The Pomp Podcast - Ryan Shea: Battling the Internet Giants Pt. 2

Episode Date: August 29, 2018

Ryan Shea is the Co-Founder of Blockstack, a new internet for decentralized apps. In this conversation, Anthony Pompliano and Ryan discuss freedom of speech, the manipulation of user data in the digital world, how decentralization will improve the internet, and how governance will evolve in the digital age.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Ryan Shay is the co-founder of Blockstack, a new internet for decentralized apps. In this conversation, Ryan and I discussed freedom of speech, manipulation of user data in the digital world, how decentralization can improve the internet, and how governance will evolve in digital age. Ryan is well-read and refreshingly intelligent. There are many great takeaways in this one, so I hope you find it as valuable as I did. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely

their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, here with Ryan Shea. Welcome. Thank you for coming to spend some time with us. Thank you so much, Tom. Absolutely. We'll try to keep this under two hours. All right. So for people who don't know, let's just go through kind of your background. Where'd you grow up? High school, what are your interests, all that, and then we'll get into some of the later years. Sure. So I

grew up mostly in Secaucus, New Jersey. I was actually, my parents moved around quite a bit when I was younger. I was born in White Plains, hopped around New Jersey a little bit, Connecticut, New York, but I went to Secaucus High School. I was very interested in science, mathematics, was a captain of the cross country team nice you know captain of uh indoor outdoor track uh what's the farthest you ever run the farthest in one one uh one setting uh you know it's not actually that far just like 15 miles i've never done a marathon before really uh no but it is something that i want to do it's most i mean you know you think like we were we were doing 5k 3.1 mile races got it um so it's

much shorter distance and in track my main um distance was a mile uh so um that was really what i specialized in i also did two miles also did like half a mile you know 800 um four by four yep uh some occasionally 400 but that wasn't my yeah my forte in particular it's uh running running's a wild sport i know you get into all the details yeah uh all right so uh seacox high school and then where did you go after that uh then i went to princeton okay uh went there was did um mechanical and aerospace engineering for my major and then did a minor in computer science got it and uh that's not a very common major so what was kind of the thought process you know what were you going to do afterwards yeah i mean you know i was always interested in in inventing

things uh my my grandfather who's an inventor he has 17 patents um across like that that have been used in so many different places i mean pretty ubiquitous like he has patents that were in like the sprinkler systems that power most of the buildings in the city um you know since the 70s um patents in uh the uh the lunar landing module stealth bombers you know all kinds of weapons used in the vietnam war etc etc right um so things like that i was just super super interested in um and he would like sit down with me and and we would go through some like uh engineering puzzles and things like that and they're just super fascinating so a big part of that um really sparked my interest in being an inventor and that's what you know when you're

when you're in high school uh there is no the closest thing to that is actual science so that's why like that's why science was was what fascinated me the most you know physics chemistry uh biology Human anatomy Just everything That was what I grasped onto And of course mathematics because it's so interrelated Didn't have any Computer science classes in high school

I wish That I could have had that opportunity But when I went to College At that point I was interested in Really inventing Things and specifically things that were in the physical world

That's why mechanical engineering really really spoke to me um and of course uh computer science is important for as a component of that so that's why i was also interested in computer science but it was less like in terms of like um i was less excited about like just pure software at first uh that i grew to love more and more over time um and uh and part of that was you know so i did mechanical and aerospace engineering i did computer science i also was um very involved in the entrepreneurship club from you know throughout my entire college career uh there was a story that uh one of the one of the presidents of the entrepreneurship club when i was um a freshman said it was like that we had this uh

this uh uh fair for all the different clubs and he told i i actually don't remember this but this is what he says that um his name is nikhil he uh uh he says that when we went to sign up for it i was the first person online to join the princeton entrepreneurship club um and then later throughout my career I've ended up being a president and and started a bunch of initiatives including hack Princeton one of the largest hackathons in the world and all these other initiatives like really you know tripled the size of the of the programs at the school but anyway so was interesting mechanical engineering interested in physical products started getting deeper deeper

into software and this is um this is 2008 when I was starting my college career uh and this was like you know around the time when Y Combinator was starting to gain some steam is around the time when when um Facebook was becoming popular so it was I would say you know to some extent before 2005 before 2004 there wasn't that much of a um there wasn't as much like methodology around starting a company there wasn't as much knowledge or like like just startup books or there wasn't there wasn't much of an industry around it outside of the like uh it was somewhat esoteric i would say it was like i think it was pretty confined to silicon valley it was pretty um there wasn't much information sharing it was a harder for people

to kind of to kind of get in and and learn how to build uh software just pure software companies and it seems like that that really picked up around that time and as part of that I started to get interested. You think that's because the media was kind of sensationalizing you know hey look here comes these companies that are growing really fast and there's a lot of money being made by you know kind of the Silicon Valley you know heroic entrepreneur or do you think it's something else that was driving that narrative and kind of the interest into um you know technology startups etc yeah i think there's a lot of forces i think like you know after the dot-com crash there was like a somewhat of a lull in the industry that's one thing um i do think that that the rise of

facebook the media attention around it was a very important factor of obviously the rise of amazon the rise of Google many other many other internet businesses that people were starting to get really exposed to also I think Y Combinator was very important starting up in 2005 I also think I don't know for some reason or another there were a lot of there were classes that were starting they were coming out that were around entrepreneurship and startups there were books that were coming out uh four steps to the epiphany uh you know lean startup um some books like the hard thing about hard things came out later i mean there's just like some things that it you didn't

see as much of that earlier and i'm not exactly sure why but there's something around um maybe you needed some low some level of critical mass some amount of uh people having exits and going to start on their next company and so on uh you had people like obviously the paypal mafia then the second derivative of that uh you know the next step i think all those things are very important and the intermixing and that just led to much more of a of a visible industry um around startups and entrepreneurship and that is that started to really pull on me um and i got really really excited about that uh throughout my college years absolutely okay so this is like 08 into 10 11 right all that's going on um where was your interest or where did you think you were gonna

end up kind of post-college um you know kind of sophomore junior going into your senior year what was the plan well i mean i always wanted to start a company um actually the first time i applied for y combinator was in 2010 okay so um with a really good friend of mine who was a previous president of the princeton entrepreneurship club and he was a you know also knew him from the computer science department his name is joseph perilla and we were we actually applied to y combinator uh as a late application in 2010 what we were going to do is drop out of college and uh and it was going to be his second time dropping out of princeton actually because he had actually come back amazing for that for his for his uh for another one of his companies so you know that

early on i wanted to even start a company and and would was willing to ditch college to some extent um and uh my uh what i what i always wanted to do was to start a company right after college that was that was like the default path and i would consider applying to different companies you know one of the companies that i wanted to work for like 2011 2012 was uh was path i was really excited about it um ultimately decided not to uh and um ended up right after college experimenting with a couple different companies that I was that I wanted to start and and eventually ended up starting a company called graph muse in 2012 when I was when I'd moved to Philadelphia right okay and worked with two two friends of mine to start this this company which

would which essentially did analysis of social network data in real time using gpu clusters so we could uh do pretty extensive analysis of social networking data that um is would normally take hours of computation to do if you had a single core normal normal cpu um and we could do it and crunch the numbers and get it get um a uh an analysis out in a second or a fraction of a second wow yeah and we could do that for we we had a different couple different customers um that we did this for uh for example like gaming companies that they wanted to for them it's very important to get the uh their viral loop like perfect and they would uh they would try to try to do and all of this was through facebook so they would try to they would they used facebook

as their main distribution channel and they would get um people to come and try the try the game but before they even started the game they would have them invite their friends and we would help them figure out who were the friends that they should surface for them to invite yep because the industry standard at the time was just alphabetically sorted list so all the anthony's andrews and aaron's of the world were getting like you know hundreds of i'm sure you probably experienced that absolutely so you were getting like the disproportionate share of all the invites and we're like whoa this is ridiculous let's help you know come in and and uh and so you do the ranking based on like close friends engagement close exactly closeness

like proclivity to like that game things like that um and we could do we actually were able to surface information that people didn't even think that you could get from from the data in real time so so walk me through how you go from that which is a pretty technical problem right and i would consider a you know early stage startup where you're selling to other companies right kind of the technology and data etc yeah when do you first come across bitcoin crypto you know kind of what is that interaction like yeah i mean i would say it's a it's a pretty um it's pretty different and you know in that case what i mean what we were what we were doing was helping businesses make better use of their existing data you know it sounds like we weren't

we weren't really we weren't selling data to them we were helping them take the data that they already had and they already had access to which are these social graphs of their users and helping them analyze it and get insights out of it yep and uh one of the things that uh you know i took away from that was just the level of dependence that not just those businesses but our own business had on a company like facebook yep platform risk exactly huge amount of platform risk and we saw that there was like this heyday where there's a lot of businesses that were getting built off of facebook platform um you know zynga perhaps the most notable um and those days soon came to an end and just to clarify the platformers you're talking about right so everyone is on the same page is

basically you build a company on top of a platform right facebook had a platform if you're a gaming company could come on they said hey we'll give you distribution yes you know we'll do all these things uh and then at any point in the future that platform whether it's facebook or some other platform reserves the right to change the rules yeah exactly you know pull the rug out from underneath these companies yeah um usually not malicious but you know they're making uh kind of um self uh self-centered business decisions yeah right they're doing what's best for themselves and that has a you know material and sometimes negative impact on businesses that are built on top yes um and so i think that you know there's a number of companies that you know zynga is

probably one of the top ones that you know we saw over the last 10 years get built on a platform the platform changes the rules or does something all of a sudden that business goes from highly valuable to not so valuable yeah um and you know good entrepreneurs are going to try to navigate the waters to find some other path forward but really what ends up happening is they had the best business when they were built on that platform they no longer can do that yeah so the warning call they put too many of their eggs in one basket yeah and the warning call i think to most founders goes out hey watch out for the platform risk right you know it's a double-edged sword you get the power of the distribution and the connections and the social graph but at the

same time you know you always have this thing in your back your head where we've got really high platform risk yeah and what's going to happen if the rules change yes exactly yeah and that happens with facebook with you think apple ios android google absolutely well and that's what makes those businesses so valuable exactly is to get the lock in the network effect yeah that kind of that platform um and then once they have it it's really hard to unseat them exactly yeah you look at what's happening with fortnight i mean they're circumventing the google play store altogether so that they don't have to worry about the 30 cut absolutely yeah so explain this more what's going on right now because i don't think probably a lot of people understand sure so um

so there's this this game probably i think maybe the most popular game right now it's probably most popular and probably the one of the highest grossing highest gross yeah of all time wow okay uh look how many video games are making billions a year yeah no seriously yeah okay was it top 25 yeah for sure yeah so i think it's at least the top grossing right now okay um but yeah it might be i have to look into that but it's you know and it's like highest in terms of live streaming maybe highest in terms of it's up there and in users whatever very very popular very popular um and they are making uh enormous amounts of money they really frustrated about the fact that the google play store is taking 30 percent of all revenue through the store itself just like apple

does so i think 30 if you're making you know if you're one of these companies you bring in 100 million dollars well um now google or apple they take 30 million you know and then that you know that's just a huge chunk of your business that's being pulled out so what they're doing instead is they're allowing the user they're telling the users you cannot download it from the from the play store you have to download it this way um and they provide instructions on their site and then if you download it they can circumvent the uh the process completely it's kind of i mean audible does this right in terms of the uh the audio web purchases yeah so what you can do is you can download the app in the app store yeah right but you're you cannot purchase an audio book via the

mobile app yep right because they would be subject to that 30 fee from apple or android yes exactly And so instead they say you have to go to the web and you can purchase books there and then download it to your phone. And so, you know, Fortnite's not the first one to do this, but I think they're kind of the latest example of people circumventing that platform.

Yeah, exactly. And a big part of, a big problem with this whole situation is that you have components that these businesses produce and provide that they work well together, but the business is saying, if you use this,

you have to use everything else that we provide yep and you have to do it exactly the way that we say or else you're out yep and you know you have an iphone the iphone has to use ios right that's the operating system that's what you see on your screen when you're on your iphone with ios you have to use the apple app store right you have to use uh you have to use some version of safari on even if you're using chrome on your iphone that chrome browser is actually webkit in the background with some modifications which is you know so so so apple is still requiring that you use some kind of version of safari under the hood behind yep behind chrome so apple is saying in our ecosystem you play by our rules and you use every single thing that we do even if so it

And we, by the way, we take 30% of all of the transactions that come through every single purchase, every single in-app purchase, everything. And that causes lots of problems for, um, for innovation, for competition, for like creating a viable business. Uh, and obviously a company like Amazon is not happy about that. Um, which is why that they do the purchases in the web. Um, and I, you know, I'd actually be curious what would happen if Apple said, you know, even that you can't do um what would happen i mean what could could they could they actually

stop somebody from doing that right could they basically say you know if you want your app in our app store we're going to tell you how to run your business off of our operating system they could in the web i mean there are things that they could do it just depends on what are they willing to do so for example what they could do is they could say amazon if you don't uh give us 30 cut through amazon.com when people are on our phones then we will block your domain right now the they would they would never do that um and part of the reason is because there is um there is precedent for that there is like um we have gotten so accustomed to a free web uh where like um there aren't restrictions of the things that you can do when you visit a website

it but we've also when it comes to native apps gotten accustomed to a world where there are gatekeepers so we're just we're just used to that it's kind of like there's like a precedent there's like case law there's like uh um in some some kind of uh habituation and so they would to some extent i think if they were to say amazon.com um we're blocking you on mobile devices well there would be two issues um one is their users would be very angry and potentially it would give them a reason to switch to another phone um the second issue is it would probably cause enough of a um enough of a public backlash or like recognition that that could lead to some kind of antitrust uh situation absolutely um and i think they're to some extent like towing the antitrust line

right now where they're like doing just enough that they can get away with it without uh the government stepping in and saying uh this is this is not okay absolutely well and i think that what's interesting though is in that situation amazon would be the victim yeah right because apple would say hey you have to do what we say or you're out right but then if you go a step deeper amazon is doing this to other people yeah right in their marketplace to say sure you can come in and sell your items right in our marketplace but we're going to take you know sometimes more than 30 percent yeah right and so i think that um oh and by the way we're going to take amazon basics and we're going to service them above your products and uh and we're going to slowly

squeeze out your business yep right and and amazon's doing that to um to to to potentially millions of business owners across the country well it is uh i saw a stat and i forget the around the world but it was uh i think it was like over 30 or 40 percent of all e-commerce purchases uh went through amazon yeah right in some form or fashion um in a year and i was i mean it's just it's insane to think that a company you know that what uh probably 20 years ago right or uh probably no less than 30 years ago existed now you know holds that much yeah um so they've pretty quick uh all right so so um let's go back to uh to crypto specifically right so um you know really into entrepreneurship uh you know obviously understanding the platform risk and all these key

components like how do you initially start to explore this idea of decentralization cryptocurrency bitcoin like what at what point does that start to at least become a thought in your head and like what do you do you know once you get it well actually so building off of the platform risk we'll just pick it up right from that point in the story um one pretty jarring thing that happened with that business is uh our business relied upon us being able to um work with uh data yep that was accessed by these companies through the facebook platform yep and facebook didn't like that we were doing this analysis on behalf of these companies and they sent us a synthesis got it and told us we could no longer operate on their platform in that kind of fashion

um how'd that feel uh that was that was terrible that was a that was a really you know rough blow because it and of course um in retrospect i would i would think knowing what i know now doesn't make sense to to to rest your business completely on some other business right um but But when, when you are hit with that, when that is, that is something that comes up, it's, it's just like, it, you know, shatters your world. It's, it's, it's like, what are we going to do now? I mean, we could, we could have tried to, we could have moved into a different direction, tried to, tried to pivot, come up, come up with a different product offering that was, that wasn't quite the same. uh but it was just a really really tough situation to be in and uh it was either it was either pivot or or or work on something else and um and ultimately we made the call that uh it didn't make sense to go forward yep absolutely and so uh okay let's go work on something else right what is kind of that next thing or would you start exploring yeah um so after that um i moved back

I moved to New York. Like I said, I was in Philadelphia at the time working with my two co-founders, Tony and Chuck. And so I moved, moved to New York. My next, I decided that the next thing that I wanted to do was to start another company. But before I did, I wanted to learn from some, uh, from some, uh, successful CEOs, um, and some industry experts, uh, both about how to run a business and about what are some really, really, um, learn from industry experts about problems that they, uh, come across on a daily basis, um, or that they're addressing or that they have quite a bit of exposure to and so i did two things one i got a job at um this health technology company called omniactive uh shadowing the ceo of that company uh i showed

him for about six months um and then the second thing that i did was i was really interested in healthcare at the time. And I started, uh, shadowing this doctor as well. Um, this gastroenterologist and, um, really trying to learn both, uh, both how to run, uh, a business from someone who, who, um, was running a 200 person business at the time. Um, and also learn firsthand what it's like to be in a doctor's office what are the types of problems that they're facing how could technology uh uh bring um the health care space forward um and uh through those two things i learned quite a quite a bit um towards the end like basically around like may of 2013 um i started getting started getting into

bitcoin a little bit a friend of mine he kept kept talking about it kept introducing me to things kept sending me all these articles and videos in the white paper and um and you know it's one of those things where at first i'm i'm skeptical um but i just kept getting exposed to it and throughout that month i got really really excited about bitcoin and um around the same time as well i was living in new york uh bumped into my co-founder minib uh who you had in the podcast earlier um and uh we just kept bumping into each other in uh in the princeton club of new york on the street we decided to get drinks talking about what were you know startups and some ideas we had and at some point we're like hey we should start a company

and that the the approach there it was separate from any particular idea we were thinking the team's going to come first let's start up a company let it let us experiment with a few different things and figure out what we're both into yep and we can rapidly prototype things and put them on the market and see get feedback from users and so on and so we did that we had a few ideas uh that we that we tested one was around um like networking and helping people meet each other another one was in health care we we messed around with a few different things and uh all throughout that same time i still kept getting more and more into bitcoin and a big part of this was learning about uh the byzantine generals problem learning about uh what was the actual

technology behind bitcoin blockchain technology learning about like what was the ethos behind it and decentralization and participating in the bitcoin subreddit and all and and the bitcoin forums and all these communities and i was slowly getting indoctrinated i was i was drinking the kool-aid and it felt really good you know uh and uh that's that was uh i was just getting more and more into that and then and as many of and i were going through and experimenting with these different uh products and trying them out and trying one putting it out of the market didn't work let's let's try another one seemed might have been working a little bit but we hated it you know for whatever reason uh throughout this um a lot of this also that i was really being

exposed to um but he was saying that i couldn't stop talking about bitcoin in the office and uh and just kept getting him into it and we just start started talking about it a lot more and more and now it at first again he's also skeptical starts uh starts getting more and more into it as well and over time now we're both hooked and we applied to y combinator with this uh this product it was called scope it was like i was talking about before this um this tool for networking for for meeting people um it would essentially like you connect your gmail and your your linkedin and twitter and facebook and it'd pull in all your data and then it would tell you if you wanted to meet this person who you should get an introduction to like who was the who was your friend who knew

this person the best or could possibly reach them because they were co-workers or you had some connection and so we were working on that we applied to y combinator we uh we ultimately got rejected but even it's it's hard to know exactly when this was but even before like it might have been right when we submitted the application or something we were we were starting to hatch the ideas of this of this decentralized internet because we were thinking wait a second as we're building this we're running into many different issues with the linkedin api and and google and facebook and and twitter and it's such a shame that all of this data that is rightfully the users is being locked up by

these businesses it's such a shame that there are so many interesting things that could be built that can't be built in a meaningful way because of the level of control that all these businesses have over the digital world and we thought well what would it look like if the internet were different what would it look like if the internet was really about the people about the individual user and the internet revolved around us instead of revolving around data silos and that's when block stack was born that's when at the time the our first our first idea for for the name was called free graph ah interesting yeah because it was the first the first layer that we were envisioning the first inspiration was this free and open social graph that could have obviously

private data but the important thing was that it was free and controlled by each person by the people so you in that model you as the user would be able to elect out of all the data that i have available you know in this graph yeah i want to expose x percent yes and you could do that yeah and keep the rest private exactly and even the data that you have private it's under your control And so if you have, you could have software that is able to run on your computer, run in your browser, on your mobile phone, that would keep the data still on your device and analyze it, do something with it, and help you do whatever you're trying to do. So just because it's private doesn't mean that it's not, uh, able to be like, you could, you could, it's accessible, it's accessible. You could theoretically like navigate an entire private graph.

Right. Um, and with, with, with individual operations and permissions along the way, you know, there's so many things that you can do, right? Absolutely. Well, it's one of these interesting things. So, uh, I thought for a really long time that, um, you know, humans are, uh, compensated for the value that they create, right? And so we usually think of that as output in terms of work, right?

And so there's people who trade their time, right? There's people who trade their manual labor. There's people who trade their intellectual abilities, right? But one of the, and that's all valuable in a analog or a digital world depending on what value you're creating, right? So, obviously, manual labor is not as valuable to an internet company as, say, a landscaping company, right? Intellectual capabilities are much, much more valuable to an internet company than that landscaping business, right? Now, one thing that is ubiquitous is data.

And so, whether you're a landscaping company, an internet company, or something else, data is in some way used in your business, right? Whether it's the data that your employees create, the data that your customers create in the market, you know, whatever. If you look at what humans have been able to monetize for themselves, either manual labor, intelligence, well, there's a third bucket that has been unmonetized for a really long time, which is the data in which they create. Yeah. Right. And so it is an output that is based on the actions that that human takes. Why not? Yeah. Right. And I think your argument here is it's because somebody else realized that that data was valuable and they were able to silo it.

Yes. Not give you access to it and then use it to monetize because they don't actually sell the data. What they do is they allow the data to be used. Yeah. They allow the data to be used for targeting and things like that. But they control the data. You don't have that data. And so you can't monetize it. And we've operated on the Internet like that for the last 15, 20 years. Yeah, exactly. Yeah. They sell the ability for a business to target a specific audience without actually seeing the data. Absolutely. And so. If we continue on this path, right, so I think there's a couple of key components here. One is, hey, we've got these products that frankly operate pretty well. Right. You know, if you look at think about from Google to Facebook to LinkedIn, Twitter, right.

These are some of the products that are, you know, heavily, heavily integrated into our lives. I don't know if LinkedIn works. Okay, so Ryan's not on the LinkedIn train, right? But I think that, you know, we use these products a lot and they've brought a lot of value to us. But there's obviously issues, right, in terms of whether it's privacy, trust, right, the data manipulation, the monetization of data for individuals, all that stuff. Let's say it doesn't change, right? I don't even know if you can say fix, but it doesn't change. and we continue down this path over the next 20 30 50 years what does that world begin to look

like like what are your fears along that path that you think are likely to occur i think i think there's a few problems a few things that could really happen um one is something that we're seeing already which is a just a massive slowdown in innovation across the entire internet um and there's so few new you know new social companies coming out um gaining traction so few companies actually getting funded because they know that there's you know what do they call it the uh there's the facebook kill zone the amazon kill zone and the google kill zone yep right if you're doing something that is in any way in those areas those spheres of influence of those three companies um you you got to watch out i mean

if you're doing an e-commerce company you first have to answer well how do you how do you beat amazon how do you beat amazon or or how do you survive in a world where amazon is this all powerful e-commerce uh lord right if you're doing something that is at all related to um social networking how do you make the case that facebook instagram whatsapp whatever is not going to eat your lunch absolutely or that you can even get traction right um or that or that instagram is not going to copy your features like your the core feature of your business like like what they what they did with snapchat um you know even snapchat wasn't safe right and um and of course you could say there's other reasons why snapchat um kind of has started on on the decline

um but you look at uh in uh in china right there um there's a really good article that came out recently that's talking about how uh the vast majority of businesses that have any chance of getting any uh mid to late stage traction uh are end up being the ones that are funded by uh two or three companies tencent baidu yep um alibaba yep right um and they actually have huge investing arms where they essentially anoint the winners right if you're if you're suddenly anointed by one of them every other competitor just goes to the wayside um we saw this happen with meerkat and with uh periscope right meerkat was getting a lot of a lot of traction running on you know essentially um you know it was running somewhat on twitter uh so was periscope um twitter wanted

to acquire meerkat meerkat said no twitter shut down meerkat said okay you don't get to play anymore acquired periscope and integrated periscope deeply into twitter yep so they just were the kingmaker right then and they killed a business at their own whims um and they decided to make this other business the winner now do you think right because i hear you and i think that a lot of people will uh agree with you right so i think it's important for us to talk about the flip side of that argument right if you believe in a capitalistic society yeah right isn't that just competition it is competition but it it gets to it gets to a certain point where these are no longer simply businesses that provide services and products they are they are in a sense

providing a digital world to people, right? That you are in, which is closer to something like a city, right? It's closer to something like a, you know, land and the buildings and all of the communication and all of the landlines and everything that is part of a city, right? And so we have, we have to separate, like, what are the, like, that's, that's more the equivalent of the digital world. And, you know, we have certain laws in the United States and countries around the world that are meant, that are, that are contrived laws in a sense. They're, they're not, they're not like natural laws. They're, they're just come up.

Man-made. Man-made. They are invented. They are whimsical. we could have come up with any other set of laws and these laws are intended to have a particular effect right we have intellectual property law right intellectual property law specifically was designed to promote innovation right it's not because there was some natural right to ideas um that's not in the at least in the united states that's not that's not think that's not

the thinking there um it was specifically designed because it was believed that it was what was needed to ensure innovation if you had a product and someone else copied the product and used a label that was identical how would how how could that business possibly operate and be able to have trust and be able to you know outside of a single town absolutely if if anyone can just copy your label and no one would know that it was the same product maybe it even have poison in it or something right yep and so that was genuinely a very difficult a very um a very rough situation to be in you had to address that with trademark right obviously you have to address that with copyright for written works and other types of creative works and patents were meant to

specifically uh incentivize people to move away from a model that's predicated on trade secrets and more which hurts innovation and more towards a model where entrepreneurs business people are incentivized to disclose their secrets so that a certain number of years from that point in time the world could build off of it yep right so these were things that were they were not natural they were contrived they were specifically designed with a goal in mind to promote innovation right and because we decided as a society that we value prosperity that we value competition that we value a well-functioning economy right if that economy no longer works for us if that economy is no longer serving us if competition breaks down right and tends towards

monopolies right that's not capitalism you end up in a situation where you have single corporations that can decide everything that you know think about a single business in an area that has the ability to that is the only provider of a very important resource electricity internet water what if they started to start engaging in a in a in a situation where they can um cut off access to anyone they want yeah right and or price manipulation manipulation price yeah uh price manipulation um they say well you know what we're you know our electricity prices are no longer fixed rate they're now a percentage of your of your income uh percentage of your net worth so if you are whatever you know you you're now going to get you're now going to be charged a hundred thousand

dollars a year for for electricity just because we said so um the government would step in and say no this is not okay because this is so important to our society to be functioning well that we can't allow this to happen right now you can do that with government you can do that with other mechanisms in place right some mechanisms for for um correcting this obviously we know we're very familiar with government historically another mechanism was violence right we know that some people would say like no you can't cut off my electricity um you can't behave this way um you're you violated our contract and then violence would ensue and one of the reasons why we use governments is

because we don't want it to resort to violence yep right um still there are other ways that we can we can address this we can address this with um other types of contracts between individuals between corporations um and specifically in the digital world we have some some very interesting capabilities where we could create some level of governance using or some level of uh social contracts between millions upon millions potentially billions of people that doesn't require a uh what we would consider traditionally to be a government yep uh and there are interesting things that we can now do in the digital world that we maybe aren't as you know we have less capabilities to do in the physical world so in some sense if you have one of these

externalities you know negative externalities from the breakdown of a free market like for example tragedy of the commons you need a way to address that and um it doesn't have to be government it doesn't have to be violence it can be some market mechanism it could be any of those things um but there has to be something or else the tragedy of the commons will persist or else whatever other externality negative externality if you think about what will persist would it be fair to say that government is needed in times of conflict when uh the incentive system was not adequately created before the conflict right basically if you if you construct a situation where the incentive system through market forces um you know personal incentives etc

works so that people are aligned in their interest and are incentivized to act in the best or the common good, right? When that's broken, then conflict ensues and government is needed to have a civil kind of recourse to avoid violence. Why don't we just fix the incentive system, right? Could we basically avoid all of the issues if we just fix the upfront incentive system of a lot of these different, you know, issues? Yep. So I think that's right.

I think there's a lot of cases where you do need to fix the incentive system. There are other cases where you need to fix the rules of the game, right? So, for example, which is outside of incentives, so I'll just give a quick example. if you're in a situation where you have patent law yep that is granting monopolies yep to certain corporations then remember patent law patent law is a contrivance yep and it is enforced via violence yep by the government so however many years 17 years or whatever depending on the you know the the country uh exact um laws for the industry um but let's just say something like 17 years to have a patent and have a monopoly on a particular thing yep

that is an unnatural phenomenon that isn't that is like a that is a weird situation that is like um that is not something that arises from the the natural physical world you can't make an argument that there is this pure capitalism that just you know happens to have patent law in it yep right um you have to say that in order for us to have well-functioning capitalism we need patent law of some kind right now you could also make the argument that maybe capitalism would function better without patent law right i don't know um i think there's that that might be a pretty bold claim i wouldn't necessarily make that but um i do think that there's a lot of interest like a lot of cases where uh our patents are directly hurting our ability to have competition and our ability to

deliver uh efficient low-cost great products to consumers well and it's uh it's not black and white either right like the binary nature of conversation i think is you know kind of what catches the mind share yeah but really there are times where patents make a ton of sense yeah right And there's times where patents make zero sense. And so I think that that's part of the complexity for a regulator, for a lawmaker to work through is difficult. And so it's much easier just to put a blanket. There's patents. There's not patents.

And, you know, maybe maybe you reduce the number of years that you can hold a patent on. Absolutely. Maybe it's maybe you have different different rules for different industries. um yeah i think all of that is uh is directly tied to you know changing the rules of a game yeah can have a direct impact on the people playing the game exactly but also can have a number of unforeseen impact right around innovation etc but you just have to realize that you are in a game you're in a game that was written for for which rules were written over a period of hundreds of years and it's a particular game that only happened in our historical timeline

right there could there could be parallel universes for which there are completely different games absolutely right you know the the whole the fact that we have copyright that can extend a lifetime of the of the author plus 70 years is the kind of a ridiculous result that we've ended up with um you know in our particular timeline we ended up with an internet that started out with a particular set of features, that started out with a domain name system that was highly insecure, that started out with the client-server model,

that started out where we really had an emphasis on advertising models and everything needs to be free as opposed to emphasizing, well, you should pay for your software, right? That was just one particular way that the internet evolved. You know, a lot of the things that we participate in that we are immersed in, we don't realize that they're just really games, that they are the matrix and that they have been written by someone else and that the game doesn't have to be that

way. The rules don't have to be that way. You could rewrite the game. You could create a new game. You could invite people to play in that game with you. And, you know, we can go back to incentives. Like we were talking about the rules around patents, but of course there's some really interesting rules around incentives. What does, what does an, what does, if you were to create a new digital world, a new digital economy, what does that look like? What is the, if you were to create a currency for that digital economy how to behave if you were to create monetary policy right if you were to create um systems for how people could participate in the economy for how people could contribute resources for how they could um extract things from the system what would

what would those the rules of those of those interactions look like and we with blockchain technology with the uh these this entire industry around decentralization and decentralized applications we can create systems that have rules for which we believe would lead to prosperity and would lead to um really productive systems right that help lots of people absolutely it's um you know we spend a lot of time thinking about like the financial system right and so this idea that um i talk a lot about you know there's four types of assets you can own so stocks bonds currencies and commodities and i say in the digital world there's just digital stocks digital currencies right digital commodities etc and i would say that's a new financial system

people say well how is it new right all you do is improve it yeah and i think to your point here is we're watching the uh building of a completely new digitally native world yeah and that includes communication information assets transactions everything right and so when that happens of course the people building that new digital world have have the uh historical benefit of seeing what has played out right and so they understand what do we have today they understand how did we get here and now they can look and say what do we build from scratch moving forward Exactly. Right. And so there's going to be a big overlap. Right. There's a lot of good things, I think, going on in the non digitally native world. Yes. Right. Look, you know, humans today are much safer and more prosperous on an aggregate basis than they've ever been in the history of human race.

Yeah. And so we've done OK. Right. Yeah. We can improve. Yeah. And building a digital world, I think, is a piece of that. And so I think that this nuance is really important of you're building a new digital world with a piece of technology that inherently is attacking one of the core competencies of the non-digitally native world. The non-digitally native world is built on trust of centralized institutions and third parties. Because that's all we had. Exactly. And so I think that with this new piece of technology, what you're seeing is that's what's being attacked. right and i think that it's almost like um a superpower yeah right and if you give a superpower to a hundred percent of people yeah probably 80 of people either misuse it or don't know what to

do with it yeah 20 of people really know what to do with it yeah right and so it's you're you're giving this piece of technology to a bunch of people and i think that's what we're seeing here 80 of people have no clue what to do or they're just applying it in weird you know unsustainable ways yeah but there's probably you know 10 20 of people who wow if i understand that i can use this technology to go after those centralized third-party institutions and recreate a digital world that is improved without them yeah that's a really interesting use case right totally and so i think that um you know as we move into that world what do you think the areas are that kind of come under attack first right what are those types of institutions um that that you think are just

you know ripe for uh replacement or disruption yeah um and i just want to make a quick comment before i address that um you were talking about like reinventing the financial system to some extent like this but i think that's that's that's right and i just want to highlight the fact that when we talk about financials when we talk about like all these different uh components that are related to a financial system i would say that they are it's not like we're focusing on financial services or we're focusing on just finance it's that when you create an economy or you create a new digital realm an important underpinning is how do people transact how do people uh exchange value how do people collaborate

and or or get other people to help them um how do people help other people you know and a lot of that comes down to well you need to make payments you need to you need to pay for goods you need to pay for labor you need to have some agreement where if two people work together they can share in the upside right and all of these different things could be encoded as different components within a system but they're you know they're important underpinnings for a lot of the rest of society that can get built on top and to some extent we're taking like we're building this in the digital world but we're not doing it for the digital world alone i mean we're we're upgrading our own world to be partly digital absolutely you know what i mean well it's i mean look humans are

a network of transactions and incentives yeah that's it right and so there are you know that's a very very elementary communication like it was just transaction of words ideas thoughts etc okay right and so using a liberal when you really really boil it down it's just transactions yes and incentives right and so at that core there's a lot of things that we've done that are probably not where we would have started if we were to start over right now it doesn't make sense to jump out of a perfectly good airplane and kind of build a new one yeah right and so i think what we're seeing is people are saying look let's thoughtfully redesign some of this yeah um and so let's take it back to the internet itself right um the internet has been uh probably

one of the most impactful inventions of i don't know the last hundreds of years right yeah um and so i don't think anyone could deny the positive impact it has had in the world yeah right in terms of um really connecting people empowering people etc yeah but there's these negative side effects of it we wouldn't know each other if it weren't for the internet absolutely we wouldn't i wouldn't be sitting here you know it's funny you say this how much what percentage of your friends do you think that you would not know if the internet didn't exist i don't know 90 a high percentage yeah right yeah what percentage of the people that you knew kind of pre-internet right so you were probably elementary middle school didn't really you know the internet was kind of a thing but you

didn't really access it every day that type of thing yeah what percentage of those people are you still in contact with and only because of the internet probably almost all of them yeah a lot of a lot of it's yeah because the internet for sure yeah right if you didn't have the internet you would have lost touch with all yes exactly yeah and so i think just that alone is pretty cool yeah right for sure um walk me through how do you think through the positive impact of the internet right in this kind of centralized model yeah versus these negative side effects right so privacy security um you know the inability to control your data you know all these things that are kind of hot topics what how do you think that balance yeah i mean you know first of all i

say like i do truly believe the internet's like just so immensely positive like on the net positive side um it's just like seriously moved the world forward uh on so many different levels i mean every every um major business in the world is impacted by the internet in some way and has to have like a very serious um uh engagement with the internet all this obviously like billions of people on social media facebook and twitter and everything um the incredible benefits that we get from having knowledge at our fingertips um the ability to uh share things books you know things that we're doing um i mean humans are exponentially smarter because of the internet yeah right on an individual basis the amount of knowledge that you would have i mean yeah

to some extent first post internet yeah is incredible yeah right now the now there's a A lot of misinformation, you know, that brings people backwards, but yeah. Okay, so let's explore that for a second, right? Even the misinformation, right? 100% of the information that those people consume is not misinformation, obviously, right? Yeah, yeah. 100% of it's not accurate either. I think that the amount of misinformation could be overstated, right?

If you think about all the information that you are consuming on the internet on a daily basis, I just don't see people consuming, you know, kind of mid-double-digit percentages of misinformation, right? So on an aggregate basis, if you look at all the data that you consume, it's not like 50% of the information you consume is misleading, right? Now, the counterargument to that is it doesn't need to be 50%. It doesn't. It actually just needs to be the most, you know, the two most important pieces of information. the piece of information that drive your most important decisions throughout the day. Absolutely.

Right. Or throughout the year. Absolutely. There are some, if you go like through the YouTube, like tunnels, I don't know if you've ever done that, but it gets kind of weird.

Reddit is, is the place where I've seen. Oh yeah. You just keep people talking about. Yeah, exactly. Okay. All right.

So, so we've got the internet, right? We're kind of moving along here. Talk to me about what, uh what your thoughts on this like decentralized internet where uh you're able to use you know technology whether it's blockchain or other technologies to really attack those centralized kind of third-party institutions um that again are just playing middleman to those transactions

and incentives yeah for sure um well well actually before we get into that okay i just want to cover a couple more things um because we got a chance to talk about like innovation yep how that's being hampered um that's being really stifled by um low competition yep um and uh well actually i have just one more comment to make on that that's just i love talking about your show man just keep going whatever you want to talk about no no we'll we'll quickly come back to this um but uh there's I mean there's there's just there's a lot of debate around really censorship on Twitter and Facebook and all these different uh platforms and people will talk about well you know isn't it isn't it private property of these businesses

they have a right to um they have a right to do what they want with their own private property and and to some extent that is true um but in another sense it's not because what is actually happening is when you have a profile on that social network yep there is a piece of that that you own you know you have created something with you know obviously within their within their walled garden right but you have put in work into it you've put labor into that yep and when that happens you come you you till the soil regularly um in and in within the confines of something that's owned by another particular business you actually do have rights you know um especially if you do that over a long period of

time um and we shouldn't you know it's kind of like uh there should be a difference between thinking about like who owns the building who owns the um apartment within the building and who is subletting from that apartment within that building within that city you know what i mean So the ways that we look at property on the physical earth, we have a good sense for that. We've defined that over thousands of years. This is a generally accepted construct of these different variations to ownership. Exactly. We have not addressed that when it comes to the digital world.

Think about social networks. i mean as an example right you have what are you twitter.com slash a pompliano okay so i'm just advertising your twitter right now so appreciate it so let's unpack that for a second what you are is you are you have own a property called a pompliano on twitter.com well what some people don't realize is that twitter owns a property on a network called dot com that's owned by verisign so what if twitter kicked you off and you were friends with the ceo of verisign i don't know yep and or somehow you were able to and they kicked twitter off and they kicked twitter off they were like you lose your.com and by the way then twitter complains to i can

and i can says hey verisign that was not cool we're kicking you off of we're revoking your com and we're giving it to google so you have to think about like what are like what does digital ownership actually mean in a world like that and if there are some problem to some extent because we don't have a good framework for that and because no one's stepping in and no one's really like making these rules really just comes down to whoever has the leverage yep makes the whoever whoever has the physical ability to do something in the digital world ends up coming out on top as long as it

doesn't alert it doesn't like trigger a government to think wait a second that's illegal and in this case um we just really have to get down into that well and i think you know if you really go deep on this censorship issue right so um you know i i tweeted a while ago and got people all rallied up because i said you know censorship in any form is a slippery slope right and it is a violation of all of our rights yes and so i think that people you know they kind of ran with that and they were saying hey you know there's definitely forms of censorship that are appropriate right and i think that the key component here is you know just like we're talking with the patent laws there's different forms of censorship right so for example if these social platforms want to

remove somebody yeah they can full-on blackball them prevent you know technology driven prevention of using that platform yeah right so you can no longer sign a user account etc yeah a watered-down version of that could be you can go on and you can post but maybe they're not going to give you as much distribution this whole shadow shadow banning and all stuff right then there's a world where actually we're going to keep the distribution the same but we're going to put some sort of you know cover or opt-in to for people to see your content yeah so if you scroll through your feed and you saw something and it said hey you know this content isn't you know it's something that twitter stands behind yeah whatever if you would still like to see it you know click through

and then you can see it sure right so so it's a way to kind of uh alert people and they can opt in you can go all the way down that rabbit hole right well i think that what people in the united states specifically forget a lot of times because we live in this democratic society where free speeches encouraged etc is this is not the environment for many people around the world right and so we don't think that if you know use twitter for example because they're actually pretty good with not censoring people but let's just say that they did start to censor you know kind of all the fringe or alternative you know viewpoints yeah right and so whether you know all ends of the political spectrum all kind of different you know ideas they basically said look

if you don't fit within anti-fuzz getting out of hand we got to censor yeah everybody you know they just start saying look you know we're going to start censoring all this stuff yeah i think there'll be this uproar from everyone yeah right where they get away from it on the censorship side is when they censor somebody that majority of people don't agree with right because then it's oh well that that's a bad person right that's a bad viewpoint it's a bad idea right and so the slippery slope to that is well when they start censoring any idea who's to say where the line is yeah who's to say where the bad ideas end and the good ideas and it highlights who is the decision maker absolutely right and and so i think that that's part of this whole censorship

thing because we see it in other countries around the world yeah is we see outright banning or you know uh the the ones that are the most kind of egregious to me are um in politics and you know a lot of these countries they might just bail uh they just may jail their opponent yeah of course right and so you're literally that's the utmost censorship that you can apply to somebody if you think about what freedom of speech is freedom of speech is specifically the ability for the oppressed to communicate absolutely you don't need freedom of speech if you are in power by definition absolutely right you don't need freedom of speech if you are if you do not have the potential threat of infringement upon your speech for sure right so it's only applicable in cases

where there's some version of oppressed you know group or whatever that needs to be able to speak out that is being and we might not agree with them we might agree with them it doesn't matter right you know to some extent we have to be able to protect that and we have to figure out And I think we really have to figure out exactly how we do communication in the digital world because it's so early with us. Yeah. So somebody once told me and it's something that I really, you know, kind of stayed with me is this idea that one of the most democratic things you can do is disagree with someone and still protect their right to share those ideas. Absolutely. Right. And I think that's a really big leap for a lot of people. yeah right um all right so so uh i think that you know we're setting the stage very nicely for there's issues right net good internet but still a lot of different issues that either

uh one we haven't had to deal with right two we've chosen not to make decisions on um so we talked about the innovation freedom to innovate we talked about censorship yep um i think the third major one is privacy what is what is actually being done with our data yep um so walk me through what do you think the issues are today you know if you had to say what's one thing that the centralized third-party companies are doing with data that people may not be aware of that you think they should know what is that i actually think it's um it's maybe not what people think okay or it's not and it wasn't even in the public conversation until this past year and that is the ability to manipulate your views based on information about you yep right it is

like once we have all this information about you once we once we have information about how you respond to things what you actually believe how we have information about what are the things that you click on what are the things that you keep coming back to yep uh once you have all of that information you can make some really really uh the the deeper the analysis that you do and the more that you combine that with potentially other uh information from other individuals you can then start to figure out well how do i how do i indoctrinate this person how do you know and and there's there's situations where this is intentional um for example with the cambridge and analytica scandal um there are situations where it might be unintentional where you have

algorithms that are just feeding people into these content spirals like is happening on youtube yep right where the algorithm is just optimizing for time on site it's just optimizing for engagement and what it doesn't realize is that it's going in a certain direction where it is driving people into this particular type of uh content hole content you know absolutely well it goes back to uh propaganda yeah right is at the at the cornerstone of this entire argument right and so we happen to call the propaganda that we believe to be harmless advertising yes right but it is still propaganda yeah i mean and so sigmund freud and the you know the the beginnings of the advertising industry and like they call they even at the time propaganda was a positive

term absolutely you know and we've turned it negative yes right it's also the idea that human psychology is a very you know weird and strong thing yeah and i think as people have begun to understand more and more about human psychology there's you know really interesting things we can do to uh you know benefit humans right so there's a study that that has always caught my mind um if if when you wake up in the morning i think it's like if you read uh or see three positive headlines yeah before you read three negative headlines yeah people at the end of the day say that they had a better day no right you know all kinds of stuff like that right so uh so you can go you just literally flip them they saw both so yeah so and then if they see

three negative headlines at the start of the day then at the end of the day they actually report they were less happy or they had a less well day yeah so there's this whole thing around like you know positive journalism but all stuff right yeah well as you go deeper and deeper in there what you realize is like in the military world this is you know psychological warfare and also like we change the nomenclature of what we are describing yeah depending on the environment at which it is applied yeah but at the end of the day it's human psychology totally yeah right and so is it bad because it is inherently bad in some situations or is it bad because we don't like it or we don't agree with it yeah and that's the you know that's a core question that i think a lot of people

struggle with a lot of people disagree with it and it kind of leads to these different perspectives on what technology should be built how should it be applied where the rules right what are the incentives all that stuff yeah and i think we should take much more seriously the in behavioral information that we give off and how that is how that is distributed yep who gets access to that and we should take much more seriously our regular exposure to advertisements yep you know uh in a talk i gave at the oslo freedom forum uh they actually introduced this concept of the fact that there are three digital sins three main digital sins that are uh exerted upon individuals in the digital world and that is surveillance censorship and manipulation very interesting

and i would say those are those are the three main things that as an individual you need to be concerned about and um and there's a lot of push for people to install ad blockers and to to move away from these you know endlessly scrolling feeds with advertisements that are just you know uh conditioning us in a certain way um and and we need to make sure that we are both we're being careful about both the information that reaches into our minds the right access to the brain to our brains as well as the information that's leaving us which is the read access to our brain and so how do we fix this though i mean the way that we fix this we have to move away from the current

model the current relationship between users and their software actually before i ask how we fix it can we fix it? Like, are we just screwed, right? Are we so far down the rabbit hole that there's no getting out? Or do you think we actually can fix it? No, no, I do think we can. And I think it's hard.

It's not going to come easy. Nothing good ever does, right? But we can fix it. Okay, all right. So how do we do that? And first of all, there has to be a better system, a system that serves us as consumers better and second um consumers have to find that and

appreciate it and understand it yep and when i say this better system what i mean is a different relationship between consumers and their software and businesses and that means that consumers are not essentially being harvested for their data and their attention that is what's happening And currently, with Facebook, with Twitter, with Instagram, with all these different businesses, these different social networks, we are being harvested in essence. We are the audience, right? And businesses are paying to reach us and to be able to have right access to our brain. And Facebook has read access to our brain. And the businesses say, well, I want these characteristics.

Facebook reads in the information has a huge database a dossier on you and is able to serve you with propaganda yep and in some in some senses it's exactly what you wanted to be able to buy this new jacket right whatever and sometimes it's not and sometimes it's something that um it is it really just changes your thinking so we need to we need to move away from that I would say you know a new model very important uh to rethink business models to rethink uh advertising i'm not saying advertising is categorically bad but i do believe that the type of advertising that we are being continuously exposed to every day um in many cases when it doesn't it's not even clear what's the difference between an ad and what's you know maybe you can see in small

fine print but like what's an ad and what is uh just content that is being algorithmically surfaced to you yep right um so so i think that's important that we move away from it i think it's also important that we move towards a model where we have choice with our software given a particular use case or given a particular uh vertical product vertical so for example with email we have choice right you can email me i can email you it doesn't matter what email provider we have right i can use gmail you can use outlook someone else can use aol right yep if they're up there um but the cool thing about email is it's a true decentralized system it is potentially the original decentralized uh application network and you have a series

of protocols and many different pieces of software that all speak those protocols and that means that each every business is on the email network can innovate independently new features can be introduced other businesses can copy those features there's high level of competition uh and you know there might be some like some large players that get a lot of part a large percentage of the market share but um they're still preserved freedom for the consumer and that's i think that's a very fine situation to be in gmail has a lot of market share outlook has a lot of market share that's fine you know you can ultimately choose and you can move your data with you from one to another and it's actually meaningful uh contrast that with something

like facebook where i give you an export you can export your your data that's useless there's no you can't bring your social graph with you you can't you know yeah i mean but the way you're sharing is is data is an asset right exactly it is a personal asset that you own and therefore you should not be required to give it away for free yes right and just because these social networks have been built and they've reached such massive scale right the ability to basically go play in a different sandbox yeah right um the example and the reason i use that expression is like if you know everyone's on the playground they're playing in a sandbox there's one ball you brought the ball well it's socially unacceptable in many cases for you to take that ball and leave

and go play somewhere else yeah because everyone gets mad at you yeah right but if it is your ball you should be allowed to do that yeah right and so that there's a trade-off there yeah now i think with data um and this may kind of skip us ahead a little bit but if it's a personal asset right does that mean that all of a sudden it's like a balance sheet where it sits next to my stocks bonds currencies commodities and my data right can i transact that data can i actually sell it to some people and monetize it can i use it as a uh as a um as a badge to get into certain networks right so hey you want to use facebook great yeah you choose to say yes here's my data and i'm going to filter out the things i don't want you to have about me right and then now you you give me entry

into your network yeah right it because now you go into a whole different rabbit hole where data is that asset yeah right yeah yeah i i i think so i mean and i i would i would make a distinction between there's like there's data itself there's things like reputation they're all intertwined um there is identity right uh to some extent if you have data and you put it out there for the world you publish it well now everyone has it you can't sell it because everyone can get it for free um reputation when you build that up you have ratings on airbnb you have ratings on uber um that reference you know statements about who you are and that can be utilized to gain you access to things that can be utilized to to to allow you to participate in a business transaction

that requires trust and so on and so forth um but yeah i think we should we're in a model today where the businesses have all the control a few businesses actually if you think about it like facebook google amazon and and apple and microsoft you could add to that as well um and the vast majority of the businesses and all of us as individuals are beholden to them and that has many negative externalities for us and we need to move to a model where that isn't the case, where we have control over our data, where we have the ability to have our own privacy, where we have the ability to choose our own software, where we have the ability to have freedom of speech, where we have this level of competition that does encourage innovation.

And all of those things together can be accomplished with a decentralized system. Do you think that, let's say that we get to that fully decentralized internet infrastructure, you know consumer apps everything is built in a way that uh would be the the farthest end of the spectrum of decentralization right do you think that the innovation pace can sustain right can we actually continue to innovate in that space and then to what would be the negative side effect of reaching kind of full decentralization of the internet yeah um well i would say i mean if you if you get to a world where there is like true decentralization you you get innovation picking up you think there's a faster pace of innovation yes okay explain that well

you get more innovation because you get more experiments that can be attempted it's a lot easier to go to market it's a lot easier to get consumers right um good luck you know pulling consumers away from uh something like an amazon right um if there was a decentralized amazon and of course the challenge is getting to that point where you could have a decentralized amazon that even can compete on user experience can you know has a series of service providers that can actually deliver upon the um delivery times promises and things like that that is an enormously complex situation but you could end up replacing amazon with a thousand businesses that each contribute resources to a decentralized e-commerce network i mean look at

the way that bittorrent operates right bittorrent is really hundreds of different service providers all contributing to the underlying network right you have um you have so many different nodes that are actually storing the files you have many different trackers that are being run you have so many different um websites that allow you a window into the torrent network that's incredible you look at bitcoin what's happening there you have uh thousands of miners dozens of mining pools major mining pools that are all contributing to maintain this network right uh at the base layer in terms of mining in terms of uh keeping making sure that bitcoin doesn't have any downtime um and then you have hundreds of businesses that are all providing

services on top transaction uh you know exchanges wallets whatever you have this huge economy around around a digital money system right you have this huge economy around a digital file storage system and you have all these incredible experiments that are um that are happening in the blockchain and decentralized app industry uh like for example filecoin like for example um uh you know auger like all these other every all these different um applications and systems that are being built on top of bitcoin and ethereum and uh and and all these different systems i think that that is uh something to look to um where i do expect to see some really incredible things i don't think i think i think bitcoin and bittorrent and email with the hundreds of businesses

that are building on top of this network that's just the beginning and we're going to see so many more incredible platforms that emerge with hundreds of businesses that are making up the the core software the under the infrastructure and everything above it yeah it is truly incredible what can occur right between now and that happening right um all right so what's one thing you believe in crypto blockchain decentralized world that you think a large majority of people would disagree with the contrarian view i feel like i have a lot a ton of them it's just hard to bring to mind right now um well let me hear what can i hear what yours is ah you usually i let people see one question

you're jumping ahead um yeah look i think that uh in this space because it is so uh heavily driven by technologists there's a lot of focus on the actual technology how it works you know what can you make um the code do etc and i think uh majority of the companies and projects that win are not going to be focused on the underlying technology, but they're going to be focused on the user experience and user behaviors. And so this idea of the companies today, many of them are being built incorrectly

with the focus on the wrong thing is scary, right? And I think part of it is just that happens to be the types of people who are in early. Can you say focus on the right thing? Give an example. So, for example, if you build a decentralized Twitter, right, people are not going to use the decentralized version of Twitter if it is as good or worse of a user experience, a network effect, etc. In order to get people to use a decentralized Twitter, you have to be better experienced. You have to pull them away from what they're already using.

And so decentralization is a feature, right? it is not the reason why somebody is going to jump in terms of mass consumer. There's some subset of people that will jump just because it's decentralized. That all of a sudden makes decentralization. One example, it could be like regimes where there's censorship on Twitter. Absolutely. They will actually enjoy a worse experience. Yeah, they'll enjoy a worse experience for the decentralization

and the avoidance of censorship for sure. right but but that kind of mass consumer right is only going to jump if it's a better experience and so if that is true right which i believe it is the focus has to be building a better twitter that oh by the way is also decentralized yes right and so it can't be i'm building decentralized twitter it's i'm building a better twitter yeah right and one of our core competencies our core ethos is that is decentralized yeah and so i think again very nuanced you know change But I think when you start to describe it differently or focus on different metrics, right, et cetera, your time, energy, and resources is applied in different ways. And so it's not like some groundbreaking truth, right?

I think it's actually pretty intuitive when somebody hears it. Yes, for sure. I think it's just easy to focus on the sexy technology component right now. But over time, I think really it is that user experience that ends up being the driving force. well i think it also depends on like when you think about crossing the chasm how do you approach the market yep um and uh for those for people who haven't read the book it's uh i think pretty would you say it's like a staple right it's like absolutely there's a joke that a friend of mine told me that was like when you arrive at business school they like have it waiting on your

desk um the idea is like there's this uh this adoption curve from like innovators to early adopters to the chasm which is the hard part between the early adopters and the early majority the late majority and then the laggards and it forms this like bell curve and um there there's an argument to be made that one of the one of the key points or takeaways like if you go straight for the majority with your offering you are doomed to fail and you have to you have to go for some innovator group and then some early adopter group and it they they use the term innovator to refer to like hyper early adopter um and i think in that case you do want to latch on to some community and you know um in the in the world where if you're starting a

decentralized twitter as a competitor you're not going to be able to compete on feature set user experience you can maybe come out with a product that has a better user experience but has five percent of the features right um and there's probably people who want that yes so you get to find them exactly so i think you either come out with a five percent twitter with a better user experience or you come out with like whatever 20 twitter with a worse user experience that specifically gives certain demographics something that they they would never go to twitter for like then they and they absolutely want they they need this right so it's like a hair and fire hair and fire problem absolutely um okay so uh last question for you um

what is the one thing you have magic wait real quick also we have a decentralized twitter on block stack oh really okay all right so it's called it's called afari okay so real quick walk me through what is uh currently built on block stack so you have a decentralized twitter yeah yeah you've got uh like a google docs type uh uh product right yes so yeah it's google suite competitor so they have google docs equivalent okay google sheets equivalent uh and some other other applications as well it's called graphite docs graphite docs.com uh afari that's decentralized twitter that launched recently we have a decentralized instagram only for travel oh interesting and it's called travel stack very cool yeah so i think that's cool because they

focused on they didn't try to just like do a decentralized instagram they are focusing on a particular vertical absolutely and they're like you come to travel stack for travel instagram you Amazing. We also have Stealthy, which is a decentralized equivalent of WeChat or WhatsApp. What other Facebook businesses do we have competitors to? We don't have a decentralized Facebook yet. um we have a and when i say we i mean the the network we don't yeah there's all these different businesses all these different teams incredible teams that are building these apps on top of block stack uh there is what else is there um oh there's really cool decentralized multi-sig wallet called mistos m-i-s-t-h-o-s that is specifically geared towards

multi-sig for businesses and what their what their goal is is to do multi-sig for bitcoin first they're gonna have stacks at some point as well they might do other other digital assets like like ethereum and so on um but then over time they're going to do multi-sig for documents and for all the parts of the business that means if you want to change your certificate of incorporation you're going to change your bylaws if you want to change your voting rights agreement you could do that with a rule set on mistos the way that mistos works is you create you you instead of creating a wallet you create a venture and then you add partners to the venture and then you have rules for how the partners can spend the money got it so let's say you

have five partners well maybe all of the funds can be withdrawn with 100 of the partners approval right but if you want to use fewer partners you can wait a longer period of time so maybe three three out of five partners takes a day or a week or something now if partners like let's say let's say three of the partners god forbid died you can actually have the multisig degrade down to a two of five multisig after three months and all this happens with bitcoin script that's really wild and then and then all the identity authentication storage everything is is is powered by block stack so it's like bitcoin script and block stack and that's it that's that's a that's an incredible smart contract i gotta say absolutely using just

bitcoin script absolutely um so so there's really cool things and they're going to add some other features in the future where you can do um like have partners have employees and they have different permissions maybe you need like you know five employees to authorize this or but just one partner to author so it's really cool uh it's just really cool um extremely powerful think of like the digital embodiment of the corporation with all of its monetary assets all of its uh document based assets and so on absolutely it's fascinating to me how quickly this stuff is getting built right and uh and how high quality it is yes exactly um all right so uh last question you got a magic wand you can wave it and change any one thing about the

crypto blockchain decentralization you know movement uh what do you change my instinct first thing comes to my head is the wild price swings the volatility and the focus the volatility and the focus on speculation and the focus on this you know hop it's pure speculation pure speculation human greed token casino the greed it's out of control and the the investors that are trying to flip tokens and the uh you know another thing i would say is the just the um herd mentality and the fads you know it's the nft fad there was the the um the uh you know nfts non-fungible tokens i like to call them crypto collectibles because i think nfts is the worst name you know horrible name the names in this industry what have you know

uh people coming up with things that just have all these different you know it's just crazy i mean and then there's the whole token curated registry fad i mean they're they're cool things they're important to talk about but i think stable coins stable coins oh my god like once you know everyone has a stable coin and then there's just this herd mentality is like you our thesis is stable coins and then there's another one it's like well our thesis is privacy coins because of course you know well we you know invest in scalable scaling technology that you know has like we just really we're into the graph based uh you know solutions to scaling well we're really big on proof of stake you know we're looking for uh it's just i mean it's it's it's

crazy it's uh i think they describe one single company yeah what do they do after they find that company yeah uh awesome man thank you so much for the time i appreciate spending so much with yeah for sure thank you this is uh this is fantastic i think you've got a really interesting you know view of the world and uh yeah i think that we are moving closer and closer to your vision every day yeah for sure totally oh wait one more thought before we go all right yeah of course okay cool um i there's a book that i'm reading right now okay i'm actually i'm kind of um sad that i haven't gotten around to reading it until this point in time it's a pretty famous book especially for the science fiction buffs it's called neuromancer

okay by william gibson um i don't know if you've read you've read snow crash or i have okay so so actually give snow crash out to every facebook hire do you really okay well then you need to read neuromancer because to some extent snow crash is a satire of neuromancer oh amazing okay um so and also neuromancer inspired the matrix actually coined the term as they use it the matrix also coined the term cyberspace ah yeah well sorry well it's inaccurate william gibson coined the term cyberspace in a previous book but he popularized it in neuromancer got it um extremely influential but i mean there are people who say that the way the internet turned out was largely inspired by neuromancer yeah like people ended up building what they read in his

book i mean marita this weekend yeah exactly um and so when which is really an incredible moment in the book where you know you essentially you jack into the matrix that's that's the way the world works there's a physical world just like in snow crash physical world there's a digital world you plug in and you're now in the digital world your neurons are actually wired up to the digital world and you're in there you're in the matrix and there is um this scene where the protagonist case um he actually gets um he ends up stealing from his employer and uh he's you know in deep with like some really shady people what they do instead of um instead of he's like are you gonna kill me whatever instead of killing him they they damage his neurons they say you're never

gonna work in this town again and you're never gonna work again and they remove him completely from the matrix now he's in the physical world he says that he feels trapped by his physical body the fact that he can no longer enter the digital he can no longer be in that world and so what they've done is they made him not exist in the digital right that what to him and to them was the ultimate penalty the ultimate penalty the most damaging thing that you could do to a person was deny them access to the digital and one of the things that i worry about with where we're headed today is that we have a few businesses like facebook and google and twitter and amazon that are and apple that are deciding who gets to exist in the digital and in order for us

to move to a world where the digital the digital is actually pervasive and powerful and it is like physics right it just is because there's incredible amazing things that you can do when when digital just is when it's just like physics and there's there's no one to turn to because it just it permeates they call it in the book a collective hallucination around the world in order for us to get there we need to have decentralized systems we need to build a decentralized foundation and all of the layers of the digital world need to be decentralized in that fashion and that's that's where it's blockstack yeah that's blockstack there we go that's that's the whole industry and and i hope we can do some incredible things with blockstack you uh you've got a number

of us that are cheering you on yeah so best of luck with that i think it is a worthy cause thank you so much for having me on of course always a pleasure hey everyone pomp here if you like this episode of off the chain and want to help us take crypto to the top of the apple spotify and other podcast charts please do us a favor and rate review and subscribe to review simply go to the off the chain homepage scroll down until you see the five blank stars taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts i appreciate you listening and see you next time on off the chain

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