We have an important, preface, an important caveat, and important disclaimer before we get started. And here it is provided from my lovely lawyers. Here we go. I am not an investment advisor. All opinions are mine alone. There are risks involved in placing any investment and securities or in Bitcoin, or in crypto currencies, or anything. None of the information presented today, or really any time. Since you might be listening to this, any time is intended to form the basis for any offer, or recommendation or have any regard to the
Vestment objectives financial situation or needs of any specific person that includes you. My dear listener. So everything you're going to hear is for informational, entertainment purposes only and with that said, please enjoy.
Hello boys and girls ladies and germs lemurs and squirrels. How goes it. I hope you are all. Well. This is Tim Ferriss. Welcome to another episode of the Tim Ferriss show. My guests today are Nevada and Chris Dixon of all ramakant is one of the most popular guests on this podcast. And for good reason, you can find my first episode with him at Tim dot blog, / navall, and a VA L. It was nominated for podcast of the year. When it first came out.
But let's get to the Bayou. The Vol at navall on Twitter is the co-founder and chairman of Angel list. He is an angel investor and has invested more than 100 companies including many mega successes such as Twitter, Uber notion Open, Door Postmates, and wish many many more you can subscribe to and of all his podcast on wealth and happiness. On Apple podcast, Spotify overcast review, get your podcasts. You can also find his blog at nav. Al and I will leave Nepal's intro.
At that, we have done quite a few interviews together in the past with Nick Szabo and also with etherium Creator vitalik butyrin. Chris Dixon on Twitter at Sea, Dixon is a general partner at Andreessen Horowitz where for the past six years. He has been an active seed and Venture stage, investor, previously, Crisco founded, and served as the CEO of to startups site advisor and hunch site advisor was an internet security company that warned web users of security threats. The company was a
Wired by McAfee in 2006 hunch, was a recommendation technology company that was acquired by eBay in 2011. Chris has been a prolific seed investor and that is the right adjectives prolific heat investor co-founding founder Collective a seed, Venture fund and making a number of personal Angel investments in various technology companies. Chris started programming as a kid and was a professional programmer after college at the high-speed options. Trading firm Are betrayed. He has a ba and Ma in philosophy.
E from Colombia and an MBA from Harvard, he has written about his theories and experiences as an entrepreneur and investor on medium. And before that at Sea Dixon dot-org, many of his predictions have come true. A lot of what he's written about has ended up being prescient and we will dig into that. His a 16z. That is Andreessen, Horowitz, with the number of letters between the first and last a 16z podcast. Appearances can be found at a 16, z.com author, slash Chris.
Ivan Dixon, and once again, you can find them on Twitter at Sea Dixon.
This episode is brought to you by Thera gun. I have to their guns and they are worth their weight in gold. I've been using them every single day, whether you're an elite athlete or just a regular person trying to get through your day, muscle pain, and muscle tension are real things. That's why I use the Thera gun. I use it at night. I use it after workouts. It is a handheld, percussive therapy device that releases your deepest muscle tension. So for instance at night, I might use it on the bottom of my feet. It's helped with my plantar fasciitis.
I will have my girlfriend, use it up and down the middle of my back and I'll use it on her. It's an easy way for us to actually trade massages in effect, and you can think of it. In fact, as massage reinvented on some level, helps with the performance helps with recovery helps with just getting your back to feel better before bed. After you've been sitting for way too many hours. I love this thing and the all-new Jenn fourth. Aragon has a proprietary brushless motor. That is surprisingly quiet. It's
Easy to use and about as quiet as an electric toothbrush. It's pretty astonishing and you really have to feel the Thera guns, signature, power amplitude and Effectiveness to believe it. It's one of my favorite Gadgets in my house at this point. So I encourage you to check it out. Try Thera gun. That's Thera th er a GU, and there's no substitute for the Gen. Fourth Aragon, with an OLED screen. That's OLED for those wondering that's organic light-emitting diode screen, personalized their gun app and incredible combination.
Ian of quiet and power and the Jen fourth era guns, start at just $199. I said, I have to, I have the prime and I also have the pro, which is like the super Cadillac version. My girlfriend loves the soft attachments on that. So, try third gun for 30 days, starting at only $199. Go to therapy. Body.com. Tim right now and get your gen fourth Oregon. Today, one more time. That's thorough body.com., /. Tim, th, er, a be ody.
Cam Tim.
This episode is brought to you by tonal imagine having an entire Jim's worth of equipment in a device smaller than a flat screen TV. Something that could fit potentially even in a closet. If it's in my closet by eliminating traditional weights, tonal can deliver 200 pounds of resistance with a Sleek design that can fit nearly anywhere. It's like having an entire gym and personal trainer, right? In your home, totals patented digital weight system, senses your strength and just the way automatically in real time, so you can get the most out of every workout.
I'm number of friends, including competitive athletes who have doubled their strength, in short order, in a lot of exercises. And part of the reason that's possible, is it uses a revolutionary system of dynamic resistance, powered, by electric motors for strength, you can feel. You can also do things like eccentric. So overtime tonal learns from your body and automatically increases the weight. Exactly. When you can handle. It, total also uses 17 sensors to provide real-time feedback on your form and technique allowing you to get the most effective workout.
Out every time it's a strength training machine with adjustable arms that provides more than 170 exercises for full body workout and that can include squats, deadlifts, bench, presses overhead, poles, bicep, curls and more. So check it out Tritonal. The smartest home gym for 30 days in your home, total is so confident that you'll love it. They offer a full money-back guarantee. You can now get total from sixty three dollars per month at 0% interest over 48 months.
Visit w-w-w dot total. That's T. Ona elle.com and for a limited time, get $100 off. When you use promo code, Tim 100 at checkout. That's www.ilga.gov promo code. Tim 100t. I am 100 total, be your strongest at this altitude. I can run flat out for a half mile before my hands start shaking another announcement post request.
A cybernetic organism living tissue over metal endoskeleton.
Prison of all, welcome to the show and crisper can start with you. And then awesome. I figured we could begin with something perhaps that most people would consider non-technical and that is philosophy. So I would like to hear first. If you could explain why the interest in philosophy and then I would love for you to tie in your conversations or specific conversations involving advice with Daniel Dennett and maybe give some context.
Who that is?
So back in college, I sort of incident computers my whole life and I read this book or lesser Bach which was sort of mind-blowing book at the time. And it's all about kind of the connection between computer science and music and philosophy and things like this. And so when I got to college, I said, you know, I started taking some philosophy classes and really kind of went down this Rabbit Hole of philosophy and actually was at one point in a Ph.D program until I dropped out. I was very interested in what's known as analytic philosophy. So language, mind Logic, the
use of mathematics is still an area. I'm interested in sort of the history of ideas. I'd say the history of Science, History of mathematics, how it happens by no means. Consider myself, a philosophy expert and I haven't read that much over the years, but I have, for example, a couple years ago. I went into this little really big deep dive into the history of logic and computer science and actually end up writing this article for the Atlantic about it and kind of my argument was which is still kind of my main area of interest. Is this idea that you could have a group of people working on something.
There's this great quote. I started the essay with is this computer scientist who said, if you went in 1905 and tried to find the least practical area of philosophy or any academic field, you could, it would be this set of logicians like Bertrand Russell and Kirk Godel and a bunch of other people like that who were doing these really, really, esoteric logical things, but it turned out that was literally the direct lineage into Alan Turing, and Von Neumann and all the great papers that came out in the thirties. And then, that culminated World War Two. So it literally history of computing came from just kind of crazy group.
Like 10 people in 1905. And so, it was that kind of stuff that I was into reading about that kind of stuff. And the fun thing with philosophies. You can say, hey, this semester I'm going to do science and this semester, I'm gonna do math. So it's really just a little bit dilettantes or something. Like, it's just sort of a fun, excuse to go read a lot of smart people. But yeah, but then at one point, this is a getting Daniel Dennett, who sort of, one of my heroes who's written a lot of great philosophy books going to popular philosophy books. I highly recommend and I had the option to talk to him. That, that was the point. I was, I was thinking about quitting and doing what I do now, basically,
Startups. And he said to me, he said look if you think you're going to be like a great philosopher and that's all you can ever. Do. You should do it. Otherwise, I would quit immediately and go do something else. I just knew it. Like I was going to be a mediocre philosopher working on the footnotes. So, basically in these kinds of academic Fields, there's like five people that matter, every century and then everyone else is sort of doing, you know, footnote clean up hitting me. My friends. Had this idea that we should look the best philosophy paper, the end of the PHD radio station. We came to the conclusion that the best.
Dissertation would be two pages long and have no footnotes, and that was just completely unacceptable and market. So we're like, there's no way that we can do actually consider to be a great because, you know, truly great philosophy. Just a brand new idea, a brand new set of ideas. Not that I hadn't them. I'm not claiming. I was a great philosopher, but if the goal was fundamentally inconsistent with the nature of the program, it was probably not this practical for me.
I don't want to say I'm gonna push back a little bit but interest in philosophy deep interest in philosophy in it could be coincidental seems to be a pattern across quite a few.
You currently adapt entrepreneurs and investors in the tech space Reid. Hoffman comes to mind. I mean, obviously navall is a deep reader and consider of different philosophies and just to build on your dissertation comment. And we don't have to spend a whole lot of time here because I still want to do a little bit of background. But for those who don't have firsthand exposure to Satoshi nakamoto's white paper. How long is that?
It's like seven pages. I think I have it on my wall actually to my other office. I have it on the wall and it literally fits on the poster. So I believe the PDF and it depends on the format. You can get them in like printed Bible, like formats, or you can get them. It's him, isn't it? Yeah, I think the PDF seven pages, you know, is very short. It's very short and actually probably two-thirds of it is implementation details. The core ideas are probably
people are compliant
similar to the Bible. There was a whole long period of forum posts and other kinds of things flushing it out. And then the actual code, the
The blockchain is of, well, I think one of the beautiful Computing Primitives that a lot of those beautiful simple things. It's relatively simple. It is
core. I'd like to revisit the logicians for second. So Bertrand Russell, and these others. So, they were the significance of that was largely missed at the time. I mean, of course, it was hindsight 20/20, but I'd like to maybe use that as a segue to something. You wrote in 2013 in a blog post titled things is the title of the blog post. What the smartest people do might.
Be a quote from the blog post with the smartest people do on the weekend, is what everyone else will do during the week and ten years and among the tech Hobbies with momentum. You included, quote, math-based currencies, like Bitcoin and quote. That's 2013. So I'd like to ask two questions. Number one is, and there were other examples that seemed now to be quite prescient. How did you identify math-based currencies, like, Bitcoin to fit into the category of what smart people are doing on the weekend? And then, are there any current?
Hobbies that you're watching with interest.
This goes back to the lure of Silicon Valley of hackers in a garage and Steve Jobs and Wozniak going. The Homebrew Computer Club. It was like this Fringe cultish Club at the time in the era of mainframe computers and things basically came back to this idea that maybe that's not a coincidence that just keeps happening that. It sees things people are doing on the weekend and particularly. They're smart people, you go and you talk to them. They had a good reason, they really understood what a personal computer can be. They had very different.
Deep thinking. So by the way, a lot of this involves actually going and speaking to people and not trusting secondary sources. I really believe very, very strongly. That one of the most important things here you can do is just go speak to a lot of people. That's where I get all of my information talking to entrepreneurs, talking with people that are smarter than me. Why was personal Computing happening at the Homebrew Computer Club. And not at let's say IBM at the time, once a company gets to a certain scale. It's managed by business people and the business people plan on a 1-2-3 year Horizon. They're very good at
Typically, it's extrapolation execution. Like, we have this computer here. Let's make a better next version of it or something like that, and they're not. This is sort of clay christensen's idea. The idea of disruptive innovation is that these things come from below, they look like toys. It's another kind of common theme. They Come From Below. They look silly, the serious people poopoo it. It's not a serious thing, some of those things by the way, that people are into the hobbyist things. Did you stay Hobbies? A lot of. It depends on the nature of the specific topic and is it going to follow some kind of exponential Improvement curve and things like that? Because the PC of
It was riding Moore's Law and a bunch of other important Trends in a way that other Fringe Hobbies at the time were, so I've always found this to be a small group of very smart cultish. People to be very, very interesting pattern. And one thing I do a lot of, I've read a lot of history, books, particularly history of innovation, and this pattern happens over and over. So I'll give you an example. Another example, I like to use is University of Utah in the 1970s, every single computer Graphics thing. Today. Apple Picsart re the best Venture Capital strategy in the 1970s with the be taken.
Big bag of money and hand it out anniversary of Utah. Okay, because they were all that the entire future of computer Graphics. Where's the University of Utah? Why? Because sometimes I forgot the specifics. I'm donor likes computer, graphics and gave money and they're all there. I always think about it. Like I do venture capital. I can sit there analyze metrics and do all this other stuff or I can just go try to find University of Utah. That's what I think about all the time. Where is that? And by the way, a lot of it now is on the Internet. It's a Discord. It's in a Reddit.
A lot of what I did that list. I had in 2013, a lot of it came from
Reddit.
It's what is the current definition of the frontier? And there was a time when it was Wild West, there was a time when it was conquistadors and people setting sail in the age of sail. And today it feels like the frontier is on the internet and even on the internet, the Frontiers within web 3 and crypto because it's sort of the least regulated, the most decentralized, the most permissionless 24/7 365 markets that are self-funding hackers from all around the world can participate. You can be a non or pseudo a non or just of a crypto punk as your profile and
Nobody has to know who you are. All that matters is the output of your code and if it works, you can make huge amounts of money. Satoshi Nakamoto may end up being the richest person who ever lived and could have pulled it off, completely a non. And that's not the only one, there are huge fortunes being made and lost on this decentralized, Anonymous Frontier. And now, I think we're seeing web 3, starting to pull, in all the talent, all the smartest people in Silicon Valley, you seem to be looking from their nine-to-five jobs into 24/7, web 3, and figuring out how to participate every company that I'm
With that's not a web three company calls me and ask me about a token or a web three angle and obviously some of it is just to make money, but some of it is this this appeal of Open Source, open platforms, portable data user, privacy user control, keys, and community-owned, and generated Network. So I want to hop in here. This is all very important and we're going to come back to it and we're going to get to a definition of terms. Also, just for people who are not familiar with web three before I get to that, just because I want to try to create
Create a thread going from 2013, and that blog post to hear University of Utah. How did you find this particular University of Utah, math-based currencies, like Bitcoin in 2003 or Pro or just prior to that. And then we're going to bring that into web three,
like a lot of these things started with I think friends and of all could have been part of that Fred Wilson, they're sort of early group of people that were kind of getting interested in Bitcoin. I used to be technical. I'm not particular technical now, but I went and kind of use Bitcoin and
Particularly in the programming language around it, which I can talk more about now. We have platforms like aetherium with much more robust, programming abilities. So I, you know, I went kind of used it and the idea I have to say it appealed to me. Initially. I had come from, actually, the first thought actually because use the syncope hashcash. So hashcash is the algorithmic. It's used for Bitcoin mining. What's called mining, which is a way to incentivize the people, to run their computer and fun part of the Bitcoin Network. I started to computer security company in 2004, and it actually looked at using hashcash. It has cash. You've been talked about for a long.
Time as a way to fight internet spam and this is what I was working on. The idea was, why do you have spam? It's a tragedy of the commons problem, where because it cost zero to send an email. If you can make a hundred dollars, every million emails, spammers will just do that. And so one idea that went back, really back to the think the 90s was idea of charging. Somebody a little bit to send an email. But then how do you do that? We don't have native internet money. So the idea was you force them to do a computation. And actually it looked at commercializing this one.
Didn't do it, but he couldn't figure out the whole thing. When I first saw Bitcoin. I'm like, oh it's stored. Hashcash. Adam Smith called capital is stored labor. And so that's what Bitcoin actually from my vantage point back. Then it was like, oh wow, Tash been stored, and that was actually what got me initially interested in. Then I started going down the rabbit hole as we say, you'll hear this phrase, a lot from crypto people because it's very much this Looking Glass experience where the outside narrative is, just so incredibly, not accurate, web 3, and once you go
And learn it yourself. I get an email. Now, the all plugging this to every day now, from web to person, a good entrepreneur. Saying, oh my God, I didn't understand what this was. And now that I do, it's like completely changed my life. It's a transformative thing. When you go down that rabbit hole, so I kind of went down the rabbit hole. Although there wasn't as deep, the rabbit-hole back then, but I think probably I'm guessing the call had a similar experience.
I read about the Byzantine generals problem and the solution to that and really, as well. You can now organize people without rulers. Could you explain what that is Noble? Yeah, Byzantine generals problem is a problem.
Basically says, how do you get people to coordinate? When nobody knows each other? Nobody trusts each other and by using proof-of-work AKA hashcash, you can say, well, I've done the work to have a credible vote. And so anybody who hasn't done the work hasn't done the vote. And so now you can take systems that before would have to be run by centralized authorities the ranging from the government, running money to Mark Zuckerberg running Facebook and you can replace them by a credible vote of all the people participating in the network and, you know, they're not cheaters that they get to have a say, because they've done the work and one
One way to do the work is hashcash, but that's essentially what blockchains and webserie do web. Three basically says, ok, we can now run this network through, the people who have invested into the network. And they can invest with money. They can invest with resources, or they can invest proof of work, which is sort of the most robust way to do it while keeping a decentralised. But I think this may lead us into we're probably getting to the point where we should Define what we mean by went three and I think Chris has articulated one of the better definitions out there. One of the best definitions
Perhaps Chris. We could also start just to show. I don't, it could be changed to be Evolution, but it'll web-one web to web three if he could lay it out.
So well, I think about it is web-one the internet, of course, existed before the 90s, but the web sort of this killer app on top of the internet was created in 1990. And so I sort of think of web. One is let's call it 1990 to 2005. The key thing with web one is it was dominated by open protocols. So the web has a protocol called HTTP. Email has a protocol called SMTP. These were the platform's you were building on then. So if
You are Larry and Sergey and you were building Google. You were building it on top of HTTP on top of the web and the web was open, which means no uncontrolled it. What that means from Larry and sergey's point of view is they knew if they built a successful product a successful search engine, they would own it and they would control it and you couldn't have somebody come along and say I'm going to take 50% or I'm going to shut you down. It's the web. It was open and similar to let's say in economics, if you talk to an entrepreneur and investor, they'll say they like to invest in countries with predictable rule of law. They don't like countries where the government.
The assets and things like this. The same thing happens with startups and entrepreneurs, they want to build on a platform that they know they can trust. And so that was what was so great about that first year of the web and why you had so much incredible Innovation and investment. And it was, I think most people would agree today, that was sort of a golden period of innovation, but the products were limited in the sense that tended to be called skeuomorphic where people were taking things from the offline, world like magazines and putting them on the internet. If you go back and look at the 90s web.
It was very much experience. Like a magazine, didn't have things like social networks and user-generated content and nearly the same degree that started to really kind of percolating this year. People call Web to let's call it around 2005 and at that time you had sort of two competing models. Like let's just take Twitter. There was an open protocol called RSS that was the obvious thing to compete with Twitter and it's still around but it's not nearly as popular as Twitter and Facebook and everything else. So they were sort of open ways to build social networks in the 2000s and then they were closed ways to build and for a variety of reasons. I won't go into all the
Because the wave one and a lot of it had to do with the ease of use. The way I think about it is web to the open. Protocols were just limited in what they could do. So if you want to set up a website in 2008, let's say and you want it to have sort of simulate, the functionality of Twitter. You have to go get like a web hosting provider. Buy a domain name, and do a whole bunch of other things. Everyone tried to you kind of reuse domain names, essentially, domain names in the earlier, the pre blockchain world. They're the one thing you can really own on. The Internet, is your domain name? You control it. And so the open side.
Keep trying to kind of use the domain name again and again, but it costs. $1. You have to go set it up is very technical. Meanwhile, you go to Twitter and it's like three clicks and you choose your name and you're in and your friends are there and then mobile phones, came along and the whole thing accelerated. And here we are now with five plus companies that kind of control the internet. So web 3 is coming along. It's a web 3 is. My definition is it's an internet owned by users and Builders orchestrated with tokens. So this new concept of a token is the kind of the key concept of web 3. This comes service door.
The from the movement that started with Bitcoin, although I think it's sort of a different branch of the genealogy or something, and a lot of the stuff is actually built on a different grip. Toe Network, all the theorem, and then there are other kind of alternatives to it. The big kind of innovation with etherium was, it's fully. Programmable. It's a computer. It's funny. I this is the most controversial thing. I've said on Twitter. I got this huge when I said blockchains our computer their computers and literally if you go look at Alan turing's on computability paper, a computer Von Neumann or any of the great computer, scientists a computer, something you write code.
Code and it can store things. Etherium has almost Turing. Complete programming language and can store information. It's a virtual computer computer that runs on a network of physical computers, which is, I think, what kind of trips people up, but, it's a computer. It's a very powerful computer that has new properties. The prior kinds of computers didn't have. And one of the things you can do on these, you can create these things called smart contracts, which are code, that will continue to run a certain way and you can also create these things called tokens and tokens Can Be fungible like kind of quote cryptocurrencies are, or it can be non fungible and if T's and it can be something like which I think some people
I've heard about now, which are things that can be represented by a piece of media. For example, you're buying this collectible basketball card or this collectible work of art things like that. Why tokens are so important is. They now provide a mechanism by which value and control can be given to users and Builders as opposed to Simply to centralize companies. So you can build today. The two things. One is remember, before I said, the functionality wasn't quite there for the open side and web to its now. There you can now build something that looks and feels like Facebook.
Or Twitter using open protocols and using this new kind of philosophy where the value and control, accrues to the users of the network, not to accompany because there is no company and you're going to see more and more things product launch like this where there is initially they'll be some kind of R&D organization that helps create these protocols. But over time they go away in the same way that there is no Bitcoin company and the theorem has a non-profit Foundation that supports our D, but there is no etherium company and this is how I believe.
The most important internet products will be created in the future is through this, kind of new means, and why will it be done? This way? One is, is better because wouldn't it be better? If the drivers on the Uber Network owned, Uber and got to participate more in the value creation and also in the control and governance of that system. I think that's clearly a better thing for society. And I also think it's just going to be a winning product. If you look at people in these web three communities, no web three company, no crypto company has ever spent a dollar on marketing including coinbase. I was on the board for you.
Years, no marketing. Why? Because tokens are self-marketing when somebody owns something and feel skin in the game. They want to go talk about it. They want to evangelize I think web trees, not only better for the world, but it's also going to beat web too because it's going to be more popular because the people get really excited when they actually get to participate. The internet is a hundred percent the most important invention of the century. That's I don't think that's hyperbolic to say that and we're literally talking about how is money and power going to flow on the internet. This is such an important issue and yet it's caricatured.
In the press and things is like Tech Bros money. This and that it's so misunderstood and it's so important which is why I get fired up about it because I feel like if people like me and of all don't explain this. That I think it's a very important thing. I guess. I'll say
I'll just if it's okay with you guys share a little bit speak for second and also try to
Paraphrase as muggle and then I want you to poke holes in what I say. So, first, I'll say that I'm relatively new to this sphere but like you said, once it started to land or a sink in, I felt something and this is going to sound, very odd perhaps but this like physiological quickening that really kept me up. I was not able to sleep well for about a week straight.
That only happens to me every like five to seven or five to ten years because I started to see some of the possibilities and some of the beneficial societal changes and on, and on, and on that, not just could are already in a sense, a byproduct of this paradigm shift. So tell me if this captures some of the essence and then either of you can poke holes in it, but just to highlight a couple things. So people might think of web one.
As read-only largely read-only and open then we have web to read right? But as we've seen it, it's become more centralized with a lot of these large companies and you don't own like you said aside from maybe a domain name. You are not in control of your own destiny. You have very few rights. Your reputation is not transferable. If you are on a platform like Twitter you can
D platformed and we put that aside but it's centralized you're at the whim of a handful of companies, which a lot of people will sign up for, like you said, because of convenience ease of use Etc. Web 3 then appears to introduce a number of things, including property rights and decentralization. And this is not going to be a perfect comparison. But if people think of say like, REI and a co-op, it would differ in the sense that we're not going to certainly going to have
Management per se with a truly decentralized platform, but what I have seen firsthand and I want to give people a concrete example, just to point out a very Niche group, perhaps that I've seen benefit very clearly and that has been artists. And so, I want to talk about this just for a second because I have friends who are photographers friends, who are graphic artists, friends are musicians, who were crippled financially by
When they couldn't tour, when they couldn't do things because they're only getting paid one cent per stream on some of these music streaming services with the ability to create unique pieces of property in the form of n FTS and launch projects. Their Futures have entirely changed and I want to highlight something for folks and that is it's not because of the initial sales price the model for authors the model for musicians has
Some royalty component but you kind of get paid up front and then you have a pittance of some percentage that you make on the back end. But with a smart contract like you said, if we think of a theorem is as World computer with a smart contract, instead of a ton of middlemen who are kind of taking the Lion's Share of profits, you can set an advance certain things that happen automatically. Like if you are an artist and your work is resold and then resold again and resold again, well if you're operating
A traditional art world. You get paid once that's the end of the story instead of that. Now people are making the Lion's Share of many of them of their income from these secondary sales and it's all done automatically. They don't have to trust some agent or broker or a rep or a curator to pay them. They don't have to audit accounting because it's all on the blockchain. So I just wanted to give that example and wonder if either.
Either of you would like to elaborate on any aspect of that, correct? Any aspect of that or give an example of other things that you're seeing that are exciting to you.
Yeah, I would just only summarize what you guys have said because I think you've approached it the right way. But basically what you're saying is that digital private Keys enable digital private property. And so we finally have private property in the internet and we don't need people like Spotify or even the studios and the labels to determine who owns what private property and hold it with their database entries. And their lawyers. We can each do it ourselves. We can finally each and and Chris got made fun of on Twitter for this. We can each own a piece of the internet, but it's
Absolutely true. We can create digital scarcity and it is a very powerful thing because then it can map to real world scarcity, because the real world is not completely abundant everything. The real world does have skiers economic resources. And so we can have digital scarcity and digital private property and in a web three context. There are three critical things that both of you have touched on by just want to summarize them for the listener that really make web 3 so unique. So distinct and so revolutionary which is in a normal model we're used to thinking of it.
HERO program as an application, run by a third party, where they control the code, they own the data, and they own the platform, and the economic benefits. And then we get our scraps. We put up tweets. We put a podcast, maybe we get a few shekels from Spotify. Maybe we got a few hearts on Twitter and a few retweets, but it's not a lot. The owners of Spotify are getting far richer than the creators and the podcasters and Spotify and musicians and Spotify, not to pick on Spotify. They're just emblematic of the whole thing and we've had this transition.
It's like web one. Okay, who won that? Microsoft maybe Netscape and and Google was a big winner web wine, and then web to who won that was Apple and Google and maybe Facebook and is web. Three also going to be controlled by big companies know, the beauty of web 3 is for the first time. All the data is actually open. The data is literally living in the blockchain OR in distributed systems, but it's secured. It's actually secured far better than these corporations can secure our data because each secured by our own.
Private key. So each of us has a safety deposit box. Now, in the cloud that we can give selective access to, with our private keys to people who need them, when they need them, and then close them off again. So they're not leaked in the next credit, reporting hack or the next big company hack and then, who owns the platform underneath. As Chris said, it's a contributors on the platform instead of Corporations on the platform and all the people who are pro Co-op and who are pro collectivism should be embracing this because now we can own the platforms that we are actually building.
With our Collective creative efforts, and finally developers, love this because the code is now open instead of being closed. So it's this insane concept. A revolutionary concept, would we flipped applications from being closed code corporations on the platform and users are the data to open code contributors on the platform and users own their data. And so now these things become completely composable and I think one of the reasons why the web three Revolution is going to be so nonlinear and so unexpected.
So fast is because with open code means these applications, plug into each other, like Lego blocks, you go buy a Lego for your kids. Well, it connects to every Lego piece that your kid already owns it. Connects to all the other Lego pieces of the kids down the block, and they can build anything they want out of it. And that's how code on web three works. That's how data on web three works. And that's how even ownership on web three Works, where I can own a little piece of every platform that I contribute to and this is absolutely a revolution, the Vault. Could you define a word which comes up a lot in web?
Decomposable and what? That means how people use it. The beauty is, this is all open source, so it's not even apis anymore. I don't have to access through the very limited apis that are Twitter might expose and then take away later on, as they famously done. I can literally connect to the code at any point that I want to and then an open source. You only solve each problem once. So, if somebody has built a good version of how to solve a certain problem. I'm just going to reuse that and reuse it again. Maybe I'll Fork it. Maybe I'll improve it a little bit. Maybe I'll Port it to a slightly different system, but essentially at the
The level each problem only has to be solved once. So composable means that it's like Legos or like digital Legos where I can just copy the Lego and then build on top of it. So the effect to a competitor is like a Voltron type thing where all of a sudden all the apps and web, three can sort of team up to create any app needed. Example, is there was an innovation in defy called automatic market makers which is instead of having to have an exchange where you have paid market makers and firms and the other side ensuring liquidity in any Market, you know, you go in the stock market.
You buy a stock. There's someone else on the other side who is paid to provide liquidity to sell you, the stock at the exact moment that you want to buy the stock. But in web three, we created this Innovation with defy actually called automated market makers. We can just do it through code. Now, once you've done that in code and most famous commentators you wanna swap which is of course, an increase in investment. So congratulations Chris, but once it's done, then anybody else can copy it, then it can just be plugged in dropped into any new application. So if you look at, for example, games that are going to come out that our web three base.
They're going to have entire market economies in them. They will have custody solutions. They will have a Nifty is built inside of them. They will be completely composable in that any piece from any other app can plug into any other app permission lessly. And so you're building an edifice. It's almost like building a civilization, or a city of interconnected apps, instead of these silos in which the data is not portable. The code is important, bill users aren't portable. So that's probably way longer a definition that you wanted and Chris can give you a crisper one. I'm sure
I think there's great.
I think I like to say that composability is to software as compounding interest is to finance, right? It's sort of this magical thing. Where if you get it going, it has a sort of exponential hockey stick. I think related to what we've all said. I think one thing people who aren't in the tech business May underestimate is how dominant open source software is open source. Software went from a curiosity in the 90s, as I happen to be watching a thing of that, Microsoft in like 1999. The antitrust case, the word Linux doesn't come up. It's all Java. Of course. What actually happened is Linux is the thing that one
99.9% of the code in the world is open source software that runs. So every server you talk to on data center. That's almost all Linux. Your Android phone is Lennox. Most of the software on your iPhone is open source. How did open source win? Its composability is when the Vall said, you only have to solve these problem. Once once you solve a problem, just go on get Hub and Fork, it and reuse the code. What web 3 is doing is taking that level of Rapid Innovation and applying it to web services. In addition to just software. The one thing software couldn't do, it couldn't run itself. It.
Wide on a company to run it. So a lot of the tech industry today is take open source software, add a little bit of extra proprietary software on top and then instantiate it running and then charge for it software as a service and that's great and they provide value and they should make money from that. But the kind of key thing driving underneath is this composability of Open Source software. And now we're going to extend that to this new area.
Yeah, composability even goes beyond software even though that's how it's commonly used. It even goes into media. So for example, today, if I want to build something on top,
The Star Wars platform. I got to go cut a deal with Disney, but in the open-source composable nft World artists are basically giving away the concepts. Yes. You can always right click and save an image or the code and then modify it, but you can build on top of it. So people will be building games that we build in cultural artifacts, new memes, new music on top of n FTS and more value, accrues to the underlying and of T because not becoming more popular. At the end of the day, the value of a piece of art or media is directly proportional to how
How the community around it and who's using it, and who's promoting it and who's working with it? So it kind of blows away this idea of copyright and intellectual property. And instead, it creates the most powerful memes in the world, means the broad sense of music and movies. And books included means, not just a little internet memes that we are familiar with and media itself, becomes composable. And the greatest artists are going to have the greatest distribution. It's, why not to pick on our friend. But you know, one reason why I think Joe Rogan others, Make Mistakes by going to Spotify, is that the
Of a mean, the power of an idea is determined by how many computers is running on power program, is how much computation power has been a power and ideas. How many brains is it running in? So if you have good ideas, you want to spread them as far and wide as possible. It's while never charge for a piece of content, and no one in their right mind, who has good ideas. Should you don't want to restrict The Avenues you want people to recompose your ideas Akira? The Dawn takes stuff that I say and remixes into music and there's smart nonsense out there making videos and cool animations out of inject butcher. Does.
Zai. This is all free or Eric Jorgensen. Does the almanac. I don't do any of this. All composability around media. Now, I don't have an underlying monetization mechanism. But if I wanted to, I could issue. And if T's against the original content and they're collectors and people who will pay for that and my content is just becoming more and more famous. So that's an example of composability, an action that extends Beyond just software, composability is a very, very powerful concept. And if you want to, for example, I know a lot of your listeners, create a lot of content there, content, creators, and innovators, and creators themselves. And if you want
Content to get as much out there as possible. Don't hold anything back. If you have good ideas, you want to spread them as widely as possible. And you wish you should be so lucky that other people come and compose them with their own content and create new memes, and new ideas.
Just a quick thanks to one of our sponsors and we'll be right back to the show. This episode is brought to you by. You can ucan what you eat and how you live exercise sleep stress. All play an important role in how your body handles glucose, its main form of energy. You might think of blood sugar, that is glucose when glucose levels are steady and you avoid spikes, you're improving your metabolic Fitness and important way to take control of your metabolic. Fitness is to eat and fuel with foods that help regulate blood sugar to help enhance my own.
Health. I was introduced to you can by dr. Peter. Tia who said there is no carb in the world like it you can't patented ingredient. Super starch has the remarkable ability to provide a steady release of energy without spiking blood sugar levels. I use you cans Energy powders and low-calorie bars to maintain Focus throughout long days for exercise, better performance when training and to avoid fatigue without making metabolic compromises. When I need a Scooby Snack, when I need a little pick-me-up, I reach for you. Can, you can't has a variety?
Variety of different products with super starch to help you balance your blood sugar from Energy powders and bars to Renault Le and almond butter. There's a whole Suite check out my favorites at. You can dot KO / Tim. That's ucan dotco, / Tim and save 30% on your first order. That's ucan dotco, Tim.
I'd love to add just a couple things here, just to give some sort of spice and specifics to some examples as you just did. And to further explain why this stuff has kept me up late at night, by the first show, is just going to become a crypto podcast going to hold him down. No, it will not. It will not. I promise folks, even though I'm getting pulled into the deep water and getting spun into the Vortex. I have, I'm able to tread water and I will, I will not pull everyone in with me, but
This stuff is important. I think it's very important to explore and it's excited. Me because I have seen how much
Good creators, good authors, good musicians have struggled because they are not good at marketing. But they have DieHard, fans may be a small group of DieHard fans, but they have some number of DieHard fans and many of the listeners of the podcast will recognize the title of an essay or blog post called 1,000 true fans by Kevin Kelly. I know that Chris you've also written about 1,000 true fans. You can find it at cake a.org. I recommend it consistently.
All the time and what web 3 allows you to do is align your interest with Collective interest with other true fans self-interest by allowing them to own digital property that you create. And what is excited? Me is I'm seeing a lot of experimentation. So we were talking about some of the advantages of Chris. You were talking about some of the advantages of what 3 what are the advantages of web 3 is?
Also, it appears and please, correct me. If I get in this wrong guys, is that it is very easy relatively speaking compared to say, web to era for many companies or projects to reach escape velocity. So if they're raising money, for instance, they might raise once or twice small amounts of capital and then they have a token and they're able to sort of control their Destiny through a collective, who act as stakeholders. And in addition to that, if we
An example like board a be out club. People can take a look. You're seeing because of the composability right? This Lego block aspect and low barriers to entry with respect to cost that people are able to experiment widely and in the case of board 8 Yacht Club and thanks to punk 6529 for sharing this particular example, with me because I wasn't aware in addition to selling say,
A the, the jpeg associated with this nft, this property title that gives you this digital asset commercial rights were also provided to at least, some purchasers of these ornate Yacht Club. So then you have people who are going out with their specific board ape and creating coffee companies or creating craft brew companies. I've never seen anything like that before. And certainly if you're a young young tech-savvy into
Property lawyer your services are going to be in need so good to get up to speed. But the fact that all of these experiments can be run, concurrently at such low cost, says to me that the ecosystem is going to produce through natural selection and evolution and recombination of different types. Lots of things that will be very, very exciting. And, you know, it doesn't even matter if 98% 99% end up being garbage because
because the winners kind of like finding Amazon or Google in 99 or 2000 will end up being so impactful and maybe that's just me. Drinking the Kool-Aid. I don't know, but that's how it feels
to me.
Yeah, I mean the right board eggs. I think that the recent drop the gibbet, the mutant Apes. So they did this thing where you got like a potion and you could kind of your mutant counterpart. Think I made a hundred million dollars. I don't, as far as I know, they haven't raised venture capital and they made him going on that one drop. So certainly, yes. It's a different economic model. They take it farther where you get the commercial rights, the next stage, which people are playing around with now is to actually have the community create narratives. And so, for example, Wattpad, you know, these kind of fanfic Community imagines, if the next Harry Potter, the future Harry Potter is owned by the nft.
There's and they get to decide, they get to write all sorts of interesting fiction and they get to vote and decide what becomes Canon and what is not. Imagine the passion people have for Star Wars and all the other kinds of communities. And now imagine they own a piece of it, and they control a piece of it. It's about to get really, really interesting. I don't think there's been this much creative kind of energy since the 90s. I don't think mobile compares to
it. Now we get into the meat of it which and FTS non fungible tokens. And this is something that Chris has been on from day one of all the investors that I know in the entire space. Chris has been the first
one who got it, two entities in a big way and it stayed consistent on, in fact, February of this year. Remember meeting with him and all he want to talk about senft. He's not even understand at the time and I was like, yeah, whatever. Chris. That sounds cool. Nice till I and I'm like, what did you say again? So I sort of missed and if T's but and if t's for me answer, the whole bunch of questions that I don't have the answer to before. One question, was a bunch of people showed up and did what Bitcoin early and they get to get rich in this giant wealth, transfer, as we move from Fiat currencies into sort of scarce math, back currencies.
As Chris also once called them. And so does that just mean at the people who showed up in 2009 to 2015 or 16 get rich and everybody else kind of is a pauper know. There's a funny quote out there, floating around, or somebody said every generation, it invents its own new Ponzi scheme and rejects the previous generations Ponzi scheme, and now we're moving in much faster times. So the previous generations Ponzi scheme might have been Bitcoin or aetherium if you think about what Bitcoin is Bitcoin shows up and says, we reject Fiat, we reject printed money, we reject
Kings and rulers and tyrants. We want the people's currency great. We got that. And then someone says, wait, you can create your own currency while I want to create my own currency. So you get all these altcoins and everybody steps up and says, well, I got my own currency. So ironically there now probably more currencies out there than their tokens. There are more, there's more currency than Bitcoin. And so people are fighting to say, well, instead of your Ledger of record. Let's use my ledger of record and nft is our people say come up and say actually maybe digital value digital assets are like fashion, their culture, their always emerging, they're all
Composing that all this combining it all was going out of style and just like in the real world, anything that's in fashion can hold value. It could be real estate, which the real use case. It could be oil. It could be gold. It could be every single house. It could be every single business. It could be a pair of shoes. It could be a laptop for a brief period of time. The same way every digital asset that has a community and a culture around, the can hold value for some period of time. Now, of course, it will be very non linearly distributed. The vast majority of objects will Trend toward zero value.
It may be flashes in the pan. But at least this gives a chance for everybody who's coming late to the crypto Revolution late in quotes because we're still so early gets a chance to say. Okay, we can Define any object, as having value that we believe has value. And these cultural memes that we're creating around, nft is like boarded Yacht Club. They don't have to like her ass you into houghtaling them houghtaling is this meme in the Bitcoin Community, right? You got to hold your Bitcoins a misspelling of hold called hottel but in the nft world you hold for sentimental value if
Punk, 6529, someone comes up to buy your punk. You're not going to sell it. In fact, I think just famously recently, one of the punks who's using it as Twitter ID because it's the new blue checkmark on Twitter, but it's actually validated and verified through wallet ownership. He got offered something like, 10 million dollars for his crypto Punk. And it was just kind of a random generic little 8-bit pixel crypto Punk, but he refused to sell because that was his identity. And he basically had to say even though I may not be worth that much money. I'm not for sale and that actually made it a cultural meme.
I'm an icon and now his crypto Punk's probably worth even more. So and if T is our this absolutely fascinating Rabbit Hole. I think Chris was probably the first investor to identify them at scale going all the way back to his Dapper Labs investment, these people who built crypto kitties and evolving from there. So I would just love to hear Chris go into n FTS, like the evolution of them and kind of where they're headed.
Yeah, obviously, I'm very excited entities. I think that there are like, I think there are very, very broad what I would call primitive primitive. Just so you understand, like the way we kind of use it.
Scalise keiki building Foundation or building blocks of the internet. And I think that most of the issues that developer some of the things I talked about earlier about how you can only view or Limited in what you can build using open methods and a lot of the problems Frank that they come from advertising. The fact that we didn't have native payments and tokens and all these things. We now have what Google wants to. They want to have a digital closed loop and a digital closed loop prior to crypto. You can really only do that with advertising. And so we built this giant infrastructure. The internet now is power,
Goodbye, banner ads and search ads, and things like this and that has been great. For a few companies is generally been really, really bad for Creative people. There were someone had a great tweet yesterday the web to companies, convince you to give away your Creations in exchange for little hearts. But yeah, tell me about how nft to the real scam or something. It was some yeah. Formulation like that. Like it's kind of amazing that they've convinced all these people. Oh, you know, Instagram, what do they pay out 0, Facebook 0, Twitter 0, YouTube, 50% Apple just
Having the phone they take 30%, dude. How many businesses can't survive when you take 30%? It's kind of crazy that we put up with this. So now you as you said, put aside nft, just look at like sub stack. So there's no crypto and substitute. So what's going on with substep? It's a platform and like a sort of a newsletter platform. You can go to as a writer and have people. Subscribe to it. Relatively simple really, elegant idea, but the interesting thing you see now is you see writers, who previously might make, I don't know what $100,000, or something, getting a million dollars a year and you see a lot of people saying, hey, that shouldn't happen.
Happen. We were told, the internet is bad for Creative people. The internet is not bad for Creative people. Web to is bad for Creative people Spotify. Just a few other day Spotify, advertises a stat. They have eight million artist 14,000 of the make 50,000 a year, the rest make less than that. Those are businesses. You have costs. You basically is very hard to live below that. So 14,000 kind of make a living out of eight million. Is that working? I'm not blaming Spotify, by the way. A lot of that money goes to labels and I think Spotify is a good company. It's the model. It's the logic of that.
All. So then you have these cases of like this musician, Blau, who I think he's like, a medium-sized artist on Spotify. He didn't entity drop. He made eleven million dollars, even if you assume that 11 million dollars is a bubble or something. People say it's a bubble if he made, $100,000, it's transformative. It's the same thing that's going on with sub stack. And so what you have is now you have this really powerful new way for Creative people who were previously getting banner ads at best very poor. Monetization are now able to go and
And and create all sorts of interesting things. And this is, we're seeing the early versions of it. You could create a JPEG, you can create digital album, are sort of an obvious thing that musicians are doing that, but it can be much more than that. It's just an object. Just like in the real world. We have all sorts of different classes of objects. We have art. We have utilities, we have entities or just as broad a concert. And so I think you're going to see all sorts of interesting experimentation where maybe you a musician you get it you get something that's beautiful. But also you can go using different ways. You can take it from a game or bring it into another experience or you.
It to go to a real life show as a ticket. And it's also it's a means of patronage. I think one of the things I experienced, I really encourage people to participate in these communities. Understand them. I buy a Nifty Zone Foundation, which is one of our investments, which is sort of a high end art nft platform, curated platform. For example, there's a science fiction writer who I sorry, graphic designer who I bought a bunch of identities and he deems me and now we're friends and it's like I never understood people that gave to bought physical offline art. I've never had any interest in it now. I kind of
Get it though, because I'm like, hey, this guy's cool. I want to be part of his being his Network. I do Venture, Capital hang around the tech people all day. It's fun for me to like be able to talk to an artist and the same time. I can support him in this sort of non-transactional way and be a patron and see if some people are buying stuff on these websites to make money. Some are doing it to patronize summer doing it too. I think down the road we're gonna see more and more can't ility these cases. The gaming is really interesting right now, this, I think the world hasn't seen this yet, but I will tell you, we have a games group at our firm that doesn't do crypto and it's
Close to a hundred percent of the things they're seeing now. These are people out of their Founders that come out of like, Riot and blizzard and things like this. I think it's close to a hundred Fender the of the of the meetings. They have now involved in ft's, the games. People get this there at The Cutting Edge, especially the kind of the younger ones, the next cohort and there is going to be so much interesting stuff. And these things is going to be real utility. So you can take this piece of art, you can take the sword and you can mix and match and move it around and they all kind of immediately get composability and why it's important. And we're just going to see like wave after wave of very creative things. I think I've been in it.
T as it says general a concept as the webpage, think about the website. When it first comes out with like, oh, it's a website and they try to kind of map it to the offline world. It's like a brochure but then, as we saw over this sort of 30-year period, all of these clever people come and the Innovative weapons on a website social network. It's a stool. It's a distance to that and if these are going to be just as broad, it's a core New Concept. The idea of owning something on the Internet and other way. I like to think about it is like imagine if in the real world we couldn't do anything and every time you go is this kind of
Wacky analogy, but like every time you go to a hotel or a restaurant that I got, you gotta change your clothes and buy a new outfit. This is how the internet works today and then you leave like a gotta get that stuff back, right? And then one day somebody comes along and they say you can take it with you. Yep, imagine the amount of innovation that would kick off. That's kind of what's been going on. On the internet. We had this sort of renting fiefdom design and we've just kind of broken it open. And so people say, oh, it's a bubble. This Nat I do. I think it's the beginning of this incredible, 20-year kind of creative run, I
believe.
It looked crispy you to talk a little bit more about the gaming because I think end of t's in the gaming context are easily understood by a lot of folks, even if they don't game. But a lot of the applications makes sense to me. So maybe you could talk about anything you want, right means so rare is kind of interesting but I think even more interesting, not actually more interesting, but there's been talk and I think some of this might be kind of bright-eyed bushy-tailed idealism, but the possibility of say, Universal basic income, when we look at
At let's say something like ygg. Or could you just speak a little bit to that and what that means? Because it's so interesting to me and interesting is is a lazy adjective. It's eye-opening and exciting.
What's the model today in video games? Video games are interesting because they're been new ways of Technology, but the old way of still exists. So the old way way to buy video game with something like mad and you pay 60 bucks or whatever costs these days that's still around. That business is still around. There's companies.
Like EA that do that, but then you had layered on top of it all these kind of new more modern but I think of more modern companies and like probably the best ones are things like Fortnight and supercell Clash Royale and League of Legends. These are basically the model they use is the game is completely free. You can play it completely forever and the only thing you buy our cosmetic Goods. So you can't buy Goods that make you win because people think that would kind of undermine the Integrity of the game. So it's all, you know, just to look cool status flex and that's a 40 billion.
Dollar a year industry, just the virtual Goods along. And this, by the way, same thing is going on. Entities. It was laughed at 10 years ago, 15 years ago. It was a big joke, of course, it wasn't. And it's very important. But, you know, those virtual goods are kind of locked into the game. Also, when you buy the virtual Goods, all the money is going to the company. So what games, like axi Infinity, where investors, in some of these kind of new crypto games is, instead of it being you buy the goods from the company. It's much more peer-to-peer. It's much more of the way eBay and Craigslist that you're buying it from another.
Person who themselves were able to basically improve the nft by playing the game. And so in the case of Acts of you have something on the order of a hundred thousand people, many of whom are in the Philippines who make a living playing that game. So they go and they do a bunch of different stuff and people call it grinding. Like you kind of play a bunch of stuff and then they make improve the nft S and then other people who maybe have more money than time, buy them from them. And the company only takes think it's like a 3%, take greater something as opposed to much more like a Marketplace kind of fee as opposed to taking all
I the kind of protocol will take lower fees. But in exchange you've got this like really kind of cool vibrant economy and basically like actually really kind of broke out. I think it's one of their four games that have a hundred thousand which is the max Discord users and it's one of the four. So it's one of them of this because like to million-ish active users, like very, very popular game by the way, not in any of the app stores because Apple and Google are trying to fight web three bands and that yet, they still had that kind of user base. And I think actually, you know, actually is probably the thing that really inspired.
A lot of people. Why did you mention two separate company, which actually also investors in which is a sealed games. It's very cool. It's almost like a it's going called out but it's essentially it's a online software. Kind of organization where people can essentially get loaned axi so they can go play it and not have to pay The Upfront cost and then earn money. So it's like this kind of Guild model that you have in games where people kind of get together and join on the same team, but suddenly you can have sort of real money involvement.
Make real livings. So I think that the games industry, a lot of sort of the next generation of talent, saw this, and we're excited.
Thank you, Chris. I'd love to add. Also just a few other, not going to give it a ton of detail. Let people look these folks up, but from the Creator standpoint, just bridging back to that if we think of nft is I guess I'm a very, very basic level, as property title of some type. There's actually a lot more that you can sort of embedded.
Bed into a 10 ft. So, for instance, Dmitry charniak, I'd encourage people to check out Dimitri, incredible digital artist. Incredible coder really. So his art is code and famous for a project and series of pieces known as ringers. But also if you check out the Eternal pump as an example, and I believe I'm getting this right. If not, I'm sure the internet will correct me and
Make amends in the show notes, but what an artist can do is provide first access to Future projects, through certain sets of n FTS. And they can also create in real life interactions or requirements for people to go to say a certain location to meant. IE purchase say given nft. So there are all these permutations providing future privileged access or requiring.
Real world actions say to be eligible to purchase or to receive a given n ft. The sort of Cambrian, explosion of experimentation is beyond anything I've ever seen and I've been in Tech in one way or another. It is since 2007. So, not that long, I guess in the set of long-term view of things, but I've never seen anything like it. The Vol. Do you have anything you'd like to add? It's a really interesting subtle point that both.
Have you been touching upon that? May be worth making explicit which is that I think a lot of people when they first see nft is their reaction as well. I can just right click and save that jpeg. Why does this thing have value and you know, hopefully people who look into entities move past that pretty quickly but you both given examples of how these things have value that you can't just right click and save as the simplest one is just yes, I can also photocopy any piece of art doesn't mean that I have the actual art. They're still Province to still a linkage. There.
Till authenticity to the art itself and the simplest way to see that. For example, the board of Yacht Club. Let's say we're building a metaverse. We're building like a 3D virtual space and hopefully it's not sock. Hopefully, it's some crypto emergent thing on block genes that we're all using. That's open. Well, if I walk into two rooms, one room has the authentic boarded Yacht Club and Scott the actual nice photos of the apes or the crypto Punk's or whatever hanging on the walls and my software tells me that and then I walk into a different room which has all fakes and copies in my software immediately tells me now. You're in the fake one.
What do you think the cool kids are going to hang up, where the risk is going to hang out where the party is going to take place. So all of a sudden having nft is in this authentication, give spaces actual value. And so it allows you to create a metaverse, which then has a distinction between space and space be, but that's just the simplest level. But you've also given examples of is in a game and nft is a smart contract. It's a thing that is usable within the game and a copy of the nft is not, if I have a special piece of loot or a special item that I picked up in one.
A game and then the developer or the same Block Chain or the same group of users went to a second game and I get to Port my n ft. /. Well that authentic and of T is going to have some value. Where's a right? Click save jpeg version is not going to have any value. And then finally, Tim you gave the example of an mft can also be a social contract between the creator of the nft and the fans of the nft. So that you get acts as a ticket for access to Future rights. And a fake one is not going to get you that or gives you access to a future Pieces by the artist first and so on and so forth.
And I love Chris example of it being a web page because the web pages programmable, a web page can do anything. You can is touring completely can run any piece of code. And so we have these essentially touring complete programmable objects, that are now suddenly scarce that you can own and that you can transfer and you can link to the real world and you can link them to the digital world through smart contracts. You can link them to the real world through social contracts. By the way, Bitcoin is only link to the real world through social contracts and it's gonna be a controversial thing to say, but essentially it's a social contract.
In the community of bitcoiners to accept Bitcoin to accept that as a canonical ledger. So the same way among the board ape Community or among the crypto Punk Community, or whatever, the toads are the frogs or whoever they are whichever Community. There is a social contract to accept these as the canonical avatars. So, essentially, what blockchains do is they allow open composability and programmability between all these objects in the digital domain through. And there was a smart contracts that regulate those and then social contracts that regulated in the outside world, and if
Is no different if Bitcoin can have value, theorem can have value. Then in theory and ft can have value as long as a smart contracts, the social contracts in the community, enforcing it, have value. Of course, that means most of them aren't, but some of them will want to also come back to so rare for a second and I'm an investor in a few funds that have a stake in so rare. That's not why I bring it up. I bring it up because I listened to a podcast guy named Andrew steinwald on Zima red, interviewing blanket. His last name. Its first name is
AJ who was I believe a data scientist at Amazon who then went on to become a so rare player. So let me explain for a second. I'm not going to do it justice, but if you can imagine collecting and this is again not going to do justice and either be sure correct me if I get this wrong but digital trading cards that represent specific players that you can assemble into teams that are then benchmarked against Real World, Sports Performance to determine how well your team does.
With said Team, you can win money in leagues of different types. Now people are you okay, fine. Sports betting, interesting but where it starts to get super, super interesting is because it's correlated to real-world play with these composite teams. You then have right. Now, for instance funds being created where they're hiring effectively digital Sports managers, they're buying and loaning out these players. These
Then ftes and then doubling down on the people who perform best as Sports managers and one of their dream / goals is at some point to take all of this Sports analytics intelligence and data science and to buy an actual sports team and to apply it. There kind of like sabermetrics and the Oakland A's and Billy Beane back in the day, but in an environment where they can simulate and test and split test and multivariate test over.
Over and over and over again. I'll give one other example of things to come and maybe it's already happening. You guys, probably speak to this. But let's say you buy a piece of artwork that is in the form of a digital nft. And I suppose that's redundant term. But in the form of an nf2, right now, if you need a loan, you might secure that loan with collateral such as your home. And if it's not happening already in the near future, people will be able to
Do that with collateral of high value that is secured and verified on the blockchain. Right? You're not gonna have to go to South of bees and get all the provenance in the letters and the this and the that which is going to take forever. You'll be able to instantly verify it and then secure loans against something like a. High-value, n of T, could be a ringer could be aphid. Enza could be a crypto Punk, could be anything. I mean, they're going to be many different options and I think those are things that just are not immediately apparent. They certainly weren't immediately apparent to me.
You won. Kevin Rose. Was the first person to show me crypto punks and I was just flabbergasted. But when you start to, I mean, they look, they're cool. I think they're amazing on a bunch of levels, but it's deceptively simple on the surface and the implications are unbelievably nuanced. So I just wanted to give a few of those examples. Yeah, it just want to drop one quote in here, which is floats around on the Internet is called Gauls law and it's a rule of thumb for systems design and it basically says that a complex system design from
Scratch and never works and cannot be patched to make it work. In a complex system. That works is invariably found to have evolved from a simple system that worked. So in that sense nft is are primitive and people are going to recombine and assemble and compose. These Primitives to create incredibly complex systems and everyone who competes with ft's with a centralized solution as happens inside every game. Every social network is trying to design a complex system from the top down as kind of a miracle that even work. So this is all part of the decentralization user ownership, revolution of web.
Be we own the nft S. They're simple. They're portable. They're programmable their composable and people going to recombine them to create these complex systems that work that are going to be impossible for larger companies to compete with. And we can already see that Apple and Google don't like n ftes. And so you're not going to see a lot of web three applications on the phones anytime soon. And even I think recently it was valve which runs steam the game distribution service so that they're not going to have any of t's on there or nft based games on there and they're going to miss out. They're going to pass out in the largest boom. In a
that gaming, since the beginning of Internet gaming, Chris. I'd love to ask you a question. Thank you, Nepal to come back to word that you used and we've spoken about this separately on the phone because I want to know how the hell to pronounce this word. Skeuomorphic. Yeah. All right. So skeuomorphic. Maybe it gives maybe some historical examples of like skeuomorphic design and what that means and you've written before the one of the most common mistakes people make when evaluating new technologies is to focus too much on doing old things better. So
Imagine we are seeing and we'll see. A lot of people are trying to copy and paste web one or two for web three. So I'd love for you to just spell and then give some examples of skeuomorphic design and then after that, to give some examples, if you can of sort of web, three native / emergent applications or instances to just illustrate what might be possible.
Yes. Asked in an interview spelling on the
This on this fraud case ske you became orphans you Norfolk Norfolk. Yeah, so it was I think it was a Steve Jobs word that he's just word and he used it to refer to visual design. So if you remember the original iPhone had like a book Gap and it had woodgrain bookshelves. And so it was this concept and design of taking something from the offline world and using that design in the online world, to make it look more familiar for whatever reason. Me and my colleagues started using this word all the time internally like three or four years ago. I'm not sure if we invent
Got it for me, that meant it, but, like, sort of poured it over from the design world. I don't really remember, but we always use it to mean, you go back and look at early films and early films, looked like plays, they put people on and they would walk around and they staged it like plays. And then over time kind of film developed its own kind of new grammar. And so you had a close-up and you had an establishing shot, you go. Look at the old movies. They would just show Grand Central Station for like 10 minutes and they learned over time. You could just show it for like a second and the human brain would figure it out. This happens with every
A new technology, the first cars they mimicking the horses. And and so the early web for example, right? It was like brochures and magazines. So the opposite, we call a sort of native. So you can do kind of web, native stuff. Like, it can be a two-way medium. It can its code, you can do all sorts of other kinds of cool stuff. So, I think it wasn't until kind of the mid-2000s that people really started. Exploring, the quote native web experience, and I believe, it's, the best investment approach was to bet on the native stuff. So I remember when YouTube was out, there were sort of two classes of video apps. There was the YouTube ones and then there was this other
On which are basically saying hey, we're going to take CBS and put it on the internet and oppress off work on a Model people. Don't remember there. Weren't YouTube stars back then so it was all this just to kind of silly viral videos or things that infringed on copyright, probably. Right? So they got bought by Google. That was a really controversial because it was the widespread mean kind of like crypto today. It's all this Shady dark and legal stuff. But what they understood the founders and Google to their credit is that this was the true native video on the internet and that once you created this experience, this
When you can embed the videos and it worked seamlessly, and there weren't permission pay walls all around it. That this huge Creator Community would come up at around it and you have this whole new and now today dude, perfect guys messing around the basketball stuff or whatever. And didn't exist back then has more subscribers than all the sports leagues combined on YouTube. It's not only with a native products, the winners, but the native creators were the winners. So this is a concept, we use a lot. Internally people who know me will tell you, I always put a negative on something. It's good to see morphic people want to take blockchain and you're like supply chain.
Management offline, ticketed, these are so sorry. I'm glad they're entrepreneurs in every category and I respect all entrepreneurs, but those are ski morphic ideas. I think they may work, but they're not going to be the thing. People talk about 10 years from now. It's going to be this new stuff the nft. So let me give you an example of really cool project. There's a thing called The Loop and we've heard of lose this game.
Yeah. Loot. By the former creator of, or I guess the creator of Vine.
Yeah. Yeah, Don Hoffman who's a genius developer and product designer created this thing Loop and what loot is
Is basically it's just these little cards that have an inventory like kind of a dungeon dragon Style game. So it'll say magic cloak just literally those words on a page and those themselves are in a tease. But what's so cool about it is that it inspired this whole community of people to build around it. It's almost like if you know Ernest Hemingway instead of writing the book wrote just the first page of the book and then let the community kind of add the next page and so that's what bomb is he wrote? This is the beginning of it. Now let your imaginations go wild. And by the way, there won't be one canonical game. They'll be a hundred different things.
Is it all kind of used during the loop verse? It says whole tapestry of creative people adding different bricks into this new structure and that's just a very profound new way to think about building a game and something you couldn't have done without as Nepal called. It's very simple, new building blocks and it's exactly the Simplicity that makes them so powerful and that the way you can recombine them and that's just an early experiment. There will be many more cool experiments like that. But what's cool about that experiment. What do they say like The Velvet Underground or something? Had only a thousand fans, but they all started.
It's kind of thing. Luke doesn't have like, millions of users. But the people that like it are the best product designers in the world. I think it's going to be one of those moments where in the same way the volume member this delicious and Flickr. It was a period of like 2,000 325 and kind of all the core web to primitive stuff. Happened and people are like, oh my God like tagging. I mean, it sounds sounds hilarious. Today tagging was like a breakthrough was a conceptual breakthrough because before that it was like, oh you have to have categories. Everything has to be mutually, exclusive bucket is every website had this thing on the left. Everything had to be in a bucket and
How you came to know, doesn't have it took, you have a computer with a lot of with a lot of powerful capabilities. You can just make a tag and then default public. That was a revolutionary console there. So there was a period. I think it's, we're in that kind of period. Now in this world where there's like, this really, really kind of creative core. That's developing these cool ideas. And those will be provide kind of the road map for the next wave. Yeah, the flickers will lead to the
Pinterest. Exactly. Yeah, your skeuomorphic idea. It runs even a little deeper in the skin. Morphism duck can work to. Like if you look at basic computers, we use a desktop Computing Paradigm there.
There's our desktop. There's files, there's folders that skeuomorphism from the physical world and it can help people to Reason by analogy into how to use something. But at the same time I actually share Chris's skepticism of skeuomorphism in this space. In fact, I made a big mistake, which is early on in the history of blockchains. I thought we were going to do is we're going to replace Uber and Facebook and Twitter with web three enabled Primitives and networks that come out of those. Now. I don't necessarily think so. I think we're just going to create brand new things that we can't yet.
Even predictor identify, but we're going to end up shifting our attention to those things. So Twitter, and Facebook will still be fine will continue to exist, but our attention will be on these new applications that are uniquely enabled by Primitives. That n of T is in tokens,
think that's right. I think like--look. I mean, people still use Microsoft Office. It's still around the internet, didn't get rid of it. I think these are just layers and layers and you I think same thing. I agree. The value is created in the cool stuff will be in the native kind of cutting-edge
stuff on the frontier. Yes. Let me make a couple recommendation for folks.
Those who are listening Tara book and a movie recommendation and you guys might make fun of me for this. But the first is go read snow crash and appreciate how prescient that book was and it's an enjoyable read, Neal Stephenson Incredible Book, but go check that out and then perhaps at the same time, or even beforehand, watch or re-watch, Ready Player one, and certainly there are aspects of it that I don't think are right around the corner.
But I think a lot is coming sooner than people expect. That is what I've at least Come Away with conditionally at this point. Having immersed, myself for the last few months. Very, very deep down the rabbit hole. And with that, though. I want to play a proxy for listeners were saying, okay. Well, we're hearing about all of the amazing things. What are some of the
Weaknesses or challenges associated with with three and I'll start with one. So I remember
Purchasing some of these entities and then having someone recommend that, I share that online and I go wait a second. If I share it online, then people are effectively looking into my bank account full of assets that are worth certain amounts and all of that is preserved in the blockchain and they're like, that's right your own bank, and I'm like, I'm not sure if I hundred percent want to be my own bank in the sense that people use external Banks.
For a lot of good reasons, right? They don't want to have gold bars and money stuck into a mattress in their own house and have to deal with home defense and so on. I do think it appears. There are some sort of Technical Solutions or Services coming that could address some of these things. I'm just wondering. I've been to your house Tim. I think your home defense is pretty good. Yep. I owned my own defenses. Fine. That's true. I think but I'm I'm an edge case. Right? So not everyone has like multiple Firearms placed in multiple locations. That's a longer conversation. It's
Not because I'm a crazy person. Although some people would disagree. But the question is, like, what are some of the challenges? Because there have been points where I'm like, okay, would I prefer Amazon to see my entire purchase history or what? I prefer the entire internet to possibly see my entire purchase history. I don't know. I at this point in time, for me, personally, probably Amazon and will the solutions that come to address some of those concerns once we get to millions of wallets, instead of say 500,000 wallets engaging with certain types of entities will those Services because
be antithetical to the ethos and promise of web three. So I just want to throw that out there and hear whatever comes to mind for you guys for me. Security is a big issue. I've been outspoken about crypto for quite a while. So I had to very carefully move all of my investments into custodians and funds so that I don't hold anything directly, but this is only possible because you can be your own bank, but the good news is you can be your own bank in very limited circumstances. You can take the majority of it being sticky with custodians and just like there's places. You can store your physical.
It under Garden lock and key. You'll be able to put your nft is at least the valuable ones into nft armories and repositories. There's going to be multi signature, where multiple people have to agree to move something. There will be time delay where it can't be moved for six months or a year. So we can help mitigate all that and the industry is working on all of that too slowly for my comfort, but it's happening. You can also keep your enmity in multiple ways. We mentioned Punk 6529, who is a purely Twitter identity. People don't know who that person is in real life, but they're already.
Be regarded as a good nft collector and curator. You can also create new Wallets on the Fly and the software is getting better and better for that. So you can literally do each purchase out of a different wallet, which may be hard to trace the previous one, because there are enough ways to anonymize it at least from the general public, or if you're using things like zero knowledge, proofs from almost anybody. So these problems will get solved. But they are problems today, which is kind of what makes this space Harry. When the time comes that anyone can mint and hold and move and
T easily. It will be a joyous moment. But also a lot of the so called Alpha in the space will be gone. Yeah, Chris. Do you have anything you'd like to add?
Yeah, I agree with that and I think related closely related security. Of course is usability and just how to make everything easy to use and secure. I think it'll all get worked out, but I agree with Nepal that it's not there yet to me. The biggest challenge in the space is probably the messaging around it. I think there's a lot of misunderstandings around it. I think some of that is sort of self inflicted by us by the community. I
Some of it is just hasn't diffused out into the broader world. So you just have a lot of people who react negatively to crypto web 3 Etc. And I think that could also lead to overzealous regulatory actions to. And so I think that is I think it's very important to do. I think what we're trying to do here and just sort of explain these ideas. I think ultimately what usually convinces people is, they need to kind of decide for themselves. They want to dive into it. I've literally in eight years in the space. I have never
Met somebody who's very well, informed on the space and also deeply skeptical. Never,
if you're deeply skeptical, about the idea of owning digital property that, if you don't understand, you're not only denying capitalism on the internet, your metaverse denier. Because if you look at the metaverse as articulated in Neal, Stephenson's snow crash or and almost anywhere else, there is this concept of there is property in the metaverse and obviously, some people own property in this jurisdiction. When that property, it's not just, you can enter into my room because I can just
Right, click and copy and save your room. There's authenticity around. This is my room. These are my objects in my room and I can shuffle them around. I can control who comes in and out and I can control. What happens when someone tries to quote unquote, sit on my metaverse couch? Are they allowed to do that or not? So all of this programmability comes from ownership and it's a bizarre idea to think that the only people who can own items in the metaverse or big corporations, you're basically saying only zuc. No fences suck. I actually think he does a better job than he has credit for but your business is only
Luck is allowed to own the metaverse, only he can own the entire metaverse. Why can't we each own our own room? Our own space, our own property in the metaverse? So denying and pushing back against entities and cryptos is basically saying we're not going to have a collectively own future. We're going to have a corporate own future and we're going to have a government or future. I can see where the Chinese Communist party wants to ban crypto because it is antithetical to the idea of users owning things, but for a capitalist Society, for Democratic Society, for a collective Society to
And crypto that makes no sense to me for it to bend. And if T's or try to put them into Financial regulations, which essentially Bandit is basically saying no you are this are not allowed to own your own output and deal directly with the fans. You have to be serfs working on spotify's farms are working on YouTubes form. This might be a complete 90-degree turn, but I'm going to ask anyway, and we'll see where it goes going back to one of your many.
Many many posts at Sea dicks and dot-org. This is an oldie 2009.
Yeah. Well, I don't
know, that's not what I'm going to do. What is hill climbing in computer
science? So, hill climbing, it's a classic kind of algorithms. The metaphor is think of a landscape with a
Bunch of pills. And the goal is to get to the highest point, but put this constraint on, let's say it's foggy. You can only see a little bit in front of you or behind you. And so there's a class of algorithms and sort of basically talk about what's the optimal way to climb that Hill. One obvious one is if you're on an incline go up, but the problem there is you might get trapped in what's called a local Maxima, which is you just happen to start on a small hill. The next iteration of that is what's called simulated annealing, which is you add some Randomness in there to to sort of avoid just simply going up.
First Hill. So this post I wrote I think you're talking to this is a popular poster. It's called climbing the wrong Hill and I was making the analogy from these algorithms to a career and the idea was just like in a career you do want to sort of climb the hill you're on but the mistake. I saw a lot of young people making was there at McKinsey or Google or something and they see kind of the next prize is six months away the next promotion, the next bonus, whatever it is and they kind of are on that treadmill and not willing to go. For example, join us. Start up and take us. What appears to be a
It backwards but is in fact, a much bigger Hill and they get caught up in the kind of local maximization thing and end up. If you find a lot of people who are unhappy in their careers, when they're in their 30s and 40s. It's because they Hill climbed wrong. He'll the lesson I take from the computer science is to add some Randomness to some exploration. There's a concept of machine learning is called exploration versus exploitation. You want to always have a balance between, for example, I try to use this when I order food, so I will make sure that sometimes of exploiting exploiting means, I'm going to my favorite restaurant but at
But I'm also trying a new restaurant is the core Concept in machine learning. When you design, these systems is sort of how to optimally kind of come to conclusion. So that's the idea of a little bit. It's just you should have, I think people in their 20s for example should add that Randomness, not literally Randomness but exploration. They should go try a bunch of different things. See what's the right Hill and also be willing to take a step
back. Yeah. You want to keep your schedule open as much as possible as you can follow your own natural, intellectual curiosity. I mean, ironically the best career of 2021 was to be a JPEG collector and I figured this
us out too late, but it's hilarious. How many of my friends have gotten Rich collecting and flipping jpegs and the best. Career of 2020 was probably to be a defy yield farmer. Whatever the heck that means go Google that so it's insane. But the world is moving so fast adapting so quickly the Frontiers and crypto. It's digital. If you have a natural intellectual curiosity about any of these things your moment will come. It may turn out actually with the axi people and the YG people that the best upcoming career, the best current career might have to do it on gaming, just playing a game, a certain way, or certain time. Good news for all the gamers.
Out there. Yeah, what a read two paragraphs from that blog post, which is climbing the wrong. He'll fantastic memory, and I should say, the context is, you're discussing hypothetical job candidate, but the lure of the current Hill is strong. There's a natural human tendency to make the next step in upward one. He ends up falling for a common trap. Highlighted by behavioral economists, people tend to systematically.
You near-term over long-term rewards. This affects seems to be even stronger and more. Ambitious people. Their ambition, seems to make it hard for them. To forego the nearby upward step people. Early in their career should learn from computer. Science Meander. Some in your walk, especially early on randomly, drop yourself into new parts of the train, and when you find the highest hill, don't waste any more time on the current Hill? No matter how much better than Next Step might appear. So, I wanted to read this.
in part because in the last few months,
Paying attention to web 3, which I feel is late. But that's only because my peer group is very weird and an edge case. I feel like it's not even the end of the first inning, not even close. It's like the anthem before the game is even started and I have never seen so many highly intelligent. Ambitious capable people, drop, whatever they are doing in many cases, really attractive things to dedicate all of their time to this.
I've never seen anything approaching it en masse. It's not a trickle that slowly builds to more than a trickle. I mean, it's people, immediately deciding. This is what they want to spend 24/7 on. I don't know. Perhaps, I just don't have a macro perspective over a long enough period of time, but certainly in all of my time in, or around technology. I've just never seen anything like it. And at the very least that means it's
That's worth taking a very close. Look at. Yeah, the big danger here, of course, is the final boss crypto and web. Three. Have not gone mainstream yet. They were in their infancy. I don't know what, it's like 10 million wallets or something out there but Americans or even though, something like that. Yeah, it's small. It's an intensive area. So we have to move to the hundreds of millions and eventually billions and has to go through the same adoption, curve the web to and web one did, and in theory could even go faster. As long as there aren't too many obstacles in the way because tokens naturally have incentive mechanism built in as Chris pointed.
Token companies don't need to do much marketing. The marketing is done by the users. And so, the problem is that where we started was. We actually decentralize the hardest thing. The hardest thing to decentralize is money. And once you have money decentralized, and you can own private property, but essentially decentralizing money threatens, the nation state, because as Central Bank currency Central Bank, digital currency is the exact opposite of a cryptocurrency. That's the complete centralization of money with no intermediate Banks or monetary instruments under the eye of the All-Seeing State and on the other.
Other hand, you have people just carrying their own money around whether as a coin or as a JPEG, or as a smart contract or as an IOU or some kind of a weird program. And unfortunately, we're trying to apply laws that are almost a hundred years old to try and regulate this incredible explosion in Internet Commerce and Market making in digital private property and they're just not going to get it. And we recently have a very aggressive SEC and cftc that are now fighting to extend their domain. And I think we end up in upside down situation.
Where Innovation, the space gets driven overseas underground and out into the internet where it will still succeed. Because The Natural end point of crypto is maximum decentralization and maximum privacy. It's going to just make it happen a lot faster. It's going to make it happen outside of the United States. So the web three revolution could happen outside of the United States. One of the big problems with being a web, three investor, or even user, these days is the kyc, around the wallets, around the purchases, around the sales. The fact that a lot of these coins,
You can participate in their offerings, you have to have offshore entities or more likely be a non US citizen to even get into these. It's becoming very, very restrictive and always seem to be focused on is investor protection and not at all an innovation or creation or creativity. And our Christmas team have been fighting the good fight and a 16z crypto is probably done. More work than anybody on the regulatory front backed up by people that coin Center and so on, but they put a lot of work into it.
I also want to chime in as a Luddite, is just barely finding his footing, or losing his footing with some water wings at the very least, but it also strikes me that, as you said Chris, sometimes the True Believers can be their own worst enemies. In the sense that people still use word. I still use what people might consider legacy tools every day and these
These Technologies, or these currencies are not mutually exclusive. And I think that it behooves the communities who are adopting and developing these tools for many reasons to be more inclusive with their consideration of having multiple options viable into the future, which I think is inevitable on some level and certainly it is unhelpful.
And counterproductive to overstate the case, for the eradication of central everything. Most people don't want to pave their own streets or handle their own garbage disposal. I mean, there are valuable Services provided by the state and it's hard to appreciate the full value until it's taken away. If anyone was here in Austin during the fries. You realize very quickly how dependent we are.
Are on many of the services that are provided and I think there is and will be certainly for a very long time, a role for centralized Banks and that if people in fact want these Technologies to continue to develop and I think that many Regulators are may feel like they're caught between a rock and a hard place in part because the messaging is so exclusive from the kind of Die Hard and True. Believers often times, but the is navall you said the economic case.
For allowing a thousand flowers to bloom in the web three ecosystem. Within the United States is hard to overstate, at least. That's what it seems like to me. Yeah, any any regulator that stops the next generation of artists and musicians and Gamers and game developers from owning their platforms and their work is going to go into the wastebasket of history as a villain. So that's simple.
Yeah, to your point Tim. I think that some of this was sort of self-inflicted and particularly around there, certain we call Maxis people that are into certain tokens and thing only that token should exist. So there's Bitcoin maximalist. There's theorem actually, you know, cetera, those folks are just, they tend to be kind of loud and somewhat aggressive and I think that's done. A lot of The Branding in the space of sort of people's common view of crypto has comes from some of those folks, who some of them like in the Bitcoin world. Are they have a political?
Able to it. This were this libertarian aspect of Bitcoin and I think as a result particularly as we're seeing now that the Democratic side thinks of crypto is the enemy, when I think that the stuff we're talking about the web three stuff is actually very, very aligned with. I think a lot of the left agenda which is better distribution of wealth raining in the power of some of the big tech companies. The differences were arguing to do it through Innovation and competition, not through regulation, which won't work. By the way, they cut up Facebook.
And were three networks. It's not going to change anything. It's exactly the same thing. As Instagram, still going to be Instagram, and the economists are going to the same and it's going to be just a centralized that's just not going to work thing. That will work is let innovators and entrepreneurs. Go build a better internet. That's what we want to do is not to me. It's not a political movement in that sense. It's a technology movement and it's somehow gotten associated with politics things in this country right now. It's very heated in the
political world. Everything is
politicized. That's a big challenge. We have. Is just a really kind of go and explain these
So I think the good news is we have truth on our side, everything I'm saying here and everything. I've tweeted is mathematically provable including the fact that a blockchains the computer and the power of this new paradigm, but there's a lot of communications challenges ahead.
So let me ask both of you. Maybe I'll start with You Chris. If there are, which I know there are at least certainly in the broader listenership, broader audience, Regulators, lawmakers policymakers, and I've met a lot of these people and I think
Part of the challenge is simply becoming educated from reliable sources when it is so difficult. I mean, it's difficult, bordering on impossible for me to separate signal from noise. If I'm trying to just take it through a funnel, like, sort of waterboarding of information and I would like to ask you if there any particular resources or could be essays books, anything where people in those positions?
It's start to begin to understand the fundamentals of what we're discussing.
One of the things we try to do is create materials for this. So we have, for example, which I could share the link afterwards. It's like a 35-page overview for, for policymakers great. The kind of talks about the benefits and things like that. So we've been trying to create materials. Like, I think it's one of them's been lacking is just all the good things in the Paul talked about earlier. The meaning the Twitter stuff, everything else. That's what's wonderful about. This world is sort of the chaos, but at the same time, it's also
So useful to have a 30 page, booklet some time. So that's what we tried to do, kind of, add that little bit on there. So, yes, we try to create a bunch of materials to sort of explain it. Our firm. We believe in Innovation and we believe in America. Lot of other people in crypto will do things with offshore entities and things. We don't, we tell people, you should be based in the US should be a us company that US taxes you to swap their in New York City. They have an office in SoHo. They hire people from to work. They go to their office. We have some European investment in things, but most of our arm vest.
Here in America. I believe Hayden Adams, who's the founder of you to swap, Robert leshner, the founder of compound?
The Open Sea Founders. All of these other Founders, my portfolio. I believe their Heroes, I believe they are heroes who are on The Cutting Edge of the frontier and creating very important technology that will transform the internet. And I believe that over time, more people will come to realize that these are people in the mold of the Steve Jobs or Henry. For this is how America stays ahead. We believe this completely. And we believe this is critical for the future of the internet and critical for the future of this country. That's why we're investing so much
in. I'm just going to add one thing for people who
Listening. I'll create a short link and be live. By the time you hear this, Tim top log / Dixon and that will take everyone to the show notes and will include a link to the booklet that you mentioned. Chris Duvall. Sorry for interrupting. No problem yet, the United States became the most powerful country in the world for many reasons, but recently, it's been because we are the home of creative technology, most creative technology on the planet. Comes from the United States. Now is that because we create all the entrepreneurs, know we attract all of the entrepreneurs because we had the most Freedom technology on
Foreigners are creative people and they want to go where they are the most free to create new things. And so if we stop being a gravitational, attractor for the best entrepreneurs on the planet, we're eventually going to lose our technological leadership. And that means we will not be able to pay for our extravagant social programs. We won't have the abundance and the deflationary drive the Technology, Innovation and productivity growth have provided. So I'm just concerned because I do talk to a lot of entrepreneurs in our overseas. Most investing these days is done over, Zoom. It's no longer than physically.
The San Francisco Bay Area, especially in web 3 and crypto land, mostly entrepreneurs are overseas. And now almost none of them in their right mind are considering moving to the United States. Which before, if you're in China, India, the default would have been, I'm going to move to California or to United States. And now, it's like, well, maybe I'll go to Miami. Maybe I'll stop in the US but no more likely. I'm going to Singapore or I'm going to Switzerland or I'm staying Anonymous on the web or I'm going to be on some little island nation. Just moving around. This is really, really bad news for all the
All who are counting on their pension pants to pay out in valuable u.s. Dollars because the only solution we seem to have in the last two years to the covid phenomenon is devaluing. The dollar. There was a funny line that went on Twitter or somebody said, now, we know what would happen. If aliens invaded the Earth, the FED would cut interest rates and that seems to be our answer to every crisis cut, interest rates, print more money. Well, that's selling the asset that we already have. Eventually, you run out the beauty of our model, is that the entire world uses the US dollar
As it's stable currency as its ultimate stable coin. And so every time we print a dollar seventy cents of that dilution that inflation goes overseas, but that's eventually going to go away. We can't just keep printing or way out of problems. We actually have to create, we have to innovate with the improved productivity and that means that the next generation of technological, innovation has to be based here where they can pay their taxes where they want to live and spend eat and consume here. And I'm just concerned that all the combination of ambiguous and aggressive regulations. Where
Haters who are purely Financial regulators and now getting their claws on the web and are going to regulate this thing into overseas. You can't stop. It is ultimately code and code is just speech and speech has his ideas. You can't stop ideas. You can push them down one place and they'll pop up somewhere else and the internet is a big place. So short of turning off the entire internet, the internet will figure out how to create store allocate and use digital value. And that's exactly what's going on. And if you try to stop that, you're just going to miss out on the greatest wealth creation.
And Innovation, since the internet itself came into being,
but the volatility we could very easily invest in other country. We don't want to, I mean frankly like it when your investors it's not it's easy to move around and invest other places and things like this. I just think it'd be a real shame if that's the
outcome. Let me add to that for just a second. And what I like to add to that is number one. There are many ways to easily incentivize innovators to create things here. We don't just sort of go through the Playbook but
It Regulators policymakers. I think have a pretty good idea of what the historically effective approaches are. And I want to come back to that in a second. We've already seen what happens when things get locked down in a place like China. And this is obviously a ball in play, but a lot of people will just relocate if they can depending on many different factors, but you see a lot of hot beds popping up in places.
Like there's like a ton in Singapore. Yeah. Ton are all Chinese. Yeah,
China China's.
Bitcoin mining. Now then they all went to gym for. Now. They're doing crypto in Singapore. The
Chinese exact out. All the Bitcoin. Mining is move the u.s. Actually the Chinese ban on Bitcoin mining. The huge beneficiary was United States. Yeah, exactly. And there are some, I was just chatting with Balaji about this separate podcast and he was commenting on, for instance, how Bitcoin May, in fact be a way for certain types of renewable energy that have high volatility such as wind or solar.
To store energy in the form of Bitcoin utilizing that energy even if it's not being consumed. So there are some really interesting applications that are not obvious, but I would like to just ask if there are because we've been talking about what policymakers and Regulators shouldn't do. And we've given a maybe a few sentences to what they should do. Other any policy makers or people in government whether that's federal state level City level.
Are worth mentioning and commending for actually taking positive actions. Patrick McHenry and the house Financial Services committee has been very forward-looking and crypto Christian Cinema. From Arizona said kind of the right things and I think she's also done some work in here. I'm sure Chris is probably more up to speed but Andrew Yang recently was talking about it in a positive way,
but I think there's a lot of politicians and policymakers and things who do understand this and what we would like. So just a couple things, one there.
Just been no Clarity. So like the sort of two ways that Regulators regulate, and one is through stating policies and one is through enforcement and so far. It's all been just through enforcement and some people just don't know what to do and as a result like, so one of the big myths in crypto is it's an unregulated. Okay, I will tell you, we have more regulators and policy and lawyers and things. I've practically become a lawyer. I spent so much time on this stuff. The first thing we do in every company we invest in is help them recruit general counsel. They all spend millions of dollars on outside counsel. Everyone wants to be as compliant as they can.
Slate, it's not very strong incentive for them to do. So there's lots of regulations that apply to these companies including consumer protection laws, Commodities laws, Etc. And no one questions that and they have to they'll have to have policies and adhere to those things. Their specific questions around things like what qualifies an asset to be a security or not. These are topics that we spent years on and countless legal resources, analyzing working on. But the way that The Regulators have chosen to enforce this is not through guidance, but through this seemingly
hard to understand set, of course, meant actions as an example. So, I think Clarity would be great. I think probably a lot of this has to happen at the policy level. I think modernizing a lot of these things. As Duvall was saying, these rules are from like the 1930s and 40s and a lot of them just involve very
Not Tech Modern practices, like putting your driver's license in front of a thing with, as like a fifty percent failure rate for kyc or something. Let's modernize. He's saying so that's that's one of the things we're working on is what's the crypto native? Waited modernize a lot of these processes and get the gold. Like the goals are very good. Like Securities laws makes a lot of sense because Securities laws all around situations with as asymmetric information. And when there's asymmetric information because there's a centralized entity that has knowledge of things, you need to have rules around. Disclosing that information Securities laws are set of rules around.
And liability and disclosure to make sure there's a level information playing field. That makes a lot of sense. We'd like that. And we think of great way to not have asymmetric information is to have no company. That's a really good way to have known a symmetric information. The SEC has the same goal we have which is let's get rid of these intermediaries. They do it for asymmetric information reasons. We're doing it for sort of other ideological reasons as we discussed here, but it's very aligned. I think it works very nicely. Actually. The challenge right now is I was saying before is much more of a communication challenge. I think if we can go and talk to folks.
And show one what the socially beneficial thing uses of this technology is having creators who are making a living and all sorts of other things. Like that are very important for that reason. And then also just sort of explain and show that the goals are aligned and that we don't want a situation where I mean, no one wants to join a session where they're sort of asymmetric information and that stuff happening. And there's money involved, as with all to protect things and money involved. There are bad people for sure. It's just inevitable. It happened in the 90s. It happened the 2000s. It happens now.
And those people give.
Web three, a very bad name. We want to get rid of those people. I think the goals are actually much more aligned. Maybe I'm being overly optimistic. But I feel like it's a communication problem.
The 1999-2000 tech bubble was the small price that we have to pay in exchange for being the home for Creative technological, innovation in the world. And we got Facebook, and Google, and Amazon, and Netflix, and a long tail of incredible companies and Innovations and exchange. And the same way we're going to have to suffer through a little bit of the
Open the Boom in crypto and web three and hopefully the SEC and the cftc can be modern and light-footed enough that they crack down on the obvious scams, but they sort of Let It Cambrian explosion happen as well where people can innovate and try things and once the dust settles. And once it's clear that, we're one and what's fair? And unfair, that's sort of the right time for them to go in and put on guard rails for the average user. But put it on those guardrails to early on just means you miss out, the best Venture investment actually of like the last decade was probably
Etherium 2014 aetherium went out there and you could have bought it for 30 cents and you would have been liquid. And ironically VC's were the ones who can participate because they're fun. Docs didn't allow them to participate but the non VCS could and just kind of closing those doors and saying, well, that's not going to happen again, you know, it makes a couple of mistakes. It pushes us out of the United States. It keeps the poor poor and makes the rich richer because people like Chris and I can always set up entities to participate. And then it also pushes the whole ecosystem. Further underground more into decentralization, more into privacy more into enemity.
When the stated goals of regulators are actually, they want users to own and control their own data data privacy and data protection is a big thing regulars care about. Well, crypto enables that uniquely, you own your private Keys. Another thing they care about interoperability. They want there to be open API. So there isn't a single Monopoly sitting the middle. Well, that's composability compose a boat is the ultimate open API. So I think there is a model here for an enlightened regulator to do the right thing and get just as much credit for letting web 3. Flourish as the original set of regulators did for web one.
And frankly, they should have been more celebrated more recognized yell. Let me add to that because I've been involved with a number of things. Now, including this is actually very related. Oddly enough, but say, funding scientific research into treatments, for end-of-life anxiety, due to terminal, cancer, diagnosis, and things like this that there are people have individual philanthropists. Have sometimes avoided certain types of scientific studies involving say intractable or so-called intractable psychiatric conditions and ultimately,
I was able to show through my own example that there was not just a lack of reputational risk or minimal reputational risk and there maybe I don't say that doesn't exist, but there was much more reputational upside potential.
And I think that's important, not just saying like we can minimize the risk of say, policymaker talking about this, but that in fact, I think there are ways to position it which comes back to comms and determining the way that things are communicated. But I think there is for people who look at this closely and really gain an understanding tremendous, reputational upside and I'll give a couple of examples. One people have already heard and that is what got me interested in all of. This was the fact that friends of mine who were in some cases close.
Broke or who had been limping along, barely able to make ends meet as creatives and artists have suddenly been able to do what they're called to do, which is create artwork. Make it commercially viable, share ownership with a flourishing community, and then receive residual payment for the work that they've created. And if we bridge, that to what I was just saying about the
Scientific work. So I have a foundation. It's not a huge Foundation. It's a small private foundation and I've been very aggressive with funding, I think, important science. And some of those Studies have ended up on the cover of nature. Others have ended up on the cover of the New York Times. It's been really effective, but I don't have enough to call it, say, an endowment. So I'm basically just spending principle instead of working off of the earnings, the investment earnings of the money in the foundation. So every year I'm just trying to basically
Patch the boat back together and keep it moving. What is possible? And I'm hoping to prove this is really viable because I would love for others to be able to emulate. This is I could launch an nft project and who knows what form that will take. But to launch an mft project where a hundred percent of the proceeds. Go to my foundation. And there are different ways that this could work. We're a wallet is owned by either directly by the foundation or through a deaf or something like that.
But here's the important part, the important part, the exciting part for me is not just that cryptocurrency, etherium could be donated to the foundation. It's that I could launch a project that then continues to generate proceeds that go directly. Right? I don't have the headcount. I don't have a team to handle this for me. And the beauty is that was smart contracts. I don't need any of that. I launched a project and then automatically when things are resold by the people,
Who originally bought and then sold again and sold again, and sold again? Hopefully for increasingly high prices that that continues to provide lifeblood to this Foundation that is doing life-changing work for veterans with complex PTSD. I've done a number of collaborations with say the Navy SEAL Foundation. All of these causes need funding mostly from Individual philanthropists and it's fucking hard to do. It is hard to make work and and
Teas to me offer a possible vehicle for actually making it sustainable and allowing me to scale and do more with that. So I just wanted to mention all that to kind of bring it home. Like why the hell would I spend all this time on this? I don't have a high burn lifestyle. Like I'm wearing the cheapest jeans, you can imagine and shoes that somebody gave to me. Right? Like let's say, I don't spend a lot of money, but I want to be able to do more. And I want to involve my community in a way that they've been asking for for a long time.
But they want to give to say, support causes or phase 3 trials. But none of these entities, these universities are researchers are equipped to handle small donations. So I can do that. And these are a lot of reasons why I was excited to have this
conversation. Yeah, that would be cool too. If you had, you could do, there's a whole bunch of interesting stuff you could do, you could have seasons. So you could have the first collection to season one and then another collection season 2. That's a cool two people are doing, you can make it into a dow. So that the folks, maybe the folks who haven't
He's get to go into a private Discord server. You have some events with them. Maybe you give them some governance rights and deciding which projects to fund and I think of it as like, then you have this. I don't know how many if you have 10,000. That's just a number people pick. You have this Army of not only do you have funding, but you have evangelists in their meaning and there.
Twittering and you know writing about
it. They're building. Yeah, they can even build. Yeah, they can build on top of the encode. On top of it. This is fundamentally. What nft is enable our digital property rights. Enable. Our old model was go back to Mark's and the theory of Labor there, which is that capitalist own the means of production. Labour has to seize the means of production. And then now what someone still has to run the factory. So okay, we hand them to the state. Now the state runs a factories and you get these horrible cars coming out of the Soviet Union. Well that didn't work. So what makes sense is for the work.
To own the means of production of the users that means of production in proportion to how much value there providing essentially. They should all be shareholders and they should all be shareholders and open system with no corporate Overlord and no State Overlord in proportion to the value of the providing into the system. And if they don't like the current distribution, the currencies like Bitcoin, they can go create their own and all the way down to the board eight Yacht Club. So, there's just this huge opportunity now to make every person a worker and in
Investor a shareholder and evangelists in owner a Creator a designer. We can fold it all into one and that's really what web three is enabling with tokens at the core. And we mistake to just think of this as Securities Law investor protection and derivatives. I get that's where it started because you have to create money, internet native money first before any of this is possible. But now that we have Internet native money, we can start creating true internet, native, corporations internet, native collectives. Internet, native projects in a native platforms that are owned by the users.
And nipping it in the bud. At this point would be a huge mistake because all we would have done, is we have created the internet native money, but we would not have allowed it to have all of its use cases. We would not have allowed it to create the new internet that we need to live in here here.
Chris, I'm going to ask a very important question. So I'd like you to speak candidly. What's the story with the Trident gum?
Oh my God, Katie told you this, huh? Well, you know, of all the bad habits to have this point. I have one which is like, yeah, I chew gum Non-Stop and I don't know, whatever reason, it seems to annoy some people, but I was doing this Dow called friends with benefits that we invested in and I did a kind of a community talk as part of kind of our investment process.
And was chewing gum the whole time, and it actually became kind of a meme at. This
is 10 packs a day. Hyperbole or is, are we talking about - it might be
true. It might be sure. I would like a descriptions of boxes of trident. Yes. I think at this point it, I smoked a long time ago. So that's why I was long time ago, but I just after that I just always chew gum. I said think it's like a nervous habit or something on the hierarchy of Isis. Yeah. I feel like I'm here.
Recognizes this like a, I don't know how you feel about. I mean, it was Will discover that the Trident gum kills you or something. I hope
not. I think you're okay on the Trident. I want to ask just a couple of unrelated questions. They could be related answers but unrelated questions. And then we're going to come back around and each you guys. If you want to add any closing comments, we can add those. And if not, that's, that's totally fine as well. I don't know if you gift books. You probably gift or recommended books. When you think of most books you have gifted or recommended the
Two others, do any come to
mind as I mention. I really like history. And I particularly like the era of the Victorian industrial age of eighteen fifty-two 1920 or something. It's an amazing period. Where you kind of think of it as you appear to be had like a hundred Elon musk's so you had Westinghouse and Edison and Ford and the Wright brothers and just bail just goes on and on, right? And you had that period we're just the number of incredible inventions during that period and that 50-year period. I mean, the airplane, the car the phonograph the light bulb for God's sake is amazing book, called empires of
Right. It's the battle between Westinghouse and Edison really it's fascinating. If they did it was Enterprise sales that they invent the light bulb Westinghouse. Has a AC, Edison is DC.
And they just went like town to town selling them. I'm like, use my system. Then there was this awesome moment at the end. The kind of coup de gras was Westinghouse built the key benefit of AC, is it goes farther without losing power. He built this giant, plant up at Niagara Falls and then turn the lights on in Buffalo and it was like this magic act. Also, they all like borrow tons of money and they think is cool about them, is, they're all Engineers reminds me of like they all started off in the telegraph business which at the time was sort of the internet of that era. So that was cool. There's another book, a sorry. I'm
Have crypto on my brain. I can't help it. There's a book. I really like called the company. A short history of the LLC is a fascinating book.
The name is the company or the owner of
the company and I can follow up the lamp. But it is history of limited liability corporation, which is very, very controversial concept to have limited liability because the thought before this is around 1830, when it started to develop, was it? You basically, before that you had to have a Act of parliament in the UK to get limited liability because was considered this very dangerous thing. Why shouldn't you be fully liable? If
To start a railroad company and somebody dies you should go to jail. And so what that meant when you for the LLC.
Was that if you were going to invest as an investor, you could lose more than your money. And so as a result, you only had Partnerships of like 10 and fewer people basically families because who are you going to trust? If you have unlimited liability, it's like your brother and you're so so but like nobody else. And then what happened is in the 1830s or so. There was this railroad boom in the UK. First, I believe in the US and they needed to a Greek Capital. So anytime two towns with link up.
Elrod, their economies would like 5x. So, every town basically had this giant line of people at Parliament saying, hey, can we get limited liability because we can't afford to build that railroad, but we know it'll pay off, but we need to be able to go out to third parties and get that capital. And so that event is very controversial and it took 30 years or something. But finally, that became that was like, the business model of Delaware, by the way, which is genius. There were like, Hey will be the place you go. Finally, they became understood. This is a very important innovation. I would argue that actually a lot of the Victorian industrial stuff. I was just
Thing about came from actually, the invention of jealousy. I bring that up because I think it's very analogous to I kind of see the purpose historical progression of Partnerships for ten people. Ten people could accrue value in an LLC World million. People can accrue value and in a token World, a billion people can. It's just natural kind of progression. And it also shows you that Tech is not just always tech. Tech is sometimes social and legal structures, like the LLC. So I doze. It's a very short book. I think the part in discussing might only been two chapters of it or something.
I thought fascinating. I don't think we normally think of these kinds of legal Innovations as a kind of quick Tech breakthrough. So on and I think there's a lot of obviously there's a lot of great books. I love books teachers happen to come to mind.
Those are two great examples. I'm going to, I'm going to pick up both of those navall. Do you have any additional comments? You would like to add questions, complaints, anything at all when Tim Ferriss nft drop,
Yeah, I'm planning on it. This is not idle chat. I'm extremely immersed and I am really excited in a way that I haven't been excited about a project in a very long time and just to again make it plain. I mean, who knows. Maybe at some point I'll do something for profit. But as it stands right now, I am excited to Pilot a project where a hundred percent of the proceeds go.
You some type of research or project Visa Vee probably this 501c3 foundations, private Foundation that I have, which is already done a lot of work as a great track record over the last few years. So, I would say next six months would be my goal. So let's call it and it, depending on when this comes out, but first, two quarters of 2022 would be my guess.
Great, I would add on to what Chris was saying about, you know, going from 10 owners to thousands of owners to millions of owners to a billion owners. I think there's finally an answer for how can communities, participate and web three and crypto before this, you know, it when people would ask like, how do I could participate in crypto those names for individuals which is hey you can bet on sound money, digital gold. That's Bitcoin. And then if you are a company you could say Hey, you can build something. On top of a theorem. You can build decentralized Finance. You can build applications on this computer.
This touring complete Block Chain that is running, computer is running on the blockchain. And now, for the first time, a community can show up and you can have an answer for the community. You can say, okay. If you have a passionate group of Believers, you can spread ownership amongst them. You can spread governance amongst them. You can build a dow, you can issue and of TS, you can have an online gaming Community can have a conversational Community. You can have a real world community that maps to each other. With NF tease. You can have digital bake sales, who knows. It's innovating like crazy, but for the first time we're seeing
Dow's which of these distributed autonomous organizations take off in web three and dowser, sort of these. They're not quite corporations. They're not quite communities. They're kind of they're not quite networks or platforms or like their own new thing that our mixture of all of the above. And I think a couple of years from now, we're going to see a lot of thriving communities on the internet that are now linked together, economically intrinsically and are doing not just not just making money. But also governance like who gets to make wish decision who gets credit for the decision who gets
I joined the company who gets to leave. The company has joined the community. It's leave the community. And if T's are so many things. It's almost I love the Chris webpage analogy. I'm going to give you full credit for that. I hadn't heard that until now. So, sorry. I've been listening to another podcast but I love it because web pages are so programmable. It can be anything the same with NF T. So programmable, so it's kind of almost silly to sit around talking about what you can do with and I've teased you can do anything with that. I've teased that you can do with the web page. But on top of it you can have scarcity and ownership and allocation and rights associated with it.
This is really big. Yeah, I want to add something because you just reminded me of also. Thank you for that. And that is I think Dows have tremendous value to government in a number of different ways whether to and this could be value to different scales of government all the way up to the federal level could apply to International organizations could apply to the military and that is and I recommend to everyone if they can find interviews with a lawyer.
Aaron Wright who has been intimately involved with the formation of many of the most famous dows dows offer the ability to test different types of governance and decision-making. So that could be rough consensus. It could be true consensus. It could be any permutation, just about the, you can imagine, you can test quickly. And this offers, I think,
An incredibly valuable opportunities to test in the microvia dowse and to observe, what many dowels are doing to study what they're doing. Not just for the implementation that you see in the Dallas, but for taking the best of breed options that emerge and then applying them in other places. I think there's just tremendous value there. That was another moment. Kind of a flash boil moment for me when I was listening to Aaron and I thought
Holy shit. This actually is a huge deal, and I'm sure I'm drinking the Kool-Aid and missing certain things. But even if I get half of it wrong, I still think that the implications are enormous before we sign off. Can add a disclaimer for you here. Yes, please. Well, we mentioned lots of nft projects and companies. This is not a recommendation to go and buy any of them and I think have to be very careful because most of these will be like 1999, you know, dot bomb. So to speak.
We're in the first generation. If you'd bet everything on the flickers, in the delicious of the world, you wouldn't have done as well as if you just waited for the Netflix in the Pinterest. So it's not too late. The good news about, entities, being fashion, and creative means it's always new. It's always bubbling up. I've talked to a lot of top and ft collectors now, because I completely missed the boat. And I now realize why I missed the boat? Because like Psychopaths, they were buying it for the art value. They genuinely liked the art and they wanted to be patrons of the Arts and they want to support the artists and it didn't have anything to do with making money. It's just that then later.
The rest of the group or small another larger group came along and recognized that there were some values at the art into the provenance of it. So the good news here. I think with any 50s is that now everybody will get to play in web three. Everybody will get to play in crypto. You're going to have a lot of creators making money. You'll have a lot of fans, making money, you'll have fans, expressing their devotion and their interest, which is really where it comes from. Because underneath, even though some of these art projects will turn into larger franchises that will launch movies and games and books and all
That's tough many won't and many will just be a patronage link between the person who's collecting or buying and the artist and that's great. I want to be able to support an artist without having to buy a sneaker in the way that they Market it. I should just be able to support them directly. I want to be able to support a fitness expert online without having to buy some BS. Vitamin that they have to stamp their name on to some supplement company that they have to start. I want to be able to support a singer and musician without having to just pay Spotify, 10 bucks a month and hoping to find this magic weight of them. I want to
The support somebody in Twitter instead of just retweeting and liking all the time. So we're establishing direct linkages, economic linkages and governance. Linkages between communities of fans and artists and I think that's wonderful. So if you want to go by en F, TS by the stuff you like because at the end of the day, which will probably end up with is a cool jpeg
second that definitely only yeah, I would only recommend buying things that you want to keep and not things you think will go up in value because that's
dangerous. Yeah.
It is dangerous and by this time, people will have also heard a disclaimer at the beginning of the show. So pay attention to the disclaimer, people. The the flicker delicious analogy is a very apt one. It is still really early just because you miss the opportunity to buy jpegs for a dollar that are now worth a million dollars in. There are examples of this a, it doesn't mean that you missed all the boats. Maybe you missed one boat.
Only. It doesn't mean all of those entities are going to maintain or appreciate. So be patient. I really feel like with the amount of exploration and experimentation that is happening right now. And I mean Chris you tell me if I'm completely delusional here, but I really feel like even though there is an Impulse to rush and there's an Impulse to be in discords 24 hours a day and on crypto or nft Twitter 24 hours a day.
Day, ultimately, you run out of hours. And I do feel like there is a place for watching for learning for getting educated for kicking the tires and ways that are low risk or no risk and looking for fat pitches, whether that is as a user or a fan, looking for a real fit, with a Creator or an artist or an entrepreneur, who you love personally or whose work you love or whose project you love or looking for?
Investments, I feel like it is a huge mistake to just impulsively from the driver of fomo dump a ton of money in hoping that you win the next Willy Wonka golden ticket because ultimately I think that is at least for me is too
high-risk. I think another lens look in the t's through is you go to the museum and you see a Roman statue. Okay, there's sort of two ways you could interpret, that one is to piece of stone and that sort of just a jpeg.
Big the other, I think the correct way. The more sophisticated way is to see it as a community artifact. It has meaning and value that statue as part of that community of ancient Rome, and I think the same things through that of teas and at ease our artifacts of networks. So like you have your own community in the end of T, is you're creating will be artifacts for that community and they derive value to the extent that they kind of reinforce that community's values and norms and language and memes. That's what crypto Punk's really your own.
Piece of this community that has importance in the history of the internet and history of crypto. If you take it out of that that's when you get the gist a JPEG, right click and save thing. I used to do this with, you know, go to the Metropolitan Museum of Art. I look at the sword if you just miss it like test Shore but if you want to go and like dig in so I think the same thing for I would say for you Tim. I would encourage you when you think about your nft sort of think of it in that way. These are artifacts. These are artifacts of the community and by buying one you sort of buying both you're supporting your cause but you're also kind of buying into that Community. Yeah, by the way the other interesting thing one reason,
I think this is sort of so powerful is that we spent the last 30 years, building communities on the internet. We didn't have good way to for them to accrue value, but the killer app of the internet is networks. We've got a million networks, built on this thing now Discord and Reddit and Twitter following. It's all built out and now we're dropping in this way to have now these Community artifacts and things with value. And I think it's very important to think of it in that context and not what I think the mistake some people are making now and this is the thing, it more transactionally. It's a cash, grab that's the wrong way. And that will backfire you need to do it in the
Wait at the community really aligns with the values of the
community. Yeah, definitely, by
the way, when you buy these things to to involves Point by things in communities, you value and expect them to be a liquid for a very long time. If you buy a crypto bunker board, a poor, something else. It's because you want to be part of that community that that should be the
motivation. Yeah, everybody gets to be a patron of the Arts and a patron of the Sciences. That's the way I think about this and I'll also say if you're just a hey aggressive capitalist, you're like, I don't give a shit about being a patron. Nonetheless.
I think it is a very dangerous game to think that you can out trade the rest of the universe and try to hold, and flip things, and hold and flip things for short periods of time or within short periods of time. So that is just to say navall. You've famously said something along, the lines are written. I guess. I think you said it first on the podcast. Maybe it was on Twitter. Who the hell knows? If you wouldn't work with someone for a lifetime, don't work with them for five minutes. Am I getting that right? Something like that? What is it? Yeah, it was literally.
I first philosophical tweet, where I was just thinking out loud, note to self. Yep, and it was, if you can't see yourself working with someone for life, don't work with them for a day. There you go. And it was a lesson to me. I was trying to telling myself. Hey, don't keep falling into that trap. There are no short-term relationships. So for me, looking at n FTS, the way I've looked at them, as if I wouldn't hold this for, doesn't have to be for life. But like, if I wouldn't hold this for five years, don't hold it for five days. Don't buy it in the first place. If you're not ready to do that because they're going to be a lot of ups and downs and
As Punk 6529 said, to me, once he said and I'm sure he's written this summer, but he said, you know, nft is make crypto look like treasury bonds with respect to volatility. They are all over the place. I think that was my maybe it was 650 while. He's maybe he told me, but maybe you said it you just ya know where it starts and I managed to articulate a little better. Where I think crypto is to Venture as a venture is the value. In other words, investing in crypto is to invest in Venture Capital, what doing? Venture capitalist to do value investing?
Like Warren Buffett does. It's crazy standard deviation squared, right? Everything is the variance squared. Everything goes up and down. Volatility. You're going to make 10 x 0 x. You're going to lose it. All you and get hacked. The blockchain is going to get. I mean, there's so many ways to go wrong. You can lose your keys, boating accident. Whatever. There's a thousand ways to go wrong in this space. So it's not for the faint of heart. Yeah. It's really not and it's true. Also in the embryonic stages and the wild west days of any
Of the technological revolutions that we've discussed the room hasn't been childproofed yet. No, not at all and that was okay. But to Chris's Point. Yeah, to Chris's point. They're the best teams are not working on and they're figuring out how to take it mainstream. How to take custody mainstream, how to take purchasing mainstream the gaming, guys, if they can and gals if they can't figure this out? Nobody can. But I think they'll figure it out. I want to add one more recommendation in that is well. There are two things we didn't have a chance to get into which is totally fine because there are a million different directions you can
With this stuff. But one is generative art and art not necessarily referring only to graphic representational art, but generative art. I recommend people check out some of the writing by Tyler Hobbs, who is the incredible artist, really nice guy creator of something called the fidence has, which are incredible. And also incredibly popular. He's written many people have now written about generated our but
One aspect of that, that I think is unique that will become more and more compelling in different ways is the ability for the purchaser of the art to become an element in the creation of the art. So, when you purchase a piece of art, you interact with, you guys are technical. Correct? If I'm getting this wrong but code that algorithm of some type and your say transaction ID. Not sure if there's a better term for that because
Times a factor in determining the output of that code. And so you are by virtue of purchasing something at a specific time with a specific wallet, changing the output, and creating a one-of-a-kind piece of artwork that you had a hand in helping create by being a participant. Is that a fair description? Anybody want to modify
the? Yeah, that's right. That's right. I think there's a lot of I think it's one of the cool things here is when you create a better business model for art. Let's say
Or for music, step one will be you take the existing artists and they get more money. Step two is, you're going to incentivize a whole new generation to go, do these cool things with a generative art. Now, you have a way to make money on it. So there's just going to be all these smart people attracted to create a things which I think is a great thing. I think we were just dramatically underpaying creative people in my view and we now figure out a way to pay them properly and that's going to lead to a huge new wave of creative activities. Not just technology and not just paying.
To musician, maybe it's we enter a world where there's instead of 8 million musicians on Spotify. There's a billion. Maybe there's a billion musicians. There's a billion artists. There's a millions of generator of artists. I think this is the right kind of evolution of the internet. This should be a golden period for Creative people there. 8 billion people and six billion or whatever. Internet-connected. And the only me, a thousand to make a living. This should be the greatest time in history for Creative people and I think we might have finally figured it
out.
Going back to your hill-climbing analogy. There should be eight billion different careers. Yeah, and each person should have their own Hill and some will be mountains and some will be molehills. But at least everyone gets their own. He'll
like take music. How much do you love music supply? Is there. The demand is there. We just don't have the right model in between it's not like people don't. People are crazy about music, they love music and there's plenty of people with money who love music. So why are musicians, why do we assume that? The internet has to make them destitute? It's a very defeatist attitude. I think it should be a golden period, the gender of our
It was cool. I'm not an expert on it. But I just think it's so cool that that like there's a business model for generative art. That is awesome. And like the kids that get excited by that and going I'm going to be a generative artist. That might be a new thing ten years
from now. I think it's definitely it's going to be a thing in the very near future from what I've seen art blocks is worth checking out people's check out our blogs and I think it's is you kind of a both alluded to it's going to expand the pie, right? So no Vol. You're intimately familiar with this when Uber
When we were went out as a possible investment on Angel list, how many rejections did they get? How many people declined? A couple of hundred? Yeah, right. And one of the assumptions underpinning. A lot of those rejections was well, how big is the total addressable market for black sedans? And then we're going to look at our percentage of that and what they didn't factor in was the possibility that it would dramatically multiply over and over again the actual
All of, not just writers, but drivers, so it completely flip the Paradigm on its head. Similarly. We might be inclined to say, how many professional musicians are there. Now, what? Percentage might be able to use this? And that's the wrong way of looking at it. When, suddenly it is proven that it is viable to create a financially secure future by creating whatever that means. It opens the floodgates, right? Opens the possibilities and I think that the early, even though generative art has been around in one form, or
Another for decades, but the experimentation now is just the tip of the iceberg. So it's very much, kind of Model T. So I'm very excited to see what's coming in the next. I mean, the time dilation, with this stuff is bizarre. I feel like I've watched for years of experimentation, in the last four months. It's really pretty wild. The
other thing to add to what you're saying is, we're probably in this scheme or for period right now. I don't know what the native generative art. Looks like. It's probably yep to advance for my artistic sense or something, but just timing-wise almost always
We'll
look back and say this is a scheme. Orphan period, they aren't leaning into the software code enough stuff. You mentioned is like a nice kind of coding thing. But I bet you this is arbitrary code. I mean you can have we have one company manifold which is trying to create sort of let smart contracts and at ease be like an app store and you have different software. You can plug and play on to it just like the App Store. One of my favorite things to do is look at old computer ads. It's funny because like in the 80s, all the computer has had this couple at the table doing recipes. Steve Jobs as much of a genius.
Susie was like greatest Genius of all time. He invents the computer. That's the iPhone and the best idea he had for what to do with a computer in 1983 was a couple organizing their Kitchen recipes.
So what I'm saying, of course
is he's a genius but it's just really hard to know. So the first thing you do is I guess they had like a filing system, whatever. But then what happens right? This Army of people come and they invent the word processor and the spreadsheet. The spreadsheet was a random guy in Boston who just came up with the idea of a spreadsheet and desktop publishing. And
Video games, and just this whole wave after wave of cool stuff. But even the inventor I'm just going to make a point of how hard it is. And so I think we're probably in the Kitchen Recipe period. And then if T's which is awesome because there's going to be so much cool stuff. Yeah. I'll even know how you got the recipes back then they didn't have the internet. Got
that to mail a tape giant tape with males.
Yep. Mobile phones. The same thing member mobile phones is always like to stock and whether they always have talked about stocks and weather.
That was it. Yeah, turns out it's, it's tick. Tock is teenage Dance videos on Tick, Tock tailing a car. Ephemeral messaging? No one knew. It's so hard to know, right? So we're in that period,
we're in the, The Kitchen Recipe period. And we haven't even talked to him. We don't need to go deeply into this, but I would imagine there's some percentage of the listenership right now are like, yeah, I still don't get it right. We're talking about jpegs. And I've yeah, okay, somebody, I somebody on the internet said like, yeah, you can take a photograph of the Mona Lisa, but is it?
The same as the Mona Lisa and like I don't really get it but there I would imagine are going to be all sorts of tie-ins and possibilities and uses for n FTS that tie into the physical world. So we didn't even get into that as an example. Okay? Today you buy a sneaker right? And now maybe the sneaker was sponsored by Kanye West Jay-Z or whatever. And now there's variations of sneaker. Well if the future Maybe by unique sneaker, and then you'll get the nft for that sneaker and
You'll have the unique copyright to the digital representation that sneaker if somebody wants to use that sneaker in a marketing campaign. If, if Nike comes along and says, hey want to feature that sneaker, then maybe you get royalties, right? You just very simple little examples but it's essentially a social contract or even a written contract that you have with the person that sold you. The nft that can be used to imbue value in all kinds of ways. So it's a Nifty is not really an object, a digital object. It is a pointer. It is a channel, the link.
Communication between you, the Creator and the community and any kind of value can be funneled down that it can be access into things. It can be recognition and reputation. It can be royalties. It can be copyrights. It can be remix rights or it could just be, you're just sending them money because you want to support them. So, it's completely programmable. We just don't know
to forgive people, talk about, ticketing within it to use. And what they mean is like going to the existing event with tickets like a sports game, music show, right?
But actually, that's the morphic. I think the native version of ticketing is you have a Tim Ferriss nft. And now I get to or let's say, I have whatever some Nike nft and I get a certain seat at this restaurant. Why do wealthy people invest in restaurants? They don't invest too because they want invest invest, invest in getting a table. Like, why don't you skip the whole investing part and just have an empty. Have a bunch of entities. I guarantee you the next six months. We're going to see like conventions and other kinds of things of, and of teak, or tapes, and crypto punks and and to anybody
If you're a business and you want to find some really good customers people that own crypto punks are probably really good customers. I think you can see a world where instead of doing the web to companies surveilling you and trying to figure out your interests, your just declaring your interest through entities. And so it's done in an opt-in way that's Pro user. The user has the power, but that's a very valuable thing that people will use from sentence and various other things. I mean, if you have a crypto Punk, that says a lot about
you.
Exactly. If you have a crypto Punk and you're tweeting, then I know that you're an OG into nft is and you probably know what you're talking about it and you've got serious money at stake behind what you're saying, Chris. I thought it might be interesting for folks. I love how I asked my last question, 40 minutes ago. So we'll wrap up in a minute, but friends with benefits best name of all time, side note, but we didn't really explain friends with benefits and I think it's a curious example, in permutation of what we're talking about. Could you describe Friends with Benefits, please?
Sure, so and just a few contacts. I not the general term, the company, very strongly, that Venture Capital. We need to be constantly taking risks. And so one of the things we started doing six months ago. We started pretty invested heavily investing in this area called the house. This is a new type of investment where there aren't there? Really isn't like, even in many cases, like a legal entity and we're buying tokens and other kinds of things. And, you know, it's a lot of questions, but it's early, but we want to be there on the frontier, and I think this is the frontier. So, Friends with Benefits is a dow, which means it's a think of
Someone said a doubt, think of a doubt, as a internet, Community, with a balance sheet. Okay, so it's an internet Community. But they also have resources and can do stuff in the particular case FWB is a bunch of web, three product developers. So it's a couple thousand people who are really high end, high quality product developers, and they're spinning out cools, to have events. Like we hadn't, we host an event and you work with them. It's like someone else on our team said, oh my God, this new wave of crypto is like a hundred X cooler to all of us.
We're like, it's very different than 2017 and 16, you know, a bunch of computer nerds talking about protocols. This is the coolest people from Williamsburg and but, which is great. But they, they're really is great. They're great Community. Their designers, their developers. They don't, they're not sort of Hardcore, like they really got into this stuff. Kind of more recently, which is good because they really got think the cultural aspects. Got them excited the nft stuff more than, you know, to them like money because the money stuff before was kind of a turn-off and it's just like a cool. I don't know. It's like it's University of Utah. It's The Homebrew computer.
Pewter Club, The Homebrew Computer Club of 2021 is probably a dow and we want to join a bunch of them and just and just learn from these people who are just more in the they're smart and they're in the trends and just how we learn. Right? I'd
also suggest people check out Aaron right there. Other people certainly experienced great, but they're different almost. I suppose you consider the categories of dollars right there acquisition doubt. One of the better-known being say Flamingo, very successful, incredible collection of nft artwork.
Assets, so they're different purposes and that's just going to multiply Out. Imagine over time. Not quick question on FWB. Did they decide? Oh shit. We can't call ourselves Friends with Benefits long-term and they like went from Kentucky Fried Chicken to KFC. Kind of not to be confused with kyc. I don't know
if they've actually tried to Rebrand. I just kind of run last whatever we say the name, so I could
stick to your guns Friends with Benefits. I love it. I swear, it'll go Farsi.
With it. All right. On that note any final comments guys, of course, you guys can be found on the internet and of all at navall and a VA L on Twitter, Chris at see Dixon, see dicks and.org also a 16z and I'll include some additional links in the show notes as well as the 30 page or so booklet. That you mentioned Chris at teamed up blog / Dixon, anything else? You guys would like to to add as closing comments. Yeah. Yeah. Sing.
Career advice for you Tim, which is what I first learned about crypto. I didn't actually get into it because I was busy with AngelList. I wrote a few tweets. I wrote a few position pieces, but I really didn't wake up into it until much later. When I, you know, a lot of the gains were gone and I wasn't fully joking when I said that this may turn into a converging to a crypto podcast, you know, don't wait too long hill climbing man. You might be on the wrong Hill is all I'm saying. Oh man the blind leading the blind. Well,
Well, I may need to invite you to co-host of all. Be careful. We'll see. We'll see how it works. Well, thanks guys. This is a lot of fun and appreciate you carving out the time. So to be continued, I'm sure we'll, we'll continue chatting offline and to everybody listening, you can find all the resources links to everything books, projects companies, Etc, in the show notes as per usual, in this case to not blog /. Dixon DX, o n. And until next time, be safe out there.
Are don't take unnecessary risks. Don't play with any money. You can't afford to lose. None of this is investment advice, just for informational purposes only like this. Fine podcast. Another reason. I like to keep my topics Broad and of all ramakant. All right, everybody. Thanks for tuning in.
Hey guys, this is Tim again. Just one more thing before you take off and that is five. Bullet Friday. Would you enjoy getting a short email from me? Every Friday? That provides a little fun before the weekend between one and a half and two million people. Subscribe to my free newsletter. My super short newsletter called 5 bolt Friday, easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things. I found or discovered or have started exploring over that week, kind of like my diary.
Cool place it often includes articles and reading books. I'm reading albums. Perhaps gadgets, gizmos, all sorts of tech tricks at. So on that gets sent to me by my friends, including a lot of podcast, guess. And these strange, esoteric things end up in my field and then I test them and then I share them with you. So, if that sounds fun, again, it's very short. A little tiny bite of goodness before you head off for the weekend. Something to think about, if you'd like to try it out. Just go to Tim.
Blog / Friday, type that into your browser. Tim dot blog, / Friday, drop in your email and you'll get the very next one. Thanks for listening. This episode is brought to you by total. Imagine having an entire Jim's worth of equipment, in a device smaller than a flat screen TV. Something that could fit potentially even in a closet. It's in my closet by eliminating traditional weights. Total can deliver 200 pounds of resistance, with a Sleek design that can fit nearly anywhere. It's like having an entire gym and personal.
Her right in your home, totals patented digital weight system, senses your strength and just the way it automatically in real time. So you can get the most out of every workout of number of friends, including competitive athletes, who have doubled their strength, in short order, in a lot of exercises. And part of the reason that's possible, is it uses a revolutionary system of dynamic resistance, powered, by electric motors for strength, you can feel. You can also do things like, he's Centrist. Overtime, tonal learns from your body and automatically increases.
The way it exactly when you can handle. It, total also uses 17 sensors to provide real-time feedback on your form and technique allowing you to get the most effective workout, every time to strength training machine with adjustable arms, that provides more than 170 exercises for full body workout and that can include squats, deadlifts, bench, presses overhead, poles, bicep, curls and more. So check it out Tritonal. The smartest home gym for 30 days in your home, total is so confident that you'll
Of it, they offer a full money-back guarantee. You can now. Get total from sixty three dollars per month at 0% interest over 48 months. Visit w-w-w dot total. That's T. Ona l.com for a limited time. Get $100 off when you use promo. Code. Tim 100 at checkout. That's www.teamafrl.com, promo, code. Tim 100t. I am 100 total, be your strongest.
This episode is brought to you by Thera gun. I have to their guns and they are worth their weight in gold. I've been using them every single day whether you're an elite athlete or just a regular person trying to get through your day, muscle pain and muscle tension are real things. That's why I use that they're gonna use it at night. I use it after workouts. It is a handheld, percussive therapy device that releases your deepest muscle tension. So for instance at night, I might use it on the bottom of my feet. It's help to buy plantar fasciitis.
I will have my girlfriend, use it up and down the middle of my back and I'll use it on her. It's an easy way for us to actually trade massages in effect, and you can think of it. In fact, as massage reinvented on some level, help with performance helps with recovery helps with just getting your back to feel better before bed. After you've been sitting for way too many hours. I love this and the all-new Jenn fourth. Aragon has a proprietary brushless motor. That is surprisingly quiet.
Easy to use and about as quiet as an electric toothbrush. It's pretty astonishing thing. You really have to feel that their guns, signature power amplitude and Effectiveness to believe it. It's one of my favorite Gadgets in my house at this point. So I encourage you to check it out. Try third gun. That's Farah th, er, a GU and there's no substitute for the Jen. Fourth Aragon, with an OLED screen. That's OLED those wondering that's organic light-emitting diode screen, personalized their gun app and an incredible combination.
Ation of quiet and power and the Gen fourth era guns. Start at just $199. I said, I have to, I have the prime and I also have the pro, which is like the super Cadillac version. My girlfriend loves the soft attachments on that. So trite, they're going for 30 days. Starting at only $199. The third body.com, Tim right now and get your gen forth. There are gun today. One more time. That's their body.com. Tim th er, a be ody.
Dot-com.
