a16z Podcast - Balaji & Benedict Evans: When Tech Breaks Industries

Episode Date: February 6, 2026

This episode originally appeared on the Network State Podcast. Balaji Srinivasan and Benedict Evans sit down in Singapore for a wide-ranging conversation on the mechanics of disruption. Evans, a former Andreessen Horowitz partner who now writes one of tech's most-read newsletters, argues that the conversation about any technology peaks during the transition—not at 0% or 100% adoption. They cover AI's real capabilities and limits, the politics of technological disruption, why crypto's killer metric is block space, and what smart glasses, elevator attendants, and the elephant graph reveal about how change works.  Resources:Follow Benedict Evans on LinkedIn: https://www.linkedin.com/in/benedictevans/Check out Benedict’s Newsletter: https://www.ben-evans.com/newsletterFollow Balaji Srinivasan on X: https://x.com/balajisCheck out Network State Podcast: https://www.youtube.com/@nspodcastHigh Output Management: https://www.amazon.com/High-Output-Management-Andrew-Grove-ebook/dp/B015VACHOK/eHang: https://www.youtube.com/watch?v=nUTu4_8QznEThe Deep Research Problem: https://www.ben-evans.com/benedictevans/2025/2/17/the-deep-research-problemARC AGI: https://arcprize.org/arc-agiUber and Airbnb didn't sell software: https://www.ben-evans.com/benedictevans/2025/3/14/what-kind-of-disruptionAI Use cases: https://www.ben-evans.com/benedictevans/2024/4/19/looking-for-ai-use-casesStablecoin surpasses Visa & Mastercard: https://crypto.news/ark-invest-stablecoin-transaction-value-in-2024-surpasses-visa-and-mastercard/Senate passes stablecoin bill: https://www.reuters.com/sustainability/boards-policy-regulation/us-senate-passes-stablecoin-bill-milestone-crypto-industry-2025-06-17/ Stay Updated:If you enjoyed this episode, be sure to like, subscribe, and share with your friends!Find a16z on X: https://twitter.com/a16zFind a16z on LinkedIn: https://www.linkedin.com/company/a16zListen to the a16z Podcast on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYXListen to the a16z Podcast on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711Follow our host: https://x.com/eriktorenbergPlease note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see http://a16z.com/disclosures. Stay Updated:Find a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

I feel like AI has almost become like the word metaverse, where like you don't know what somebody means when they say it. Could you explain it to another human being? Can you actually kind of shut your eyes and conceptualize how is it that I'm going to explain what it is that I want this thing to do? Blockchains are, in a sense, one of the frontiers of operating systems research. Like in the same way, like there's an operating system like Windows, there's a browser, which is itself an operating system because you can run apps in it. It's got a full programming language. Mark Zuckerberg bought Oculus because he thinks this is the next smartphone. He didn't buy it to be a game's device or to have 100 million people using it.

He bought it because he thinks this is an Xbox smartphone. The moment you finally understand a technology is often the moment you should stop paying attention to it. What matters isn't the absolute level of adoption, but the rate of change. We talk about a technology most during the transition, then forget it exists. Today, that transition is happening simultaneously in AI, crypto, smart glasses, and robotics. The conversation about each is at maximum volume, which means the interesting question isn't whether they matter,

but what each one actually disrupts and what it leaves standing. Today we're bringing you a conversation from the Network State podcast. Host Balaji Srinivasaan speaks with Benedict Evans, independent technology analyst, and one of tech's most read newsletter authors. I'm here with Bendict Evans. We worked together at A6 and Z more than 10 years ago. Benedict is, you know, well-known newsletter author. Probably needs no introduction for people watching this.

We're here in Singapore. We just came here for an AI conference. You do about one-fourth newsletter, three-fourth conference nowadays or speaking. That's what brought you out here, right? Pretty much, yeah. And newsletters now at like 175, something like that, you said? Yeah, something like that. It wobbles a bit from day to day.

And it started out, you started as a mobile analyst, and you became like a broader tech analyst? Is that the evolution? Yeah, it's one way to put it. I mean, I think... You're at Orange. Is that right? A long time ago, yes.

Long time ago, yes. Just when it was all becoming horribly French. There's like, we were chatting before this. And I said, like, the thing in tech is at the point that you understand something is often the point that you should be moving on to pay attention to something else. So I started my career in the dot-com bubble as an equity analyst, and I was covering mobile stocks. And at that time, mobile was kind of dynamic and exciting.

and sexy and disruptive, and they turned into water companies. Into water companies? Utilities. Oh, utilities, yeah. They were going to connect everybody in the world, and then they did. And now what? They were, like, Mark Andreessen's phrase, they were like the dog that caught the truck. Right.

And I went and worked in a strategy and a bunch of media and telecom things. And, yeah, I was analyzing looking at smartphones because that was suddenly become the center of the industry and no one understood it. Now, like it happened. I'm time to look for different questions. Well, it's funny because I think when we were overlapping, it was right in the middle of the smartphone dividend, the smartphone explosion.

And just to, you know, we actually is a few things. One is the smartphone dividend, that's a useful concept, right? Like that the rise of a billion smartphones meant that everything that went into them became cheaper and that enabled VR headsets, that enabled drones, right, all this stuff. Yeah, all the components that came out of it. Yeah, so smartphone sales are now from memory like one and a quarter, 1.5 billion units a year.

And all supply chain from that, all of those components, is then available off the shelf if you want to buy 5,000 of them or 10,000 of them, all the Wi-Fi chips and the batteries and the cameras and all the other bits. And before, if you wanted to put computer into something, you basically need to use PC components.

So ATMs and so on are all basically PCs. Like elevators are basically PCs. And that has size and power and cost constraints. And then smartphones become the thing, and then all those components are available. And so that's what gets you drones and connected light bulbs and all the other bits and pieces around the edge of that. One of the things I think people don't appreciate is they think, for example, like the consumer, the thing like the military has like special gear and it's got its own kind of supply chain.

And often the military supply chain is often just a subset of the consumer supply chain because you sell a billion units of this and maybe you have 100,000 or a million units of a military thing. It's almost kind of reverse now in that it used to be, so the way I think about this is like in the past, like before we were born, the intelligence agencies would get the cool new stuff first and then the military would get it

and then big corporations would get it and eventually consumers would get it like 30 years afterwards. So this is like the canonical thing is like microwaves were invented for NASA. Right. And eventually consumers get them. Yeah, or like GPS was invented to guide missiles and now it's used for tagging cat photos.

And the shift is like, like a combination of the stuff getting cheap enough that it can be for consumers instead of you needing a billion dollars to have one. And then the scale of consumers once it gets cheap enough. And so now the way it works is the consumers get the new stuff and the military gets it 10 years later because that's how long it takes to...

The bureaucracy to assume like that. A, the bureaucracy, B, to harden it and productize it and turn it into what you need if it's going to get shot out or it's going to be cold or hot or warm or whatever it is. Yeah, it's funny. Does it really improve through that process? I know people think it does, but I'm not sure it does relative to the cost of not using the pretty good product

versus whatever improvements come from the delay to harden it. I'm not sure if it actually is. I don't know. Clearly, there's a sort of a process of you have to put it into a fighter jet. You don't replace the avionics in a fighter jet every six months. Right. But, yeah, you know, that's the kind of the core of it is the cutting edge of the innovation is for consumers.

And then that flows back to all you to everything else. That's right. Well, you know, I was going to say, maybe in China you do. Maybe in China, like, I think what happened with the consumer drones, they got good at quadcopters. And that's led them to their new form. Have you seen E Heng? It's like the Chinese flying cars.

Oh, well, okay. And I've seen it. You know, I played this clip like a year, year and a half ago, and people said, you know, the TL one another, like, we wanted flying cars. We've got 140 characters. And I was like, a lot of people have done a riff on. on that, but I was like, we want to fly in cars, we got them

with Chinese characters, okay? And the thing is, when I put that up there, people are like, that's not a car. It's a, you know, it's a copter, right? That's not a car. It doesn't have wheels, but it solved a problem differently, right? And actually, I think one of your lines, it's like unfair comparisons

are often the best kind of comparisons, right? Yeah, I remember seeing a bunch of flying cars when we were at Andreessen Horowitz. I think Mark Andreessen, he said it's like, they're all like houseboats. And the houseboat is a crap house and a crap. Yes, that's right. And, you know, thinking of it as a flying car is like the wrong term. It's better to think of it as like a small, much better, much cheaper helicopter.

Yes, maybe. But the point is that they now, the other thing is it depends for short hops and like city to city where you fly over the traffic. And they've got this, Uber was going to do this, by the way, before they decapitated Uber. Like the low altitude economy was something they were thinking about. And a lot of things get like cut off in the West and then they appear fully formed in China. Like consumer drones, for example, you know Chris Anderson? He was very early on drones and that got blocked by the FAA.

And so consumer drones were hobbled in the U.S. That's why DGI arose in China. So lots of things get blocked in the West and they arise in China because of that. Anyway, coming back up. So smartphones, I mean, I think you and Horace Didiou of Simpo, who I saw on his podcast. a while ago. I think you're two of the best.

He's also like European or something like that. Yeah, he was at Nokia. I mean, there's an interesting kind of like information. Did you know him? Yeah, I know. Yeah, he's great guy. Part of it was, it was like, and there was a moment in time

when there weren't many people who really understood this and were industry analysts and were able to talk in public. Ah, right, yes. So there were people inside Nokia or Goldman or Bain or wherever who had all the data,

but they couldn't publish a data and they weren't allowed to say stuff in public. Or if they were writing analysis, it was analysis for public markets investors or something. And so there were very few people who knew that you could go and take Apple's reports and make a chart of unit cells and make a chart of ASP and knew what ASP was

or knew what ARP was. Now there's like an explosion of this. So there's huge numbers, if you look at AI now, there's like 10 people who do a really, really good 200-page deck of every possible AI chart. Oh, is that right? Interesting, yeah. And so that whole thing shifted.

But at the time, yes, it was me and Horace and like Ben Bahrain were like the only people. And strategorri kind of adjacent. Yeah, exactly. There were like, you know, a handful of people who understood this and could do the charts and were allowed to do the charts. And so that was sort of, you know,

being at the right place, right time got me a lot of attention. Yeah, it's interesting. I think like you and Ben Thompson is Tritechery and I'm not sure of Horace had a newsletter but you guys were newsletters before Sub-Sack productized it. Sort of like Rogan was podcast before that became productized as a category. And are you on Sub-Sec?

Were you on Ghosts, no? No. You got your own custom thing. I'm still on my old cobble together stack of MailChimp plus memberful plus Squarespace. Why don't you, you don't want to move to something? It's just a pain to move. It's a heavy lift to move platform.

And you sit and do the analysis and you're like, it's just a good use of like a week of my time. Right. Maybe. Maybe. It might be. At this point,

substack's pretty good. But I mean, you know, you're ghost also. There's a separate substack thing, which is do you want it to be on your newsletter or your substack? Yes, that's sure.

Yeah. Because it's a platform. And you get the advantage of, I mean, this is something we can talk about. You know, it's Quistix and his line of come for the tool state for the network.

Right. You go on subsstack. They will get you new subscribers, goes, won't get you subscribers. Yes. On the other hand, now they control

who your readers are and you don't, which is always the thing of a network. Well, I mean, you still mail out to everybody. You do, but then they're trying to get you

to use their website and their algorithm to decide who reads and what. That's true. So there's always these kind of questions like, do you want to go with the people who will give you an audience

and in exchange to that, they're deciding that they'll give you the audience. There's always a tradeoff for the distribution. Yeah, I think Ghost is another. option. Yeah, yeah.

And I think... There's Ghost and Beehive are the two others that people use. Ghosts, like, you know, I saw Ghosts when it was very early, and I just thought it was so good for what it was. Like, it was, I mean, not even for it. It's just a very polished thought through. For an open source product, it's unusually polished. John Nolan's very, very good.

It's funny, you know, like on that, well, by, there's a bunch of things we can talk about, but the whole newsletter thing, it's, sometimes there's things that are like newsletters or podcasts that are, would I consider lowercase in technology before they become uppercase. Like, for example, Odeo, you know, like what Twitter was, Twitter was a podcasting company before it became Twitter. And the time constant, they just got the time constant wrong where you needed, which is hard to predict, that micro blogging would take off first. And then it required like AirPods and everybody being online for a long time and maybe, you know,

COVID before podcasts really exploded. And the term was around. You can even argue it's needed like 5G or 4G. Something like it. If you're listening to it in the car, then you need a half fast enough network. Yes. Bandwidth is a good trade, yes. And then the time works.

So what do you think is lowercase today that's going to become uppercase? Like what exists in tech that people are like, oh yeah, that exists, that's going to go big? I have some ideas. I want to hear yours. Interesting question. I think there's probably the answer. if I was a consultant and trying to whiteboard this,

is I would be looking around AI because that's a new platform. And, you know, there's a lot, all the white space got filled in and now you've got a whole bunch of new white space. So deterministically, there should be a bunch of those things here. AI, which I'm sure we'll talk about, does feel very sort of mid-90s

in that you're like mid-90s internet, in that like, well, is this a browser? How do you use it? What's it for? how would you get to it? How does this work? Where's the value capture going to be? I'm not sure that there's like,

maybe one answer is like I'm too old and I'm not like spending too much time looking for like weird stuff around the edges. The last one of these that I spotted personally was Sheehan. Shine. Is it Sheen or Shine? I'm told it Sheehan. Is that right?

Okay. I haven't worked out her team has pronounced. Oh, sure. That was an interesting one that it was, Maybe you could also say it was the last of the ones that you could spot because suddenly wait, what is this thing that's at the top of the iPhone app store chart all the time. Oh, I see, yeah. Suddenly that thing exploded.

And that's like probably the largest apparel, pure player apparel retailer on Earth. Yeah, and like Sheehan and Tammu. Yeah, that's right. They're now getting here with the tariff stuff. Yeah, tariffs plus a de minimis rule in the U.S. That's only the U.S. market. And that's not, you know, I don't know a fraction of their sales. Yeah, yeah.

It's like a third of that. sales or a half quarter of their sales or something. So that was like that was that was a thing that was interesting. I'm not sure there's not like a new thing that I'm watching that I've noticed recently. I'm sure there will be. You know, I keep looking. So I have a few. We were talking about the glasses, right? Like I think smart glasses are sort of like the most predictable thing after the iPhone. Oh yeah. I put it in a different category. I was sort of thinking like what stuff that's being used now that people haven't quite noticed is being used yet. I see. Well, I guess that glass is definitely your next thing. Sure. So I guess I would sort of bundle VR headsets, AR headsets, you know, like that with glasses and say that that's just glasses are sort of the next version for goggles.

But, okay, so that's one. That would agree on, except the question is, as you said, is it going to be watches or phones? How big does that get, right? Yeah. I think, you know, just like podcasts grew up me and like a video podcast and so on, the robot dogs are interesting. they are fun to play with and they're getting way cheaper now, right? They went from the Boston Dynamics kind of things. So the home robot as a toy, I think, is probably going to become more and more popular, like a Christmas present kind of thing at first, right?

Because I see kids playing with them and they just love them just as a toy. And the, you know, it's kind of like the robot dog, the drone as like a starting to become a Christmas present kind of thing. I think that that becomes a thing. and eventually like we were talking about this at the Museum of the Future in the UAE, they clad these so that it doesn't, it's not just like a skeleton of a robot dog, but it actually looks like an animal.

And that completely changed your perception of it, right? So I think that that'll be a thing. And with respect to AI, and so let's do, I mean, there's AI, there's Bitcoin, there's China, there's drones, there's biotech, there's actually several different areas that I'm tracking, I'm tracking a bunch of these various singularities, whatever. then I'll really actually singularities in the technical sense of going to infinity. Yeah, there was a curves, curves. That's right, yeah.

With AI, there's, you know, one way of thinking about it is, like now we're two and a half years in, let's say, let's call the chat cheptie moment, right? Yeah. And it's interesting because it, I think what people really overestimated was how much it's agentic intelligence versus amplified intelligence, like that to say, you still have to prompt it. So prompting is like higher level programming, number one. You still have to verify the output. And that means you kind of need to know what it is you're looking for. For example, if it spits out a bunch of mathematical symbols in an area of math that you don't know,

then you have to be Terence Tao to verify it. It might be gibberish might be real. Who knows, right? And so the prompting and verifying are actually the bottlenecks in many areas. Now, Carpati and I, you know, the Androge Carpathie, we're just having a discussion on this like a week or so ago. And the thing about verifying is if you're using the GPUs that we have built in and you're looking at images or video or front end code, right,

like the user interface, your eye can just instantly pick out and you can verify pretty quickly. So for that side of things, AI is quite good. Anything that's images, video, your ear can also pick out audio, right? and front end. But when it's back-end stuff, right, when it's like database code, when it's like crypto,

when it's mathematical equations, that you don't have like GPUs. You can't just like hit it with your eyes and quickly detect it, right? Whether it's correct or not, you have to deep read it carefully, right? So it can generate reams of text, but then you have to verify it.

Exactly, that's right. Maybe you have some thoughts on that. Well, so it's funny, I was talking to John Borswick the other day and he said, Benedict, you think, in slides. So that would, do too. We both think in slides. So I have a slide. Yes. And maybe there's sort of a, I'll talk

about the slide and there's an observation around it. I think a lot of discussion of LLMs is sort of hunting for like what's the right, what the right way to conceptualize this. So like with machine learning, the right way to conceptualize it was this is pattern recognition. And we're sort of hunting for the right way to conceptualize LLMs. The slide is that traditional software is deterministic and does things that are easy to explain to machines. In fact, automation, machine tools, selling machines, typewriters, adding machines, things that are easy to explain to a computer. There may be things that are very hard for people to do, but they're easy to explain. So it's hard for you to drill a hole a hundred times or to calculate a mortgage

in your head, but it's easy for you to write down the logical steps to explain how you do this. So that's traditional software like databases, data processing, the whole 60s 70s mainframe thing. Machine learning is stuff that's hard to explain to a computer. So it's hard to explain why that credit card transaction is weird. Or how to move your hand or something. Yeah, it's hard to explain why that's a picture of a dog and not cat. You think it's easy until you try and do it. And then it's like you try to make a mechanical horse. It always folds over until robots comes along.

So that was machine learning. I also think that as a kind of quiz for you, do you think machine learning is still AI? Or is that now just software? Well, so the way that... I think there's a process that once it's been around for a while that's not AI anymore. It's funny.

So I think within the field, technically the division would be machine learning would be, you know, everything up to linear logist regression and SVMs, all that kind of stuff. And then right at the point you start doing deep learning and you have large neural networks, now you start getting into what people would call modern AI. So ML is almost like the boundary of understandability, you might say, right, where you can write clean equations and like really understand what's going on.

And to me, the most surprising and confusing, I'm still, I still don't feel like, I know the funnel phenomenon is, but I still find it magical. It's something called the double descent problem. Do you know what that is? Basically, normally when you're fitting to data, you want to have the few as possible parameters because you can overfit, right? And so your error goes down,

and then your error starts going up on the holdout set. So you train your model in machine learning, and you want the minimum number of parameters to be able to explain the, the training data and predict the test data. And if you overfit, then you're no longer predicting out of sampled stuff. But double descent is when you do AI, you get actually a second win when you start going to a very highly parameterized model and the error actually drops again, right?

And which is just a really weird phenomenon that there's papers on this and so on. And it's one of the most countertitude of things about the whole thing. that just having these gigantically parameterized models would generalize well, right? Because it violates, that's the biggest difference. Go ahead. There's other things people might say

is the biggest difference. I think, I mean, I think of, the term AI, is that people kind of use it like technology, the word technology. Yeah, that's right. That anything new is technology, anything your parents had is in technology.

I'm a stickler for precision. There's different ways that you can say, what do we mean by the word AI? Yes. I feel like AI has almost become like the word metaverse where like you don't know what somebody means when they say it. But to continue my slide, so the first point is there's deterministic software,

which is stuff that's easy to explain. There's machine learning, which is stuff that was hard to explain, which basically machine learning solvers. And now an LLM is maybe stuff that's easy to explain to an intern. So it's something where if you had to go away and have a kickoff meeting and spend half an hour working out how we're going to do this project,

then an LLM probably can't do that. But if it's something that you could explain in 10 seconds or 20 seconds, then an LLM is going to be able to do that. And part of the problem is, are you able to explain it even to yourself? Could you explain it to another human being? Can you actually kind of shut your eyes and conceptualize how is it that I'm going to explain what it is that I want this thing to do?

What you're saying is very important because, you know, There's several different angles I can, I want to take off of that. You know, in one sense, I had this tweet, we're living in the age of the phrase, right? So the prompt for the AI or the 140 character tweet or actually in crypto, like 14 words, 13 words, 12 words can be your crypto reset phrase. Right. These, like, are phrases of power, right? In AI, in social and crypto, right? Like there's strings of characters that do a lot, you know?

and they're spells right and the thing about it is um the the crisper you are as a manager like you know if you if you're if you're a really good engineering manager you're great at prompting i because crucially you don't just say hey code this you say hey you know try and use you know react for this you can use react native for you know the ios and android interfaces use tailwind use it the more in a sense vocabulary terms you have the better you can prompt something with and you use of vocabulary terms

correctly. And what that meant is, for example, I realized with Dali, you know, when that was first, you know, before the chat chip peteam moment,

I was like, wow, art history is now an applied subject, knowing like Cizan and Picasso and what, you know, these various kinds of obscure style, suddenly you can be like, boom, style it like this,

and it'll do that, right? You could say the same thing for music. Like, what exactly is it that's being done there? I knew there is a word for that. So, and you have to know that word. That's right. Exactly.

so you can upload a track and you can say, what style is this? How do you caption this, right? Ever seen, you know, like the restaurants for the fancy menus and they don't say, they don't say tomatoes. They say like heirloom. There's things that are theoretically subjective.

Yeah. But they're within the probation, there is a particular term for doing that particular thing. Exactly. It's like, they're interesting like red versus Burgundy and, you know, crimson and what have you. They've got precise words.

which means something, and then you can summon greater precision with those precise words. And so a way I was thinking about, what you're saying is that, and I've written about this, AI is like undocumented APIs, right? So normal API, every function is like written out,

and it's like, you can do this and you can do that, and it's like got 20 functions, and here's everything is there, right? With AI, it can do lots of things that even the people who wrote it up, so it's much more mysterious as to what it can do. You just have to try things, right? So the way I was thinking about this from a different angle

was to think about GUIs. Oh, yeah. What a GUI is doing, several things that a GUI is doing, one of them is it's telling you all the features that the developers have created. And part of the reason that was a revolution is, A, you knew what they were

and you didn't need to memorize keyboard commands. But B, you can actually have more stuff because you're not constrained by the number of keyboard commands that you can write down. So you can have hundreds of functions instead of like, you know, you can just add more shit to the menus. Yes.

But the other part of it is that the GUI is telling the user a whole bunch of accumulated decision and institutional knowledge about what the right things to do at this point would be. And so if you're in a workflow as opposed to just a blank screen, you know, it's one thing if you're in like Photoshop or Excel. Yeah, it can prompt you on the prompt. But if you're in a workflow in Salesforce,

then there's a decision taken. This is I'm going to offer the user these five options here and not 750 options. And with a prompt, you don't have any of that. So you've got to shut your eyes and think for a minute of like, well, what would I do here? And you don't have that help. This is, you know, Carpathie has talked about us also, but I do think there's room for AIOS, right? Like, in a sense, and we can talk about crypto in a second, but I think A&Crypto are both actually operating system level innovations.

And for example, maybe someone just does it as an app or like a downloadable thing and just does it as a layer on top of the Mac. but if you have the full context of all the actions that are happening on your Mac, you can suggest which apps to use, suggest which apps to download, suggest, hey, you probably want to change these keyboard settings. And so, like, there's, you know, it's funny to put it this way, but clipy is finally vindicated. Clippy but for everything, right? And because Clippy can now be really, really, really, really smart, right?

Like, you know, it was Anderson's line. It's like everything in tech works. It's just when. right? And even the thing that's interesting about the clippy thing is somebody also made a point which is that you actually want to put faces on your AI avatars, on your AI agents,

so you could pick from clippy or 10 other kinds of things. And the reason you want to do that, this is counterintuitive, but people, like you and I can use chat chabit, and, you know, Claude and what have you because we're familiar with interfaces. But the reason they're actually intuitive to 100 million people is they're used to chatting with another human on the other side.

So they're already modeling the chat box as being a human-like response because they've been using WhatsApp or Facebook Messenger or Instagram chat or something like that for a long time, right? But when it's outside of that chat box environment and it's like suggesting on the screen, you kind of want a face to pop up so they can associate, okay, this person is suggesting this because that's who they are. and they kind of map that personality onto the AI agent. And so you could choose from different kinds of clippies that would give you prompts on what to do.

Or it just does it for you. That's the other possibility. But I don't think people like it when it does it. They want to be able to approve it before they do it. I think there's a sort of sense in here of how people conceptualize what this thing is and how it works. I remember John Prothero at Google showing me a chart, a Google Trends chart,

of best versus cheap. Best versus cheap. So the best does this and cheap does that. And what are the axes? Crossing over time. So Google trends. So what's the frequency of the word best? So it starts with like cheap phones

and it goes to best phones? Yes. And so the thesis was that this was shifting from the internet as price comparison where you'd already knew what you wanted and it's at the top of the, and that's the bottom of the funnel to the internet as recommendation,

curation, suggestion. where you're looking for suggestions. That's so interesting. So let me see if I can understand the psychology. So when people... So it starts from 2004. Okay. In 2004, you go on the internet

and you already know what you want and you look for the cheap, what is the cheap X and then you put in a scoop or you put in a product or something. Whereas over time, that goes down and Best goes up. And Best goes up and crosses it.

It's a perfect X on the chart, unfortunately. And the thesis is you're going further up the funnel, you're looking more and more for, I want some on the internet to tell me the best X or Y. Where previously you'd have got that from the magazine or newspaper or something. There's two or three, there's two things about that. The first is, you know Andy Grove's thing about the paired metrics?

So Andy Grove, whenever anybody's optimizing like sales, for example, they will usually sort of recruiting, they'll start by optimizing quantity. But there's a, you know, you can sometimes optimize quantity and then quality drops off. Yeah, yeah. Right. So quantity is easy to measure. It's like just a number of people we hired or whatever. But quality is how good were they, right? And so that's the second paired metric is usually a quality metric. And so quantity is cheap, right? And people start with cheap. And then quality is best and they go to best. So that's another lens on this. A third lens, what I thought my explanation, maybe it's different than what actually happened was when people are just trying out of space, they just want the cheap version to try it out. And once they've committed to a space, at like, for example, the cheap digital camera, cheap drone or something like that.

I want to try it out, right? And they want to try it at low cost, try it before you buy. And then once they're committed to a space, then they're like, I want the best drone out there now because I want to... Well, the analysis then would be

cheap drone versus best drone. Right. But I think the... That's what I thought you were saying. Yeah, no. You're saying cheap versus best overall. Yes, overall. But I'd love to see a category by category.

I wouldn't be surprised to see that happen category by category, but maybe not. Well, there's a different, point there, which is sort of what I was talking about in our panel this morning, which is this infinite product, so how do you know what to buy? And it used to be

that you'd start with a magazine and then you go to the internet to find the cheap place to buy it or you know what you wanted, and now you go to the internet. To figure out. Yeah, to figure out. Like, what's the right place to do this? So the internet has become much more kind of a default. But actually, the thing, the thought that prompted me to that was you can also go and

play with Google Trends and I did a chart played with like, how, why, where, what, like more kind of basic questions and you really need to be inside Google to do that analysis probably. Yes, exactly, yeah. But it's that sense of how much are people doing conversational queries into Google as opposed to typing keywords into Google? And things that are not really a Google query, like what is A is not,

probably doesn't help Google, but that's still how people use it. People were trained for years to not, to remove all prepositions, to remove all that stuff and just do keyword ease. And now we're trained the opposite to write full and complete English sentences like prompting is the new searching, but it's a completely different, you know, behavior, right? Go ahead.

Well, so this is one of the, there's a sort of tangential point of that. Like, one of the, like, the early, easy, obvious things that people have deployed with AI, with LLMs on the internet is different kinds of, is sort of natural language queries

or different, not so much tangible than natural language, but like different kinds of query. So the canonical one, we'll talk about is Walmart saying now you can search for what should I buy to take on a picnic, which isn't a database query. And for Google, for Walmart or for Amazon five years ago, that search just wouldn't work. Because unless there's a product that's like tagged with picnic, it's not going to come up.

Whereas now there's an LLM with a world model that has some sense of how you might answer that question. Yes, is it a world model. It is, it's a, it's a web model. It's a different kind of query anyway. Yes, yes, yes. You're not doing a SQL query. You're doing something else.

That's right. And I think, you know, one of the things that's interesting is the computers are, we knew they were very good at that first kind of deterministic computation, the SQL query, the calculation. That's what they're built for doing math, right? Yeah. And now they've gotten good at probabilistic kinds of things, right? So this would be like system one and system two thinking, right? Probabilistic is like the quick impression and then, you know, this is like the logical calculation. So it's actually good at the heart, the thing that's harder for human.

is the, you know, like long and involved mathematical condition can do that errorlessly. And now it can also do the other kind of thing. And so it does suggest that there would be some synthesis of that eventually where an AI can, I mean, this is like AI tool use or what have you, like it detects that it needs to go to System 1 and it starts invoking Python for that. And this is getting better.

But it's surprisingly not amazing two and a half years in, right? when it needs to go deterministic. Well, so I wrote, last long thing I wrote about this, was about looking at deep research, which Open AI launched. And one of the kind of traps in looking at the news thing is to test it based on what was important to the old thing. So, you know, to look at the Apple 2 and say, does this match the uptime of a mainframe?

No, so it's useless. Well, no, but that's not the right question. Yes. Can you write and build an Excel model on an iPhone? no, but that's not the point. It can still replace PCs. And the reason I mention this is, so deep research, open air launch this thing,

and it's whatever it was, $100 a month or whatever. But you look at the marketing page, and the marketing page shows it doing a research project about mobile, which, as we said, I know a lot about, and it got the answers wrong. And it's first... That's verifying. See, you could tell that it was wrong, but it looked...

Exactly. So this is the thing, and it got stuff wrong in several... levels. People can, remembering now what I wrote like two months ago. And so there was a specific, it was make a table which shows mobile smartphone adoption in a bunch of countries and then the operating system market share. And then this is like an intern teaching moment. Because first of all, what does adoption mean? Does that mean unit sales share, install base, app store sales? Like what what do you, what metrics specifically are you asking you for? Yeah. Then it had given a source for the number it had come up with, which was

Statista. And Statista is an aggregator that steals other people's data and you publishes it. And when you jump through a bunch of registration hoops, you discover that the actual source was, I think, Cantor. Canter? It's an ad agent. It's part of Group M.

I thought it was part of one of that. It's consumer survey data. So it's a proper company. Yeah. So it was actual proper consumer survey data. But the two things so then when you go to the Cantor on chart, page, you discover that deep research had got the numbers the opposite.

So it had flipped percentages. I see. And then it had also said... Right, because it didn't have... It had copied them from the website wrong. I see. And then the other source it gave was stat counter and stat counter was just using the same wrong data. Which is a traffic measure.

Right. So that's not going to tell you an option because high-end phones get used more and iPhones can use more. And there's a bunch of things in here where you'd like this is what I'd expect from an intern. Right. I would go back and say, no, this is what I mean by adoption,

and this is a good data source, and that isn't. And it's like a great first version. The problem is A, had to copy the number out wrong, which is not what I would expect for an intern, or at least not a good intern. But secondly, I'd have to be a mobile analyst to know any of these things.

And that's a verifying thing that I was getting at. This is the kind of the core of it is, all these people are looking at deep research and saying this is fantastic for researching things, don't know anything about. And I was like, no. No, it's not.

Yeah. It's fantastic if you need a bunch of material about something you know a lot about. Exactly. So that's thing is that's why I think AI in its current incarnation is better thought of as amplified intelligence because the better, the more you know about a field, the better you aren't prompting because you've got better vocabulary. And the better you aren't verifying because you know more facts about it and you have more cross-cutting checks.

And that is less true for the visual area. But just identifying that is a very important limitation where you have a, a completely different system you can use for the visual stuff, which is just your eyes, right? You don't have to use the, you know, we have just different hardware for quickly seeing, you know, this way, the hands or something like that. Whereas if that was...

It's a monkey brain. It's a monkey brain, exactly, right? So that's... Now, an interesting question, this is, you know, Carpathia, we were discussing this is, is there some way to turn some, or a subset of the non-visual things into visual cues where you could see it was wrong immediately?

So I'll give you a small, a simple example. let's say it generated an audio file, right? You know, like a spectrogram of an audio file, right? You could maybe immediately see if there's some artifact there, right? That's a trivial example. So I think it's a fascinating concept. I would wonder whether that's the right split. Okay, it's at least one split I found useful for now.

But what are you thinking? Well, so the split I was thinking was that the natural language generation to make text is perfect. So the text is always grammatically correct. That is true, yes. But the model underneath, like the facts presented by the nut in the text might be wrong. Yes. And that's sort of deceptive to us because we see the text is correct and it looks confident.

Yeah, that's right. Whereas in an image, like you ask it for a picture of somebody and everything's perfect except the person's got six hands. I'm not sure conceptually what is it that that's flattened, is that you're seeing two things in one layer. Or is it that, do you see what I mean? I see what you mean. Or is it that it's a different level of, well, maybe there's a different point here, which is if you ask for an image of a car. Yeah.

And the car, I actually do this, ask for a fantasy 1960s French sports car. Right. It will look French. It will look like a sports car. It will have four wheels. It might have two steering wheels. Yes, that's right.

The two steering wheels is the equivalent of a grammatical mistake or spelling mistake in the text generator. Yes, because however, it may also be that the balance of the car is all wrong and it would flip over if it tried to go around a corner, but you'd have to be an automotive expert to know that. So I'm saying there's different levels of error. That's right. What you're saying is

the two steering wheels is like a spelling error, but spelling errors are very rare for AI, whereas the two steering wheels is a common error, right? And I think that has to do with just the way diffusion models work versus how Transformers work. That would be like one high-level answer I'd give where it's doing like kind of, it's more local with the diffusion model. And you can be locally correct with the steering wheel,

but globally incorrect. Whereas locally correct with spelling is usually correct. That's like maybe one. That's useful, yeah. That's one answer. the second is that with there's only a small space I think like for example we are optimized to recognize faces so we can detect very subtle differences in faces but if I gave you like five different sheets of like static noise right even if there are very clear patterns like mathematically like these are all like four-year transforms of the same object and this is the one eye at they just look like total noise to you a computer would be like these 12 are the same and this one is an odd one out right so in a sense our eyes are optimized for a very low-dimensional

set of things which are the things that occur in the real world. Like those are the things we can pick out, right? Which is also that our eyes are, like dogs are better at motion than us. Yeah, exactly. So even eyes are different depending on the species. That's right.

So because of that, we actually have a, like, because they can't detect patterns and static, that's like too high dimensional space. I think text is kind of like that because it can describe, one of the most, I mean, surprising things to me about how AI has evolved. We were talking about this question before

is I was surprised you could get so much mileage out of pure text. The reason is... So much what so? So much mileage out of pure text, right? And the reason I was surprised by that is, you know, you'd think... You mean like reasoning and stuff that looks like reasoning

and also spatial manipulation. Like picking, like having cameras, having eyes, seeing the world, reasoning about it, like a baby and so and so forth. It is amazing how much of that world humans have assigned machine readable labels to with text. And the way that, you know, it's just very surprising how well that worked. Like language, what I'm trying to say is in a few, in like 40 words, you can describe, it's like code. You can describe many, many, many different kinds of things in like 40 words, right?

and it's just more general. It's one of those things where if you're, sometimes when you're really close to a space, you're actually more surprised by a breakthrough than if you're farther away. And I should say like, you know, even seeing all the style transfer stuff in the mid-2010s and seeing ImageNet and seeing the benchmarks

and so and so forth, I was surprised that it got, you know, markup chain is? Well, if you saw the stuff before GPT3, right it was like semi-coherent but it didn't look like it was converging on something you know it just looked like

you know it would repeat itself many times and what have you and the fact that it broke through to what it did just based on language was so counterintuitive and it's I think it's because it's such a high dimensional thing it captures so many different aspects of the world like anything you can perceive in the world

there's a word for it there's many words for it and then we also have have billions of people who've been typing those words for two decades, right? So in a sense, like the entire internet, the video games and social media were like this bootstrapper for AI. Anyway, so

on the other hand, AI is very bad at spatial stuff. You know this thing called ARC? Francois Chalet has this benchmark. Oh, yeah. And so he is his benchmark that actually got beaten by the recent you know, chat chitp-tee

release. And he's got like a new one. And it's almost like a Tetrisi kind of thing that's got some degree of logic and spatial type of stuff that AI finds it hard, but humans still find it easy. It's kind of like maybe the next generation capture. And it's visual more than it is verbal, right? So for a reason...

Is it something that would be hard to explain in words? Yes, I think, kind of. It's about like this is here, and it's almost like Mindsweeper. You know, Mindsweeper where you... You click and it expands and so and so forth. I think AI because it started with words, it doesn't do well with the spatial side of things. Now, on their hand, what the Chinese are working on in particular is physical robotics.

Obviously, Elon's working on and so and so forth. But China's way ahead on the physical supply chain. So like physical AI is robots. And those definitely have cameras and XYZ and spatial and rotation and so and so forth. So there's some eventual fusion, you know, like the, The self-daring cars are gathered hundreds of millions, billions of miles at this point. So there's some fusion of the web, which is words, and the world, which is, you know, spatial, that will get you like a completely, you know, maybe a fusion set,

where it can reason about the world as it is. It knows how tall Everest is because someone, some robot has hiked it. You know, like Google Street View, you might eventually imagine a bunch of humanoids walking the world, just like that, you know? I wrote a thing years ago about Street View and Yahoo. And the sort of thing I was kind of poking away at is that basically every big internet system is a mechanical Turk. And the question is, where do you put the people?

Where the humans, yes. And with Google search, the people are, A, everybody making a link on a web page and B, everybody using Google. That's true. Whereas with Yahoo, they tried to have a bunch of people in an office. Yeah, doing it in the middle. making a hierarchical list of all the websites on the internet, which became impossible.

Yeah. And with Street View, you just pay a bunch of people to drive down every street in the world, which is actually not impossible. It's just expensive. It's just expensive. It's really, it's an interesting computation. It's not obvious that it would be feasible to it.

It's funny. You know, the Yahoo thing, Yahoo, you know, I think got started in like early mid-90s, right? I think 94-ish, 93s, something like that. Yeah. And the thing about it is it, like Yahoo had to kind of get to its limit before it was obvious that you needed something like Google because like webpages had to be suffused with

at the time they put on page spam and so and so forth you had to kind of top out, you had to get enough web pages that the hierarchical model model broke down. You had to get enough economic value that people were really incentivized to game the system and so on and so forth before, you know, maybe Yahoo could have self-disrupted,

but before something like Google was there, Yahoo almost built out enough of the web economy to make something like Google necessary, you know? Anyway, so one thing I wanted to talk about, I'm going to go through various other areas, but what is AI disrupted? What is AI going to disrupt? Right, so what is it already disrupted?

So search is taking points off of Google share. You know, like Stack Overflow, you know, their queries are down. Image search, because now image search is image generation. obviously video obviously many different kinds of specialty apps will you know things that are for example like various sales tools

that make templated emails and things like that those all you know change I'm not sure Salesforce I mean Salesforce is you know certainly they're using AI but the entire Salesforce model like spamming people with email I'm not sure that's going to last in the age of AI

because you can spam so many of them now, right? So those are some of the, you know, obviously of robotics, obviously protein folding and whatnot. What is it going to disrupt that people haven't thought about yet? And I can give some ideas as well. Well, I mean, one answer is we don't know. It's like trying to say that, ask that question

about the internet in 1994. Sure. And the joke is always that newspapers thought the internet would be great because they'd save on printing and they did. At first, at first probably it was good for them. Yes. They did, yes. I did a slide in the last presentation I did because it struck me that people would always say well you know Uber didn't sell software to taxi companies

and Airbnb didn't sell software to hotels they redefined what those things were so I went and did a chart of well what hammed taxis versus what happened to hotels and actually one surprisingly What happened? Taxi Mandalians Uber demolishes taxis mostly Airbnb is mostly additive to hotels

Why is that? I think so Airbnb is a different kind of experience in a hotel. It's not a substitutional experience in the same way. Yeah, it's complementary. Half of business half of hotels are business. There's another whole bunch of conferences. There's a bunch that's about like, I mean just, you know, okay, so two examples

like my fiancee works for her. It goes to fly to Milwaukee. She arrives in town at 10 o'clock at night. She needs a gym. She's got a client meeting the next morning and then she's got a flying back to New York. She doesn't want to go and stay in some random strangers hotel, which she's got no idea what it's going to be like. She wants

you know, a very specific brand promise from... You mean, random strangers, Airbnb, she wants to stay in a hotel. No, she will stay in a hotel. She's not going to stay in an Airbnb. The other side of this is, I think there's a more general point. And the same thing I arrived in Singapore, two o'clock this morning, I'm not going to go and work out whether this Airbnb is any good.

I'm going to stay in a hotel. Sure. I think there's a more general point, which is that, like, everything is probably disruptive to someone at some point in the value chain. But it kind of depends on the industry quite how much and in what sense.

So like the iPhone demolished the existing cellular industry really having the effect on telcos. Telcos kind of hoped that they were going to do all these services but that was never going to happen. But mobile operators today are basically the same companies that they were 20 years ago

with more basically the same share price because their business was not in anything that the iPhone changed except that they're providing massively more data than they were in the past. The business is basically owning sites and owning spectrum and connecting them up and selling that to consumers. The same thing was like online travel booking,

completely demolished a travel agent industry, didn't really change the airline business. Airlines had to do a bunch of stuff around loyalty and pricing and maybe pricing became much more transparent and so on. But the end of the day, their business is owning or leasing airplanes and buying fuel and owning landing slots. Right. And maintaining the aircraft.

and so now of course the counter argument you could have looked at taxis and say well clearly that's not going to get changed by the internet except maybe you'll be able to book a taxi more efficient until it becomes long and changes it but the point is you can't

there's this sort of very naive view that says oh well there are this software will just destroy everything and the answer is well it kind of depends it's path to moment that's true yeah and like one of the ways that I sort of think about this is that the tech industry kind of comes and changes everything in an industry and resets how it works and then leaves and goes off and works. You know the joke about how consultants are seagulls.

Yeah, they fly in crap everywhere, make lots of noise and fly out. And so as you think about what happened to books or music, no one in the tech industry cares about music anymore. Right. Well, yeah, Spotify does. Yeah, Spotify. It's not the mean event. Yeah, recorded music is like $20 billion a year.

It's like a rounding error in the scale of the tech industry. it has no streaming means it has no strategic leverage for Apple or Google Sooner is interesting though So the AI clear music, yes But the last 20 years ago the internet Completely screwed the music industry And since then it left and doesn't care Same thing in books

Like all the conversations around books right now Some of which are about Amazon A book industry conversations I think there's something similar happening now With video generation and Hollywood Like everybody in Hollywood Like got over the panic And now everyone is sitting and looking at

looking at this and thinking, okay, well, this saves a bunch of second unit stuff. So when we have... But they all like, all the questions for what does this mean are questions for people in LA. So when we have thinking about it is conversation is proportional to derivative rather than the absolute value. So let's say you have a sigmoid that's going like vru like this and then it flattens out, right? Yeah. So when it's like a nullity or ubiquity, you know, when it doesn't exist or when it's

everywhere. When 0% or 100% it's just not notable, it's not worth talking about, right? People use Uber or Dropbox a lot more today than when they were talking about Dropbox and Uber a lot, right? So the conversation is maximum at the time of maximum

growth and then it's just much less because now it's like not notable it's just a feature of the environment, right? So you can do Google Ngrams that show exactly this. I think that'd be a great graph to make some of that. So you can do them for like steel or and some of these

Oh yeah, railroads is the carloader because it starts in 1800 and of course some of them you look at it you go oh I'm actually seeing a chart of World War II in some ways where you see steel suddenly does that or shipping suddenly does that in world and that's not obvious right because conversations or like attention is focused on change rather than absolute

value well I always used to do a I was just be fascinated by elevators I get these kind of autistic autism spectrum fascinations about things and there's a chart I did of the number of people employed in the US elevator attendants which is a perfect bell curve

Oh interesting Yeah It was all curves up and that And this is because first half of the 20th century You didn't have any elevators Right Second half of the 20th century They become automatic

You have a button And you can go and find all this advertising Why were they at the beginning Was it just like So short operators Was it technical enough? There was no button There was the well if you think about

What it actually takes to have an automatic elevator system in a building. You've got to have all the dispatching. Uh-huh. Oh, you're going to have the dispatching in the queuing. I see. There's an interim stage where you have an elevator attendant who would just stand in the elevator

and you would say, I want Buffalo 5 please, and they'd press the button for 5. Right. But if you get in, you know, an originally elevator... What was it originally before the buttons? There is a lever that's an accelerator and a brake. Oh, so it was like a car almost. Exactly.

It's a street car. There's a vertical street. I didn't know that. So there's a fantastic book I have called The Cultural History of Elevators, which is all about how weird this was. So it was a vertical train? Yes. It's a vertical train.

Wow. That's how people thought about it. Yeah. And so an elevator train, you can kill people. And there's this wonderful story I tell everybody, which is that you press the buzzer to summon the elevator, but it's literally you're just ringing a bell and a light goes on in the elevator car. And there's a story from the war department. It's like a hilling a taxi.

Yeah. There's a story from a war department or ringing for a servant. There's a story from the war department in D.C., which is that you would buzz more based on how senior you were. So imagine you're like a lieutenant and you get into the elevator on the second floor and you want to go to the 10th floor. But on the way, the buzz rang, it rings four times. And it's a general.

So he has to stop on the sixth floor and go down to the first floor and then a major gets in. So now you're going to say theoretically, this pull of turn it could spend the entire day in the elevator going up and down. So interesting. And we don't see any of this now, which is your point about conversation. You don't get into an elevator now and so it's an electronic elevator. Right, right. It's automatic.

Right. It's just an elevator. It's somebody said something like there's a phrase which is civilization advances as you can do more things without thinking about them. Like they quote just work, right? And the classic one is light people who are. Yeah, electricity. Light gets cheap.

Yes, that's right. I think, you know, the age of intranetaph, now sometimes what happens is these things get really ubiquitous and they're out of the conversation. And then there's this, now that you can treat them as like at 100% adoption, then the new thing arises. For example, all of the craziness of the last 10 years is in part a function of the fact that social media got such ubiquity

in the early 2010s such that it was no longer, the novelty was, oh, I'm on social media, I'm using it, how do I use this Twitter app or whatever? Everybody knows what Twitter is. Everybody knows how to use it. They know what a like is, whatever, whatever. And then you start getting user... Then you get the second order effects.

The second order effects. That's right. So it's almost like... It's like installing a device driver, and then you can install the next one and the next one. But it's like the device driver is the percentage of the population that's adopted something. And once it gets to 100% or 90-something,

then you can... Like, I'll give you an example. Like, during the pandemic, there's just the assumption that everybody had a mobile phone, right? And they could QR code scan this and another in Asia. That was a really big thing, right? That's how you'd show your health check. Yeah, that made QR codes work in the West as well.

Yeah, that's right. But basically, obviously 10 years ago, you know, 10 years beforehand, they wouldn't be able to do that. They would have to have some other paper system or something like that. In 2010, you couldn't assume everybody on the planet had a smartphone. It was getting big, but it wasn't yet there. Certainly 15 years ago, nobody would have it, right? So that was something where the ubiquity of something,

maybe sometimes the next step comes from that ubiquity or ubiquity of two or three things at the same time. Yeah, I mean, you could think about TV and radio, all forms of mass media in the past, and the growth of pop music requires recorded music and requires radio. And, you know, the greater mass democracy kind of goes hand in hand with literacy and cheap newspapers. Right.

But you need newspapers before you can have the whole other stuff has to happen. Right. For that to come. And then, of course, you have backlash. So I sort of think there's something interesting in looking at stuff like the arts and crafts movement in the late 19th century.

Because these are a bunch of people who say we hate all this mass manufactured stuff. That's handcrafted things. It's funny that's... And that's not a statement that would make any sense in 1800. Well, it's funny because there's this...

What you're talking about, like people were farmers, or that are artisans and are like, oh my God, this automation is disrupting us. We hate it so much. We want to go back to the old ways. And now what's funny is those manufacturing jobs that all these workers were so mad about

in the late age hundreds and early 90s, all the strikes, all communism and so on. Those are now the things that are looked back on romantically by a lot of megatipes where they are like, oh, that was such a great job. I wish I had that. I hate this information job kind of thing. I hate this, you know, these desk jobs and so on and so forth.

So it's interesting because there's a romanticization sometimes of the past thing, even as millions of people are exiting that for the next thing. Now, this is a little more complicated, obviously, by the fact that China has a lot of those, quote, manufacturing jobs, but yet a lot of them are being automated in China as well with the robots. So it's funny, the thing that people were so mad about that they were getting seemingly pushed into, which was manufacturing, out of farming, into manufacturing,

are things that at least some fraction of this generation wants to go back to, or they think they do, you know. I think that's interesting. Some of those things, I mean, the Luddites are one of these sort of misunderstood movements because a lot of what the Luddites are about is self-employed high-status artisans, losing that status and being pushed into low-status commodity jobs. So this is going to be the big thing with, I think, have you seen the elephant graph? So the elephant graph, and some people dispute the graph, but I think it's probably gesturing at something that's right.

It shows percentiles or deciles of the world in terms of income. And it shows over the last 20-something years, I think from 91 to 2008 or something like that, where the growth went, like whose incomes rose. And basically, most of the world, so the lower 10% in Africa didn't gain that much. But like maybe from the 10 to 20th percent through the 70 to 8% to 8% to 8% to 8% to almost zero. and then it picks up again at the very top, right? So that means is the global, you know, elite in every country did great. And so did China, India, Vietnam, Eastern Europe,

all these countries are no longer socialist, communist, et cetera, right? But the Western middle class didn't. And that is a big part of, I think, the societal instability now, when we're looking at it is, you know, in America they have, you know, obviously red versus blue. But one way of thinking about it is starting in, in, you know, certainly in 2008 there's a ramp where China flips U.S. manufacturing.

And so China puts all this pressure on red America, and that leads to Trump and trade war. And you've seen that graph of print media disruption, right? As the intranet suddenly rising after 2008 to flip Blue America, and it takes all the ad revenue away. And it's not just Addering, it's also Craigslist's classified ads, a bunch of other things. So the internet disrupts Blue America,

and that leads to Whopeness in the 2010s, I think. and also tech lash, right, which is the anti-tech movement. So we look at it as red and blue, but there's also China and the internet over here where the internet is disrupting blue and China is disrupting red. So the thing I think that's coming next is AI disrupts blue America and robots disrupt red America. And so Chinese robots and internet AI. And so that artisan movement kind of thing is going to accelerate where people are going to be mad about that happening. I think on balance, there's going to be a lot more productivity in the rest of the world, but it's possible. for example, that a job that's at, let's say, 200K or something like that in the U.S.,

and there's somebody in India or Mongolia or Vietnam or something who's at $2,000 a year, that that equilibrates at like 20K, right, for like somebody supervising medical results or something like that, right? But the licensure is no longer as important. The Western licensure, the Western state can't really protect it as much because it's all on the Internet. And that's a boon for everybody who's a customer. of that like healthcare costs go down around the world.

You've got a great doctor on tap at any time. Most people benefit from it, but those people who lost, you know, relative status, relative money and that gets super angry. And I think the burning of the Waymos and like the extreme anti-AI sentiment that I see among some people is kind of a precursor to that.

Let me know your thoughts. So I think, This is a general observation that like when Europeans live in Europe, probably something similar in Asia, when Europeans live in Europe, we all feel different. So like Germans are very different to Italians, and different to British people, different French people and so on. And when Europeans live in America, they all feel European.

And America is in a different place to the aggregate of Europe. And the US has its own sort of political, culture and political questions. Ah, yes. That are different to the questions in France or Germany or Britain. I do think some of what's happened, and I wouldn't call myself political analyst, but I think some of what's happened is that,

certainly in the US, to some extent the UK, there were coalitions, particularly on the progressive side or the left side, there was a coalition of urban upper middle class, highly educated people with a certain set of social attitudes and working-collar, working-class blue-collar people. Has been totally busted.

In a different part of the country, often with rather different social and political attitudes. Yes. And the same thing, I think, in the US and the Republican Party on the right, there was a coalition of sort of... Walser's Journal, reading capitalists. Yeah, like mid- Romney and military guys.

That has split apart completely. And all of those, you know, center-right, economically conservative, socially liberal people who are Republicans kind of don't have a political party anymore. And equally people who were sort of... Lumberg Central, you know... Bloomberg Centralists, centrist kind of don't have a political party anymore. And those coalitions have kind of break. broken apart. Now, what you have in a bunch of European countries is partly because of proportional

representation is it's viable to have half a dozen different parties. And the US and the UK, because of the first past the post system, you don't have multiple, it's never been viable to have five different political parties at different points on the spectrum in the same way. The US has got, the UK has got this kind of weird hangover, central liberal party, which no one's ever been quite clear what it before, sort of in the middle quote on call called liberal parties. It's, um, There's an interesting side line there, which is the liberal party in the UK in the 19th century was one of the two parties of government, and it was socially liberal and economically conservative. But in the 19th century, what we now call economically conservative in the 19th century meant pro-free trade and against regulation.

Right. Whereas now economically conservative is the other way around. Yes. So all of those labels kind of shift and move and change in different things at the time. It's interesting. I would say Mag is arguably certainly against free trade, but they're also against regulation. So it's like half, right? But it's, I finish what you're saying.

I agree with you. Of course, the labels do change. Yeah, the labels change. The coalition has broke apart, break apart. I think there's always this tension in looking at progressive ideas and saying, because if you look at the last hundred years, the social progressive ideas have always won. Like nobody today says, like being gay should be illegal.

like so you know a little bit like what we were saying about AI a while ago today you you could deterministically say that what is woke today in 30 years time will be what every rothar right conservative agrees with like yeah people have said that kind of thing theoretically in 50 years you know maybe maybe not yeah you also have these kind of overreaches around this right it does strike me that one of the differences between the US US and UK politics is that what happened in the last in my lifetime is the that the right, for want of a better term, won the economic argument,

that state ownership and government control of the economy is bad. Right. And the left won the social arguments that, like, gay marriage is okay. Well, it's... And so on. And in what happened in the UK was the right embraced that

and the Conservative Party is the party that brought in gay marriage in the UK. Whereas in the left, in the US, it's kind of the other way around. Republicans kind of never... And Tony Blair sort of brought in kind of... Yeah, and he brought in level economics. Whereas what happened in the U.S. is that the Republican Party in the U.S.

never kind of accepted that it had lost the social arguments. Hmm. Well, it's interesting. I think from 1950, like the moment of 1950, you do have something where because communism fell, basically because Nazis is defeated, the world moved socially to the left. And then when communist, as communism was defeated, it moved economically to the right. And so thus, for example, like the immigrant billionaire or gay billionaire is like in a sense...

Can be white wing. Well, they're far to the left of 1950 socially. And they're far to the right, in an economic right, in a sense of 1950 economically. Because 1950, yes, the Soviet Union had 100% taxes because it's communism. But the U.S. had 90% marginal tax rates. And you really couldn't get rich mid-century in the U.S. You could be a corporation man. You could work for NASA or GM, General Motors, General Mills, General Electric,

but you're sort of funneled, channeled into like these gigantic things. You had more freedom in the U.S. and other places, but you're still very stultified. It was too capital and it tends to be an entrepreneur and so on. And then gradually with, you know, I think the transition was the mirror moment where that's begun a decentralization arc and history is running in reverse since that moment. And so I think a lot of things are happening this century that are like a reversal of things in the past. I think it would be interesting. and I have no opinion about this at all,

but it would be interesting to ask what is behind the growth in billionaires? Is this an unlocking of a new kind? Is this a wave of company creation? So I have a piece. Yeah, I do have this on this. Which is to your point is, why are there new billionaires? Is that because there were a bunch of new companies

and there are first generation owners? And where did those come from? And certainly some of them came from Google and, you know, global winner takes all of them. and some of them didn't. I don't know. I mean, I'm not sure how much value I can I kind of add to that conversation. There's a bunch of kind of statistical questions where I just not have the time of thing.

I can give some thoughts on that, which is that has a U-curve, right? Where, for example, like, who is the richest guy in the Soviet Union? Like, didn't exist. Communism, you know, basically Stalin, you know, didn't need money because you could just requisition anything. Well, the Soviet Union is kind of a bad example of creating billionaires. because they just cut the country up and gave it to 20 people. Well, no, it's right, but that's starting in the 90s, right? Then it wasn't, that was Russia then, right?

But basically the number of, like, independently wealthy men who could do things. In the U.S., for example, a lot of the great fortunes, the robber barons and captains of industry, were forced into foundations. That's why you have the Ford Foundation, Carnegie Foundation, Mellon Foundation, Rackville Foundation. Because in 1930s, Roosevelt didn't want any other powers besides them. So he, you know, went after Andrew Mellon, all these people. Ida Tarbill went after Rockefeller

and those fortunes were corralled and basically controlled by the state in these foundations in the Soviet Union in Communist China they were just seized, right? So basically let me give the normal way of talking about this is inequality is rising and that's terrible, right? Another way of thinking about it is what is the state, right?

The state is in a sense, it's like all the people who are its citizens and they kind of crowd fund the state, right? And the question is, do they have a choice in doing that? Can they opt out of that? Like, what set are they part of? You know, for example, if they're on the Franco-German border, can they call themselves part of the German side or the French side?

You know, how about the Polish German border, but that kind of thing? And how much does the state take and how powerful is it? And mid-century, because of mass media and mass production, the states were more centralized they've ever been in history. I could show a bunch of graphs on that. That's not just, that's a quantitative thing. So you had these Geiga states, you had fewer sovereign units on the planet than at any time before or since. Like only like 50 UN countries.

Today there's like 196. So things have decentralized since then. If you go backwards in time, you go to like Germany under Bismarck, you've got all these principalities. Go to France before the revolution. You have all these things. Italy before Garibaldi, you have all of these little, you know, city states and so on, right? So you go backwards to time and forth the time. It's decentralized.

And the same thing happens where you've got lots of fortunes. You've got lots of, you know, individual potentates and what have you, right? So in a sense, like the world is sort of returning to what it used to be, with the big exception being China. I think China is the like the 20th century centralized state that will keep scaling into the century. So anyway, the reason I just say that is I think there is something real going on, which is that the state is just taking capture less of the wealth of its individuals. People are sort of breaking away on the borders of it and then being able to do their own thing. And so it's like Elon, not NASA. It's like Travis, not taxi medallions and so on.

And there's a good to that where there's a lot more room for individual initiative. But there's a bad to that as well, which is then people don't feel as bought in on the collective project and they're not included in it. It's some guy's thing. It's not their thing. It's not like America lands on the moon or it's Elon. Okay, fine. And they don't feel as bought in, right?

So it's a complicated kind of thing. I think we're going to have to renegotiate all that stuff in the future. I think there's a lot of to this outside, again, outside of sort of U.S. politics, which is that partly because the US you know the liberal partly the nature of the US economy partly because the US is a big domestic market partly because the successful internet companies

are in the US and have global winner takes all effects people outside the US for the first time I think well we've got all these giant US companies that are running stuff in our country and that was kind of true for like General Motors or Coca-Cola but it's much more direct but not really yeah yeah right you know general motion

to sold cars, but you had a lot of your own car companies as well. And IBM didn't decide how you built roads or anything. And there's certainly a sort of a, you know, you go to European events now. And there's people saying, well, do we need our own Google? And at one level, those are like dumb questions. But they're dumb questions about like a real issue, which is you have this other layer of stuff that you're using, which didn't used to be globalized and used to be subject to local democratic control.

And now, well, it's not quite clear how that works. Yeah, yeah. So actually, it's very important. what you're hitting on there is I think one of the core questions and I'll actually ask it in reverse which is are those American companies basically is the internet American right now on one level you'd say that's a weird question of course there's two parts of that is are they American but also is they're not they're not in our country if you're Swedish or Italian it's not a

Swedish company that's right that's right so so like you know my view is the internet is to America but America was to Britain it is like the version 3.0 and because the early Americans actually considered themselves, as you know, British, right? All the folkways and stuff came from Britain. And the American War of Independence is essentially a civil war. Yeah, exactly. That's right. So they had a people and they had a land, but they didn't have a government, right?

Because the government was in London, right? And when they had all three, they became Americans. They had a sense of self. And I think with the intranet, we have actually a lot of tribes that actually have a people and a government but not land. And the reason they have a government is they have a blockchain. They have a social network. They have with moderators or forums.

And now increasingly they have like an AI agent or like a central oracle or something like that where it almost takes a role of like a god which they all ask questions to, right? So you think of every large enough online community that has its own social network, whether it's a Discord or a forum or something like that, its own cryptocurrency, which has its, you know,

smart contracts and currency, and its own AI, which is sort of like its Oracle or search of all the community's knowledge, right? And that's like a digital community that actually has a fair amount of strength. And then because, you know, where are your communications happening? They're happening online.

Whereas your transactions are online. More and more of your wealth is stored online. Like crypto is at trillions of dollars now. It wasn't that 15 years ago. It was at zero, basically. And so the significance of these cloud communities, I think, is underappreciated. And eventually they're going to be able to have enough money

to crowd fund territory. And so because the tension between your primary identity is online, your social network's online, your currency is online, your information is online, and then not being grouped offline, that'll resolve in my view in terms of the descent of the clouds of the land. So it's interesting. I mean, I probably take a sort of more prosaic view of this, but listening to you talk, I am reminded of like distant memories of being at university and looking at social history. And, you know, there are a lot of social history is about the kind of the joining into groups. Yes. And so the joining, I think about this a lot.

And what is this sort of form a sort of self-expression? Yes. Why do people want to fund monasteries? Why do people form lay brotherhoods around the church? Why do people, like there's a whole 19th century British thing of like all sorts of social joining? Why do people want to join militias? And, you know, why do they want to form?

all these kind of former guild, why do they bond to form, all of these kind of different social groups and social clubs and ways of getting together. And what are they trying to achieve? And some of it is about, you know, self-defense, you know, or putting, not in a kind of military sense, but about, you know, forming your group to protect your group's interest. Some of it is about establishing status.

Some of it is about, you know, self-expression and self-actualization, you know, kind of classic Maslow hierarchy stuff. But it's not new to have lots of communities, what is new is that they're not necessarily kind of physically like co-located and they're not necessarily centered around I mean things like women suffrage you know they're not necessarily centered around a movement or some specific political objective I think they will be I think they will be but we've had those in the past you know the Cornwall League or women suffrage all of those yes veganism slavery

anti-slavery movements and so on so those senses of you know social organization and joining and grouping in clubs in different forms, in different aspects of society for different reasons, is kind of a recurrent pattern of human society. Yes. And now it gets expressed, which is the sort of thing we always talk about, is, you know, the Internet is human behavior.

And it expresses and channels it in new ways. And that's everything from, you know, people being horrible on Twitter or doing terrible things on the Internet through to people forming groups, clubs and societies on Discord or Reddit or whatever it is. That's right. You know, by the way, I have an explanation, which you might find funny as to, I used to wonder, why are people so crazy on Twitter? Why are they so crazy on social media? Because, you know, like starting fights and stuff, just as a sidebar.

I was able to explain it in the following way. You know, you know, the Unabomber in the early 90s? Yeah. So he blew up all these people. Yep. But, you know, the reason he did that was to get an op-ed in the Washington Post, right? So he killed all those people for the distribution. He killed all those people just to get his message out there.

So you realize there's people like that, then it actually makes it more understandable how many crazy people there are on social media. If someone is willing to kill all these people to get just his message out there, a lot of other people would be willing to be very nasty on social media to get their message out there. Yeah, I always thought a lot of it was about context collapse,

which is sort of actually a fuzzy word that doesn't mean anything. I felt like some of it was you don't know who that person is and you haven't understood what they've said on what else they think and you presume they think X. It's like it's lossy compression. You kind of compress three paragraphs. There's no subclaws, there's no nuance. You can't say, of course, I'm not a Nazi.

And some of it is also, which... And in fact, they can't take that for granted because you're not in their trial. Yeah, well, yeah, or basically they're like, you know, they have no context on you. They can't read 5,000 posts. They don't know where to trust you and so, and sort of. Yeah, some of it is also just... What's is Morgan Housel, I think?

Yeah, Morgan Housel is the... Yeah, he wrote a book that quoted me and that gets endlessly re-quoted. Oh, I'd said something like, like, the internet means that basically you're confronted with people who disagree with you. Yes. All the time. And you didn't realize there were all these people who like, the particular thing I was found was weird

was there were people who were like very, very far left. There are people who are communists. And they're like, you'll say something that isn't communist and they'll be like amazed. They were like, the thing was always, I always thought it was weird. It's like I can, I think it's weird that you're a communist because at this stage you have to be an idiot to be a communist.

Yeah, yeah, right. But it's even more weird that you don't know that most people aren't. Yeah, yeah, yeah. They're like shocked by it. They're like amazed that anyone doesn't agree with their tiny minority opinion. Yes, that's right.

And a lot of Twitter was that, it was like, you're amazed that I don't think everybody should own a car. You're amazed that I don't agree with, I'm like that I don't necessarily share your opinion on every possible matter. That's right. And I think the way that's going to reconcile is you're going to get a lot more, I think, smaller. I mean, in a sense, Twitter doesn't exist anymore, right? X.

Exactly. Exactly. It's a tower available moment, right? So Twitter no longer exists. There's X and there's truth and there's gab and blue sky on the left and Macedon and threads. And then the crypto ones like Farcaster, Lincolster, right? A lot of stuff went to things that didn't look like that. So stuff went to LinkedIn. TikTok.

Or it went to TikTok or it went to Instagram. And people make fun of LinkedIn like there isn't a bunch of bullshit on Twitter. But, you know, I realize that an awful lot of corporate people were sitting quietly using LinkedIn. when it didn't feel that they could use Twitter. Yeah, because basically the funny thing is, it's interesting. Something about LinkedIn means people are artificially polite.

And something about X or Twitter, especially Twitter, I think, even more than X in some ways, meant that they were artificially negative, hostile, right? And the funny thing about it is artificially hostile reads to people as more sincere. Like, that's to say, of the two, there's something about the artificially polite,

Like, for example, a good review is not a rave review. A good review is, I love, you know, Ben's book, it was great, but he could improve X, Y, and Z. That's like the best review you'll get. Yeah. You know what I mean? Usually. Whereas a hater will be like, just completely crap on you, right? So the negative is generally much more negative than the positive is positive.

And so when you see a LinkedIn style post, it's often like super positive and it feels fake immediately. But people don't apply the same filter. They think negative is real. they don't think negative could also be fake. I always like that a mental, you know. There was a thing that went viral a while ago of some surgeon who got a, they got a review and it was like, he saved my life. He's the most wonderful surgeon in history.

It's amazing. It's wonderful. Four out of five stars. Yeah, yeah, yeah, yeah, yeah, yeah, exactly. Okay, exactly. Wow, what did I have to do to get five stars? Yeah, exactly. That's right.

Like, you know, I forgot to give the mint chocolate under the pillar or something. Yeah. Yeah. Okay, so like, you know, let's change gears. Let's talk about just survey of tech, Just things, you know, and you can tell me you've been thinking about this, you have anything about this. So we talked about, like, gadgets. So we talked about, you know, the glasses.

We talked about glasses. Did we talk about glasses on the podcast or in the car? We talked about glasses a little bit on the pod, but basically, well, tell me your thoughts on the glasses. Oh, so. Air VR VR VR glasses. Yeah, XR glasses, yeah. So I've made this point a while, a bunch online.

As far as I can see, like you have the VR experience, you think it's amazing. It's not clear to me that this My base case of VR is that it may end up like games consoles In that you see a games console It's amazing, most people don't buy it There's a portion of people that don't understand That games is actually quite a small industry

In terms of number of people, it's a lot of money, but a lot, there's like 200 or 300 million people play games console games And so it may be that VR, you have the experience, it's amazing, you put it down, you walk away, most people don't buy it, no matter how good the hardware gets. I think it's much easier to see something

like what I'm wearing now, being a universal device at the level of a smartphone, clearly we don't have the optics for that yet. We may have... It's improving every year, though. It is. Yeah, it is. The question is, is that next five years time? Is that two years time?

Is that 10 years? It's not clear yet. Yeah, there's a few people I know who just, like, they almost subscribe to this space in the sense of they're constantly just getting the latest glasses. usually out of China, and they're just trying them out, right? Or getting prototypes. There's various prototypes people are making.

And this is something that I feel there's some value in tracking because it's almost being ignored by the world right now. It is because it's like it's one of the... It hit that Garner-hype cycle things. It's the S-curb that's bumpling along the bottom and hasn't quite happened. Yeah. Or it's a trough after the hype of metaverse or something. And there's a subset of that which is, okay,

clearly you want a wide field of view. Do you need to have something that looks like it's 3D like it's really there? So do I need to have glasses that could put something on the table in front of us that looked like it was there? And that's radically harder than having a really good heads-up display that could put a poplar that could put, that could put like an iPad display hovering in front of me. I think it helps a lot with things like repair.

Like, you know, for example, you open the hood of a car. Well, but that's still a HUD. That's still like a hovering label over the thing. Versus, does it need to work in broad daylight? Does it need to have black? Does it need to be able to acclude a bright white table like this? Right. Maybe, maybe not.

I think there's a range of outcomes there where maybe it ends up like a watch. To be clearly to begin with it, it will be a smartphone accessory just to have the computer battery. Yes, yes. But does it end up like a watch where there's hundreds of millions of people who have it, but the smartphone is the main device?

Right. Or does end up, no, actually a couple of billion people are wearing this? Let me ask you another question. Does a watch top out? And because the thing is, wearables are another thing that has huge traction, and it's kind of like there's a lot, a lot, a lot. We could fill this table, this whole room now,

with IoT health stuff, right? Because there's watches, there's rings like the uro ring, there's, you know, wristbands. It depends on the question. Is it a nuclear white, like Mark Zuckerberg board Oculus. Borok, sorry? Mark Zuckerberg, board Oculus because he thinks this is the next smartphone. He didn't buy it to be a game's device

or to have 100 million people using it. He bought it because he thinks this is the next smartphone. Yeah, because also he had been hit by the platform so hard. Yeah, he wants to own the platform, for sure. It makes sense. So my base case is that VR might be, might crap out at 50 or 100 million people. And I struggle to see it being 5 billion. I can see glasses being a couple of hundred quite easily once it work.

The optics are there. I can imagine it being 5 billion. I think that's harder. but AR. Yeah, AR slash XR is probably bigger than VR. But as we were talking about, VR is very, you know, the thing, new thing they're doing with, for controlling military drones, like, you know. There's loads of vertical stuff where absolutely that's going to nail it. Yes.

No question. That's right. So all the telepresence stuff. Yeah. And, you know, the guy up the telephone pole, the guy on the oil with growing glasses, yes, absolutely, that will be a thing already. That's right. And I think, have you seen this movie?

It's called Surrogates. It's actually, you know, pretty good sci-fi movie from like almost 10, 15 years ago. And essentially, like, people are like, they stay at home and they pilot a good-looking version of themselves as a surrogate walking around outside. So you can take more risks and so on because if that thing gets in a car crash or whatever, nobody cares. And then they could just do another surrogate in a runner outside, right? So I do think what are the use cases for, like, a proper, the VR control of a remote thing. So it starts with, I think, drones. And have you ever done a VR headset with a drone?

It's an experience. You should definitely try it. It's a wow moment because it really does feel like you're flying, right? Which is very cool and an interesting experience. So I think it starts with drones, but I think it eventually gets to something where you've got gloves and maybe an omnidirectional treadmill or something like that. There's various kinds of things like that.

And you are able to control a humanoid anywhere, right? So you control a humanoid and you can clamber up a telephone pole and fix something. And you're training the AI. as you're doing this, right? You could have a maintenance worker with skill in the art. And we're not there yet. It'll be years before we're there.

But eventually you have all these humanoids around where you can just go into this, like animate the suit and start doing things, you know? So that's a pretty important use case for VR, like physical telepresence. You have to nail a bunch of technology for that, but I could go through the gloves. I could go through the haptics.

A lot of those things are moving forward, right? and a lot of people are pouring money into this. That's something I give a lot of credit to Zuck for. He's just, you know, he's just continuing this, you know, like I don't know how many tens of billions of dollars are being put in. He's probably put the thick end of $100 billion into that. Something along those lines. Like it's 75 to $100.

Yeah. I mean, they are actually selling a fair number of units now. It just hasn't come close to keeping up with the spend. The sales are just bouncing along. It's like it's not good enough to break out of VR and CVS. And it's funny, you go back to what you said about Twitter. There's almost like a test which is, if you say that something probably isn't working yet

and you get a bunch of people shouting at you on social media, then that proves you're right. Because if it was working, they wouldn't care. Yeah, yeah, that's right. If you went on social media and said nobody uses TikTok, then people would just say this guy's an idiot. If you're on social media and say, and there aren't actually any consumer use cases for drones,

you'll get like the 10 people who love their drone. Okay, there's the one exception, which I will argue with you on, which is crypto. Yes, right? So that is something where people will say there's no use for crypto. You will say there's no... Yes, but there's just a huge number of idiots on every side. That's all true. Yes, right.

That's right. So, okay, so we did... So I don't say there's no use... In use case of crypto. I have the most unpopular position possible, which, as I say, it's kind of useful but not completely useful, which means I get both sides screaming at me. Yeah, that's funny.

That's this perfect position. So actually, what has Ben Evans on crypto? Then I'll tell you, apology on crypto. There's several answers to that question. one of them is, and this is more an observation, which I hope you won't say, I'll tell me I'm wrong, is like there's a bunch of clever people working away

building, like all the tourists left. Like the whole NFT thing was all nonsense, and that all there, all the tourists left. The tourists and the grifters basically all moved on to AI. Yeah, a lot of them, yes. And all the kind of people trying to build content brands saying this is all wonderful, or this is all bullshit, they moved off to AI.

There's a bunch of people sitting and doing like, abstruse, very clever, very technical stuff. there's a bunch of stuff working or being built that may work around a financial finance industry around finance rails around stable coins various kinds of financial instruments most of which is storing money or speculating in money or moving money around yeah there is a thesis that you could build instagram on this that this is sort of an open source computer in which you could write software that consumers would use and I have a bunch of questions about how that would work,

whether that would work, whether you would need to abstract the open sort of the crypto stuff away so that the consumers didn't see it. And if you did that, then why would they care? Totally. But none of that's kind of there yet. Like they're all billion-scale consumer apps built on blockchain yet. So there's a sort of watch this space around that.

And then there's the finance source. which I think is sort of theoretically very interesting but I struggle to get very interested in it just personally. Sure. Not what I'm interested in. And I struggle to see ways that I could add value in talking about it. So I kind of pay attention to it. And every now and then I point out like my newsletter on Sunday,

I pointed to the Shopify and Stripe announcements and said like, there's stuff happening here. Yeah. And you should pay attention. to this and there's people still interested in trying to build things. So if you've just written this off as all bullshit, you're kind of wrong. Right. But as a writer

and an analyst, I haven't moved it onto something that I feel I should write about. Totally. So okay, so that's very helpful. It's always helpful for me to kind of triangulate on an area, you know. So here is my basic view. You may

have heard me say it's 12 years ago. I think this is still true. Crypto is good for transactions that are very large, very small, very fast, very international, very automated, very complex, or then to be very transparent. And the reason for that is, like, for example, a Starbucks swipe, like a credit card is none of those things. It's not very large or very small. It's like a mezzanine transaction. It doesn't need to be very automated because you can just talk to the, you know, a cashier and see your receipt. It's not international. Both you and them are in the same room at the same.

same time. It doesn't need to be transparent. You don't need a receipt on the blockchain for everybody to see and so on and so forth. So the reason people think about the coffee transaction when they think about crypto is one of the most common transactions people do. They pay for their coffee every day, right? So it's like, I don't know, 10% of your transactions, 20% are maybe coffee because it's very few things you buy every day. Coffee is one of those things people buy every day. So where crypto really shines is the alternative forms of traffic. Actually, let me take your mobile example, right? The internet

can do telephony, but that was actually the thing that was best served by the existing system. We still have, like, local telephone calls, right? You can still use a telephone network to place telephone calls. Where the internet shine was, and telephone calls were sort of like mezzanine amounts

of information, right? Especially local was like between people in the same country, it wasn't very international. Where the internet shine was, for example, moving really large files like Dropbox, or very small files like tweets, right? Being very international, like across borders, being very automated. So it wasn't a human on both sides of the call, right?

It's shown for, you know, being very transparent. You're broadcasting the webpage here, but it's not a phone call just between two people and so on and so forth, right? So that I think is a good analogy where like, yes, now today, eventually the internet took over long distance telephony because that was Skype and then WhatsApp and what have you. But even still today, telephony is well captured. by the current system, right?

And like the existing phone lines still exist. That, I think, is a useful analogy for crypto, where crypto, for example, if you're a power user of money, right, if I want to receive or send a wire to a startup in Japan, USC, I can do that in seconds, and then I can refresh the page, they can refresh the page, and they can see it's cleared, right? Yeah. That is a real use case that's international wire transfers from anybody to anybody with,

and by the bank account set up also. is instant, right? So think about what we've done. We've taken it from days to get a U.S. and Japanese bank account set up to seconds. We've taken it from paying money to do that for the transfer itself to free. We've taken it from taking multiple days for a wire transfer to clear to seconds. And we also, by the way, the uptime, it's not nine to five banking hours. You can do it 24-7 and you can do it on any device, right? That's a lot of improvements just for the important use case of international wire transfers, right? Then you also have the digital gold use case.

Yeah, it's also, I mean, digital gold, I think it's also something that there's a kind of country mapping here. Because some of what you're talking about is a much bigger problem in, say, in the US than it is in countries with different banking systems. Some of it is also... You guys have SEPA in Europe, and it's not terrible. You send the money,

it arrives for free. Also, this is a point about PayPal. But that SEPA is worse within Europe, though. SEPA would not work for a wire transfer to Brazil, for example. you still have the same issue. I think there's another point which is like, I remember reading about people in Argentina, literally keeping their money in bricks.

Exactly. That's right. So Argentina, Nigeria, Lebanon. There are places where you actually can't trust your government. Yes. And there are kind of places. There's a lot of places like that, unfortunately. There's also a bunch of places where nobody's worried about that for 100 years.

Exactly. That's right. So the more middle class, stable, and so on, you are, Basically, crypto is for the power user of money and the powerless, right? The person who's like reinventing what a bank account even is, and the person who's just trying to hang on to a bank account. So it's like a U-shaped coalition, right? Similar to the people who actually benefited most from the global economy.

Remember what I said is like the elephant graph, right? You had the basically 10th to 80th percent of the world who grew, and you had the top 1% who grew and the Western Mill class didn't, right? that coalition is actually also the Crypto Coalition. It's like the people who are just, you know, internet, as Tim Ferriss put it, James, what's his name? Jason Borenz of the internet, right?

Like just internet hackers who are just trying to move money. Like, for example, I'll give a concrete example. Brian Armstrong, you know, my friend, CEO of Coinbase. One of the reasons he got into crypto, he had a few different life experiences that led him there. One was actually lived in Argentina for a while, so we saw like what a failed state would be like. The second, though, was actually being an Airbnb engineer.

So the thing is Airbnb, even still today, has the problem of transactions that are very large, very international, right? And also very one-time, low trust, right? Because you've got like somebody from Denmark, staying with someone from Japan, and it's a one-time transaction of maybe on the order of $1,000, which is actually a fair amount of money. Yep.

And like the wire system is simply not set up for that frequency of use between unrelated parties. And so there's a lot of friction on something like that. And to a surprising extent, Airbnb had a lot of Forex risk, like, you know, because they had to hold currencies and all these different things. And the thing you thought was a solved problem, like just moving money from one country to another, it's like, well, Airbnb has to do its accounting in USDA, but it's got income in, You know, if they're an American company that's got somebody transferring money from Denmark to Japan,

there's three currencies in that transaction just right there, right? So there's at least three currency pairs which fluctuate, and you've got at least two or three banking systems and all the delays and fees. You start to see if people are like, wow, this sucks so much. We need an internet-first banking system, right? We need something which is payments as packets. Yeah.

Right. So that was the second thing that motivated Brian to do it, right? there's other things as well right but so where where would I put crypto today right I'd say there's at least three applications there's more but I'd say at least three that are at the trillion

or multi hundred billion range and those are a digital gold right just whether you believe in gold or not like that's there people do people do believe even if you just consider an insurance policy that people are doing it's the thing that people are doing that's right B is it's like even if you didn't believe in luxury cars

that's a market right so there's a market for it, right? Okay. B is international wire transfers. I think stable coins are now there at this point. They are now one, two percent is $250 billion. Cablecoins have passed Visa, they pass MasterCard, right? And then third is actually crowdfunding, right? So if you look at the largest crowd fundings of all time, most of them are crypto.

And the reason is that capital formation online, like if you think about something like Kickstarter or what have you, it's actually more geographically limited and more limited by the credit card rails than you might think. For example, it's not that easy for somebody in Brazil and Japan and India to put $5,000 into your Kickstarter, right? The credit car rails may not accept it, maybe fraud hit, go ahead. Yeah, I was just to say, I wonder with some of the, there's a certain amount of swapping paper for paper in some of that. Go ahead. Well, in the sense of here is a new crypto project.

Yes. A bunch of people who've speculated and made a bunch of crypto money. For sure. put their paper games in Bitcoin into this new crypto project. Yes, that's right. That's right. But I'd say you're right. A bunch of it is like that. Which is what a lot of NFTs was.

Yes, that's right. But even if you just totally write what was funded off, just the mechanic of crowdfunding shows that that mechanic for capital formation. What they spent it on, I would agree with you, many of those projects didn't go somewhere. Some of them went really far. Like Ethereum was a really, that paid for all the rest in a sense. If all the ones went to do that was so successful. But just the mechanic of capital formation

where you have... So that gets me to number four, right? If you look at... Now, you may start disbelief... So at least those three markets. Gold, wire transfers, crowdfunding, those are very large markets. Those are $100 billion trillion markets.

So then you go to, like, other cases. Now, if I just look at trade volume, right? Crypto today is actually the number four stock exchange in the world in terms of volume. Number one, Nisi, number two, NASDAQ, number three, Shenzhen, number four, crypto. And it's rising fast. The thing that has held it back for almost 15 years is doing the obvious things was pathologized, meaning like literally yesterday or like a day or two ago,

we finally fully legalized, very clearly legalized, putting a dollar on chain, right? Now that we can put a dollar on chain very clearly, such to the point that Amazon and Walmart are like, okay, congressional legislation is perfectly good. Let's go time, right? Now we can finally put an equity on chain, and we can put a fund interest on chain, and we could put every paper kind of thing on chain.

That is a very big deal, right? That means that crowdfunding thing I talked about says that an internet company can issue internet equity and anybody in the world can be part of that cap table. Whether you choose to accept them or not is another thing, but the capital formation mechanism, it's now possible for somebody in Japan or Brazil or Mexico to invest in your company.

Once you have intranet equities, internet capital markets, that is now within sight. Now that we have the stable coin thing, boom, done. There's nothing, you know, now it's just a mechanical thing to get the legal system going

to make the on-chain equities work, and there's already work on that. So that is a big deal, right? Because the U.S. doesn't want to be the center of a global financial empire anymore, right? It's like, it's very conflicted about this, but with the tariffs and the trade war

and, you know, tourist visas, work visas, student visa bans and so on, it, like, is very conflict about whether he even wants foreign money coming in to America, right? And they've got remittances, taxes coming up, like one for 5%. So U.S. financial markets, I don't think, are going to be there in the same way by 2035. I think Chinese markets are rising. Chinese stocks are rising. That's going to be one thing that's there. But I think the internet capital markets will take over from American capital markets,

and that's a very, very big application. Let me go through a few more. Is this interesting so far? It's interesting. I mean, I sort of think about... I mean, we've got numbers now. Yeah, go through. There was a thing that I was...

So I'm leaning away from the microphone. We were chatting about it in the call this morning. I have a sort of a mental van diagram of like stuff I feel I can add something to. Sure. Stuff that I feel I understand and stuff where there's an audience. Yes. And the challenge I always had in writing a rat crypto

there's like a kind of a practical question as an analyst is all AI, all kind of crypto questions, it felt like there were either very, very technical conversations about, it was kind of like writing about Linux. So I should always think that like crypto reminds me a lot of open source. Yes. And you are either. It is open source.

Yeah, I know, but just in the sense of the general movement around it. Yes, yes, yes, yes. It was sort of, it reminded me a bit of like either I write something about like the new kernel memory management thing in Linux where I don't understand it and the people who do aren't interested in what I'm going to say and no one else cares.

It gets better. Or it was like, imagine what will happen when it's like talking about open source in the early 90s. Imagine what is going to happen when software is free. And there's not, I've struggled and it's actually it's a thing

I've also had writing about AI because I want to kind of, it's not a specific about what you think about this is what I'm most good at, I think, or the stuff that I write that people seem to like most, is kind of talking about the product strategy of how is this going to work, who's going to win, who's not going to win,

how is a corporation or consumer going to buy this, what would you do with it? And I struggled for a while to write about LLMs on that point because it was either like, what are the 30 new papers this year, or like, this is going to transform humanity. Right.

And it was kind of hard to find anything in the middle. It was in the weeds or super macro, but the mezzo is hard. Or super kind of messianic, but not much about like product strategy in the middle. And I have the same challenge in writing about crypto in that it's either very very tentical. Okay, I've got something for you that. Or it's, you know, imagine in 30 years. Okay. Or it's about finance where I don't.

You don't care that much about it. It's not just that I don't care. It's like I would have to spend six months to get to the point that I know what all the acronyms for moving money between banks are. I have an opinion about them. So I've never like seen, well, is that, is it, is it, it's in a completely different analogy, it's also like talking about chips.

You know, should I get to the point that I understand what's going on in chips? Is that a good use of my time? Would I be able to say anything of value there? And I, so far I've kind of felt, no, there's a bunch of people who know way more about it. Like the semis analyst guys have got it. So let me actually empathize with you in a certain way,

which is I was actually, a very late user of social media, right? I only got on Twitter in, like, December 2013, okay? Which is like a decade. Like, hello boomer. Huh? Hello, boomer, exactly.

That's right. No, I mean, the thing is, I got onto Facebook very early because it just was, like, moving around universities or what have you at the time, but I didn't really use it. And the reason is that until 2013, I essentially believed that there was absolutely,

I was just a very private person. You know, I was just like, you know, it's weird because I now post a lot or what have you. I was just a very private person and I didn't give any public talks until late 2013 and so on. And I just thought social media was a complete waste of time and all it mattered was genomics and math and, you know, like heart, like what people call hard tech now. Like I was doing genomics and robotics. And I'm, you know, proud of that work. I think it was important stuff. And I didn't see the utility in tweet.

my breakfast. And I didn't see the utility in just, you know, petting each other's fur, which is a lot of what people do on Facebook or whatever, you know, right? So I didn't see the value in any of that. And it was only once all of that was what bootstrapped the space. All of the fur petting got hundreds of millions of people on there, all of the breakfast tweeting and so on. Until, you know, what actually made it useful and interesting to me was I saw somebody tweeting a summary of a genomics conference at Colespring Harbor that had never the time to attend

and they gave a much better account of it than any layman would have. It's like, you know, like someone tweeting a mobile thing and you're like, oh, those are really great details and you're skilled in the art, right? And as then I was like, oh, wow, I can get like really detailed information here. Okay, now this is valuable to me as a reader, right? What's my point? My point is,

I think the parameter that you want to track when you're looking at crypto is block space. Have you heard that parameter before? Okay, that is the most important parameter in crypto that people outside crypto don't realize governance crypto. Blockspace is to crypto, what bandwidth is to the web. So if you think about the early internet, or the early web, I should be more precise, in the 90s,

like, it was very bandwidth constraints. It was 28, 58, 576 modems. And so that's why, like, Google was 10 blinks. And I think Amazon even had many images at all. And in fact, you remember six degrees? It was a social network, right? So that was a text-based social number. It didn't take off because,

without images people didn't really Yeah, you've got not even to share. You got on the name to share, exactly, right? ICQ was a chat app that did work, AOL and some messenger worked because that was just text that could be sent on that low bandwidth thing. It was only in the 2000s that you started to get more graphical things when bandwidth increased.

Like Facebook, the reason it took off at Harvard, everybody had a T1 connection being at Harvard, and they finally had digital cameras so you could have photos. And as digital cameras propagated out, so did Facebook, right? And you go further and further, and like, you know, the Internet only or Internet Explorer only got disrupted by Firefox in like the late 2000s, right? It was only really by the early 2010s that you had the full JavaScript stack of like J. Quarry and then only later for React and what have you. So this concept that we have today of like a mobile web app where you can download JavaScript and run an app in the browser on a phone was a vision in the 90s, but it took a long time together because bandwidth had to increase for that, right?

So what's the analogy here? Blockspace. basically block space is the amount of storage that you have on a blockchain. Like think of a blockchain as like an armored car for data, right? Because this is a data that people want to corrupt, right? In a sense, if it's a file on disk, it's important to you. If it's a file online, it's important to others. And if it's a file on chain, it's really important to others.

And it's so important that they might try to screw with it. And so Bitcoin came up with like an armored car for data where you, you could guard the minus one or plus one of who had what Bitcoin. And over time, that block space increased so that you could do some basic smart contracts on Ethereum. And now it's increased enough that you can blast millions of stablecoin transactions a day on like base and Solana and so and so forth. And so you should conceptualize it as, oh, why hasn't this happened yet? And instead think of, okay, these applications are gated by the amount of block space. and so they're coming online

similar to the amount of bandwidth you had text-only apps then you had images then you had videos and like Netflix only did streaming video in like the early 2010s right

I mean that we think about all that as reset I don't know that's the way of thinking about yeah I don't have a problem with the idea that you couldn't build Instagram on this

because the infrastructure isn't fast block space wasn't there yes I think there's a bunch of like interesting conceptual questions around

well what would happen when we got there yeah So here's a few things. There will be also kind of you're sort of speculating five years in advance. Yeah. So my view is I'm not sure if it'll be exactly Instagram, you know. Well, I think we can be sure it wouldn't be exactly Instagram.

Right, right, right, right. But just kind of conception. What is the app? You could build consumer applications. You could use, I mean, this is the phrasing I remember you using years ago, that one should think of, one should think of a blockchain as a distributed virtual. machine. Yes.

And it's another layer of abstraction. It is. That's right. And every layer of abstraction is always slower and crapper than running on the bare metal. Except that it allows you to do a bunch of stuff that you can't do if you want on the bare metal. That's exactly right. That's exactly right.

And the thing is, blockchains are, in a sense, one of the frontiers of operating systems research. Like in the same way, like there's an operating system like Windows. There's a browser, which is itself an operating system because you can run apps in it. It's got a full programming language. That's our Chrome layer. Were you at A6GNZ when Martin Casado was there? I can't remember a few.

We overlapped just a bit. We invested a bunch of things together. Yeah. Well, Martin had this great observation. You remember when YC said that, like, for a quarter of their companies, 90% of the code was written with AI? Yeah.

And he responded to this by saying, yes, but if you write an iPhone out, 90% of your code is written by Apple. Yes. And so there were all those levels of abstraction. Prompting is just a higher level of programming. That's right. Yeah, exactly.

And so there's a... I suppose the, you know, another way of answering your question is like the finance stuff is there, I can see it, I get it, I'm not sure I can add any value to that, it's interesting, and I will tell people it's kind of interesting, but you pay attention to this. I think you'll be a leader, go ahead, sir. The running, the building more generalized consumer applications on it is conceptually more interesting to me as something that I could make money telling other people about.

Yes. Except that it isn't happening yet. And it probably will, at a certain point, the, curve will curve up, the blocked space will expand, the stuff will get faster and cheaper and can store more stuff. And people will be, people will be able to build stuff on this. Deterministically, it won't be exactly Instagram. I think that's just kind of a useful mental model for thinking that you could build something like that. You could build consumer network apps like that on this. At that point, then I think you have a bunch of kind of new

interesting questions like, well, is it a good idea to have a social network where all the users have a vote? What would that look like? What problems does that? Right, right, right, right, yes. Well, Dallas are that already. Yeah, exactly. But it struck me the other day that all the arguments against that are basically all the argument and saying, no, you need a CEO in charge. It's basically all the same arguments to say, no, you don't want mass democracy, you need a king.

And you can have some balance like representative democracy, right? So you have the vote and they vote for somebody for a term. You can mix constitutions, which again, like look at Africa to or see how Latin America to see how mixed constitutions block out. Well, I'm saying, but just representative democracy where you have a leader, but they've got a fixed term and there's a vote for them, for example. All of that stuff is fascinating. It's like we don't have it yet.

And no one's going to pay me to go to a conference and give a presentation. So it's kind of tough for me to write about. Yeah, totally, too. I will say, all I just say is to put it on your radar. If you go to like snapshot.org or Vodegora, there are actually very large treasuries where all that voting stuff is happening on chain cryptographic voting and so on. So that's growing like stablecoins kind of people that ignore stablecoins for a while, just kept compounding, so the on-chain voting stuff is there.

But what I will say is that I think, just like I was like a late adopter of social media since I just, it had to get to a certain level of significance before I cared about it for the kinds of things I care about. Just I think the kinds of people are interesting in crypto are either A, they're engineers, and they just like the developer, ask their power users, B, their financiers, right?

Or in some sense, financiers or day traders, whatever is both the high and all over. And then C, in the part we didn't say is just like, they're political. Right? It's like a political motivation. So I kind of mean like being a Protestant or a Catholic. They have a certain world. But you also have our APSource.

Yeah, that's right. Exactly. So like I have that, you know, we both like enterprise SaaS type stuff, product type stuff, that kind of discussion. But I also like a bunch of other things. And you like, you like art museums and things like that, which I'm like, okay, that's cool. You know, go have fun, right? And so we have our own Venn diagram kind of thing, right? So, okay. So switching gears, I think you'll be more than crypto as block space increases.

and once crypto wallets, let me actually give you an example of something which it's useful for right now where the blocks space increased enough. You know OpenRouter? That allows you to try a bunch of different AI models and it just uses a crypto to pay for all of it. So this way you don't have to have 500 different accounts

at 500 different because there's so many different AI models you don't necessarily set up accounts and all that stuff, right? So it just takes all that account set up process and you just have one account, you pay crypto and it settles it with all these other guys, right? There's a kind of completely tangential thing that just occurs to me as you were speaking is, you know, Elamarina,

as this distributed voting system. The thing I always thought would be interesting would be to flip that and say, can you pass a double-blind test? Yeah, yeah. If you take a model that's on the top 20 in Alamarina and give me a bunch of responses,

how many people would pass a double-blind test to know which is which? Well, the thing is... There's probably some kinds of question you would tell very easily, but an awful lot, I bet most people So the most fundamental one would be like what is the private key to this or like basically what is the private key to this wallet? That's something that depending on how it's set up.

We were talking about this in the car, but basically another major use case for crypto is AI makes everything fake. Crypto makes it real again because AI can fake all kinds of stuff and give you this very convincing thing on like the deep research thing where it said 40% of the phones or whatever you're saying. But it cannot fake the private key. so it cannot show a non-zero Bitcoin balance or non-zero Ethereum balance without actually having the cryptographic solution there. Yeah, but it could probably just tell you that the balance is zero because it might be.

Yeah, sure, sure. But what I mean about that is, like, for example, all kinds of, let me give it, you know, CAPTCs, right, websites. So AI can bust a lot of CAPTCHAs now. It can get through, it can, am I a robot? It can figure it out, get through. But if you had to log in with a crypto wallet that had $1 in it or $10 or $100,

dollars. I can't fake that. It cannot fake the possession of that cryptography, right? Like to give you one, here's one motivating example for why crypto will get, maybe this argument will convince you. Maybe not, but it's fine, you know. Google login, you agree is it billions of users, right? But Google login, when you log into a website,

you only can log in basically with your email address and the permissions to your Google account. There's something very obvious that somehow even Google, with all of its strength, has not been able to implement, which is an international balance. a spendable balance, right? Google login could not have, for a reason, a spendable balance across different countries. They've solved that for Google itself,

where everybody can pay Google and subscribe to Google with a zillion credit cards in all these different countries, but somehow they couldn't make it work so you could log into a third-party site with a spendable balance. Crypto did solve that. Just that alone means that every Google and Facebook login will eventually be either augmented or replaced

by a crypto login. So I'm going to pick up something you said, which I mentioned, which I mentioned in the car around what's fake and what's real. Yeah. So if you're buying an apartment and, well, so going back a step,

like I think most of what most people follow on Instagram is no longer their friends. It's interest graph. Yes, that's right. And so do you care if that photo is a photo of a real thing or not? Sometimes you really do and sometimes you really don't.

Exactly. Yes. And I think that's kind of of interesting. It's not so much generative search as generative content. Exactly. If you're decorating your apartment and you want a mood board and you can specify some styles and you can say I like this and this and this and this

and it gives you more and you look and you say, oh, more more like that or more like this, it doesn't necessarily matter at all if those images are real. It does if maybe you want to buy that table and that table doesn't exist. It just looks like those kinds of tables or it looks like those kinds of

chairs or whatever. But if what you're looking for is no, I want to be more like this or more like that and you keep going until you get a mood board of exactly what you want, it may not matter at all whether those images are real. That's right. So if it's Pinterest on the one hand, then just inspiration or what have you. But if it is... If it's shoppable, then maybe it does, unless you're...

There's an extreme case here, which is they'll just send that the rest to She and and will make it for you. That's right. Or let's say, you know, there's some photo of a fire somewhere, right? And quite a lot of times people will post photos of fires and it's from like some... A concrete example, the Brazilian fires from a few years ago.

There was like a fake photo like from... that Macron tweeted out because he was told there was a photo of the Brazilian fires. But someone was able to show that it was actually like a... I think it was like a Reuters image or something

but from a photographer who had died years ago. Yeah, it wasn't that image. Well, this is a funny thing about people complaining about deep fakes. It's like we don't... The problem isn't the picture. is the label.

The label, exactly. That's right. So the thing is that with crypto, you can do what I call chain of custody, right, blockchain of custody, where you can have a camera. And by the, this is also important in scientific work as well. There's this huge replication crisis with all these labs and data. You know, fake the data. Yeah, exactly.

Or something, right? So you could have, you know, there's something called pre-registration of studies where, like, if you're doing a study, you have described in some places who you're doing it on what you're doing, it's like monitored to make sure that people report the results, whether they're positive or negative, right? So let's say it's a study or it's a camera. You can have like a either cryptosoft or hardware in there, such that when the frames of images are recorded,

they're instantly hashed and put on chain, either directly or as a digest of some kind, right? That basically is like tamper-proofing, such that before the data is even like collected or analyzed, this internet connected thing is doing something. Now, it's possible maybe to hack the firmware and mess with that, but it would be pretty hard to, depending on how you do this, it would be pretty hard to do that.

We also have this on, you know, Google and so on, trying to watermark, then generate images. The challenge is if the image isn't watermark, that doesn't, that won't stop people believing it. True, that's right. But I think over time, this type of stuff where it'll gain traction at first are crypto-oracles for prediction markets, because if you're making a financial decision,

I don't know if you've seen that stuff, Alex Tabrock has talked about this. When people have money on the line, their partisanship reduces, and they actually get a different chip in their head where they're like, is this true or not? They're trying to dispassionately figure it out, right? They're not just cheering my tribe, your tribe, whatever.

And is this true chip basically means, okay, I'm going to double-click into this, I'm going to verify this, I'm going to look at this, and that's where, like, oracles come in. They're like feeds of data that have some degree of verification. And right now they're like mostly price data, but people use it for weather data. They use it for this side and the other, right?

All these different feeds of information that people trade on. And over time, I think those feeds, once you can guard price data, weather data, you know, health data, et cetera, eventually you can guard any kind of data. And then now you've got like a chain of custody for data, like the scientific data rough, you know, rough off it.

Anyway, why don't we, we should wrap, but this is actually awesome conversation. Sure. latest stuff what should people go and check out anything uh well i've been publishing a newsletter every week since 2013 and i'd always welcome more subscribers to that you should write where is it is there going to be a benedict book google benedict heavens my parents had good SEO book is interesting i've had publishers approach me every now and then about doing a book i have to work out what it would actually be and why it would be worth reading honestly if you just i don't know maybe a history of tech like because all your

slide decks are very good right and there's um one of the things i learned from you know my friend novel like the Navalmanac, right? Yeah. That sold a million copies. Why did sell a million copies? I was surprised by that. It was Eric Jorgensen went and curated Novel's old content and turned into a book.

And I was really surprised. I was like, wait a second, isn't that all available on Twitter for free already? Didn't people already see it? They did, however, if you say, what is the one work that represents like the best of Novel's thought over years, you know, just to see his latest tweets

is not the entry point for that. You want to kind of collect all of them, sort them, filter them, organize them, them, thematically style them, and so on and so forth. And I think you could have a pretty good book. If you do that, let me know. Well, that's one thing on the list. And yes, the other thing is I used to do an annual presentation. I've now shifted my cadence. So I did a new AI presentation last month that I published, which I was just in town to present.

And then I will do another one in the autumn, the fall for American listeners. Great. on a sort of e-commerce, advertising, marketing, brand, like all the other stuff that's being transformed by AI right now. And in general, what do I do? I try and work out what's going on and how to explain it and how I can explain it. And then I go and do presentations and speak at events

and talk to companies, and I do slides for money. Basically. Well, that is similar. I do a lot of slides too. I do a lot of speaking. So, you know, I've mentioned the cloud communities thing and materializing those cloud communities. So that's what I'm working on at NS.com, like NetworkS School.

So if people are interested in this kind of stuff, we talk about that there. So subscribe to Ben Dick's newsletter at, is that Benedict Evans.com? Ben-Dash Evans.com. Ben-dash-Evins.com. Okay, great. And then if you want to check out NetworkSchool, come to NS.com. Sure. There you go.

So Benedict Evans.com is another Benedict Evans. No. Who is a photographer. Really? And so my profile picture is taken by him. Because I used to get his email. Oh, my God. This is obviously this is a blockchain use case.

There's a contact form on my website. And he won't sell to you. And I redesigned it. I don't need you, didn't ask. I redesigned my website recently, so it's clear of who I am. But it was quite generic. And people would go to the contact form and they would say, Hey, Benedict, we really liked your work photographing Harvey Kytel.

Would you like to go to Mexico next week and take pictures of Robert De Niro? And I would look at it. That's so funny. Forward. Well, you know, it's funny. You know, it's funny. There's actually probably as maybe even more, abolish history of Austin's that are.

but because there's like 12 people last I checked in like the SF Bay Area alone with my first and last name, you know. So just I feel your pain. Okay, well, this is great. Really great seeing you been a while and we should just more. Yeah, great. Thank you, sir. Thanks for listening to this episode of the A16Z podcast. If you like this episode, be sure to like, comment, subscribe, leave us a rating or review and share it with your friends and family.

For more episodes, go to YouTube, Apple Podcast, and Spotify. Follow us on X at A16Z and subscribe to our substack at A16Z. com. Thanks again for listening and I'll see you in the next episode. This information is for educational purposes only and is not a recommendation to buy, hold, or sell any investment or financial product. This podcast has been produced by a third party and may include pay promotional advertisements, other company references, and individuals unaffiliated with A16Z.

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