collective bargaining machine where lots of you know a million small parties can get together set terms and do deals with a few big parties and so then I kind of walk through ways that might work it's up to entrepreneurs to build it but that's just one other kind of

interesting thing is how do we pay content providers in a world where content creation probably the cost goes to zero for a lot of types of contact I I'm going to hold off on my final question I may ask it at the end but I want to switch it over to some of the questions that are coming in from folks on the call so one of them come from Sandy the question is basically that the space changes so quickly has anything basically happened from when you like you know hit s you know this the book industry has a longer lead time than I'm used to on the puzzling isn't it so it's been October the reason that is is I something to learn it's that like to make a book successful a lot of

people have to read it in the production of the chain of it right you have to have like reviewers read it you have to have book buyers read it you have to have all stuff and like all those people have a stack of giant books there so you were like but can't we just print it and send it to the stores it's like no we need reading like the blurbs that took me mon to get the the back of the book for those folks who don't like I had to send it out to those people give them time to read it you know yeah but we're used to just like hey I pressed F on the actual you're right it's not the actual printing doesn't seem to take I don't know it seems like it's all the other stuff but um it's a good question

Sandy I tried very hard to write the book to be a little less time sensitive I guess so like I mentioned a few startups as an example but I try to minimize it partly because we're regulated in compliance and I don't want to like be promoting portfolio companies but partly I just want it to be something that's a little bit higher level abstraction so that like it was a very hard balance like make it concrete enough that it's not too abstract that people get it and I'm using real life examples but I didn't want to be too specific because the world does change very quickly I was worried specific with the AI stuff that it might change I did just a few last minute changes in like October or something but actually I feel pretty good about it right now then knock on wood two months from now some

dramatic thing happens and everything changes but right now I feel like I wouldn't change much since October but we'll see what happens yeah ages so Rob asks How likely do you think it is that these new blockchain networks will actually be able to usurp today's giant tech companies for example I'm in music can we realistically expect the masses to adopt something like collecting music as an alternative to Spotify there's a in Enterprise software they have this phrase Greenfield Brownfield it might come from somewhere else but the basic idea is do you go after new use cases or do you go after old use cases like for example Excel has been around for 50 years and there's all these modern things and Excel is still really really popular a lot of tech just has a very

long shelf life so it's very possible to your question maybe the music industry is just so recalcitrant or obstinate or whatever word or just calcified or whatever word you want to pick that it's just not going to change but there will always be new things it's a good qu like when I speak to entrepreneurs I think it's a key question like do you go after things that are already entrenched like social networking social networking is already a thing it's already big or do you go after something new like one of the exciting areas I talk about in the book is collaborative storytelling which is the idea of communities getting together and creating narrative worlds and getting rewarded with tokens and evangelizing those narrative worlds and like that's just a brand new thing right and maybe with music maybe it's not music pers say maybe the actual playing

of music is finished but music is one of those things where there's all these interesting adjacencies right like why can't music be like video games where video games I think about it as used to be they charge for the video game now most video games give the video game away for free and charge for all these complimentary Goods like virtual goods and other things and maybe that's the future of music maybe it's not just something so literal like you just replace Spotify with something else maybe it's a new genres of music Comm and they decide to embrace you know digital worlds and virtual experiences and use the music as a complimentary good to get you to do something else you know I don't know but that's a great question if you're an entrepreneur you want to think about that do you want to go fight the last war or do you want to

try to fight the next war with this new technology I always think about like YouTube when they started there were all these other video sites that were taking like CBS and NFL content and trying to license it and YouTube said we're just going to put up a website and the people that are going to become big on YouTube don't exist yet right which is was kind of crazy and ambitious right I mean it was like kind of stripe used to say this when they first raise money like people ask who your customers are and they say they don't exist yet like that's the really ambitious thing is if you say who are the musicians that are GNA use nfts and do all this crypto stuff maybe they don't exist yet maybe the genre doesn't exist yet we got a long way to go in the

next hundred years of the internet and also it's not even just the musical genre that could open up it's like I mean I think of could be that Spotify Etc remains a place that the mass release of the song yeah lives but it's like the Grateful Dead bottle of like hey there's a unique perform of this song you know if you could all those Grateful Dead tapes I'm not a dead head at all but I know if they're like model all those tapes circulating if like they actually had some kind of unique value and this is the one time the song that was played and we're going to release this one recording and I don't know there might be that's it already happens today right like if you ask musicians they tour and they make a lot of their money touring and why do they make their

money touring selling merchandise is because they don't have an intermediary they can sell direct so it maybe that you have sort of as you just describ it's even like a digital tour kind of thing you know where you're selling merchandise and it's a complimentary Thing versus trying to take on Spotify directly which seems much much tougher I'm gonna pitch you guys about this idea I'll be showing up your offices good one excited okay let's keep going on Harry from teleport asks how do you hope the US regulatory framework develops so that the us-based web3 startups can Thrive that's a great question yeah so I think of it as part of the book here you know I talk about this idea of the computer versus the casino and sort of the vision that I'm a proponent of of blockchains and then what I think is a more speculative side

which I associate with memec coin some of the meme coins and FTX and things and like I just have come to believe and I think some people in crypto will disagree with me but we just need to have regulation that tamps that down one mainly is bad for consumers and everything else but I think it's also just crowding out the positive use cases of the technology and really hurting public perception and a whole bunch of negative things so and I think the other thing I would say is that a lot of what's going on now is very reactive a lot of it's playing out in courts I think by the way it's happening in AI to you have the New York Times open AI case there's going to be a lot of reactive things I would like to see a more proactive approach so that like what I'm

hoping to do with the book is start a conversation about the positive use cases of the technology and I the way I look at it is you can use a hammer to build a house or destroy a house and that a smart policy approach is to look at the technology holistically what are the good what are the bad what's the of AI what's the bad what are the good of blockchains what's the bad and how do we design the policy to maximize the good and minimize the bad there's lots of specific proposals around there like lockups and time periods and other kinds of things but I think the key thing is is sort of ideally we have like a this m incredibly naive but like a respectful reasonable discussion of course SS absurd but uh my fantasy world we'd have a discussion and try to come

together and think about how to maximize the good and minimize the bad and I like I think things like lockups and time periods and just various safeguards can go a long way we see that in other financial markets or financialized markets so there's a question from Paul here that I'm GNA kind of insert my question that I wanted to ask at the beginning of this and then continue on to Paul so Paul's asking how do you see adoption of web 3 playing out over the next year three years five years the thing I wanted to ask you is like in terms of that that most kind of compelling vision that we discussed before where you have a new kind of protocol that's developed and a new kind of governance system and a new kind of Cooperative profit sharing model that emerges out of it where it's not just

the founders and investors but it's the early adopters and users and developers that participate what is happening right now that is the most encouraging example of this that's on your radar where can we see the seeds of that right now it hasn't fully come to pass but like what's the most promising thing right now and then turn to Paul's question like where do you see this in three or five years I mean I think there's a lot of great communities like I think the ethereum community for example is very is a very strong generally very positive Community very Tech forward if you go to the forums and other things like there people talking about technology they're generally positive and idealistic they've done a lot of really good work around the or

infrastructure I think that has progressed a lot so a lot of it has been you know sort of these infrastructure kind of layer things like ethereum to me embodies a lot of the best ideals there's the area of defi which is decentralized finance which you know I think things like Unis swap are very interesting where they it's I think 65% of the tokens of the kind of ownership of the protocol have gone to users they were one of the first ones to do what's called a retroactive airdrop where they gave out 15% of the tokens to past users based on their use of the protocol and there's all these great stories like this classroom in turkey that used it and they all got like all these tokens and and so you people can debate whether or not they like finance and the applications but I think in terms of how

these communities were built and the value shared those are very positive examples I think there's a bunch of interesting kind of emerging nft Community someone had asked earli about music I think there's some interesting things happening around the music nft space like I think I just think creators to me the Creator use case is just such a powerful one with all of this because creators have such a bad deal on the current Internet that it's just from a business value ition point of view going to somebody ask a typical small musician who's not a big famous One how much they make on Spotify and it's just Minimus and so if you can go to them and the bar is relatively low to really improve their life and so even like in the downturn for example this year I think there'll be a couple billion in volume

of nft sales and this is in the low point which is still actually meaningful because the existing social networks are so stingy look I I do think that I wish it was going faster and I'd like it to go faster and I think in some ways some of the casino kind of stuff distracted both Us in this world and and then that also led to you know this regulatory reaction which is also just kind of made things more complicated you know you mentioned ethereum there I just wanted to raise one question you talking about in the book so ethereum people on the call may know went through this transition from proof of work to proof of stake which had a big impact on energy consumption and I think that's one of the other big criticisms you hear from people who aren't in space as much

that it's just not sustainable to have all these computers crunching all these numbers to generate these transactions can you speak to that critique yeah so there's two main ways to do you know blockchain mining or validation and those are proof of work and proof of stake and proof of stake is 10,000 100 thousand times less energy consumptive than proof of work compares favorably to traditional non-blockchain Computing right and so it kind of removes that objection now in the book I take the position that I look I just come to believe proof of stake is better we have a team of computer science professors who all would argue very strongly that it is better not only from an energy point of view but from a security point of view and a kind of game theoretic and attack vectors and

everything else so I've come to believe it's just strictly Superior the bitcoiners are religious about proof of work and and argue and like argue with some justification that you can use clean energy and other things and so they already don't like the fact that we're kind of proof sake but I just think look this is something where yes you can use clean energy and everything else but this is just a strictly Superior thing and it just simply removes that objection and let's move beyond that and that's my view but yeah great so another listener viewer named Amy reports that she loves your writing can't wait to read a book so that's good news wondering if you cover the fat protocol thesis and what your thoughts are on business models for user-facing web 3 applications do they need their

own tokens how can new protocols incentivize developers to build apps for end users so I think it's a great question it's a really complicated question I think one thing we've learned over the last 15 years is that tokens are very powerful and can be overpowered in a way and that you know I think we've seen with some of the games and maybe arguably with Bitcoin and other things that they make people you know it's sort of the it's the ring of power or something like it's like people get obsessed with them and then watch the price go up and down and what Stephen was asking me about before it's very powerful the idea that you can share part of the upside of service with users so I think obviously I I have a bunch of section of the book about token I think they're very important but I also think

they're kind of there's a real risk with a lot of these services and we've seen it play out that people just only focus on the financial aspects and it really crowds out everything else I think there's a new wave of that we're involved with of Builders who are thinking very thoughtfully about how do you kind of introduce tokens but do it in a way that significantly dampens the kind of speculative aspects and so for example one obvious thing is you have a big movement now is like all points or nontransferable tokens you have tokens but the for some number of years you can't sell them or buy you know buy them or trade them and it just you got to wait until the service is popular and there hundreds of millions of users and then maybe at that point they unlock or something right I think that's a really

interesting Direction and one that we're encouraging so that's one of many kind of ways of what I would call Financial dampening I think game developers for example a lot of them are trying to build games that are inherently popular and fun and then thinking about tokens is a thing you can lay in to create kind of an interesting peer-to-peer economy so people have like the virtual goods and Eve online is doing a blockchain version where the you know it's a spaceship world where the spaceships aren't just created by the company they're now peer-to-peer spaceships and you have an economy but again you got to be careful because if it's just all about the money and the tokens you you bring back the casino right it's better to have an OP thing an overpowered thing that you dampen than the opposite which is something no one cares about so I

feel like I'd rather have that problem but I do think that they need to be people have to be really thoughtful and think about ways to really Tamp down on the speculation because it's I mean look it just create a lot of damage and it's patory blacklash and and crowding out of real Innovation yeah very interesting okay John asks a question that I don't understand but I'm just where are we in the development of l1s and l2s and I would like to add please explain what it is yeah so yeah with layer one and Layer Two blockchain so like ethereum's an L1 and then there's things called like rollups like Optimus and arbitrum that are l2s and the the basic idea is think of like a co-processor like your GPU stick with that so it's like CPU GPU

not going into too much detail the nice thing is you can run it on the L2 but know that you have all the security guarantees of the L1 is kind of the idea with a real rollup and I would say John knock on wood I think we're there in the sense that rollups you know for those who've been around we had plasma we had charting I think we up at clearly the answer and like all of my smarter colleagues who do technical engineering stuff feel like that too so I I feel like we're there now we need of course like data availability and 4844 and all that stuff but like I think this is it and I mean and then we're like very close to having like no tradeoff scalable blockchains after having traversed a seven-year ID dmas or whatever as a space so so Heather asks do you have

recommendations to get smart and stay up to date on the biggest concerns people have about crypto like environmental regulatory Bad actors like what are the best sources yeah I do touch on all these topics in my book so that will be up to date as of the writing of the book I don't go super deep on all of them look we try to do a lot of this on our blogs and podcasts and stuff too and then there's various groups like coinbase and other industry participants who put out stuff but to be honest I mean that's one reason I want to write a book because I want to just kind of package everything together it's a lot it's kind of all over the place okay I think this is not a bad place to kind of have some closing thoughts so. gwam kwami go Swami says you know we've been

drawing these parallels we kind of started by talking about 90s web development and so his question is how do we map onto that trajectory like where do you where do you think we are compared to the way that the web developed in the 90s is it 1992 is it you know 99 or is it post bubble kind of and then also since blockchains haven't had an AI moment do you think the apples and Googles of the world would take the biggest share of blockchain tech as happened in in Mobile yeah the mapping you know it's always as hard this sort of History Rhymes but doesn't repeat and it's always different and you know the internet it was interesting like if you look at it they had had a pretty consistent user growth

over time the problem it had was no one thought it was a real business until like maybe Google's IPO in 2005 so in some ways it had sort of the rever it was like underf financialized in a way it's almost in some ways the inverse of blockchains where there's clear there's a business model the question is is there utility and with the internet it was clearly there's utility there the question is there business business model right so I almost think of them as funhouse mirror or something I think you could also look at it through the lens of there's always this sort of aha moments in these evolution of tech with the internet it was probably Mosaic the first browser with smartphones it was certainly the iPhone with AI you know 80 years of AI 1943 mallik and pits right 80 years later chat GPT that was the

moment so yeah we haven't had our kind of iPhone chat gbt moment and so that's another lens to look at it through and like when will we have it I I've been somewhat humbled in my timing predictions in Tech um I feel like I've been directionally right on the things that happen I think I've been very very hard to predict when things will happen like I think we're getting close but I sort of chuckle I also thought AI was gonna happen I I started an AI company 2008 and I was like it's about to happen and I was 15 years too early so I don't know it's hard to know like there's so many factors that go into the timing of these things like because there's like the underlying teac and sort of Moors law and chips getting better and in our case blockchain's getting better in l2s

but then there's like when does the right application come along when does the right cultural moment come along when does the right entrepreneur come along and it's these complex feedback loops right so it's very hard to know exactly when it will happen but it does feel like we're kind of headed that way and in the conclusion of the book I have sort of reasion for optimism which is sort of a number of kind of trends that I think are very positive I I have a kind of final question for you really which is more about your method and your kind of workflow so in trying to make sense of what is happening and this enormously space with all these different players both in blockchain world but just understanding the path of Technology over time like do you have a routine for like how you get the

information how you like think about the information like what's just for learning about tech tech yeah like what's your kind of like workflow for understanding the world I mean like I I have a rarified job which is I I mean the an is I mostly talking to people but I am in a fortunate position where I get to talk to smart people because I just find like you think about it like if I get to meet with an entrepreneur what I'm really getting is like a package of like it's in the same way a book packages up 10 years of knowledge in 200 Pages a meeting with an entrepreneur is packaging up years and years of hard-earned knowledge in an hour meeting I actually have a rule I Read 50 pages of book a day is my kind of personal rule it's just like my protein so to

speak I try to really focus on books primary sources meaning like watch somebody who actually did something speak or or write reading books speaking to people people and I try to minimize sort of secondary sources a little bit of social media but not like overdoing it it's very easy to kind of just get all of your information passively and then just sort of follow the consensus and that's if you're in my business or in the entrepreneur business you need to be in the non-consensus business so you need to be very judicious about curating your your mental inputs right otherwise you'll just fall into the I call it the kids soccer problem you know you watch professional soccer and they're all like staying in their position and then in like venture capital it's like the kids soccer where there's like 22 people around the ball and like you just it's

not can't do can't make money and Venture Capital if you do that or be a great entrepreneur if you do that so you need to be very thoughtful about how you curate your input sources that's great that's good advice I think so anything that you want to tell books on the call about how to follow the book tour any upcoming events like anything that people that you're headed towards that can book comes out next week on the 30th in the US and then the next day in the UK I'll just say one thing which is I am committing myself to if people want to critique the book I'm sure there are smart counterarguments I've made a personal commitment that I'd like to respond to sort of all good faith

counterarguments in a non-emotional way like like what I really want to do is I just want to have a discussion about these topics I'm not saying I'm right about everything but I am sort of just there's there's so much Tech debate and everything else sort of AD homonym and dunking on Twitter and all this other stuff so I really look forward to feedback and I will try my best to respond to it and I like I'm pretty accessible on social media and Twitter and farcast or any other social media platforms so anyways I'm excited to see what people think I hope they all like it and I thank you Stephen for doing this I really appreciate it I think folks who when the book arrives they will really enjoy it it's a great achievement and uh your work is been inspiring for so long I'm glad to

have been a part of it this early stage of the launch thanks everyone for joining well thank you so much St