AI transcript
0:00:06 What if crypto isn’t just a speculative asset class, but the next foundational layer of the internet?
0:00:12 Today, we have Chris Dixon, founding partner of A16Z Crypto and one of the earliest investors in the space.
0:00:20 He backed Coinbase before crypto was cool, and he spent the last decade not just investing in, but actively shaping the future of decentralized technology.
0:00:26 In this conversation, Chris lays out a vision for crypto that goes far beyond price charts and hype cycles.
0:00:35 He talks about stablecoins as internet-native money, blockchains as global financial rails, and how programmability, not just low fees, is the real unlock.
0:00:42 Chris also gives a candid look at the evolving regulatory landscape and why crypto still feels unexplored despite massive potential.
0:00:48 This episode is about long-term thinking, technical optimism, and building the infrastructure for a more open internet.
0:00:50 Let’s get into it.
0:00:56 As a reminder, the content here is for informational purposes only.
0:01:06 It should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.
0:01:11 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:01:18 For more details, including a link to our investments, please see A16Z.com forward slash disclosures.
0:01:25 Chris, welcome to the show. How are you doing?
0:01:28 I’m great. Good to see you guys. Congratulations on all the success with the show.
0:01:30 Thank you. Thank you. Yeah, it’s been a lot of fun.
0:01:35 Where should we start? Obviously, extremely storied investor, top of the Midas list.
0:01:41 Can you give us a temperature on the crypto markets? It’s been up and down.
0:01:42 Come on, let them take a victory lap.
0:01:43 Take a victory lap.
0:01:44 Let them take a victory lap.
0:01:44 I feel like you get…
0:01:46 I mean, I know the job’s not finished, but…
0:01:52 They always twist your arm into doing podcasts when the market’s down and saying, oh, you’ve got to hold you accountable.
0:01:54 And then where is Kara Swisher calling you when the market’s up?
0:01:55 That’s a good point.
0:01:58 Yeah, it’s been a long journey, as you guys pointed out.
0:02:04 I think that we had a lot of challenges the last four years, regulatory challenges with the last administration.
0:02:07 And that looks like it’s trending much better now.
0:02:09 With the new administration, it’s sort of more pro-tech.
0:02:11 And I think we have a lot of momentum in Congress.
0:02:14 And that’s a big deal because that created a lot of headwinds.
0:02:15 So that’s great.
0:02:17 And then also the kind of core infrastructure.
0:02:20 So, for example, one of the things happening right now are stable coins are really taking off.
0:02:28 So, like, last month, it was something like $2 trillion in stable coin volume, trillion with a T, which is more than Visa, quite a lot of volume.
0:02:32 And a lot of that’s due to the fact that the infrastructure, so Solana, Ethereum, and so forth, has gotten really good.
0:02:37 So you can now send an arbitrary amount of money anywhere in the world for under one penny in one second.
0:02:42 But that took years and years of work, investment, founders, technical folks doing a lot of work.
0:02:43 So that’s great.
0:02:45 And so there’s a lot of good things.
0:02:46 I think that there’s a lot of challenges, too.
0:02:48 But overall, it’s been fun.
0:02:55 Do you think that the narrative around stable coins is still going to morph into micropayments for the Internet?
0:02:57 Ben Thompson was talking about this with MCP.
0:03:02 It’s not in the standard, but you can easily imagine that getting worked into the second version of the standard.
0:03:06 At the same time, obviously, just global remittances has always been a huge category.
0:03:10 It is the one category that I used stable coins for years ago.
0:03:14 And it felt very real in that moment, even while people were saying, oh, this is useless.
0:03:15 It felt like, okay, this is the value.
0:03:19 But I’m interested in, like, the next application of stable coins and then the one after that.
0:03:26 Yeah, so I think just maybe briefly, the way to think about stable coins is today, we don’t really have a global payment system or global financial system.
0:03:28 We have 195 countries.
0:03:30 Each one has many different banking systems.
0:03:33 When you send money to another country, like I say, you wire money.
0:03:36 Like, actually, we’ve had this experience at the firm where we wire investment.
0:03:40 And it ends up going through, like, a bunch of humans and paperwork.
0:03:41 It’s really just a mishmash of systems.
0:03:48 And so the way to think about stable coins is similar to how, for those who are old enough to remember, text messaging was like this in the 2000s.
0:03:51 You would send a text message and it would say you don’t have a plan to send to Canada.
0:03:52 You’ve got to sign up.
0:03:53 And it was all these different systems.
0:03:58 And then WhatsApp and FaceTime came along and they built this sort of what they call over-the-top global network, right?
0:04:01 So think of sort of stable coins and blockchains as an over-the-top network.
0:04:08 It’s from day one, global, low-fee, credibly neutral, programmable payment system that just sort of works everywhere.
0:04:10 That’s kind of the simple way to think of it.
0:04:13 And so as you mentioned, one of the obvious benefits is just cross-border.
0:04:15 And that’s where a lot of the uses are right now.
0:04:21 And so, for example, like SpaceX has a program where they’ll sell a Starlink in, I think it’s like some south of like Brazil or something.
0:04:24 And then they’ll immediately use stable coins for so-called treasury management.
0:04:28 This is one of the kind of growing use cases that folks like Stripe will talk about.
0:04:35 Remittances, you’re sending money back home from the U.S. to countries where the currency is volatile and they want access to dollars or euros.
0:04:39 And then as you mentioned, John, I encourage those who are interested to go listen to the Collison’s.
0:04:41 They were an all-in podcast a few weeks ago talking about this.
0:04:47 What they’re actually, they say they’re really excited about is less the low fees and more the programmability, as you just described.
0:04:49 One obvious thing is invoice fraud.
0:04:52 So people will send these faxes type things.
0:04:55 It’s really old-fashioned where they’ll say, like, here’s my wiring instruction.
0:04:58 And if you’ve done this, you’ll say, please make sure you call first.
0:05:01 But, of course, calling doesn’t work in an age of AI because it could be a fake voice.
0:05:08 And so what Stripe was excited about is because blockchains are programmable, they can have a full kind of reputation system on top.
0:05:12 So they know, like, this is a valid place to send money to for your invoicing system, right?
0:05:13 So you can program it.
0:05:14 As you mentioned, micropayments, right?
0:05:18 Now that you can send money for one penny, that unlocks a whole bunch of use cases.
0:05:20 So machine-to-machine payments.
0:05:24 Every time you’re doing an AI API request, as you mentioned MCP, right?
0:05:27 So, like, MCP, I would expect, would have down the road a payment standard, right?
0:05:34 And AI agents, you imagine a world, which I think we’re headed to pretty soon, in a couple of years, where you have all these different AI agents running around.
0:05:35 Hey, I’m advertising.
0:05:36 I can program.
0:05:38 I can write your essay for you.
0:05:39 I can do your homework, whatever.
0:05:41 And they’re all sort of advertising their services.
0:05:47 And then you sort of imagine other agents coming along and negotiating and pennies getting transferred back and forth.
0:05:50 And this big kind of economic kind of collection on top.
0:05:54 So the web moves from, like, these kind of sign-up forms to agents sending money automatically.
0:06:02 And we think that would be powered by, most naturally powered by, a global, you know, low-fee programmable system like blockchains.
0:06:03 Yeah, yeah.
0:06:10 I’m super curious to understand how your guys’ lobbying efforts have evolved over the past 6 to 12 months.
0:06:19 We went from a sort of large coalition of people trying to basically block crypto from getting real adoption and traction in the U.S.
0:06:22 to suddenly ETFs being approved and things like that.
0:06:26 And I imagine that’s kind of changed your guys’ strategy on the Hill.
0:06:27 So I’m interested to hear how that’s evolved.
0:06:28 Yeah.
0:06:31 I saw Mark Andreessen on you guys, I think it was a week or two ago.
0:06:32 I watched that.
0:06:33 And he was talking about it a little bit.
0:06:34 Mark and I have been very involved in this.
0:06:37 And by necessity, originally, like, four or five years ago.
0:06:40 And then over time, realized just how important it is to engage.
0:06:43 In Washington, they like to say, if you are not at the table, you’re on the menu.
0:06:44 Yeah.
0:06:46 So you don’t want to be on the menu.
0:06:51 So I’ve been going sort of like once a month and Mark has to, and really just kind of trying to explain our perspective.
0:06:58 Because we feel like the interests of startups, so most startups don’t have the resources to go to D.C., right?
0:07:03 And, of course, big tech companies do and big banks do and all sorts of other big entities do.
0:07:11 And so our kind of logic was that we’re one of the few, you know, kind of organizations that has enough scale to have a government affairs team who represents the interests of startups.
0:07:15 And so we go and we say, look, we represent small companies and here’s what they’re interested in.
0:07:18 So, for example, they want to have clear guardrails and rules around blockchains.
0:07:20 They want to have open source AI.
0:07:21 That’s another really important issue to us.
0:07:24 Clear rules on AI and copyright.
0:07:30 There’s a series of things, having a single federal framework and not a 50 state laws on a lot of these things and so forth, right?
0:07:32 And so we go and we kind of advocate for that.
0:07:34 We’ve taken a bipartisan approach from the beginning.
0:07:35 We think that’s very important.
0:07:38 I mean, look, just one is we think the way you really build industries is legislation.
0:07:46 If you think back to the Internet, that was built on really on the 96 Telecom Act and had things like Section 230, which, you know, you may know is now a contentious issue.
0:07:53 I like to say if Section 230 had been administrative guidance instead of legislation, it would have been a political football every four years.
0:07:54 It was built into legislation.
0:07:59 And so you could Section 230 is what enabled marketplaces, social networks and so forth to build reliably on the Internet.
0:08:11 So we’ve always felt that both for AI and for crypto, we want legislation that provides clear rules, pass for innovation and really eliminates or mitigates or eliminates all the kind of bad use cases and bad actors.
0:08:12 And so that’s always been our approach.
0:08:13 It’s been bipartisan.
0:08:15 That’s the legislation you need bipartisan, first of all.
0:08:19 And secondly, you know, like most people will sort of think Republicans are pro-crypto, Democrats are anti.
0:08:19 That’s not really true.
0:08:24 Like we just had a last week, a Senate sort of it was a procedural vote on the stablecoin bill.
0:08:28 And I believe there were 17 Democrats who voted for it, which is significant.
0:08:38 And I think our view has been we want to shift the Democratic Party back to the values of Obama and Bill Clinton when they were pro-tech and not sort of the kind of blue sky Democrat thing that happened in the last years.
0:08:49 Yeah, I mean, the interesting thing about the lobbying is that I looked at the donation dollars that were coming from crypto aligned people and crypto funds, and it was split almost exactly 50-50.
0:08:53 Like the entire crypto community really did go super bipartisan with the spend.
0:08:57 And obviously the Republicans won, so it feels like a Republican issue like right now.
0:08:59 But it doesn’t feel like it’s going to remain that way.
0:09:05 On the issue of government, I’m interested to know, maybe stablecoins are a good example, but just general crypto adoption.
0:09:13 How do you bucket, how do you think about the adoption across government, B2B, or just direct-to-consumer?
0:09:17 Because when I think about stablecoins, for example, there’s people that want to pay people individually.
0:09:21 But there’s so many ways that you can just tuck stablecoins under some business.
0:09:34 Like with the AI thing, if you get Anthropic, OpenAI, Google, Microsoft using stablecoins in an agentic application, the user might never know that I’m paying a fraction of a cent to access a Wall Street Journal article.
0:09:36 It just happens, and I’m not even aware.
0:09:41 So what are the key drivers for the different constituencies and then the different applications, and how do they fit together?
0:09:43 No, that’s a great question.
0:09:50 Like I have a broader kind of framework I like to talk about, which is sort of, I sort of like to distinguish technologies between what I call inside-out and outside-in.
0:09:55 So inside-out of things that sort of start with established institutions, like AI to some extent is like that.
0:09:56 The iPhone was like this.
0:09:58 It came out of Apple, a very established institution.
0:10:00 AI came out of Stanford and so forth.
0:10:03 Whereas crypto very much, you know, Bitcoin started at the fringes, right?
0:10:07 And sort of like open source software and there’s, you know, other kind of tech movements have started at the fringes.
0:10:09 And it sort of worked its way in, right?
0:10:14 So stablecoin started for, the main use case was settling crypto trades seven years ago or something.
0:10:21 And then over time, you started to see more and more payment providers in Argentina, for example, and, you know, sort of more kind of moving to the center.
0:10:29 Now Stripe, you know, I think of Stripe is very much probably, I think the smartest, a lot of people think the smartest, one of the, if not the smartest fintech company is all in on it.
0:10:32 You know, they did a billion dollar acquisition bridge to ramp up their efforts.
0:10:43 I think the main gating factor, like I speak to a lot of, what I would love to see is a world where you have banks and asset management firms and every payment provider, as you described, John, like behind the scenes, it’s just sort of, it’s the substrate.
0:10:44 It’s the infrastructure, right?
0:10:46 It’s HDP or SMTP.
0:10:47 It’s just this thing that exists.
0:10:51 A lot of them say, we just want like that final regulatory clarity piece, right?
0:10:54 Because they want that assurance because they’re, look, they’re risk averse.
0:10:57 We just had four years of kind of lawfare against the industry.
0:11:02 So that’s why I think that’s really like, honestly, like I probably spend more than half my time on that now.
0:11:03 Like that’s just kind of the key.
0:11:07 There’s two, and just to say, there’s two big kind of bills that we’re, that we’re advocating for.
0:11:08 There’s stable coins.
0:11:13 There’s one called market structure that’s just coming forward in the house now, which is also to kind of clarify more broadly on tokens.
0:11:15 But I think that’s the main thing right now.
0:11:16 I think, and I, but to your point, exactly.
0:11:20 I don’t think most people ultimately will, will think of even the word stable coin.
0:11:24 I think there’ll be like digital dollars, you know, that like for the, for the average person.
0:11:26 Yeah, it’ll be an industry term like ERP.
0:11:28 People interface with that, but they don’t know.
0:11:32 And like, actually, but we’ll see like, like we have a fintech group at the firm that’s not crypto.
0:11:37 I don’t know if you know folks like, I think you interviewed Anish and all those folks.
0:11:39 And then, you know, they like crypto, but they’re not like crypto.
0:11:45 And they’ll tell me now, like it’s become pretty standard in the stable, in the fintech stack that people will use stable coins.
0:11:50 Yeah, you’re like a three person startup and like, boom, you push a button and you got 190 countries.
0:11:52 That’s very different than the old days.
0:11:52 Yeah.
0:12:00 I want to get your point of view on the competitive forces and dynamics right now, because we have startups, which there’s entire subcategories.
0:12:11 You have hyper decentralized, you know, crypto companies, you have sort of hybrid companies like maybe bridge that are kind of sitting in between fintech and, and crypto rails.
0:12:18 And then you now have big institutional players that are coming in, maybe they brought ETFs to market to start.
0:12:22 And then now they’re thinking about, you know, stable coin applications as well.
0:12:24 How do you look at the market?
0:12:35 And what kind of advice do you give to portfolio companies that are trying to figure out who they are, whether that’s fully decentralized or some type of hybrid or, or, or so on?
0:12:35 Yeah.
0:12:37 Yeah, I think that that’s a great question.
0:12:45 I think that, I mean, the, the, you know, the, the point is not for like decentralization and kind of this new architecture of blockchains for its own sake.
0:12:46 The point is they have specific benefits.
0:12:55 So like why, why would one build on a blockchain like Ethereum or Solana, as opposed to a traditional, you know, AWS, like a traditional architecture.
0:13:03 And the answer is by built, you know, when you build, the way I like to describe it most simply is blockchains allow you to build digital services that remove the intermediaries.
0:13:07 So you remove, so for example, stable coins, you have no intermediaries that are taking fees.
0:13:11 You don’t have the banks and the payment providers and the payment networks, right.
0:13:12 To take the, all the different layers of fees.
0:13:16 So that’s an important benefit is you’re building these, you know, you could build social networks without fees.
0:13:17 You can build games without fees.
0:13:19 You can build AI systems without fees, right.
0:13:20 Without fees.
0:13:24 It’s like very low, like sub, like a couple of basis points.
0:13:25 I actually have it for those interested.
0:13:33 I wrote a book, read right on, and I have a chapter on take rates where I go through this in detail, but it’s essentially you’re going from like 30% in the app store, you know, a hundred percent.
0:13:37 And Facebook and 50% on YouTube to like five basis points or something, right.
0:13:40 So, or, you know, two and a half percent for payments and so forth.
0:13:43 So, so, so the first question is, why would you want to build on them?
0:13:45 The other one we mentioned before is programmability.
0:13:47 You know, you can do all sorts of cool stuff on top.
0:13:52 And so I think it, to your question, I think it depends, like, like ultimately I think of startups as you want to work backwards.
0:13:54 You want to say, what do you want to do for the world?
0:13:55 What kind of service do you want to provide?
0:13:58 And then you work backwards and you say, how do you want to build that?
0:13:58 Right.
0:14:04 In some cases that means you want to build something on a blockchain, like a pure service, like a protocol, we call it, with a token and so forth.
0:14:12 In other cases, you want to build more traditional software that may be like, for example, like you mentioned that, that bridges between a bank and an asset manager and a, and a blockchain system.
0:14:12 Right.
0:14:18 So I think it, ultimately we think of it through that lens is kind of, now as an investor, I, I skew towards things.
0:14:24 I like things with, for example, network effects, because they can be very, I’ve, my career, I’ve found that network effects can be very powerful.
0:14:24 Right.
0:14:31 You, you know, since something, it grows, it kind of has a natural kind of defensibility and kind of gets better as more people use it.
0:14:33 So there’s just kind of different lenses you can look at it.
0:14:36 I would, the last thing I would say is to your, to your listeners, I know you have a broad audience.
0:14:46 I think that the crypto space right now, the real shortage we have is startup talent in that there’s a lot of obvious good ideas where there just aren’t many people pursuing it.
0:14:56 So I think it’s actually the opposite problem than most, like, than you might have an AI right now, where I imagine AI, it’s an amazing technology and deservingly people are excited as they should be excited about it.
0:15:00 But you probably, for every idea have, I don’t know, 50 good startups pursuing it.
0:15:04 In crypto, I think we’re undercompeted, like we have under, too little competition, honestly.
0:15:10 So I would say to your listeners, if you’re a smart person thinking about doing a startup, I think there’s a lot of white space right now.
0:15:12 If you’re in AI, pivot to crypto.
0:15:13 We heard it here first.
0:15:14 Or do both.
0:15:15 We love AI.
0:15:17 It is my worst.
0:15:27 Yeah, how, how are you, I’m sure you’re perpetually going to be unsatisfied with the technological progress because you understand the full potential, right?
0:15:28 Where are you at right now?
0:15:30 You know, we had Balaji on earlier.
0:15:35 He’s, you know, was, was very bullish on ZK proofs and what’s coming down the pipeline there.
0:15:39 And there’s obviously, yeah, prediction markets feel like.
0:15:43 During the election, it was like, wow, this is a completely, no one was talking about this during the Bitcoin white paper.
0:15:48 And yet crypto has created something that everyone gets value out of in one way or another.
0:15:49 Yeah.
0:15:55 Yeah, I think, I think we are still, you know, I think of these, these technology things always go in S curves.
0:15:59 We’re clearly still at the sort of, you know, somewhere in the bottom of the S curve.
0:16:02 Like, I think there’s just a lot more growth and just like user base, there’s something on the order.
0:16:10 There’s tens, most of these applications I’m describing have, you know, up to 50 at the highest end, probably 50 million users, which is 1% of the internet.
0:16:17 So it’s still very early in, you know, Polymarket is doing incredibly well, but I assume it’s still in that kind of sub 1% of the internet.
0:16:20 It’s not, the internet has, you know, 5 billion people now, right?
0:16:22 So we have a long way to go.
0:16:26 I think a lot of the kind of core infrastructure is now, as of a year and a half ago, kind of good enough.
0:16:32 You know, I think a lot of these technologies have that characteristic where you have kind of, you know, whether like neural networks only got good enough.
0:16:39 I don’t know, whatever, circa, let’s call it, you know, something in the 2010s because of the, you know, the Moore’s law in GPUs, right?
0:16:44 And so, you know, iPhones, once you had capacitive screens and semi, whatever, processors and so forth.
0:16:48 I think blockchains, I think we no longer have infrastructure as an excuse anymore.
0:16:51 Like now it’s about building applications, about getting regulatory clarity.
0:16:52 And I think we’re pretty far along there.
0:16:58 I think we have a long way to go fully exploring kind of the idea maze and all the different cool things you can do.
0:17:02 And, you know, and then bringing it to billions of people is the goal.
0:17:07 How have you been advising crypto emerging managers?
0:17:19 One of my favorite, I’m going to kind of butcher the stat, but apparently like the sort of median crypto fund massively outperformed like the median venture fund for most of the last decade.
0:17:31 And so I thought that that was this beautiful narrative violation because, you know, people, traditional venture would love to poke fun at crypto VCs, yet they were sort of like systemically outperforming the other party.
0:17:43 But what kind of general guidance are you giving to somebody that maybe was an active trader and wants to get more into the actual, you know, kind of venture side of the game?
0:17:51 Like I’ve been, so, you know, I’ve, I’ve been that, so I’ve been investing in, in venture funds and crypto funds for a long time.
0:17:55 I just sort of, after I sold my first company, in fact, Mark, Mark Andreessen and I have done it together for a long time.
0:18:01 And have been doing crypto funds since, gosh, probably 10 years and just consistently, and I’m still very bullish.
0:18:06 And to your point, I think that’s probably correct, like on the, on their, you know, the data, like they’ve just, they’ve done.
0:18:11 And I think it’s just, it’s just traditional finance in the sense of you have to, you know, non-consensus right, right?
0:18:16 Like as much as we hear about crypto, it’s still very non-consensus.
0:18:22 A lot of, a lot, a lot of venture funds just simply, maybe they’ll have a little bit of Bitcoin, but they’ll, otherwise they’ll rule it out if there’s tokens and things.
0:18:28 You talk to fund funds, they, a lot of them will say we have a no crypto rule, you know, sovereign wealth funds.
0:18:31 So all the kind of giant pools of capital that fund the venture world.
0:18:39 And so it’s still kind of this, considered this kind of weird sideshow, like obviously the past doesn’t predict the future and so forth.
0:18:45 And we don’t know how things will play out, but it’s still very non-consensus, I think, from a, from a financial investing point of view, the broader crypto world.
0:18:50 So I, I believe, look, I believe that’s where the opportunities are in, in, in, in venture investing.
0:19:00 Obviously you have to also be right and so, and time will tell, but it’s, I think it’s still much more non, it’s surprisingly non-consensus in the investing world.
0:19:03 I think to this day, despite the performance.
0:19:11 Can you explain a little bit of the dynamic of how venture fits into the life cycle of a new crypto company these days?
0:19:15 Because there’s liquidity available from retail in some cases.
0:19:22 There’s some companies that are going to be profitable very early because of their, you know, insane product.
0:19:29 Yeah, we had a lawn from, from pump on earlier and that’s classic example of a company that was able to be very efficient.
0:19:37 And I think we’ve seen on the other side, you have companies like Hyperliquid that got out and have a token very early.
0:19:40 So I’m curious, yeah, how, how you think of the capital life cycle?
0:19:41 Yeah.
0:19:42 Yeah.
0:19:43 So we, I mean, let’s see if I can answer that.
0:19:52 So like one reason we started a separate crypto fund originally, like I guess 2018 was so that we could, before that I was doing like crypto investing.
0:19:53 Yeah.
0:19:56 But it would always get these questions from the LPs and like, what is this?
0:19:56 Is it equity?
0:19:57 Is it tokens?
0:19:58 And so create a separate crypto fund.
0:20:00 But the basic idea was we have maximum flexibility.
0:20:06 And we went to the LPs and we said, look, this is going to be different and here’s the idea and here’s the, and a lot of them opted out.
0:20:09 Some of them opted in, but we were very clear up front what it was.
0:20:15 And so what we, what we think of it is we can do everything from, we can buy, buy Bitcoin or something just directly, which we do.
0:20:18 People see our funds and they assume it’s all ventures.
0:20:21 We also do a lot of, we can do equity investments like a Coinbase.
0:20:22 It’s just a classic equity investment.
0:20:25 We have a bunch of those that, you know, the goal would be to someday IPO.
0:20:35 And then the third one, which is actually, you know, one of our core ones is you’ll, you’ll do an equity, a project will start as a, as an equity investment, but then over time we’ll launch a token.
0:20:40 And the equity investors get sort of pro rata rights to those tokens.
0:20:50 And that actually, that’s kind of, that was sort of the new thing that we really wanted to lean into back in, when we started the crypto fund, that was a new idea that, you know, we helped kind of pioneer that, I think.
0:20:53 And that was like the warrant structure?
0:20:55 Yeah, it was basically, yeah, it’s very simple.
0:20:58 It’s a term sheet with two extra things that has essentially token rights.
0:20:58 Yeah.
0:21:00 And it can be a warrant and there’s different ways to structure it.
0:21:09 And what’s nice about that is it, you know, one of the reasons startups work so well is that they’re max, like when they work is that the investors and the founders are fully aligned.
0:21:13 So before that structure existed, I don’t know how deep you guys want to go on this.
0:21:17 There were these things called SAFs and like these kinds of things where you do token purchases.
0:21:21 And the problem is it created all these weird incentives where the founder would try to create a token just to do something.
0:21:25 What we believe very strongly is alignment between the investors and the founders.
0:21:35 And so there’s sort of this, this equity structure with token rights or token warrants is one where if they decide they can stay an equity company and they can do, you know, just do traditional kind of go for profits and things,
0:21:40 or they can create a token or they can create two tokens or whatever is best for that service they’re trying to create.
0:21:50 And in, in, in, in whatever way that they eventually decide to, you know, whatever business model they pursue, they, the investor will participate kind of pro rata alongside the founders.
0:22:00 What happens to the C Corp in that scenario where they launch a token, the token grows and the community is in like the, the, the asset is now controlled by the token and the C Corp still exists.
0:22:05 Are there roles for foundations and nonprofits and, and, and, and different transitions that could happen?
0:22:06 Yeah, it’s a great question.
0:22:11 A lot of times they’ll become, um, they’ll just become like kind of one software provider in the network.
0:22:12 Oh, sure.
0:22:18 Like, um, you know, they’re so, so for example, um, you know, think of the Ethereum foundation.
0:22:21 I don’t know if you guys know the relationship between Ethereum foundation, Ethereum, Ethereum is a network.
0:22:24 Ethereum foundation, you know, they help make a little bit of software.
0:22:27 They give some research guidance, but they don’t control the network.
0:22:32 They don’t, you know, it’s like kind of in the same way, there’s just sort of a foundation that has some kind of a bully pulpit.
0:22:35 Um, sometimes they can have a separate business model.
0:22:41 Um, you know, so like Uniswap is a, is a decentralized protocol that we’re investors in.
0:22:50 It’s sort of a, uh, let’s think of it as a decentralized New York stock exchange or something, um, that’s doing very well, multiple trillions and trillions in volume traded.
0:22:56 And they separately, so they spun off this protocol and then they separately have a website that they operate, which is what the company does.
0:23:03 And the website is now, I believe it’s a sub 5% of the volume on the protocol, but it’s still 5%, right?
0:23:05 And so they’re just one front end to it.
0:23:09 And so that, I think that’s probably one of the best examples of what you’re asking, John.
0:23:10 That makes a ton of sense.
0:23:10 Jordy?
0:23:18 Where, what are you expecting to see out of the kind of category, real world asset category over the next couple of years?
0:23:29 It feels like it’s this year, at least to me, it’s felt like we’re days or weeks away from some pretty high profile assets coming on chain.
0:23:32 Uh, I’m curious how you think about the category broadly.
0:23:37 Yeah, um, yeah, I mean, I think of stable coins as sort of the initial real world asset, right?
0:23:49 So you have dollars, bank account, and then the next, and then, and then the great thing about that, the kind of adoption there, and hopefully all the regulatory clarity we’re getting is that will be a natural stepping stone to, you know, you have Robin Hood talking about stocks.
0:23:56 You have BlackRock talking about, you know, treasury bills, um, wouldn’t, I think it would be nice if anyone in the world, uh, I think it’d be good for the U.S.
0:24:02 And I think it’d be good for the world if anyone in the world could buy, you know, four and a half percent, uh, treasury, you know, uh, interest treasury bill, right?
0:24:05 And have it secure and easy and permissionless and low fee.
0:24:10 Uh, I think it’s, you know, it’s good for our, you know, the U.S., the popularity of the dollar.
0:24:15 And I think it’s, you know, it’d be nice for somebody who has a volatile currency to have access to those.
0:24:22 And, um, um, so, you know, stocks, stocks, bonds, and then you can imagine, you know, um, all of these sorts of so-called dark pools.
0:24:26 So, you know, still a large part of finance is people using Bloomberg and calling each other.
0:24:32 And a lot of that, you know, like trading bonds and muni bonds and corporate bonds and things like that.
0:24:39 There’s a lot of interest from the banks to think about ways to use blockchains, uh, to create essentially marketplaces there.
0:24:42 You know, maybe permissioned marketplaces where only kind of certain participants can participate.
0:24:46 For them, the benefit is, you know, why haven’t they created a network, like a marketplace before?
0:24:49 Because, um, they, you know, they, they don’t trust each other.
0:24:51 They don’t want to like, who’s going to create it?
0:24:52 Is Goldman going to create it?
0:24:53 And JP Morgan’s going to use it.
0:24:54 They don’t trust each other.
0:24:58 You know, they don’t trust startups to do it because then the startup will start taking big fees.
0:25:00 They’ve just sort of kept it informal and by phone.
0:25:08 Um, and so in a way, a blockchain kind of solves a political problem of getting these 20 entities or 100 entities who previously wouldn’t kind of coordinate together.
0:25:17 I think that’s one broader way to think of blockchains is like, it’s, it’s like if AI, you know, is solving all the problems in the world that, that they need more intelligence, right?
0:25:21 Blockchains try to solve the problems in the world that need more coordination, right?
0:25:28 Or more, you know, kind of collective, um, uh, collective action, getting a bunch of, you know, blockchains are fundamentally social technologies.
0:25:31 And it’s about getting a bunch of, you know, that’s what money is ultimately social, right?
0:25:37 It’s getting a lot of people to agree on a standard and to, and to use the same, the same systems and tools.
0:25:41 Um, and so similarly with real world assets like that, and there’s other interesting ones to your question.
0:25:55 Like we have one called story protocol, a project where investors in, that’s putting intellectual property on blockchains, um, and letting people, you know, do capital formation and licensing and so forth around, you know, so you create a new, you know, a superhero theme thing.
0:25:59 And someone wants to make an AI remix of it and like, how do they say AI really important.
0:26:05 And so we think a lot about like in an AI world, like how will, you know, creators get paid?
0:26:06 How will IP work?
0:26:10 How will, how will, how will, how will money flow on the internet in a world with abundant content?
0:26:10 Right.
0:26:13 Um, and I think, we think blockchains have an important role to play in that.
0:26:22 How would you like to see the industry and kind of the world collectively try to solve social engineering hacks?
0:26:30 It feels like world coin is, is one potential solution there, but I imagine there’s a bunch of other sort of businesses that you could fund.
0:26:42 And then a whole regulatory piece as well, which is, we sort of force these large companies now, Balaji described it as like, you know, to, to basically hold these, you know, honeypots of, of, of data.
0:26:45 And there’s probably got to be a better, a better way.
0:26:46 Yeah.
0:26:47 A great question.
0:26:52 So, you know, you mentioned world coin, I’ll just say briefly, so what world coin does is, is what we call proof of humanity.
0:26:55 So it’s a way for you to get a cryptographic key that proves you’re human.
0:27:01 And the idea is in a world, you know, as we’re moving too quickly with AI bots and deep fakes and so forth, it was useful to be able to say, Hey, I’m truly a human.
0:27:08 And then, you know, I can get a, imagine a blue check on Twitter that actually literally, you know, cryptographically means you’re human and not just that you pay $10.
0:27:11 And we think that would be useful.
0:27:17 It’s sort of a missing, you know, kind of building block, so to speak for the, you know, for the internet that I think we all want.
0:27:20 And so one thing we think about is like, what are those missing building blocks?
0:27:21 You mentioned zero knowledge proofs.
0:27:28 Zero knowledge proofs are, I think, a really interesting cryptographic breakthrough that I think people underestimate in the broader world, how important they are.
0:27:34 What they let you do is essentially proofing.
0:27:42 So I can prove, you know, like a bank needs to know I’m a U.S. citizen, let’s say, or I’m, you know, have a certain income or certain profile, you know, health data or so forth.
0:27:56 What zero knowledge proofs let you do is I can prove that to the system without revealing any of that, like my actual, you know, where I can, it can basically send me a cryptographic kind of a game that says, prove that you’re a U.S. citizen.
0:28:03 And I can prove it back without revealing all, you know, my name and all the other kind of stuff that might dox me, right?
0:28:10 I mean, I just, you know, we just saw like, you know, day after day we see these giant hacks, KYC hacks, so forth.
0:28:15 Like at this point, you should just assume all of your information, sadly, has been hacked many times.
0:28:21 And, you know, having Social Security as like your unique ID and password is just like a ridiculous system in this era.
0:28:29 And meanwhile, we have these, you know, we carry around these supercomputers with, you know, biometrics and advanced cryptography.
0:28:30 Like, why aren’t we using it, right?
0:28:34 The problem is not the tech, the core tech.
0:28:35 The problem is coordination, again.
0:28:38 Like, it’s how do you get everyone to agree on what the standards are, right?
0:28:43 And that’s why I think blockchains can be important because it’s really the, all the pieces are there.
0:28:48 But how do you kind of put them all together in a broad kind of, you know, standard or coordinated system?
0:28:50 Amazing.
0:28:50 That’s great.
0:28:51 Thank you so much for coming on.
0:28:52 Well, we’d love to continue for another hour.
0:28:53 Yeah, we can go way longer.
0:28:54 We need to have you back and talk more.
0:28:54 Awesome, guys.
0:28:55 Appreciate it.
0:29:00 It’s great to see somebody, a contrarian idea that a tech show that actually likes tech.
0:29:01 Yeah.
0:29:01 What a concept.
0:29:03 Very bullish on it.
0:29:03 So thank you for having me.
0:29:04 Thank you so much.
0:29:04 We’ll talk to you soon, Chris.
0:29:05 Thanks for coming on, Chris.
0:29:06 Have a good one.
0:29:06 Bye.
0:29:16 Let us know by leaving a review at ratethispodcast.com slash A16Z.
0:29:19 We’ve got more great conversations coming your way.
0:29:20 See you next time.
0:00:12 Today, we have Chris Dixon, founding partner of A16Z Crypto and one of the earliest investors in the space.
0:00:20 He backed Coinbase before crypto was cool, and he spent the last decade not just investing in, but actively shaping the future of decentralized technology.
0:00:26 In this conversation, Chris lays out a vision for crypto that goes far beyond price charts and hype cycles.
0:00:35 He talks about stablecoins as internet-native money, blockchains as global financial rails, and how programmability, not just low fees, is the real unlock.
0:00:42 Chris also gives a candid look at the evolving regulatory landscape and why crypto still feels unexplored despite massive potential.
0:00:48 This episode is about long-term thinking, technical optimism, and building the infrastructure for a more open internet.
0:00:50 Let’s get into it.
0:00:56 As a reminder, the content here is for informational purposes only.
0:01:06 It should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.
0:01:11 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:01:18 For more details, including a link to our investments, please see A16Z.com forward slash disclosures.
0:01:25 Chris, welcome to the show. How are you doing?
0:01:28 I’m great. Good to see you guys. Congratulations on all the success with the show.
0:01:30 Thank you. Thank you. Yeah, it’s been a lot of fun.
0:01:35 Where should we start? Obviously, extremely storied investor, top of the Midas list.
0:01:41 Can you give us a temperature on the crypto markets? It’s been up and down.
0:01:42 Come on, let them take a victory lap.
0:01:43 Take a victory lap.
0:01:44 Let them take a victory lap.
0:01:44 I feel like you get…
0:01:46 I mean, I know the job’s not finished, but…
0:01:52 They always twist your arm into doing podcasts when the market’s down and saying, oh, you’ve got to hold you accountable.
0:01:54 And then where is Kara Swisher calling you when the market’s up?
0:01:55 That’s a good point.
0:01:58 Yeah, it’s been a long journey, as you guys pointed out.
0:02:04 I think that we had a lot of challenges the last four years, regulatory challenges with the last administration.
0:02:07 And that looks like it’s trending much better now.
0:02:09 With the new administration, it’s sort of more pro-tech.
0:02:11 And I think we have a lot of momentum in Congress.
0:02:14 And that’s a big deal because that created a lot of headwinds.
0:02:15 So that’s great.
0:02:17 And then also the kind of core infrastructure.
0:02:20 So, for example, one of the things happening right now are stable coins are really taking off.
0:02:28 So, like, last month, it was something like $2 trillion in stable coin volume, trillion with a T, which is more than Visa, quite a lot of volume.
0:02:32 And a lot of that’s due to the fact that the infrastructure, so Solana, Ethereum, and so forth, has gotten really good.
0:02:37 So you can now send an arbitrary amount of money anywhere in the world for under one penny in one second.
0:02:42 But that took years and years of work, investment, founders, technical folks doing a lot of work.
0:02:43 So that’s great.
0:02:45 And so there’s a lot of good things.
0:02:46 I think that there’s a lot of challenges, too.
0:02:48 But overall, it’s been fun.
0:02:55 Do you think that the narrative around stable coins is still going to morph into micropayments for the Internet?
0:02:57 Ben Thompson was talking about this with MCP.
0:03:02 It’s not in the standard, but you can easily imagine that getting worked into the second version of the standard.
0:03:06 At the same time, obviously, just global remittances has always been a huge category.
0:03:10 It is the one category that I used stable coins for years ago.
0:03:14 And it felt very real in that moment, even while people were saying, oh, this is useless.
0:03:15 It felt like, okay, this is the value.
0:03:19 But I’m interested in, like, the next application of stable coins and then the one after that.
0:03:26 Yeah, so I think just maybe briefly, the way to think about stable coins is today, we don’t really have a global payment system or global financial system.
0:03:28 We have 195 countries.
0:03:30 Each one has many different banking systems.
0:03:33 When you send money to another country, like I say, you wire money.
0:03:36 Like, actually, we’ve had this experience at the firm where we wire investment.
0:03:40 And it ends up going through, like, a bunch of humans and paperwork.
0:03:41 It’s really just a mishmash of systems.
0:03:48 And so the way to think about stable coins is similar to how, for those who are old enough to remember, text messaging was like this in the 2000s.
0:03:51 You would send a text message and it would say you don’t have a plan to send to Canada.
0:03:52 You’ve got to sign up.
0:03:53 And it was all these different systems.
0:03:58 And then WhatsApp and FaceTime came along and they built this sort of what they call over-the-top global network, right?
0:04:01 So think of sort of stable coins and blockchains as an over-the-top network.
0:04:08 It’s from day one, global, low-fee, credibly neutral, programmable payment system that just sort of works everywhere.
0:04:10 That’s kind of the simple way to think of it.
0:04:13 And so as you mentioned, one of the obvious benefits is just cross-border.
0:04:15 And that’s where a lot of the uses are right now.
0:04:21 And so, for example, like SpaceX has a program where they’ll sell a Starlink in, I think it’s like some south of like Brazil or something.
0:04:24 And then they’ll immediately use stable coins for so-called treasury management.
0:04:28 This is one of the kind of growing use cases that folks like Stripe will talk about.
0:04:35 Remittances, you’re sending money back home from the U.S. to countries where the currency is volatile and they want access to dollars or euros.
0:04:39 And then as you mentioned, John, I encourage those who are interested to go listen to the Collison’s.
0:04:41 They were an all-in podcast a few weeks ago talking about this.
0:04:47 What they’re actually, they say they’re really excited about is less the low fees and more the programmability, as you just described.
0:04:49 One obvious thing is invoice fraud.
0:04:52 So people will send these faxes type things.
0:04:55 It’s really old-fashioned where they’ll say, like, here’s my wiring instruction.
0:04:58 And if you’ve done this, you’ll say, please make sure you call first.
0:05:01 But, of course, calling doesn’t work in an age of AI because it could be a fake voice.
0:05:08 And so what Stripe was excited about is because blockchains are programmable, they can have a full kind of reputation system on top.
0:05:12 So they know, like, this is a valid place to send money to for your invoicing system, right?
0:05:13 So you can program it.
0:05:14 As you mentioned, micropayments, right?
0:05:18 Now that you can send money for one penny, that unlocks a whole bunch of use cases.
0:05:20 So machine-to-machine payments.
0:05:24 Every time you’re doing an AI API request, as you mentioned MCP, right?
0:05:27 So, like, MCP, I would expect, would have down the road a payment standard, right?
0:05:34 And AI agents, you imagine a world, which I think we’re headed to pretty soon, in a couple of years, where you have all these different AI agents running around.
0:05:35 Hey, I’m advertising.
0:05:36 I can program.
0:05:38 I can write your essay for you.
0:05:39 I can do your homework, whatever.
0:05:41 And they’re all sort of advertising their services.
0:05:47 And then you sort of imagine other agents coming along and negotiating and pennies getting transferred back and forth.
0:05:50 And this big kind of economic kind of collection on top.
0:05:54 So the web moves from, like, these kind of sign-up forms to agents sending money automatically.
0:06:02 And we think that would be powered by, most naturally powered by, a global, you know, low-fee programmable system like blockchains.
0:06:03 Yeah, yeah.
0:06:10 I’m super curious to understand how your guys’ lobbying efforts have evolved over the past 6 to 12 months.
0:06:19 We went from a sort of large coalition of people trying to basically block crypto from getting real adoption and traction in the U.S.
0:06:22 to suddenly ETFs being approved and things like that.
0:06:26 And I imagine that’s kind of changed your guys’ strategy on the Hill.
0:06:27 So I’m interested to hear how that’s evolved.
0:06:28 Yeah.
0:06:31 I saw Mark Andreessen on you guys, I think it was a week or two ago.
0:06:32 I watched that.
0:06:33 And he was talking about it a little bit.
0:06:34 Mark and I have been very involved in this.
0:06:37 And by necessity, originally, like, four or five years ago.
0:06:40 And then over time, realized just how important it is to engage.
0:06:43 In Washington, they like to say, if you are not at the table, you’re on the menu.
0:06:44 Yeah.
0:06:46 So you don’t want to be on the menu.
0:06:51 So I’ve been going sort of like once a month and Mark has to, and really just kind of trying to explain our perspective.
0:06:58 Because we feel like the interests of startups, so most startups don’t have the resources to go to D.C., right?
0:07:03 And, of course, big tech companies do and big banks do and all sorts of other big entities do.
0:07:11 And so our kind of logic was that we’re one of the few, you know, kind of organizations that has enough scale to have a government affairs team who represents the interests of startups.
0:07:15 And so we go and we say, look, we represent small companies and here’s what they’re interested in.
0:07:18 So, for example, they want to have clear guardrails and rules around blockchains.
0:07:20 They want to have open source AI.
0:07:21 That’s another really important issue to us.
0:07:24 Clear rules on AI and copyright.
0:07:30 There’s a series of things, having a single federal framework and not a 50 state laws on a lot of these things and so forth, right?
0:07:32 And so we go and we kind of advocate for that.
0:07:34 We’ve taken a bipartisan approach from the beginning.
0:07:35 We think that’s very important.
0:07:38 I mean, look, just one is we think the way you really build industries is legislation.
0:07:46 If you think back to the Internet, that was built on really on the 96 Telecom Act and had things like Section 230, which, you know, you may know is now a contentious issue.
0:07:53 I like to say if Section 230 had been administrative guidance instead of legislation, it would have been a political football every four years.
0:07:54 It was built into legislation.
0:07:59 And so you could Section 230 is what enabled marketplaces, social networks and so forth to build reliably on the Internet.
0:08:11 So we’ve always felt that both for AI and for crypto, we want legislation that provides clear rules, pass for innovation and really eliminates or mitigates or eliminates all the kind of bad use cases and bad actors.
0:08:12 And so that’s always been our approach.
0:08:13 It’s been bipartisan.
0:08:15 That’s the legislation you need bipartisan, first of all.
0:08:19 And secondly, you know, like most people will sort of think Republicans are pro-crypto, Democrats are anti.
0:08:19 That’s not really true.
0:08:24 Like we just had a last week, a Senate sort of it was a procedural vote on the stablecoin bill.
0:08:28 And I believe there were 17 Democrats who voted for it, which is significant.
0:08:38 And I think our view has been we want to shift the Democratic Party back to the values of Obama and Bill Clinton when they were pro-tech and not sort of the kind of blue sky Democrat thing that happened in the last years.
0:08:49 Yeah, I mean, the interesting thing about the lobbying is that I looked at the donation dollars that were coming from crypto aligned people and crypto funds, and it was split almost exactly 50-50.
0:08:53 Like the entire crypto community really did go super bipartisan with the spend.
0:08:57 And obviously the Republicans won, so it feels like a Republican issue like right now.
0:08:59 But it doesn’t feel like it’s going to remain that way.
0:09:05 On the issue of government, I’m interested to know, maybe stablecoins are a good example, but just general crypto adoption.
0:09:13 How do you bucket, how do you think about the adoption across government, B2B, or just direct-to-consumer?
0:09:17 Because when I think about stablecoins, for example, there’s people that want to pay people individually.
0:09:21 But there’s so many ways that you can just tuck stablecoins under some business.
0:09:34 Like with the AI thing, if you get Anthropic, OpenAI, Google, Microsoft using stablecoins in an agentic application, the user might never know that I’m paying a fraction of a cent to access a Wall Street Journal article.
0:09:36 It just happens, and I’m not even aware.
0:09:41 So what are the key drivers for the different constituencies and then the different applications, and how do they fit together?
0:09:43 No, that’s a great question.
0:09:50 Like I have a broader kind of framework I like to talk about, which is sort of, I sort of like to distinguish technologies between what I call inside-out and outside-in.
0:09:55 So inside-out of things that sort of start with established institutions, like AI to some extent is like that.
0:09:56 The iPhone was like this.
0:09:58 It came out of Apple, a very established institution.
0:10:00 AI came out of Stanford and so forth.
0:10:03 Whereas crypto very much, you know, Bitcoin started at the fringes, right?
0:10:07 And sort of like open source software and there’s, you know, other kind of tech movements have started at the fringes.
0:10:09 And it sort of worked its way in, right?
0:10:14 So stablecoin started for, the main use case was settling crypto trades seven years ago or something.
0:10:21 And then over time, you started to see more and more payment providers in Argentina, for example, and, you know, sort of more kind of moving to the center.
0:10:29 Now Stripe, you know, I think of Stripe is very much probably, I think the smartest, a lot of people think the smartest, one of the, if not the smartest fintech company is all in on it.
0:10:32 You know, they did a billion dollar acquisition bridge to ramp up their efforts.
0:10:43 I think the main gating factor, like I speak to a lot of, what I would love to see is a world where you have banks and asset management firms and every payment provider, as you described, John, like behind the scenes, it’s just sort of, it’s the substrate.
0:10:44 It’s the infrastructure, right?
0:10:46 It’s HDP or SMTP.
0:10:47 It’s just this thing that exists.
0:10:51 A lot of them say, we just want like that final regulatory clarity piece, right?
0:10:54 Because they want that assurance because they’re, look, they’re risk averse.
0:10:57 We just had four years of kind of lawfare against the industry.
0:11:02 So that’s why I think that’s really like, honestly, like I probably spend more than half my time on that now.
0:11:03 Like that’s just kind of the key.
0:11:07 There’s two, and just to say, there’s two big kind of bills that we’re, that we’re advocating for.
0:11:08 There’s stable coins.
0:11:13 There’s one called market structure that’s just coming forward in the house now, which is also to kind of clarify more broadly on tokens.
0:11:15 But I think that’s the main thing right now.
0:11:16 I think, and I, but to your point, exactly.
0:11:20 I don’t think most people ultimately will, will think of even the word stable coin.
0:11:24 I think there’ll be like digital dollars, you know, that like for the, for the average person.
0:11:26 Yeah, it’ll be an industry term like ERP.
0:11:28 People interface with that, but they don’t know.
0:11:32 And like, actually, but we’ll see like, like we have a fintech group at the firm that’s not crypto.
0:11:37 I don’t know if you know folks like, I think you interviewed Anish and all those folks.
0:11:39 And then, you know, they like crypto, but they’re not like crypto.
0:11:45 And they’ll tell me now, like it’s become pretty standard in the stable, in the fintech stack that people will use stable coins.
0:11:50 Yeah, you’re like a three person startup and like, boom, you push a button and you got 190 countries.
0:11:52 That’s very different than the old days.
0:11:52 Yeah.
0:12:00 I want to get your point of view on the competitive forces and dynamics right now, because we have startups, which there’s entire subcategories.
0:12:11 You have hyper decentralized, you know, crypto companies, you have sort of hybrid companies like maybe bridge that are kind of sitting in between fintech and, and crypto rails.
0:12:18 And then you now have big institutional players that are coming in, maybe they brought ETFs to market to start.
0:12:22 And then now they’re thinking about, you know, stable coin applications as well.
0:12:24 How do you look at the market?
0:12:35 And what kind of advice do you give to portfolio companies that are trying to figure out who they are, whether that’s fully decentralized or some type of hybrid or, or, or so on?
0:12:35 Yeah.
0:12:37 Yeah, I think that that’s a great question.
0:12:45 I think that, I mean, the, the, you know, the, the point is not for like decentralization and kind of this new architecture of blockchains for its own sake.
0:12:46 The point is they have specific benefits.
0:12:55 So like why, why would one build on a blockchain like Ethereum or Solana, as opposed to a traditional, you know, AWS, like a traditional architecture.
0:13:03 And the answer is by built, you know, when you build, the way I like to describe it most simply is blockchains allow you to build digital services that remove the intermediaries.
0:13:07 So you remove, so for example, stable coins, you have no intermediaries that are taking fees.
0:13:11 You don’t have the banks and the payment providers and the payment networks, right.
0:13:12 To take the, all the different layers of fees.
0:13:16 So that’s an important benefit is you’re building these, you know, you could build social networks without fees.
0:13:17 You can build games without fees.
0:13:19 You can build AI systems without fees, right.
0:13:20 Without fees.
0:13:24 It’s like very low, like sub, like a couple of basis points.
0:13:25 I actually have it for those interested.
0:13:33 I wrote a book, read right on, and I have a chapter on take rates where I go through this in detail, but it’s essentially you’re going from like 30% in the app store, you know, a hundred percent.
0:13:37 And Facebook and 50% on YouTube to like five basis points or something, right.
0:13:40 So, or, you know, two and a half percent for payments and so forth.
0:13:43 So, so, so the first question is, why would you want to build on them?
0:13:45 The other one we mentioned before is programmability.
0:13:47 You know, you can do all sorts of cool stuff on top.
0:13:52 And so I think it, to your question, I think it depends, like, like ultimately I think of startups as you want to work backwards.
0:13:54 You want to say, what do you want to do for the world?
0:13:55 What kind of service do you want to provide?
0:13:58 And then you work backwards and you say, how do you want to build that?
0:13:58 Right.
0:14:04 In some cases that means you want to build something on a blockchain, like a pure service, like a protocol, we call it, with a token and so forth.
0:14:12 In other cases, you want to build more traditional software that may be like, for example, like you mentioned that, that bridges between a bank and an asset manager and a, and a blockchain system.
0:14:12 Right.
0:14:18 So I think it, ultimately we think of it through that lens is kind of, now as an investor, I, I skew towards things.
0:14:24 I like things with, for example, network effects, because they can be very, I’ve, my career, I’ve found that network effects can be very powerful.
0:14:24 Right.
0:14:31 You, you know, since something, it grows, it kind of has a natural kind of defensibility and kind of gets better as more people use it.
0:14:33 So there’s just kind of different lenses you can look at it.
0:14:36 I would, the last thing I would say is to your, to your listeners, I know you have a broad audience.
0:14:46 I think that the crypto space right now, the real shortage we have is startup talent in that there’s a lot of obvious good ideas where there just aren’t many people pursuing it.
0:14:56 So I think it’s actually the opposite problem than most, like, than you might have an AI right now, where I imagine AI, it’s an amazing technology and deservingly people are excited as they should be excited about it.
0:15:00 But you probably, for every idea have, I don’t know, 50 good startups pursuing it.
0:15:04 In crypto, I think we’re undercompeted, like we have under, too little competition, honestly.
0:15:10 So I would say to your listeners, if you’re a smart person thinking about doing a startup, I think there’s a lot of white space right now.
0:15:12 If you’re in AI, pivot to crypto.
0:15:13 We heard it here first.
0:15:14 Or do both.
0:15:15 We love AI.
0:15:17 It is my worst.
0:15:27 Yeah, how, how are you, I’m sure you’re perpetually going to be unsatisfied with the technological progress because you understand the full potential, right?
0:15:28 Where are you at right now?
0:15:30 You know, we had Balaji on earlier.
0:15:35 He’s, you know, was, was very bullish on ZK proofs and what’s coming down the pipeline there.
0:15:39 And there’s obviously, yeah, prediction markets feel like.
0:15:43 During the election, it was like, wow, this is a completely, no one was talking about this during the Bitcoin white paper.
0:15:48 And yet crypto has created something that everyone gets value out of in one way or another.
0:15:49 Yeah.
0:15:55 Yeah, I think, I think we are still, you know, I think of these, these technology things always go in S curves.
0:15:59 We’re clearly still at the sort of, you know, somewhere in the bottom of the S curve.
0:16:02 Like, I think there’s just a lot more growth and just like user base, there’s something on the order.
0:16:10 There’s tens, most of these applications I’m describing have, you know, up to 50 at the highest end, probably 50 million users, which is 1% of the internet.
0:16:17 So it’s still very early in, you know, Polymarket is doing incredibly well, but I assume it’s still in that kind of sub 1% of the internet.
0:16:20 It’s not, the internet has, you know, 5 billion people now, right?
0:16:22 So we have a long way to go.
0:16:26 I think a lot of the kind of core infrastructure is now, as of a year and a half ago, kind of good enough.
0:16:32 You know, I think a lot of these technologies have that characteristic where you have kind of, you know, whether like neural networks only got good enough.
0:16:39 I don’t know, whatever, circa, let’s call it, you know, something in the 2010s because of the, you know, the Moore’s law in GPUs, right?
0:16:44 And so, you know, iPhones, once you had capacitive screens and semi, whatever, processors and so forth.
0:16:48 I think blockchains, I think we no longer have infrastructure as an excuse anymore.
0:16:51 Like now it’s about building applications, about getting regulatory clarity.
0:16:52 And I think we’re pretty far along there.
0:16:58 I think we have a long way to go fully exploring kind of the idea maze and all the different cool things you can do.
0:17:02 And, you know, and then bringing it to billions of people is the goal.
0:17:07 How have you been advising crypto emerging managers?
0:17:19 One of my favorite, I’m going to kind of butcher the stat, but apparently like the sort of median crypto fund massively outperformed like the median venture fund for most of the last decade.
0:17:31 And so I thought that that was this beautiful narrative violation because, you know, people, traditional venture would love to poke fun at crypto VCs, yet they were sort of like systemically outperforming the other party.
0:17:43 But what kind of general guidance are you giving to somebody that maybe was an active trader and wants to get more into the actual, you know, kind of venture side of the game?
0:17:51 Like I’ve been, so, you know, I’ve, I’ve been that, so I’ve been investing in, in venture funds and crypto funds for a long time.
0:17:55 I just sort of, after I sold my first company, in fact, Mark, Mark Andreessen and I have done it together for a long time.
0:18:01 And have been doing crypto funds since, gosh, probably 10 years and just consistently, and I’m still very bullish.
0:18:06 And to your point, I think that’s probably correct, like on the, on their, you know, the data, like they’ve just, they’ve done.
0:18:11 And I think it’s just, it’s just traditional finance in the sense of you have to, you know, non-consensus right, right?
0:18:16 Like as much as we hear about crypto, it’s still very non-consensus.
0:18:22 A lot of, a lot, a lot of venture funds just simply, maybe they’ll have a little bit of Bitcoin, but they’ll, otherwise they’ll rule it out if there’s tokens and things.
0:18:28 You talk to fund funds, they, a lot of them will say we have a no crypto rule, you know, sovereign wealth funds.
0:18:31 So all the kind of giant pools of capital that fund the venture world.
0:18:39 And so it’s still kind of this, considered this kind of weird sideshow, like obviously the past doesn’t predict the future and so forth.
0:18:45 And we don’t know how things will play out, but it’s still very non-consensus, I think, from a, from a financial investing point of view, the broader crypto world.
0:18:50 So I, I believe, look, I believe that’s where the opportunities are in, in, in, in venture investing.
0:19:00 Obviously you have to also be right and so, and time will tell, but it’s, I think it’s still much more non, it’s surprisingly non-consensus in the investing world.
0:19:03 I think to this day, despite the performance.
0:19:11 Can you explain a little bit of the dynamic of how venture fits into the life cycle of a new crypto company these days?
0:19:15 Because there’s liquidity available from retail in some cases.
0:19:22 There’s some companies that are going to be profitable very early because of their, you know, insane product.
0:19:29 Yeah, we had a lawn from, from pump on earlier and that’s classic example of a company that was able to be very efficient.
0:19:37 And I think we’ve seen on the other side, you have companies like Hyperliquid that got out and have a token very early.
0:19:40 So I’m curious, yeah, how, how you think of the capital life cycle?
0:19:41 Yeah.
0:19:42 Yeah.
0:19:43 So we, I mean, let’s see if I can answer that.
0:19:52 So like one reason we started a separate crypto fund originally, like I guess 2018 was so that we could, before that I was doing like crypto investing.
0:19:53 Yeah.
0:19:56 But it would always get these questions from the LPs and like, what is this?
0:19:56 Is it equity?
0:19:57 Is it tokens?
0:19:58 And so create a separate crypto fund.
0:20:00 But the basic idea was we have maximum flexibility.
0:20:06 And we went to the LPs and we said, look, this is going to be different and here’s the idea and here’s the, and a lot of them opted out.
0:20:09 Some of them opted in, but we were very clear up front what it was.
0:20:15 And so what we, what we think of it is we can do everything from, we can buy, buy Bitcoin or something just directly, which we do.
0:20:18 People see our funds and they assume it’s all ventures.
0:20:21 We also do a lot of, we can do equity investments like a Coinbase.
0:20:22 It’s just a classic equity investment.
0:20:25 We have a bunch of those that, you know, the goal would be to someday IPO.
0:20:35 And then the third one, which is actually, you know, one of our core ones is you’ll, you’ll do an equity, a project will start as a, as an equity investment, but then over time we’ll launch a token.
0:20:40 And the equity investors get sort of pro rata rights to those tokens.
0:20:50 And that actually, that’s kind of, that was sort of the new thing that we really wanted to lean into back in, when we started the crypto fund, that was a new idea that, you know, we helped kind of pioneer that, I think.
0:20:53 And that was like the warrant structure?
0:20:55 Yeah, it was basically, yeah, it’s very simple.
0:20:58 It’s a term sheet with two extra things that has essentially token rights.
0:20:58 Yeah.
0:21:00 And it can be a warrant and there’s different ways to structure it.
0:21:09 And what’s nice about that is it, you know, one of the reasons startups work so well is that they’re max, like when they work is that the investors and the founders are fully aligned.
0:21:13 So before that structure existed, I don’t know how deep you guys want to go on this.
0:21:17 There were these things called SAFs and like these kinds of things where you do token purchases.
0:21:21 And the problem is it created all these weird incentives where the founder would try to create a token just to do something.
0:21:25 What we believe very strongly is alignment between the investors and the founders.
0:21:35 And so there’s sort of this, this equity structure with token rights or token warrants is one where if they decide they can stay an equity company and they can do, you know, just do traditional kind of go for profits and things,
0:21:40 or they can create a token or they can create two tokens or whatever is best for that service they’re trying to create.
0:21:50 And in, in, in, in whatever way that they eventually decide to, you know, whatever business model they pursue, they, the investor will participate kind of pro rata alongside the founders.
0:22:00 What happens to the C Corp in that scenario where they launch a token, the token grows and the community is in like the, the, the asset is now controlled by the token and the C Corp still exists.
0:22:05 Are there roles for foundations and nonprofits and, and, and, and different transitions that could happen?
0:22:06 Yeah, it’s a great question.
0:22:11 A lot of times they’ll become, um, they’ll just become like kind of one software provider in the network.
0:22:12 Oh, sure.
0:22:18 Like, um, you know, they’re so, so for example, um, you know, think of the Ethereum foundation.
0:22:21 I don’t know if you guys know the relationship between Ethereum foundation, Ethereum, Ethereum is a network.
0:22:24 Ethereum foundation, you know, they help make a little bit of software.
0:22:27 They give some research guidance, but they don’t control the network.
0:22:32 They don’t, you know, it’s like kind of in the same way, there’s just sort of a foundation that has some kind of a bully pulpit.
0:22:35 Um, sometimes they can have a separate business model.
0:22:41 Um, you know, so like Uniswap is a, is a decentralized protocol that we’re investors in.
0:22:50 It’s sort of a, uh, let’s think of it as a decentralized New York stock exchange or something, um, that’s doing very well, multiple trillions and trillions in volume traded.
0:22:56 And they separately, so they spun off this protocol and then they separately have a website that they operate, which is what the company does.
0:23:03 And the website is now, I believe it’s a sub 5% of the volume on the protocol, but it’s still 5%, right?
0:23:05 And so they’re just one front end to it.
0:23:09 And so that, I think that’s probably one of the best examples of what you’re asking, John.
0:23:10 That makes a ton of sense.
0:23:10 Jordy?
0:23:18 Where, what are you expecting to see out of the kind of category, real world asset category over the next couple of years?
0:23:29 It feels like it’s this year, at least to me, it’s felt like we’re days or weeks away from some pretty high profile assets coming on chain.
0:23:32 Uh, I’m curious how you think about the category broadly.
0:23:37 Yeah, um, yeah, I mean, I think of stable coins as sort of the initial real world asset, right?
0:23:49 So you have dollars, bank account, and then the next, and then, and then the great thing about that, the kind of adoption there, and hopefully all the regulatory clarity we’re getting is that will be a natural stepping stone to, you know, you have Robin Hood talking about stocks.
0:23:56 You have BlackRock talking about, you know, treasury bills, um, wouldn’t, I think it would be nice if anyone in the world, uh, I think it’d be good for the U.S.
0:24:02 And I think it’d be good for the world if anyone in the world could buy, you know, four and a half percent, uh, treasury, you know, uh, interest treasury bill, right?
0:24:05 And have it secure and easy and permissionless and low fee.
0:24:10 Uh, I think it’s, you know, it’s good for our, you know, the U.S., the popularity of the dollar.
0:24:15 And I think it’s, you know, it’d be nice for somebody who has a volatile currency to have access to those.
0:24:22 And, um, um, so, you know, stocks, stocks, bonds, and then you can imagine, you know, um, all of these sorts of so-called dark pools.
0:24:26 So, you know, still a large part of finance is people using Bloomberg and calling each other.
0:24:32 And a lot of that, you know, like trading bonds and muni bonds and corporate bonds and things like that.
0:24:39 There’s a lot of interest from the banks to think about ways to use blockchains, uh, to create essentially marketplaces there.
0:24:42 You know, maybe permissioned marketplaces where only kind of certain participants can participate.
0:24:46 For them, the benefit is, you know, why haven’t they created a network, like a marketplace before?
0:24:49 Because, um, they, you know, they, they don’t trust each other.
0:24:51 They don’t want to like, who’s going to create it?
0:24:52 Is Goldman going to create it?
0:24:53 And JP Morgan’s going to use it.
0:24:54 They don’t trust each other.
0:24:58 You know, they don’t trust startups to do it because then the startup will start taking big fees.
0:25:00 They’ve just sort of kept it informal and by phone.
0:25:08 Um, and so in a way, a blockchain kind of solves a political problem of getting these 20 entities or 100 entities who previously wouldn’t kind of coordinate together.
0:25:17 I think that’s one broader way to think of blockchains is like, it’s, it’s like if AI, you know, is solving all the problems in the world that, that they need more intelligence, right?
0:25:21 Blockchains try to solve the problems in the world that need more coordination, right?
0:25:28 Or more, you know, kind of collective, um, uh, collective action, getting a bunch of, you know, blockchains are fundamentally social technologies.
0:25:31 And it’s about getting a bunch of, you know, that’s what money is ultimately social, right?
0:25:37 It’s getting a lot of people to agree on a standard and to, and to use the same, the same systems and tools.
0:25:41 Um, and so similarly with real world assets like that, and there’s other interesting ones to your question.
0:25:55 Like we have one called story protocol, a project where investors in, that’s putting intellectual property on blockchains, um, and letting people, you know, do capital formation and licensing and so forth around, you know, so you create a new, you know, a superhero theme thing.
0:25:59 And someone wants to make an AI remix of it and like, how do they say AI really important.
0:26:05 And so we think a lot about like in an AI world, like how will, you know, creators get paid?
0:26:06 How will IP work?
0:26:10 How will, how will, how will, how will money flow on the internet in a world with abundant content?
0:26:10 Right.
0:26:13 Um, and I think, we think blockchains have an important role to play in that.
0:26:22 How would you like to see the industry and kind of the world collectively try to solve social engineering hacks?
0:26:30 It feels like world coin is, is one potential solution there, but I imagine there’s a bunch of other sort of businesses that you could fund.
0:26:42 And then a whole regulatory piece as well, which is, we sort of force these large companies now, Balaji described it as like, you know, to, to basically hold these, you know, honeypots of, of, of data.
0:26:45 And there’s probably got to be a better, a better way.
0:26:46 Yeah.
0:26:47 A great question.
0:26:52 So, you know, you mentioned world coin, I’ll just say briefly, so what world coin does is, is what we call proof of humanity.
0:26:55 So it’s a way for you to get a cryptographic key that proves you’re human.
0:27:01 And the idea is in a world, you know, as we’re moving too quickly with AI bots and deep fakes and so forth, it was useful to be able to say, Hey, I’m truly a human.
0:27:08 And then, you know, I can get a, imagine a blue check on Twitter that actually literally, you know, cryptographically means you’re human and not just that you pay $10.
0:27:11 And we think that would be useful.
0:27:17 It’s sort of a missing, you know, kind of building block, so to speak for the, you know, for the internet that I think we all want.
0:27:20 And so one thing we think about is like, what are those missing building blocks?
0:27:21 You mentioned zero knowledge proofs.
0:27:28 Zero knowledge proofs are, I think, a really interesting cryptographic breakthrough that I think people underestimate in the broader world, how important they are.
0:27:34 What they let you do is essentially proofing.
0:27:42 So I can prove, you know, like a bank needs to know I’m a U.S. citizen, let’s say, or I’m, you know, have a certain income or certain profile, you know, health data or so forth.
0:27:56 What zero knowledge proofs let you do is I can prove that to the system without revealing any of that, like my actual, you know, where I can, it can basically send me a cryptographic kind of a game that says, prove that you’re a U.S. citizen.
0:28:03 And I can prove it back without revealing all, you know, my name and all the other kind of stuff that might dox me, right?
0:28:10 I mean, I just, you know, we just saw like, you know, day after day we see these giant hacks, KYC hacks, so forth.
0:28:15 Like at this point, you should just assume all of your information, sadly, has been hacked many times.
0:28:21 And, you know, having Social Security as like your unique ID and password is just like a ridiculous system in this era.
0:28:29 And meanwhile, we have these, you know, we carry around these supercomputers with, you know, biometrics and advanced cryptography.
0:28:30 Like, why aren’t we using it, right?
0:28:34 The problem is not the tech, the core tech.
0:28:35 The problem is coordination, again.
0:28:38 Like, it’s how do you get everyone to agree on what the standards are, right?
0:28:43 And that’s why I think blockchains can be important because it’s really the, all the pieces are there.
0:28:48 But how do you kind of put them all together in a broad kind of, you know, standard or coordinated system?
0:28:50 Amazing.
0:28:50 That’s great.
0:28:51 Thank you so much for coming on.
0:28:52 Well, we’d love to continue for another hour.
0:28:53 Yeah, we can go way longer.
0:28:54 We need to have you back and talk more.
0:28:54 Awesome, guys.
0:28:55 Appreciate it.
0:29:00 It’s great to see somebody, a contrarian idea that a tech show that actually likes tech.
0:29:01 Yeah.
0:29:01 What a concept.
0:29:03 Very bullish on it.
0:29:03 So thank you for having me.
0:29:04 Thank you so much.
0:29:04 We’ll talk to you soon, Chris.
0:29:05 Thanks for coming on, Chris.
0:29:06 Have a good one.
0:29:06 Bye.
0:29:16 Let us know by leaving a review at ratethispodcast.com slash A16Z.
0:29:19 We’ve got more great conversations coming your way.
0:29:20 See you next time.
What if crypto isn’t just a speculative asset class—but the next foundational layer of the internet?
In this episode, Chris Dixon, founding partner of a16z crypto and one of the earliest, most forward-thinking investors in the space, joins TBPN for a wide-ranging conversation on the real, long-term promise of crypto—and why we’re still early.
He unpacks:
- Why stablecoins are already functioning as internet-native money
- How blockchains can serve as global, programmable financial infrastructure
- Why programmability, not just low fees, is the real unlock
- The evolving regulatory landscape and new bipartisan momentum
- The rise of AI agents, decentralized platforms, and real-world crypto use cases
This episode is about long-term thinking, technical optimism, and building open infrastructure for the future of the internet.
Resources:
Find Chris on X: https://x.com/cdixon
Watch TBPN: https://www.tbpn.com/
Timecodes:
00:00 Meet Chris Dixon: Crypto Visionary
00:26 The Evolution of Stable Coins
02:49 The Future of Stable Coins and Global Payments
06:04 Lobbying Efforts and Legislative Impact
09:01 Adoption Across Different Sectors
11:53 Competitive Forces in the Crypto Market
14:37 The Crypto Talent Shortage
15:05 Opportunities in the Crypto Space
17:08 Crypto Fund Performance
19:04 Venture Capital in Crypto
23:30 Real World Assets on Blockchain
26:34 Social Engineering and Proof of Humanity
29:10 Conclusion and Final Thoughts
Stay Updated:
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Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
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