Bankless - 148 - This is How Crypto Fixes the Internet | Antonio García Martínez

Episode Date: December 12, 2022

✨ DEBRIEF | Unpacking the Episode: https://shows.banklesshq.com/p/debrief-antonio  ------ 📣 Opolis | Get 1000 $WORK and 1000 $BANK  https://bankless.cc/opolis   ------ 🚀 SUBSCRIBE TO NEWSLETTER:          https://newsletter.banklesshq.com/?utm_source=banklessshowsyt  🎙️ SUBSCRIBE TO PODCAST:                 http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS:  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  🔐 LEDGER | NANO HARDWARE WALLETS https://bankless.cc/Ledger  ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod  ------ Topics Covered 0:00 Intro 6:00 Antonio Garcia Martinez 9:25 AdGrok 14:00 Paying for the Internet 19:50 How Advertising Works 29:10 Facebook Culture 36:30 The Attention Squeeze 41:00 The Double-Edged Sword 48:20 Free Speech 58:00 Digital Identity 1:03:00 Owning Web3 Data 1:07:45 Web3 Today 1:16:20 Growth in Crypto 1:21:15 Antonio in 2022 1:24:45 The Web3 Ad Model 1:27:15 Closing ------ Resources: Antonio García Martínez https://twitter.com/antoniogm  Spindl https://twitter.com/spindl_xyz  The right to never be forgotten https://www.thepullrequest.com/p/the-right-to-never-be-forgotten  Why Spindle(e)? https://blog.spindl.xyz/p/why-spindle?utm_source=profile&utm_medium=reader2  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

Welcome to bankless where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman and we're here to help you become more bankless. Antonio Garcia Martinez is on the podcast. This guy has been around the block, Facebook, Twitter, Apple. He's seen it all. He knows the internet.

We talk about his journey, why the internet's boring and why it's broken, how to fix it. a few things to look for in today's episode. Number one, he actually defines what an internet ad is. It was surprisingly useful to me. A unit of your attention sold at the highest bidder. We get into that definition what it means. He also says, for the good and the bad, advertisers were the ones who paid for the internet.

We talk about what this means. We talk about the flaws and also the benefits. We also talk about why Antonio thinks NFT drops are actually ads. Lastly, we talk about attribution and how, attribution on Web 3 can help us win against Big Silicon Valley and the Big Banks. David, Antonio's just a lot of fun to talk to. He's kind of a straight shooter, tells it like it is. Yeah, what are your takes going to this episode? Yeah, Antonio, I think he's going to be able to tell the story of the complete trajectory,

hopefully, of the ad-based models of Web 2 as it goes into Web 3. And of course, how hopefully, again, Web 3 doesn't just take the same, same ad models of Web 2, but it gives it its own native spin, right? Like how the ad-based model of Web 2 is going to change, yet still achieve some of the same goals that ads do in Web 3. And I think rather than just like poo-pooing on ads in general, Antonio in this podcast really gives a pretty clear and sober idea of what an ad is, why ads are actually good.

The take that ads actually paved the way for the internet to be adopted, I thought it was a pretty good one. And then also then later it comes to become extractive and bad and evil. And then he, of course, is starting this company called Spindle. which he thinks can help create the ad model of Web3, that is hopefully a way that's not extractive, that it's enabling of users. But his history is insane, Ryan, as you know,

worked on Facebook before the Facebook ad exchange was in existence helped build the Facebook ad exchange, and so he saw the before and after of what we now know of modern Facebook. He also started an ad company, sold it to Twitter. He's been around Silicon Valley. And so I think in the future, as this Web3 world gets built out,

Antonio himself will have seen the complete trajectory of ads on the internet. And I think this is really just going to be the lesson that bankless listeners take away today is the ad model is going to still exist in Web3 and is going to be different and hopefully better if we do it right. One thing we also talk about is privacy.

If you're curious about that, some back and forth on that, he has some interesting opinions on that. So look out for that. And by the way, David, when we were talking about that, I noticed it's about four or five times you said the word, hopefully. I want to talk about you more about that word hopefully, but we'll save that for the debrief.

The debrief, of course, is the episode that David and I record right after the episode, which is literally what we're about to go do, where we give you our raw and unfiltered thoughts. It's available for all premium subscribers. If you want to upgrade, get the premium RSS feed. You can do so. There's a link in the show notes, as always, to do that. Now we're going to get right to our episode with Antonio. But before we do, we want to tell you about these tools to help you go bankless.

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He knows social media. He knows its flaws. He knows the effect of social media on society and the major effect to tat on his life. He's going to tell us what has been like to be in the belly of the beast, what he's learned, and why he is in crypto as a result. Antonio, welcome bankless. It's great to have you. Thanks, Ryan. Thanks, David. How are you doing, man? You just came back from Miami, I think. We'll trip out there. I'm a little tanned. Yeah, I got some sun. Yeah. I hope you enjoyed yourselves because, you know, you've had an exciting life, I would say, as we

look through this bio. David, why don't you just tee up Antonio's bio for bankless listeners who haven't run across who Antonio is. Yeah, and Antonio, I think you're going to fit in very well on this podcast because of you are extremely multidisciplinary. So started at Goldman Sachs pre-2008, moved into a Y Combinator startup ad grok, which you sold to Twitter in 2011. Then you started working at Facebook in that same year, director of Facebook's ad exchange, which is a point in this podcast that we are going to dive into, definitely.

Left Facebook in 2013 to write a book. You wrote this book called Chaos Monkeys, Obscene Fortune. and random failure in Silicon Valley talking about a lot of your experiences. And then you also had a brief stint at Apple in 2021. And you're now at Spindle, which is a Web 3 out of station platform, which I believe takes a lot of the lessons that you've learned in Silicon Valley working on the Facebook ad exchange. But now, now that we have this new blockchain platform, taking a web three stance towards some of the lessons that you've learned in Silicon Valley. Antonio, how do you like that for a description of all of the places that you've been in the world?

You included all the good stuff and excluded all the bad stuff, which is great. You did exclude some good stuff, too. There were some weird detours in there, including living in an off-grid yurt and, you know, moving to Europe and a few other things. But, yeah, mostly you got the trajectory right. Yes. Thanks. So, Antonio, it's a hard question to ask because you've been to so many places.

This podcast, I think we're going to talk a lot about Facebook and the Facebook ad exchange because I think that your time at Facebook straddled that. So you were at Facebook pre-ad exchange and post-ad exchange. And so we want to talk about how did that era of Facebook? Facebook, which you had involvement in, change the direction of the company, but also change the direction of the internet and, you know, this place that we go to the internet. How did that change? And then we also want to pick your brain about perhaps what you see as a trajectory, learning what you've learned at Facebook and Twitter and just being in Silicon Valley, how that's going to

go forward with blockchain and how the whole blockchain role changes the game of the internet. Does that sound good? Yeah, definitely, Dave. Thanks for pumping me up. I should mention it was a group effort at Facebook, but it's true that I was there at the formative time where the five or six products that made Facebook were shipped. So that was a fascinating thing to see. So let's start this story at AdGroc. Can you talk about the inspiration for AdGroc and where that came from and what Agroch did? Yeah, it's funny. I mean, this is like total deja vu. So I'm right now in San Francisco isoma across from South Park. Agrox's office was like two blocks that way. Right. And I remember living like the Web 2 boom, which like this used to be the

pulsing heart of like consumer internet web 2 10 years ago. Now it's pretty empty. There's a reason why we can afford this office. But yeah, AdGroc was basically, so once in there, I went from Goldman, which is basically pricing and trading credit derivatives, that whole blew up in 2008. I joined an ad tech company. That was my first exposure to ad tech. Company run by sociopath, it wasn't amazing, but they had very good recruiting. So I met two co-founders and like literally the last day of the deadline, we applied to YC. Back when YC was still kind of somewhat of a niche thing in the sense that, you know, it was only 35 companies, Paul still ran the show, et cetera. And we managed to get in. We oddly managed to get in with basically no product.

And the idea there, one of the great unsolved problems at the time, and again, this is ancient history, but it sounds like you want to stroll down memory lane, so let's do it. You know, Google AdWords, right, the little ads that you see on the right, like when you, in case you don't know it, and there's a whole riff on this in Chaos Monkeys, like if you enter a query, that unleashes a whole wave of computation to match a set of ads that targeted that query, right? And those queries literally have prices to them. So for a while, there's this form of lung cancer called miso thyloma that asbestos workers got after the 40s that I think now you can no longer bid on it because it's a little bit skeezy. But back in the day, you clicked on anything with

misothelioma, somebody paid $100 for that click, right? And yeah, yeah, yeah. Well, like some kind of an attorney or something? Yeah, yeah, yeah. This is personal injury attorneys who are in class action suits against whoever had the asbestos plan. The ambulance chaser type, you know, that kind of exactly. Exactly, exactly. But the cool thing is that you've got like a piece of human thought and attention, which is, oh, do I have misoelioma? That gets auctioned and sold off like a can of tomatoes or like a share of Google, right, in an open market. And then it all happens billions of times a day, right? So the Google thing was one of the first examples of we're going at internet history. And this is way before my time in the ad tech space. Wait, wait. That's an interesting mental model. Like a piece of human attention. It's auctioned and sold off to the highest bidder. That is wild. I've never thought about it in those terms. That's exactly what it is. A quantum of human attention is being sold. And that's, it's not just on search. Every app you open, every time you load Facebook. Like in the case of programmatic exchanges, literally requests go out and say, obviously pseudonymously, but this human is here. What do you know of? about them. All these databases spin into gear, machine learning model, all the rest of it. They

return with a bid and a piece of act creative. Somebody wins the auction and boom. And then it happens billions and billions of times a day. Yes. And the winner doesn't actually care necessarily about the well-being of the human who's behind the attention that it's receiving. It just cares about the ROI. It's just an economic calculation. And so am I going to make more money on this human's attention than it cost me to purchase it? Yes. I mean, this is not a utopia. The advertiser is not trying to improve your mental health. But the reason why advertising exists, right, advertising is a weird thing, right? It's not like I make a thing and then sell it.

It's like this weird triangle trade, right? Advertising exists when some other party is willing to pay more money to the provider of the service than I'm willing to pay for the service, right? If that inequality holds, someone's willing to pay to reach me through that service more than I'm willing to pay for the service, then some form of advertising must exist, which is why I think it will end up existing in Web3 as well. But this is why, like, you know, the sort of cynical statement that ad tech people say after the fifth drink at the conference is, well, you know, we pay for the internet, which is true. They paid for much of Web2, which doesn't mean, is not to say that it has to be that way going forward.

I think Web 3 is going to have way more interesting monetization models. But if you expand the definition of ads widely enough, you're already seeing it happen in Web3. An NFT drop is an ad, basically. Right. It's a piece of targeted media that's driving. We're skipping ahead. I don't want to get too off the topic, David. Well, I love the deconstruction that you just did.

And I want to just emphasize that a little bit. advertising happens when somebody, it's more economically viable for somebody to access the attention of the user than the user is willing to pay for the service that they are entering. Correct. That's pretty cool. I love that definition. I feel like that's pretty close to the metal of what a definition for advertising is. That's right. And then the other thing that you said is that advertisers paid for the internet. Can you just unpack that a little bit? Elaborate on that. Just riff on that for a little bit. I mean, so let's think about it. I mean, I'm not even a Facebook user anymore, but how much money does Facebook make off the average user? That metric's just known as

Arpoo average revenue per user. It doesn't get used in Web3 at all. It should get used more. Part of Spindle's point is helping you calculate that thing. But basically what it means is how much money am I making off that user over some set period of time? That Arpoo for Facebook, I haven't looked at the numbers recently, but it's north of $100, right? Like ask yourselves this, would you pay $100 for Instagram or would you pay $100 for WhatsApp? You probably extract more than $100 of value, but would you necessarily pay for it? Eh, probably not, right? Like per year? Antonio? Yeah, yeah, per year. I mean, we probably would because we're in media.

Like, I'd pay more than $100. Like, if anything, the $8 blue check from Elon is like cheap compared to its actual value, right? But for the average user, for the three plus billion people that use Facebook and its sociality, it's a lot. It's a lot of money, right? They're not going to pay it. And note also that a network obviously has network effects, right? Facebook is worth something because there's three billion people on it, right? If it had half as many people, it's not worth half as much, it's worth a quarter as much, right?

This is known as Metcass Law, that the value of a network was roughly as the square of the number of people. I mean, it's a rule of thumb. It's not exact, obviously. But in a state where you have network effects and you have a mass consumer product, advertising almost has to play a role. Because what you'd lose in growth, if you actually put up a paywall in front of Facebook, would be extraordinarily expensive if every marginal user is actually, you know, exponentially important. That's interesting because it's a double-edged sword. Advertisers paid for the internet is interesting because for the good and the bad, right? But a tremendous amount of good has been created. Yeah. And not just a first order of like, oh, look, we have Instagram. We

wouldn't have otherwise. There's also second order effects. Like look at, it's funny that, I did some pieces back in the early days of Wired. I'm not the only one to observe it. This period, this like 80 to 90 year period of like somewhat objective, both sides journalism where there's fact checking. Like, I mean, now I think things are getting more partisan, but at least in theory, unlike much of Europe or other parts of the world, a newspaper kind of tries to get it right and show both sides in the United States. Why was that? I mean, it was partially for ideological reasons, right? But if you go back and read the works of Walter Lipman, he was an early intellectual that founded the first journalism schools, he wrote a

called public opinion. It was partially ideological because the press had gotten World War I very wrong, right? But it was partially also a commercial decision. Macy's basically needed the most reach possible to run its ads, right? And so the New York Times of the world, New York Times actually started as a publication that was not overtly partisan, right? A newspaper in the 19th century was like the press Democrat. It was literally like the Democratic Party's paper in that town. And if you remember that party, you subscribe to that paper. And if you're part of the GOP, you read something else altogether, right? And that's just the way journalism worked until about the beginning of the 20th century.

And so journalism gave us this sort of golden period of relatively somewhat objective and nonpartisan media. And so if you switch to a subscription model, which everything is going to, by the way, whether it be Substack or the New York Times, now makes an enormous amount of money from its digital subscriptions, right? Well, at the end of the day, the customer gets what it wants. And the customer used to want nonpartisan, agreeable media. And now the customer wants its own views reflected back at them because the customer is the reader.

And again, like, it's not necessarily an unalloyed good that suddenly readers are getting what they want all the time, right? So there's like a second order effect here as well, which is advertising supported media has to be within certain rules because at some point advertisers will bail, right? If the media is too extreme, they're just going to walk away, right? Lean into the whole advertisers paid for the internet. I want to keep on going down that rabbit hole because that's fascinating. And I want to just like illustrate this, I think in this way, where like imagine all of the apps that we use on the internet that got us on the internet. Like it was Facebook for me back when I was in like middle school, perhaps also Reddit. Imagine

if we had to pay as a user to access all of those things, how much less would the internet be adopted if that was the case? Like orders of magnitude, like the internet would, like the advertising model probably was a lubricant for the adoption of the internet. I think that's what you really mean when you say advertisers paid for the growth of the internet. A theme in previous bankless podcast, Antonio, that we talked about with Mark Andreessen and Chris Dixon and a few others is that the fact that native payments in the internet wasn't a thing until. crypto was one of the main reasons why the current business models of the internet is what it is, where advertising is the only way to do it, because that's how it paid for. But I think with what

you're saying, that actually kind of argues against that where, no, like, if we had native money in the internet before the advertising model, we probably still would have had the advertising model because of the free lubricant that is the onboarding of everyone because everyone's free. Yeah, yeah. I mean, I agree with Chris Dixon and Mark about 99% of reality. So I I don't want to like overly contradict them. And I do think the fact that there's like magic internet money that's programmable money and that web three can financialize itself is very interesting and unique. That said, I don't totally buy the story that now because we have native internet money, there's subscription models that are viable that weren't before. I've been hearing about micropayments solving the publisher problem for like 15 years. We've had micro payments before. We've had startups that do this before. It's not about even though obviously stuff on chain is better than some of the fiat stuff. It's the emotional decision cost of like, do I want to pay 25 cents for this? article all the time. People just don't think about it that way. It's like a mental toll. Even if you made it like a one-click thing, humans just don't think about media that way. And that said, I do think the blockchain makes other business models viable that weren't viable before.

But I don't think just making subscriptions easier is kind of good enough to change the dominant business model of the internet. So, Antonio, that's a little bit about ad grok. And I want to bring kind of the next place that you visited in your journey, which is Facebook into the story. Because for all of the good, and I think for the first, like, I don't know, the birth of Web 1, and Web 2, all of this advertisers paying for the internet thing, we only saw the upside, right? We only saw the benefit. We only saw more and more people getting connected. And I remember back in the day when Facebook was like a beacon of hope.

It's the social graph. It's how we bring world peace and connect everyone together. Sounds like you worked at Facebook, but okay. Yeah. But like I heard it. And like I believed a portion of it. I remember kind of my first time logging into Facebook. And it was just a magical experience.

He said everyone is here. Like, isn't this amazing? This is what the, internet can do. That wasn't possible in Web 1. So that's all of the good. But as we said, it's also a double-edged sword. So advertisers paid for the internet, but also advertisers paid for the internet, right? Like there's a problem with that. We kind of own it now. And we started to see, I think, the negative effects of that over maybe the last 10 years. But tell us about how your experience with Facebook fed into that story, kind of what you saw, and maybe some of the negative side of this

attention-based economy that we created on the internet. Yeah, yeah. I mean, we should distinguish as different types of advertising, right? The rise of what I think broadly you'd call programmatic advertising was something that changed the course of human history. I think it's a bigger story than just Facebook. I mean, it had impacted Facebook because that was one of the people to help bring it to Facebook, but it's a bigger story. What do I mean by that? So again, let's go back into the midst of time. A lot of internet monetization or the ad system was very skeuomorphic to use acoustics in term of what the newspaper business was like. You know, if you look at, you know, display ad on the right hand side of an online publication, it looks like a newspaper ad. That's

intentional because that's what it was modeling. In fact, literally the first display ad was then called HotWired, now called Wired Magazine, and it was built out as if it was a print ad because they had no other model. And you still have terminologies like insertion order. That comes from the printage because they would insert an ad into the print of a thing. The I.O. is still how you buy an ad. In any case, so that was the ad world in which you had the New York Times are wired with a sales force, go to an advertiser and say, hey, we don't have much tracking or attribution. Like, we don't know how well the ad's going to perform. But we're going to charge you for the medium. By the way, we own the audience, right? If you want to address

techies in the mid-aughts, right, you basically had to buy an ad in wired.com. There's nowhere else to actually target those users. So what did programmatic advertising do? And this is where I wish I could take the camera to our whiteboard wall because I would walk you through schematics. But basically how it worked is rather than Wired or New York Times saying, here we have a captive audience, like pay up, right? Pay us $30 per thousand ads, which is kind of a lot of money. You had somebody like Facebook or somebody like the Google Display Market, you know, ad exchange saying, you know what? How about we actually track individual users when they come to your website, right? So if you're an e-commerce guy, a user is going to come to you, you're going to cookie the user, you're going to fire a bunch of pixels to a bunch of other sites.

And then you can actually target that user in all sorts of different places, right? If you've got a techie user that comes to your blog or comes to your gadget store, I can target them anywhere. I don't have to pay $30 per thousand ads at Wired. I can target them anywhere throughout the internet. And so what you've done is you've unbundled the audience from the publisher. And the publisher here is just the person who produces the media, whether it's wired.com, Facebook, wherever. They're all publishers in the ad tech sort of imagining of this, right?

De coupling the audience from and breaking it out of the publisher is what basically wrecked the mainstream media, right? That's why New York Times has managed to transition to subscriptions, but local news is basically dead because all they would do is sell ads against what was a captive audience, which was the local market. but again, if that audience has been decoupled, like you, the publisher no longer own this, actually the ad exchange and ultimately the first party data the advertiser has owns it, then that just changes the whole dynamics.

Never mind that Facebook has actually upstreamed, to use a later David term, the actual media, right? Because a lot of the inbound that went to a New York Times or whatever else actually came from Facebook. So you could run the ad. A, you rip out the audience. Like the New York Times audience is no longer imaginable. I can find them on Facebook, and by the way, they're actually, they spend more time on Facebook they knew on the New York Times, right?

That was the death blow of like conventional ads driven media. And so that programmatic ads technology changed everything, right, really. It's fascinating. And I think a lot of people would say wrecked it in a good way because now it allows, maybe that's another double-edged sword, but now it allows anybody to kind of create a platform. And it disrupts the gatekeeping media that sort of were the gatekeepers of truth and the gatekeepers on what you see and what you hear and all of these things. And it opens this out.

It democratizes the internet. This is very much the Web 2 vision still. and still feels like it's a good thing? I mean, I think so. I agree with you, but it depends how you feel about the New York Times. There are some who still yearn for the days of your in which you had a human editor deciding what Americans read every day. Not everyone looks well upon the algorithm as if that's the problem or whatever.

It depends how you look at it. But yeah, I mean, the problem I think with the Facebook model, right, is, again, what Chris Dixon calls the take rate. The problem with Facebook, like, yes, you've democratized thing. You can run a Facebook page that would have a level of reach that it wouldn't before. But Facebook sits there and takes all the cash off the table. Facebook kind of does sit there and intermediate the ad spend in a huge way. And if Web3 has any promise, it's pushing the value to the edges, to the users, to the brands, to the creators, it's not having some like vampire squid sitting in the middle of it, right, hoovering up 70 cents of every dollar that goes through the system, which is more or less how it works now.

So that's the, yeah, that's a bigger downside, I would say. So Facebook as the intermediary between users and advertisers, I would assume that when we talk about their take rate, that they're trying to capture as much value as possible because they're a business. that's what they do. And so basically they're eking out all the value that advertisers are getting from reaching their audience. There's some like profitability there. But then Facebook is probably collapsing that profitability to approach like zero percent of like value to advertisers. Is that a fair take or is that not right?

Well, let's get a little technical. You're not talking ad tech until you have a bunch of three letter acronyms in the mix. So let's include some three letter acronyms, which might be educational. So there's some key concepts when it comes to advertising and they're not even that complicated, but things like customer acquisition costs, right? so KAC or like lifetime value, LTV. And KAC is like, what does it cost me to get that user to come in the door and become a paid user? It could be an ad or it can be, by the way, running a Discord community.

Like Zinga back in the bad old days of Farmville used to run communities as well, right? That's a form of marketing. You don't pay for it as paid media, but it costs you something because you have a community manager. So how much does it cost you to bring a user in your door? And then, you know, to be blunt, how well can you monetize them going forward? What is their LTV? Because some of they're going to turn out. So how much money do they spend over what time period, right?

So if you're a business and you're advertising and trying to drive growth, your LTV has to be higher than your KAC, right? If that ratio is above one, you're happy if it's below, it isn't. And looking at it from very mercenary point of view, every company is a marketing company that has a side hustle, which is how they drive usage on the funnel. But for example, Uber was profitable, I think, for the first quarter this year. Their LTV was not better than their KAC for 15 years, right? That number was less than one. And that's what basically, you know, and of course, they had to tie that over with speculative capital. Don't even ask me what that ratio looks like in Web 3, right?

there. But of course, if money is free, cax are zero. Who cares? Right? I can just invent this token and give it to users to use my product. Of course, I think those days are over. And I think people have to start looking very seriously at what their cacks are. But it's not quite true that Facebook can just squeeze the market. Because Facebook has to squeeze the market. Because Facebook has competition, by the way. Because Facebook can also spend on Google. Now I can spend on Apple. There's the open web, right? Facebook isn't the only game in town anymore. And so, Facebook gets screwed. I just stopped money on Facebook. Facebook has competition, by the way. I can also spend on Google. Now I can spend on Apple. There's the open web, right? Facebook isn't the only game in town anymore. And so, they can't quite do it arbitrarily. You said every company is a marketing company that has a side gig. I love how meta that is. Basically, what you're saying is like Uber's side gig is moving people around. You know, Apple's side gig is making iPhones. Why is every company an advertising company? Can you unpack that a little bit?

Because if you sit there and talk to their marketing teams, that's how they view the world, right? What's called the marketing funnel, right? Like, oh, the user comes in here, sees an ad, sees a tweet, installs the app, goes into the app, spends money, and then churns out. That's the central metaphor of marketing, right? that is what determines the success or failure of your business. And if you talk to the marketing teams, like I used to talk to the gaming marketing teams at Facebook back in the day, they tried out the PM to talk to the quarterly business review.

They knew their customer acquisition costs out to four decimals, right? Like Zinga back in the day, all it was was a quantitative exercise in funnel dynamics, and then it would just have studios pumping out games for the sake of running. And to be honest, every Web 2 game basically followed that model. And Web 3 games, if they're going to be successful, we'll need growth teams whose mentality is that. Right. That's absolutely fascinating. Yeah. Antonio, can you take the listeners, and me and Ryan, into your shoes during your time at Facebook? Oh, God.

Pre-add-exchange, during ad-exchange, post-ad-ad-exchange. Like, what was the culture of Facebook? Yeah. Like, did Facebook as a company understand the trajectory of where they were going when they were making the out-exchange? Can you just, like, tell that story a little bit? Yeah, sure. From what I understand, I saw have friends there. It's a very different company that it is now.

I guess I was employee 2,000 or so. And then in terms of actual engineer, it was probably 8 or 900. They only had 25 product managers for the entire company. We would fill like a small conference room. I was a product manager officially. And I was the first product manager on the ads targeting product. They'd never had like a formal roadmap. The engineers would just ship whatever random thing.

Ads was kind of a ghetto. Like, you know, Zuck and his S1, which is the IPO document said, you know, we don't build services to make money. We make money to build services. And that was kind of true. Ads has never really been a focus, right? It was this necessary evil. We were in like a crappy part of the building.

Our desks were shitty. The carpets were stained. We were not in the nice part of the building or any of that stuff. And the ad system, to be blunt, didn't work. I remember the first thing I did is I logged into the main dashboard that only we could see because it was pre-IPO. And, you know, the CPMs were like 17 cents. CPM, again, another acronym, cost per mill, it's cost per thousand impressions. It's basically the cost per square foot of media inventory.

It's how every publisher thinks of itself. Like every time I have a thousand experiences, how much money do I make, right? That is like the basic number that every publisher needs to know. If they don't know it, they need to get an attribution system and figure it out because they're not, you know, playing, you know, a real monetization game. So, you know, I logged in in 17 cents, and it's just like my boss is like come up with a targeting roadmap. We've never had one. Best of luck. And, you know, we tried basically using, there's so many things kind of wrong with the way I think the public perceives Facebook.

So I might attack them one after another in a very myth busters fashion. One is that like your Facebook data is so valuable. It is in some very high level and second order ways, but in the very simplistic way of, oh, they're going to target the thing I did on Facebook. No, it is not, right? The persistent rumor that Zuck is listening to me through my phone. Okay. Even assuming that's true, which by the way, you would see on the network bandwidth because you'd have this constant call going to suck. Like it's impossible to not listening to you all the time. But leaving that aside, how often do you actually say, oh, by the way, I'm in market for a flight to Boston leaving February 3rd and coming back February 6 and I don't want to pay more than $600. When the fuck do you ever say that? You never say it, right? And this whole biz, oh, I talked about the cat with my girlfriend and I saw cat food ads. Yeah, because you looked up cat food literally an hour before that. That's why. Or your girlfriend did. And here's where your data does get used a little bit. There's a product called lookalike audiences, which doesn't get talked about much. It's one of the most success.

products that Facebook ever launched. I wasn't involved with it, but I was there when it started. And what that means is you two guys are probably very similar to each other. You're probably like a high coefficient edge on whatever social graph you're a part of. If David does the thing, then we might show Ryan an ad for the same thing. And it won't be as good as showing it to the David's of the world, right? Because maybe you're not exactly like David, but it's definitely way better than random chance, right? And that's one of the biggest problems advertisers have is like, here's my Mliu-3 language. Here's my NFT whales, right? And this is, I'm sure, a problem that, like, OpenC has in trying to address. Here's my NFT whales.

Like I know how to sort of address them, right, when they come on site or send them out of T's, but give me like another million like them, right? Create a similarity metric in order to do that. So your data gets used to do that, basically, to a large extent. But again, the things you do, like we literally spend a year trying to input. I actually called it Project Jodiso after Spanish sausages. We were literally feeding into the sausage grinder of like literally everything you posted, everything, everything we could legally use, right? Would it actually improve like the interest targeting system that we had?

And it didn't. It didn't move the needle at all. And the key unlock, and again, it's not like some brilliant insight. right, because I knew about the ad tech world a little bit, but most of Facebook at the time did not. I mean, now they're pros, of course, but at the time, almost nobody in Facebook ads had worked in ads, right? So I'm like, hey, dude, like there's this whole outside world of program marketing advertising. I know you guys don't know about, but I come with good news, right? What we should do is actually join to the outside world of data and rather trying to use the fact that you liked Starbucks a year ago and sell you coffee, which is stupid because it isn't, it's not a signal to anything.

We should use the fact that you put a $300 tenant REI in your shopping cart and abandoned. it an hour ago and we should show you an ad for that tint for the next two days and see if you convert and see if the click through rates go up at all, which of course they did. Not only did the ad bid come for it because it's a $300 tent. They're going to make 20% margins. They're willing to pay 60 bucks a pop to get you to buy the damn tent, right? So they're willing to bid a lot for it. And secondly, the actual click through rate, right? I mean, this is the whole experience you've all had. You go browse the internet. You see an ad for your favorite beard or or whatever the whole it is in Instagram and you click on it 20 times. 5% CTR. Great.

That's orders of magnitude higher than the click through rates were when I joined Facebook, right and that's the power of data not that it's magical i can't turn you into a zombie i can't force you to vote for trump i can't like ads don't work that well but as a statistical phenomenon can you make it go from a 1% click through rate to a 2% clickstree rate thereby doubling your traffic right like that's a big jump yes you can't that said 98% of people are still completely ignore the ad because it's just mistargeting whatever like ads are still a statistical fluke but you can make them be less fluky with data right and so that was the key unlock for facebook that's like you know we're not going to be a walled garden in some way or another we're going to take first party data, which is a valuable data, and then use that to inform ads on Facebook. That was one of many things that happened, by the way. That wasn't the only thing at Facebook. That's what made Facebook into the behemoth that it is today. I mean, but that's crazy.

What that is, is just like a massive professionalization, a massive, like, you just science the hell out of it, basically. Well, we copied Google, to be clear, I literally, the FBX actual integration docs, I literally had Google's docs open with basically writing like a simplified version of it. But yeah, whatever. Yeah, sure, basically. One thing I just want to clear out in that whole story is because there is this sort of persistent thing. I've heard so many people in my life friends and such tell me that Facebook or Twitter or someone is listening to them.

Can you clear that up? Clear there. You've been in the belly of the beast. So that doesn't. You're telling us that doesn't happen. No, no. In fact, I wrote an entire wired piece about it. And in fact, I went on one of the NPR podcast, the Money Show, whatever it's called. Planet Money. Yeah, Planet Money, which I came on and gave my spiel. At this point I've just given up. But they actually interviewed a set of people, all of them had the same like cat food with the girlfriend's story or whatever. And they basically like interviewed, like grilled them for minutes and figured out what it actually was, how it was they actually got. And there was always some mechanism. They had actually Google search for it or the girlfriend had looked it up or they had to use a loyalty card at PECCO or something, which by the way can be joined to your online experience. So there was some more conventional means of targeting that they just weren't familiar with that was correlated with yes, talking about cat food.

But no. I mean, think about it, right? Like imagine you would have to have basically like the phones aren't good enough to do the ML on your phone. So you'd basically have to feed the audio like a series speaker to like Facebook all. You'd see it in your network. Like it's impossible. It's just not possible. So the punchline here is that the claim is that my phone, which is sitting on my desk, is listening to me.

And it's going to interpret what I'm saying out loud in this room. And it's going to find me a product to sell me as a result of that data. What you're actually saying is that no, I'm actually feeding it data directly through my internet path. and it's just using the data that I'm already sending outbound. Correct. That was the theme of my word piece. It's like Facebook doesn't need to listen to your phone. You just give it the data.

You're doing that stuff on the website already, right? Okay. So when you first joined Facebook back in 2011, right, there was just a field of opportunity here. Just more things to science. You just had basically nothing at Facebook and you kind of like can turn that and create metrics and quantify it and just continue to turn through it. I'm just curious your perspective.

I was like, are we at the end of that? Have we squeezed all of the juice out of? attention and like there's nothing left to squeeze. Like how much more efficient can this form of advertising that the social media behemoths have discovered and implemented? How much more efficient can we get? Yeah, you know, we're at the end of a long saga. I mean, that's part of the reason why I've made various jumps in my career. Let me just rattle through some of the list of things that Facebook shipped that like completed the picture. So one is obviously much better targeting. That was part of it. Two better ad units. Facebook ads used to be these little stupid postage stamps

on the right-hand side, right? Now you have these much more compelling in-feed or even on Instagram, beautiful things that look like organic posts. You had what's called attribution, right? So back in the day, when I joined Facebook, you'd click on a Facebook ad. You'd go off Facebook. Facebook had no idea what's going on. They have no idea if you bought the thing, like no idea whatsoever. What attribution is, it's basically it's closing the causal loop of like, oh, did they buy the thing? And let's use that to inform whatever the media experiences that were trying to optimize, right? They didn't have that. And then they, you know, they just got smarter about mobile. A bunch of stuff happened, right? But a lot of the things. But a lot of

of those adaptations have gotten to the point where there's not that much alpha left in ad tech as a thing. Like, VCs aren't funding Web2 ad tech anymore. There's one last thing I want to mention. You skipped a couple steps in my trajectory a little bit. I worked at one company, not to plug them or anything, I no longer hold shares, but a company called Branch Metrics, which is an attribution company. Web2 is one of the biggest independent attribution companies. It has competitors, of course, App Flyer, adjust, et cetera.

But basically what they do is what you need in Web 2, right? Like you need a data Switzerland. Like, say you're the advertiser, David, right? Like, you don't, like, speaking of trustlessness, the ad tech world is completely trustless before that term was invented. You don't trust Google and Facebook, right? And so you want somebody to grade their homework and tell you like, yeah, okay, Facebook says they showed all these ads, but how many of them actually bought the thing. So tell me how many of them bought the thing and how much I spent on Facebook to get them to buy those things and how much are those things worth. And should I spend

more money on Facebook or not? Right. So you will have a relationship to an attribution system like branch or App Flyer or just or whatever that tells you that. And half their value is the fact that they're not Google and Facebook, right? That they're checking that other person's homework, right? Like auditors of sorts. Effectively. And, you know, we're jumping ahead a little bit. But if, you know, when I get asked, like, how did you come up with a spindle idea? It's so weird.

You, Web 2, Web 3, blockchain. It's like, dude, I just asked myself the question, like, what in Web 2 should be rebuilt along blockchain lines. Like, what is basically trustless, basically permissionless, requires system-wide consensus and is responsible for large sums of money moving around and establishing like a ground truth. Attribution is that's what, right? So the branches of the world should probably live on as blockchains if they were being

designed from the ground up now. We're going to spend some more time on attribution, but just to define that a little bit more, like, attribution is just did they buy the thing? Why is completing the circuit and did they buy the thing actually important when you're kind of sciencing the heck out of like your ad spend? Because if you look at the entire media funnel, right, the human internet experience is varied and chaotic and frantic and all over the place, right? Like you watch a Joe Rogan video, you engage with a tweet, you watch a YouTube video, you scroll your Instagram feed, then you buy a thing, right? And so then like times error. goes forward, but attribution goes backwards. So you bought the thing. What led to it? Was it the incremental value of Joe Rogan mentioning the thing? Was it the brand's channel on the YouTube video you saw?

Was it just the tweet and the offer of a 10% off code? What was it? Without it, you're just in a world of chaos of data of randomness, right? Without it, you don't have enough, you know, information to even make decisions as to, you know, what's effective and what's not. You're basically flying blind. You have no idea what to do. Even if you have levers to pull, you don't know which one to pull without it. So when we asked Antonio about like kind of what's the double-edged sword of like, you know, Facebook social media, the negative side of things, right? You said the take rate. You said they've become a monopoly and they're extracting too much and the rents too high and all of these things, right? And that's what Dixon says. That's what,

like, I think we hear that, right? There are some other things that people point to as problems with big social media though. And let's, you know, talk about maybe two of them. The second is introduced earlier in this episode, the concept that was new at the time in Web 2, which is the concept of a cookie, the concept of us being able to, us being kind of the app or the service or whatever, track what you do, not just across our app, but across other apps on the internet. And this has been pointed to as another problem, another, I guess, externality of the Web 2 internet and Web 1 internet is these things called cookies and nobody has privacy on the internet anymore.

What's your take on that? How do you respond to that? Is that a problem? Yeah, privacy is a complicated issue. There's a lot you can say about it. It's a relatively novel invention. didn't appear in the dictionary in our modern sense until the 19th century. Most of the case law is actually from the 20th century.

It's not mentioned the Constitution even once. Although, of course, it's implicit in the Fourth Amendment. You know, the right to live as a stranger among strangers, right, was a very obvious reaction to the urbanization of life, right? The fact that we left traditional small villages and suddenly we were living among strangers and we felt we needed some redoubt against that. You know, if you ever live in a small village and one of the chapters you skipped over in my bio, I once lived on a small island northwest of Seattle, off grid and a yurt.

I literally bought a piece of land and lived like a hermit on this thing. If you live in a small community, nobody has privacy, right? Not only that, it's not considered a social good. If you live like a recluse, if I had lived like a true recluse and had told nobody anything about me, didn't establish relationships, like it wouldn't be a good thing. You'd be like a weirdo, right? There's no GDPR on Orcas Island, right, northwest of Seattle, right? Everyone is kind of in your business.

But of course, the break on that is like, well, it's a community, right? You can't be nasty to people because you have to see them at checkout line the next day, right? And this is just how human life works. Unfortunately, these are the things that we don't have online, which is why media it drives us completely crazy, which I think it does, right? So yeah, so privacy has to exist in a very real way. But I think the way that the privacy discourse goes, particularly from people who tend to advocate like privacy maxis, and the revealed preferences of actual users, I think, tend to diverge, right? Yes, there are people who want to remain forever anonymous online for reasons that they want, but that's

not how most people want to live. Most people like cookies because they don't want to log into every site they go to. They want to remember that, oh, yeah, there's no state in HGP. Remember, the cookie was a hack because in HGP's protocol, there was no idea. being passed, so they had to write a file to the browser. So it's a very early hack to make identity happen because you don't want to log into your bank literally every single time you go, right? So most users do not delete their cookies every day, although they could, because it just degrades the experience in a big way. And that's the reality of it. Privacy, I mean, you talk about it as this absolute right, because that's how you posture online, but the reality is it's more

of a commodity that you trade for something else, right? You trade a little bit of privacy for convenience. Like I let Amazon see all of my credit card transactions, because I don't want to enter the damn credit card every time I buy a thing, right? And I even use Amazon pay on other sites, which means they get that data. They know other places that I'm buying as well. But you know what? I hate entering my credit cards. I'm just going to do it.

And also curation, right? Like, if we give them a bunch of data, they can curate. Like, I want Spotify to have all of my music data because I want Spotify to give me the best artists that I don't know. Right. And I will totally give up that privacy for better music. Right. And I want to sync it to my device and my Tesla and this computer.

And like, I don't care that, you know, that I owe three devices. Like, I'm happy to not log in all the time and have all my music store there. You trade it for a community, right? Like, you know, you guys probably found me on Twitter, right? This relationship would not exist if I didn't expose my life on Twitter in some way. And that's often bad. I get into, I get dog piled or whatever. But net, it's pretty good.

Like, I haven't stopped you. I did not go to Mastodom because Elon bought it, right? And I don't think anyone actually did. Everyone's back, right? But that's the thing, right? And so it's not this absolute thing like, oh, we have to design for like the Edward Snowden use case of like an enemy of the state who's fleeing three different intelligence agencies. We must design the internet around that. It's like, I mean, you can do that, right?

Like, we had PGP, pretty good privacy back in day. probably before your time, but there was this whole cryptography craze in like email. And I doubt that ever got used by anybody at any scale because most people don't actually want to live their lives that way. And so I'm not saying, I mean, again, some measure of privacy obviously is good. I'm just saying it's, you know, it's a spectrum. It's not a binary. And there's no solutions. There's tradeoffs. So what is the tradeoff that we're doing with privacy, right? I think that's interesting. I think that that's a really good perspective. I do think that like the problem with privacy comes in and lack of privacy among the public is sort of related to centralization.

It's when you have aggregators that can use all of that data to do something repressive against a certain segment of the population. And this was, like, I know you said there was not privacy in the, you know, the Constitution except for maybe like the Fourth Amendment. And this is about unreasonable search and seizures, right? This is about the state having the ability to just look at your stuff and take it whenever they want, right? And that is some of the worry with mega corporate entities that, you know, Facebook

has what like 2.5 billion people on it, something like that. It's a massive data repository, and it has information about it. If you're in a year in a community and everybody in the community knows your business, who cares? I mean, that's a community of a thousand. But if you're part of a population of $2.5 billion and subject to a repressive state regime and something you post online gets routed to you and then you get disconnected from your economy as a result and your bank account gets frozen, that's where we start to get into

dystopia. Yeah, I'm just wondering your reaction on that. I mean, like, you probably agree like us that that would be a pretty bad state to get into, but do you have any takes on that? Yeah, I mean, again, privacy is weird. And you can get into like, I did a substack post on like the difference between web two and web three privacy, right? There's this notion of what's called contextual privacy, right? Privacy exists. This is due to a Stanford academic who's published a lot about it. Privacy exists within a certain context. So like, take for example what's considered private and web three, which is very strange web two, right? Like imagine Amazon published to a public ledger, everything you bought on Amazon, right?

You would have a total freak out. And yet, that's how Web3 works by default, right? But everyone's like, oh, well, but it's pseudonymous, so it's fine. I mean, sort of pseudonymous, right? If I want to make the FBI show up on my door, I'll touch an OFAC wallet, and they'll show up way faster than anything else I can do in the conventional, traditional. So it's not even that private, actually, being on chain.

But yet somehow people mentally say, well, you know what? I can always just get another wallet ID, but everything about that wallet is known online, right, which I would never do on Web 2. And so I think it's just, it's a question of how you approach it, right? If you violate what is the context of that privacy, you feel violated. But as long as you play roughly along the rules, it's kind of okay. But yeah, getting back to your question of like, what if like you're an enemy of the state and they try to crush you and like take away your banks and all the rest of it. It's possible.

Yeah. I mean, you definitely saw it in terms of like how deep in the stack does it go? Does Cloudflare pull your blog offline? All these debates that had like I think they were hosting like a Nazi site or something at one point. And, you know, Cloudfer wondered, do I pull the plug on the Nazi site or not? It's a good question. It's a big debate. I don't claim to know the answer is.

But I would say, I think you're right to distinguish between this one didn't have a government as an enemy, like men with guns show up and stick you in jail, versus Facebook trying to help, you know, R.E. I saw you a sweater, right? That is just a different scale of threat. And it's hard to imagine cases where literally all of American capitalism conspires to ruin you. Right. Yeah. The reality today is that five corporations control the entire world of social media. They own our names. They restrict our content. They monitor our every move. And their time is up. Thanks so. sponsor, DeSoe. DeSoe is a layer one blockchain built from the ground up to decentralize and scale social networks. With DeSo, you can own your own identity, content, and social graph, and take it with you across hundreds of applications already built on the censorship-resistant DeSoe blockchain. DeSot storage advantages make it finally possible to build infinite state applications that can efficiently store and index large amounts of content and data fully on-chain. Diso also offers multiple crypto-native monetization primitives for developers and creators, including social NFTs, social dows, social tokens, and social tipping.

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cheapest, and most secure cross-chain bridge. With a cross, you don't have to worry about high fees or long wait times. Assets are bridged and available for use almost instantaneously. Across's bridges are powered by UMA's Optimistic Oracle to securely transfer tokens between Layer 2's and Ethereum. Across its critical ecosystem infrastructure and Across V2 has just launched.

Their new version focuses on higher capital efficiency, layer 2 to layer 2 transfers, and a brand new chain with Polygon, all while prioritizing high security and low fees. You can be a part of Across's story by joining their Discord and using Across for all of your layer 2 transferring needs. So go to across.com to quickly and securely bridge your assets between Ethereum, Optimism, Polygon, Arbitrum, or Boba networks. The last piece I just wanted to hear about. So we talked about kind of the take rate being a negative of, you know, Facebook and social media monopoly and then loss of privacy. The other piece that's kind of circulated more recently is kind of this, the social media platforms becoming the new arbitrators of truth.

Oh, God, yeah. Don't get me started. I did a whole post about it today. I got some pissed off. Yeah, yeah. Okay. Yeah. Well, tell us about that.

Is that another negative byproduct here? Do you see this? If this is Rogan, like the guy would be pulling up the tweet right now. Maybe you should share. Well, what tweet? We can make it. one that I posted this morning. I only tweeted like one thing this morning. It was me being kind of a dick and saying, you know, caha, I was right. So I've been very consistently skeptical of what we now call the content moderation regime, right? The thought that platform should be arbiters of truth, I've always been very skeptical of. To be clear, I am not a free speech, you know, absolutist. I think they should be able to ban porn or hyperviolent content. I certainly think they should ban any sort of CSAM or, you know, child abuse material. Like, that should obviously be crushed by all means possible. But.

But we're talking outside of porn and violence and obviously illegal activity, right? That's really the realm of debate. The rest of it, nobody really who's saying debates, right? I've always been skeptical of it for two reasons. One, as someone who's been inside the machine and open dashboards in which the numbers are all in the billions, I just felt it was impractical. You just wouldn't be able to do it at scale in every country in the world. They just wouldn't be possible, right?

And then secondly, even assuming you had some regime that sort of did it, at some point it would be ideologically captured by one side or the other. I'm not necessarily pointing figures to what side of the political spectrum, but there would be a contingent that says, you know what, this is actually good speech, this is bad speech, and it would be difficult to apply anything like an objective standard to it. And that, frankly, in my opinion, is what's happened, right? Like, ask yourselves this, do you feel safer now? Like, are politics less polarized now that, you know, Facebook is the arbiter of truth and actually has, like, an oversight board that sits in a closed conference meeting

and, like, reviews decisions? Do you feel better now that, like, the Supreme Court of Free Speech is now sitting inside a conference room at Twitter or Facebook? Makes me feel terrible. Right. It sucks. And I've been calling this as 2017. It's a terrible idea, actually. and it's not good and it's not successful and it's been a complete mess. Of course, you talk to these people like, oh, well, real content moderation hasn't been tried. You need to hire more people, do more things, do this and that. It's a joke. What's the answer for that? You just don't have the governance boards. You just like, it's just basic, you know, First Amendment kind of rights. It's free speech, anything goes. Which before, like, the reply guy chimes in, like, I understand Facebook doesn't have to abide by the First Amendment. But if you're arguing that they don't have to follow it. You're basically saying one of our most valued principles, some big corporation doesn't have to follow. Right. Broadly speaking, a person of good faith who believes in the First Amendment. wants more entities following it rather than fewer in society, right? But doesn't the algo itself also have to be some sort of moderator of truth? Yes. Because it's going to surface what makes people more engaged, because, again, the unit of currency

is attention, and I can get more blocks of human time to sell to the highest bidder if I can get that human being to spend more time on my app. And so I'm going to program my algos for engagement and for rage and things that maybe don't help the human being or the society in general. Like, what's, what about this line of criticism? So two comments on that. I think you're right to hide the difference between freedom of speech and then reach. Those are different things. And I think there's a whole debate to be had there. The second thing I would say is there's a lot of focus on the algorithm. Like humans always have a fascination with like the robots getting out of control, like in mythologies of the

Gallum. And there's some fascination we have with we created a thing and it turned against us. Like, like Frankenstein. Right. Right. And again, I'm dating myself. I don't even engage in these debates anymore because it just pisses me off, as you can tell. But I also have a piece going back to 2017, just to cite the record, by the way, and which I say, you know what, if you think the algorithm is so important, then explain WhatsApp, right? WhatsApp is just a messaging app. There's no feed. There's no algorithm.

It's N10 encrypted in theory. Like, Facebook does nothing to affect what you see. And yet, if you use WhatsApp in a country where it's popular, it's as crazy and ridiculous and shit posters and groups. It's caused violence in Brazil and Indian elections. Like, it's been a force for kind of negative things in the world. There's no algorithm, right? Here's the problem.

Humans have decided to refract their needs. entire existence through this. And now everyone has one, everyone, literally everyone has one. That is the problem. For podcast listeners, Antonio's holding up his phone. I'm holding up my phone. This is the problem. This little black mirror is the problem. We've wired everyone's brain to everyone else's, right? The algorithm might make it a little bit better or worse at the margin, right? But broadly speaking, I don't think that's the challenge, right? Well, we're not going back from that though, right? Right, right. Who's willing to give away their little black device? Right. I mean, Luddism, right? The Bulgarian jihad, which is like this thing, this artifice in the

Dune universe in which, oh, they supposedly gave up machine learning because it was apocalyptic, which is why you have these exciting knife fight scenes in Dune. It was obviously a fictional artifice. It's never happening, right? Here's the real problem. There's a truism in startups that like everyone thinks that what's broken in a startup is like a technical problem because that's what's easy to fix. It's almost always a human problem, right? There's like, that guy's an asshole or that guy's a bad manager or the product roadmap is

wrong. There's always a human problem. And here's the problem. There is no technical solution. We're not going to have more and better content moderation is going to fix Facebook. We're going to fix the algorithm. That is all bullshit. I'm willing to make a bet.

I'll bet anybody 10ith that like five years from now, you will not agree that things are better now because we have better content moderation. As in fact, you wouldn't agree that things are better now than they were four years ago when we started on this road, right? And that's a big bet because five years from now, 10th is going to be worth a lot, right, David? A heck of a lot. Got to pump the back. I want to be devil's advocate about moderation, content moderation. Okay. Where like, okay, there's no such thing as like good content moderation.

It's always like a trap. But if we just don't do content moderation and we just let like Twitter, Facebook be a complete public square and let the participants just say whatever they want to say, then you get spam attacked. You get bot attacked. There are external third parties that will come in and manipulate the platform using whatever powers that they have, whatever technologies that they have. And then they become the content moderators because they silence dissident, they spin up public accounts. And so if you do not engage in content moderation, you just kind of enable some other

third party to leverage your platform and then they become the content moderators. Well, so on, to be clear, so content moderation, remember, I included things like, you know, nuisance accounts, pornography, violence, like a lot of things I'm for. I'm not anti-content moderation more broadly. I'm anti-disinformation or misinformation policing that's thought that in a developing situation like COVID or a war or whatever that you're going to be able to discern God's own truth online, I think is ridiculous as a premise. So I agree with you. Bot traffic is super annoying. I have all these crypto bots following me on Twitter. Those should just be wrecked. But what is the standard right now, the United States of America, at least. It's what's the Brandonburg v. Ohio standard.

Basically, if you actually are inciting violence, like physical violence, like let's go kick that guy's right now. Illegal, pulled off the stage, gone, right? Which I'm absolutely happy with. If you incite violence online, you're out of here, right? So again, I'm not a free speech absolutist, if you have a canonical version of events of, you know, various political stories or the origin of a certain disease or whatever it might be, I just don't think you can actually arrive to truth. Galileo would have been content moderated, right? Just to say, very clear historical example. Martin Luther would have been booted off Twitter. Ben Franklin would have been booted off Twitter. And he was in a non-ship poster who wrote under 20 different names, right? He would

have been booted off Twitter as well, right? What content moderation regime are you going to accept that Ben Franklin and Galileo would get caught in? That's the problem, right? Yeah, 100%. Antonio, I want to come out of this rabbit hole and go down a different one. And this is where we can start to get into the blockchain web three side of things. I'll be less agitated, I'm sure. It's just one of these things that I like, I have fucking PTSD about. This is why I went back to tech because I got tired of fighting about it online. Sorry, go ahead.

I'm normally not like this listeners, by the way. I'm normally a very agreeable person. Just don't mention content moderation. I like both versions myself. I want to pick up the thread that we were talking about how Amazon knows all of our consumer history, knows what products we bought. and if they publish that information, we would be, like, upset. You would see all the crazy things that I've purchased that I don't want the

Bankless Nation to know that I purchased. What are this, David, just for the record. Can you share those things? I know. I'll just, I'll show you my NFT wallet, and you can see all the NFTs that I bought. Wait, those are got to be way more embarrassing, David. I know what NFTs you own, my friend. And so that's really the point, right? Amazon has all my data, keeps it private.

I trust Amazon to keep it private. The blockchain is all my consumer stuff is, completely public. And you wrote this post called The Right to Never Be Forgotten. And so I want to go down that rabbit hole. Can you talk about just like the inverse nature between consumer data and identity in Web 2 versus Web 3? Yeah. Let me just explain the title for a second because some people might not get the reference. So under GDPR, which is the reigning European Union law, there's what's called the right to be forgotten. And the idea, like if I were to summarize GDPR and lawyers will freak out, but basically two things. Who owns the data about you and can you delete it? There's a basically. get the two questions. And deleteability is a big deal in GDPR. And so the blockchain, given that the data is typically spread over thousands possibly of nodes all over the world, and nothing is really deletable in the real sense. It's completely flies in the face of GDP. There's no way you can actually comply with GDPR if you had personal data on the blockchain. And so that's a little bit of a snarky reference in the title. And then, yeah, the inverted nature of it is I think we hinted at earlier in the

podcast, which is web two is mostly real identity, right, in private centralized databases, in which what you do online and your financial holdings are private, right? Like, that's a duality. Web3 is the inverse. It is not the real you. And that unless you attach it to your E&S, you know, domain, I don't necessarily know what David Hoffman's wallet idea is. But assuming I figured out the wallet idea, I have literally every embarrassing thing you've ever done, at least without wallet, right? And somehow... So just to unpack that a little bit more, David Hoffman.Eath, unequivocally, my address. Yeah. My other address is, I actually am the only person that knows that. Right. So that's the pseudonymous, right? And so what you're saying is like the status quo for

an Ethereum address, Bitcoin address, is that you actually don't know the identity of the owner. But that is not true in Web 2 because Amazon does know who exactly you are. Facebook does know exactly who you are. Right. In many ways, Web 2 and Web 3 are analogous to each other. And in some ways, it's like the exact inverse. And this is one of those cases where it's the exact universe. And can you just unpack the significance of that?

Like, why is that a big deal? Well, I mean, if you're trying to comply with GDPR on chain, which we are, it gets a little squirly. you know again how do you if you've got stuff that you've got on chain that you want to get rid like let's say you applied the web two mentality to david hoffman's public wallet because you like the wallet there's no way that you'd be able to delete those transactions that you ever own some nfts that you're not found embarrassing and the web two model you would be able to delete that right so clearly the conception of what privacy means in the web three side is going to be weird and the way this really gets weird is that one of my theories and you know i'm curious what you guys think about it is that web two and web three are going to coexist for a long time right we're not going to have pure web three and pre-web-2. If you look at examples like Reddit's NFT avatar thing, like the user doesn't even really know they have a wallet. Like it's cool. They can buy the thing. They can actually sell it on an open-Cy. Like they have full Web3 functionality. But by default, it just kind of seamlessly works and it's obviously non-custodial. You know, how do you square the two versions of privacy? Because like Reddit's going to know who you are with that wallet, right?

They're going to know your cookie ID, your login. And so you've merged the streams, right? And any system of analytics retribution similar to spindle that spans the two worlds will also be able have to join those things to make sense of it. Right. If you ask the question, how many guys came from Twitter, people came from Twitter and bought my NFT? Well, you've got to lose some of the pseudonymity on the Web 3 site to answer that question. And so how do you manage that? That's the question. I think the part of this article that really stood out to me is like there's going to be some institutions out there that you're going to give your identity towards many like crypto exchanges have our government ID unequivocally. They know who we are through and through. And then

Coinbase, Gemini, whatever your exchange is, you send money. outbound from your account to an Ethereum wallet, which no one in the world knows who that Ethereum wallet is, Bitcoin wallet, except for you and now Coinbase, because you just provided that information. And so if we're taking like a GDPR perspective, all of a sudden Coinbase is now able to map your nation state identity to Ethereum addresses. And that, if we want to go back into the Web 2 advertising model, to unpack that, like, well, now Coinbase can look at your consumer behavior on chain. It's got to be pretty valuable.

Probably pretty valuable consumer behavior, all of this identity, especially as the world of the metaverse gets built out beyond financial use cases. All of a sudden, we're talking about cultural use cases. And now, Coinbase is the owner of so much data about you and consumer data and maps right back to what we were talking about with the Facebook ad exchange. How is this going to play out? Because this is like hairy and delicate. Yeah, yeah.

And, you know, I'm not a big believer in applying cryptographic match. Oh, we're going to ZK this and that. It's like, no, there's a basic problem here, which is you have like a physical driver's license that's associated to a wallet ID. right yeah i i can tell you how i think it's going to go down and the approach spindle is taking because it's the problem that we face because again you know we launched with polygon they had an nf team meant for the world cup and like they want to know like how well did this tweet do in a conversion basis so we have to kind of join that a little bit the attitude we're taking is that and again we're going to be totally

compliant with gdpr all the rest of it although i think we're going to have to have new regulation because gdpr kind of doesn't apply to web three basically we just delete the connection so like if you say you know what like i want out right like i just don't want to be tracked or you know if if Polygon whoever offered the opt-out, which, by the way, they're going to have to. Like, Web3 hasn't gotten the memo on privacy yet. Like if you're, if, and it's like nobody's in compliance. It's really weird because I'm like, you know, at some point the EU regulators are going to show up. But if you want out of it, we just delete the match.

Like, hey, that's it. Like, we're going to disassociate like the browser cookie or whatever it is with a wallet ID. And it's as if this match never happened. Like, that's done. You're as anonymous and pseudonymous online as you were before. Mind you, it kind of sucks for Polygon or if we eventually we work with Magic Eden or opency or whatever, because they're not going to be able to tell where you came from. And again, kind of target things towards you and offers that maybe you want. But yeah, if you really want

to be, you know, then you can do that. Right. We empower users to do that. Yeah, I don't know how that's all going to resolve. It's very interesting. Like one thing that we know we need on the base, because, you know, David and I would talk a lot about base protocols. On the base protocol, we do need a privacy option. You know, the internet has HTTP. It has HTTPS. It has unencrypted things. It has encrypted things. That is clearly not going to be a, uh, privacy layer on Ethereum, for example, but there will be like specialized layer twos, like Aztec that are complete privacy and no one can see in them. And it's kind of like, you know, a black box and you're not leaking all this public data. But I'm curious,

Antonio. But out of curiosity, how is the adoption going for the privacy chains? I mean, not so well yet, right? I think that this will also happen like it could also be a niche. Yeah. Right. So like there's, um, there's certain protocols that I think are very important in that they are useful if things go really bad, for example, right? Right. Like, I mean, the original framers, put the Second Amendment rights. If your government goes evil and you need to take up arms and fight the government, then you have that right to do that, right?

Privacy could be one of those things where we sort of don't need it unless things go bad and a whole group, a whole population feels like opting out. And then we have other alternatives. But if things are going well, if our governments aren't evil, if companies aren't preying on us, then maybe people don't opt into that. They don't need to opt into that so much. It's kind of how I view it. But it's also early.

Look, I get the message and, you know, I may or may not have an AR-15 in my closet as well, right, to invoke the Second Amendment option. But here's the reality. And I'm saying this completely descriptively, not normatively, not taking an opinion at all. But like, this is the view from a Web 2 boomer who's been like 10 years in this world.

Privacy is never actually a product, right, that anyone actually kind of pays for, except for in extreme cases, or when it comes to things like financial stuff, It's very hard to sell privacy as a thing in and of itself. It typically has to be coupled to some other value creation that people are willing to pay for. I think we agree with that. I think like we've seen like Zcash and these times haven't gotten much adoption.

But having that option is important. Beyond privacy, though, can you tell us a bit more about this whole story? So we've gone through kind of what you've seen in social media, right? Coming out the other side and living with kind of like living in kind of the ad tech world. So what do you see when you look at Web3 today? And you've got a company that you spun up. It's called Spindle. Yep.

And it's all around this problem of attribution, right? And before that, before you said what you said earlier in this episode, I don't think I really had a good definition of attribution. But attribution is just, did they buy the thing? Right. You're tracking to see if they bought the thing. Yeah. So why are you doing this in Web 3?

Like, what did you learn from Web 2? Why does Web 3 even need this? Yeah. Can you make the case for why attribution is important or good for Web 3? Yeah, yeah. I mean, there's a few reasons that I got onto Web 3, right? I mean, it's tremendously exciting. Like, to me, it's almost like deja vu of the excitement in Web 2 10 years ago.

And I wrote a post about when the whole FDX thing blew up that's like, dude, guys, like, I know this is your first time going through it, but relax. Like, the world comes back. It's like the first dot-com boom, like wrecked the entire U.S. economy, right? It was way bigger than FDX. And there was so much hate against all these companies, right? Okay, can we just camp on that? Yeah.

Because a lot of people haven't, they didn't see that. So does this feel like the dot-com boom bus? No, it's way smaller. It's like a way smaller hiccup. It's so much smaller. There is a NASDAQ lost 80% of its value in 2001 after the dot-com crash. Like, it wrecked lots and lots of people. This is small in the scheme of things, right?

If anything, it says the crypto is still relatively isolated, that the biggest, well, one of the biggest exchanges can blow up and people aren't like literally losing their houses in Phoenix, right? Like, it's not the mortgage crisis in 2008. And I should also mention, another thing to mention is, like, there's so much, like, what you would call wig history, like a sort of perfect idealized history of how things went down. Dude, I'm old enough to remember when Uber sent a lot of.

like a stupid idea, which it was initially. It was literally only black cars running in two cities. The whole UberX concept didn't exist. Like it didn't work in some cities. Like it was not actually a good idea. Airbnb seemed like a dumb idea early on. Paul Graham has written an essay about it, right? They had to sell cereal at political conventions because nobody was using it because who the hell would sleep in some stranger's house? I was at Facebook when the ad system sucked. Like you literally could not, you could not sell Facebook ads because it was so shitty. Right. So like everyone assumes that all these companies are always amazing and always a great. And there wasn't like this drumbeat of haterade going all the time. there was, just like there is now in Web 3. Like all that hate was there.

And all the people who are like shitting on Web 3 now who are going to have to like eat crow five years from now when it takes off, they're just going to disappear and never refer to it again. Just like everyone who hated Web 2 kind of disappeared and never referred to it again, right? This is just the eternal return of human innovation. So, you know, that part of it I wouldn't worry so much about.

What I like about Web 3 though is that it's like, it is the Wild West, right? Like we're like pioneering a new field as we build it, which you can't do in Web 2 anymore. It's like boring SaaS. It's buying some other dumb shit on your phone. Like, there's nothing that radical that new, that interesting, that exciting in Web 2 anymore. And, like, if the Web 2 guys who are being Web 3, like, trolls or being honest with themselves,

the smartest talent isn't going and working at some of these Web 2 giants anymore. They're simply not, right. Do you know, Dixon describes it as, like, sterile? It is. It feels like Disneyland rather than, like, a real neighborhood. It is. And, you know, maybe Chris and I are having been in life crazy because I'm old enough to remember Web 1 and Web 2. And that excitement of, like, oh, there's this just like untrammeled frontier and you have to invent all this shit to make it work. And that just doesn't exist in Web2 anymore. Like those companies became the man that there were once the rebels against. They just don't realize it.

Right. And Web 3 is kind of that rebellious thing. Right. And so to me, it was exciting. But answering your specific question, which is like, why did I build spindle? Like I said, I looked at Web 2 and said, like, what should be a blockchain, something like attribution or, you know, some layer of shared state. And I look at Web 3 and like, what is totally missing? Attribution.

Right. Like I got introductions to a lot of, you know, game developer and stuff. and like, hey, what's your cack? Like, well, it's your customer acquisition cost. Like, how much you paid to have that user come in the door? It's like, I don't know. We did an NFT drop? I'm like, okay, well, did you check and see if the guys who got the NFT, like, converted

more than the guys who didn't? No. Why not? It's like, well, it's hard. All we have is dune. Like, we don't have a good way of querying the data. We don't have data science. Like, I don't know.

There was no technology there from there. And I don't mean, like, being super critical of these people, like, they're just working with the tools they have. But there's no tools there to actually to measure this. And the problem is, like, in my opinion, Web3 is not going to really take off in a big way until you have those tools. Because these are basic table stakes stuff on the Web 2 side. It's not rocket science, right? Yeah, so tell us that story.

Can you give us a story of what is Spindle if it's maximally successful? What is the future blockchain world when we have this part of that world built out? Let me sketch it out by maybe listing the questions that Spindle can answer. And that might be an interesting way. Say you have, I'm not going to name individual companies because we may or may not be working with them in any case. I don't want to feel like I'm plugging them. But let's say you have some web. three game in which involves like some NFT game like something like well just to cite one crypto unicorns

or Zed run all these games on polygon which you buy and trade and breed NFTs right and you're wondering okay what is my LTV like how much money am I making off every user and if I'm paying them to use the game how much am I paying them is it a positive ROI trade how long are they sticking around retention is a major problem right churn is murder like you literally go through the funnel they use the app and they drop out and if that churn rate gets above a certain amount like think of your app has a turn rate of 20%? That means you have to grow by at least 20% a month just to stay flat, right? That's how a mature company thinks about growth. And I don't think a lot of Web3 companies are thinking about that because they had such explosive growth. They didn't have to.

But now that we're in crypto winner, money isn't free, users aren't using the app. They have to start asking themselves this question. So like, what is my retention rate? What does that mean a retention rate? It's like, okay, I did an NFT drop or I had a Twitter social media campaign. I got 100,000 new users. How many stuck around a month later? If that number is 10,000 versus 90,000, one is a good app the other you're on the road to death you cannot survive a 90% turn rate force your magic cohort you have to either fix something or go out of business because it's over right and just quantifying these sorts of things are just the v1 of spindle there's a bigger vision here right which is okay like if you think about how should user acquisition by which i mean there's a machine

in which i put in money and i get users and more revenue right which has to exist for any media ecosystem to exist right doesn't have to be as necessarily but there has to be some way to get users to come into your app What does that look like going forward? It's like, well, do we want to speed run the 10 to 15 years of ad tech history I was forced to live in? Or do we want to leapfrog to the right answer, which is advertisers should be able to say, look, I'm a lending protocol and I want people to come in and put liquidity into my exchange and stick around for more than a month. That's what I want. That's my target event. I'm the head of growth for Ave, compound, whatever.

That's my target. That's how I get paid. How do I do that? Spendell would help you answer that and structure that problem, such that. So how does it work? Right? Like, just get to details. In the Web 2 world, right?

Like when you buy a thing on Amazon, like literally a signal goes out to Facebook or to the Amazon attribution system saying, hey, David came in and bought this thing. Right. Great. How does it work on the blockchain? It's like, well, usually that conversion event is on chain, right? It's like you literally did a currency swap and uniswap or you lent money to whoever or you bought the NFT.

And so what we do is basically carve out a subgraph of the blockchain and say, this is the conversion event. And so if you come and you buy the NFT on OpenCear, you buy the crypto, unicquivary, or whatever it is, we capture that and actually index that event, right? And it's as simple as a single transaction hash that the event is a hash, right? In the happiest case, often the actual conversion rent is a little more complicated, right? So, like, in a lot of these Web 2, 3 hybrids, like the Polygon NFT meant they did two weeks ago for the World Cup, how it worked is you just signed the transaction and then they sent you the NFT so that you wouldn't

actually have to pay gas fees because they didn't want users to get tripped up on having Madik, right? And so there it's a little weird because the transaction that, like you didn't actually sign the transaction that gave you the NFT, but then we did a little bit. little bit of finagling there and we made it such that, okay, whatever. Like the point is they got the NFT and that's what you want to track. And then, you know, using a little bit of clever front-end code, we could answer questions like, okay, how many mentors came from Telegram versus Twitter, for example, or how many users that do lose on the landing page because the landing page sucked. Or maybe it didn't suck. Maybe they converted and they actually signed in with their wallet at an enormous conversion rate.

But until you actually get what's called that user funnel together, you don't really know how well you're doing. All you see is like, I don't know, the min sold out or it didn't. Right. And so without it, you're just in chaos and darkness. And with an attribution system, you at least have some logic around the world. Can I sort of frame this a little bit differently and see if this kind of resonates a little bit for listeners and for you, Antonio? Yeah. So I think some people listening to this in crypto, and there's an undercurrent in crypto who are a little bit anti-marketing, anti-growth. And so they hear some of what you're saying, and they're like, great, another marketing person entering crypto, that's all we need, right?

Like tracking our clicks, awesome, cool, and optimizing every click and grabbing more of our attention. That's certainly one view. And I think that has been a view that's sort of why you're encountering, you know, not only companies haven't had to, but I think culturally, like, many crypto companies, like, don't want to. But let me counter that with another idea that I've been thinking of, as I've learned about this. One of the reasons in 2022, we got in the mess we did with Celsius and with BlockFi and with FTX and others is because we were forced to funnel all of the growth of crypto into centralized intermediaries. And one of the big reasons was because we didn't have a growth engine working for defy and for NFTs and for quote unquote real decentralized

crypto. And they did. It was very easy for an FTX and a sample. Bank been freed and his growth team to track clicks using all of the traditional Web 2 infrastructure and pump growth and benefit that way. It was very easy for them to do that. Very difficult for a protocol like Ave to do something similar for its lending and borrowing protocols. Why? Because they don't have the Web 2 infrastructure. They don't have the attribution. They can't tell you how to attract new liquidity. The only thing they can do is do shotgun approaches like liquidity farming and giving away essentially like protocol value and doing it that way. It's very expensive. And guess what? If we don't improve in this area, we're going to continue to lose to Web 2 centralized CFI

companies that do. And we all know what happens if we lose to CFI companies. That's another way of me thinking about this. And I'm wondering what you think about that take, Antonio. Yeah. Dude, that's exactly right. We're actually hiring for BD person, Ryan, if you want to join Spindle. You've made the, you're busy. You've made the perfect, that is exactly the case for Spindle. That is exactly it, right? We're building a fully Web3 native attribution system so that the truly Web3 companies can actually do the growth that they need to do. Like, it might sound cynical, but you're going to have to have a growth strategy of some sort that's more than just sprinkling NFTs and liquidity bonuses. And even if you do that, you're going to still have to track those and see where it works best and where it works less well. Right. So yes, that is the goal. me ask you about an underlying concern. Let's say we get this. It's good. We have attribution. We have some of the tools that Web 2 had in Web 3. How do we not make the mistakes that Web 2 has made? How do we not become them? We talk about this all the time in bankless, right? This is a bankless movement, right? Do more without banks. But the question always, the meta question

in the back of our minds, bankless is how do we go bankless without establishing a new set of bankers and becoming them. How do we set up that defensive perimeter and embed that in the social contract? And can you do that with attribution? Are we just going to become Web3, Facebook, 3.0, whatever? Yeah, that's a very good concern. Because, again, if we end up in another Google Facebook duopoly, that's like a major fail for Web 3. And just to be clear, that's not at all Spindles aim whatsoever. Just because I work there, I kind of know the beast, we're not trying to reproduce the beast here, right? How you do it, right? And this was part of the original promise of a lot of programmatic ad technology, you embrace Web3. You make it permissionless. You make it

trustless. You make it composable. Like right now we're thinking about how we're going to work with potentially other partners in the sort of Web3 marketing space to make it easy to work with an attribution system. But again, it's going to be fully on chain, fully transparent. Hopefully there's no way that a Facebook or Google emergence from this who just sits there in accrues of value, right? The cool thing about Web3, right, to echo Dixon, read, right, you have true creators who are creating things. You have their fans who want to enjoy that creative. You have brands that want to dress your users. You have apps. You want to address your users as well. That's where the value is. That's the cool part. Right. You know, the Facebook sitting in the middle

with a 70% take rate, that is the enemy. And that is not the goal. So anything we have to do has to be geared around that. That's right. And I think if we do this right, it'll be impossible to have like a Facebook sitting in the middle of it, hopefully. This is cool. Antonia, so we've appreciated your time and just maybe as we close. I'm curious, like maybe a personal question. What gives you kind of the energy to do this. I mean, you were around during dot-com boom busts. You did 2008. That was crazy. That busted. And then you did the whole Web 2 thing. You wrote a bestselling book, chaos. Like, you've done all of this stuff. Now, here we are in 2022. I imagine you don't have to work for financial reasons. I'm imagining you're enjoying what you're doing. Why? Why are you

giving it another go? Because this is not a one to two-year project to me. What this sounds like is another five-year type thing in order to get this off the ground. What gives you personal energy right now? I mean, my kids' tuition bills, maybe? No, I'm joking. It's partially true. Yeah, no, it's exciting. I mean, I've had the good luck of being kind of in the right place at the right time, like with Facebook.

Right? I kind of chanced into it, to be honest. But it's a sort of place where if you have the right idea and the ability to execute, you can totally change kind of the course of a technology. And that's super exciting, right? For as much as I kind of bitch and moan about Facebook and in Chaos Monkeys, it was a hugely exciting thing that, frankly, in retrospect, I should have appreciated more. But now I do in retrospect, I do appreciate it.

And I think that weird little tingle I got when I'm like, you know what, I should pitch a suck on like outside targeting and joining. Like this is going to like totally upend the Apple cart. And like, who knows what it really does? But it's going to be big, right? I had that same tingle when it like I started thinking through what Web3 needs and how to spend. It's like, okay, you know, it's a whole Archimedes cliche about like applying the lever

and moving the world or whatever. Like there's some like I think it's the right place. It's the right time. It's the right person, hopefully, the right team. And it's just, I don't know, it's tremendously kind of exciting. think I have one big startup thing left in me. And then then I'll really move to the island or the sailboat and just never turn off my Twitter account and disappear forever. But I think for the next five to 10 years, we've got a window to really change the way Web3 work. And also like,

you know, ideologically, I'm in the Chris Dixon camp of like let's wreck the fan companies. Web3 is a new internet. Let's create it. Like to me, half the fun of Web3, like, forget all the reasons that I've told you about why I think it's cool. I'm just tired of talking about Facebook and Google. I'm just like, I'm so fucking tired of hearing about these people. Like, I just want a whole other internet that doesn't involve them and that I don't have to think about, oh, what's Google going to do if I build this thing? I don't care. I don't want to think about that. I don't want big giants in the picture that can just crush me, right? And so, yeah, building an alternative internet, I think is important, right? That's a big deal.

We absolutely love that sentiment. When we talk about going bank lists, it's in direct opposition to Wall Street. But it's also Silicon Valley, too. It is the intermediaries and the arbiters of our experience on the internet that we definitely want to route around. Antonio, one last technical question with Web 3. The theme of this podcast has been just like the ad model of Web 2 as it's going to change, but still exist in Web 3, same, same, but different. And I want to unpack that different thing a little bit, where I don't think my intuition, my gut tells me that nothing's new under the sun. We're still going to have attribution. We're still going to have advertising in Web 3. But it's not going to be a one-to-one the same thing. It's going to look different. And so hopefully,

if this goes in line with my general thesis for the space, the ads and ad model of Web3 is going to be, there's going to be more creativity, there's going to be more culture, there's going to be more alignment with the user. There's not going to be sort of like this oppressive owned relationship. When you think about the ad model in Web 3, how is it going to be different? How might it be a little bit more vibrant and fulfilling as users of this internet? Yeah. I mean, to be clear to your listeners, I'm using ads in a very abstract. level of like a piece of media that drives a user action. So like NFT drops, I think are Web3's first

ads, right? It's addressable media. You can send it somebody. They may not engage, but maybe they do. But I'm with you that I think if we end up in a world of like little display ads, man, that would just suck. That would be skeomorphic to use Dixon's term. Like there has to be something cooler. Maybe it's something like Farcaster, which small investor in full disclosure or like a web three version of TikTok where like I'm an influencer, but I own the NFT as the video as an NFT. And then if a brand comes in and wants to use it, they can promote that to some other thing. and I still get paid, and there's an attribution system, by the way, that tracks it all, right? Like, it has to be something interesting and cool that's not just like little colored squares,

like interrupting your mobile experience. It cannot be that. I don't know. That's why, to be honest, that's why I didn't build like an ad system per se because I think it's really up in the air and it's really early. But hopefully it's something around, again, brands, influencers, creators. There's like a personal connection. Like, that's the luxury good in a digital economy, like the connection that I have with

that artist and that interaction. Somehow doing that in a non-anoxious way that still gets the, the creator paid and pays for the Farcaster or whatever the publisher is in the future. Like that's the thing. I'm not sure what it looks like. But I know it has to be attributed to some degree. So that's why I'm making the bet that I am. But I'm hoping that there's a lot more consumer adoption inside Web3 so that we can start

experimenting with these models to see what I personally like Farcester. But I'm a DAU on Farcester. But yeah, things need to get crazier. Like we need to turn up the crazy knob somehow and, yeah, have different media experiences. 100%. 100%. Yeah. If the ad model and the acquisition, attribution, all this stuff, if this goes from invasive, like a banner ad is like invasive, right? And it kind of just gets in the way. Right. If we go from invasive to enabling. And this is, again, just a general thesis I have for the space where Web 2 extracts Web 3 enables. The ad model for Web 3 should enable us to be better, to access cooler things. And Antonio, if that is what you are working on it at Spindle to help support that platform.

platform. I'm all for it. So thank you for joining us here with the Bankless Nation to talk about this story and hopefully how Web3 ads can be enhanced our lifestyles rather than extract from them. Yeah, yeah, definitely. Thanks for having me, guys. It's been fun. Bankless Nation, we appreciate you hanging out with us some action items after today's episode. You'll find these in the show notes, as always. Read the post that we talked about, the right to never be forgotten San Antonio's post about privacy, Web 3, contrast versus Web 2. Also, his post on why he started Spindle. And we'll problem it's solving. We'll include those links in the show notes. Of course, got to remind you, risks and disclaimers. Crypto is risky. You could lose what you put in, but we're headed west.

This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.