#6 - Chris Dixon on Read Write Own

[00:00:00] Balaji: Chris, welcome to the Network state podcast. Hey,

[00:00:03] Chris Dixon: Balaji . How are you? Great to be here. You

[00:00:05] Balaji: know, you and I have been talking crypto for like 10 years and it’s kind of like raising a child together. So you’ve got this new book and it’s read right on. You want to hold it up for the camera? Do you have, do you have a copy?

[00:00:20] Chris Dixon: Here we go, everyone. ReadWriteOwn, available January 30th. ReadWriteOwn. com has, uh, you can of course buy it at Amazon, but also if you want to support other smaller booksellers or whatever you prefer, it’s there. And we have audiobook and, um, Kindle, too, coming in the same day. Wonderful.

[00:00:36] Balaji: So, going on, ReadWriteOwn.

[00:00:38] Balaji: And, you know, it’s, it’s funny. I, I’m glad you wrote this book because it’s kind of like Crypto 101 2024. I think if people ask me what this crypto thing is all about, I can just point them to this and this will be sort of a onboarding manual. You said you wrote it for a smart high school student. You want

[00:00:55] Chris Dixon: to talk about that a little bit?

[00:00:56] Chris Dixon: Yeah, yeah. Yeah, yeah. So, I mean, that’s exactly what I’m hoping that the book becomes. Is that it’s [00:01:00] the book that, like, you know, you join, you’re an employee who joins Coinbase and your family and friends are like, Isn’t crypto that thing that, like, FTX? Right. A bunch of speculate and I can’t, I mean, I’ve literally heard this like a thousand times and then I go to DC a lot, you know, and just meet with, you know, press and policymakers sort of part of my job is to, you know, is to do that and kind of work on policy stuff and literally almost every meeting there’s like, what book should I read?

[00:01:25] Chris Dixon: Um, and look, there’s some great books on Bitcoin specifically, and there’s some great books like there’s a, you know, the history of Coinbase and the history of Ethereum. Um, but there isn’t sort of, As you said, like kind of a 2024 onboarding manual that sort of explains what I wanted to do was to look and I wrote it partly to test myself, frankly, because this, this, I wrote it during, you know, after FTX and this sort of downturn.

[00:01:46] Chris Dixon: And I was like, let me, you know, I think it’s Richard Feynman who said, if you can’t explain it to a, I forgot, like a 10 year old, you don’t understand it. Right. You know, and like, and like, I’ve always said, like, this is, you know, That, that, that blockchains and crypto are about [00:02:00] kind of, you know, decentralizing various internet services and returning power to, um, users and software developers and creators and kind of the edges of the internet, you know, as opposed to these big intermediaries, but like, can I really write it out in detail?

[00:02:15] Chris Dixon: In a way that, that could convince somebody who’s a skeptic, open minded skeptic, um, who doesn’t have a background in technology and the internet. And like I said, yeah, someone said a smart, actually I think, I think I got it indirectly from Peter Thiel. Someone told me he wrote, his like agent told me he wrote it for, he wrote Zero to One, which I, I have a lot of respect for that book.

[00:02:33] Chris Dixon: He, he wrote that, um, for smart high school students and I, and I thought that kind of was a great. Um, kind of God guidance. So I thought about that a lot. And so I don’t use, I avoid jargon and except when I absolutely need it. And I define it actually in one rewrite to I went through, you know, the very, yeah, for those who’ve written, obviously you’ve written a lot, including your book, all of you, it’s easy to kind of slip into passive voice and kind of, uh, make [00:03:00] assumptions that kind of jump over stuff.

[00:03:01] Chris Dixon: And so I was very, like, if you notice, there’s very few, like, Kind of superlatives in the book. There’s very few, um, very little passive voice. Like every, part of the discipline of it is like, who did this? You know, what did they do? And I’m going to show you, not tell you. I’m not going to claim something.

[00:03:17] Chris Dixon: I’m going to walk through the details. And I was, it actually took me, I mean, it took me a year, um, and a bunch of kind of rewrites and somewhat painful to like get it to that point where it’s just really kind of broken down. And so that’s what I’m hoping is a sort of first principles. You’re, you know, open minded, but don’t have a background in this.

[00:03:36] Chris Dixon: I do a brief, um, uh, history of the internet in the beginning with a specific folk, I mean, and it’s very important. Like one thing I realized when speaking to people, um, in the general public and like, Maybe like, why write a book? Like, I’m of the sort of, I think probably the biology Naval school of thought that why write a book when you can write a blog post, right?

[00:03:54] Chris Dixon: And I used to blog for years and I was like, there’s no point in writing a book. You know, why, why a book now? And a lot of [00:04:00] business books are kind of like filler, you know, I’ve gotten all these people ask me like, did you write the book? Like, they think it’s like this ghost. It’s like a ghost because, you know, I run a fund.

[00:04:08] Chris Dixon: So they assume it’s like ghost written and it’s like seven. seven habits of, you know, successful people or some kind of like inspirational thing, which is not, it’s not at all. And yes, I wrote it and yes, and it’s like, this is like a, you know, you may not agree with it, but it’s like a, it’s a book. It’s not a, you know,

[00:04:24] Balaji: I mean, you and I are both academics.

[00:04:26] Balaji: So.

[00:04:27] Chris Dixon: Yeah, I mean, I’m ghostwrite our papers, academic reformed,

[00:04:32] Balaji: reformed. I think, I think we were, we were smart enough to leave at some point, but we were dumb enough to stay too long and smart enough to leave or something like that. But,

[00:04:39] Chris Dixon: um, so, um, anyway, so. Questions for you. Okay. Sorry. I could go on and on.

[00:04:45] Chris Dixon: You go ahead and ask

[00:04:46] Balaji: your question. I, I, I, just on, on that actually. So just to digress on the topic of writing for a second, you know, what I found hard about writing a book, and right now I’m doing the second edition of the network scene, actually a network scene movie. Oh, nice. But, um, [00:05:00] yeah, okay. I guess I just broke some news there.

[00:05:02] Balaji: Fine. That’s coming. Okay. What I found hard about doing a book is if you’re at a 10 or even 15 page essay, you can read and reread the whole thing.

[00:05:12] Chris Dixon: Okay. I think, I think I know where you’re going here.

[00:05:14] Balaji: Sorry, but exactly. But the moment it gets to like. Maybe a hundred pages, let alone 200 or something. You can’t reread the whole thing, start to finish before you write page 201.

[00:05:26] Balaji: And so you have to have, it’s like, it’s like a code base, which becomes large enough that normally you’d factor it into functions and just import them. The only way you can get through something like that is with a really good outline that just sort of decompresses. And even then, you kind of need either an editor or nowadays AI to find the redundancies and so on.

[00:05:47] Balaji: I think I’m going to have a better tack on that, but I’d love to know what your approach was

[00:05:49] Chris Dixon: on that. No, no, no. It’s very interesting. You’re right. Because I’ve done a lot of blogging, obviously, and it really does change when it’s longer. And, and so I’d say a couple of things like one like one of the hardest [00:06:00] things was had I already explained that I think that’s what you’re saying with redundancies.

[00:06:03] Chris Dixon: Yes. It’s really annoying when you’re reading a book and you’re like they explain something twice or they over explain it sort of the second time. Right. Like it hasn’t been explained enough. Right. It’s so hard when it’s in this case 230 pages like. When you get to this, you’re reading chapter seven and you’re like, wait a second.

[00:06:19] Chris Dixon: Is this, did I, did I already explain this enough or not? Right. Um, and, but I found is I had to take, if I didn’t take, I had to take two week break sometimes to clear my head. Yes. I didn’t take a two week break. Then I couldn’t read, do a fresh read and read it as like. Right. And then be like, Oh wait, that feels silly.

[00:06:36] Chris Dixon: That I didn’t explain that. Or I over explained that and I had to take these two week cycles. And then what I would do in the meantime is I would like work on small pieces of the code base, so to speak. Right. And then I would say, okay, now my brain’s fresh and I can do a full read. And then I would do like a two, and then that would take me like two weeks to do a full read or something.

[00:06:55] Chris Dixon: And at one point actually for my case, so I actually had, also I had, the other thing I learned is that [00:07:00] with, so with, you think about you’re reading like a non fiction book, and let’s say they make like three claims in a row, and let’s say as you’re reading, you know, when you’re reading it’s really an interactive process, right?

[00:07:07] Chris Dixon: You’re kind of saying, I don’t agree with that. And if they keep saying stuff and they don’t address your concern, you’ll probably quit reading because you’ll be like, wait a second, right? Like, it’s kind of like the tree fork too far away from the reader or something. So I had like 20 people, really smart people, a lot of them work with me on my team, read it, including like Dan Bonet, Tim Ruffgarden, like CS professors, Bill Hinton, law, you know, law experts.

[00:07:30] Chris Dixon: And they would give, it was amazing. They gave me like paragraph level. Comments, right? Like this doesn’t make sense. This is a counter argument. And then I went and addressed them all and that took me four months or something. But then the code base had to, I read it again. I was like, holy crap, this is just a mess.

[00:07:44] Chris Dixon: And it’s a mess now. The code base is a mess. I then had to refactor the whole thing, right? Because it was like, you know, like all code, right. It was just like, you know, kind of metastasize or something in all these different weird ways. Um, and so, anyway, so yeah, but that, that, [00:08:00] yeah, go ahead.

[00:08:01] Balaji: Yeah. It’s, it’s so sorry.

[00:08:02] Balaji: I finished it, finished yourself, uh, thought, thought, because I’ll tell you. But

[00:08:05] Chris Dixon: you’re right. Like I just had no idea that like the pure length of it. I guess it meant like I couldn’t keep it in. In memory on board memory ram. I had to go, I had to, uh, page to the hard drive or something.

[00:08:18] Balaji: That’s, that’s exactly, that’s exactly how I felt.

[00:08:20] Balaji: And I think you and I both have actually normally a pretty good memory for written text and whatnot. So this is like a buffer overflow. And the other thing is you can’t just. You, you mentioned, Oh, you know, people have explained it too much in maybe by repeating a definition and the chapter seven, the opposite of course, is you are very concise and like a math textbook, you introduce five definitions and you use them all.

[00:08:44] Balaji: Back to back to back, but then people are lost because you just use five keywords that you explained, but not used together, you know, anyway. So, um, I think you did that pretty well, by the way, for what it’s worth. Thank you. You know, hopefully this also gives like a verbal vote review for people.

[00:08:59] Chris Dixon: Yeah. I was [00:09:00] very happy with like, so I sent it to like, for example, Kevin Kelly, who I have a lot of respect for, who’s the founder of wired, um, you know, great writer, written many books, and he’s sort of a real tech optimist for those who don’t follow him, you should.

[00:09:10] Chris Dixon: He’s, he’s brilliant, but he’s actually, I’ve, I know him and he’s. skeptic, and actually he’s one of the quotes I have on the back of the book. And he’s like, and he’s the kind of guy, he’s not going to bullshit me. Yeah. He, he like, he’s like, this changed my mind. This is, I think the response I’ve been happy with overall, but I think it’s actually been more positive, the less into crypto they are.

[00:09:29] Chris Dixon: Yeah. So like some of the crypto, like on my team, they’re like, well, I kind of knew the first. You know, two thirds of it, Chris. Well, also, they hear me, they’re like, Chris, I’ve been around you for six years, you’ve been saying it over and over, you know, but, um, but I think that that, you know, that, that I’m hoping is sort of how it lands.

[00:09:43] Chris Dixon: Is it kind of like. I hope the crypto people like it. I think particularly in the token section, like I have this framework, faucets and sinks, which I think is, it’s not my ideas, but I think I do a nice kind of crystallization of a lot of the best ideas. So I think crypto people will find some of that interesting.

[00:09:58] Chris Dixon: Um, some of the, I do [00:10:00] have a treatment of the regulatory topics like securities laws. Um, I have a bunch of application, example application areas. Um, so I think the, I hope crypto people will find parts of it, uh, you know, a lot of the younger crypto people won’t know a lot of the internet history stuff as much.

[00:10:12] Chris Dixon: So hopefully that will be helpful to them. But, but fundamentally I want them to, I really hope they like it, but I really want it to be the book they recommend to the kind of adjacent layer, which I just feel like, because look, we have, you know, it’s, I think you’re the, I think you invented the sort of phrase or I think so, right?

[00:10:28] Chris Dixon: Like kind of speculation is the bootstrap mechanism. Yeah. Speculation is insulation. It’s sort of, yeah, it’s sort of the, but like, what is, but like the question then is like, what exactly, what does that mean exactly? Like, how do we actually get

[00:10:39] Balaji: there? You have to value the thing on the other side, installation, installation of what?

[00:10:43] Balaji: And then we’ll get to that in a sec. Yeah. I do think, by the way, that you have something in the book for everybody because, uh, I think you’re right that junior crypto people who are in their twenties didn’t live through web one and web two like we did, and that’s just been around their whole life. So they’ll learn something from it.

[00:10:59] Balaji: And, you [00:11:00] know, Kevin Kelly is a good example of like the tech swing vote. Who is like a rational actor, but just hasn’t dug into this or what have you. And now, you know, he’s smart enough. He, he, he understands it from your, your description. There’s something else, by the way, the TL writing zero to one for a smart high school student probably helped him bring Vitalik to the TL fellowship.

[00:11:19] Balaji: I’m not sure if the timing on that. It’s true. I

[00:11:21] Chris Dixon: forgot. I forgot he has a program that recruits smart high school students. Right. So there’s

[00:11:26] Balaji: a utility to it there as well. Okay. So why don’t we, why don’t we jump into the book itself? You know, crypto is a big enough area. People come at it from different schools of thought.

[00:11:35] Balaji: Many come at it as a financial thing. I come at it as a primarily political thing and you come at it as a technological phenomenon. And of course those are interlinked. You know, your, your book is divided into five sections, which, you know, I’d roughly summarize. So you’ve got read, write. That’s your brief history of Web 2.

[00:11:51] Balaji: You have Own, which is on the, like, the invention of blockchains and the concept of cryptographic ownership. A New Era, which I’d call maybe the basics of crypto [00:12:00] economics, but in a, in a nice distilled way, which aggregates 50 different blog posts and heuristics into, into a nice little chapter. Here and Now, the current controversies, which, you know, will be the most, in a sense, timely section of the book.

[00:12:13] Balaji: And then What’s Next, where we can build with crypto. So maybe, you know, tell me if you think that’s a correct overview. Yeah. Oh, that’s perfect. Yeah. Great. And you want to, do you want to give your overview of like the book as a whole and maybe drill into those sections a bit? Go ahead.

[00:12:25] Chris Dixon: Yeah. So, and maybe just to give a little bit of context, you know, I got into the internet sort of late nineties and have spent my entire career on the internet.

[00:12:33] Chris Dixon: I was originally an entrepreneur and an investor. And, and as you mentioned earlier, I’m sort of a, reformed academic. Um, and I actually think I wouldn’t like I was attracted to the Internet because I mean, it was an amazing, amazing promise of of a network that was truly decentralized and owned by the users, right?

[00:12:54] Chris Dixon: This is the original Internet. Um, and that happened for a variety of reasons. It You know, it’s origins and academia and government, and [00:13:00] there were sort of political motivations, but to me, by the way, that was not a fait accompli like there were alternative visions like Bill Gates and Comcast and Disney had this information superhighway, right?

[00:13:10] Chris Dixon: Sort of a centralized Internet, right? And like, you know, our friend Mark Andreessen was on the kind of the open Internet, sort of open source side. And of course, you know, with Netscape and everything else. Um, and and to me, that was just It’s a remarkable thing. I mean, that we would link all the computers in the world and we would do it in a way that there was no kind of intermediary, right, that was taking tolls, money and power and control and that this was actually sort of this thing owned by the people.

[00:13:34] Chris Dixon: And the specific instance, the specific way that was sort of implemented, right, is you got basically everybody got their own little plot of land. You got your own domain. You could put up, right? I have cdixon. org. You have Bology S, I think, and Bology. com

[00:13:46] Balaji: and Bology S.

[00:13:48] Chris Dixon: com. And like, that’s your little plot of land, right?

[00:13:50] Chris Dixon: You own it. Um, and you know, you can have at least if you have your own domain, you have your own email address, so you have and that was kind of came. So like, you know, you had the sort of base layer of the course [00:14:00] of the Internet I P. But then you had these layers on top like email on the web and they respected ownership and they did it.

[00:14:05] Chris Dixon: I go through in the book a little bit through, you know, this mechanism of D. N. S. Um, and, you know, one of the key features just technically of D. N. S. Right. As you have, the user has control of the mapping. Right. of the domain name to the hardware, which means if the hardware provider turns evil, you can exit, right?

[00:14:21] Chris Dixon: Right. DNF gives you the ability to exit. Yes. And this, this was, and this is a very, very, so this is, I think this is an often overlooked but profound feature of the early internet. That ability to exit meant that First of all, you know, creators, political dissidents, activists, whoever they might be, had the ability to go do something right and like put up have their own little plot of land and as long as you were obeyed the law, you could have your plot of land, right?

[00:14:44] Chris Dixon: But it also enabled entrepreneurship, right? Like, that’s why Larry Page and and Jeff Bezos and others, they knew they could if they built something on that plot of land, and it was valuable, That, that, that they would own it, right. Or that they, they, and their shareholders would own it. But like, there wouldn’t be sort of an Apple in the middle taking 30 [00:15:00] percent or something like it was, it was true ownership, right?

[00:15:03] Chris Dixon: An analogy

[00:15:03] Balaji: that I think we’ve probably both made. I mean, the auth code of DNS is very similar to a private key

[00:15:08] Chris Dixon: from crypto. Oh, it’s very, yeah. Yeah. No, it’s, it’s because it’s, it’s all about that mapping, right? It’s like, it’s that one layer. Do you control the layer of the virtual to the physical, right? Um, and who has control of that?

[00:15:19] Chris Dixon: Is it? Twitter that has control or does the user have control? Yes.

[00:15:23] Balaji: Right. And actually it’s funny because. I remember, you know, actually, I’m not sure if this is in the book or not, but I think maybe we both made this analogy different times. Uh, you know, I, I, somebody, you know, who’s a web two person, I asked them, okay, you’re doing a new company.

[00:15:36] Balaji: Are you going to buy the domain name or are you going to lease it? Cause you know, some, some of the really nice domain names, they want you to lease it or something like that. Right. And the problem with that is you’re five years in. And now suddenly they can jack up the cost on, you know, your domain name because you just added all this value to it.

[00:15:54] Balaji: That’s

[00:15:54] Chris Dixon: why, you know, every good restaurant in the world goes out of business is they always jack up the rent exactly just to the [00:16:00] point where they are different. Because they built the neighborhood. Yeah, exactly. And they just assume that they can put another restaurant in there because they don’t own it.

[00:16:06] Chris Dixon: That’s right.

[00:16:06] Balaji: And so. The, you know, the right, the smart at first says, Oh, of course I’d want to buy the domain. I wouldn’t want to just lease it. And I’m like, and now you understand crypto. That’s digital ownership.

[00:16:15] Chris Dixon: Right. Whereas they don’t own, of course, their social, like you jump forward to web two, you don’t own your Twitter name.

[00:16:20] Chris Dixon: You don’t own your Instagram name. You don’t own like all of these different things. You don’t own your, you know, PayPal or your square cash or any of these services, right? You’re just, you’re just there at their discretion and their whims. Yes. And,

[00:16:33] Balaji: and yet your username is becoming. As important, if not more important than your real name.

[00:16:38] Balaji: And I mean, most messages that come into you are coming into your C. Dixon, not your physical mail, right? 99 percent of communications online. Okay. So. Good, so that’s kind of, go ahead,

[00:16:49] Chris Dixon: you were saying something. Yeah, so then I sort of, sort of, give a little bit of, you know, it’s one chapter on the kind of Web 1, and look, that’s, and that’s really why I got into this, for example, like, I got into the Internet, is I thought this was just an amazing thing, and then, [00:17:00] so then Web 2 comes along, and, and I talk about the history of this a little bit, but the, you know, on the good side was, was this movement to make the Web read and write.

[00:17:07] Chris Dixon: So in the 90s, the Internet was, What I, you know, call skeuomorphic, right? So it was like a lot of new forms of media. It was sort of porting old media onto the new form, right? Like early, early films were just like a camera on a play. And then later on, they figured out that you could have a close up and establishing shot and kind of established the grammar of film.

[00:17:25] Chris Dixon: Right. And the same way, early internet, you know, if you go back and look at these retro Internet Archive things, you’ll see they’re just like brochures, magazines, you know, you did have like online shopping, but it was very primitive. And so the web to movement, which I, this is when I became an entrepreneur in the early two thousands was said, was saying, Hey, the internet actually has these sort of native two way possibilities.

[00:17:44] Chris Dixon: You can build, you don’t need to make the user just. A passive consumer, you can let the user publish, right? And so that was a social media and it began social media movement. And that began with blogging, um, and morphed into, you know, Facebook and Twitter and all these other things, which everyone, of course, knows [00:18:00] today in the course of that happening.

[00:18:01] Chris Dixon: What happened is that in the 2000s, kind of two architectures for how social networking would One was an open architecture, most notably RSS, which, you know, today it still exists. People use it for podcasting. But in 2007 8, it was literally had the same number of users as, you know, Facebook, Twitter, and everybody else combined.

[00:18:19] Chris Dixon: People forget this. It was a legitimate horse race in like 2008 or so, up until that point. Which one? Which one? Uh,

[00:18:25] Balaji: but RSS did? Oh,

[00:18:27] Chris Dixon: yeah. RSS was legit. Yeah. If you go back, like I was going back and looking at my early blogging, like my whole blogging career beginning was always this RSS versus proprietary social media debate.

[00:18:36] Chris Dixon: Yeah. This was a, this was a, and look, I would argue that this people say, you know, today the top five tech companies are five 50 percent of NASDAQ up from 25 percent 10 years ago. Top 1 percent of social networks is 99 percent of social networking traffic and revenue. Like why did we get so consolidated?

[00:18:53] Chris Dixon: I would argue that was the pivotal point. was the, was the fall of RSS was the fact that RSS, the fact that social networking [00:19:00] is, you know, people spend seven hours a day on the internet. And like, it’s like, I think four hours of that is social networking or something. Like it was a Matt had a massive economic, um, consequence.

[00:19:08] Balaji: Here’s how I think about that. And then, uh, you know, give me, give me your thoughts

[00:19:12] Chris Dixon: or You were, you were in bio that at that time I was in bio, right. So I wasn’t You weren’t quite, yeah, you weren’t, you weren’t in the In the battle. That

[00:19:18] Balaji: battle. That’s right. I’m a little bit like Kevin Kelly actually in reverse where I actually tried to stay off of social media because Yeah, just like, so Kevin Kelly, you know, I’m just saying ’cause of his remark there, he relatively late to crypto, but he’s a smart guy and so on.

[00:19:32] Balaji: He’s just thinking about other things. I was in bio and I was actually trying to stay off the internet and I actually only started tweeting in December, November, December, 2013. Right? So like seven years after, because I thought it was all tweeting breakfast and so on and so forth, and that’s the power of, that’s the equivalent of, oh, crypto scams and, and, and hacks or whatever.

[00:19:52] Balaji: When someone’s on the outside, that’s basically all they hear. Uh, but I, but I wanted to say, so web one, web two, web three, at the [00:20:00] time, web 2. 0 was thought of as Ajax and Google Maps and interactive stuff and what have you. But now in retrospect, we can say that there’s, there’s a front end evolution, for example, with going from login password, web one, social login and OAuth and web two, and then like connect wallet with web three.

[00:20:17] Balaji: And there’s a backend evolution where you go from peer to peer, like P2P, then MVC, and then what I call CBC client, blockchain client. So like peer to peer, every node is equal, right? MVC, you know, like the rails, uh, pioneering thing, but just the hub and spoke architecture around the center. And now client blockchain client, which combines aspects of both of them.

[00:20:36] Balaji: You’ve got some of the peer to peer aspects and cause open source and it’s open state and it’s programmable, but you also got the monetization and the single global hub of the MVC era. So this is like the best of both worlds. The reason I bring that up is. That’s why I was a little surprised when you mentioned RSS because RSS was certainly good for, uh, like static content distribution.

[00:20:56] Balaji: But the moment you, you want a dynamic content, you had like, like a Facebook [00:21:00] page or social networking, you kind of needed to have that hub. Otherwise you’d be message passing. Social

[00:21:05] Chris Dixon: profiles. You’re exactly right. So, so no, I mean, I completely, I think we agree, but I’m just saying like historic, like at the time,

[00:21:10] Balaji: at the time it seemed like a horse race and then it

[00:21:12] Chris Dixon: passed.

[00:21:12] Chris Dixon: Yes. And in fact, I have a section, it was like a smaller section of the book, the fall of RSS where I try to diagnose why it failed. And so, and of course that leads to exactly your argument, which is I view blockchains as, as ameliorating the fit, the things, the things that the reasons RSS failed, I believe are two things, features and funding.

[00:21:31] Chris Dixon: Yep. Okay. So features is the ability to store, for example, your username. So RSS asked you to, it didn’t have any storage. It was a stateless protocol as, as like HTTP and SMTP. Therefore, and like actually quote in this thing, there was a wired article from 2008 where they tried, they, they, they tried to build a social network and they said, we can do everything except for the.

[00:21:49] Chris Dixon: Except storing the usernames. Right? We have no way to do that. And there were all these proposals. At the time I was involved in these debates, it was like, should we create a nonprofit that stores a social graph? It could be like Wikipedia, like how do we store it? Right? Or over? Over DNS [00:22:00] dss. Yeah. And of course it was what you needed was a blockchain, right?

[00:22:02] Chris Dixon: You need a community owned decentralized database, right? And so what, yeah, so what? Yeah, what actually, the way R Ss worked is you had to go pay $8, buy a domain, set it up, and that was just not a consumer. Value proposition when, when Twitter and Facebook said, just click a button and you get a name. It just, that was one thing.

[00:22:18] Chris Dixon: And then the other is subsidization. So I think a lot of people that don’t work on the internet, that aren’t internet investors like me and things don’t realize, um, how much subsidization has gone into the building of social networks. And so the example I use in the book is YouTube. So when YouTube came out 2005, it was actually originally a dating site.

[00:22:33] Chris Dixon: And then it pivot, I remember it came out, yeah. Yes. Um, it pivoted into a, you know, peer to like a social, um, video site. And by the way, at the time there were all these video sites, but it was like much more of the kind of, uh, you know, anyone can upload something. A lot of the other ones were like taking CBS content and whatever.

[00:22:49] Chris Dixon: Um, and so that’s why they

[00:22:51] Balaji: beat Google video cause they’re more risk tolerant. But anyway, go ahead. Yes. So with

[00:22:54] Chris Dixon: YouTube, when it came out, it, they, they pursued the strategy called that I call come for the tool, stay for the network. So [00:23:00] when YouTube came out, there was no, no one went to youtube. com. All right.

[00:23:03] Chris Dixon: And everyone had their audience on their blog, like I did. Right. And I wanted to have video on my blog. Now, to have video on my blog at the time, I would have to, before YouTube, I would use RSS as the, as the kind of protocol for people to subscribe. But then I would actually have to host it, like, fiddle with some software to host it on my site, and then pay for the bandwidth costs, which were really expensive.

[00:23:22] Chris Dixon: Right. And so YouTube came along and said, you know what? You click a button, you upload stuff and we will pay for the hosting costs. And you can put, you can embed it. Their killer feature was you can embed it in your blog. They actually had, the first thing you saw on YouTube was these big HTML at the top that was like the embed codes.

[00:23:36] Chris Dixon: Right. Um, and, and they said, Oh, and by the way, we’d like to also put it on youtube. com. No one comes here, but what the heck? Why not? Right, right. And so that was the strategy. And so all the people in the beginning used it as this sort of free video hosting thing to host on your blog. But then of course, over time, right, it was come for the tool.

[00:23:53] Chris Dixon: That’s the tool, the free hosting, the single player, the network. Suddenly YouTube had all this great content. I’m not going to go to cdixon. org anymore. I’m just going to go [00:24:00] to YouTube and, you know, fast forward. It’s worth like wall street analysts, say 140 billion, probably more as part of Google, but they spent, you know, this, why did Twitter and Facebook and all these guys raise tens of billions of dollars?

[00:24:10] Chris Dixon: A lot of it. Subsidization. They, they spend tons and tons of money. What is a blockchain like? I think of it as sort of thesis, antithesis, synthesis thesis is exactly protocol networks, right? I mean, you, you like these , these tri, yes. I love these frameworks like I do. The thesis is protocol networks. Uh, antithesis is these, what I call corporate networks is kind of centralized networks.

[00:24:28] Chris Dixon: And then synthesis is blockchains, right? Which is the best of both worlds. You get. You get the way I kind of characterize in the book, you get the societal benefits of protocol networks, but the competitive advantages of corporate networks exactly. You get the ability to do subsidization through tokens.

[00:24:42] Chris Dixon: You get the ability to store state right through the blockchain state. But you don’t as part of that have, you know, for people in Palo Alto who get to decide the flow of global culture, business and and economics, which is the current state, which is the trade we make today with corporate networks, right?

[00:24:58] Chris Dixon: Like it’s we’ve we’ve [00:25:00] bizarrely You know, it’s like as if AT& T got to decide who made phone calls and who gets to, uh, how much, and how, and they get to take, you know, anytime you call somebody up, they get to take a bunch of the money like that.

[00:25:10] Balaji: And they’re asked, and they’re also asked to get in the middle of that, and people want them to filter and so on.

[00:25:14] Balaji: Yeah, all this stuff. Yeah. I

[00:25:15] Chris Dixon: mean, I don’t care what your political views are, like the idea that we are going to outsource these incredibly important, um, global, uh, communication systems to seemingly, apparently arbitrary groups. Like, I just, I’m fundamentally against that idea. I think these, I agree.

[00:25:30] Chris Dixon: Decentralized community on systems, a

[00:25:32] Balaji: couple of reactions or thoughts. So first is, you know, you had a good line a while back, which is every command line tool becomes an app, right? Like

[00:25:41] Chris Dixon: every Unix command becomes a, yeah, exactly. Right. So our man, man becomes stack becomes stack overflow. And, and our sync

[00:25:48] Balaji: is like Dropbox and, uh, grab,

[00:25:50] Chris Dixon: grab is Google.

[00:25:51] Chris Dixon: And, you know, I don’t know. Right. Yeah.

[00:25:54] Balaji: So now, you know, one of the things I’ve thought is that you can revisit. Every [00:26:00] protocol. And then you say, what does it look like when you can add global state? Yep. Right. So for example, what does BitTorrent look like with a blockchain? Mm-Hmm. and for discovery, so you don’t have to go to pirate A or whatever.

[00:26:13] Balaji: You know, like there’s, there’s 50 kinds of things like this where, you know, almost every protocol is A, is communicating with b. And so what does it look like SCP with discovery or, you know, SSH with discovery? There’s probably something interesting there in that space of things,

[00:26:26] Chris Dixon: right? Yeah, I think you can go both ways.

[00:26:28] Chris Dixon: You could start like, I list some of them in the book, but they’re, and I, you know, I didn’t do a bunch of research on this, but. I mean, there have been hundreds of serious attempts to create new protocols, you know, in the last 30 years, you know, everything from somewhat successful ones like, you know, Jabber and, I don’t know if you remember, like, there was all these social attempts like Diaspora and, you know, there’s a million, you know, status.

[00:26:50] Chris Dixon: net and there’s a hundred of them. So I think there’s, and like, like a lot of these things, there’s probably a lot of good ideas in these, you say, because they were just limit, they had to. One arm tied behind their back because they couldn’t stay and they didn’t have money. [00:27:00] They didn’t have fun, but there was no, the protocol had no funding, right?

[00:27:03] Chris Dixon: I mean, they could go and maybe raise a little venture capital or do this, but they couldn’t, there was no, like the VCs wouldn’t want to put a ton of money into an open protocol network because they’re not going to get the prize at the end. The prize at the end of a Facebook is you control a network effect, right?

[00:27:16] Chris Dixon: If you’re, if you’re, if you’re deliberately giving away the network effect to the community as you are in a protocol, why would the VCs put billions of dollars in?

[00:27:23] Balaji: It’s actually important from another standpoint as well, which is one of the good consequences of all of that, you know, let’s call it subsidization build out and whatnot is the user interfaces for something like.

[00:27:34] Balaji: YouTube or Twitter or Facebook or what have you have actually now remained relatively constant for about 10 years. Like, I mean, I’m not saying they don’t add new features, but essentially it’s kind of the same looking feed. Right. And why that’s good is have you seen like the early history of like electrical power outlets?

[00:27:52] Balaji: There was a lot of innovation until it settled on a few standardized. Yeah. Yeah. Form factors. Right. And those. Uh, form factors for like [00:28:00] wall sockets. I mean, there’s a few different like Australians, Australia’s model and like Britain’s model and the U. S. model. Um, but there’s just a few form factors. In kind of the same way, I think of these sorts of feed formats as like form factors for our mind.

[00:28:14] Balaji: You know, they just plug in, right? And, uh, they’re sort of like natural fits, like, like the same with the handle of a cup is a natural fit. Once All of those billions of dollars have gone into just perfecting how Twitter looks, how, uh, how YouTube looks. Every new video site can copy YouTube’s format, basically, and then slightly innovate.

[00:28:36] Balaji: We’ve now seen like ten different Twitters that basically copy Twitter’s UX and swap out the community. And the other thing they can do is they can copy Twitter or, you know, uh, YouTube’s UX and swap out the backend. So that’s actually something where a lot of web three things I think are essentially taking the same user interface of web two, adding balances and [00:29:00] payments and adding global state.

[00:29:02] Balaji: And now you actually have a transformatively new app. Like, uh, there’s like web three WhatsApps, you know, that do this kind of thing. Now you can have balances and other stuff. Go ahead.

[00:29:09] Chris Dixon: No, I agree. I completely agree with you. Look, and I think. I, you know, I’m obviously somewhat critical of Web 2 in some ways.

[00:29:15] Chris Dixon: I think there’s also really strong things about it. And one of them is the user experience. Like, I think the Web 2, you know, WhatsApp, Facebook, Twitter are, you know, approaching the perfect or pinnacle of design and user experience. They’ve done a great job on that. Look, they’ve also done a great job just to give them all credit.

[00:29:31] Chris Dixon: of getting free services to 5 billion people. Like, I don’t want to take that away. Like, I think there’s been a lot of positive things. And by the way, the other thing I just mentioned is I think I have a lot of friends at these companies. I think they’re good people. My critique in the book is not of the people.

[00:29:42] Chris Dixon: It’s of the system that inevitably leads to these kinds of issues. Um, but, but I agree with you completely. I think that web three needs feature parody at a minimum with web two, it needs feature parody, and then it needs to have these advantages that benefit the users and the developers and the entrepreneurs [00:30:00] through ownership.

[00:30:01] Balaji: I think that’s right. And I think basically, you know, as you were also just saying in the early two thousands, the concept of free hosting. Phenomenally easy to use interface, global reach. I mean, those were so many things all at once that were so transformative that Facebook and YouTube and Twitter and so on were giving people.

[00:30:22] Balaji: And that was an absolutely amazing deal at the time. I mean, you know, one way I put it. Uh, you remember the Unabomber, you know, in the early nineties, right? Yeah. Okay. So Unabomber, he blew all these people up, but why did he blow these people up? He blew them up so he could get an op ed in the Washington Post and the New York Times.

[00:30:39] Balaji: Okay. That’s how scarce, he wanted

[00:30:41] Chris Dixon: to get his manifesto out.

[00:30:43] Balaji: That’s literally, that’s really why he did it. Right. So distribution was so scarce that he killed for the distribution. And so then distribution became so abundant that we kind of took it for in like 20 years, 10, 15 years, it became so [00:31:00] abundant that we basically took for granted that you could tweet something out and anybody could see it anywhere in the world.

[00:31:04] Balaji: It’s actually a remarkable, remarkable shift.

[00:31:07] Chris Dixon: Well, and by the way, that 5 billion people can do it and you can do it for basically, I think it’s 10 now is the going rate for a low end Android phone. Right. I mean, like there were all these kind of talk about, you know, digital divide, et cetera, in the nineties.

[00:31:21] Chris Dixon: Now my, the stat I heard recently is more people have access to the internet than running water. Right. It’s more reliable. Yeah. And it’s just a remarkable thing, right? If anyone can plug in, um, and, and participate and publish and it’s just amazing, right?

[00:31:34] Balaji: Now, now the problem is screen time. It’s too much time online.

[00:31:37] Balaji: Not, not, not enough. At seven, seven hours a day. Coming back to what you were saying, I mean, uh, and then let’s go through the book and whatever, a couple, a couple of thoughts I’ve had, and, you know, probably related to yours are that if you just take every web two app. And you add a web three wallet that has a balance and that has the ability to do encrypted signing.

[00:31:56] Balaji: You enable completely new things like a web three WhatsApp. You can now [00:32:00] do, for example, pooling like crowdfunding within a WhatsApp group, right? Like just in the same way, you can just instantly attach a message or a video or something like that. So I’m seeing tools that do this or like, you know, Farcaster which we, you know, we invest in, which is a Dan, Dan Romero’s thing.

[00:32:15] Balaji: Now you have, you have Twitter. But you can have communities that are defined by like, you know, the crypto that they hold and, and so they’ve got common interest. And so just taking those web two things and adding web three to them, I think, I think people are going to, are starting to see the value of that.

[00:32:28] Chris Dixon: But like I would add to me, you just described one of the user facing kind of improvements. I think there’s also like a very important developer facing improvement, which is you take WhatsApp and you just, you can make, you can hack it and make a different client. You can make a different interface. You can make a different, you can set up a different service that, you know, I don’t know, as a group chat thing that it becomes this hackable Lego brick, right?

[00:32:50] Chris Dixon: Which I think, look, if you look at the history, one of the case arguments I make in the book, if you look at the history of software development, there’s kind of two great threads of software development, like Eric Raymond calls it the cathedral in the bazaar, right? [00:33:00] It’s the sort of the open movement of, you know, Unix.

[00:33:03] Chris Dixon: The web was open, you know, obviously Linux and the open source movement, and then there’s sort of the Microsoft kind of the cathedral, the proprietary movement, and a lot of the history of the Internet of computing has been driven by these kind of decentralized communities of developers. I think I would, I would argue the PC in many ways, you know, Wozniak and Jobs at the homebrew computer club was sort of, I call it an outside in movement, a tech movement of kind of outsiders from the fringe.

[00:33:29] Chris Dixon: I think we’ve lived through this centralized era of sort of app store last 10 years. Everyone’s got, and I believe people in tech have this kind of Stockholm syndrome where they’re like, it’s great to be controlled by this guy that takes all your money. Right. Yeah. And like, but when they get a taste of freedom, I think like when they get a taste again of like what does it mean for developers to be able to do what they want and not have to worry about getting rugged by the.

[00:33:50] Chris Dixon: I think that there will be, you know, this renaissance in, in kind of developer, um, sort of hacking together the, these, you know, composable, uh, software. [00:34:00] So I would just add to your point, like, I think there’s adding tokens and financial things, but I think there’s also adding composability and developer facing features.

[00:34:07] Balaji: It’s like the Chinese, you know, the romance of three kingdoms, the empire long. United must divide, long divided must unite. Right? So the remains of the three webs, the technology, long centralized, must decentralize. And then when it’s decentralized, I

[00:34:22] Chris Dixon: mean, I get accused a lot of like fanciful, I’m sure you do too, of like magical thinking fans.

[00:34:26] Chris Dixon: And then, and maybe, but like the other hand is like, we’re 30 years into something that’s clearly as important as like the printing press and like, oh yeah. Should, should we assume that the structure is locked in? Or that, you know, or that these historical forces, like you just said, of like the, you know, like the pendulum swing back.

[00:34:44] Chris Dixon: And like, I think it will, I think we’re very early in this development. Oh yeah. I

[00:34:48] Balaji: think, I mean, basically what happens is I, I don’t think it’s magical at all in the sense of if we go and just look at, you know, when any one of these gets too strong, then the other one, if you have a period of too much [00:35:00] decentralization, then what happens is people want it to just work.

[00:35:02] Balaji: Apple, an Apple like thing to emerge where it all snaps together and they’re willing to pay for that. And so amidst that anarchy, then one solution arises and then it becomes too powerful. And then people want to decentralize And we’ve just seen like 10 cycles of that in computing from, you know, centralized the, the centralized mainframes to personal computing, to the cloud, to, you know, local again, to, and so on and so forth.

[00:35:28] Balaji: Right.

[00:35:29] Chris Dixon: I don’t know if you followed this, but like the new thing social networks are doing now. So they’ve, they’ve moved from sort of all, you know, user growth and everything else to keeping you in the app the whole time. And so they’ve all now been punishing people for linking out and linking out. Right.

[00:35:42] Chris Dixon: Yes. Like you get, you know, if you put a link in your tweet, it will get demoted in terms of its reach. Right. Like

[00:35:47] Balaji: subset. That’s true. Yeah. The word that can’t be said.

[00:35:52] Chris Dixon: Well, no, and like, what is, what is Substack and Patreon in a way? In a way, what they are, right, is they’re, they’re, um, escape hatches [00:36:00] back to the open web.

[00:36:01] Chris Dixon: Right? Right. So, like, you, you put a link to Substack, and Substack, of course, is driven by email, Patreon by the web. Those are web one protocols that don’t charge you. You know, 100%, 90%, 30%, whatever, they charge you 0%, um, now Substack charges some fee on top, but the point is, like, it’s, it flips the economics, right?

[00:36:18] Chris Dixon: On Twitter, you get nothing, on Substack, you get 90%, or, you know, Patreon, you get whatever, and I don’t know what the exact take rate on Patreon is, but, but the, but, but then that’s why they’re devaluing the link. So I think you’re going to see even more, like, to your point of, like, consolidation, I think you’re about to see even more where, You just move to like really, really keep people within one of five apps and, and the occasional time that you click out and go to a website today, like it’s still a thing you do.

[00:36:42] Chris Dixon: And if you look at the data, like it’s still pretty common for people to use websites. Like I think you’re going to see further pushing back against that over the next couple of years to the point where, you know, I believe they’ll overdo it. And then there will be this counter movement. Right. As you described.

[00:36:57] Balaji: Right. And I think actually it’s interesting [00:37:00] because. I think the Web 1, Web 2, Web 3 also has some relevance to what you’re saying there, where Web 1 is, in a sense, another definition of it, slightly different than the definition we’ve been using, is it’s a web that Google can index. It’s the web crawler accessible web and then web two is the social web, which is much better structured, but it lives on Facebook’s database servers.

[00:37:25] Balaji: It lives in Twitter databases and they can SQL query it and they can get it’s much more clean than the open web. But it’s much less accessible. And then I actually think, in a sense, Web3 also combines the best of both worlds because, um, block explorers are search engines. What’s awesome about them is you just get all the updates pushed to you every, you know, block.

[00:37:47] Balaji: And so you don’t have to go and scrape and crawl a bunch of mess to find out what changed, you get all the edits pushed to you. And it’s really rich and so you can index it and so on, and it’s open and it’s public. So it’s as [00:38:00] structured as the Web 2 style databases, but it’s as open as a Web 1 style web.

[00:38:04] Balaji: And so I think that’s actually The new open web, and it’s not a moment too soon because AI is making the old open web kind of under threat, right? So these are two things that feedback on each other, you know? Yeah,

[00:38:17] Chris Dixon: I was going to say AI has excelled, like, so Reddit and Twitter just, you know, put greater restrictions on their API because they feel like These AI systems came and took their content and trained on them.

[00:38:29] Chris Dixon: And then, like, look, Stack Overflow’s traffic is way down because of Copilot. And yet Copilot was trained partly on Stack Overflow, right? And so there’s a sense in which these, these AI systems, like I’m pro AI, et cetera, et cetera. But, but there is this dynamic going on. where these systems are essentially incentivizing further closing down of the web.

[00:38:47] Chris Dixon: By the way, if you’re a graphic designer, you know, do you want to still put your content on the open web, or do you want to put it behind a paywall? Like, I think we’re going to see a move towards sort of paywalls and siloization unless we figure out a good model for [00:39:00] paying those people, for keeping it open.

[00:39:01] Chris Dixon: And I think to your point, like, and I make, I have a whole chapter on this at the end, I think blockchains not only do what you do, which is they, Commit to open systems, but they also provide business models for creative people in an AI world. And that’s very important. You need a way to pay those people.

[00:39:15] Chris Dixon: I believe both sort of societally, but also for, to keep the internet sustainable. Like you, you, you don’t want an internet where people don’t want to put their stuff online. Like that’s just not a good, good internet.

[00:39:25] Balaji: Right. I agree with that. And I think what’s interesting about it is like many of the things that AI is doing, crypto is like the counter force to it.

[00:39:32] Balaji: Like, for example, AI makes everything fake. Crypto is how you can make it real again, you know, with cryptographic signing. It’s

[00:39:39] Chris Dixon: yeah. Deepfake it’s the answer for deepfakes is the answer for counterfeit persons. It’s the answer for proof of personhood. Of course it is. Right. Like it’s the only answer.

[00:39:46] Balaji: And you talk about this towards the end in chapter five, and we’ll come to that in a sec.

[00:39:50] Balaji: Yeah. And then the other, another one is what you were just talking about. And we’ve, we’ve probably both, you know, like I may have seen invest in some of the same things, um, attributability. Right. Micro [00:40:00] NFTs allow artists to, uh, maybe, you know, if something is incorporated into a work, you can see that you get much more tracking and provenance on, on something.

[00:40:10] Balaji: If you, if you want to go that route. It’s like

[00:40:13] Chris Dixon: how the offline world works, which is like, you don’t, like an artist doesn’t, generally doesn’t monetize through the photograph of a piece of art, they monetize through the authentic real piece of art, and the photograph is just out there and they don’t control that, right?

[00:40:27] Chris Dixon: Um, and so you have sort of a layer of, of the, the, the layer that can be easily copied by technology is the free, is the free layer and the freemium, like the, the, the paid layer is the, Scare Slayer, right? By the way, video game, I have some stuff on this in the book, the video game industry figured this out a long time ago.

[00:40:49] Chris Dixon: It’s a very interesting case study with the, so video game industry has grown in revenue, annual revenue to 180 billion while all other forms of media have been flat to down in that same time. Yeah, it’s bigger than Hollywood.

[00:40:59] Balaji: It flipped Hollywood a [00:41:00] while

[00:41:00] Chris Dixon: back. Oh, significantly bigger. And like, like Grand Theft Auto, um, the new 1.

[00:41:03] Chris Dixon: 6 or whatever it is, 5. 6 will be bigger, bigger than any Marvel movie and, you know, it’s, it’s far bigger. And so, you know, why is that? I mean, there’s a bunch of reasons, including graphics cards and just video games. Designers are great, but a big part of it is they were very, um, uh, they essentially moved to what, like the dominant model now is free games with, with virtual goods, which are essentially NFTs.

[00:41:27] Chris Dixon: Um, so you look at games like League of Legends and fortnight. These are free games. And what they figured out was you look, you’re not You’re not going to lock down the game. There’s just a million people making games. In the same way there’s a million people making generative art. And there’s a million people writing stuff on social media.

[00:41:43] Chris Dixon: And there’s a million, like, news has become a commodity. Like, there’s just all, like, the games, the games industry said, Look, the gameplay itself will be a commodity. Let’s not fight that. Let’s, let’s not try to fight the natural kind of pull of the internet. Right. So let’s let that be a commodity. Let’s let it spread.

[00:41:57] Chris Dixon: By the way, streaming, that was very controversial in the beginning. [00:42:00] Nintendo actually, um, they could shut it down through copyright. Nintendo fought it in the beginning. Streaming came out in the late two thousands because they’re like, it’s copy, you’re taking my content and copy it’s copyrighted game streaming.

[00:42:09] Chris Dixon: Game streaming. Sorry. Game streaming. Yeah, yeah, right. But then the game industry was very, like, if you look at other industries, they fight it, game industry finally was like, Hey, this is good. The, the net, you know, and that led to Twitch and attention. Yeah. But more attention is good. Let’s monetize something else.

[00:42:21] Chris Dixon: And so then they said, Let’s lean into this. Let’s let the game play is going to be commoditized anyways. Let’s make it free and let’s monetize community and of course what virtual goods are, are status signaling in the community, right? But they’re essentially monetizing the people and the status signaling within those, within those communities.

[00:42:38] Chris Dixon: And it’s

[00:42:38] Balaji: actually good. It’s actually good to push status signaling to virtual goods because it removes it from Physical goods. And so then you decouple the dispensable online signaling from the, you know, Yeah.

[00:42:51] Chris Dixon: I mean, it’s, it’s like, it’s the same behavior we see. I mean, does that Ferrari down the street actually worth a million dollars or it’s probably a hundred thousand dollars in [00:43:00] car and 9, 000 in status, right?

[00:43:02] Chris Dixon: I mean, almost every good you look at around anywhere you go is like a lot of it is status signaling in the, in the developed world. Right. Yeah. So. You know, I think similar stuff will move to the online world. And so, so yeah, so in a world of abundant content where anyone can push a button and get any piece of text and any piece of art and a movie, you know, you’re just not going to probably monetize through the actual content.

[00:43:26] Chris Dixon: You’re going to monetize through something else. I

[00:43:28] Balaji: think that’s right. And so that actually brings to the title of your book. I mean, we’re spending all this time online, you know, one, one of the lines I’ve had for a while is ask people. How many hours a day are they looking at a screen? And then they’ll say six or something.

[00:43:42] Balaji: I’m like, Oh, so the majority of your waking hours, you spend looking at screen, which means most of the rest of your life is going to be in the matrix, right? In some sense, vision pro and Oculus all make that a real Chris early Oculus investor as well. And so you’re living in these, you know, increasingly virtual worlds.

[00:43:59] Balaji: We’re spending a lot of [00:44:00] time online. We’re earning these digital tchotchkes, but we’re not owning them. And so I think most people kind of understand what reading and writing on the internet is. What does owning on the internet mean, that third verb? What exactly does that mean?

[00:44:13] Chris Dixon: Yeah, so I think to go back to the kind of web one example, like you own your domain name.

[00:44:18] Chris Dixon: Alright, so you own that in the sense that like if I, you know, if I have my, if I’m hosting my website at Amazon or Whatever rack rack space and they decide to jack up the prices. I can just leave, copy my files and then I can redirect my domain name and I don’t lose any of my followers. Quote unquote, anyone can still send me an email.

[00:44:38] Chris Dixon: You know, I’m still ranked in Google. the same way, right? It all happens behind the scenes. And so imagine this isn’t. This is one of many examples, but imagine a world where social networking worked that way. And you had, you know, I’m at C Dixon and I control that and I choose, Hey, I’m going to go and use this interface or that interface, but I own it now because I don’t own it.

[00:44:56] Chris Dixon: Now the most visible consequence of not owning my name, my social media name [00:45:00] is deplatforming. Right. People talk about this, you know. So and so was kicked off this network, and that’s a real issue, um, but part of my point in my book is there’s a lot of very common subtler effects, um, of not owning your name, uh, and not owning your digital presence, including, um, you know, the fact that at a whim, they can change the way ranking works, right?

[00:45:21] Chris Dixon: So like I Hey, now, now sub stack links are demoted. Um, and the fact that the, the, probably the most consequential in my mind that’s overlooked is the fact that they control everything means they control the economics. And so, you know, every social network outside of YouTube, um, makes money through advertising and has a Basically, effectively 0 percent revenue share with the users.

[00:45:43] Chris Dixon: So, you know, you go to Instagram, you go to tick tock, you’re not going for the Instagram and tick tock created content. You’re going for the users, right? And those users are outside of these little, like, kind of, you know, de minimis sub 1 percent of revenue creator funds that some of them create, like, it’s just really just [00:46:00] not material.

[00:46:01] Chris Dixon: They don’t. Share revenue with the creators. And so the creators, I have a bunch of creator friends and they’re off trying to do these weird Sponsorships and they’re selling, you know you know body lotion and their kinds of things because they can’t get right on the internet and Yeah, one exception being YouTube which which is is pretty generous.

[00:46:20] Chris Dixon: It’s like, you know Close to 50 percent of rev share. And that’s, that’s great. And YouTube, that’s for historical reasons. There’s a bunch of reasons why, but all the other social networks don’t do that. So that’s, that’s

[00:46:28] Balaji: one. What is the historical reason on that? Actually, I don’t know. Is it because of AdSense or

[00:46:32] Chris Dixon: something?

[00:46:33] Chris Dixon: No, I have it in the book cause they were competing. It was a competitive thing. There were other, um, there were other, I have a little thing about it in the, in the footnotes, but the, um, there were some other, um, services out there that were, that were, that were giving out rev shares and they just had to do it as a competitive thing.

[00:46:48] Chris Dixon: So it was just kind of video. At that point, for whatever reason, like the entrepreneurs were viewing it more as like a marketplace. Remember how social networking started, right? It was, it was not user created content. Like [00:47:00] Facebook was just literally profiles. Right. And then people started changing their profiles.

[00:47:05] Chris Dixon: And then people started looking for the changes to the profiles. And then he saw the newsfeed. And then he created a newsfeed, which was just sort of a list of deltas, the diffs, right? It was a, it was a grep of diffs. And that freaked out, by the way, for those who don’t know, that was the most controversial thing in history.

[00:47:20] Chris Dixon: The internet is doing that. Um, and so, and so Facebook just kind of evolved much more like it was a profile system. And why would you share revenue? Whereas YouTube very much started off as like, this is a marketplace like Airbnb. Right. And then we have a take rate and that was how all these video sites started and you had to have a.

[00:47:37] Chris Dixon: So it’s a kind of a historical legacy mindset thing that they have a take rate that they share, but TikTok doesn’t, for example. So, so anyway, so what does ownership means? It’s essentially that, you know, that users, developers, all the kind of participants, entrepreneurs have digital rights. Like you, you, you know, you use a service, you, you can own a name, you can own your money.

[00:47:59] Chris Dixon: You can [00:48:00] own a virtual good. You can own an NFT. You can own like some kind of item like embodied in a token. A token is a way to kind of encapsulate ownership that gives you rights that can’t be taken away. Right. And that’s one of the key things that blockchain enables is a blockchain can make these strong commitments.

[00:48:16] Chris Dixon: It says you, once you own this, you really own it. And even though you’re using this service, they can’t, they can’t remove it from you. Right. So, so it’s like, look, we’re used to this concept in the offline world. Like, it’s property rights, right? And imagine a world where instead of you owning your house and your car, you, you know, every venue you went to, you had to like, go and get a new set of clothes and, and you know, you leave and they own it.

[00:48:37] Chris Dixon: That’s the internet today. It’s a very strange world that evolved and we’re all kind of, I think, kind of, uh, uh, you know, numbed into thinking is normal, but it’s not normal. It’s not the way that something you spend seven hours a day should work. You should have the same kind of, property rights that you do in the office.

[00:48:52] Chris Dixon: By the way, you don’t own the Kindle book on your phone. You don’t, you know, they remove those things all the time. Music disappears. [00:49:00] Like, all these things. And like, what’s your, what commitment do these services give you? They give you a 50 page Terms of Service privacy policy, which nobody reads, no one negotiates.

[00:49:08] Chris Dixon: They can do whatever they want with their data. Like, so you’re just going to these services and And giving them all of your data, all of the rights, all of the control, all the economics, and the users and, and all the other participants are just have no power and are disenfranchised. And the alternative, what sort of web three vision is one where you actually have real kind of rights.

[00:49:26] Chris Dixon: Um, and you control data and you control economics and, you know, you can have money where you are in control and you don’t have to, you know, PayPal decides to change. page 40 of their 80 page privacy policy and you’re, and you know, this line of businesses or this, this category of businesses are now banned, like, is that the kind of internet that we want to live in?

[00:49:46] Chris Dixon: I mean, I’m all for rule of law. And like, we should have the obviously, like with the web and email, there were laws governing it, you can’t put up a website that does illegal stuff, you know, you get You go to jail, and that’s the way it should be, but we don’t have a [00:50:00] separate tribunal. That’s a bunch of other people that aren’t legally enforced that decide things, right?

[00:50:05] Chris Dixon: We rely on democracy, and that’s what we should do, I think, with other digital systems. You know, I had this

[00:50:10] Balaji: concept in 2018, this talk, I probably should have made it public, this talk at Coinbase on The nouns and the verbs, you know, like nouns, like, like minors and stakers and, and so on holders and the verbs buy, sell, send, receive, but also like mint, burn, et cetera.

[00:50:24] Balaji: And one that we were just talking about is switch. And one, one issue currently with these web two services. Your practical alternative is really just take it or leave it. Either you take this huge terms of service thing, which you, you, you, you can’t redline it and send it back. And can you, you know, you have no negotiating leverage as an individual or you just accept it in total, but with, you know, web three profiles, and this is already true for crypto exchanges.

[00:50:50] Balaji: To some extent, you can just withdraw all of your funds or all of your assets and then move to a different. Exchange. So we [00:51:00] know that Alderay works at the asset level and it’s starting to work at the username level with ENS, where you can take your entire profile out and then bring it into another site.

[00:51:08] Balaji: And so technology changes, microeconomic leverage, right? And so that’s, that’s exactly what you’re talking about, where it’s giving the individual more leverage against. a giant company that otherwise, you know, uh, everybody, they don’t actually have a real option beyond just clicking yes in the job service.

[00:51:26] Balaji: Now they do. Both

[00:51:27] Chris Dixon: users and creators. So example, Tik Tok, what happened is, you know, they kind of rose up in the last three years and a, and a bunch of creators got to like a hundred million followers. Like there was, it was driven by like 10 big, 10 big, it’s kind of influencers on Tik Tok. And then Yeah. I mean, there’s like the D’Amelio’s and a bunch of others.

[00:51:46] Chris Dixon: KB Lame and so on. Yeah. And so it was very power law, right? As a lot of things are. But then TikTok’s like, we don’t want to be dependent on these 10 because then they can go and negotiate. So they deliberately then turn the dial down on those 10 and turn the dial up on a bunch [00:52:00] of new people. So what they want is, 10, 000 people with a million followers, not 10 people, right?

[00:52:05] Chris Dixon: Because it’s, it’s, this is, this is Porter’s five forces. This is too much supplier power, but they’re, but all the social networks are constantly doing this. They’re constantly turning the dials there, you know, they’re, and by the way, a lot of this is happening now through AI and it’s not some malicious thing.

[00:52:19] Chris Dixon: It’s just profit maximization. I’m not, I’m not

[00:52:21] Balaji: against them doing that. I am, what I am against is when. There isn’t leverage on the other side as well.

[00:52:27] Chris Dixon: That’s what I’m saying is because there’s no leverage on the other side, these guys can’t like, look, you know, they can’t switch. They can’t leave like their entire thing is dependent on tick tock.

[00:52:34] Chris Dixon: And so there’s no, yeah, I’m not like I’m for free market and the company should do what they want. The problem is they’re doing what they want with the strongest force in the history of business, namely network effects, giving them unlimited power over their dominion. Um, the network effects, like I’m all for businesses competing, but like, look how web hosts compete.

[00:52:52] Chris Dixon: They compete on features, service price. Like AWS competes on, in my mind, on good, good things, right? They can, it’s [00:53:00] like they’re fighting Google and other web house, uh, hosting providers through features and pricing and just all the things, and they still make profits and that’s great, but they don’t have like AWS doesn’t have lock in, like you’re hosting their, your website there.

[00:53:14] Chris Dixon: Because of network effects, right? And network effects are just such a powerful lock in force that if you don’t have a counterbalance like digital ownership for users, you just end up with these, I think what we have now, these five monopolies who run roughshod over everybody. It

[00:53:29] Balaji: is, it’s definitely a pain to withdraw from AWS, but it is also something where they know their customers are developers and developers.

[00:53:36] Balaji: There’s always new dev tools and stuff coming

[00:53:39] Chris Dixon: up. So look, they know you can, and then therefore they can’t talk. They can’t fuck with you too much. They’re just, they’re just not going to do it. I mean, um, that’s right. That’s right. And they, and they know you’ll pay some premium for convenience, but it’s just, it’s very different to have your moat, you know, Warren Buffett style moat be scale and quality and scope and all the kinds of traditional moats.

[00:53:59] Chris Dixon: [00:54:00] Network effects are just a very, are just in some ways an OP moat, right? Right. Like it’s just, it’s just really, really powerful. And the only really counterbalance I think, credible counterbalance is to let users, like to your point, have new verbs and switch would be a key verb there. So,

[00:54:18] Balaji: you know, towards that end, right?

[00:54:19] Balaji: Like basically now let’s say they’ve, they have the own of rewrite own. They’ve got their private keys locally. Right. That is interesting because, um, own can be individual ownership. It can be developer ownership, it’s community ownership, it’s algorithmic ownership, like an algorithm can now own property, even a robot, like a physical robot can, you know, have ownership.

[00:54:43] Balaji: So, uh, you know, talk about that. You touch on each of these things in the book,

[00:54:48] Chris Dixon: right? I have a section about machine to machine payments as an example of that.

[00:54:52] Balaji: Right. That’s one thing. Basically, like you have the community ownership where a crowd can buy things like, you know, these, we just talked about [00:55:00] how an individual who’s dealing with a corporation now gets microeconomic leverage, they can get better negotiating power, but you can now actually have a group of people that all move at once, for example, right.

[00:55:09] Balaji: Or you can have an algorithm, you know, go ahead. Well,

[00:55:11] Chris Dixon: yeah, I guess another way to frame it maybe is there’s like the way I like to think of it is when new computing platforms come along and I think of a blockchain as a computer and I know that’s slightly controversial statement. I just when I say computer, I mean, ledger to me is not strong enough because ledger to me implies it’s the hard drive where it’s also the It’s also the processor.

[00:55:31] Chris Dixon: It’s both the nouns and the verbs, right? So that’s why I like to use computer because it’s even stronger than ledger, right? It’s a, because you can program modern blockchains like Ethereum are fully, you know, semi turing complete programmable computers. It’s actually,

[00:55:43] Balaji: so what you’re saying, I mean, in fact, just to complement what you’re saying is I think that they’re like the third operating system.

[00:55:48] Balaji: Cause you had the operating system. You had the web browser, which is OS of web two. And the blockchain is OS of web three. Cause you have a developer environment, you have a compiler and you have all this stuff,

[00:55:57] Chris Dixon: right? When you have new computing movements come [00:56:00] along, like when you sort of look at historically, and I, and I go through some of this in the book is you generally have what I call skeuomorphic and native applications.

[00:56:07] Chris Dixon: And so skeuomorphic applications are kind of what are basically taking older. Existing applications and layering on kind of new functionality, new Web three functionality. So it’s a little bit what you’re describing earlier. Like you take what’s out, you take messaging, but now you kind of reimagine it with once the users and developers and creators can have digital ownership, right?

[00:56:25] Chris Dixon: Um, there’s a second category of, and, and, and so like YouTube is a good example, kind of. Um, going back to 2005, there was a whole wave of video startups then, venture backed video startups in 2005, because that was the moment where broadband had sort of crossed over narrowband in terms of penetration and everyone realized video was going to be a thing, right?

[00:56:43] Chris Dixon: And there were broadly two approaches to doing video. One was take CBS and NFL and all these existing TV content and kind of port it over to the internet. And the other was just put up a website and anyone can upload and it’s, you know, and basically the bet YouTube was, and that [00:57:00] was of course YouTube, but the bet YouTube was making in some sense was crazy because it was like there is no one doing that today.

[00:57:05] Chris Dixon: There are no video creators on the internet. The closest

[00:57:08] Balaji: analog was like America’s Funniest Home Videos or something. Yeah, exactly.

[00:57:12] Chris Dixon: And you ask YouTube at the time, it’s a little bit like I remember the Stripe founder said this too, when they were raising money initially, who are your customers? They said they don’t exist yet, right?

[00:57:19] Chris Dixon: Like, who are your who’s going to put video on there? They don’t exist yet, right? But that so YouTube was the native video, right? And the and the ones that were doing like the CBS content, like bright cove and stuff. That was that was a skeuomorphic video, right? So I think it’s similar with blockchains and by the way, I think skeuomorphic and native are both valuable.

[00:57:36] Chris Dixon: So I’m not, I’m not saying one’s better. There are two

[00:57:38] Balaji: different turns in the idea maze, you know, right? Like Netflix and, you know, first party content also did really well and it just turned out to be a different

[00:57:45] Chris Dixon: branch. Yeah. And so both can succeed, right? And so I think that there will be sort of web three social networks, web three games, but then there’ll also be these crazy new things that just.

[00:57:54] Chris Dixon: Couldn’t exist before. And, and like one example I, I like is what I call collaborative story, or people call collaborative [00:58:00] storytelling. And so this is an idea that a crowd of people, kind of Wikipedia style, can get together and essentially do what Hollywood does today. They can get together and, you know, a thousand people all over the world.

[00:58:13] Chris Dixon: Um, get together and create the next Marvels, the next Harry Potter, the next Star Wars, right? So today, you know, you have these really excited fan communities if you go read Reddit and things, but they’re just sort of passive observers, you know, like, wouldn’t it be cool if Obi Wan did this or whatever they say, right?

[00:58:28] Chris Dixon: And, you know, but they’re really enthusiastic. Now imagine if you actually had these fan created communities, and then those Those, those creators were rewarded with tokens for their kind of proportional to their contribution. And then what’s really cool is that they would then, you know, if you think about the power of meme coins like Dogecoin, you have these armies of people out evangelizing these coins.

[00:58:47] Chris Dixon: In the case of Dogecoin, it’s kind of this silly meaningless coin. But now imagine it’s sort of, you know, this Harry Potter universe, right? And they’re out evangelizing it. And that, that’s a very important thing because it, you know, why is Hollywood stuck in a rut where there’s everything’s a sequel? [00:59:00] It’s stuck in a rut because it costs hundreds of millions of dollars to go market a new narrative world.

[00:59:05] Chris Dixon: So what if these communities, it both sort of opens the gateway, allows anyone to become, you know, sort of globalizes and decentralizes Hollywood, and solves the marketing problem of Hollywood because you have these organic communities who can just go out and evangelize it, right? I love that idea. It’s a really cool idea.

[00:59:22] Chris Dixon: We made a few investments. It’s still early and like no, no one has proven it yet. But like, that’s the kind of thing where you just have like a brand new behavior that to your point, like a sort of a crowd coming together. And by the way, could some of those participants be machines? Like, why not? Like I, my view is if a machine is like in all of these systems, there’s no reason a machine shouldn’t be an AI.

[00:59:43] Chris Dixon: shouldn’t be part of that system. And, you know, if the AI is, you know, you already have this on Wikipedia to some extent, you have bots that go fix commas and stuff like this, you know, like, so like, it’s like, if you look at a typical page on Wikipedia, like, you know, on the planet Jupiter or something, there’ll be some couple [01:00:00] of astronomy, um, aficionados who are editing it, but then there’s like the comma guy and the, you know, and the.

[01:00:07] Chris Dixon: The split infinitive guy. And like, there’s a whole bunch of other people coming and messing with it. And I think a similar thing here with storytelling, you may have AIs that come in and say, I think that’s a, you know, you should add a little more flourish to the third actor. I don’t know what they’re going to do.

[01:00:20] Chris Dixon: Right. And if they’re doing a good job, they should get paid. And then you can have like, you know, some programmer somewhere who’s like, you know, prompt engineering and AI who’s then participating in some economic system and, you know, and like, why not? Right. Um, so it’s

[01:00:35] Balaji: funny because. I, uh, I have thought about this a lot from a slightly different angle, which is the class of tasks that you can.

[01:00:45] Balaji: Improve crowdsourcing with, with crypto online. So storytelling is one, there’s, uh, there was something called the, um, uh, it was like the massively math project or something like that, where Terence Tao posted, uh, uh, an unsolved [01:01:00] problem and had his comment section, try to go to work on it in math. And they were able to make progress on it.

[01:01:04] Chris Dixon: I’m not a math person, but my understanding is math overflow, Stack Overflow’s math thing is a very active and. Successful site. And so a lot of it is crowdsource math. I mean, you know, crowd. Yeah.

[01:01:15] Balaji: The big thing I’ve been thinking about is something where right now, crowdsourcing is low skill activities, like a mechanical Turk and something I’ve thought about for many years.

[01:01:23] Balaji: And actually, you know, I’ve done iterations on this theme. Imagine if, for example, Elon could tweet out a task and limit it to that percentage of his user base that actually was qualified in rocket science. And so that would work if they had a crypto resume and they had like NFTs in there that proved that they had that skill, then it’s kind of like, you know, the limit who can reply to this, you could limit it to those people.

[01:01:50] Balaji: Right. So that’s kind of, you know, the version of that here would be, okay, here’s all these people who are actually good writers and you source these 30 out [01:02:00] of 5, 000 people. And, you know, I’m not saying it’s as credentialed or whatever is this, but You know, there’s a way of basically distributing

[01:02:07] Chris Dixon: work more.

[01:02:07] Chris Dixon: I mean, we have no digital identity today. The closest thing we have is like LinkedIn, which is this shitty paywalled website, which I personally can’t stand. And so imagine if you had, you know, in the right design, right, users would have what you’re describing, like they’d have sort of public NFT credentials.

[01:02:22] Chris Dixon: They’d probably also have private data that they could then choose to share with select providers, right? Um, so all of these things would be, you know, you basically have this massive unlock of new applications you could create, like the one you’re describing where the Elon is, is, you know, selectively crowdsourcing.

[01:02:41] Chris Dixon: If you may,

[01:02:41] Balaji: Elon, isn’t the guy, maybe he’s not the guy, but it might be something like that where now you can, uh, cause crypto helps in other ways. You can give a little small payments and all that kind of stuff. So I

[01:02:51] Chris Dixon: like to call it the missing primitives. Like I think of it as yes. One of the, you know, it’s, it’s wonderful that the internet was sort of created in this bottoms [01:03:00] up, um, open source way, but as one of the byproducts of that, there were just kind of missing pieces and like payments was one of the missing piece, like search index, controlled digital identity.

[01:03:10] Chris Dixon: Yeah, reputation systems were missing. And so, and what happens is if, if, if you don’t step in and fill it with a public good, it gets filled with a private good. So like. In some ways, Google, there was a gap, which was we needed a reputation system for websites and it wasn’t part of the open internet. And so Google made that a private good and made, you know, a boatload of money off of that.

[01:03:30] Chris Dixon: Trillion dollars, yep. And the same thing is going to happen with all, like, all these systems, like proof of person, like CAPTCHAs don’t work anymore. How are you going to prove you’re a person? How are you going to prove, like, you know, looking at the text of an email is not going to work anymore. for detecting if something is phishing, listening to an audio, you know, that is, it sounds like your voice, that’s not going to work anymore, right, that all of this stuff is going away very quickly.

[01:03:53] Chris Dixon: And so in that world, like, how do we fill the gap where we prove things are real? And I think that’s, look, I think the gap, my view is the gap is [01:04:00] going to get filled. It’s either going to get filled by like a company like Facebook, or it’s going to be filled by a public good, like a shared community service that’s part of the open internet.

[01:04:08] Chris Dixon: And that’s like kind of one of the key questions right now is, is we need to build those things now before they get subsumed by these companies because it will get filled in some way, like it’s not, the world’s not going to let it be the case that you just, you know, get fished all the time. Right. So I

[01:04:22] Balaji: think that’s right.

[01:04:23] Balaji: And I think basically the crypto version is going to be a lot more secure. You know, there’s, there’s a chapter five that you wrote. There’s, there’s a lot that you’re excited about in the next 10 years of crypto and it’s not just crypto. It’s becoming, it’s now crypto is like a primitive. That we can use for things.

[01:04:35] Balaji: It’s global state. It’s, it’s, it’s signed messages. It’s micropayments. It’s all of this kind of stuff. What, what do you think is, uh, is, is exciting to you? What kinds of things?

[01:04:45] Chris Dixon: Yeah. And just, if I can make one note about the book for the, for the listeners is that I wrote the book, although it’s a book and it’s meant to be read beginning to end, it’s all.

[01:04:53] Chris Dixon: Chunked into three to four page chunks. And so what biology is describing is, uh, you can jump around like if you’re an expert, you can jump to [01:05:00] like the last part five is seven application areas that I picked just to like kind of because a lot of the critics will say, well, like what problems does blockchain solve right now?

[01:05:09] Chris Dixon: Of course, blockchain is a better way to build networks. It’s like a building material. It’s more like, it’s like asking what problem does steel solve? Like steel doesn’t really solve a problem. It just makes us, you can build better buildings and unlocks new possibilities. It’s just like a better building material.

[01:05:23] Chris Dixon: Um, but at the, you know, I wanted to go really specific into some areas. So I talk about social networking cause it’s just such a big, important category. I talk about finance, defy Bitcoin payments. I talk about the thing I just described, the collaborative storytelling. I talk about AI. Well, specific specifically around AI, like it’s a little bit, we were talking about with paywalls, but.

[01:05:42] Chris Dixon: You know, the Internet has operated on this implicit economic covenant between distribution, namely search engines and social networks, and content, like websites, you know, media sites, et cetera, right? And the implicit covenant is that, like, Google The website says, [01:06:00] Google, you’re allowed to index me, you’re allowed to use a snippet on your page, but you’ve got to send me some traffic back.

[01:06:06] Chris Dixon: You know, like, like I was on the board of Stack Overflow and like one of the biggest fears you have as a content site is that you get one box, right? And so one boxing is when Google takes your content and just shows it without linking back because suddenly your traffic drops off overnight. And so, you know, in the world of AI, you’re going to have, it’s, you’re going to have these systems that you just say.

[01:06:23] Chris Dixon: Tell me 10 restaurants to go to in New York and it just gives you the answer and doesn’t link and that’s how a lot of these systems work today. And even if they do link, why would you click through? Because you get the answer. And so what’s the new economic covenant in that world? And that’s, so that’s one chapter of like, how do we, how do we rethink business models for media, creative people, anyone putting content on the internet in a world where You have infinite content generation and distribute search systems that just give you the answer, right?

[01:06:49] Chris Dixon: And so, you know, that, that needs to be rethought. I talk about sort of metaverse and video games. Metaverse is one of these, you know, kind of jargony words. Yeah, but you

[01:06:56] Balaji: know what? It’s, it’s real. I mean, like, that’s a funny thing. Both [01:07:00] crypto and the metaverse were kind of in the trough when you started work on this.

[01:07:04] Balaji: And now with Vision Pro and Bitcoin ETF.

[01:07:07] Chris Dixon: I think Metaverse, I mean, whether you call it Metaverse, Apple’s calling it spatial computing. Of course it’s real. It’s like spending all this time online. Of course it is. No, no, it’s, it’s very real. And, and, and look, it’s also like, there’s sort of two ways to look at it.

[01:07:17] Chris Dixon: There’s the extreme thing of like Apple’s, you know, vision pro. Um, and then there’s sort of this other thing, which is this gradual immersion, greater, greater immersion of the, of virtual experiences. So games, the graphics are getting better and better, people are spending more and more time, they’re becoming more social, the worlds are becoming more persistent, it’s becoming more like real life.

[01:07:38] Chris Dixon: And there’s a question of like, in that world where, Most experiences 20 years from now, I think it’s pretty credible to think a lot of internet experiences are 3D, three dimensional experiences. It doesn’t mean you always have a headset on, but they’re in 3D worlds. How is that 3D spatial world organized?

[01:07:54] Chris Dixon: Is it organized as, like, social networks today, where five companies control everything? Or is it more like the open [01:08:00] web, where it’s like a bunch of, you know, little areas that are all linked together in an open system, and anyone can set up a storefront or You know, content side or make a micro game or whatever it might be, and I think that’s a critical question.

[01:08:13] Chris Dixon: And it’s interesting. I have a I talk about it because I’m Tim Sweeney, the founder of epic and fortnight has a great Bob podcast. I cite the podcast is in my end notes on like how to have an open metaverse, right? And he’s, you know, he’s using a lot of Kind of web protocols and other things. And he actually is pro blockchain, which is somewhat unusual for the games folks, which is nice.

[01:08:34] Chris Dixon: But like, you know, how would we build, I think now would be the time we, if we open. technology, internet people want this to happen. Now is the time to start thinking about these standards and protocols and things because it’s gonna the way tech works is like, you know, Hemingway, how’d you go bankrupt?

[01:08:49] Chris Dixon: Gradually, then suddenly, like, yep, this is how these things are going to work. It’s going to be like, Oh, gradually the metaverse, it seems bigger. And then one day, boom, it’s like happening. And we better be ready with the right [01:09:00] standards and protocols. If we want to see these, these new worlds be open, or, you know, be open systems, a la the web and not closed systems, a la web two.

[01:09:09] Chris Dixon: So there’s a whole bunch of, you know, like you, and I just have one chapter on finance, but that’s its own, you know, defy and everything. It’s its own huge topic. So I think that the broader implications are profound. I tried to keep the book manageable and readable, but

[01:09:23] Balaji: it’s good that you covered, uh, I mean, there’s obviously a lot of folks who have, I shouldn’t say written.

[01:09:29] Balaji: There’s a lot of folks, uh, they haven’t written book length treatments, but there’s a lot of coverage of the financial aspects of crypto. So I feel like it’s good that you got into the technological aspects and. You know, kind of like me getting into the political aspects or what have you, kind of, kind of a different lens, you know?

[01:09:44] Balaji: Awesome. All right. So book comes out January 30th. Uh, anything, any Easter eggs? Uh, there’s the NFT thing, right? The cover, the NFT

[01:09:52] Chris Dixon: thing. And actually I have a, I won’t just sell the whole thing, but there’s, I’m doing some AI stuff around the book too, that I’ll be releasing. It’ll be some, some interesting [01:10:00] tools.

[01:10:00] Chris Dixon: I hope people, you know, if they have a chance to read it, I might, my intention is to, to any good faith. Counterarguments, which I’m sure there are good faith, smart counterarguments. My intention is to, you know, kind of in long form, respond to any of those. So I would love to see, I’m sure I’m not right about everything.

[01:10:14] Chris Dixon: I think I’m, I believe I’m mostly right, but, um, but I’m sure that, I’m sure there are things I overlooked or, or, you know. Critiques that can be made, and I’m looking forward to that, you know, having that discussion. Look, I think, part of why I wrote a book is I just think all the dunking on Twitter, people dunk on me, it’s ad hominem, it’s appeals to authority, like, I, I just would like to see, I, I don’t know, I just would like to see the tech discussion elevated.

[01:10:38] Chris Dixon: Sure. And it, whether it’s, you know, this topic or AI or whatever it might be, um, and just have, like, these are, and this, actually, we didn’t really talk about the policy side, but if I could just briefly, the Sure, of course. I think part of it is, You know, like to me, the right way to do to think about tech policy, whether it’s a or crypto is let’s go examine.

[01:10:57] Chris Dixon: What is this thing? Like, what is a block chain and what is it [01:11:00] useful for? And like any technology, you know, you can use a hammer to destroy or to build. Nitrogen can be explosives or it can be fertilizer, right? Like nuclear can be electricity. You know, free and clean energy, or it can be bombs. Um, AI can create bioweapons or it can enable a new golden age of creativity, right?

[01:11:18] Chris Dixon: Crypto can empower users and, you know, shift power of the internet back to the edges, or it can be a gambling casino like FTX, right? And so a smart policy view, I think, instead of having the Twitter dunks and sort of everybody taking a side in this sort of food fight, and, oh, they’re on the other side, let’s fight them.

[01:11:35] Chris Dixon: Why don’t we Go and really look at the technology. Look at the what is the actual kind of good case. And that’s what I try to read right on. I try to make the best case of like what is the productive positive use cases for blockchain, right? We’ve seen the negative use cases like we’ve read. We read about them in the news all the time.

[01:11:52] Chris Dixon: And now here’s the positive side. And in my view, the right policy approach. It would be then to say, how do we design a policy that [01:12:00] maximizes the good and minimizes the bad as opposed to what’s happening now, which I think is very reactive and very emotionally charged, right? People are like they’re on the other team.

[01:12:08] Chris Dixon: Crypto people are on the other team. Therefore, let’s dunk on them. Let’s hate them. Let’s ban them. Let’s take laws from 100 years ago and use them to take them to court. Right? And is that like, is that what a smart? country that wants to get ahead of the future and design a policy should be doing, or should it be doing what I would describe as more proactive and AI?

[01:12:28] Chris Dixon: Look, there’s these very interesting questions of like, how do you balance? Obviously, we want AI to progress, but we also want, you know, creators to get paid. That’s going to probably play out in the next 5 to 10 years over like the New York Times Open AI lawsuit. It’s going to be a series of lawsuits.

[01:12:43] Chris Dixon: You’re gonna have people reading laws from 200 years ago. And like, is there something implicit in it? Two hundred years ago, laws about how you should treat copyright and AI like I don’t think so. Like, I mean, I’m sure you’ll have some judgment or ruling, but in the end, is that the right way to do policy?

[01:12:58] Chris Dixon: Shouldn’t we be saying what’s good about [01:13:00] this and how do we maximize the good and minimize the bad? Like, and let’s have like a intelligent, honest conversation. Like, that’s what I’m trying to begin. And I. I’m trying to commit myself going forward to do that and not dunk and not, right. And so I just say to your listeners, if anyone reads it and wants to respond, like I’ll be active on, you know, Twitter and things and blogging.

[01:13:17] Chris Dixon: And I would love to have a discussion about that.

[01:13:20] Balaji: Awesome. And Chris is actually quite responsive and smart and interesting on Twitter. X, X, sorry, X, X. com. Right. Yeah.

[01:13:29] Chris Dixon: But hard, hard to switch, hard to switch

[01:13:31] Balaji: the names. Yeah, I will definitely get, uh, and I will recommend read right on to anybody. Who is just trying to figure out what this thing is in 2024.

[01:13:41] Balaji: And that’s, uh, that’s actually a lot of people. So it’s a, it’s an amazing thing to just kind of checkpoint and say, here’s where the whole space is as of right now. It’s a great thing to give out to all your employees or something like that.

[01:13:54] Chris Dixon: Awesome. Thanks. Thank you, Balaji.