AI transcript
So when I first saw blockchains, what was interesting about it is that maybe this is a
way that we can build new… I think blockchains are the only credible technology.
…reaching a two-year high above $57,000.
There’s often a lot of kind of confusion around what is crypto? What are blockchains?
What problems do they solve? Why would you want to use them? The internet was supposed to be
a decentralized network. Anyone can go put up a website. There’s a few aspects to that.
Like one is control and then number two is the economics. Like is it free or maybe you put ads
or maybe you charge for something. But it also had, I think, an explosion of entrepreneurship.
You know, Amazon, Facebook, YouTube, and all these great companies is they knew they could
put up a website, build it, and they would own it.
What are your thoughts on NFTs and how they evolved over the last couple of years?
Like NFTs are an atomic unit of ownership. What if we have all of this sort of big complicated
thing with everyone in the world and the internet can now own things? Okay, well that sounds
complicated. So NFTs are a way to simplify that. Here’s a little container. It’s a little box and
you can put something in it and that’s the unit of ownership. That’s what an NFT is. It’s a very
abstract concept. There have been a lot of dumb and empty projects. There’s been a lot of dumb
shit on the internet. But over time, I think these technologies have a logic of their own
because people run experiments and build things around it. So you’ve probably heard me mention
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Notion.com/KevinRose. Chris, thank you so much for joining me today.
Thanks for having me, Kevin. Great to see you. Good to see you as well. I know you’re such a
busy guy. And the whole crypto side of Andreessen Horowitz has absolutely exploded. Just to give
people a sense of how many assets you manage, what does it look like on the crypto side now at
Andreessen? Yeah, I mean, the number we disclosed is $7 billion under management on the crypto
side. And so we’re one division within the broader firm. And so the firm does all sorts of other
things like AI and enterprise software. And we have a bio fund. But I run sort of a division,
which is a crypto fund, which has $7 billion under management. So that’s exactly why I want to
lead into this question, which is with that much under management, you’re an insanely busy guy.
Why write a book right now? Yeah, I mean, so it’s a great question. So one is I felt like we needed
a book. We meaning the kind of the category, the space of blockchains and crypto. And that came
from, as I’m sure you and lots of other people in the industry do, you go out and you speak to
people. And I speak to policymakers and to friends and potential business partners and
prospective employees. And there’s often a lot of confusion around, what is crypto? What are
blockchains? What they ask questions like, what problems do they solve? Why would you want to
use them? And I’ve done countless podcasts and meetings where I try to explain it.
And I finally kind of came to the conclusion that it’s just a topic that requires kind of a little
more than an hour. Yeah, and specifically, you’re not scalable to talk. Yeah, it just, yeah. I mean,
even then in an hour, it’s hard. I mean, and specifically, and I think you know this, Kevin,
is that if you come from the internet as a background, you have certain kind of working
assumptions that aren’t that widespread. So in the first part of the book, I kind of try to bring
people up to speed on kind of how I think folks like you and me and other sort of more internet
veterans think about the internet. So you can kind of think of the book as taking sort of the
things internet veterans know and trying to kind of in a pretty compact, hopefully very accessible
way, kind of share that and then sort of take things that the crypto blockchain people all
kind of know and share that and then sort of put it all together and show why it matters and why
it’s important and how this can lead to not just sort of what people see in the news of like speculation
and kind of casino stuff and FTX, a lot of the public impression is formed by that, right? They
see Bitcoin going up and down or some token going up and down and they say, what’s the point of this?
Isn’t this just speculation? And, you know, I’m here and I think you’re here and a lot of other
folks that I work with are here because we think that there are productive applications
that can be built using this technology. And so that’s ultimately what I want to explain is kind
of that. That’s what the book lays out is that vision of how and specific and the specific kind
of problem that I think blockchain solve is the internet, you know, so the introduction of the
book I talk about this, the internet was supposed to be and was originally a decentralized network
where, you know, anyone could go like you could sort of go back to the 90s. Anyone can go put up
a website. They can have a build a direct relationship with their audience if they’re
an entrepreneur or a creator or be a writer or an artist or an entrepreneur or make a video game,
whatever you’re doing or just a, you know, personal blog or whatever it might be,
you put it up there and you sort of build an audience, right? And having that direct
relationship with the audience means there’s a few aspects to that. Like one is control.
You kind of control your own destiny. You know, you can build your audience. You kind of have
a direct relationship. You own that audience. And then number two is the economics. Like you
can decide, hey, do you want to, is it free or maybe you put ads or maybe you charge for something.
And if you, to the extent you have the, you know, a business model, you get that money, you get
basically all of that money in the original, the way the web worked. And that, that led to,
I think, both, both at the kind of smaller scale, lots of really cool kind of experiments and, you
know, just sort of, I think of the 90s and 2000s web is just a really exciting time where there
was just all these kind of cool, weird things going on. So that was one benefit is just sort of
this kind of explosion of creativity. But it also had, I think, an explosion of entrepreneurship,
right? I mean, the reason you had, you know, Amazon, Facebook, YouTube and all these great
companies is they knew they could put up a website, build it and they would own it. They weren’t
sharing that with some intermediary, right? They had a direct relationship with the audience.
And I believe that a lot of that is, is, has been lost and is at risk of getting even,
getting even worse, honestly. So I go through this in the intro of the book. It’s essentially,
if you look at all the kind of key statistics, sort of revenue generated, traffic,
the internet has basically become consolidated around five companies. These are companies we
know, Apple, Facebook, you know, Meta, Amazon, et cetera, right? Google. And those five companies
have the 95% ish, depending on which category you’re looking at, of the traffic, of the money,
of the market cap, of all those kinds of things, right? And more and more, and I see this on the
entrepreneurial side, it’s the internet has become a place you have to ask for permission.
Right? I mean, of course, yes, you can still put up a website, but you need that website to get
indexed by Google. You need to build an app that gets accepted by the app store. You need to get
distribution. You need to show up in search results. You need to show up in social rankings,
right? And you don’t control that. You can build, I can tell you countless stories of people that
have built audiences on Twitter or on TikTok. And then one day, mysteriously, that, you know,
someone turns dial internally, of course, it’s really probably a machine, AI or something,
but it goes away, right? Yeah, you mentioned this a couple of times in your book,
there were two examples you had. One was, you said when Twitter wanted the handle at X,
they just took it back. And there was another one on Instagram. Instagram took Metaverse.
When they switched the name, when Meta changed the name to Metaverse, they just took the name,
Metaverse. Those are the most kind of extreme dramatic examples when they just sort of say,
hey, we’re, you know, we own this. It’s ours. This is ours. But I think actually the more,
the really the more insidious thing is the much more subtle things that happen. So
I hear this right now from a lot of TikTok creators where they built up audiences,
you know, like a hundred million followers and things like this. I know one,
one group that did this. And TikTok’s internal strategy is, hey, we don’t want any of these
single creators to get too big. Let’s turn down the dial. The TikTok would rather have
a million people or 100,000 creators with 100,000 followers than five with a million, because,
you know, millions, because that kind of starts to give too much power to the kind of supply or
power in business speak. And there’s a whole bunch of reasons why. And so there’s, there’s all these
social networks and, and other kinds of web properties are have all of these optimization
systems that make sure that they kind of spread the traffic however they want. And then also the
money, remember now to TikTok, they control the money, they put up the ads, they take all that
money. You know, most people that are on these networks are forced to do all of these kinds of
gymnastics to figure out a business model, like selling things in the offline world and
sponsorships and just all sorts of things because they can’t go direct, right? Because they lost,
because we lost that, that thing we have with the web, which is you could just put up a website
and have an ad. And actually, this is one reason you see kind of a move back to things like
sub stack and email, because people are sort of trying to go back to, in some ways, it’s a way
to sort of back to the future of trying to go back to the older model where you do hope a direct
relationship with your audience. So that’s kind of the problem. And, and, you know, I think that
really started and I kind of go through this in the book, I tried it in the book to talk a lot of,
you know, to give sort of historical examples and anecdotes. And a lot of it I experienced
directly. You, I think you were also there for a lot of it. The, you know, I think that really
kind of happened around the early 2010s, like 2012 ish. And I think I use RSS as a specific kind
of case study where RSS, for those who don’t know, was a kind of an open alternative to social
networks like Twitter and Facebook. And had RSS succeeded, I think a lot of the problems I’m
describing would not be problems. So you would have, you would have sort of social networking
done in this sort of open, decentralized way where people could have a direct relationship
with their audience. And around 2012 or ’13 is when, you know, basically Twitter and Google,
all the other companies stopped supporting RSS and the numbers declined precipitously and things
like this. Anyways, and that’s actually when I, so when I first saw blockchains, you know,
obviously that started in 2008 and nine with Bitcoin, but then kind of really developed
over the 2010 era and the sort of initial ideas were expanded.
To me, what was interesting about it is that it said, hey, maybe this is a way that we can build
new systems, new services that have, that are able to compete with these modern systems like
Facebook and Twitter, but have a lot of the benefits of the early internet. And that’s
sort of the core thesis of the book. But I think sort of to understand that you asked
why to write a book is that you need some context, you need a little bit of history.
And you also need to know like the way I think about it, Kevin, is like you and I,
like what business, you and I have been in kind of the consumer internet business for most of our
careers, right? When you’re in the consumer internet business, I think it’s sort of taken
for granted that, that you were basically in the business of building networks, right? If you
think about you with Dig and Moonbirds, you’re building networks. For the most part, entrepreneurship
on the internet is building networks, right? So Facebook is a network, Twitter’s a network,
Uber’s a network, Ebay’s a network. So the internet, corporate networks, those are corporate
networks, though. That’s right. That’s right. They’re owned by companies. But like the internet,
so this is sort of the reason I had to write a book is that I think a lot of people don’t have
this context. The way I see it is the internet is a network of networks, right? There’s the base
layer sort of internet protocol, like a hardware and basic software that connects it. But on top
of it are networks that we build. And that’s sort of the core activity that I’ve spent my career
doing is investing in or building networks. And you, of course, have been building networks.
And that’s what you do as an entrepreneur. And so when blockchains came along to me,
it was sort of, I was like, wait a second, this is a new, cool new way to build networks, right?
And that obviously, would you consider that? One thing I’m curious about there is like, when I
think about these corporate networks, you know, they’re very much like, you know, Elon can say
anything and it just goes on the corporate network side, right? So you have one single unified
source of power that stops at the CEO or chairman or whatever it may be at the board. And, you know,
they can, you know, laterally just make decisions that affect, you know, millions of people.
Do we need to pause now and say like, okay, it’s time to actually get back to building
more protocol networks? Because, you know, in some sense, like email has probably been the most
resilient against this, right? It’s an open protocol that can just, you know, or HTTPS or
whatever, right? Like, these are open standards that anyone can build on top of and they still
are around today. Like, is it, is it, is that the movement that you think Web3 needs to, like,
how do we actually, now that there’s so much power and so much lobbying power and everything
else, like, how do we get back to basics and, you know, disrupt those big, large massive corporate
networks? Yeah. So no great question. So the, just so maybe just so the audience has the context,
in the book, I use sort of slightly novel nomenclature just for clarity, which is I call sort
of the three kinds of networks. There’s protocol networks, corporate networks, and blockchain
networks. And protocol, protocol networks are often called protocols, but so are blockchain.
So I had to use some words to distinguish them. That’s why I called them those things.
So protocol networks are sort of the original networks of the internet. That’s, as you described,
the two big ones are the Web, the World Wide Web, HTTP, and email. Also, you know, the protocol
is called SMTP. And those, those were created in the 80s. I think a lot of the success honestly
was due to the fact that there wasn’t really competition. You know, had you had sort of Gmail,
I’m making it up, but like, you know, Gmail’s of course built on SMTP. But if you had, you had
sort of companies of that caliber, like Google and the 80s and the internet, it’s sort of hard
to imagine, but just imagine, like, I think it would have been harder. And there’s been a long
history of people trying to build new protocols, right? There’s like Jabber and Diaspora and RSS,
and like, I go through and I list like 50 of them in the book. So, in different parts. And by the
way, I’ve been a supporter of those. I’m a big fan of those. And I’ve been blogging about that
stuff for 15 years. Like I’ve, you know, so I, and if, if those could succeed, if RSS could succeed,
I would be very happy and, and be very supportive. Okay. But I would say, you know, the evidence is,
it’s now been, you know, a lot of people have tried, there’s been a lot of startups around
that kind of stuff. And it’s been 30 years and nothing has succeeded. And I would argue that,
and I do argue in the book that that is, you know, fundamentally, that those protocol networks
can’t compete with, with these big companies. And, and I use YouTube as an example. Like one big
reason is funding, right? So YouTube spent many, many billions of dollars in the early days subsidizing
free video hosting, right? I mean, that was kind of their strategy. It was, it was expensive in the
lawsuits they had, the copyright lawsuits. And also the video, you know, in the 2005, when they
launched to host high quality video on your site and stream, it was quite expensive. And so what
they did is a strategy, right? As they said, they said, Hey, you can upload your video. Hey,
you blogger, because there wasn’t people, people weren’t going to YouTube them, right? They were
going directly to websites like yours website or my website or startup websites. And they said,
Hey, you for free, you can, you can host video. We’ll put it on our site, but we’ll also let you
embed it on your site. That was their kind of killer feature in the beginning was the embed
feature. And people were like, Great, this solves all my problems. It’s easy. And they pay for it.
Right. And then what happened, of course, over time is they would dual host it, right? You’d
have it embedded on your site. And it would also be on YouTube.com. And eventually YouTube.com had
so much interesting stuff that people just started going there directly fast forward. It’s, you know,
the big, big website it is today. Meanwhile, like RSS, there were, there were things called a media
RSS. That was a competitor to it. It was a media version of RSS that was meant to be hosting,
you know, video hosting, but you had to pay for it yourself. And there were no, and there was
like this kind of ragtag group of developers kind of hacking away on it, right? As there are with
these protocol networks. There was no funding. There was, you know, in YouTube, you know, once
especially they acquired by Google, they had, they had sort of infinite resources. So my argument is
that after 30 years of, so my arguments, I guess one, I, I’m a big proponent of protocol networks,
if they could succeed, I would be supportive. But after 30 years of them not working, I feel like,
you know, perhaps there’s something fundamentally difficult about making about about, about helping
those succeed. And specifically, I argue that there’s sort of one of the main issues is funding.
And the other main issues sort of features and functionality. And then sort of the, then the,
then the kind of the concluding part of my argument is that blockchains essentially solve
those problems. So you can, in some ways, you can think of blockchain networks as evolved protocol
networks that have evolved to have sort of, you know, internal sources of funding and more advanced
feature sets. So for example, I’m talking about this in the history part of the book, that there was
a whole bunch of people trying to create social networks using RSS in the late 2000s to compete
with sites like Facebook, and they kept having a problem of where do you put the social graph,
where do you store it? Because, because protocol networks like the web and email have no place,
no, no database, no place to store things. And of course, that’s blockchain is a community on
database. And so blockchain lets you put those, there’s like new social networks like Farcaster
and Lens and these other things, which are kind of RSS like, except they store the social graph
on the blockchain. So I don’t want to go too deep in the weeds there. But essentially, I, the kind
of the, the, the high level argument is that protocol networks are great for, have all these
positive societal benefits. So do blockchain networks, but blockchain networks are kind of
further evolved and allow and more likely to, to, to be able to compete head to head with these big
kind of corporate networks. And what do you think when I think of each of these, call it like 10
plus year cycles, you know, starting with web one, you think about, there was always this,
there was always two camps that felt like one camp that would say, Hey, this is, this is hype,
this is bullshit. Like, you know, there was, you know, they call them dot bombs back in the day
when like the dot comms were just like, you know, popping up as an IPO. And then just like, I have
a board game. I think it’s called dot bomb. I still have it on my shelf. It’s from like 2003.
And it was like this mocking board game of all of the ridiculous web one ideas.
Well, remember, that’s what I don’t, I’m sure, you know, Philip Kaplan member of fucked company
that was there was a whole site. Every day, it was like the company’s winding down.
The funniest thing about the dot bomb game is almost every idea, I actually blogged about it
once almost every idea, like turned out to like 10 years later, be a hit startup, it was like
grocery, you know, like restaurant food delivery and like video conferencing and internet payments.
I was just too early. But I mean, out of that first web 1.0, you know, we obviously saw Google,
PayPal, Amazon, like a lot of the bigs that we know today come out of that web two, same thing,
some social networks, Uber, you know, some great companies that emerged there.
Web three, I think, you know, you have this, like you had mentioned earlier in the book,
you call this this kind of casino mentality. And there can be, we get a lot of black eyes,
right? Like, like we get a lot of PR black eyes and like absent a killer app that everyone can
point to and say, hot damn, like this is why web three matters. I wonder, like, when do we
actually, you know, we can beat the drum all day long, but if we keep just getting beat up on
the PR and press side, yeah, we’re it’s really doing a lot of damage. So I’m wondering, you know,
obviously, Bitcoin store value, no brainer, like that that that’s that’s a done deal, right?
What else do you see as being like, what’s going to what’s going to stick? We look back
five, seven, 10 years from now and say, ah, that was the Amazon of that era.
No, I mean, and I guess to to build on your point, I do think so I do. So and I describe this a
little bit in the book, because I think there’s sort of two cultures around blockchains, right?
There’s the there’s the, and a productive side that we’re talking about. And there’s just kind
of casino side. And I do think the casino side has created done a lot of damage, both to consumers
who, you know, for example, who lost money at places like FTX, but also just from a, you know,
as you mentioned, like kind of PR and image wise. And I think in this goes to policy questions,
which we may or may not want to talk about today, but I think like a smart policy approach would
be to to try to minimize the casino and maximize the productive use cases. I don’t think we have
that that that policy, the US is taking that policy approach today. So I think that’s one,
you know, one important thing that could happen is just sort of really putting guardrails around it
and encouraging the good stuff and discouraging the bad stuff. But but a precondition of that
is understanding what the good stuff is, right, which is also you asked me why I wrote a book,
that’s part of it is like the book is like, this is the positive vision, like you may or may not
believe it, but this is the positive vision. And this is how it could lead to the positive vision
and why it might be worthwhile to have policies that encourage that positive vision.
To your sec, to your point also, like, look, I don’t think we’ve had our kind of quote iPhone
moment or, you know, chat GPT moment. Let’s take AI. I mean, AI, you know, to some people,
AI started in 2023. You know, in fact, it’s, you know, the first paper on neural networks was
from 1943. So 80 year gap there. And I started a machine learning company in 2008 called Hunch,
they got acquired by eBay. We got acquired by eBay, we ended up being part of the product. But in
all honesty, you know, we were we were too early. And and the product didn’t work the way that I
hoped it would work because the technology just simply hadn’t evolved to the point it did. And
it’s interesting to ask like, why did it evolve to the point it did? There’s a bunch of smart
people building algorithms. But the core reason was GPU GPUs, companies like Nvidia created better
and better GPUs. Why did they do that for video games? So, you know, just this is just to illustrate
that like these things can take long, very long times and follow very kind of circuitous paths.
Who would have thought that like video games would lead to, you know, AGI, like that was not
sort of the obvious, the obvious kind of prediction. So so I don’t think we’ve had
that sort of chat GPT moment. I think, I think there’s a few reasons I mentioned the policy kind
of stuff. I think that we’ve unfortunately, we’re in a situation now where a lot of the good actors
are burdened by lots and lots of kind of legal. I’d say in an average company financing, we do
have let’s say 10 million dollar series a three plus maybe five million goes to legal and policy
kind of stuff. Like it’s just a major, major kind of overhead piece of overhead. And then, you know,
of course, the bad actors are offshore anonymous. They just don’t care. And so they in some ways,
you know, so have sort of this lack of clarity and and and the fact that it’s going to be playing
out in course for years, I think benefits those folks. So that’s number one, number two, like I
think infrastructure always matters in computing movements. And I think the blockchains is a
computing movement. Steve Jobs is a genius. But the reality is, you know, you couldn’t have done
that and probably to you know, the iPhone came in 2007, you probably couldn’t have done it three
years earlier. And had he not done it, someone else would have probably done it at some point,
because at some point, you know, the chips got good enough to fit on a small thing, you had
capacitive touchscreens, you had, you know, cellular technology, all these other kinds of
components got good enough. So you kind of can go back in history and look at a lot of the things
that happen and look at the underlying kind of Moore’s law curves. And, you know, I’m not saying
that, of course, entrepreneurs and geniuses like Steve Jobs matter, but there is these very powerful
underlying forces. And I think blockchains have those as well. And that anyone who’s tried to use
something like Ethereum lately, you know, will tell you that like it’s a clunky experience,
you pay too much for gas, the transaction times are low. So that surpassed. So I think the
infrastructure stuff has to get fixed, the policy stuff has to get fixed. Do you think that it’s
likely the kind of leaning out and rewriting of the financial stack, you know, on the lending side,
maybe even mortgages, like this, that whole infrastructure that gives way to Web3 first?
I think that that is so I think financial applications are very interesting. There’s
been some very sophisticated stuff done, especially around like kind of deep so-called
DeFi. I think one of the things overlooked in the last couple of years is that DeFi protocols like
Uniswap and Compound and Ave worked perfectly throughout all of the ups and downs and market
volatility. And the really, really interesting kind of new constructions that I wish more people
would look at. I think honestly, the challenge there is regulatory. I mean, like right now,
you want to connect any of those systems to, you know, kind of outside of this sort of blockchain
microcosm and you run into all sorts of regulatory issues. So if you want to put the so-called real
world assets and put them on chain and, you know, kind of put all these, use all these new tools,
you just have to, right now, it’s just very, very unclear from a regulatory point of view. So I do
think that the tech there is very sophisticated and evolved. And I think it’s really that particular
one. I mean, finance is a very, it’s like healthcare. You know, there’s a few areas of the
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How much do you think the average consumer will have to know about Web 3 in the future,
meaning like, you know, when I’m on Gmail, I’m not asking, I mean, of course, it’s a
Google database, but I’m not asking if Oracle’s behind the scenes running the database or whatever
it may be. I’m just interacting with an application. And when I think about, you know, Web 3 largely
today, I mean, us geeks, we get how there’s like five hurdles to get to a layer two and the things
you have to sign. And, you know, even we get, you know, hosed sometimes and hacked or whatever it
may be. So it’s like, I have to think there’s a certain amount of tooling and adoption that either
has to just disappear, where the consumer doesn’t even know they’re using Web 3 tech behind the
scenes. Or it just needs to be, you know, maybe it’s a new layer one that comes up that just makes
it one click instead of five, maybe it’s Solana that ends up, you know, shining here because they
don’t have the baggage of layer twos and the additional complexity. What are your thoughts on
that? Yeah, no, I think, look, I think most of the kind of friction stuff should and will be abstracted
away. Like you should not have to see all those things, right? And that should be, and the security
needs to be improved. And just the whole kind of model of like looking through and looking at these
kind of, these kind of strange popups and all that kind of stuff that that should be, I do think that
some of the some of the concepts will will come through will be understood. So, you know, just
think about, I think a regular internet user has some sense that like a website is different than
their, you know, Twitter handle, right, in the sense that they kind of own their website,
right? I think that’s a pretty broadly understood concept. And so I think this concept, one of the
really the core idea, the reason the book’s called Read Right Own, own is the is kind of the key
thing, the third part, I think this sense of ownership of like, hey, this is an object,
this is a name in a social network, this is a digital collectible, this is a,
you know, some other kind of asset that might be part of a video game asset or whatever it might be
that I actually own, I think that needs to come through to the end consumer, they need to know
it’s different. And it’s not just something that you’re sort of borrowing from this application.
And that you actually have this sort of this kind of persistent inventory
that you carry around with you to different services, right? That’s a very different that’s
sort of flipping. Web3 flips that model, right? So right now, to the extent they’re sort of objects
on the internet, those are owned by the service you use, and you’re just kind of come in and borrow
it, right? If you come into a social network, and the name is owned by Twitter, you come into a
video game, the objects are owned by the game, right? You all of those anything you interact with
is owned by the service. So I think that concept of flipping that and having the user have control,
like in an ideal world, they would have control of things like their,
you know, their tastes, you know, so like their preference, like to taste, meaning like you’re
going to have all of these algorithm AI systems that learn about you and recommend things to you.
And does that data sit with the service? And do they own it? Do they go and do all the things
these services do today with your data? Or do you own it? And then do you give them permission
to use it in certain ways? Like so I think flipping the key idea to me is flipping the power dynamic
away from the service toward the user. And I think that part needs to come through to the end
user. I don’t think all of the kind of visual cruft should come through, hopefully. Like that
there’s no need for that, right? Yeah, when you mentioned in the book, like this is a moment where,
you know, the thing that’s nice about these blockchains is they’re democratic and they’re
transparent. And if we want, it’s something that we can rely on not to be changed over
time. You know, and so I could imagine a world where I opt into an algorithm that sorts my data
for me. And I understand completely, maybe not completely, but to a large extent, how it’s doing
that. So I’m just not artificially getting, you know, weird things happening, like shadow banning
or certain pieces of content getting promoted over others. Is that kind of how you see it unfolding?
Yeah, and like, exactly. And like, think about it today, like you buy, I was just looking at
these some cool new AI devices that are coming out. If you follow those things, I think they’re
really cool. But I just like, what’s going to happen with my data? I’m supposed to read the
current model is just, I think, kind of ridiculous, which is I’m supposed to read a 40 page privacy
policy, these popups to come up. And like, it’s just absurd, the system, right? And then, oh,
you had a clause in the privacy policy that said you could use all of your data in these different
ways. And by the way, I talk about this in the book. All of these services go through this cycle,
I believe, which is they start off kind of, I call it the attract extract cycle. And I’ve seen
this now for decades, which is they start off your new AI service, and you’re like, you want users,
you want content, you want to your super friendly, you’re super open, don’t worry about extracting
money out of it. But then over time, you raise venture money, you, you know, got competitors,
you’ve gotten to enough scale. Like, I’ve been on the boards of companies, and it’s just depressing
to see, I’ve been, you know, at like, you’re on the board, and you’re like, okay, now we have to
start extracting and like, and like legally show it as a S curve in the book. Yeah, yeah,
it’s like very friendly. Yeah, and it happens over, look at Google now, I can’t even use,
you’ve been, I can’t even use a service anymore. It’s all sponsored links on mobile. Most of time,
now it’s all, remember their whole thing, the entire pitch at the beginning was we don’t put
all these ads everywhere. Now it’s all Google services and sponsored links. Amazon, I just,
you just, I love, I love Amazon, I use it, but like, I just now I’m just trained to scroll down,
you know, so much. And I don’t know, regular people, probably they don’t do it, regular people,
because they obviously, that’s why Amazon does it, people click on it. And it’s, and it tricks them,
and it’s not, it’s not, it’s not an honest way to do business. But that’s what they do. I mean,
like, it’s legal, they put it, I’m sure there’s some clause in that 40 page privacy policy.
But it’s just not a good system. And I think it worked for a while, because they were in that
kind of early honeymoon phase. But now we’re seeing the kind of the consequences of it. And I
think it’s only going to get worse. And by the way, I’m a big fan of AI. We do a lot of AI and
investing at the firm. AI is going to further can just going to make all these issues even
greater. It’s going to further consolidate the internet. It rewards companies that have lots of
data and lots of money and lots of compute. And that’s going to sort of further entrench the big
companies. It’s going to make these data issues much bigger. I have a chapter in the book about
this. It’s going to like one of it’s going to break the I call it break the covenant that the
internet has today with creative people. So with creative people, like you think about Google,
like they’re sort of an implicit covenant, who’s never agreed to it just kind of evolved.
But the covenant is you, you know, you content creator, I’m a web, I’m a news site, I’m a travel
site, I’m an artist, you let you let Google crawl you index you and show snippets on the search
result. And in return, they’ll send you some amount of traffic, right? And in AI world,
that’s not going to they’re just going to show you the answer, or they’re just going to give
you an image, right? You’re going to say, Hey, give me an image of X and it’s going to give you
the image. And why would it bother to link back, right? The user doesn’t need to click through,
Hey, here’s the travel times, here’s the recipe, here’s the whatever. And so in that world, it
breaks that covenant, right? So you no longer have so so those creators, then what happens,
you’re already seeing this happen, like a like Twitter and Reddit are already pulling back on
their API as people are adding paywalls. So great. So then we have five companies. This is really
where we’re headed right now. And like, like, I think we have a direct path to it. And I don’t
know why people aren’t talking about it. But we’re gonna have five big companies with AI services.
And then a bunch of people, you know, creators are going to be fighting them locking down their site,
taking them to court, the big, you know, New York Times just all the big lawsuit,
and you’re gonna have years and years of court battles. And, you know, and this is how much of
that do we have to, do you think we have to live with just because of the pure efficiency that it
affords us? Like, sometimes when I think, okay, maybe let’s pretend I’m shopping for the next
smartphone, I’m on the Android ecosystem, I have a lot of choice. And I’m like, who has the best
camera right now in production that I can buy today? I ask AI, and I say, Hey, look at the top 10
review sites and give me give me the winner, right? And it gives me spits me back one line of text.
Like, in some sense, I’m pretty happy about that result. But also, I see how it’s screwing people
over. So there’s like convenience, you know, but it’s also kind of like, how do we, how do they
get paid? Yeah, look, I’m not saying that we should like, we should, we should that we should
not build these AI systems. Like, I think that they are better for users, and they are better
ultimately for, you know, humanity and productivity and human flourishing. And look for, I was talking
about the creator side on the sort of supply side on the flip side, they help creators create things
right there, like your but your co pilot that helps you do stuff. And so I think they’re very
powerful, important technology, and we shouldn’t and we shouldn’t sort of, you know, kind of handicap
them. I think that I guess my what I would argue, and this is both true of blockchains and AI is
that we’re sort of taking the wrong approach to the policy kinds of questions, which is we’re
sort of saying, Okay, these right now, there’s a conflict going on between New York Times and open
AI, and they’re going to go to court. And then a judge is going to, you know, two years from now,
a judge is going to interpret documents from 200 years ago as to how they apply to AI. And I’m
saying it’s and it’s very reactive. And I’m saying a better way to think about it is proactively,
right, which is you describe the positive vision, which is what I tried to do for blockchains and
read write on somebody should do that for AI. I’m probably not me. I’m not going to do it. But
someone should like someone should describe the positive vision. And then we should construct
policies that that find the best balance that like in the case of AI, like what’s what’s a good set
of policies that allow the AI systems to flourish, but also make sure that creators get paid, right,
you need both. Like we can’t we don’t want an internet where everybody’s afraid to put their
content on the internet, like that’s not a good internet. And that that’s where we’re going to
be headed if we don’t think about that, the creators need to get paid, and they need to get paid
fairly, and they should get paid like they do contribute like the like with the AI thing, like
there’s this kind of philosophical question of like, does does the AI system copy like when it
learns from, let’s say it learns some art style from a bunch of artists, is it copying it? Or is
it inspired by it? Is it more like a human being inspired by it? Or you know, and some judge will
two years from now will decide that the truth is there’s no answer to that question. Like it’s
kind of this new thing. There’s no actual like way to interpret the Constitution or some other
document that tells you the answer to that question. I think instead, we should be asking the question
of like, look, if you’re contributing, if the AI system is valuable, and you created something
that contributed to it, through machine learning training or some other mechanism, like you should
get some of that money that that some of that value creates, right? And I don’t know the exact
mechanism of how that that is formed, I suggest some things, I think blockchains can play an
important role because blockchains are kind of effectively economic machines that let you sort
of do collective bargaining between large groups of people and other services. That’s, I think,
one way you could imagine policy approaches. But to me, that’s the way you should think about it,
is like, how do you get the best of both worlds? Like, I think you can get the best, like, how do
you get like, you should not force a consumer to jump through hoops to find out what the best camera
is in order to get the camera review sites paid, you should let the user have the best experience
and make sure that the money that’s made off of that sort of cascades back to the people who
contributed to it in whatever way they did. It’s actually really interesting because blockchains
in some sense are a really good use case here because they’re transparent. So you can see what’s
going on, the waterfall, the cascading money. Exactly. So if we can see the waterfall and say,
okay, I just asked for, you know, the ultimate martini recipe, and it pulled from 150 data
sources, like weighed them in this particular way. And, you know, these are the micro payments that
went out to all those sources based on the weight of that data. Like that to me is, it feels like
that should be the kind of transparency we need around this. I agree. I completely agree. I mean,
that’s one of, blockchains provide this incredible kind of transparent audit trail
for these sorts of things. It also lets a bunch of creative people kind of get together and
collectively bargain. They can come together and through a blockchain say, you can use our data,
but you need to give us X percent of the revenue as an example. And then they can say,
but, and instead of you bargaining with each one of us, a million of us individually, where,
where the, you know, the big company would have all the power by being together,
we get more leverage, right? And like in a world where blockchains weren’t politicized as they are
today, and you have people, partly because of casino culture and partly because the world,
everything in the world seems politicized these days. But for some reason, like there’s a set of
people who just won’t consider blockchains, which of course, they’re just a software construction.
There’s not, they’re not, they don’t have a political orientation. It’s a, it’s a way to
build certain software systems. They are very valuable for solving a lot of the problems that,
that AI will create. And again, I’m pro AI, I think that we should have these systems, but I think
that we need complementary systems. And I think blockchains are very powerful,
sort of complementary systems to help mitigate some of the problems that AI creates.
One of the, you brought this up a couple of times, but the title of the book is Read
Right Own. On the own side, obviously a big piece of this, and you cover this, you know,
a bit in the book is around NFTs as well. And so, you know, we’ve in the NFTs space taken our fair
share of black eyes, because there’s been all different types of, you know, participants in
this space in it for all different reasons, you know, and so it’s challenging because I see some
of the use cases you outlined in the book and some of the use cases that I think about,
especially around interoperable gaming components, you know, ownable assets,
instead of some of these virtual worlds, you know, certainly on the digital art side, being a huge
piece that I think is durable in here to stay, generative art here to stay.
What are your thoughts on NFTs and how they evolved over the last couple of years?
Yeah, I mean, so, you know, NFTs are, they are an atomic unit of ownership, right? They’re very
abstract concepts. I kind of talk about this in the book. I talk about this software concept of,
it was called encapsulation. It’s an old, old idea in software, which is you can take something
complex and you can encapsulate it in something simple. And so, for the example I used is the
website. So, when you have the original vision of the web, when Tim Berners-Lee and the others who
were kind of imagining it, it was like, what if we had all the information in the world linked
together, anyone can contribute to it? Okay, that sounds complicated. Well, let’s simplify it. We’ll
have a little unit is called a website and you control, someone controls that website and there’s
things called links and they connect them, right? So, the web 3 vision is what if we have all of
this sort of big complicated thing with everyone in the world and the internet can now own things?
Okay, well, that sounds complicated. So, NFTs are a way to simplify that. Here’s a little container.
It’s a little box and you can put something in it and that’s the unit of ownership. That’s what
an NFT is. It’s a very abstract concept. You mentioned it like it being like, I thought this
was an interesting take where you said it’s almost like an artist, maybe you didn’t say
baseball card, but like signing something, right? Like almost like an autograph on something.
Well, that’s a specific. So, I just described a very general concept of an NFT. A specific,
one specific type of NFT are these kinds of artistic NFTs where you buy it from the artist
and they kind of sign it and you have cryptographic proof they signed it. And that may or may not
have value to people depending on how they, a lot of things in the world, a lot of value in the
world is subjective. Most fashion, most sneakers and collectibles and baseball cards. And I would
argue most fancy cars and most nice clothes. Like, sure, there’s some kind of… The US dollar.
Yeah, I mean, there’s some utilitarian kind of objective value. It’s not back like gold, yeah.
Like of like, yeah, this sweater sure keeps me warm and this and that, but I probably paid a
premium for it because of the brand and how it looked. And that’s a very common thing. So,
some people may choose to value those things. I think the key point though is a lot of the
people negative in NFTs, I think are confusing the specific sort of presentation of NFTs that
happened in 2021 with the broader concept, right? It’d be kind of like if somebody invented the
web and the early websites, a bunch of them were like kind of dumb websites or something, right?
That doesn’t mean the web is a bad idea. It means that the early websites weren’t great, okay?
That’s kind of what… And look, that happened with social media, by the way. You were there,
like I was early on. People were like constantly mocking it as like, these are like these nerds
talking about what they’re having for lunch. But if you step back and you looked at…
That was Twitter in the early days. Why would I want to know what Chris Stix and Kevin
Rose is having for lunch? Like, I heard that… Chris, a question for you. Have you downloaded
your Twitter history, like backed it up? I think I did it at one point, yeah, yeah.
So I did it with mine and they actually have a… When you launch and you unzip it, the file,
is that they actually have a beautiful interface for kind of searching and bruising your old data
and you can sort by date. I would do it again and save it before Elon decides to change that
interface because it’s actually quite good. When you get that data, do a look at your oldest tweets
and they’re so embarrassing. They’re literally like… It is actually what you were having for lunch.
Is anyone here? I was like… Because it was right after they launched. I’m sure you were on that too
back then. Yeah. It was like, yeah, that’s funny. No, but that’s what it was, right? It was silly.
But that’s the thing is like, when you look back, so say you’re 2006 or something, looking at social
media, you could look at Twitter as this, you know, this is these sort of whatever these
self-promoting nerds who are talking about what they’re having for lunch. Or you could say,
look at it kind of more abstractly, which is, wow, this is a new way, this is a new protocol for
global communication. And of course, the more abstract way to look at it ended up being the
correct way. And I believe that that’s sort of a core thing you need to do in technology if you
want to try to predict the future is you need to look at things and sort of throw away the accidental
trappings of how it kind of shows up. If you look just at the superficial aspects, you’re
going to miss the essence of it. You need to look at the essence of it. What is it really?
And because what it really is kind of gives you some insight into how it may evolve.
And I think that’s the core mistake people are making around NFTs right now, is they’re looking
at, yes, there’s been a lot of dumb and empty projects. There’s been a lot of dumb shit on
the internet my entire career. Like, it’s just like, there’s a lot of dumb websites. It’s all of
humanity and people, you know, like, there’s good and bad, right? But over time, I think these
technologies have a logic of their own and they evolve into kind of what their essence should be,
because people run experiments and build things around it. And so that would be
a miracle with NFTs is like, are you, for the critics, do you dislike specific things that
happened a couple of years ago or projects you saw? Or do you dislike the idea of an atomic
unit of ownership on the internet? Because I bet you if they thought about the latter concept,
they’d realize it’s actually a really interesting and important idea. And I continue to think that.
I know it’s not a popular view. I’m like, I just feel 100% sure this is like one of the most important
things. No, I’m 100% sure as well. It’s silly to me to think that like, you know,
oftentimes one of the things I do is I just kind of close my eyes and say, okay, if I were to like
be in a coma for the next 10 years, and I wake up, will this still be true, right? Like, and like,
just kind of like played out in your head, like what and the idea that ownable digital assets,
like verifiable scarcity, guaranteed provenance, like ownable digital assets is going away is
just like laughable to me. Like, of course, that will be a thing in the future. Like,
digital currency, like if I have a brand new island and I say, hey, this is my new country,
what am I going to do go by printing presses? Of course, I’m going to embrace a digital currency.
So some of these things I just think it’s funny, the very first quote that you had in your book,
I thought was a fantastic one where by Freeman Dyson, where it says, when the great innovation
appears, it will almost certainly be in a muddled, incomplete and confusing form. Like that, that’s
and there’s more to the quote there, but that that was, he says, at first glance, they will look crazy.
And so you believe that to be true. I’m obviously put the be, yeah, look, let’s be very true with
web through. And I talk about this, another, another important thing in the book is this concept of,
if you recall, there’s outside, I called outside in versus inside out technologies.
And so like, if you just look at the history of computing, I think that it kind of bifurcates
very pretty cleanly into these two camps. And let me describe it. So the one camp is kind of
things that come from established institutions. And so for example, the iPhone came from Apple,
right, and sort of smartphones and AI, AI was, you know, done at places like Stanford and Google.
And then there’s this other kind of thread, which is the kind of outside in, I call it,
because it comes from the fringes. The worldwide web was like this, right? I mean,
Tim Berners-Lee was at a physics lab. I mean, that was not sort of, you know,
the obvious place for internet innovation and was competing against Comcast and Disney and
Microsoft and a bunch of people who were kind of central casting. Linux is probably the best
example, right? I mean, people saw people don’t realize this is 90. I mean, it must be 99% of
operating systems in production in the world or Linux, every backend servers, Linux, every, you
know, Android phones are all Linux, every new device is Linux. It is completely one.
Yeah, like your Mac was based on what? Yeah, I know it’s still has a lot of Unix stack and not
Linux, but Unix back in it, which is closely related. And in fact, I think like some is a very
high percentage of Apple software is built on open source software. And so and then this and
that’s not even counting like databases and web servers and, you know, Apache and Postgres and
just like 99% of like running software in the world at 95 to 99 something like that is open
source software, right? Which is a crazy thing when you look back on it, which is open source
software. It began probably in the 80s with Richard Stallman at MIT. And it was this kind of weird
fringe kind of left wing political movement that didn’t believe that anyone should own anything
and let alone software. And then it morphed in the 90s, you know, Linus with Linux into sort of
more of a pragmatic computing movement. But in the 90s, it was not a thing, a mainstream thing,
even the early 2000s, it wasn’t. And then eventually, you know, some companies started getting built
around it, really the rise of kind of cloud computing, you know, that those cloud computing
providers like AWS, they all adopted open source. And now it’s dominant. And so that came from the
fringes, right? And so for me, like, and blockchains and crypto was outside in, just if it’s not
obvious AI is inside out blockchains. So the outside in ones, they always start off kind of weird
and amorphous. And they’re there, you know, like this idea that like this, you know, Norwegian guys
hacking project, where he’s got a rag tag group of people without funding who are creating an
operating system is now going to be the dominant operating system world, like you had to have,
you know, you had to sort of understand a lot of things. And, and I think there’s lessons,
by the way, that that are very interesting ones as to why that ended up winning and why the web
ended up winning and a bunch of other, you know, PCs to some extent, we’re outside in, you know,
the Apple to Wozniak and jobs at the Hack homebrew computer club, all the incumbents at the time
didn’t take it seriously. Because, you know, it was classic innovative dilemma where they’re
selling to their business customers or like, we want faster computers, we don’t want those little
crappy things, you know. And so, so a lot of the history of computing has been these outside in
things. And they come as I was describing it, they come kind of disguised. They come looking
like something else. And I’ve, this is what I’ve, look, my personal, I’ve always been interested
in the outside in stuff. You know, I grew up using Unix and sort of always used open source
software, I’m sort of an open source software maximalist and, and protocol networks and blockchains.
And I see this as sort of the next, this natural evolution of that. And that’s the thing is that
they come that that’s actually what’s made it interesting for me career wise is that is like
figuring out those puzzles, right, like to your point about the quote, that’s what make the you
know, it’s like, Hey, it’s your first impression is wrong, you need to go dig into it. And you need
to understand it. And there’s value in doing that, by the way, if you want to be an entrepreneur or
an investor or something, because you, it helps give you insight into where the world’s going.
And so anyway, so that’s why I did love that quote is that it, you kind of summarize how I
think about how I think about a lot of the interesting threads of in the history of technology.
When, when we think about the future and the terminology we use with consumers,
how much damage has been done in terms of Web three today, and how much backtracking do we in
reframing do we have to do, I, I say that largely because, you know, in looking at your book,
there’s no mention of Web three on the cover nor of crypto. And, you know, do we need to stop calling
them NFTs? Do we need to like rethink how to position this? By the way, I’m not anti those words
and like, look, our fund is called crypto. I’m not trying to like hide from it. I just
wanted to sidestep the sort of tribal battles inside of the crypto space. And I didn’t want
to get involved in them. And so the reason I, I just tried to use descriptive sort of type,
like kind of more technical words. Mostly I do mention crypto and Web three and say, hey,
these are other words for it in the book. But yeah, I don’t feature prominently. So I just,
it was more of just the tribalist thing. Like I would argue, I mean, I’d love your view on this,
Kevin, but I would argue that like, I remember with when I had my AI company, we wouldn’t, we
wouldn’t use the word AI because AI had a bad word for, it had bad name for a long time because
it was seen as sort of emblematic of the, the space over promising. Right. And so we said machine
learning. That was kind of the thing you said back then, right? Now people say AI again. I think
there’s a lot of, you know, look MP threes, like that’s like the worst name in the world. Those
things became popular. GIFs, JPEGs, like there’s a lot of bad names in tech. I would argue that tech
is driven more by products than naming. And that, and that what we really need is going back to our
earlier conversation, a chat GPT iPhone kind of killer app. And if you do that, all the naming
just takes care of itself. I think it drops away. I think to your point about MP threes is that it’s
just spot on. Like we don’t ask, is this file an MP three or a AC or what is it behind the scenes?
We just stream our shit and it works. Like, you know, so it’s like, I feel like that’s just going
to be what happens here. Once the killer, you just need things that people products that people use
and then the, I think the names take care of themselves. So that’s why I kind of have stayed
out of some of those naming debates. I just, I think, I think everything in tech is product driven
and to the end, consumers product driven and then under the hood is tech driven. And so those are
the kind of things we should focus on. Now, all that said, like, look, the history of tech of
internet tech, computing tech hasn’t had this policy angle before, like for the most part,
people are building PCs and internet had some regulation, but it has been a much lighter touch.
It’s completely changed now. I think AI is about to experience it unfortunately.
But like today, building on the internet is much more like it is building in the offline world,
where like, you know, like, go try to build a building or a train or train tracks or something
else. Like, there’s a lot of kind of regulatory and legal stuff you got to deal with. And I think
the internet world is becoming like that. And I think to the extent that names end up, you know,
influencing the policy debate, maybe that, you know, maybe it’s different. That is different
this time, right? That you need to, I don’t know. Like the difference here is that perception can
become react like if there’s enough negative perception, that you can then sort of entrench
that into bad policy that that makes it much harder for entrepreneurs to operate.
Yeah, I’d like that you like frame Lee squarely put this, the use the word casino and just say,
because it, it’s such a great way to say, no, no, no, that’s not what we’re talking,
we’re not talking about the casino, right? And when you say that it puts all those people in
a bucket, and it kind of separates them out of the conversation, you know, how you lead the business.
I will see how the, how the, what the reaction is, I think it won’t be popular with some crowds.
But, but like, I feel very strongly that that’s not why I got involved. And
it’s not why I’m excited. And I don’t think, you know, like, I mean, I think there’s,
I think of it like domain names or other real estate for, let’s make real estate people know
it better, like there is real estate speculation. And I think we all accept that that is a necessary
byproduct of ownership, right? But the point of ownership is that somebody can own a house that
they can, you know, save money through that, you know, have that appreciate. I think that they can
have the emotional satisfaction of knowing they own it, of improving it, of caring about their
house and building it out, caring about the community. Like that’s why home ownership really
matters, right, is for families to have a sense of, you know, a true home that they own and being
part of a community and the incentives that that ownership creates on top of it. And that should
be the same thing with blockchains, right, that should be the core of it is that this is about
ownership and there will be spec like anytime you have ownership, you have speculation. I would,
I use this, I forgot if I think I have this in the book. Imagine if we had a world where
you could only rent houses. This is sort of a wacky thought expert, philosophical thought experiment.
And no one could own houses. And then one day somebody flipped a switch and you could buy houses.
Like you’d probably have a couple of years of like crazy speculation. Like I kind of think of that
as a little bit of a web three, right? Like we had this internet where you couldn’t own anything.
And now suddenly you could. And the first thing people do, you know, some set of people do is
they start speculating on it, right? But like, I hope that that both through policy and just through
kind of just, just time, yeah, it gets tamped down and that the real point of ownership,
which is all the things I talk about in the book becomes the becomes the heart of it.
Yeah. Fantastic. Well, I have a couple last questions for you. One, you know, I just want
to pick your brain on is someone that is always really good at seeing around corners before
anyone else. One odd thing that I’ve been scratching my head on is watching this idea of
federated communities really start to kind of take shape specifically around activity pub and
really looking at Facebook and seeing our meta and saying, okay, this is an area where they know
they cannot dominate, but they want to play. And so they’ve lost to X. They can’t win the
Twitter kind of Global Town Hall, you know, world for now. But they’re saying in some sense,
maybe if I support Federation and a new protocol network, we can create something that will
overthrow the incumbent here. Do you think they have a shot at that?
Yeah. So I think, I guess the question is like, would Facebook, a company whose entire
business is built around network effects really go all in on the technology that’s
meant to undermine their network effect? Well, if they’re dying, they might be forced to, right?
Like if they can’t dominate an area. I just, maybe I’m too cynical about it, but I feel like,
you know, it’s like a nice marketing strategy, but I have trouble, you know, I don’t know. I just
have trouble believing that they’re going to do it fully. But I do think, look, I think that,
I talk about the federated networks in the book, I think they’re very interesting. I’m pro federated
networks. I’m pro anything that’s sort of more open and not, I think that social networks should
not be controlled by a few individuals, which they are today, and they should be controlled
by communities. And I think federated networks are one way to get there. I think there’s a
risk with federated networks, which is, and you already see this on things like Macedon,
which is, it’s right now, it’s, there’s a lot of friction between the different so-called servers.
So if you go on like, macedon.social versus macedon.something else, like there’s, it’s very,
there’s a lot of high friction of like following people on other servers and doing other things.
So what, so what ends up happening is people coalesce around a single server. And that server
has to pay for hosting costs and all sorts of other things. So I do worry that like,
Facebook could have, you know, on threads, support activity hub, but is there in fact
going to be just an effective network effect? I call this protocol COOS in the book, I talk about
a little bit, which is, I think it’s kind of happened with Twitter and RSS, which is people
started originally, if you remember, early Twitter, people were kind of seeing it as like a hub for
RSS because you could both take RSS in and out, right? And people would post on our on Twitter
as like an RSS server. And saw it as, in fact, I have old blog posts where I’m like, and these
all these heated debates about like, whether that’s a good idea or whether Twitter will undermine it
at some point. And so I think that the risk is just that like, it starts off that way. But then
over time, threads is sort of the dominant node in the activity pub network. And then we’re just
sort of back to where we started, right? And then look, this is my argument. One of my arguments
for blockchains is blockchains, they’re, I call them computers that can make commitments. They,
you lock it in, you make your commitments in immutable software. And so you can’t change it.
So the user and the developer and everybody else can see those commitments very transparently
and decide whether to adopt them. So you’re not dependent on corporate assurances in terms of
service and privacy policies, right? You can look at open code. And so it’s like, maybe, maybe it’ll
happen. I don’t want to be overly cynical about it. But like, but, but I, you know, I sort of feel
like after this many years of these other approaches not working, we should try something else. And
my proposal in the book is blockchains. But
yeah, I’m always wondering, you know, when, when, if there’s a company like a Facebook or something
where their own internal products are starting to, to, to kind of flounder or not be as hot,
especially in social networks, if they don’t try, yeah, it’s like, they call like a sort of the
Android strategy, the arm the rebels strategy, people call it sometimes like Shopify, right?
Like the, you know, so like, if you, if you’re losing something bad, like say with Android,
right? They were, they, when they launched that they were, they weren’t that far behind,
but the iPhone clearly had momentum. So they took a, they kind of took a zig zag to their zig
strategy of like, let’s make the operating system free, which is by the way, really smart move at
the time against Microsoft, who was trying to charge 100 bucks for their operating system.
And let’s make Samsung and Sony and LG and all these, you know, at the time phone providers
are ally instead of our enemy and make, you know, and so we’ll go and unite with telecom carriers
and handset manufacturers and get this coalition to, to go against Apple. And that was very smart.
And that’s, that’s a, that’s a time-tested strategy. And so I think you could argue that
maybe Facebook is saying with respect to X that, that segment of social networking,
they’re taking kind of an arm the rebel strategy as opposed to head to head against the incumbent.
So that would be the positive spin on it. The more cynical spin would be that it’s sort of just a,
you know, feel good marketing thing. And then they, and then they switch it later on.
Last question for you, you know, I keep coming back to the title on the, you know,
read write own, on the own side, you know, it’s so many people, they think about,
okay, I should have seen this coming, you know, I should have seen AI coming, I should have,
you know, and I’m not asking you for make, to make investment advice here, but like,
you know, I should have bought Nvidia stock five years ago, you know, when all this, given that,
you know, web three, and you see these technologies starting to kind of take shape and we’re still
in those early days, you know, like we’re in the, the, the kind of like, you know, early web 1.0 days
where people were like picking apart the ideas and saying it wasn’t going to work and all of that.
Like, where should people be spending their time if they want to play on the edges here
and, and, and really learn, you know, about these projects and about, you know, maybe try and, and
spot some of the ones that are going to take hold or take shape here. Like, how, how do you think
about that when you’re trying to educate yourself about the space? I mean, like what I would recommend
to people is probably what you and I did in early in our career. I mean, I think almost every
internet service, you know, I bet you and I were users one through something, you know, very early
on. I used to love that. Did you use CompuServe? I used CompuServe. I’ve used ever, I’ve used that.
Prodigy? I’ve used ever, ever, yes. And like, and like, I use.
Netcom? Did you use Netcom? I used Dig. I used Reddit. I used Twitter. I mean, and all those
things, I was very early and I was always, because I like, I like the software. I mean,
I just did it because I liked it. It’s not like some, but, but I, but I think it really,
you know, I really sort of lived on that kind of early adopter part of the curve because I enjoyed
it. I like, I still like, I’m not doing AI professionally right now, but I just bought a
bunch of these AI devices and I’m just always like intro, I have all the VR stuff. I’m like,
I just am excited about early tech. And I think you must have bought a rabbit then as well.
I bought one. I look cool. The teenage, the teenage engineering design got me.
Dude, they’re just so good. So good. Yeah. How does it get any cooler than of a company
than d-engineering? It’s insane. I agree. I think it’s cool. Although I will tell you,
I’m like an open source maximum. So what I really want is like a Raspberry Pi with like,
you know, with like an open source, one of the open source, like the, the-
You want like an AI chumby, member chumbies?
But I would, I’m max, I would want like Lama 2, like a, it was a Mithril like Lama 2, Mistril,
like a real open source backend and like some kind of, yeah, the device doesn’t have to be
that complicated, right? It’s just like, probably just has to send the commands, the voice data back
up to the cloud and have all the work done there, I assume. So I look, I think a lot of it is like,
I would just say like, especially like, I’m not, I think less in terms of investors and more in
terms of like 20-somethings thinking about their career, I would, I think a great career strategy
is just to be excited about new technology, be trying it. I’d be trying AI, I’d be trying VR,
I’d be trying, you know, blockchain crypto stuff. What is, what is your, what does your
home life look like though? Like, are you like, with your, like when VR came out, were you like,
goggles on, slicing watermelons and shit, like trying to feed this? So I also, you know, at the
firm at Andreessen Orbital, I invested, I invested in Oculus in 2013. So I had the business reason,
but I’d like, I think, by the way, what excites me about VR is not the headsets, what excites me
about VR is the, is the creativity, the new thing unlocks. Okay. So like, I’m not actually like
that into the hardware. When I’m into, have you seen, like, have you seen like Gorilla Tag as an
example? So like, my son plays it, it’s hilarious because he’s like sitting there with a headset on
and he’s waving his arms madly, right? So Gorilla Tag is like some hacker made this and like,
it’s cool because there’s all these other people making these big elaborate games that let her
kind of more like, you know, console games. And then this Gorilla Tag is, what’s cool is it’s,
it’s VR native. And so what I mean by that is like, it couldn’t exist outside of VR. And so
you’re a Gorilla and you move your arms to make your Gorilla run. And you run around and play
with other Gorillas who are other humans in VR. Right. And so that’s one example. Like, I think
superhots are really good. There’s a couple of these that are like VR native. Supernatural is
what my wife is like all the time. Supernatural is cool too. But like, it’s like, it’s like,
what are, what are the cool things that developers are going to, are going to come up with? That’s
the part that I like is the creative part, right? Like same with the, it’s not the device itself,
right? It’s the, and same with blockchains, like blockchains are a means to an end. In the end,
what’s cool is like, what are all the app layer kind of creative things that’s going to unlock?
Same with web too, right? It wasn’t the HTML, HTTP, the, all the other kinds of, you know,
I mean, the tech was a means to the end. The cool thing was, hey, what can humans do now that you
can have a, an internet that’s not just one way. It’s two way. You can, you can both read and
write. You can also publish, you know, like what are all the, what’s your, one of the things I’m
curious about is like, you’re, you’re always, you’re always so good at spotting this stuff early.
Like, what is your, people ask me this a lot too. Like, how do you get your information?
Like, do you have like a handful of friends that hit you up on WhatsApp and be like, dude,
you got to check this out. When you see enough of those people hit you up,
you’re like, this is something to pay attention to. Like, what is that, what is that inflow? Like,
how do you know how to cut out the crap? I would say, I, okay, so I almost, I read
very little kind of traditional news. I don’t find that’s a good signal at all. In fact, it’s
in tech. It’s a negative signal. It’s probably pretty off. I read it more like just curious
what they’re, you know, saying or something, but it’s not some social media, like definitely
like following the right people. I find, you know, I find there’s no replacement for conversations,
direct conversation. I read a lot of books and things too, but there tend to be like lagging
a little bit, but direct conversations, like conversations with entrepreneurs, conversations
with smart people, like, because you think about a conversation, like what you and I are having now,
like you’re distilling so much information that, you know, you’ve gone out, we’ve each gone out
and done all this work and all these conversations and all this reading. And then we’re here distilling
it in this very compact form, right? And I think one of the cool things about venture capital,
like the best thing about venture capital is it’s basically you’re paid to go have conversations
with smart people. What about you, Kevin? It’s kind of one of those things where, like you said,
if, if there’s two or three people you respect on social that have bubbled something up,
and they’re like, Oh, this is cool because of this. I’m like, huh, I’ve seen that hit my radar
now three times in the last 24 hours. And then just, you know, having small little micro communities,
like I have a small little WhatsApp group with probably 20 of the smartest people I know in AI
that are just, you know, sharing stuff and, you know, to having conversations with some of those
people. And it’s, it’s, it’s those little pings that I think when, because there’s only a certain
number of hours in the day and like, I don’t have time to read ever and check out every single product.
So it’s like, it has to be two people have told me about it that I really trust. Or one person
that’s like, No, Kevin, trust me, drop everything, go play with this. And like, if that happens,
then it’s like, Okay, fine, I’ll go check it out. You know, it’s exactly your point. It’s just,
you know, it’s a version of that instead of from social media, I’m getting it from conversations.
But you just keep hearing these words from smart people, and it’s an incredibly powerful signal.
You got to go do your own work afterwards and decide if it’s real. Sometimes it isn’t. But
I agree with you. I think that’s like the by far the most important kind of filter.
Yeah, awesome. Well, Chris, I don’t want to take up any more of your time. I know you’re a busy
guy. Thank you for for coming on the show and talking about your book. I just want to tell
people it drops January 30th. It can be found on Amazon. Is that your preferred place for people?
Yeah, read write own.com. We have other. So if you want to support smaller booksellers, but yeah,
any of those awesome read write own.com building the next era of the internet.
Chris, thank you so much. This is like, I went through it, I read it, I thought it was,
it’s going to help a lot of people because there is, you’re right, there is this gap. And I’ve been
a part of these conversations too, where it’s like, you’re at the cocktail party, it’s like, no,
no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no
no, no, no. Convince me of Web 3 and you’re like, “Oh, God, how much time do I have?” Like, you know, so this is like just a point. I’m hoping it’ll be the book that you give to just give people and sort of say, “Hey.” Exactly. It’s a very gift, it’s a very giftable book. Like this is something you can give to pretty much anyone. They don’t have to be super technical, you know, and even if you are technical, you’ll learn something as well. So it’s a fantastic read. Thank you. Well, thank you for having me, Kevin. Well, thanks for being on the show. Talk soon.
way that we can build new… I think blockchains are the only credible technology.
…reaching a two-year high above $57,000.
There’s often a lot of kind of confusion around what is crypto? What are blockchains?
What problems do they solve? Why would you want to use them? The internet was supposed to be
a decentralized network. Anyone can go put up a website. There’s a few aspects to that.
Like one is control and then number two is the economics. Like is it free or maybe you put ads
or maybe you charge for something. But it also had, I think, an explosion of entrepreneurship.
You know, Amazon, Facebook, YouTube, and all these great companies is they knew they could
put up a website, build it, and they would own it.
What are your thoughts on NFTs and how they evolved over the last couple of years?
Like NFTs are an atomic unit of ownership. What if we have all of this sort of big complicated
thing with everyone in the world and the internet can now own things? Okay, well that sounds
complicated. So NFTs are a way to simplify that. Here’s a little container. It’s a little box and
you can put something in it and that’s the unit of ownership. That’s what an NFT is. It’s a very
abstract concept. There have been a lot of dumb and empty projects. There’s been a lot of dumb
shit on the internet. But over time, I think these technologies have a logic of their own
because people run experiments and build things around it. So you’ve probably heard me mention
on the podcast in the past or other podcasts. There are two activities that I love. One is
Rucking, which is where you are hiking with a weighted backpack. Peter Tia got me into that one.
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So I mention these because they both really make you sweat like a ton. And after that,
you definitely need to replenish your electrolytes. Sadly, a lot of the electrolyte powders out there
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So if you know me, I’m always trying out the latest and greatest stuff, always bouncing
around trying out different apps. But I will say there is one app in particular
that I absolutely love and just keeps getting better and better with time.
And I’m proud to say that they’re a sponsor of the show, and that is Notion. I use Notion as
my life dashboard. It tracks all my angel investments. It has travel documents for my
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really clean. And the mobile app’s awesome too. It’s nice that it’s just all in one tool. And
of course, we know it is the season of AI and AI is built right inside of Notion. So you don’t have
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Notion.com/KevinRose. Chris, thank you so much for joining me today.
Thanks for having me, Kevin. Great to see you. Good to see you as well. I know you’re such a
busy guy. And the whole crypto side of Andreessen Horowitz has absolutely exploded. Just to give
people a sense of how many assets you manage, what does it look like on the crypto side now at
Andreessen? Yeah, I mean, the number we disclosed is $7 billion under management on the crypto
side. And so we’re one division within the broader firm. And so the firm does all sorts of other
things like AI and enterprise software. And we have a bio fund. But I run sort of a division,
which is a crypto fund, which has $7 billion under management. So that’s exactly why I want to
lead into this question, which is with that much under management, you’re an insanely busy guy.
Why write a book right now? Yeah, I mean, so it’s a great question. So one is I felt like we needed
a book. We meaning the kind of the category, the space of blockchains and crypto. And that came
from, as I’m sure you and lots of other people in the industry do, you go out and you speak to
people. And I speak to policymakers and to friends and potential business partners and
prospective employees. And there’s often a lot of confusion around, what is crypto? What are
blockchains? What they ask questions like, what problems do they solve? Why would you want to
use them? And I’ve done countless podcasts and meetings where I try to explain it.
And I finally kind of came to the conclusion that it’s just a topic that requires kind of a little
more than an hour. Yeah, and specifically, you’re not scalable to talk. Yeah, it just, yeah. I mean,
even then in an hour, it’s hard. I mean, and specifically, and I think you know this, Kevin,
is that if you come from the internet as a background, you have certain kind of working
assumptions that aren’t that widespread. So in the first part of the book, I kind of try to bring
people up to speed on kind of how I think folks like you and me and other sort of more internet
veterans think about the internet. So you can kind of think of the book as taking sort of the
things internet veterans know and trying to kind of in a pretty compact, hopefully very accessible
way, kind of share that and then sort of take things that the crypto blockchain people all
kind of know and share that and then sort of put it all together and show why it matters and why
it’s important and how this can lead to not just sort of what people see in the news of like speculation
and kind of casino stuff and FTX, a lot of the public impression is formed by that, right? They
see Bitcoin going up and down or some token going up and down and they say, what’s the point of this?
Isn’t this just speculation? And, you know, I’m here and I think you’re here and a lot of other
folks that I work with are here because we think that there are productive applications
that can be built using this technology. And so that’s ultimately what I want to explain is kind
of that. That’s what the book lays out is that vision of how and specific and the specific kind
of problem that I think blockchain solve is the internet, you know, so the introduction of the
book I talk about this, the internet was supposed to be and was originally a decentralized network
where, you know, anyone could go like you could sort of go back to the 90s. Anyone can go put up
a website. They can have a build a direct relationship with their audience if they’re
an entrepreneur or a creator or be a writer or an artist or an entrepreneur or make a video game,
whatever you’re doing or just a, you know, personal blog or whatever it might be,
you put it up there and you sort of build an audience, right? And having that direct
relationship with the audience means there’s a few aspects to that. Like one is control.
You kind of control your own destiny. You know, you can build your audience. You kind of have
a direct relationship. You own that audience. And then number two is the economics. Like you
can decide, hey, do you want to, is it free or maybe you put ads or maybe you charge for something.
And if you, to the extent you have the, you know, a business model, you get that money, you get
basically all of that money in the original, the way the web worked. And that, that led to,
I think, both, both at the kind of smaller scale, lots of really cool kind of experiments and, you
know, just sort of, I think of the 90s and 2000s web is just a really exciting time where there
was just all these kind of cool, weird things going on. So that was one benefit is just sort of
this kind of explosion of creativity. But it also had, I think, an explosion of entrepreneurship,
right? I mean, the reason you had, you know, Amazon, Facebook, YouTube and all these great
companies is they knew they could put up a website, build it and they would own it. They weren’t
sharing that with some intermediary, right? They had a direct relationship with the audience.
And I believe that a lot of that is, is, has been lost and is at risk of getting even,
getting even worse, honestly. So I go through this in the intro of the book. It’s essentially,
if you look at all the kind of key statistics, sort of revenue generated, traffic,
the internet has basically become consolidated around five companies. These are companies we
know, Apple, Facebook, you know, Meta, Amazon, et cetera, right? Google. And those five companies
have the 95% ish, depending on which category you’re looking at, of the traffic, of the money,
of the market cap, of all those kinds of things, right? And more and more, and I see this on the
entrepreneurial side, it’s the internet has become a place you have to ask for permission.
Right? I mean, of course, yes, you can still put up a website, but you need that website to get
indexed by Google. You need to build an app that gets accepted by the app store. You need to get
distribution. You need to show up in search results. You need to show up in social rankings,
right? And you don’t control that. You can build, I can tell you countless stories of people that
have built audiences on Twitter or on TikTok. And then one day, mysteriously, that, you know,
someone turns dial internally, of course, it’s really probably a machine, AI or something,
but it goes away, right? Yeah, you mentioned this a couple of times in your book,
there were two examples you had. One was, you said when Twitter wanted the handle at X,
they just took it back. And there was another one on Instagram. Instagram took Metaverse.
When they switched the name, when Meta changed the name to Metaverse, they just took the name,
Metaverse. Those are the most kind of extreme dramatic examples when they just sort of say,
hey, we’re, you know, we own this. It’s ours. This is ours. But I think actually the more,
the really the more insidious thing is the much more subtle things that happen. So
I hear this right now from a lot of TikTok creators where they built up audiences,
you know, like a hundred million followers and things like this. I know one,
one group that did this. And TikTok’s internal strategy is, hey, we don’t want any of these
single creators to get too big. Let’s turn down the dial. The TikTok would rather have
a million people or 100,000 creators with 100,000 followers than five with a million, because,
you know, millions, because that kind of starts to give too much power to the kind of supply or
power in business speak. And there’s a whole bunch of reasons why. And so there’s, there’s all these
social networks and, and other kinds of web properties are have all of these optimization
systems that make sure that they kind of spread the traffic however they want. And then also the
money, remember now to TikTok, they control the money, they put up the ads, they take all that
money. You know, most people that are on these networks are forced to do all of these kinds of
gymnastics to figure out a business model, like selling things in the offline world and
sponsorships and just all sorts of things because they can’t go direct, right? Because they lost,
because we lost that, that thing we have with the web, which is you could just put up a website
and have an ad. And actually, this is one reason you see kind of a move back to things like
sub stack and email, because people are sort of trying to go back to, in some ways, it’s a way
to sort of back to the future of trying to go back to the older model where you do hope a direct
relationship with your audience. So that’s kind of the problem. And, and, you know, I think that
really started and I kind of go through this in the book, I tried it in the book to talk a lot of,
you know, to give sort of historical examples and anecdotes. And a lot of it I experienced
directly. You, I think you were also there for a lot of it. The, you know, I think that really
kind of happened around the early 2010s, like 2012 ish. And I think I use RSS as a specific kind
of case study where RSS, for those who don’t know, was a kind of an open alternative to social
networks like Twitter and Facebook. And had RSS succeeded, I think a lot of the problems I’m
describing would not be problems. So you would have, you would have sort of social networking
done in this sort of open, decentralized way where people could have a direct relationship
with their audience. And around 2012 or ’13 is when, you know, basically Twitter and Google,
all the other companies stopped supporting RSS and the numbers declined precipitously and things
like this. Anyways, and that’s actually when I, so when I first saw blockchains, you know,
obviously that started in 2008 and nine with Bitcoin, but then kind of really developed
over the 2010 era and the sort of initial ideas were expanded.
To me, what was interesting about it is that it said, hey, maybe this is a way that we can build
new systems, new services that have, that are able to compete with these modern systems like
Facebook and Twitter, but have a lot of the benefits of the early internet. And that’s
sort of the core thesis of the book. But I think sort of to understand that you asked
why to write a book is that you need some context, you need a little bit of history.
And you also need to know like the way I think about it, Kevin, is like you and I,
like what business, you and I have been in kind of the consumer internet business for most of our
careers, right? When you’re in the consumer internet business, I think it’s sort of taken
for granted that, that you were basically in the business of building networks, right? If you
think about you with Dig and Moonbirds, you’re building networks. For the most part, entrepreneurship
on the internet is building networks, right? So Facebook is a network, Twitter’s a network,
Uber’s a network, Ebay’s a network. So the internet, corporate networks, those are corporate
networks, though. That’s right. That’s right. They’re owned by companies. But like the internet,
so this is sort of the reason I had to write a book is that I think a lot of people don’t have
this context. The way I see it is the internet is a network of networks, right? There’s the base
layer sort of internet protocol, like a hardware and basic software that connects it. But on top
of it are networks that we build. And that’s sort of the core activity that I’ve spent my career
doing is investing in or building networks. And you, of course, have been building networks.
And that’s what you do as an entrepreneur. And so when blockchains came along to me,
it was sort of, I was like, wait a second, this is a new, cool new way to build networks, right?
And that obviously, would you consider that? One thing I’m curious about there is like, when I
think about these corporate networks, you know, they’re very much like, you know, Elon can say
anything and it just goes on the corporate network side, right? So you have one single unified
source of power that stops at the CEO or chairman or whatever it may be at the board. And, you know,
they can, you know, laterally just make decisions that affect, you know, millions of people.
Do we need to pause now and say like, okay, it’s time to actually get back to building
more protocol networks? Because, you know, in some sense, like email has probably been the most
resilient against this, right? It’s an open protocol that can just, you know, or HTTPS or
whatever, right? Like, these are open standards that anyone can build on top of and they still
are around today. Like, is it, is it, is that the movement that you think Web3 needs to, like,
how do we actually, now that there’s so much power and so much lobbying power and everything
else, like, how do we get back to basics and, you know, disrupt those big, large massive corporate
networks? Yeah. So no great question. So the, just so maybe just so the audience has the context,
in the book, I use sort of slightly novel nomenclature just for clarity, which is I call sort
of the three kinds of networks. There’s protocol networks, corporate networks, and blockchain
networks. And protocol, protocol networks are often called protocols, but so are blockchain.
So I had to use some words to distinguish them. That’s why I called them those things.
So protocol networks are sort of the original networks of the internet. That’s, as you described,
the two big ones are the Web, the World Wide Web, HTTP, and email. Also, you know, the protocol
is called SMTP. And those, those were created in the 80s. I think a lot of the success honestly
was due to the fact that there wasn’t really competition. You know, had you had sort of Gmail,
I’m making it up, but like, you know, Gmail’s of course built on SMTP. But if you had, you had
sort of companies of that caliber, like Google and the 80s and the internet, it’s sort of hard
to imagine, but just imagine, like, I think it would have been harder. And there’s been a long
history of people trying to build new protocols, right? There’s like Jabber and Diaspora and RSS,
and like, I go through and I list like 50 of them in the book. So, in different parts. And by the
way, I’ve been a supporter of those. I’m a big fan of those. And I’ve been blogging about that
stuff for 15 years. Like I’ve, you know, so I, and if, if those could succeed, if RSS could succeed,
I would be very happy and, and be very supportive. Okay. But I would say, you know, the evidence is,
it’s now been, you know, a lot of people have tried, there’s been a lot of startups around
that kind of stuff. And it’s been 30 years and nothing has succeeded. And I would argue that,
and I do argue in the book that that is, you know, fundamentally, that those protocol networks
can’t compete with, with these big companies. And, and I use YouTube as an example. Like one big
reason is funding, right? So YouTube spent many, many billions of dollars in the early days subsidizing
free video hosting, right? I mean, that was kind of their strategy. It was, it was expensive in the
lawsuits they had, the copyright lawsuits. And also the video, you know, in the 2005, when they
launched to host high quality video on your site and stream, it was quite expensive. And so what
they did is a strategy, right? As they said, they said, Hey, you can upload your video. Hey,
you blogger, because there wasn’t people, people weren’t going to YouTube them, right? They were
going directly to websites like yours website or my website or startup websites. And they said,
Hey, you for free, you can, you can host video. We’ll put it on our site, but we’ll also let you
embed it on your site. That was their kind of killer feature in the beginning was the embed
feature. And people were like, Great, this solves all my problems. It’s easy. And they pay for it.
Right. And then what happened, of course, over time is they would dual host it, right? You’d
have it embedded on your site. And it would also be on YouTube.com. And eventually YouTube.com had
so much interesting stuff that people just started going there directly fast forward. It’s, you know,
the big, big website it is today. Meanwhile, like RSS, there were, there were things called a media
RSS. That was a competitor to it. It was a media version of RSS that was meant to be hosting,
you know, video hosting, but you had to pay for it yourself. And there were no, and there was
like this kind of ragtag group of developers kind of hacking away on it, right? As there are with
these protocol networks. There was no funding. There was, you know, in YouTube, you know, once
especially they acquired by Google, they had, they had sort of infinite resources. So my argument is
that after 30 years of, so my arguments, I guess one, I, I’m a big proponent of protocol networks,
if they could succeed, I would be supportive. But after 30 years of them not working, I feel like,
you know, perhaps there’s something fundamentally difficult about making about about, about helping
those succeed. And specifically, I argue that there’s sort of one of the main issues is funding.
And the other main issues sort of features and functionality. And then sort of the, then the,
then the kind of the concluding part of my argument is that blockchains essentially solve
those problems. So you can, in some ways, you can think of blockchain networks as evolved protocol
networks that have evolved to have sort of, you know, internal sources of funding and more advanced
feature sets. So for example, I’m talking about this in the history part of the book, that there was
a whole bunch of people trying to create social networks using RSS in the late 2000s to compete
with sites like Facebook, and they kept having a problem of where do you put the social graph,
where do you store it? Because, because protocol networks like the web and email have no place,
no, no database, no place to store things. And of course, that’s blockchain is a community on
database. And so blockchain lets you put those, there’s like new social networks like Farcaster
and Lens and these other things, which are kind of RSS like, except they store the social graph
on the blockchain. So I don’t want to go too deep in the weeds there. But essentially, I, the kind
of the, the, the high level argument is that protocol networks are great for, have all these
positive societal benefits. So do blockchain networks, but blockchain networks are kind of
further evolved and allow and more likely to, to, to be able to compete head to head with these big
kind of corporate networks. And what do you think when I think of each of these, call it like 10
plus year cycles, you know, starting with web one, you think about, there was always this,
there was always two camps that felt like one camp that would say, Hey, this is, this is hype,
this is bullshit. Like, you know, there was, you know, they call them dot bombs back in the day
when like the dot comms were just like, you know, popping up as an IPO. And then just like, I have
a board game. I think it’s called dot bomb. I still have it on my shelf. It’s from like 2003.
And it was like this mocking board game of all of the ridiculous web one ideas.
Well, remember, that’s what I don’t, I’m sure, you know, Philip Kaplan member of fucked company
that was there was a whole site. Every day, it was like the company’s winding down.
The funniest thing about the dot bomb game is almost every idea, I actually blogged about it
once almost every idea, like turned out to like 10 years later, be a hit startup, it was like
grocery, you know, like restaurant food delivery and like video conferencing and internet payments.
I was just too early. But I mean, out of that first web 1.0, you know, we obviously saw Google,
PayPal, Amazon, like a lot of the bigs that we know today come out of that web two, same thing,
some social networks, Uber, you know, some great companies that emerged there.
Web three, I think, you know, you have this, like you had mentioned earlier in the book,
you call this this kind of casino mentality. And there can be, we get a lot of black eyes,
right? Like, like we get a lot of PR black eyes and like absent a killer app that everyone can
point to and say, hot damn, like this is why web three matters. I wonder, like, when do we
actually, you know, we can beat the drum all day long, but if we keep just getting beat up on
the PR and press side, yeah, we’re it’s really doing a lot of damage. So I’m wondering, you know,
obviously, Bitcoin store value, no brainer, like that that that’s that’s a done deal, right?
What else do you see as being like, what’s going to what’s going to stick? We look back
five, seven, 10 years from now and say, ah, that was the Amazon of that era.
No, I mean, and I guess to to build on your point, I do think so I do. So and I describe this a
little bit in the book, because I think there’s sort of two cultures around blockchains, right?
There’s the there’s the, and a productive side that we’re talking about. And there’s just kind
of casino side. And I do think the casino side has created done a lot of damage, both to consumers
who, you know, for example, who lost money at places like FTX, but also just from a, you know,
as you mentioned, like kind of PR and image wise. And I think in this goes to policy questions,
which we may or may not want to talk about today, but I think like a smart policy approach would
be to to try to minimize the casino and maximize the productive use cases. I don’t think we have
that that that policy, the US is taking that policy approach today. So I think that’s one,
you know, one important thing that could happen is just sort of really putting guardrails around it
and encouraging the good stuff and discouraging the bad stuff. But but a precondition of that
is understanding what the good stuff is, right, which is also you asked me why I wrote a book,
that’s part of it is like the book is like, this is the positive vision, like you may or may not
believe it, but this is the positive vision. And this is how it could lead to the positive vision
and why it might be worthwhile to have policies that encourage that positive vision.
To your sec, to your point also, like, look, I don’t think we’ve had our kind of quote iPhone
moment or, you know, chat GPT moment. Let’s take AI. I mean, AI, you know, to some people,
AI started in 2023. You know, in fact, it’s, you know, the first paper on neural networks was
from 1943. So 80 year gap there. And I started a machine learning company in 2008 called Hunch,
they got acquired by eBay. We got acquired by eBay, we ended up being part of the product. But in
all honesty, you know, we were we were too early. And and the product didn’t work the way that I
hoped it would work because the technology just simply hadn’t evolved to the point it did. And
it’s interesting to ask like, why did it evolve to the point it did? There’s a bunch of smart
people building algorithms. But the core reason was GPU GPUs, companies like Nvidia created better
and better GPUs. Why did they do that for video games? So, you know, just this is just to illustrate
that like these things can take long, very long times and follow very kind of circuitous paths.
Who would have thought that like video games would lead to, you know, AGI, like that was not
sort of the obvious, the obvious kind of prediction. So so I don’t think we’ve had
that sort of chat GPT moment. I think, I think there’s a few reasons I mentioned the policy kind
of stuff. I think that we’ve unfortunately, we’re in a situation now where a lot of the good actors
are burdened by lots and lots of kind of legal. I’d say in an average company financing, we do
have let’s say 10 million dollar series a three plus maybe five million goes to legal and policy
kind of stuff. Like it’s just a major, major kind of overhead piece of overhead. And then, you know,
of course, the bad actors are offshore anonymous. They just don’t care. And so they in some ways,
you know, so have sort of this lack of clarity and and and the fact that it’s going to be playing
out in course for years, I think benefits those folks. So that’s number one, number two, like I
think infrastructure always matters in computing movements. And I think the blockchains is a
computing movement. Steve Jobs is a genius. But the reality is, you know, you couldn’t have done
that and probably to you know, the iPhone came in 2007, you probably couldn’t have done it three
years earlier. And had he not done it, someone else would have probably done it at some point,
because at some point, you know, the chips got good enough to fit on a small thing, you had
capacitive touchscreens, you had, you know, cellular technology, all these other kinds of
components got good enough. So you kind of can go back in history and look at a lot of the things
that happen and look at the underlying kind of Moore’s law curves. And, you know, I’m not saying
that, of course, entrepreneurs and geniuses like Steve Jobs matter, but there is these very powerful
underlying forces. And I think blockchains have those as well. And that anyone who’s tried to use
something like Ethereum lately, you know, will tell you that like it’s a clunky experience,
you pay too much for gas, the transaction times are low. So that surpassed. So I think the
infrastructure stuff has to get fixed, the policy stuff has to get fixed. Do you think that it’s
likely the kind of leaning out and rewriting of the financial stack, you know, on the lending side,
maybe even mortgages, like this, that whole infrastructure that gives way to Web3 first?
I think that that is so I think financial applications are very interesting. There’s
been some very sophisticated stuff done, especially around like kind of deep so-called
DeFi. I think one of the things overlooked in the last couple of years is that DeFi protocols like
Uniswap and Compound and Ave worked perfectly throughout all of the ups and downs and market
volatility. And the really, really interesting kind of new constructions that I wish more people
would look at. I think honestly, the challenge there is regulatory. I mean, like right now,
you want to connect any of those systems to, you know, kind of outside of this sort of blockchain
microcosm and you run into all sorts of regulatory issues. So if you want to put the so-called real
world assets and put them on chain and, you know, kind of put all these, use all these new tools,
you just have to, right now, it’s just very, very unclear from a regulatory point of view. So I do
think that the tech there is very sophisticated and evolved. And I think it’s really that particular
one. I mean, finance is a very, it’s like healthcare. You know, there’s a few areas of the
economy that are just extremely heavily regulated. And I think that’s kind of the main sticking point
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How much do you think the average consumer will have to know about Web 3 in the future,
meaning like, you know, when I’m on Gmail, I’m not asking, I mean, of course, it’s a
Google database, but I’m not asking if Oracle’s behind the scenes running the database or whatever
it may be. I’m just interacting with an application. And when I think about, you know, Web 3 largely
today, I mean, us geeks, we get how there’s like five hurdles to get to a layer two and the things
you have to sign. And, you know, even we get, you know, hosed sometimes and hacked or whatever it
may be. So it’s like, I have to think there’s a certain amount of tooling and adoption that either
has to just disappear, where the consumer doesn’t even know they’re using Web 3 tech behind the
scenes. Or it just needs to be, you know, maybe it’s a new layer one that comes up that just makes
it one click instead of five, maybe it’s Solana that ends up, you know, shining here because they
don’t have the baggage of layer twos and the additional complexity. What are your thoughts on
that? Yeah, no, I think, look, I think most of the kind of friction stuff should and will be abstracted
away. Like you should not have to see all those things, right? And that should be, and the security
needs to be improved. And just the whole kind of model of like looking through and looking at these
kind of, these kind of strange popups and all that kind of stuff that that should be, I do think that
some of the some of the concepts will will come through will be understood. So, you know, just
think about, I think a regular internet user has some sense that like a website is different than
their, you know, Twitter handle, right, in the sense that they kind of own their website,
right? I think that’s a pretty broadly understood concept. And so I think this concept, one of the
really the core idea, the reason the book’s called Read Right Own, own is the is kind of the key
thing, the third part, I think this sense of ownership of like, hey, this is an object,
this is a name in a social network, this is a digital collectible, this is a,
you know, some other kind of asset that might be part of a video game asset or whatever it might be
that I actually own, I think that needs to come through to the end consumer, they need to know
it’s different. And it’s not just something that you’re sort of borrowing from this application.
And that you actually have this sort of this kind of persistent inventory
that you carry around with you to different services, right? That’s a very different that’s
sort of flipping. Web3 flips that model, right? So right now, to the extent they’re sort of objects
on the internet, those are owned by the service you use, and you’re just kind of come in and borrow
it, right? If you come into a social network, and the name is owned by Twitter, you come into a
video game, the objects are owned by the game, right? You all of those anything you interact with
is owned by the service. So I think that concept of flipping that and having the user have control,
like in an ideal world, they would have control of things like their,
you know, their tastes, you know, so like their preference, like to taste, meaning like you’re
going to have all of these algorithm AI systems that learn about you and recommend things to you.
And does that data sit with the service? And do they own it? Do they go and do all the things
these services do today with your data? Or do you own it? And then do you give them permission
to use it in certain ways? Like so I think flipping the key idea to me is flipping the power dynamic
away from the service toward the user. And I think that part needs to come through to the end
user. I don’t think all of the kind of visual cruft should come through, hopefully. Like that
there’s no need for that, right? Yeah, when you mentioned in the book, like this is a moment where,
you know, the thing that’s nice about these blockchains is they’re democratic and they’re
transparent. And if we want, it’s something that we can rely on not to be changed over
time. You know, and so I could imagine a world where I opt into an algorithm that sorts my data
for me. And I understand completely, maybe not completely, but to a large extent, how it’s doing
that. So I’m just not artificially getting, you know, weird things happening, like shadow banning
or certain pieces of content getting promoted over others. Is that kind of how you see it unfolding?
Yeah, and like, exactly. And like, think about it today, like you buy, I was just looking at
these some cool new AI devices that are coming out. If you follow those things, I think they’re
really cool. But I just like, what’s going to happen with my data? I’m supposed to read the
current model is just, I think, kind of ridiculous, which is I’m supposed to read a 40 page privacy
policy, these popups to come up. And like, it’s just absurd, the system, right? And then, oh,
you had a clause in the privacy policy that said you could use all of your data in these different
ways. And by the way, I talk about this in the book. All of these services go through this cycle,
I believe, which is they start off kind of, I call it the attract extract cycle. And I’ve seen
this now for decades, which is they start off your new AI service, and you’re like, you want users,
you want content, you want to your super friendly, you’re super open, don’t worry about extracting
money out of it. But then over time, you raise venture money, you, you know, got competitors,
you’ve gotten to enough scale. Like, I’ve been on the boards of companies, and it’s just depressing
to see, I’ve been, you know, at like, you’re on the board, and you’re like, okay, now we have to
start extracting and like, and like legally show it as a S curve in the book. Yeah, yeah,
it’s like very friendly. Yeah, and it happens over, look at Google now, I can’t even use,
you’ve been, I can’t even use a service anymore. It’s all sponsored links on mobile. Most of time,
now it’s all, remember their whole thing, the entire pitch at the beginning was we don’t put
all these ads everywhere. Now it’s all Google services and sponsored links. Amazon, I just,
you just, I love, I love Amazon, I use it, but like, I just now I’m just trained to scroll down,
you know, so much. And I don’t know, regular people, probably they don’t do it, regular people,
because they obviously, that’s why Amazon does it, people click on it. And it’s, and it tricks them,
and it’s not, it’s not, it’s not an honest way to do business. But that’s what they do. I mean,
like, it’s legal, they put it, I’m sure there’s some clause in that 40 page privacy policy.
But it’s just not a good system. And I think it worked for a while, because they were in that
kind of early honeymoon phase. But now we’re seeing the kind of the consequences of it. And I
think it’s only going to get worse. And by the way, I’m a big fan of AI. We do a lot of AI and
investing at the firm. AI is going to further can just going to make all these issues even
greater. It’s going to further consolidate the internet. It rewards companies that have lots of
data and lots of money and lots of compute. And that’s going to sort of further entrench the big
companies. It’s going to make these data issues much bigger. I have a chapter in the book about
this. It’s going to like one of it’s going to break the I call it break the covenant that the
internet has today with creative people. So with creative people, like you think about Google,
like they’re sort of an implicit covenant, who’s never agreed to it just kind of evolved.
But the covenant is you, you know, you content creator, I’m a web, I’m a news site, I’m a travel
site, I’m an artist, you let you let Google crawl you index you and show snippets on the search
result. And in return, they’ll send you some amount of traffic, right? And in AI world,
that’s not going to they’re just going to show you the answer, or they’re just going to give
you an image, right? You’re going to say, Hey, give me an image of X and it’s going to give you
the image. And why would it bother to link back, right? The user doesn’t need to click through,
Hey, here’s the travel times, here’s the recipe, here’s the whatever. And so in that world, it
breaks that covenant, right? So you no longer have so so those creators, then what happens,
you’re already seeing this happen, like a like Twitter and Reddit are already pulling back on
their API as people are adding paywalls. So great. So then we have five companies. This is really
where we’re headed right now. And like, like, I think we have a direct path to it. And I don’t
know why people aren’t talking about it. But we’re gonna have five big companies with AI services.
And then a bunch of people, you know, creators are going to be fighting them locking down their site,
taking them to court, the big, you know, New York Times just all the big lawsuit,
and you’re gonna have years and years of court battles. And, you know, and this is how much of
that do we have to, do you think we have to live with just because of the pure efficiency that it
affords us? Like, sometimes when I think, okay, maybe let’s pretend I’m shopping for the next
smartphone, I’m on the Android ecosystem, I have a lot of choice. And I’m like, who has the best
camera right now in production that I can buy today? I ask AI, and I say, Hey, look at the top 10
review sites and give me give me the winner, right? And it gives me spits me back one line of text.
Like, in some sense, I’m pretty happy about that result. But also, I see how it’s screwing people
over. So there’s like convenience, you know, but it’s also kind of like, how do we, how do they
get paid? Yeah, look, I’m not saying that we should like, we should, we should that we should
not build these AI systems. Like, I think that they are better for users, and they are better
ultimately for, you know, humanity and productivity and human flourishing. And look for, I was talking
about the creator side on the sort of supply side on the flip side, they help creators create things
right there, like your but your co pilot that helps you do stuff. And so I think they’re very
powerful, important technology, and we shouldn’t and we shouldn’t sort of, you know, kind of handicap
them. I think that I guess my what I would argue, and this is both true of blockchains and AI is
that we’re sort of taking the wrong approach to the policy kinds of questions, which is we’re
sort of saying, Okay, these right now, there’s a conflict going on between New York Times and open
AI, and they’re going to go to court. And then a judge is going to, you know, two years from now,
a judge is going to interpret documents from 200 years ago as to how they apply to AI. And I’m
saying it’s and it’s very reactive. And I’m saying a better way to think about it is proactively,
right, which is you describe the positive vision, which is what I tried to do for blockchains and
read write on somebody should do that for AI. I’m probably not me. I’m not going to do it. But
someone should like someone should describe the positive vision. And then we should construct
policies that that find the best balance that like in the case of AI, like what’s what’s a good set
of policies that allow the AI systems to flourish, but also make sure that creators get paid, right,
you need both. Like we can’t we don’t want an internet where everybody’s afraid to put their
content on the internet, like that’s not a good internet. And that that’s where we’re going to
be headed if we don’t think about that, the creators need to get paid, and they need to get paid
fairly, and they should get paid like they do contribute like the like with the AI thing, like
there’s this kind of philosophical question of like, does does the AI system copy like when it
learns from, let’s say it learns some art style from a bunch of artists, is it copying it? Or is
it inspired by it? Is it more like a human being inspired by it? Or you know, and some judge will
two years from now will decide that the truth is there’s no answer to that question. Like it’s
kind of this new thing. There’s no actual like way to interpret the Constitution or some other
document that tells you the answer to that question. I think instead, we should be asking the question
of like, look, if you’re contributing, if the AI system is valuable, and you created something
that contributed to it, through machine learning training or some other mechanism, like you should
get some of that money that that some of that value creates, right? And I don’t know the exact
mechanism of how that that is formed, I suggest some things, I think blockchains can play an
important role because blockchains are kind of effectively economic machines that let you sort
of do collective bargaining between large groups of people and other services. That’s, I think,
one way you could imagine policy approaches. But to me, that’s the way you should think about it,
is like, how do you get the best of both worlds? Like, I think you can get the best, like, how do
you get like, you should not force a consumer to jump through hoops to find out what the best camera
is in order to get the camera review sites paid, you should let the user have the best experience
and make sure that the money that’s made off of that sort of cascades back to the people who
contributed to it in whatever way they did. It’s actually really interesting because blockchains
in some sense are a really good use case here because they’re transparent. So you can see what’s
going on, the waterfall, the cascading money. Exactly. So if we can see the waterfall and say,
okay, I just asked for, you know, the ultimate martini recipe, and it pulled from 150 data
sources, like weighed them in this particular way. And, you know, these are the micro payments that
went out to all those sources based on the weight of that data. Like that to me is, it feels like
that should be the kind of transparency we need around this. I agree. I completely agree. I mean,
that’s one of, blockchains provide this incredible kind of transparent audit trail
for these sorts of things. It also lets a bunch of creative people kind of get together and
collectively bargain. They can come together and through a blockchain say, you can use our data,
but you need to give us X percent of the revenue as an example. And then they can say,
but, and instead of you bargaining with each one of us, a million of us individually, where,
where the, you know, the big company would have all the power by being together,
we get more leverage, right? And like in a world where blockchains weren’t politicized as they are
today, and you have people, partly because of casino culture and partly because the world,
everything in the world seems politicized these days. But for some reason, like there’s a set of
people who just won’t consider blockchains, which of course, they’re just a software construction.
There’s not, they’re not, they don’t have a political orientation. It’s a, it’s a way to
build certain software systems. They are very valuable for solving a lot of the problems that,
that AI will create. And again, I’m pro AI, I think that we should have these systems, but I think
that we need complementary systems. And I think blockchains are very powerful,
sort of complementary systems to help mitigate some of the problems that AI creates.
One of the, you brought this up a couple of times, but the title of the book is Read
Right Own. On the own side, obviously a big piece of this, and you cover this, you know,
a bit in the book is around NFTs as well. And so, you know, we’ve in the NFTs space taken our fair
share of black eyes, because there’s been all different types of, you know, participants in
this space in it for all different reasons, you know, and so it’s challenging because I see some
of the use cases you outlined in the book and some of the use cases that I think about,
especially around interoperable gaming components, you know, ownable assets,
instead of some of these virtual worlds, you know, certainly on the digital art side, being a huge
piece that I think is durable in here to stay, generative art here to stay.
What are your thoughts on NFTs and how they evolved over the last couple of years?
Yeah, I mean, so, you know, NFTs are, they are an atomic unit of ownership, right? They’re very
abstract concepts. I kind of talk about this in the book. I talk about this software concept of,
it was called encapsulation. It’s an old, old idea in software, which is you can take something
complex and you can encapsulate it in something simple. And so, for the example I used is the
website. So, when you have the original vision of the web, when Tim Berners-Lee and the others who
were kind of imagining it, it was like, what if we had all the information in the world linked
together, anyone can contribute to it? Okay, that sounds complicated. Well, let’s simplify it. We’ll
have a little unit is called a website and you control, someone controls that website and there’s
things called links and they connect them, right? So, the web 3 vision is what if we have all of
this sort of big complicated thing with everyone in the world and the internet can now own things?
Okay, well, that sounds complicated. So, NFTs are a way to simplify that. Here’s a little container.
It’s a little box and you can put something in it and that’s the unit of ownership. That’s what
an NFT is. It’s a very abstract concept. You mentioned it like it being like, I thought this
was an interesting take where you said it’s almost like an artist, maybe you didn’t say
baseball card, but like signing something, right? Like almost like an autograph on something.
Well, that’s a specific. So, I just described a very general concept of an NFT. A specific,
one specific type of NFT are these kinds of artistic NFTs where you buy it from the artist
and they kind of sign it and you have cryptographic proof they signed it. And that may or may not
have value to people depending on how they, a lot of things in the world, a lot of value in the
world is subjective. Most fashion, most sneakers and collectibles and baseball cards. And I would
argue most fancy cars and most nice clothes. Like, sure, there’s some kind of… The US dollar.
Yeah, I mean, there’s some utilitarian kind of objective value. It’s not back like gold, yeah.
Like of like, yeah, this sweater sure keeps me warm and this and that, but I probably paid a
premium for it because of the brand and how it looked. And that’s a very common thing. So,
some people may choose to value those things. I think the key point though is a lot of the
people negative in NFTs, I think are confusing the specific sort of presentation of NFTs that
happened in 2021 with the broader concept, right? It’d be kind of like if somebody invented the
web and the early websites, a bunch of them were like kind of dumb websites or something, right?
That doesn’t mean the web is a bad idea. It means that the early websites weren’t great, okay?
That’s kind of what… And look, that happened with social media, by the way. You were there,
like I was early on. People were like constantly mocking it as like, these are like these nerds
talking about what they’re having for lunch. But if you step back and you looked at…
That was Twitter in the early days. Why would I want to know what Chris Stix and Kevin
Rose is having for lunch? Like, I heard that… Chris, a question for you. Have you downloaded
your Twitter history, like backed it up? I think I did it at one point, yeah, yeah.
So I did it with mine and they actually have a… When you launch and you unzip it, the file,
is that they actually have a beautiful interface for kind of searching and bruising your old data
and you can sort by date. I would do it again and save it before Elon decides to change that
interface because it’s actually quite good. When you get that data, do a look at your oldest tweets
and they’re so embarrassing. They’re literally like… It is actually what you were having for lunch.
Is anyone here? I was like… Because it was right after they launched. I’m sure you were on that too
back then. Yeah. It was like, yeah, that’s funny. No, but that’s what it was, right? It was silly.
But that’s the thing is like, when you look back, so say you’re 2006 or something, looking at social
media, you could look at Twitter as this, you know, this is these sort of whatever these
self-promoting nerds who are talking about what they’re having for lunch. Or you could say,
look at it kind of more abstractly, which is, wow, this is a new way, this is a new protocol for
global communication. And of course, the more abstract way to look at it ended up being the
correct way. And I believe that that’s sort of a core thing you need to do in technology if you
want to try to predict the future is you need to look at things and sort of throw away the accidental
trappings of how it kind of shows up. If you look just at the superficial aspects, you’re
going to miss the essence of it. You need to look at the essence of it. What is it really?
And because what it really is kind of gives you some insight into how it may evolve.
And I think that’s the core mistake people are making around NFTs right now, is they’re looking
at, yes, there’s been a lot of dumb and empty projects. There’s been a lot of dumb shit on
the internet my entire career. Like, it’s just like, there’s a lot of dumb websites. It’s all of
humanity and people, you know, like, there’s good and bad, right? But over time, I think these
technologies have a logic of their own and they evolve into kind of what their essence should be,
because people run experiments and build things around it. And so that would be
a miracle with NFTs is like, are you, for the critics, do you dislike specific things that
happened a couple of years ago or projects you saw? Or do you dislike the idea of an atomic
unit of ownership on the internet? Because I bet you if they thought about the latter concept,
they’d realize it’s actually a really interesting and important idea. And I continue to think that.
I know it’s not a popular view. I’m like, I just feel 100% sure this is like one of the most important
things. No, I’m 100% sure as well. It’s silly to me to think that like, you know,
oftentimes one of the things I do is I just kind of close my eyes and say, okay, if I were to like
be in a coma for the next 10 years, and I wake up, will this still be true, right? Like, and like,
just kind of like played out in your head, like what and the idea that ownable digital assets,
like verifiable scarcity, guaranteed provenance, like ownable digital assets is going away is
just like laughable to me. Like, of course, that will be a thing in the future. Like,
digital currency, like if I have a brand new island and I say, hey, this is my new country,
what am I going to do go by printing presses? Of course, I’m going to embrace a digital currency.
So some of these things I just think it’s funny, the very first quote that you had in your book,
I thought was a fantastic one where by Freeman Dyson, where it says, when the great innovation
appears, it will almost certainly be in a muddled, incomplete and confusing form. Like that, that’s
and there’s more to the quote there, but that that was, he says, at first glance, they will look crazy.
And so you believe that to be true. I’m obviously put the be, yeah, look, let’s be very true with
web through. And I talk about this, another, another important thing in the book is this concept of,
if you recall, there’s outside, I called outside in versus inside out technologies.
And so like, if you just look at the history of computing, I think that it kind of bifurcates
very pretty cleanly into these two camps. And let me describe it. So the one camp is kind of
things that come from established institutions. And so for example, the iPhone came from Apple,
right, and sort of smartphones and AI, AI was, you know, done at places like Stanford and Google.
And then there’s this other kind of thread, which is the kind of outside in, I call it,
because it comes from the fringes. The worldwide web was like this, right? I mean,
Tim Berners-Lee was at a physics lab. I mean, that was not sort of, you know,
the obvious place for internet innovation and was competing against Comcast and Disney and
Microsoft and a bunch of people who were kind of central casting. Linux is probably the best
example, right? I mean, people saw people don’t realize this is 90. I mean, it must be 99% of
operating systems in production in the world or Linux, every backend servers, Linux, every, you
know, Android phones are all Linux, every new device is Linux. It is completely one.
Yeah, like your Mac was based on what? Yeah, I know it’s still has a lot of Unix stack and not
Linux, but Unix back in it, which is closely related. And in fact, I think like some is a very
high percentage of Apple software is built on open source software. And so and then this and
that’s not even counting like databases and web servers and, you know, Apache and Postgres and
just like 99% of like running software in the world at 95 to 99 something like that is open
source software, right? Which is a crazy thing when you look back on it, which is open source
software. It began probably in the 80s with Richard Stallman at MIT. And it was this kind of weird
fringe kind of left wing political movement that didn’t believe that anyone should own anything
and let alone software. And then it morphed in the 90s, you know, Linus with Linux into sort of
more of a pragmatic computing movement. But in the 90s, it was not a thing, a mainstream thing,
even the early 2000s, it wasn’t. And then eventually, you know, some companies started getting built
around it, really the rise of kind of cloud computing, you know, that those cloud computing
providers like AWS, they all adopted open source. And now it’s dominant. And so that came from the
fringes, right? And so for me, like, and blockchains and crypto was outside in, just if it’s not
obvious AI is inside out blockchains. So the outside in ones, they always start off kind of weird
and amorphous. And they’re there, you know, like this idea that like this, you know, Norwegian guys
hacking project, where he’s got a rag tag group of people without funding who are creating an
operating system is now going to be the dominant operating system world, like you had to have,
you know, you had to sort of understand a lot of things. And, and I think there’s lessons,
by the way, that that are very interesting ones as to why that ended up winning and why the web
ended up winning and a bunch of other, you know, PCs to some extent, we’re outside in, you know,
the Apple to Wozniak and jobs at the Hack homebrew computer club, all the incumbents at the time
didn’t take it seriously. Because, you know, it was classic innovative dilemma where they’re
selling to their business customers or like, we want faster computers, we don’t want those little
crappy things, you know. And so, so a lot of the history of computing has been these outside in
things. And they come as I was describing it, they come kind of disguised. They come looking
like something else. And I’ve, this is what I’ve, look, my personal, I’ve always been interested
in the outside in stuff. You know, I grew up using Unix and sort of always used open source
software, I’m sort of an open source software maximalist and, and protocol networks and blockchains.
And I see this as sort of the next, this natural evolution of that. And that’s the thing is that
they come that that’s actually what’s made it interesting for me career wise is that is like
figuring out those puzzles, right, like to your point about the quote, that’s what make the you
know, it’s like, Hey, it’s your first impression is wrong, you need to go dig into it. And you need
to understand it. And there’s value in doing that, by the way, if you want to be an entrepreneur or
an investor or something, because you, it helps give you insight into where the world’s going.
And so anyway, so that’s why I did love that quote is that it, you kind of summarize how I
think about how I think about a lot of the interesting threads of in the history of technology.
When, when we think about the future and the terminology we use with consumers,
how much damage has been done in terms of Web three today, and how much backtracking do we in
reframing do we have to do, I, I say that largely because, you know, in looking at your book,
there’s no mention of Web three on the cover nor of crypto. And, you know, do we need to stop calling
them NFTs? Do we need to like rethink how to position this? By the way, I’m not anti those words
and like, look, our fund is called crypto. I’m not trying to like hide from it. I just
wanted to sidestep the sort of tribal battles inside of the crypto space. And I didn’t want
to get involved in them. And so the reason I, I just tried to use descriptive sort of type,
like kind of more technical words. Mostly I do mention crypto and Web three and say, hey,
these are other words for it in the book. But yeah, I don’t feature prominently. So I just,
it was more of just the tribalist thing. Like I would argue, I mean, I’d love your view on this,
Kevin, but I would argue that like, I remember with when I had my AI company, we wouldn’t, we
wouldn’t use the word AI because AI had a bad word for, it had bad name for a long time because
it was seen as sort of emblematic of the, the space over promising. Right. And so we said machine
learning. That was kind of the thing you said back then, right? Now people say AI again. I think
there’s a lot of, you know, look MP threes, like that’s like the worst name in the world. Those
things became popular. GIFs, JPEGs, like there’s a lot of bad names in tech. I would argue that tech
is driven more by products than naming. And that, and that what we really need is going back to our
earlier conversation, a chat GPT iPhone kind of killer app. And if you do that, all the naming
just takes care of itself. I think it drops away. I think to your point about MP threes is that it’s
just spot on. Like we don’t ask, is this file an MP three or a AC or what is it behind the scenes?
We just stream our shit and it works. Like, you know, so it’s like, I feel like that’s just going
to be what happens here. Once the killer, you just need things that people products that people use
and then the, I think the names take care of themselves. So that’s why I kind of have stayed
out of some of those naming debates. I just, I think, I think everything in tech is product driven
and to the end, consumers product driven and then under the hood is tech driven. And so those are
the kind of things we should focus on. Now, all that said, like, look, the history of tech of
internet tech, computing tech hasn’t had this policy angle before, like for the most part,
people are building PCs and internet had some regulation, but it has been a much lighter touch.
It’s completely changed now. I think AI is about to experience it unfortunately.
But like today, building on the internet is much more like it is building in the offline world,
where like, you know, like, go try to build a building or a train or train tracks or something
else. Like, there’s a lot of kind of regulatory and legal stuff you got to deal with. And I think
the internet world is becoming like that. And I think to the extent that names end up, you know,
influencing the policy debate, maybe that, you know, maybe it’s different. That is different
this time, right? That you need to, I don’t know. Like the difference here is that perception can
become react like if there’s enough negative perception, that you can then sort of entrench
that into bad policy that that makes it much harder for entrepreneurs to operate.
Yeah, I’d like that you like frame Lee squarely put this, the use the word casino and just say,
because it, it’s such a great way to say, no, no, no, that’s not what we’re talking,
we’re not talking about the casino, right? And when you say that it puts all those people in
a bucket, and it kind of separates them out of the conversation, you know, how you lead the business.
I will see how the, how the, what the reaction is, I think it won’t be popular with some crowds.
But, but like, I feel very strongly that that’s not why I got involved. And
it’s not why I’m excited. And I don’t think, you know, like, I mean, I think there’s,
I think of it like domain names or other real estate for, let’s make real estate people know
it better, like there is real estate speculation. And I think we all accept that that is a necessary
byproduct of ownership, right? But the point of ownership is that somebody can own a house that
they can, you know, save money through that, you know, have that appreciate. I think that they can
have the emotional satisfaction of knowing they own it, of improving it, of caring about their
house and building it out, caring about the community. Like that’s why home ownership really
matters, right, is for families to have a sense of, you know, a true home that they own and being
part of a community and the incentives that that ownership creates on top of it. And that should
be the same thing with blockchains, right, that should be the core of it is that this is about
ownership and there will be spec like anytime you have ownership, you have speculation. I would,
I use this, I forgot if I think I have this in the book. Imagine if we had a world where
you could only rent houses. This is sort of a wacky thought expert, philosophical thought experiment.
And no one could own houses. And then one day somebody flipped a switch and you could buy houses.
Like you’d probably have a couple of years of like crazy speculation. Like I kind of think of that
as a little bit of a web three, right? Like we had this internet where you couldn’t own anything.
And now suddenly you could. And the first thing people do, you know, some set of people do is
they start speculating on it, right? But like, I hope that that both through policy and just through
kind of just, just time, yeah, it gets tamped down and that the real point of ownership,
which is all the things I talk about in the book becomes the becomes the heart of it.
Yeah. Fantastic. Well, I have a couple last questions for you. One, you know, I just want
to pick your brain on is someone that is always really good at seeing around corners before
anyone else. One odd thing that I’ve been scratching my head on is watching this idea of
federated communities really start to kind of take shape specifically around activity pub and
really looking at Facebook and seeing our meta and saying, okay, this is an area where they know
they cannot dominate, but they want to play. And so they’ve lost to X. They can’t win the
Twitter kind of Global Town Hall, you know, world for now. But they’re saying in some sense,
maybe if I support Federation and a new protocol network, we can create something that will
overthrow the incumbent here. Do you think they have a shot at that?
Yeah. So I think, I guess the question is like, would Facebook, a company whose entire
business is built around network effects really go all in on the technology that’s
meant to undermine their network effect? Well, if they’re dying, they might be forced to, right?
Like if they can’t dominate an area. I just, maybe I’m too cynical about it, but I feel like,
you know, it’s like a nice marketing strategy, but I have trouble, you know, I don’t know. I just
have trouble believing that they’re going to do it fully. But I do think, look, I think that,
I talk about the federated networks in the book, I think they’re very interesting. I’m pro federated
networks. I’m pro anything that’s sort of more open and not, I think that social networks should
not be controlled by a few individuals, which they are today, and they should be controlled
by communities. And I think federated networks are one way to get there. I think there’s a
risk with federated networks, which is, and you already see this on things like Macedon,
which is, it’s right now, it’s, there’s a lot of friction between the different so-called servers.
So if you go on like, macedon.social versus macedon.something else, like there’s, it’s very,
there’s a lot of high friction of like following people on other servers and doing other things.
So what, so what ends up happening is people coalesce around a single server. And that server
has to pay for hosting costs and all sorts of other things. So I do worry that like,
Facebook could have, you know, on threads, support activity hub, but is there in fact
going to be just an effective network effect? I call this protocol COOS in the book, I talk about
a little bit, which is, I think it’s kind of happened with Twitter and RSS, which is people
started originally, if you remember, early Twitter, people were kind of seeing it as like a hub for
RSS because you could both take RSS in and out, right? And people would post on our on Twitter
as like an RSS server. And saw it as, in fact, I have old blog posts where I’m like, and these
all these heated debates about like, whether that’s a good idea or whether Twitter will undermine it
at some point. And so I think that the risk is just that like, it starts off that way. But then
over time, threads is sort of the dominant node in the activity pub network. And then we’re just
sort of back to where we started, right? And then look, this is my argument. One of my arguments
for blockchains is blockchains, they’re, I call them computers that can make commitments. They,
you lock it in, you make your commitments in immutable software. And so you can’t change it.
So the user and the developer and everybody else can see those commitments very transparently
and decide whether to adopt them. So you’re not dependent on corporate assurances in terms of
service and privacy policies, right? You can look at open code. And so it’s like, maybe, maybe it’ll
happen. I don’t want to be overly cynical about it. But like, but, but I, you know, I sort of feel
like after this many years of these other approaches not working, we should try something else. And
my proposal in the book is blockchains. But
yeah, I’m always wondering, you know, when, when, if there’s a company like a Facebook or something
where their own internal products are starting to, to, to kind of flounder or not be as hot,
especially in social networks, if they don’t try, yeah, it’s like, they call like a sort of the
Android strategy, the arm the rebels strategy, people call it sometimes like Shopify, right?
Like the, you know, so like, if you, if you’re losing something bad, like say with Android,
right? They were, they, when they launched that they were, they weren’t that far behind,
but the iPhone clearly had momentum. So they took a, they kind of took a zig zag to their zig
strategy of like, let’s make the operating system free, which is by the way, really smart move at
the time against Microsoft, who was trying to charge 100 bucks for their operating system.
And let’s make Samsung and Sony and LG and all these, you know, at the time phone providers
are ally instead of our enemy and make, you know, and so we’ll go and unite with telecom carriers
and handset manufacturers and get this coalition to, to go against Apple. And that was very smart.
And that’s, that’s a, that’s a time-tested strategy. And so I think you could argue that
maybe Facebook is saying with respect to X that, that segment of social networking,
they’re taking kind of an arm the rebel strategy as opposed to head to head against the incumbent.
So that would be the positive spin on it. The more cynical spin would be that it’s sort of just a,
you know, feel good marketing thing. And then they, and then they switch it later on.
Last question for you, you know, I keep coming back to the title on the, you know,
read write own, on the own side, you know, it’s so many people, they think about,
okay, I should have seen this coming, you know, I should have seen AI coming, I should have,
you know, and I’m not asking you for make, to make investment advice here, but like,
you know, I should have bought Nvidia stock five years ago, you know, when all this, given that,
you know, web three, and you see these technologies starting to kind of take shape and we’re still
in those early days, you know, like we’re in the, the, the kind of like, you know, early web 1.0 days
where people were like picking apart the ideas and saying it wasn’t going to work and all of that.
Like, where should people be spending their time if they want to play on the edges here
and, and, and really learn, you know, about these projects and about, you know, maybe try and, and
spot some of the ones that are going to take hold or take shape here. Like, how, how do you think
about that when you’re trying to educate yourself about the space? I mean, like what I would recommend
to people is probably what you and I did in early in our career. I mean, I think almost every
internet service, you know, I bet you and I were users one through something, you know, very early
on. I used to love that. Did you use CompuServe? I used CompuServe. I’ve used ever, I’ve used that.
Prodigy? I’ve used ever, ever, yes. And like, and like, I use.
Netcom? Did you use Netcom? I used Dig. I used Reddit. I used Twitter. I mean, and all those
things, I was very early and I was always, because I like, I like the software. I mean,
I just did it because I liked it. It’s not like some, but, but I, but I think it really,
you know, I really sort of lived on that kind of early adopter part of the curve because I enjoyed
it. I like, I still like, I’m not doing AI professionally right now, but I just bought a
bunch of these AI devices and I’m just always like intro, I have all the VR stuff. I’m like,
I just am excited about early tech. And I think you must have bought a rabbit then as well.
I bought one. I look cool. The teenage, the teenage engineering design got me.
Dude, they’re just so good. So good. Yeah. How does it get any cooler than of a company
than d-engineering? It’s insane. I agree. I think it’s cool. Although I will tell you,
I’m like an open source maximum. So what I really want is like a Raspberry Pi with like,
you know, with like an open source, one of the open source, like the, the-
You want like an AI chumby, member chumbies?
But I would, I’m max, I would want like Lama 2, like a, it was a Mithril like Lama 2, Mistril,
like a real open source backend and like some kind of, yeah, the device doesn’t have to be
that complicated, right? It’s just like, probably just has to send the commands, the voice data back
up to the cloud and have all the work done there, I assume. So I look, I think a lot of it is like,
I would just say like, especially like, I’m not, I think less in terms of investors and more in
terms of like 20-somethings thinking about their career, I would, I think a great career strategy
is just to be excited about new technology, be trying it. I’d be trying AI, I’d be trying VR,
I’d be trying, you know, blockchain crypto stuff. What is, what is your, what does your
home life look like though? Like, are you like, with your, like when VR came out, were you like,
goggles on, slicing watermelons and shit, like trying to feed this? So I also, you know, at the
firm at Andreessen Orbital, I invested, I invested in Oculus in 2013. So I had the business reason,
but I’d like, I think, by the way, what excites me about VR is not the headsets, what excites me
about VR is the, is the creativity, the new thing unlocks. Okay. So like, I’m not actually like
that into the hardware. When I’m into, have you seen, like, have you seen like Gorilla Tag as an
example? So like, my son plays it, it’s hilarious because he’s like sitting there with a headset on
and he’s waving his arms madly, right? So Gorilla Tag is like some hacker made this and like,
it’s cool because there’s all these other people making these big elaborate games that let her
kind of more like, you know, console games. And then this Gorilla Tag is, what’s cool is it’s,
it’s VR native. And so what I mean by that is like, it couldn’t exist outside of VR. And so
you’re a Gorilla and you move your arms to make your Gorilla run. And you run around and play
with other Gorillas who are other humans in VR. Right. And so that’s one example. Like, I think
superhots are really good. There’s a couple of these that are like VR native. Supernatural is
what my wife is like all the time. Supernatural is cool too. But like, it’s like, it’s like,
what are, what are the cool things that developers are going to, are going to come up with? That’s
the part that I like is the creative part, right? Like same with the, it’s not the device itself,
right? It’s the, and same with blockchains, like blockchains are a means to an end. In the end,
what’s cool is like, what are all the app layer kind of creative things that’s going to unlock?
Same with web too, right? It wasn’t the HTML, HTTP, the, all the other kinds of, you know,
I mean, the tech was a means to the end. The cool thing was, hey, what can humans do now that you
can have a, an internet that’s not just one way. It’s two way. You can, you can both read and
write. You can also publish, you know, like what are all the, what’s your, one of the things I’m
curious about is like, you’re, you’re always, you’re always so good at spotting this stuff early.
Like, what is your, people ask me this a lot too. Like, how do you get your information?
Like, do you have like a handful of friends that hit you up on WhatsApp and be like, dude,
you got to check this out. When you see enough of those people hit you up,
you’re like, this is something to pay attention to. Like, what is that, what is that inflow? Like,
how do you know how to cut out the crap? I would say, I, okay, so I almost, I read
very little kind of traditional news. I don’t find that’s a good signal at all. In fact, it’s
in tech. It’s a negative signal. It’s probably pretty off. I read it more like just curious
what they’re, you know, saying or something, but it’s not some social media, like definitely
like following the right people. I find, you know, I find there’s no replacement for conversations,
direct conversation. I read a lot of books and things too, but there tend to be like lagging
a little bit, but direct conversations, like conversations with entrepreneurs, conversations
with smart people, like, because you think about a conversation, like what you and I are having now,
like you’re distilling so much information that, you know, you’ve gone out, we’ve each gone out
and done all this work and all these conversations and all this reading. And then we’re here distilling
it in this very compact form, right? And I think one of the cool things about venture capital,
like the best thing about venture capital is it’s basically you’re paid to go have conversations
with smart people. What about you, Kevin? It’s kind of one of those things where, like you said,
if, if there’s two or three people you respect on social that have bubbled something up,
and they’re like, Oh, this is cool because of this. I’m like, huh, I’ve seen that hit my radar
now three times in the last 24 hours. And then just, you know, having small little micro communities,
like I have a small little WhatsApp group with probably 20 of the smartest people I know in AI
that are just, you know, sharing stuff and, you know, to having conversations with some of those
people. And it’s, it’s, it’s those little pings that I think when, because there’s only a certain
number of hours in the day and like, I don’t have time to read ever and check out every single product.
So it’s like, it has to be two people have told me about it that I really trust. Or one person
that’s like, No, Kevin, trust me, drop everything, go play with this. And like, if that happens,
then it’s like, Okay, fine, I’ll go check it out. You know, it’s exactly your point. It’s just,
you know, it’s a version of that instead of from social media, I’m getting it from conversations.
But you just keep hearing these words from smart people, and it’s an incredibly powerful signal.
You got to go do your own work afterwards and decide if it’s real. Sometimes it isn’t. But
I agree with you. I think that’s like the by far the most important kind of filter.
Yeah, awesome. Well, Chris, I don’t want to take up any more of your time. I know you’re a busy
guy. Thank you for for coming on the show and talking about your book. I just want to tell
people it drops January 30th. It can be found on Amazon. Is that your preferred place for people?
Yeah, read write own.com. We have other. So if you want to support smaller booksellers, but yeah,
any of those awesome read write own.com building the next era of the internet.
Chris, thank you so much. This is like, I went through it, I read it, I thought it was,
it’s going to help a lot of people because there is, you’re right, there is this gap. And I’ve been
a part of these conversations too, where it’s like, you’re at the cocktail party, it’s like, no,
no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no
no, no, no. Convince me of Web 3 and you’re like, “Oh, God, how much time do I have?” Like, you know, so this is like just a point. I’m hoping it’ll be the book that you give to just give people and sort of say, “Hey.” Exactly. It’s a very gift, it’s a very giftable book. Like this is something you can give to pretty much anyone. They don’t have to be super technical, you know, and even if you are technical, you’ll learn something as well. So it’s a fantastic read. Thank you. Well, thank you for having me, Kevin. Well, thanks for being on the show. Talk soon.
Kevin sits down with Chris Dixon to discuss his new book “Read Write Own: Building the Next Era of the Internet”. They also dissect the history and evolution of the internet, including the rise of web2, corporate networks, and the decentralization promises of web3 and crypto. They discuss blockchain technology, crypto speculation vs utility, decentralized networks, NFTs, AI, and VR. Chris provides an overview of how blockchain and crypto can help build a more open, transparent, and user-empowering next era of the internet.
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Guest Bio and Links:
Chris Dixon is a General Partner and has been at Andreessen Horowitz since 2012. He founded and leads a16z crypto, which invests in web3 technologies through four dedicated funds with more than $7 billion under management. Chris is the author of Read Write Own: Building the Next Era of the Internet.
Listeners can learn more about Chris at his website
https://cdixon.org/
or on X @cdixon
Resources:
Read Write Own: Building the Next Era of the Internet
Show Notes:
* [0:00] Introduction
* [0:00] Kevin introduces guest, Chris Dixon to the listeners
* [3:00] Chris speaks on his book Read Write Own: Building the Next Generation of the Internet
* [6:30] Insight into the early days of Internet evolution
* [9:30] “For the most part, entrepreneurship on the internet is building networks.”
* [11:30] Protocol networks, corporate networks, and blockchain networks
* [15:00] Early days of YouTube
* [22:00] Perspectives on the current state of internet technology
* [25:40] Question: How much do you think the average consumer will have to know about web three in the future?
* [33:00] The intersection of AI and blockchain technologies
* [34:30] The need for policies to protect creators online
* [39:25] Question: What are your thoughts on NFTs and how they evolved over the last couple of years?
* [43:30] Outside-in vs. inside out technologies
* [55:00] The idea of federated social networks
* [1:00:00] Predictions and AI synergy
Connect with Kevin:
Website:
https://kevinrose.com
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X – @KevinRose
YouTube – @KevinRose
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