The Tim Ferriss Show - #542: Chris Dixon and Naval Ravikant — The Wonders of Web3, How to Pick the Right Hill to Climb, Finding the Right Amount of Crypto Regulation, Friends with Benefits, and the Untapped Potential of NFTs

Starting point is 00:00:00 We have an important preface, an important caveat, an important disclaimer before we get started. And here it is provided from my lovely lawyers. Here we go. I am not an investment advisor. All opinions are mine alone. There are risks involved in placing any investment in securities or in Bitcoin or in cryptocurrencies or in anything. None of the information presented today or really anytime since you might be listening to this anytime, is intended to form the basis for any offer or recommendation or have any regard to the investment objectives, financial situation, or needs of any specific person. That includes you, my dear listener. So everything you're going to hear is for informational entertainment purposes

Starting point is 00:00:39 only. And with that said, please enjoy. Hello, boys and girls, ladies and germs, lemurs and squirrels. How goes it? I hope you are all well. This is Tim Ferriss. Welcome to another episode of The Tim Ferriss Show. My guests today are Naval Ravikant and Chris Dixon. Naval Ravikant is one of the most popular guests on this podcast. And for good reason, you can find my first episode with him at tim.blog slash Naval, N-A-V-A-L. It was nominated for podcast of the year when it first came out. But let's get to the bio. Naval, at Naval on Twitter, is the co-founder and chairman of AngelList. He is an angel investor and has invested in more than 100 companies, including many mega successes such as Twitter, Uber, Notion, Opendoor, Postmates, and Wish, many, many more.

Starting point is 00:01:32 You can subscribe to Naval, his podcast on wealth and happiness, on Apple Podcasts, Spotify, Overcast, wherever you get your podcasts. You can also find his blog at nav.al. And I will leave Naval's intro at that. We have done quite a few interviews together in the past with Nick Szabo and also with Ethereum creator Vitalik Buterin. Chris Dixon on Twitter at cdixon is a general partner at Andreessen Horowitz, where for the past six years, he has been an active seed and venture stage investor. Previously, Chris co-founded and served as the CEO of two startups, SiteAdvisor and Hunch. SiteAdvisor was an internet security company that warned web

Starting point is 00:02:13 users of security threats. The company was acquired by McAfee in 2006. Hunch was a recommendation technology company that was acquired by eBay in 2011. Chris has been a prolific seed investor, and that is the right adjective, prolific seed investor, co-founding Founder Collective, a seed venture fund, and making a number of personal angel investments in various technology companies. Chris started programming as a kid and was a professional programmer after college at the high-speed options trading firm Arbitrade. He has a BA and MA in philosophy from Columbia and an MBA from Harvard. He has written about his theories and experiences as an entrepreneur and investor on Medium and before that at cdixon.org. Many of his predictions have

Starting point is 00:02:57 come true. A lot of what he's written about has ended up being prescient and we will dig into that. His A16Z, that is Andreessen Horowitz with the number of letters between the first and last A16Z podcast appearances can be found at a16z.com slash author slash Chris hyphen Dixon. And once again, you can find him on Twitter at C Dixon. This episode is brought to you by Theragun. I have two Theraguns and they're worth their weight in gold. I've been using them every single day. Whether you're an elite athlete or just a regular person trying to get through your day, muscle pain and muscle tension are real things. That's why I use the Theragun. I use it at night. I use it after workouts. It is a handheld percussive therapy device that releases your deepest muscle tension. So for instance, at night,

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Starting point is 00:07:30 What if I did the opposite? I'm a cybernetic organism, living tissue over metal endoscopy. The Tim Ferriss Show. Chris and Naval, welcome to the show. And Chris, we're going to start with you. And then I figured we could begin with something perhaps that most people would consider non-technical, and that is philosophy. So I would like to hear first if you could explain why the interest in philosophy and then i would love for you to tie in

Starting point is 00:08:06 your conversations or specific conversations involving advice with daniel dennett and maybe give some context for who that is so back in college i sort of interested in computers my whole life and i read this book gerda lesher bach which was a sort of mind-blowing book at the time and it's all about kind of the connection between computer science and music and philosophy and things like this. And so when I got to college, I said, you know, I started taking some philosophy classes and really kind of went down this rabbit hole of philosophy and actually was at one point in a PhD program until I dropped out. I was very interested in what's known as analytic philosophy. So language, mind, logic, the foundations of mathematics. It's still an area I'm interested in sort of the history of ideas, I'd say. The history of science, the history of

Starting point is 00:08:50 mathematics, how it happens. I by no means consider myself a philosophy expert, and I haven't read that much over the years. But I have, for example, a couple of years ago, I went and did this really big deep dive into the history of logic and computer science, and actually ended up writing this article for The Atlantic about it. And kind of my argument was, which is still kind of my main area of interest, is this idea that you could have a group of people working on something. There was this great quote I started the essay with. It was this computer scientist who said, if you went to 1905 and tried to find the least practical area of philosophy or any academic field you could, it would be this set of logicians like Bertrand Russell and Kurt Gödel and a bunch of other people like that who were

Starting point is 00:09:30 doing these really, really esoteric, logical things. But it turned out that was literally the direct lineage into Alan Turing and von Neumann and all the great papers that came out in the 30s. And then that culminated in World War II. So literally, the history of computing came from this kind of crazy group of like 10 people in 1905. And so it was that kind of stuff that I was into, reading about that kind of stuff. And the fun thing with philosophy is you can say, hey, this semester, I'm going to do science. And this semester, I'm going to do math.

Starting point is 00:09:54 So it's really just a little bit dilettante-ish or something. Like it's just sort of a fun excuse to go read a lot of smart people. But yeah, but then at one point, this guy named Daniel Tennant, who's sort of one of my heroes, who's written a lot of great philosophy books, kind of popular philosophy books, I highly recommend. And I had the opportunity to talk to him. And that was the point at which I was thinking about quitting and doing what I do now, basically startups. And he said to me, he said, Look, if you think you're going to be like a great philosopher, and that's all you can ever do, you should do it. Otherwise, I would quit immediately

Starting point is 00:10:21 and go do something else. I just knew I was going to be a mediocre philosopher working on footnotes. But basically, in these kinds of academic fields, there's like five people that matter every century. And then everyone else is sort of doing, you know, footnote cleanup. The other thing, me and my friends had this idea that we, look, the best philosophy paper, the end of the PhD, you write a dissertation. We came to the conclusion that the best dissertation would be two pages long and have no footnotes. And that was just completely unacceptable in modern academia. So we're like, there's no way that we can do what we actually consider to be a great, because, you know, truly great philosophy,

Starting point is 00:10:55 just a brand new idea, a brand new set of ideas. Not that I had them. I'm not claiming I was a great philosopher. But if the goal was fundamentally inconsistent with the nature of the program, it was probably not as practical for me. comes to mind. I mean, obviously, Naval is a deep reader and considerer of different philosophies. And just to build on your dissertation comment, and we don't have to spend a whole lot of time here because I still want to do a little bit of background. But for those who don't have firsthand exposure to Satoshi Nakamoto's white paper, how long is that? It's like seven pages. I think I have it on my wall. Actually, my other office, I have it on the wall and it literally fits on the poster. So I believe the

Starting point is 00:11:50 PDF, you know, it depends on the format. You can get them in like printed Bible-like formats or you can get them as a PDF. I think the PDF is seven pages. Yeah, no, it's very short. It's very short. And actually, probably two-thirds of it is implementation details. The core ideas are probably a couple of paragraphs. Similar to the Bible, there was a whole long period of forum posts and other kinds of things fleshing it out, and then the actual code. The concept of a blockchain is, I think, one of the beautiful computing primitives. A lot of those beautiful, simple things, it's relatively simple at its core. I'd like to revisit the logicians for a second,

Starting point is 00:12:23 so Bertrand Russell and these others. So they were, the significance of that was largely missed at the time. I mean, of course it was hindsight 2020, but I'd like to maybe use that as a segue to something you wrote in 2013 in a blog post titled, I think this is the title of the blog post, what the smartest people do, might just be a quote from the blog post, what the smartest people do on the weekend is what everyone else will do during the week in 10 years. And among the tech hobbies with momentum, you included, quote, math-based currencies like Bitcoin, end quote. That's 2013. So I'd like to ask two questions. Number one is, and there were other examples that seemed now to be quite prescient. How did you identify math-based currencies like Bitcoin to fit into the category of what smart people are doing on the weekend?

Starting point is 00:13:15 And then are there any current hobbies that you're watching with interest? This goes back to the lore of Silicon Valley of the hackers in a garage and Steve Jobs and Wozniak going to the homebrew computer club. And it was like this fringe cultish club at the time in the era of mainframe computers and things. It basically came back to this idea that maybe that's not a coincidence that this keeps happening, that it's these things people are doing on the weekend. And particularly they're smart people. You go and you talk to them, they had a good reason. They really understood what a personal computer could be. They had very deep thinking. So by the way, a lot of this just involves actually going and speaking to people and not trusting secondary sources. I really believe very, very strongly that one of the most important things here you

Starting point is 00:13:52 can do is just go speak to a lot of people. That's where I get all of my information, talking to entrepreneurs, talking to people that are smarter than me. Why was personal computing happening at the Homebrew Computer Club and not at, let's say, IBM at the time? Once a company gets to a certain scale, it's managed by business people and business people plan on a one to three year horizon. They're very good at execution, but typically it's extrapolation execution. Like we have this computer here, let's make a better next version

Starting point is 00:14:17 of it or something like that. And they're not, this is sort of Clay Christensen's idea. The idea of disruptive innovation is that these things come from below. They look like toys. It's another kind of common theme. They come from below. They look silly. The serious people poo-poo it. It's not a serious thing. Some of those things, by the way, that people are into the hobbyist things, they're just stay hobbies. A lot of it depends on the nature of the specific topic. And is it going to follow some kind of exponential improvement curve and things like that? Because the PC, of course, was riding Moore's law and a bunch of other important trends in a way that other fringe hobbies at the time weren't. So I've always found this to be a small group of very smart, cultish people to be a very,

Starting point is 00:14:54 very interesting pattern. And one thing I do a lot of, I've read a lot of history books, particularly history of innovation, and this pattern happens over and over. So I'll give you an example. Another example I like to use is University of Utah in the 1970s. Every single computer graphics thing today, Apple, Pixar, Atari, the best venture capital strategy in the 1970s would be to take a big bag of money and hand it out to the University of Utah. Okay. Because they were all the entire future of computer graphics was the University of Utah. Why? Because some, I forgot the specifics, some donor liked computer graphics and gave money, and they're all there. I always think about it like I do venture capital. I can sit there,

Starting point is 00:15:34 analyze metrics, and do all this other stuff, or I can just go try to find University of Utah. That's what I think about all the time. Like, where is that? And by the way, a lot of it now is on the internet. It's in a Discord. It's in a Reddit. A lot of what I did in that list I had in 2013, a lot of that came from reddit it's what is the current definition of the frontier and there was a time when it was wild west there was a time when it was conquistadors and people setting sail in the age of sail and today it feels like the frontier is on the internet and even on the internet the frontier is within web3 and crypto because it's sort of the least regulated the most decentralized the most permissionless 24 7 365 markets that are self-funding hackers from all around the world can participate you can be anon or pseudo anon or just have a crypto punk as your profile

Starting point is 00:16:14 and nobody has to know who you are all that matters is the output of your code and if it works you can make huge amounts of money satoshi nakamoto may end up being the richest person who ever lived and could have pulled it off completely anon and And that's not the only one. There are huge fortunes being made and lost on this decentralized anonymous frontier. And now I think we're seeing Web3 starting to pull in all the talent. All the smartest people in Silicon Valley seem to be looking from their nine to five jobs into 24-7 Web3 and figuring out how to participate. Every company that I'm involved with that's not a Web3 company calls me and asks me about a token or a Web3 angle. And obviously, some of it is just to make money, but some of it is this appeal of open source,

Starting point is 00:16:55 open platforms, portable data, user privacy, user control keys, and community-owned and generated networks. So I want to hop in here. This is all very important, and we're going to come back to it. And we're going to get to a definition of terms also, just for people who are not familiar with Web3. Before I get to that, just because I want to try to create a thread going from 2013 in that blog post to here, University of Utah.

Starting point is 00:17:23 How did you find this particular University of Utah math-based currencies like Bitcoin in 2003 or just prior to that? And then we're going to bring that into Web3. Like a lot of these things that started with, I think, friends. Naval could have been part of that. Fred Wilson, their sort of early group of people that were kind of getting interested in Bitcoin. I used to be technical. I'm not particularly technical now, but I went and kind of used Bitcoin. And I was particularly interested in Bitcoin. I used to be technical. I'm not particularly technical now, but I went and kind of used Bitcoin. And I was particularly interested in the programming language around it,

Starting point is 00:17:48 which I can talk more about. Now we have platforms like Ethereum with much more robust programming abilities. So I went and kind of used it. And the idea, I have to say, it appealed to me initially. I had come from, actually the first thought actually, because I used this thing called Hashcash. So Hashcash is the algorithm

Starting point is 00:18:03 that's used for Bitcoin mining, what's called mining, which is a way to incentivize the people to run their computer and run part of the Bitcoin network. I started a computer security company in 2004, and it actually looked at using Hashcash. So Hashcash had been talked about for a long time as a way to fight internet spam. And this is what I was working on. The idea was, why do you have spam? It's a tragedy of the commons problem where because it costs zero to send an email, if you can make a hundred dollars every million emails, spammers will just do that. And so one idea that went back, really back to the, I think the nineties was idea of charging

Starting point is 00:18:37 somebody a little bit to send an email, but then how do you do that when you don't have native internet money? And so the idea was you force them to do a computation. And I actually had looked at commercializing this at one point. I didn't do it because I couldn't figure out the whole thing. When I first saw Bitcoin, I'm like, oh, it's stored hash cash. Adam Smith called capital is stored labor. And so that's what Bitcoin actually, from my vantage point back then, it was like, oh, wow, it's hash cash, but it's stored.

Starting point is 00:19:01 And that was actually what got me initially interested in it. And then I started going down the rabbit hole, as we say. You'll hear this phrase a lot from crypto people because it's stored. And that was actually what got me initially interested in it. And then I started going down the rabbit hole. As we say, you'll hear this phrase a lot from crypto people, because it's very much this looking glass experience where the outside narrative is just so incredibly not accurate about Web3. And once you go and learn it yourself, I get an email now, I was probably getting this too, every day now from a Web2 person, a good entrepreneur saying, oh my God, I didn't understand what this was. And now that I do, it's like completely changed my life. It's a transformative thing

Starting point is 00:19:29 when you go down that rabbit hole. So I kind of went down that rabbit hole, although there wasn't as deep a rabbit hole back then, but I think probably I'm guessing they've all had a similar experience. I read about the Byzantine generals problem and the solution to that in order as well, you can now organize people without rulers. Could you explain what that is, Naval? Yeah. Byzantine generals problem is a problem that basically says, how do you get people to coordinate when nobody knows each other, nobody trusts each other? And by using proof of work, aka hash cash, you can say, well, I've done the work to have a credible vote. And so anybody who hasn't done the work hasn't done the vote. And so now you can take systems that before would have

Starting point is 00:20:00 to be run by centralized authorities, ranging from the government running money to Mark Zuckerberg running Facebook. And you can replace them by a credible vote of all the people participating in the network. And you know they're not cheaters, that they get to have a say because they've done the work. And one way to do the work is hash cash. But that's essentially what blockchains and Web3 do. Web3 basically says, okay, we can now run this network through the people who have invested into the network and they can invest with money they can invest with resources or they can invest proof of work which is sort of the most robust way to do it while keeping it decentralized

Starting point is 00:20:34 but i think this may lead us into we're probably getting to the point where we should define what we mean by web 3 and i think chris has articulated one of the better definitions out there, one of the best definitions. And perhaps, Chris, we could also start, just to show, it could be change, it could be evolution, but web one, web two, web three, if you could lay it out. So the way I think about it is web one, the internet, of course, existed before the 90s, but the web, sort of this killer app on top of the internet,

Starting point is 00:21:02 was created in 1990. And so I sort of think of web one as, let's call it 1990 to 2005. The key thing with Web1 is it was dominated by open protocol. So the web has a protocol called HTTP, email has a protocol called SMTP. These were the platforms you were building on then. So if you were Larry and Sergey, and you were building Google, you were building it on top of HTTP, on top of the web, and the web was open, which means no one controlled it. And what that means from Larry and Sergey's point of view is they knew if they built a successful product, a successful search engine, they would own it and they would control it. And you couldn't have somebody come along and say, I'm going to take 50% or I'm going to shut you down. It's the web. It was open.

Starting point is 00:21:37 And similar to, let's say in economics, if you talk to an entrepreneur or an investor, they'll say they like to invest in countries with predictable rule of law. They don't like countries where the government seizes the assets and things like this. It's the same thing that happens with startups and entrepreneurs. They want to build on a platform that they know they can trust. And so that was what was so great about that first year of the web and why you had so much incredible innovation and investment. And it was, I think most people would agree today, that was sort of a golden period of

Starting point is 00:22:01 innovation. But the products were limited in the sense that it tended to be, I call it skeuomorphic, where people were taking things from the offline world like magazines and putting them on the internet. If you go back and look at the 90s web, it was very much experienced like a magazine. You didn't have things like social networks and user-generated content to nearly the same degree. That started really kind of percolating this year. People call it Web 2. let's call it around 2005. And at that time, you had sort of two competing models. Like let's just take Twitter. There was an open protocol called RSS. That was the obvious thing to compete with Twitter. I mean, it's still around, but it's not nearly as popular as Twitter

Starting point is 00:22:37 and Facebook and everything else. And so there were sort of open ways to build social networks in the 2000s. And then there were closed ways to build. And for a variety of reasons, I won't go into all the details, the closed ways one, a lot of it had to do with the ease of use. The way I think about it is web to the open protocols were just limited in what they could do. So if you want to set up a website in 2008, let's say, and you wanted to have sort of simulate the functionality of Twitter, you'd have to go get like a web hosting provider by a domain name, and do a whole bunch of other things. Everyone tried to kind of reuse domain names, essentially. Domain names in the earlier, in the pre-blockchain world, they're the one thing you can really own on the internet. It's your domain name. You control it. And so the open side kept trying to kind of

Starting point is 00:23:16 use the domain name again and again, but it costs $8. You have to go set it up. It was very technical. Meanwhile, you go to Twitter and it's like three clicks and you choose your name and you're in and your friends are there. And then mobile phones came along and the whole thing accelerated. And here we are now with five plus companies that kind of control the internet. So Web3 is coming along. And so Web3 is, my definition is, it's an internet owned by users and builders orchestrated with tokens. So this new concept of a token is kind of the key concept of Web3. This comes sort of historically from the movement that started with Bitcoin, although I think it's sort of a different branch of the genealogy or something. And a lot of the

Starting point is 00:23:52 stuff's actually built on a different crypto network called Ethereum. And then there are other kind of alternatives to it. The big kind of innovation with Ethereum was it's fully programmable. It's a computer. It's funny. This is the most controversial thing I've said on Twitter. I got this huge, when I said blockchains are computers, they are computers. And literally, if you go look at Alan Turing's on computability paper,

Starting point is 00:24:11 or Von Neumann, or any of the great computer scientists, a computer is something you write code and it can store things. Ethereum is an almost Turing-complete programming language and can store information. It's a virtual computer,

Starting point is 00:24:23 a computer that runs on a network of physical computers, which is, I think, what kind of trips people up, but it's a computer. It's a very powerful computer that has new properties that prior kinds of computers didn't have. And one of the things you can do on these is you can create these things called smart contracts, which are code that will continue to run in a certain way. And you can also create these things called tokens and tokens can be fungible, like kind of quote cryptocurrencies are, or it can be non fungible NFTs. And it can be something like, which I think some people have heard about now, which are things that can be represented by a piece of media, for example, you're buying this collectible basketball card or this collectible

Starting point is 00:24:53 work of art, things like that. Why tokens are so important is they now provide a mechanism by which value and control can be given to users and builders as opposed to simply to centralized companies. So you can build today. There are two things. One is, remember before I said the functionality wasn't quite there for the open side and web two, it's now there. You can now build something that looks and feels like Facebook or Twitter using open protocols and using this new kind of philosophy where the value and control accrues to the users of the network, not to a company because there is no company. And you're going to see more and more things, products launched like this, where there is initially there'll be some kind of R&D organization

Starting point is 00:25:33 that helps create these protocols. But over time, they go away in the same way that there is no Bitcoin company. And the Ethereum has a nonprofit foundation that supports R&D, but there is no Ethereum company. And this is how I believe the most important internet products will be created in the future is through this kind of new means. And why will it be done this way? One is it's better because wouldn't it be better if the drivers on the Uber network owned Uber and got to participate more in the value creation and also in the control and governance of that system?

Starting point is 00:26:03 I think that's clearly a better thing for society. And I also think it's just going to be a winning product. If you look at people in these Web3 communities, no Web3 company, no crypto company has ever spent a dollar on marketing, including Coinbase. I was on the board for years. No marketing. Why? Because tokens are self-marketing. When somebody owns something and feels skin in the game, they want to go talk about it. They want to evangelize. I think Web3 is not only better for the world, but it's also going to beat Web2, because it's going to be more popular, because the people get really excited when they actually get to participate. The internet is 100% the most important invention of the century. I don't think that's hyperbolic to say that. And we're literally talking about how is money and power going to flow

Starting point is 00:26:41 on the internet. This is such an important issue. And yet it's caricatured in the press and things like tech bros, money, this and that. It's so misunderstood. And it's so important, which is why I get fired up about it. Because I feel like if people like me and Naval don't explain this, that this thing is a very important thing, I guess I'll say. I'll just, if it's okay with you guys, share a little bit, speak for a second, and also try to paraphrase as a muggle, and then I want you to poke holes in what I say. So first I'll say that I'm relatively new to this sphere, but like you said, once it started to land or sink in, I felt something, and this is going to sound very odd perhaps, but this physiological quickening that really kept me up. I was not able to sleep well for about a week straight. And that only happens to me every five to seven or five to 10

Starting point is 00:27:41 years because I started to see some of the possibilities and some of the beneficial societal changes and on and on and on that not just could are already in a sense a byproduct of this paradigm shift. So tell me if this captures some of the essence and then either of you can poke holes in it. But just to highlight a couple of things. So people might think of Web 1 as read-only, largely read-only, and open. Then we have Web 2, read-write. But as we've seen it, it's become more centralized with a lot of these large companies. And you don't own, like you said, aside from maybe a domain name,

Starting point is 00:28:25 you are not in control of your own destiny. You have very few rights. Your reputation is not transferable if you are on a platform like Twitter. You can be deplatformed and we put that aside, but it's centralized. You're at the whim of a handful of companies, which a lot of people will sign up for, like you said, because of convenience, ease of use, etc. Web3 then appears to introduce a number of things, including property rights and decentralization. And this is not going to be a perfect comparison, but if people think of, say, REI and a co-op, it would differ in the sense that we're not necessarily going to have management per se with a truly decentralized platform. But what I have seen firsthand, and I want to give people a concrete example just to point out a very

Starting point is 00:29:19 niche group, perhaps, that I've seen benefit very clearly. And that has been artists. And so I want to talk about this just for a second, because I have friends who are photographers, friends who are graphic artists, friends who are musicians, who were crippled financially by COVID when they couldn't tour, when they couldn't do things because they're only getting paid one cent per stream on some of these music streaming services. With the ability to create unique pieces of property in the form of NFTs and launch projects, their futures have entirely changed. And I want to highlight something for folks, and that is it's not because of the initial sales price. The model for authors, the model for musicians has some royalty component, but you kind of get paid up front,

Starting point is 00:30:15 and then you have a pittance of some percentage that you make on the back end. But with a smart contract, like you said, if we think of Ethereum as this world computer, with a smart contract, instead of a ton of middlemen who are kind of taking the lion's share of profits, you can set in advance certain things that happen automatically. Like if you are an artist and your work is resold and then resold again and resold again, well, if you're operating in a traditional art world, you get paid once, that's the end of the story. Instead of that, now people are making the lion's share, many of them, of their income from these secondary sales, and it's all done automatically. They don't have to trust some agent or a broker or a rep or a curator to pay them. They don't have to audit accounting because it's all on the blockchain. So I just wanted to give that example. And wonder if either

Starting point is 00:31:07 of you would like to elaborate on any aspect of that, correct any aspect of that, or give an example of other things that you're seeing that are exciting to you. Yeah, I would just only summarize what you guys have said, because I think you've approached it the right way. But basically, what you're saying is that digital private keys enable digital private property. And so we finally have private property in the internet. And we don't need people like Spotify or even the studios and the labels to determine who owns what private property and hold it with their database entries and their lawyers. We can each do it ourselves.

Starting point is 00:31:41 We can finally each, and Chris Scott made fun of on Twitter for this, we can each own a piece of the internet but it's absolutely true we can create digital scarcity and it is a very powerful thing because then it can map to real world scarcity because the real world is not completely abundant in everything the real world does have scarce economic resources and so we can have digital scarcity and digital private property and in a web3 context there are three critical things that both of you have touched on, but I just want to summarize them for the listener, that really make Web3 so unique, so distinct, and so revolutionary, which is in a normal model, we're used to thinking of a computer program as an application run by a third party, where they control the code, they own the data,

Starting point is 00:32:23 and they own the platform and the economic benefits. And then we get our scraps. We put up tweets, we put a podcast, maybe we get a few shekels from Spotify, maybe we get a few hearts on Twitter and a few retweets. But it's not a lot. The owners of Spotify are getting far richer than the creators and the podcasters on Spotify and the musicians on Spotify. Not to pick on Spotify, they're just emblematic of the whole thing. And we've had this transition where it's like web one, okay, who won that Microsoft, maybe Netscape and, and Google was a big winner of web one, and then web two, who won that was Apple and Google and maybe Facebook. And is web three also going to be controlled by big companies? No, the beauty of web three is,

Starting point is 00:33:02 for the first time, all the data is actually open. The data is literally living in the blockchain or in distributed systems, but it's secured. It's actually secured far better than these corporations can secure our data because it's each secured by our own private key. So each of us has a safety deposit box now in the cloud that we can give selective access to with our private keys to people who need them when they need them, and then close them off again. So they're not leaked in the next credit reporting hack or the next big company hack. And then who owns the platform underneath? As Chris

Starting point is 00:33:34 said, it's the contributors own the platform, instead of corporations own the platform. And all the people who are pro co-op and who are pro collectivism should be embracing this because now we can own the platforms that we are actually building with our collective creative efforts. And finally, developers love this because the code is now open instead of being closed. So it's this insane concept, a revolutionary concept where we've flipped applications from being closed code, corporations own the platform and users are the data to open code, contributors own the platform and users are the data to open code contributors own the platform and users own their data. And so now these things become completely composable. And I think one of the reasons why the Web3 revolution is going to be so nonlinear and so unexpected and so fast

Starting point is 00:34:17 is because with open code means these applications plug into each other like Lego blocks. You go buy a Lego for your kids, well, it connects to every Lego piece that your kid already owns. It connects to all the other Lego pieces of the kids down the block, and they can build anything they want out of it. And that's how code on Web3 works. That's how data on Web3 works.

Starting point is 00:34:35 And that's how even ownership on Web3 works, where I can own a little piece of every platform that I contribute to. And this is absolutely a revolution. Naval, could you define a word which comes up a lot in Web3, composable, and what that means, how people use it? The beauty is this is all open source. So it's not even APIs anymore. I don't have to access through the very limited APIs that a Twitter might expose and then take away later on as

Starting point is 00:34:58 they famously done. I can literally connect to the code at any point that I want to. And then in open source, you only solve each problem once. So if somebody has built a good version of how to solve a certain problem, I'm just going to reuse that and reuse it again. Maybe I'll fork it, maybe I'll improve it a little bit, maybe I'll port it to a slightly different system. But essentially, at the fundamental level, each problem only has to be solved once. So composable means that it's like Legos or like digital Legos, where I can just copy the Lego and then build on top of it. So the effect to a competitor is like a Voltron type thing where all of a sudden all the apps in Web3 can sort of team up to create any app needed. Example is there was an innovation in DeFi called

Starting point is 00:35:36 automatic market makers, which is instead of having to have an exchange where you have paid market makers and firms on the other side, ensuring liquidity in any market, you know, you go in the stock market, you buy a stock, there's someone else on the other side, who is paid to provide liquidity to sell you the stock at the exact moment that you want to buy the stock. But in Web3, we created this innovation with DeFi actually called automated market makers, we can just do it through code. Now, once you've done that in code, and most famous company is Uniswap, which is of course an Andreessen investment. So congratulations, Chris. But once it's done, then anybody else can copy it.

Starting point is 00:36:08 Then it can just be plugged in, dropped into any new application. So if you look at, for example, games that are going to come out that are Web3 based, they're going to have entire market economies in them. They will have custody solutions. They will have NFTs built inside of them. They'll be completely composable in that any piece from any other app can plug into any other app permissionlessly. And so you're building an edifice. It's almost like building a civilization or a city of interconnected apps instead of these silos in which the data is not portable. The code isn't portable.

Starting point is 00:36:39 Users aren't portable. So that's probably way longer of a definition than you wanted. And Chris can give you a crisper one, I'm sure. I think that was great i think i like to say that composability is to software as compounding interest is to finance right it's sort of this magical thing where if you get it going it has a sort of exponential hockey stick i think related to what they've all said i think one thing people who aren't in the tech business may underestimate is how dominant open source software is so open software went from a curiosity in the 90s i I happen to be watching a thing about Microsoft in like 1999, the antitrust case, the word Linux doesn't come up. It's all Java. Of course, what actually happened is Linux is the

Starting point is 00:37:15 thing that won. 99.9% of the code in the world is open source software that runs. So every server you talk to on the data center, that's almost all Linux. Your Android phone is Linux. Most of the software on your iPhone is open source. How did open source win? It's composability is what Naval said. You only have to solve each problem once. Once you solve a problem, just go on GitHub and fork it and reuse the code. What Web3 is doing is it's taking that level of rapid innovation and applying it to web services in addition to just software. The one thing software couldn't do is it couldn't run itself. It relied on a company to run it. So a lot of the tech industry today is take open source software,

Starting point is 00:37:51 add a little bit of extra proprietary software on top, and then instantiate it, run it, and then charge for it. It's software as a service. And that's great. And they provide value and they should make money from that. But the kind of key thing driving underneath is this composability of open source software. And now we're going to extend that to this new area.

Starting point is 00:38:08 Yeah, composability even goes beyond software, even though that's how it's commonly used. It even goes into media. So for example, today, if I want to build something on top of the Star Wars platform, I got to go cut a deal with Disney. But in the open source composable NFT world, artists are basically giving away the concepts. Yes, you can always right click and save an image or the code and then modify it, but you can build on top of it. So people will be building games, they'll be building cultural artifacts, new memes, new music on top of NFTs and more value accrues to the underlying NFT because now it's becoming more popular. At the end of the day, the value of a piece of art or media is directly proportional to how the community around it and who's using it and who's promoting

Starting point is 00:38:49 it and who's working with it. So it kind of blows away this idea of copyright and intellectual property. And instead, it creates the most powerful memes in the world, memes in the broad sense of music and movies and books included in memes, not just little internet memes that we're familiar with. And media itself becomes composable. And the greatest artists are going to have the greatest distribution. It's why, not to pick on our friend, but one reason why I think Joe Rogan and others make mistakes by going to Spotify is that the power of a meme, the power of an idea is determined by how many computers it's running on. The power of a program is how much computation power it has behind it. The power of an idea is how many brains is it running in. So if you have good ideas, you want to spread them

Starting point is 00:39:27 as far and wide as possible. That's why I'll never charge for a piece of content. And no one in their right mind who has good ideas should. You don't want to restrict the avenues. You want people to recompose your ideas. Akira the Don takes stuff that I say and remixes into music, and there's smart nonsense out there making videos and cool animations out of it. Jack Butcher does visualizations. This is all free. Or Eric Jorgensen does the almanac. I don't have to do any of it. This is all composability around media. Now, I don't have an underlying monetization mechanism, but if I wanted to, I could issue NFTs against the original content. And there are collectors and people who will pay for that. And my content is just becoming more and more famous. So that's an example of composability in action that extends beyond

Starting point is 00:40:04 just software. Composability is a very, very powerful concept. And if you want to, for example, I know a lot of your listeners create a lot of content, their content creators and innovators and creators themselves. And if you want your content to get as much out there as possible, don't hold anything back. If you have good ideas, you want to spread them as widely as possible. And you wish you should be so lucky that other people come and compose them with their own content and create new memes and new ideas. Just a quick thanks to one of our sponsors and we'll be right back to the show. This episode is brought to you by UCAN, U-C-A-N. What you eat and how you live, exercise, sleep, stress, all play an important role in how

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Starting point is 00:41:46 Tim, and save 30% on your first order. That's ucan.co. Tim. I'd love to add just a couple of things here, just to give some sort of spice and specifics to some examples, as you just did, and to further explain why this stuff has kept me up late at night. By the way, the first show is just going to become a crypto podcast. No, it will not. It will not. I promise, folks, even though I'm getting pulled into the deep water and getting spun into the vortex, I'm able to tread water and I will not pull everyone in with me. But this stuff is important. I think it's very important to explore. And it's excited me because I have seen how much good creators, good authors, good musicians have struggled because they are not good at marketing.

Starting point is 00:42:39 But they have diehard fans, maybe a small group of diehard fans, but they have some number of diehard fans. And many of the listeners of the podcast will recognize the title of an essay or blog post called 1,000 True Fans by Kevin Kelly. I know that, Chris, you've also written about 1,000 True Fans. You can find it at kk.org. I recommend it consistently all the time. And what Web3 allows you to do is align your interest with collective interest with other true fans' self-interest by allowing them to own digital property that you create. And what has excited me is I'm seeing a lot of experimentation. So we were talking about some of the advantages, or Chris, you were talking about some of the advantages of Web3. One of the advantages of Web3 is also, it appears, and please correct me if I

Starting point is 00:43:35 get any of this wrong, guys, is that it is very easy, relatively speaking, compared to say Web2 era, for many companies or projects to reach escape velocity. So if they're raising money, for instance, they might raise once or twice small amounts of capital, and then they have a token, and they're able to sort of control their destiny through a collective who act as stakeholders. And in addition to that, if we look at an example like Bored Ape Yacht Club, people can take a look, you're seeing because of the composability, right, this Lego block aspect and low barriers to entry with respect to cost, that people are able to experiment widely. And in the case of Bored Ape Yacht Club, and thanks to Punk6529 for sharing

Starting point is 00:44:28 this particular example with me because I wasn't aware, in addition to selling, say, the JPEG associated with this NFT, this property title that gives you this digital asset, commercial rights were also provided to at least some purchasers of these board aid yacht clubs. So then you have people who are going out with their specific board aid and creating coffee companies or creating craft brew companies. I've never seen anything like that before. And certainly, if you're a young, young, tech-savvy intellectual property lawyer, your services are going to be in need. So good to get up to speed. But the fact that all of these experiments can be run concurrently at such low cost says to me that the ecosystem is going to produce, through natural selection and evolution and recombination of different types,

Starting point is 00:45:26 lots of things that will be very, very exciting. And it doesn't even matter if 98%, 99% end up being garbage because the winner is kind of like finding Amazon or Google in 99 or 2000 will end up being so impactful. And maybe that's just me drinking the Kool-Aid. I don't know, but that's how it feels to me. Yeah, I mean, right, Bored Apes. I think that the recent drop they did with the Mutant Apes. So they did this thing where you got like a potion and you could get kind of your mutant counterpart. I think they made a hundred million dollars. I don't, as far as I know,

Starting point is 00:45:55 they haven't raised venture capital and they made a hundred million on that one drop. So certainly, yes, it's a different economic model. They take it farther where you get the commercial rights. The next stage where people are playing around now, is to actually have the community create narratives. And so, for example, Wattpad, you know, these kind of fanfic community. Imagine the next Harry Potter, the future Harry Potter is owned by the NFT holders. And they get to decide, they get to write all sorts of interesting fiction and they get to vote and decide what becomes canon and what is not. Imagine the passion people have for Star Wars and all

Starting point is 00:46:25 these other kinds of communities. And now imagine they own a piece of it and they control a piece of it. It's about to get really, really interesting. I don't think there's been this much creative kind of energy since the 90s. I don't think mobile compares to it. Now we get into the meat of it, which are NFTs, non-fungible tokens. And this is something that Chris has been on from day one. Of all the investors that I know in the entire space, Chris has been the first one who got into NFTs in a big way and has stayed consistent on it. In fact, February of this year, I remember meeting with him and all he wanted to talk about was NFTs and I didn't even understand at the time. And I was like, yeah, whatever, Chris, that sounds cool,

Starting point is 00:46:54 nice toy. And now I'm like, what did you say again? So I sort of missed NFTs. But NFTs for me answered a whole bunch of questions that I didn't have the answer to before. One question was, a bunch of people showed up and they bought Bitcoin early, and they get to get rich in this giant wealth transfer as we move from fiat currencies into sort of is a pauper. No, there's a funny quote out there floating around where somebody said, every generation invents its own new Ponzi scheme and rejects the previous generation's Ponzi scheme. And now we're moving in much faster times. So the previous generation's Ponzi scheme might have been Bitcoin or Ethereum. If you think about what Bitcoin is, Bitcoin shows up and says, we reject fiat, we reject printed money, we reject kings and rulers and tyrants, we want the people's currency. Great, we got that. And then someone says, wait, you can create your own currency. Well, I want to create my own currency. So you get all these altcoins and everybody steps up and says, well, I got my own currency. So ironically, there are now probably more currencies out there than there are tokens. There's more currencies than Bitcoin. And so people are fighting to say, well, instead of your ledger of record, let's use my ledger of record. And NFTs are people say, come up and say, actually, maybe digital value, digital assets are like fashion, their culture, they're always emerging, they're always composing, they're always combining, they're always going out of style.

Starting point is 00:48:18 And just like in the real world, anything that's in fashion can hold value. It could be real estate, which is a real use case, it could be oil, It could be gold. It could be every single house. It could be every single business. It could be a pair of shoes. It could be a laptop for a brief period of time. The same way, every digital asset that has a community and a culture around it can hold value for some period of time. Now, of course, it will be very non-linearly distributed. The vast majority of objects will trend towards zero value. It maybe flashes in the pan, but at least this gives a chance for everybody who's coming late to the crypto revolution, late in quotes, because we're still so early, gets a chance to say, okay, we can define any object as having value that we believe has value. And these cultural memes that

Starting point is 00:49:00 we're creating around NFTs, like Bored Ape Yacht Club, they don't have to like harass you into hodling them. Hodling is this meme in the Bitcoin community, right? You got to hold your Bitcoin. It's a misspelling of hold called hodl. But in the NFT world, you hold for sentimental value. If you're punk 6529, someone comes up to buy your punk, you're not going to sell it. In fact, I think just famously recently, one of the punks who's using it as Twitter ID, because it's the new blue checkmark on Twitter, but it's actually validated and verified through wallet ownership. He got offered something like $10 million for his CryptoPunk. And it was just kind of a random generic little eight bit pixel CryptoPunk, but he refused to sell because that was his identity. And he basically had to say, even though I may not be worth that much money, I'm not for sale. And that actually

Starting point is 00:49:44 made it a cultural meme and icon. And now his CryptoPunk is probably worth even more. So NFTs are this absolutely fascinating rabbit hole. I think Chris was probably the first investor to identify them at scale, going all the way back to his Dapper Labs investment. These are the people who built CryptoKitties and evolving from there. So I would just love to hear Chris go into NFTs, like the evolution of them and kind of where they're headed. Yeah, obviously, I'm very excited about NFTs. I think that they're, look, I think they're very, very broad, what I would call primitive.

Starting point is 00:50:12 Primitive, just so you understand, like the way we kind of use it is there's these kind of key building, foundational building blocks of the internet. And I think that most of the issues that develop were some of the things I talked about earlier, about how you could only, you were limited in what you could build using open methods. And a lot of the problems, frankly, I think come from advertising, the fact that we didn't have native payments and tokens and all these things we now have, what Google wants to do, they want to have a digital closed loop. And a digital closed loop prior to crypto, you could really only do that with advertising.

Starting point is 00:50:41 And so we built this giant infrastructure, The internet now is powered by banner ads and search ads and things like this. And that has been great for a few companies. It's generally been really, really bad for creative people. There was someone had a great tweet yesterday. The web two companies convinced you to give away your creations in exchange for little hearts. But yeah, tell me about how NFTs are the real scam or something. It was some formulation like that. Like it's kind of amazing that they've convinced all these people, oh, Instagram, what do they pay out? Zero. Facebook, zero. Twitter, zero. YouTube, 50%. Apple, just for having the phone, they take 30%. Do you know how many businesses can't survive when you take 30%? It's kind of crazy that we put up with this. So now, as you said, put aside NFTs, just look at

Starting point is 00:51:25 like Substack. So there's no crypto in Substack. So what's going on with Substack? It's a platform, like a sort of a newsletter platform you can go to as a writer and have people subscribe to it. It's relatively simple, really elegant idea. But the interesting thing you see now is you see writers who previously might make, I don't know what, $100,000 or something, getting a million dollars a year. And you see a lot of people saying, hey, that shouldn't happen. We were told the internet is bad for creative people. The internet is not bad for creative people. Web2 is bad for creative people. Spotify, I just saw the stat the other day. Spotify advertises a stat. They have 8 million artists, 14,000 of them make 50,000 a year. The rest make less than that. Those are businesses,

Starting point is 00:52:01 you have costs. It's very hard to live below that. So 14,000 make a living out of 8 million. Is that working? I'm not blaming Spotify, by the way. A lot of that money goes to labels. And I think Spotify is a good company. It's the model. It's the logic of that model. So then you have these cases of this musician Blau, who I think he's a medium-sized artist on Spotify. He did an NFT drop. He made $11 million. Even if you assume that $11 million is a bubble or something, people say it's a bubble. If he made $100,000, it's transformative. It's the same thing that's going on with Substack. And so what you have is now you have this really powerful new way for creative people who were previously getting banner ads at best, very poor

Starting point is 00:52:42 monetization, are now able to go and create all sorts of interesting things. And we're seeing the early versions of it. You could create a JPEG. You can create digital album art. It's sort of an obvious thing that musicians are doing now. But it can be much more than that. It's just an object.

Starting point is 00:52:55 Just like in the real world, we have all sorts of different classes of objects. We have art. We have utilities. We have NFTs. They're just as broad a concept. And so I think you're going to see all sorts of interesting experimentation where, you know, maybe you, a musician, you get it, you get something that's beautiful, but also you can go use in different ways.

Starting point is 00:53:11 You can take it from a game or bring it into another experience or use it to go to a real life show as a ticket. And it's also, it's a means of patronage. I think one of the things I experienced, I really encourage people to participate in these communities to understand them. I buy NFTs on foundation, which is one of our investments, which is sort of a high end art NFT platform, curated platform. For example, there's a science fiction writer who I, sorry, graphic designer who I bought a bunch of his NFTs and he DMs me and now we're friends.

Starting point is 00:53:39 And it's like, I never understood people that gave to bought physical offline art. I've never had any interest in it. Now I kind of get it though, because I'm like, Hey, this guy's cool. I want to be part of his, be in his network. I do venture capital.

Starting point is 00:53:51 I hang around with tech people all day. It's fun for me to like be able to talk to an artist. And at the same time, I can support him in this sort of non-transactional way and be his patron. And see, if some people are buying stuff on these websites to make money, some are doing it to patronize. Some are doing it to,

Starting point is 00:54:03 I think down the road, we're gonna see more and more utility use cases. The gaming is really interesting right now. This, I think the world hasn't seen this yet, but I will tell you, we have a games group at our firm that doesn't do crypto. And it's close to a hundred percent of the things they're seeing now. These are people out of, these are founders that come out of like Riot and Blizzard and things like this. I think it's close to a hundred percent of the meetings they have now involve NFTs. The games people get this, they're at the cutting edge, especially the kind of the younger ones, the next cohort. And there is going to be so much interesting stuff. And these things,

Starting point is 00:54:33 these are going to be real utility. So you can take this piece of art, you can take the sword, and you can mix and match and move it around. And they all kind of immediately get composability and why it's important. And we're just going to see like wave after wave of very creative things. I think of an NFT as it's as general a concept as the webpage. Think about the website. When it first comes out, people are like, oh, it's a website, you know, and they try to kind of map it to the offline world. It's like a brochure. But then as we saw over this sort of 30 year period, all of these clever people come and they innovate. It's not a website, it's a social network. It's a SaaS tool. It's a this, it's a that. NFTs are going to be just as

Starting point is 00:55:04 broad. It's a core new concept. the idea of owning something on the internet. Another way I like to think about it is imagine if in the real world, we couldn't own anything. And every time you go, this is kind of a wacky analogy, but every time you go to a hotel or a restaurant, they're like, oh, you got to change your clothes and buy a new outfit. This is how the internet works today. And then you leave like, hey, you got to give that stuff back. And then one day somebody comes along and they say, no, you can take it with you. Imagine the amount of innovation that would kick off. That's kind of what's been going on on the internet. We had this sort of renting fiefdom design and we've just kind of broken

Starting point is 00:55:37 it open. And so people say, oh, it's a bubble, this and that. I think it's the beginning of this incredible 20-year kind of creative run, I believe. I'd love, Chris, for you to talk a little bit more about the gaming because I think NFTs in the gaming context are easily understood by a lot of folks, even if they don't game. But a lot of the applications make sense to me. So you could talk about anything you want, right? I mean, so rare is kind of interesting. But I think even more interesting, not necessarily more interesting, but there's been talk, and I think some of this might be kind of bright-eyed, bushy-tailed idealism, but the possibility of, say, universal basic income

Starting point is 00:56:13 when we look at, let's say, something like YGG, or could you just speak a little bit to that and what that means? Because it's so interesting to me. And interesting is a lazy adjective. It's eye-opening and exciting. What's the model today in video games? Video games are interesting because there have been new waves of technology, but the old wave still exists. So the old way to buy a video game was something like Madden. You pay $60 or whatever it costs these days.

Starting point is 00:56:42 That's still around. That business is still around. There's companies like EA that do that. But then you have layered on top of it all these kind of new, more modern, what I think of more modern companies. And probably the best ones are things like Fortnite and Supercell, Clash Royale, and League of Legends. These are basically, the model they use is the game is completely free. You can play it completely forever. And the only thing you buy are cosmetic goods. So you can't buy goods that make you win

Starting point is 00:57:07 because people think that would kind of undermine the integrity of the game. So it's all, you know, just to look cool, status flex. And that's a $40 billion a year industry, just the virtual goods alone. And this, by the way, same thing is going on with NFTs. It was laughed at 10 years ago, 15 years ago. It was a big joke.

Starting point is 00:57:23 Of course it wasn't, and it's very important. But those virtual goods are kind of locked into the game. Also, when you buy the virtual goods, all the money is going to the company. So what games like Axie Infinity, we're investors in one of these kind of new crypto games, is instead of it being you buy the goods from the company, it's much more peer-to-peer. It's much more the way eBay and Craigslist, you're buying it from another person who themselves were able to basically improve the NFT by playing the game. And so in the case of Axie, you have something on the order of 100,000 people, many of whom are in the Philippines,

Starting point is 00:57:54 who make a living playing that game. And so they go and they do a bunch of different stuff. And people call it grinding, like you kind of play a bunch of stuff. And then they make improve the NFTs. And then other people who maybe have more money than time buy them from them and the company only takes i think it's like a three percent take rate or something as opposed to much more like a marketplace kind of fee as opposed to taking all the money the kind of protocol will take lower fees but in exchange you've got this like really kind of cool vibrant economy and basically like axi really kind of broke out i think it's one of the four games that have 800 000 which is the max discord users and it's one of the four so it's one of them i think it's like two million ish active users like very

Starting point is 00:58:34 very popular game by the way not in any of the app stores because apple and google are trying to fight web 3 bans and yet they still have that kind of user base and i think axi you know actually is probably the thing that really inspired a lot of people. YGG mentions a separate company, which we're also investors in, which is Yield Guild Games. It's very cool. It's almost like a, well, it's what we call a DAO, but it's essentially it's an online software kind of organization where people can essentially get loaned Axie so they can go play it and not have to pay the upfront costs and then earn money. So it's like this kind of guild model that you have in games where people kind of get together and join on the same team, but suddenly you can have sort of real money involved and

Starting point is 00:59:14 people make real livings. So I think that the games industry, a lot of sort of the next generation of talent saw this and were excited. Thank you, Chris. I'd love to add also just a few other, I'm not going to give a ton of detail. I'll let people look these folks up. But from the creator standpoint, just bridging back to that, if we think of NFTs, I guess on a very, very basic level as property title of some type, there's actually a lot more that you can sort of embed into an NFT. So for instance, Dimitri Cherniak, I'd encourage people to check out Dimitri.

Starting point is 00:59:52 Incredible digital artist, incredible coder, really. So his art is code and famous for a project and a series of pieces known as ringers. But also, if you check out the Eternal Pump as an example, and I believe I'm getting this right. If not, I'm sure the internet will correct me and I'll make amends in the show notes. But what an artist can do is provide first access to future projects through certain sets of NFTs. And they can also create in real life interactions or requirements for people to go to, say, a certain location to mint, i.e., purchase, say, a given NFT. So there are all these permutations providing future privileged access, or requiring real world actions, say, to be eligible to

Starting point is 01:00:49 purchase or to receive a given NFT, the sort of Cambrian explosion of experimentation is beyond anything I've ever seen. And I've been in tech in one way or another since 2007. So not that long, I guess, in the sort of long-term view of things, but I've never seen anything like it. Naval, do you have anything you'd like to add? There's a really interesting, subtle point that both of you have been touching upon that may be worth making explicit, which is that I think a lot of people, when they first see NFTs, their reaction is, well, I can just right-click and save that JPEG. Why does this thing have value? And, you know, hopefully, people who look into NFTs move past that pretty quickly. But you're both given examples of how these things have value that you can't just right click and save as the simplest one is just, yes, I can also photocopy

Starting point is 01:01:39 any piece of art doesn't mean that I have the actual art, there's still provenance, there's still a linkage, there's still authenticity to the art itself. And the simplest way to see that is, for example, the Bored Ape Yacht Club. Let's say we're building a metaverse. We're building like a 3D virtual space. And hopefully it's not Zuck. Hopefully it's some crypto emergent thing

Starting point is 01:01:55 on blockchains that we're all using that's open. Well, if I walk into two rooms, one room has the authentic Bored Ape Yacht Club and it's got the actual nice photos of the apes or the crypto punks or whatever hanging on the walls. And my software tells me that. And then I walk into a different room, which has all fakes and copies. And my software immediately tells me, now you're in the fake one, where do you think the cool kids are going to hang out? Where are the rich kids going to hang out? Where are the parties going to take place? So all of a sudden, having NFTs and

Starting point is 01:02:22 this authentication gives spaces actual value. And so it allows you to create a metaverse, which then has a distinction between space A and space B. But that's just the simplest level. What you've also given examples of is in a game, an NFT is a smart contract. It's a thing that is usable within the game. And a copy of the NFT is not. If I have a special piece of loot or a special item that I've picked up in one game, and then the developer or the same blockchain or the same group of users went to a second game, and I the creator of the NFT and the fans of the NFT

Starting point is 01:03:06 so that it acts as a ticket for access to future rights. And a fake one is not going to get you that. Or it gives you access to future pieces by the artist first and so on and so forth. And I love Chris example of it being a web page because a web page is programmable. A web page can do anything. It's Turing complete. It can run any piece of code. And so we have these essentially Turing complete programmable objects that are now suddenly scarce that you can own and that you can transfer and you can link to the real world. And you can link them to the digital world through smart contracts. You can link them to the real world through social contracts. By the way, Bitcoin is only linked to the real world through social contracts.

Starting point is 01:03:41 I know that's going to be a controversial thing to say, but essentially it's a social contract between the community of Bitcoiners to accept Bitcoin, to accept that as a canonical ledger. So the same way among the Bored Ape community or among the CryptoPunk community or whatever, the toads or the frogs or whoever they are, whichever community, there is a social contract to accept these as the canonical avatars. So essentially what blockchains do is they allow open composability and programmability between all these objects in the digital domain and there's those smart contracts that regulate those and then social contracts that regulate it in the outside world and NFT is no different.

Starting point is 01:04:16 If Bitcoin can have value, if Ethereum can have value, then in theory an NFT can have value as long as the smart contracts and the social contracts and the community enforcing it have value. Of course, that means most of them aren't, but some of them will. I want to also come back to SoRare for a second. And I'm an investor in a few funds that have stake in SoRare. That's not why I bring it up. I bring it up because I listened to a podcast by a guy named Andrew Steinwald on Zima Red interviewing, I'm blanking on his last name, but his first name is AJ, who was, I believe, a data scientist at Amazon who then went on to become a so rare player. So let me explain for a second. I'm not going to do it justice, but if you can imagine collecting,

Starting point is 01:04:57 and this is, again, not going to do it justice, and either of you should correct me if I get this wrong, but digital trading cards that represent specific players that you can assemble into teams that are then benchmarked against real-world sports performance to determine how well your team does. With said team, you can win money in leagues of different types. Now, people are like, okay, fine, sports betting, interesting. But where it starts to get super, super interesting is because it's correlated to real-world play with these composite teams, you then have right now, for instance, funds being created where they're hiring effectively digital sports managers, they're buying and loaning out these players, these NFTs, and then doubling down on the people who perform best as sports managers. And one of their dreams slash goals is at some point to take all of this sports analytics intelligence and data science and to buy an actual sports team and to apply it there, kind of like Sabermetrics and

Starting point is 01:06:06 the Oakland A's and Billy Bean back in the day, but in an environment where they can simulate and test and split test and multivariate test over and over and over and over again. I'll give one other example of things to come, and maybe it's already happening. You guys could probably speak to this, but let's say you buy a piece of artwork that is in the form of a digital NFT. And I suppose that's a redundant term, but in the form of an NFT. Right now, if you need a loan, you might secure that loan with collateral, such as your home. And if it's not happening already in the near future, people will be able to do that with collateral of high value that is secured and verified on the blockchain, right? You're not going to have to go to Sotheby's and get all the provenance and the letters and the this and the

Starting point is 01:06:55 that, which is going to take forever. You'll be able to instantly verify it and then secure loans against something like a high value NFT. It could be a ringer, could be a Fidenza, could be a CryptoPunk, could be anything. I mean, there are going to be many different options. And I think those are things that just are not immediately apparent. They certainly weren't immediately apparent to me when Kevin Rose was the first person to show me CryptoPunks, and I was just flabbergasted. But when you start to... I mean, look, they're cool. I think they're amazing on a bunch of levels, but it's deceptively simple on the surface

Starting point is 01:07:28 and the implications are unbelievably nuanced. So I just wanted to give a few of those examples. Yeah, I just want to drop one quote in here, which floats around on the internet. It's called Gall's Law. It's a rule of thumb for systems design. And it basically says that a complex system designed from scratch

Starting point is 01:07:45 never works and cannot be patched to make it work. A complex system that works is invariably found to have evolved from a simple system that worked. So in that sense, NFTs are primitive, and people are going to recombine and assemble and compose these primitives to create incredibly complex systems. And everyone who competes with NFTs with a centralized solution, as happens inside every game or every social network, is trying to design a complex system from the top down. And it's kind of a miracle that Google don't like NFTs. And so you're not going to see a lot of Web3 applications on the phones anytime soon. And even I think recently, it was Valve, which runs Steam, the game distribution service, so that they're not going to have NFTs on there or NFT based games on there. And they're going to miss out. They're going to miss out on the largest boom in internet gaming since the beginning of internet gaming. Chris, I'd love to ask you a question. Thank you, Naval. To come back to a word that you used, and we've spoken about this separately on the phone, because I wanted to know how the hell to pronounce this word. Skeuomorphic. All right, so skeuomorphic. Maybe you could give some

Starting point is 01:09:03 historical examples of skeuomorphic design and what that means. And you've written before that one of the most common mistakes people make when evaluating new technologies is to focus too much on doing old things better. So I imagine we are seeing, and we'll see a lot of people are trying to copy and paste web one or two for web three.

Starting point is 01:09:21 So I'd love for you to just spell and then give some examples of skeuomorphic design. And then after that, to give some examples, if you can, of sort of web three native slash emergent applications or instances to just illustrate what might be possible. Yeah, so skeu, I didn't know there was spelling on this, on this process. S-K-E-U, morphic, it was, I think it was a Steve Jobs word that he used this word and he used it to refer to visual design. So if you remember the original iPhone had like a book

Starting point is 01:09:58 app and it had wood grain bookshelves. And so it was this concept and design of taking something from the offline world and using that design in the online world to make it look more familiar. For whatever reason, me and my colleagues started using this word all the time internally, like three or four years ago. I'm not sure if we invented it or got it. I mean, not invented it, but like sort of ported it over from the design world. I don't really remember, but we'd always use it to mean you go back and look at early films and early films looked like plays they put people on and they would walk around and they stage it like plays and then over time kind of film developed its own kind of new grammar and so you had a close-up and you had an establishing shot you go look at the old movies they would just show grand central station for

Starting point is 01:10:37 like 10 minutes and they learned over time you could just show it for like a second and the human brain would figure it out and And this happens with every new technology. The first cars, they're mimicking the horses. And so the early web, for example, right? It was like brochures and magazines. So the opposite we call it sort of native. So you can do kind of web native stuff. Like it can be a two-way medium.

Starting point is 01:10:56 It's code. You can do all sorts of other kind of cool stuff. So I think it wasn't until kind of the mid 2000s that people really started exploring the quote native web experience. And I believe the best investment approach was to bet on the native stuff. So I remember when YouTube was out, there were sort of two classes of video apps. There was the YouTube ones, and then there was these other ones which were basically saying, hey, we're going to take CBS and put it on the Internet, enterprise software kind of model.

Starting point is 01:11:20 People don't remember there weren't YouTube stars back then. So it was all these just kind of silly viral videos or things that infringed on copyright probably. Right. So when they got bought by Google, that was really controversial because it was the widespread meme, kind of like crypto today. once you created this experience, this thing where you can embed the videos and it worked seamlessly and there weren't permission paywalls all around it, that this huge creator community would come up around it. And you'd have this whole new, and now today, Dude Perfect, guys messing around with basketball stuff or whatever

Starting point is 01:11:57 and didn't exist back then, has more subscribers than all the sports leagues combined on YouTube. It's not only with the native products, the winners, but the native creators are the winners. And so this is a concept we use a lot internally. People who know me will tell you, when I'm negative on something, it's because it's skeuomorphic. People want to take blockchains and do supply chain management, offline ticketing. These are, sorry. I'm glad there are entrepreneurs in every category and I respect all entrepreneurs, but those are skeuomorphic ideas. I think they may work,

Starting point is 01:12:24 but they're not going to be the thing that we'll talk about 10 years from now. It's going to be this new stuff, the NFT. So let me give you an example of a really cool project. There's a thing called Loot. I don't know if you've heard of Loot. It's this game. Yeah, Loot by the former creator of,

Starting point is 01:12:35 or I guess the creator of Vine. Yeah. Yeah, Dom Hoffman, who's a genius developer and product designer, created this thing, Loot. And what Loot is, is basically it's just these little cards that have an inventory, like kind of a Dungeons and Dragons style game. So

Starting point is 01:12:49 it'll say Magic Cloak, just literally those words on a page. And those themselves are NFTs. But what's so cool about it is that it inspired this whole community of people to build around it. It's almost like if, you know, Ernest Hemingway, instead of writing the book, wrote just the first page of the book, and then let the community kind of add the next page. And so that's what Dom is. He wrote, this is the beginning of it. Now let your imaginations go wild. And by the way, there won't be one canonical game.

Starting point is 01:13:13 There'll be a hundred different things that all kind of use, they're in the loop verse. It's this whole tapestry of creative people adding different bricks into this new structure. And that's just a very profound new way to think about building a game and something you couldn't have done without, as Naval called it,

Starting point is 01:13:28 these very simple new building blocks. And it's exactly the simplicity that makes them so powerful and the way you can recombine them. And that's just an early experiment. There'll be many more cool experiments like that. But what's cool about that experiment, what do they say,

Starting point is 01:13:41 like the Velvet Underground or something had only a thousand fans, but they all started bands kind of thing. Luke doesn't have like millions of users, but the people that like it are the best product designers in the world. I think it's going to be one of those moments where in the same way, Naval, you remember this delicious and flicker, there was a period of like 2003 to five, and kind of all the core web to primitive stuff happened. And people was like, Oh my god, like tagging. I mean, it sounds sounds hilarious today. Tagging was like a breakthrough. It was a conceptual breakthrough because before that,

Starting point is 01:14:08 it was like, Oh, you have to have categories. Everything has to be mutually exclusive bucket. There's every website had this thing on the left. Everything had to be in a bucket and tagging came. It's like, no, it doesn't. It's like you have a computer with a lot of, with a lot of powerful capabilities. You can just make a tag and then default public. That was a revolutionary concept. So there was this period. I think we're in that kind of period now in this world where there's like this really, really kind of creative core that's developing these cool ideas. And those will provide kind of the roadmap for the next wave. Yeah, the flickers will lead to the Pinterest.

Starting point is 01:14:36 Exactly. Yeah, your skeuomorphic idea, it runs even a little deeper. Now skeuomorphism can work too. If you look at basic computers, we use a desktop computing paradigm. There's a desktop, there's files, there's folders. That's skeuomorphism from the physical world. And it can help people to reason by analogy into how to use something. But at the same time, I actually share Chris's skepticism of skeuomorphism in this space. In fact, I made a big mistake, which is early on in the history of blockchains, I thought we're going to do is we're going to replace Uber and

Starting point is 01:15:04 Facebook and Twitter with Web3 enabled primitives and networks that come out of those. Now, I don't necessarily think so. I think we're just going to create brand new things that we can't yet even predict or identify, but we're going to end up shifting our attention to those things. So Twitter and Facebook will still be fine, will continue to exist, but our attention will be on these new applications that are uniquely enabled by primitives like NFTs and tokens. I think that's right. I think like, look, I mean, people still use Microsoft Office. It's still around. The internet didn't get rid of it. I think these are just layers and layers. And I think the same thing. I agree. The value is created in the cool stuff will be in the native kind of cutting

Starting point is 01:15:40 edge stuff. On the frontier. Yes. Let me make a couple of recommendations for folks who are listening. They're a book and a movie recommendation, and you guys might make fun of me for this. But the first is, go read Snow Crash and appreciate how prescient that book was. And it's an enjoyable read. Neil Stevenson, incredible book. But go check that out. And then perhaps at the same time or even beforehand, watch or rewatch Ready Player One. And certainly there are aspects of it that I don't think are right around the corner, but I think a lot is coming sooner than people expect. That is

Starting point is 01:16:19 what I've at least come away with conditionally at this point, having immersed myself for the last few months very, very deep down the rabbit hole. And with that, though, I want to play proxy for listeners who are saying, okay, well, we're hearing about all of the amazing things. What are some of the weaknesses or challenges associated with Web3? And I'll start with one. So I remember purchasing some of these NFTs and then having someone recommend that I share that online. And I go, wait a second, if I share it online, then people are effectively looking into my bank account full of assets that are worth certain amounts. And all of that is preserved in the blockchain. And they're like, that's right,

Starting point is 01:17:11 your own bank. And I'm like, I'm not sure if I 100% want to be my own bank in the sense that people use external banks for a lot of good reasons, right? They don't want to have gold bars and money stuck into a mattress in their own house and have to deal with home defense and so on. I do think it appears there are some sort of technical solutions or services coming that could address some of these things. I'm just wondering. I've been to your house, Tim. I think your home defense is pretty good. Yeah, my home defense is fine. That's true. But I'm an edge case, right? So not everyone has multiple firearms placed in multiple locations. That's a longer conversation. It's not because I'm a crazy person, although some people would disagree. But the question is,

Starting point is 01:17:56 what are some of the challenges? Because there have been points where I'm like, okay, would I prefer Amazon to see my entire purchase history? Or would I prefer the entire internet to possibly see my entire purchase history? I don't know the entire internet to possibly see my entire purchase history? I don't know. At this point in time, for me personally, probably Amazon. And will the solutions that come to address some of those concerns, once we get to millions of wallets instead of, say, 500,000 wallets engaging with certain types of NFTs, will those services be antithetical to the ethos and promise of Web3?

Starting point is 01:18:24 So I just wanted to throw that out there and hear whatever comes to mind for you guys. For me, security is a big issue. I've been outspoken about crypto for quite a while. So I had to very carefully move all of my investments into custodians and funds so that I don't hold anything directly. But this is only possible because you can be your own bank. But the good news is you can be your own bank in very limited circumstances. You can take the majority of it, you can stick it with custodians. And just like there's places you can store your physical art

Starting point is 01:18:51 under guard and lock and key, you'll be able to put your NFTs, at least the valuable ones, into NFT armories and repositories. There's going to be a multi-signature where multiple people have to agree to move something. There'll be time delay where it can't be moved for six months or a year. So we can help mitigate all that. And the industry is working on all of that too slowly for my comfort, but it's happening. You can also keep your anonymity in multiple ways. We mentioned Punk6529, who is a purely Twitter identity.

Starting point is 01:19:18 People don't know who that person is in real life, but they're already regarded as a good NFT collector and curator. You can also create new wallets on the fly, and the software is getting better and better for that. So you can literally do each purchase out of a different wallet, which may be hard to trace the previous one, because there are enough ways to anonymize it, at least from the general public, or if you're using things like zero knowledge proofs from almost anybody. So these problems will get solved.

Starting point is 01:19:43 But there are problems today, which is kind of what makes this space hairy. When the time comes that anyone can mint and hold and move an NFT easily, it'll be a joyous moment, but also a lot of the so-called alpha in the space will be gone. Chris, anything you'd like to add?

Starting point is 01:19:59 I agree with that, and I think closely related to security of course is usability and just how to make everything easy to use and secure. I think it'll all get worked out, but I agree with Naval that And I think related, closely related to security, of course, is usability and just how to make everything easy to use and secure. I think it'll all get worked out, but I agree with Naval that it's not there yet. To me, the biggest challenge in the space is probably the messaging around it. I think there's a lot of misunderstandings around it. I think some of that is sort of self-inflicted by us, by the community. I think some of it is just hasn't fused out into the broader world.

Starting point is 01:20:25 So you just have a lot of people who react negatively to crypto, Web3, etc. And I think that could also lead to overzealous regulatory actions, too. And so I think that is I think it's very important to do, I think, what we're trying to do here and just sort of explain these ideas. I think ultimately what usually convinces people is they need to kind of decide for themselves, they want to dive into it. I've literally in eight years in the space, I have never met somebody who's very well informed on the space and also deeply skeptical. Never. If you're deeply skeptical about the idea of owning digital property, then you don't understand. You're not only denying capitalism on the internet,

Starting point is 01:21:03 you're a metaverse denier. Because if you look at the metaverse as articulated in neil stevenson snow crash or and almost anywhere else there is this concept of there is property in the metaverse and obviously some people own property and there's jurisdiction within that property and it's not just you can enter into my room because i can just right click and copy and save your room there's authenticity around this is my room. These are my objects in my room, and I can shuffle them around. I can control who comes in and out, and I can control what happens when someone tries to, quote-unquote,

Starting point is 01:21:34 sit on my metaverse couch. Are they allowed to do that or not? So all of this programmability comes from ownership. And it's a bizarre idea to think that the only people who can own items in the metaverse are big corporations. You're basically saying, only Zuck. No offense to Zuck, I actually think he does a better job than he has credit for, but you're basically saying only Zuck is allowed to own the metaverse. Only he can own the entire metaverse. Why can't we each own our own room, our own space, our own property in the metaverse? So denying and pushing back against NFTs and cryptos is

Starting point is 01:22:02 basically saying we're not going to have a collectively owned future, we're going to have a corporate owned future. And we're going to have a government future, I can see why the Chinese Communist Party wants to ban crypto, because it is antithetical to the idea of users owning things. But for a capitalist society, for a democratic society, for a collective society, to ban crypto, that makes no sense to me for it to ban NFTs, or try to put them into financial regulations, which essentially ban it, is basically saying, no, you artists are not allowed to own your own output and deal directly with the fans. You have to be serfs working on Spotify's farm or working on YouTube's farm. This might be a complete 90 degree turn,

Starting point is 01:22:41 but I'm going to ask anyway, and we'll see where it goes. Going back to one of your many, many, many posts at cdixon.org. This is an oldie, 2009. Yeah, we'll see. Yeah, I know. You're about to get canceled. No, you're not going to get canceled. So I do have a question about one very, very questionable paragraph. No, that's not what I'm going to do. What is hill climbing in computer science? So hill climbing, it's a class of kind of algorithms. The metaphor is think of a landscape with a bunch of hills. And the goal is to get to the highest point. But put this constraint on, let's say it's foggy, you can only see a little bit in front of you or behind you. And so there's a class of algorithms that sort of basically talk about what's the optimal way to climb that hill. One obvious one is if you're on an incline, go up. But the problem there is you might get trapped in what's called a local maxima, which is you just happen to start on a small hill. The next iteration of that is what's called simulated annealing,

Starting point is 01:23:42 which is you add some randomness in there too, to sort of avoid just simply going up the first hill. And so this post I wrote, I think you're talking to, this is a popular post. It's called climbing the wrong hill. And I was making the analogy from these algorithms to a career. And the idea was just like in a career, you do want to sort of climb the hill you're on. But the mistake I saw a lot of young people making was they're at McKinsey or Google or something, and they see kind of the next prize is six months away, the next promotion, the next bonus, whatever it is.

Starting point is 01:24:10 And they kind of are on that treadmill and not willing to go, for example, join a startup and take what appears to be a step backwards, but is in fact a much bigger hill. And they get caught up in the kind of local maximization thing and end up, and I think you find a lot of people who are unhappy in their careers when they're in their 30s and 40s, it's because they hill climbed the wrong hill. The lesson I take from the computer science is to add some randomness to some exploration. There's a concept in machine learning, it's called exploration versus exploitation. You want to always have a balance between, for example, I try to use this when I order food. So I will make sure that

Starting point is 01:24:42 sometimes I'm exploiting. Exploiting means I'm going to my favorite restaurant, but half the time I'm also trying a new restaurant. This is the core concept in machine learning. When you design new systems, it's sort of how to optimally kind of come to conclusions. So that's the idea a little bit. It's just you should add, I think people in their 20s, for example, should add not randomness, not literally randomness, but exploration. They should go try a bunch of different things, see what's the right hill, and also be willing to take a step back. Yeah, you want to keep your schedule open as much as possible. So you can follow your own natural intellectual curiosity. I mean, ironically, the best career of 2021 was to be a JPEG collector.

Starting point is 01:25:15 And I figured this out too late, but it's hilarious how many of my friends have gotten rich collecting and flipping JPEGs. And the best career of 2020 was probably to be a DeFi yield farmer, whatever the heck that means, go Google that. So it's insane, but the world is moving so fast, adapting so quickly, the frontier is in crypto, it's digital. If you have a natural intellectual curiosity about any of these things, your moment will come. It may turn out actually with the Axie people and the YGG people that the best upcoming career, the best current career might have to do around gaming, just playing a game a certain way at a certain time. Good news for all the gamers out there. Yeah, I want to read two paragraphs from that blog post, which is climbing the wrong hill.

Starting point is 01:25:54 Fantastic memory. And I should say the context is you're discussing a hypothetical job candidate. But the lure of the current hill is strong. There's a natural human tendency to make the next step an upward one. He ends up falling for a common trap highlighted by behavioral economists. People tend to systematically overvalue near-term over long-term rewards. This effect seems to be even stronger in more ambitious people. Their ambition seems to make it hard for them to forego the nearby upward step. People early in their career should learn from computer science. Meander some in your walk, especially early on.

Starting point is 01:26:32 Randomly drop yourself into new parts of the terrain. And when you find the highest hill, don't waste any more time on the current hill, no matter how much better the next step might appear. So I wanted to read this in part because in the last few months, paying attention to Web3, which I feel is late, but that's only because my peer group is very weird and an edge case, I feel like it's not even the end of the first inning, not even close. It's like the anthem before the game has even started. And I have never seen so many highly intelligent, ambitious, capable people drop whatever they are doing, in many cases really attractive things, to dedicate all of their time to this. I've never seen

Starting point is 01:27:20 anything approaching it en masse. It's not a trickle that slowly builds to more than a trickle. I mean, it's people immediately deciding this is what they want to spend 24-7 on. I don't know, perhaps I just don't have a macro perspective over a long enough period of time. But certainly, in all of my time in or around technology, I've just never seen anything like it. And at the very least, that means it's something that's worth taking a very close look at. Yeah, the big danger here, of course, is the final boss. Crypto and Web3 have not gone mainstream yet. They're in their infancy.

Starting point is 01:27:57 I don't know what it's like 10 million wallets or something out there among Americans or even globally. Yeah, it's small. It's in the tens of millions. So we have to move to the hundreds of millions and eventually billions and it has to go through the same adoption curve that Web2 and Web1 did. And in theory, it could even go faster as long as there aren't too many obstacles in the way

Starting point is 01:28:15 because tokens naturally have incentive mechanisms built in. As Chris pointed out, the token companies don't need to do much marketing. The marketing is done by the users. And so the problem is that where we started was we actually decentralized the hardest thing. The hardest thing to decentralize is money. And once you have money decentralized, then you can own private property. But essentially, decentralizing money threatens the nation state because a central bank currency, central bank

Starting point is 01:28:39 digital currency is the exact opposite of a cryptocurrency. That's the complete centralization of money with no intermediate banks or monetary instruments under the eye of the all-seeing state. And on the other hand, you have people just carrying their own money around, whether as a coin or as a JPEG or as a smart contract or as an IOU or some kind of a weird program. And unfortunately, we're trying to apply laws

Starting point is 01:29:01 that are almost 100 years old to try and regulate this incredible explosion in internet commerce and market making and digital private property. And they're just not going to get it. And we recently have a very aggressive SEC and CFTC that are now fighting to extend their domain. And I think we end up in an upside down situation where innovation in the space gets driven overseas, underground, and out into the internet, where it will still succeed because the natural endpoint of crypto is maximum decentralization and maximum privacy. It's going to just make it happen a lot faster. It's going to make it happen outside of the United States. So the Web3 revolution could happen outside of the United States. One of the big

Starting point is 01:29:38 problems with being a Web3 investor or even user these days is the KYC around the wallets, around the purchases, around the sales, the fact that a lot of these coins, you can't participate in their offerings. You have to have offshore entities or more likely be a non-US citizen to even get into these. It's becoming very, very restrictive. And all we seem to be focused on is investor protection and not at all an innovation or creation or creativity. And I know Chris and his team have been fighting the good fight. And A16Z Crypto has probably done more work than anybody on the regulatory front, backed up by people like CoinCenter and so on.

Starting point is 01:30:12 But they put a lot of work into it. I also want to chime in as a Luddite who's just barely finding his footing or losing his footing with some water wings at the very least. But it also strikes me that, as you said, Chris, sometimes the true believers can be their own worst enemies in the sense that people still use Word. I still use what people might consider legacy tools every day. And these technologies or these currencies are not mutually exclusive. And I think that it behooves the communities who are adopting and developing these tools

Starting point is 01:30:57 for many reasons to be more inclusive with their consideration of having multiple options viable into the future, which I think is inevitable on some level. And certainly, it is unhelpful and counterproductive to overstate the case for the eradication of central everything. Most people don't want to pave their own streets or handle their own garbage disposal. I mean, there are valuable services provided by the state, and it's hard to appreciate the full value until it's taken away. If anyone was here in Austin during the freeze, you realize very quickly how dependent we are on many of the services that are provided. And I think there is and will be certainly for a very long time a role for centralized banks, and that if people in fact want these technologies to continue to develop, and I think that many

Starting point is 01:31:58 regulators may feel like they're caught between a rock and a hard place, in part because the messaging is so exclusive from the kind of diehard and true believers oftentimes. But as Naval, you said, the economic case for allowing a thousand flowers to bloom in the Web3 ecosystem within the United States is hard to overstate. At least that's what it seems like to me. Yeah, any regulator that stops the next generation of artists and musicians and gamers and game developers from owning their platforms and their work is going to go into the waste basket of history as a villain. It's that simple. Yeah, and to your point, Tim, I think that some of this was sort of self-inflicted, and particularly around there's certain what we call maxis, people that are into certain tokens and think only that token should exist. So there's Bitcoin maximalists, there's Ethereum maxi, you know, et cetera. Those folks are just, they tend to be kind of loud and somewhat aggressive. And I think that's done a lot, a lot of the branding in the space of sort of people's common view of crypto has comes from some of those folks who some of them like in the Bitcoin world are they have a political angle to

Starting point is 01:33:10 it. There's sort of this libertarian aspect of Bitcoin. And I think as a result, particularly as we're seeing now that the Democratic side thinks of crypto as the enemy, when I think that the stuff we're talking about, the Web3 stuff, is actually very, very aligned with, I think, a lot of the left agenda, which is better distribution of wealth, reigning in the power of some of the big tech companies. The difference is we're arguing to do it through innovation and competition, not through regulation, which won't work, by the way. If they cut up Facebook into three networks, it's not going to change anything. It's exactly the same thing. Instagram's still going to be Instagram, and the economics are going to be the same, and it's going to be just decentralized. That's's not going to change anything. It's exactly the same thing. It's Instagram still going to be Instagram and the economics are going to be the same and it's going to be just a centralized.

Starting point is 01:33:48 That's just not going to work. The thing that will work is let innovators and entrepreneurs go build a better internet. That's what we want to do. It's not, to me, this is not a political movement in that sense.

Starting point is 01:33:57 It's a technology movement and it's somehow gotten associated with politics. Things in this country right now, it's very heated in the political world. Everything is politicized. That's a big challenge we have, is just to really kind of go and explain these things.

Starting point is 01:34:10 I think the good news is we have truth on our side. Everything I'm saying here and everything I've tweeted is mathematically provable, including the fact that a blockchain is a computer and the power of this new paradigm. But there's a lot of communications challenges ahead. So let me ask both of you, and maybe I'll start with you, Chris, if there are, which I know there are, at least certainly in the broader listenership, broader audience, regulators, lawmakers,

Starting point is 01:34:36 policymakers, and I've met a lot of these people, and I think part of the challenge is simply becoming educated from reliable sources when it is so difficult. I mean, it's difficult, bordering on impossible, for me to separate signal from noise if I'm trying to just take it through a funnel, like sort of waterboarding of information. And I would like to ask you if there are any particular resources or could be essays, books, anything where people in those positions could start to begin to understand the fundamentals of what we're discussing. One of the things we've tried to do is create materials for this.

Starting point is 01:35:18 So we have, for example, which I could share the link afterwards, it's like a 35-page overview for policymakers. Great. That kind of talks about the benefits and things like that. So we've been trying to create materials like that because I think it's one of the things that's been lacking is just all the good things that we've all talked about earlier, the meaning, the Twitter stuff, everything else.

Starting point is 01:35:36 What's wonderful about this world is sort of the chaos, but at the same time, it's also useful to have a 30-page booklet sometimes. So that's what we've tried to do, kind of add that a little bit on there. So yeah, so we've tried to create a bunch of materials to sort of explain it. Our firm, we believe in innovation and we believe in America. A lot of other people in crypto will do things with offshore entities and things. We don't. We tell people you should be based in the US, you should be a US company, pay US taxes, Uniswap, they're in New York City. They have

Starting point is 01:36:01 an office in Soho, they hire people from New York. They go to their office. We have some European investments and things, but most of our investments are here in America. And I believe Hayden Adams, who's the founder of Uniswap, Robert Leshner, the founder of Compound, the OpenSea founders, all of these other founders in our portfolio, I believe they're heroes. I believe they're heroes who are on the cutting edge of the frontier and creating very important technology that will transform the internet. And I believe that over time, more people will come to realize that these are people in the mold of Steve Jobs or Henry Ford. This is how America stays ahead. We believe this completely

Starting point is 01:36:38 and we believe this is critical for the future of the internet and critical for the future of this country. That's why we're investing so much in it. I'm just going to add one thing for people who are listening. I'll create a short link. It'll be live by the time you hear this, tim.blogs.com. And that will take everyone to the show notes and will include a link to the booklet that you mentioned, Chris. Naval, sorry for interrupting.

Starting point is 01:36:59 No, no problem. Yeah, the United States became the most powerful country in the world for many reasons. But recently, it's been because we are the home of creative technology. Most creative technology on the planet comes from the United States became the most powerful country in the world for many reasons. But recently, it's been because we are the home of creative technology. Most creative technology on the planet comes from the United States. Now, is that because we create all the entrepreneurs? No, we attract all of the entrepreneurs, because we had the most freedom. Technology entrepreneurs are creative people, and they want to go where they are the most free to create new things. And so if we stop being a gravitational attractor for the best entrepreneurs on the planet, we're eventually going to lose our technological leadership.

Starting point is 01:37:29 And that means we will not be able to pay for our extravagant social programs. We won't have the abundance and the deflationary drive that technology, innovation, and productivity growth have provided. So I'm just concerned because I do talk to a lot of entrepreneurs now who are overseas. Most investing these days is done over Zoom. It's no longer done physically in the San Francisco Bay Area, especially in Web3 and crypto land. Most of the entrepreneurs are overseas. And now almost none of them, in their right mind, are considering moving to the United

Starting point is 01:37:56 States, which before, if you're in China or India, the default would have been, I'm going to move to California or to the United States. And now it's like, well, maybe I'll go to Miami. Maybe I'll stop in the US. But no, more likely I'm going to Singapore or I'm going to Switzerland, or I'm staying anonymous on the web, or I'm going to be on some little island nation just moving around. This is really, really bad news for all the people who are counting on their pension plans to pay out in valuable US dollars, because the only solution we seem to have in the last two years to the COVID phenomenon is devaluing the dollar. There was a funny line that went out on Twitter where somebody

Starting point is 01:38:29 said, now we know what would happen if aliens invaded the earth, the Fed would cut interest rates. And that seems to be our answer to every crisis, cut interest rates, print more money. Well, that's selling the asset that we already have. Eventually you run out. The beauty of our model is that the entire world uses the US dollar as its stable currency, as its ultimate stable coin. And so every time we print a dollar, 70 cents of that dilution, that inflation goes overseas. But that's eventually going to go away. We can't just keep printing our way out of problems. We actually have to create, we have to innovate, we have to improve productivity. And that means that the next generation of technological

Starting point is 01:39:04 innovation has to be based here, where they can pay their taxes, where they want to live and spend and eat and consume here. And I'm just concerned that all the combination of ambiguous and aggressive regulations, where regulators who are purely financial regulators are now getting their claws on the web, and are going to regulate this thing into overseas, You can't stop it. It's ultimately code and code is just speech and speech is just ideas. You can't stop ideas. You can push them down one place and they'll pop up somewhere else. And the internet is a big place. So short of turning off the entire internet, the internet will figure out how to create,

Starting point is 01:39:39 store, allocate, and use digital value. And that's exactly what's going on. And if you try to stop that, you're just going to miss And if you try to stop that, you're just going to miss out on the greatest wealth creation and innovation since the internet itself came into being. Look, Naval and I, we could very easily invest in another country. We don't want to. I mean, frankly, when you're investors, it's easy to move around and invest other places and things like this. I just think it'd be a real shame if that's the outcome. Let me add to that for just a second. And what I like to add to that is, number one, there are many ways to easily incentivize innovators to create things here. We don't have to sort of go through the playbook, but regulators, policymakers, I think,

Starting point is 01:40:19 have a pretty good idea of what the historically effective approaches are. And I want to come back to that in a second. We've already seen what happens when things get locked down in a place like China. And this is obviously a ball in play, but a lot of people will just relocate if they can, depending on many different factors. But you see a lot of hotbeds popping up in places like- There's a ton in Singapore. Yeah, a ton in Singapore. They're all Chinese. Yeah. exactly china china stopped bitcoin mining no then they all went to singapore now they're doing crypto in singapore all the chinese yeah exactly all the bitcoin mining has moved to

Starting point is 01:40:53 the u.s actually the chinese ban on bitcoin mining the huge beneficiary was the united states yeah exactly and there are some i was just chatting with apologyaji about this separate podcast, and he was commenting on, for instance, how Bitcoin may in fact be a way for certain types of renewable energy that have high volatility, such as wind or solar, to store energy in the form of Bitcoin, utilizing that energy even if it's not being consumed. So there are some really interesting applications that are non-obvious, but I would like to just ask if there are, because we've been talking about what policymakers and regulators shouldn't do, and we've given maybe a few sentences to what they should do. Are there any policymakers or people in government, whether that's federal, state level, city level, who are worth mentioning and commending for actually taking positive actions? Patrick McHenry in the House Financial Services Committee has been very forward-looking on crypto.

Starting point is 01:41:58 Kristen Sinema from Arizona said kind of the right things. And I think she's also done some work in here. I'm sure Chris is probably more up to speed. But Andrew Yang recently was talking about it in a positive way. Look, I think there's a lot of politicians and policymakers and things who do understand this. And what we would like, so there's been a couple of things. One, there's just been no clarity. So like the sort of two ways that regulators regulate, and one is through stating policies, and one is through enforcement. And so far, it's and one is through enforcement. And so far, it's all been just through enforcement. And so people just don't know what to do. And as a result, like, so one of the big myths in crypto is it's unregulated. Okay. I will tell you,

Starting point is 01:42:31 we have more regulators and policy lawyers and things. I've practically become a lawyer. I've spent so much time on this stuff. The first thing we do in every company we invest in is help them recruit a general counsel. They all spend millions of dollars on outside counsel. Everyone wants to be as compliant as they can. Obviously, it's a very strong incentive for them to do so. There's lots of regulations that apply to these companies, including consumer protection laws, commodities laws, et cetera. And no one questions that. And they all have to have policies and adhere to those things. There's specific questions around things like what qualifies an asset to be a security or not. These are topics that we've spent years on and countless legal resources analyzing and working on. But the way that the regulators have chosen to enforce this is not

Starting point is 01:43:13 through guidance, but through this seemingly hard to understand set of enforcement actions, as an example. So I think clarity would be great. I think probably a lot of this has to happen at the policy level. I think modernizing a lot of these things, as Naval was saying, these rules are from like the 1930s and 40s. And a lot of them just involve very not tech modern practices, like putting your driver's license in front of a thing that has like a 50% failure rate for KYC or something. Let's modernize these things. So that's one of the things we're working on is what's the crypto native way to modernize a lot of these that's one of the things we're working on is what's the crypto native way to modernize a lot of these processes

Starting point is 01:43:46 and get the goal. Like the goals are very good. Like securities laws makes a lot of sense because securities laws all around situations where there's asymmetric information. And when there's asymmetric information, because there's a centralized entity that has knowledge of things,

Starting point is 01:43:58 you need to have rules around disclosing that information. Securities laws are a set of rules around liability and disclosure to make sure there's a level information playing field. That makes a lot of sense. We like that. And we think a great way to not have asymmetric information is to have no company. That's a really good way to have no asymmetric information. The SEC has the same goal we have, which is let's get rid of these intermediaries. They do it for asymmetric information reasons. We're doing it for sort of

Starting point is 01:44:22 other ideological reasons, as we discussed here, but it's very aligned. I think it works very nicely, actually. The challenge right now, as I was saying before, is much more of a communication challenge, I think. If we can go and talk to folks and show, one, what the socially beneficial uses of this technology is, having creators who are making a living and all sorts of other things like that are very important for that reason, and then also just sort of explain and show that the goals are aligned and that we don't want a situation where, I mean, no one wants a situation where there's sort of asymmetric information and bad stuff happening. And there's money involved.

Starting point is 01:44:54 As with all sort of tech things and money involved, there are bad people for sure. It's just inevitable. It happened in the 90s. It happened in the 2000s. It happens now. And those people give Web3 a very bad name. We want to get rid of those people. I think that the goals are actually much more aligned, maybe I'm being overly optimistic,

Starting point is 01:45:12 but I feel like it's a communication problem. The 1999-2000 tech bubble was the small price that we had to pay in exchange for being the home for creative technological innovation in the world. And we got Facebook and Google and Amazon and Netflix and a long tail of incredible companies and innovations in exchange. And the same way, we're going to have to suffer through a little bit of the pump and the boom in crypto and in Web3. And hopefully the SEC and the CFTC can be modern and light-footed enough that they crack down on the obvious scams, but they sort of let a Cambrian explosion happen as well, where people can innovate and try things. And once the dust settles, and once it's clear that we have won and what's fair and unfair,

Starting point is 01:45:54 that's sort of the right time for them to go in and put on guardrails for the average user. But putting on those guardrails too early on just means you miss out. The best venture investment actually of like the last decade was probably Ethereum. In 2014, Ethereum went out there and you could have bought it for 30 cents and you would have been liquid. And ironically, VCs were the ones who couldn't participate because their fund docs didn't allow them to participate, but the non-VCs could. And just kind of closing those doors and saying, well, that's not going to happen again. You know, it makes a couple of mistakes. It pushes us out of the United States. It keeps the poor poor and makes the rich richer because people like Chris and I can

Starting point is 01:46:25 always set up entities to participate. And then it also pushes the whole ecosystem further underground, more into decentralization, more into privacy, more into anonymity. When the stated goals of regulators are actually they want users to own and control their own data, data privacy and data protection is a big thing regulators care about. Well, crypto enables that uniquely. You own your private keys. Another thing they care about is interoperability. They want there to be open API, so there's a single monopolist sitting in the middle. Well, that's composability. Composability is the ultimate open API.

Starting point is 01:46:55 So I think there is a model here for an enlightened regulator to do the right thing and get just as much credit for letting Web3 flourish as the original set of regulators did for Web1. And frankly, they should have been more celebrated, more recognized. Yeah. Let me add to that because I've been involved with a number of things now, including, and this is actually very related, oddly enough, but say funding scientific research into treatments for end-of-life anxiety due to terminal cancer, diagnoses, and things like this, that there are people have, individual philanthropists have sometimes avoided certain types of scientific studies involving,

Starting point is 01:47:30 say, intractable or so-called intractable psychiatric conditions. And ultimately, I was able to show through my own example that there was not just a lack of reputational risk or minimal reputational risk. And there may be, I don't want to say that doesn't exist, but there was much more reputational upside potential. And I think that's important. Not just saying we can minimize the risk of, say, a policymaker talking about this, but that in fact, I think there are ways to position it, which comes back to comms and determining the way that things are communicated. But I think there is, for people who look at this closely and really gain an understanding, tremendous reputational upside. And I'll give a couple of examples. One, people have already heard, and that is what got me interested in all of this was the fact that friends of mine who were, in some cases, close to broke,

Starting point is 01:48:21 or who had been limping along, barely able to make ends meet, as creatives and artists, have suddenly been able to do what they're called to do, which is create artwork, make it commercially viable, share ownership with a flourishing community, and then receive residual payment for the works that they've created. And if we bridge that to what I was just saying about the scientific work, so I have a foundation. It's not a huge foundation. It's a small, private foundation. And I've been very aggressive with funding, I think, important science. And some of those studies have ended up on the cover of Nature, others have ended up on the cover of the New York Times. It's been really effective, but I don't have

Starting point is 01:49:09 enough to call it, say, an endowment. So I'm basically just spending principal instead of working off of the earnings, the investment earnings of the money in the foundation. So every year I'm just trying to basically patch the boat back together and keep it moving. What is possible, and I'm hoping to prove this is really viable because I would love for others to be able to emulate this, is I could launch an NFT project and who knows what form that will take, but to launch an NFT project where 100% of the proceeds go to my foundation, and there are different ways that this could work, where a wallet is owned by either directly by the foundation or through a DAF or something like that.

Starting point is 01:49:51 But here's the important part. The important part, the exciting part for me is not just that cryptocurrency or Ethereum could be donated to the foundation. It's that I could launch a project that then continues to generate proceeds that go directly, right? I don't have the headcount. I don't have a team to handle this for me. And the beauty is that with smart contracts, I don't need any of that. I launch a project, and then automatically, when things are resold by the people who originally bought and then sold again and sold again and sold again, hopefully for increasingly high prices, that that continues to provide lifeblood to this foundation that is doing life-changing work for veterans with complex PTSD. I've done a number of collaborations with, say, the Navy SEAL Foundation. All of these causes need funding, mostly from individual philanthropists, and it's fucking

Starting point is 01:50:47 hard to do. It is hard to make work. And NFTs, to me, offer a possible vehicle for actually making it sustainable and allowing me to scale and do more with that. So I just wanted to mention all of that to kind of bring it home. Why the hell would I spend all this time on this? I don't have a high burn lifestyle. Like I'm wearing the cheapest jeans you can imagine and shoes that somebody gave to me, right? Like I don't spend a lot of money, but

Starting point is 01:51:13 I want to be able to do more. And I want to involve my community in a way that they've been asking for, for a long time, but they want to give to, say, support causes or phase three trials, but none of these entities, these universities or researchers are equipped to handle small donations. So I can do that. And these are a lot of reasons why I was excited to have this conversation. Yeah, it'd be cool too if you had, you could do, there's a whole bunch of interesting stuff you could do. You could have seasons. So you could have the first collection is season one, and then another collection is season two. That's a cool thing of interesting stuff you could do. You could have seasons. So you could have the first collection is season one and then another collection season two.

Starting point is 01:51:46 That's a cool thing people are doing. You can make it into a DAO so that the folks, maybe the folks who have NFTs get to go into a private Discord server. You have some events with them. Maybe you give them some governance rights and deciding which projects to fund. And think of it as like, then you have this, I don't know how many NFTs, you have 10,000. That's just the number of people pick. You have this army of, not only do you have this i don't know how many nfts you have 10 000 that's just the number people pick you have this army of not only do you have funding but you have evangelists and they're memeing and they're twittering and you know writing about it

Starting point is 01:52:14 they're building yeah they can even build yeah they can build on top of it they can code on top of it this is fundamentally what nfts enable or digital property rights enable our old model was go back to Marx and the theory of labor there, which is that capitalists own the means of production, labor has to seize the means of production. And then now what someone still has to run the factory. So okay, we hand them to the state. Now the state runs the factories, and you get these horrible cars coming out of the Soviet Union. Well, that didn't work. So what makes sense is for the workers to own the means of production and the users the means of production in proportion to how much value they're providing.

Starting point is 01:52:48 Essentially, they should all be shareholders. And they should all be shareholders in an open system with no corporate overlord and no state overlord in proportion to the value that they're providing into the system. And if they don't like the current distribution, the current system like Bitcoin, they can go create their own and all the way down to the Bored Ape Yacht Club. So there's just this huge opportunity now to make every person a worker, an investor, a shareholder, an evangelist, an owner, a creator, a designer. We can fold it all into one. And that's really what Web3 is enabling with tokens at the core. And it would be a mistake to just think of this as securities law, investor protection, and derivatives. I get that's where it started because you have to create money,

Starting point is 01:53:28 internet native money, first before any of this is possible. But now that we have internet native money, we can start creating true internet native corporations, internet native collectives, internet native projects, internet native platforms that are owned by the users. And nipping it in the bud at this point would be a huge mistake because all we would have done is we would have created the internet native money, but we would not have allowed it to have all of its use cases. We would not have allowed it to create the new internet that we need to live in. Here, here. Chris, I'm going to ask a very important question. So I'd like you to speak candidly. What's the story with the Trident gum? Oh my God. Katie told you this, huh?

Starting point is 01:54:08 Well, you know, all the bad habits to have at this point, I have one, which is like, yeah, I chew gum nonstop. And I don't know, for whatever reason, it seems to annoy some people, but I was doing this DAO called Friends with Benefits that we invested in. And I did a kind of a community talk as part of kind of our investment process and was chewing that we invested in. And I did a community talk as part of our investment process and was chewing gum the whole time. And it actually became a meme after that. Now, is 10 packs a day

Starting point is 01:54:33 hyperbole? Or are we talking about serious... That might be true. That might be true. I have subscriptions of boxes of Trident. Yes. I think at this point... I smoked a long time ago. So that's why it was a long time ago.

Starting point is 01:54:50 But I just, after that, I just always chewed gum. I think it's just like a nervous habit or something. On the hierarchy of vices. Yeah, I feel like on the hierarchy of vices. It's like, I don't know how you feel about, maybe they'll discover that the Trident gum kills you or something. I hope not. I think you're okay on the Trident.

Starting point is 01:55:05 I want to ask just a couple of unrelated questions. They could be related answers, but unrelated questions, and then we're going to come back around and each of you guys, if you want to add any closing comments, we can add those. And if not, that's totally fine as well.

Starting point is 01:55:18 I don't know if you gift books. You probably gift or recommend books. When you think of most books you have gifted or recommended the most to others, do any come to mind? As I mentioned, I really like history. And I particularly like the era of the Victorian industrial age of 1850 to 1920 or something. It's an amazing period. I kind of think of it as a period where you had like 100 Elon Musks. So you had Westinghouse and Edison and Ford and the Wright brothers and just Bell. It just goes on and on. And you had that period where and edison and ford and the wright brothers and just bell it just goes

Starting point is 01:55:45 on and on right and you had that period where just the number of incredible inventions during that period in that 50-year period i mean the airplane the car the phonograph the light bulb for god's sake this amazing book called empires of light it's the battle between westinghouse and edison really it's fascinating it was enterprise sales they invent invent the light bulb. Westinghouse has a AC, Edison has DC. And they just went like town to town selling them. I'm like, use my system. And there was this awesome moment at the end,

Starting point is 01:56:13 the kind of coup de grace was Westinghouse built the key benefit of ACs. It goes farther without losing power. He built this giant plant up at Niagara Falls and then turned the lights on in Buffalo. And it was like this magic act. Also, they all like borrowed tons of money. And the other thing that's cool about them is they're all engineers it reminds me a lot they all started off in the telegraph business which at the time

Starting point is 01:56:31 was sort of the internet of that era so that was cool there's another book sorry i have crypto on my brain i can't help it there's a book i really like called the company a short history of the llc this is a fascinating book the name name is The Company or The LLC? The Company, yeah. And I can follow up with the link. But it's the history of limited liability corporation, which is a very, very controversial concept to have limited liability. Because the thought before, this is around 1830 when it started to develop, was that you basically, before that, you had to have an act of parliament in the UK to get limited liability. Because it was considered this very dangerous thing. Why shouldn't you be fully liable? If you start a railroad company and somebody dies,

Starting point is 01:57:09 you should go to jail. And so what that meant for the LLC was that if you were going to invest, as an investor, you could lose more than your money. And so as a result, you only had partnerships of like 10 and fewer people, basically families, because who are you going to trust? If you have unlimited liability, it's like your brother and your so and so, but like nobody else. And then what happened is in the 1830s or so, there was this railroad boom in the UK first, I believe, and then in the US. And they needed to aggregate capital. So anytime two towns would link up a railroad, their economies would like 5X. So every town basically had this giant line of people

Starting point is 01:57:49 at parliament saying, hey, can we get limited liability? Because we can't afford to build that railroad, but we know it'll pay off, but we need to be able to go out to third parties and get that capital. And so that eventually was very controversial and it took 30 years or something.

Starting point is 01:58:01 But finally that became, and that was like the business model of Delaware, by the way, which is genius. They were like, hey, we'll be the place you. But finally, that became, and that was like the business model of Delaware, by the way, which is genius. They were like, hey, we'll be the place you go. Finally, it became understood. This was a very important innovation. I would argue that actually a lot of the Victorian industrial stuff I was just talking about

Starting point is 01:58:14 came from actually the invention of the LLC. And I bring that up because I think it's very analogous to, I kind of see the historical progression of partnerships for 10 people. 10 people could accrue value. In an LLC world, a million people can accrue value. And in a token world, a billion people can. It's this natural kind of progression. And it also shows you that tech is not just always tech. Tech is sometimes social and legal structures like the LLC. So I know it's a very short book. I think the part I'm discussing might have only been two chapters of it or something. But I thought

Starting point is 01:58:44 fascinating because I don't think we normally think of these kinds of legal innovations as a kind of a quote tech breakthrough. So I don't know. I think there's a lot of, obviously, there's a lot of great books. I love books. These just happen to come to mind. Those are two great examples. I'm going to pick up both of those. Naval, do you have any additional comments you would like to add?

Starting point is 01:59:08 Questions? Complaints? Anything at all? When Tim Ferriss NFT drop. And I am really excited in a way that I haven't been excited about a project in a very long time. And just some type of research or project vis-a-vis probably this 501c3 foundation, this private foundation that I have, which has already done a lot of work, has a great track record over the last few years. So I would say next six months would be my goal. So let's call it, depending on when this comes out, first two quarters of 2022 would be my guess. Great. I would add on to what Chris was saying about going from 10 owners to thousands of owners to millions of owners to a billion owners. I think there's finally an answer for how can

Starting point is 02:00:20 communities participate in Web3 and crypto. Before this, you know, when people would ask, like, how do I participate in crypto, there's an answer for individuals, which is, hey, you can bet on sound money, digital gold, that's Bitcoin. And then if you were a company, you could say, hey, you can build something on top of Ethereum, you can build decentralized finance, you can build applications on this computer, this Turing complete blockchain, that is running computer that's running on the blockchain. And now for the first time, a community can show up and you can have an answer for the community. You can say, okay, if you have a passionate group of believers, you can spread ownership amongst them. You can spread governance amongst them. You can build a DAO. You can issue NFTs. You can have

Starting point is 02:00:58 an online gaming community. You can have a conversational community. You can have a real world community that maps to each other with NFTs. You can even have digital bake sales. Who knows? It's innovating like crazy. But for the first time, we're seeing DAOs, which are these distributed autonomous organizations, take off in Web3. And DAOs are sort of these, they're not quite corporations. They're not quite communities. They're not quite networks or platforms. They're like their own new thing that are a mixture of all of the above. And I think a couple of years from now, we're going to see a lot of thriving communities on the internet that are now linked together economically, intrinsically, and are doing not just making money, but also governance.

Starting point is 02:01:35 Like who gets to make which decision? Who gets credit for the decision? Who gets to join the company? Who gets to leave the company? Who gets to join the community? Who gets to leave the community? NFTs are so many things. It's almost, I love the Chris webpage analogy. I want to give you full

Starting point is 02:01:47 credit for that. I hadn't heard that until now. So sorry, I haven't been listening to you on other podcasts. But I love it because webpages are so programmable. It can be anything. The same with NFTs, so programmable. So it's kind of almost silly to sit around talking about what you can do with NFTs. You can do anything with NFTs that you can do with a webpage. But on top of it, you can have scarcity and ownership and allocation and rights associated with it. This is really big. Yeah. I want to add something because you just reminded me, Naval, so thank you for that. And that is, I think DAOs have tremendous value to government in a number of different ways, whether to, and this could be value to different scales of government all the way up to the federal level, could apply to international organizations, could apply to

Starting point is 02:02:33 the military. And that is, and I recommend to everyone, if they can find interviews with a lawyer named Aaron Wright, who has been intimately involved with the formation of many of the most famous DAOs. DAOs offer the ability to test different types of governance and decision-making. So that could be rough consensus. It could be true consensus. It could be any permutation just about that you can imagine, you can test quickly. And this offers, I think, incredibly valuable opportunities to test in the micro via DAOs and to observe what many DAOs are doing, to study what they're doing, not just for the implementation that you see in the DAOs, but for taking the best of breed options that emerge and then applying them in other places. I think there's just tremendous value there. That was another moment, kind of a flash boil

Starting point is 02:03:36 moment for me when I was listening to Aaron and I thought, holy shit, this actually is a huge deal. And I'm sure I'm drinking the Kool-Aid and missing certain things, but even if I get half of it wrong, I still think that the implications are enormous. Before we sign off, can I add a disclaimer for you here? Yes, please. Well, we mentioned lots of NFT projects and companies. This is not a recommendation to go and buy any of them.

Starting point is 02:04:04 And I think you have to be very careful because most of these will be like 1999, you know, dot bomb, so to speak. We're in the first generation. If you'd bet everything on the Flickers and the delicious of the world, you wouldn't have done as well as if you just waited for the Netflix and the Pinterest. So it's not too late. The good news about NFTs being fashion and creative means it's always new. It's always bubbling up.

Starting point is 02:04:23 I've talked to a lot of top NFT collectors now because I completely missed the boat. And I now realize why I missed the boat, because like psychopaths, they were buying it for the art value. They genuinely liked the art, and they wanted to be patrons of the arts, and they wanted to support the artists. And it didn't have anything to do with making money. It's just that then later, the rest of the group or small, another larger group came along and recognized that there was some value to the art and to the provenance of it. So the good news here, I think with NFTs is that now everybody will get to play in Web3, everybody will get to play in crypto, you're going to have a lot of creators making money, you'll have a lot of fans making money, you'll have fans expressing their devotion and their interest, which is really where it comes from. Because underneath,

Starting point is 02:05:02 even though some of these art projects will turn into larger franchises that will launch movies and games and books and all of that stuff, many won't. And many will just be a patronage link between the person who's collecting or buying and the artist. And that's great. I want to be able to support an artist

Starting point is 02:05:19 without having to buy a sneaker in the way that they market it. I should just be able to support them directly. I want to be able to support a fitness expert online without having to buy a sneaker in the way that they market it. I should just be able to support them directly. I want to be able to support a fitness expert online without having to buy some BS vitamin that they have to stamp their name on to some supplement company that they have to start. I want to be able to support a singer and musician

Starting point is 02:05:34 without having to just pay Spotify 10 bucks a month and hoping it finds its magic way to them. I want to be able to support somebody on Twitter instead of just retweeting and liking all the time. So we're establishing direct linkages, economic linkages and governance linkages between communities of fans and artists. And I think that's wonderful. So if you want to go buy NFTs, buy the stuff you like, because at the end of the day, what you're probably gonna end up with is a cool JPEG.

Starting point is 02:06:00 I second that definitely only Yeah, I would only recommend buying things that you want to keep and not things you think will go up in value because that's dangerous. Yeah, it is dangerous. And by this time, people will have also heard a disclaimer at the beginning of the show. So pay attention to the disclaimer, people. The Flickr delicious analogy is a very apt one. It is still really early. Just because you missed the opportunity to buy JPEGs for a dollar that are now worth a million dollars, and there are examples of this, A, it doesn't mean that you missed all the boats. Maybe you missed one boat. Secondly, it doesn't mean all of those NFTs are going to maintain or appreciate. So be patient. I really feel like with the amount of exploration and experimentation that is happening right now,

Starting point is 02:06:52 and I mean, Chris, you tell me if I'm completely delusional here, but I really feel like even though there is an impulse to rush and there's an impulse to be in discords 24 hours a day and on crypto or nft twitter 24 hours a day ultimately you run out of hours and i do feel like there is a place for watching for learning for getting educated for kicking the tires in ways that are low risk or no risk and looking for pitches, whether that is as a user or a fan, looking for a real fit with a creator or an artist or an entrepreneur who you love personally or whose work you love or whose project you love, or looking for investments. I feel like it is a huge mistake to just impulsively, from the driver of FOMO, dump a ton of money in hoping that you win the next Willy Wonka golden ticket. Because ultimately, I think that is, at least for me, is too high risk.

Starting point is 02:07:57 I think another lens to look at in the T's through is you go to the museum and you see a Roman statue. Okay. There's sort of two ways you could interpret that. One is the piece of stone and that's sort of just a JPEG. The other, I think the correct way, the more sophisticated way is to see it as a community artifact. It has meaning and value that statue as part of that community of ancient Rome. And I think the same thing is true with NFTs.

Starting point is 02:08:22 NFTs are artifacts of networks. So like you have your own community and the NFs you're creating will be artifacts for that community and they derive value to the extent that they kind of reinforce that community's values and norms and language and memes that's what crypto punks really you're owning a piece of this community that has importance in the history of the internet and history of crypto if you take it out of that that's when you get the just a JPEG, right click and save thing. I used to do this with, you know, I go to the Metropolitan Museum of Art. Oh, look, that's a sword. If you dismiss it like that, sure. But if you want to go and like dig in. And so I think the same thing for,

Starting point is 02:08:55 I would say for you, Tim, I would encourage you when you think about your NFTs to sort of think of it in that way. These are artifacts. These are artifacts of the community. And by buying one, you're sort of buying both, you're supporting your cause, but you're also kind of buying into that community. By the way, the other interesting thing, one reason I think this is sort of so powerful is that we've spent the last 30 years building communities on the internet. We didn't have a good way for them to accrue value. But the killer app of the internet is networks. We've got a million networks built on this thing now.

Starting point is 02:09:20 Discord and Reddit and Twitter followings. It's all built out. And now we're dropping in this way to have now these community artifacts and things with value and i think it's very important though to think of it in that context and not what i think the mistakes some people are making now and this is they're thinking of more transactionally it's a cash grab that's the wrong way and that will backfire you need to do it in the way that the community really aligns with the values of the community yeah definitely by the way when you buy these things you buy these things, too, to Neval's point, buy things in communities

Starting point is 02:09:47 you value and expect them to be illiquid for a very long time. If you buy a crypto bunker or a board ape or something else, it's because you want to be part of that community. That should be the motivation. Yeah, everybody gets to be a patron of the arts and a patron of the sciences. That's the way I think about this. And I'll also say, if you're just an aggressive capitalist and you're like, I don't give a shit about being a patron, nonetheless, I think it is a very dangerous game

Starting point is 02:10:12 to think that you can out-trade the rest of the universe and try to hold and flip things and hold and flip things for short periods of time or within short periods of time. So that is just to say, Naval, you've famously said something along the lines or written, I guess. I think you said it first on the podcast, maybe it was on Twitter, who the hell knows. If you wouldn't work with someone for a lifetime, don't work with them for five minutes. Am I getting that right? Something like that. What is it? Yeah, it was literally my first philosophical tweet where I was just thinking out loud, note to self. And it was, if you can't see yourself working with someone for life, don't work with them for a day. And it was a lesson to me.

Starting point is 02:10:49 I was trying to telling myself, hey, don't keep falling into that trap. There are no short-term relationships. So for me, looking at NFTs, the way I've looked at them is if I wouldn't hold this for, it doesn't have to be for life, but like if I wouldn't hold this for five years, don't hold it for five days. Don't buy it in the first place. If you're not ready to do that, because there are going to be a lot of ups and downs. And as Punk6529 said to me once, he said, and I'm sure he's written this somewhere, but he said, NFTs make crypto look like treasury bonds. With respect to volatility, they are all over the place. I think that was mine. Maybe it was 6529. Oh, well, maybe he told me, but maybe you said it.

Starting point is 02:11:26 You just never know where it starts. And I managed to articulate a little better where I think crypto is to venture as venture is to value. In other words, investing in crypto is to investing in venture capital. What doing venture capital is to doing value investing like Warren Buffett does. It's crazy. It's standard deviation squared, right? Everything is variance

Starting point is 02:11:45 squared. Everything goes up and down volatile. You're going to make 10x, 0x. You're going to lose it all. You're going to get hacked. The blockchain is going to get, I mean, there's so many ways to go wrong. You're going to lose your keys, boating accident, whatever. There's a thousand ways to go wrong in this space. So it's not for the faint of heart. It's really not. And it's true also in the embryonic stages and the Wild West days of any of the technological revolutions that we've discussed. The room hasn't been childproofed

Starting point is 02:12:14 yet. No, not at all. And that's okay. But to Chris's point, the best teams are not working on it. They're figuring out how to take it mainstream, how to take custody mainstream, how to take purchasing mainstream. The gaming guys and gals, if they can't figure this out, nobody can. But I think they'll figure it out. I wanted to add one more recommendation, and that is, well, there are two things we didn't have a chance to get into, which is totally fine,

Starting point is 02:12:36 because there are a million different directions you can go with this stuff. But one is generative art, and art not necessarily referring only to graphic representational art, but generative art. I recommend people check out some of the writing by Tyler Hobbs, who is the incredible artist, really nice guy, creator of something called Fidenzas, which are incredible and also incredibly popular. He's written, many people have now written about generative art. But one aspect of that that I think is unique that will become more and more compelling in different ways is the ability for the purchaser of the art to become an element in the creation of the art. So when you purchase a piece of art, you interact with, you guys are technical, correct me if I'm getting this wrong, but code, that algorithm of some type, and your, say, transaction ID,

Starting point is 02:13:36 I'm not sure if there's a better term for that, becomes a factor in determining the output of that code. And so you are, by virtue of purchasing something at a specific time with a specific wallet, changing the output and creating a one-of-a-kind piece of artwork that you had a hand in helping create by being a participant. Is that a fair description? Anybody want to modify that? Yeah, yeah. No, that's right. That's right. I think there's a lot of, I think that's one of the cool things here is when you create a better business model for art, let's say, or for music, step one will be you take the existing artists and they get more money. Step two is you're going

Starting point is 02:14:14 to incentivize a whole new generation to go do these cool things. With a generative art, now you have a way to make money on it. And so there's just going to be all these smart people attracted to creative things, which I think is a great thing i think we were just dramatically underpaying creative people in my view and we've now figured out a way to pay them properly and that's going to lead to a huge new wave of creative activities not just technology and not just paying existing musicians maybe we enter a world where there's instead of eight million musicians on spotify there's a billion maybe there's a billion musicians there's a world where there's, instead of 8 million musicians on Spotify, there's a billion. Maybe there's a billion musicians, there's a billion artists, there's millions of generative artists.

Starting point is 02:14:53 I think this is the right kind of evolution of the internet. This should be a golden period for creative people. There are 8 billion people and 6 billion or whatever are internet connected, and you only need a thousand to make a living. This should be the greatest time in history for creative people. And I think we might have finally figured it out. Going back to your hill climbing analogy, there should be 8 billion different careers. Yeah. And each person should have their own hill.

Starting point is 02:15:16 And some will be mountains and some will be molehills, but at least everyone gets their own hill. Like take music. How much do you love music? The supply is there. The demand is there. We just don't have the right model in between. It's not like people don't, people are crazy about music. They love music. And there's plenty of people with money who love music. So why are musicians, why do we assume that the internet has to make them destitute?

Starting point is 02:15:33 It's a very defeatist attitude, I think. It should be a golden period. The generative art stuff is cool. I'm not an expert on it, but I just think it's so cool that now there's a business model for generative art. That is awesome. And the kids that get excited by that and go, I'm going to be a generative artist. That might be a new thing 10 years from now. I think it's definitely going to be a thing in the very near future. From what I've seen, art blocks is worth checking out. People should check out art blocks. And I think it's, as you both alluded to, it's going to expand the pie.

Starting point is 02:16:03 So Naval, you're intimately familiar with this. When Uber went out as a possible investment on AngelList, how many rejections did they get? How many people declined? A couple of hundred. Yeah, right. And one of the assumptions underpinning a lot of those rejections was, well, how big is the total addressable market for black sedans? And then we're going to look at a percentage of that. And what they didn't factor in was the possibility that it would dramatically multiply over and over again, the actual pool of not just riders, but drivers. So it completely flipped the paradigm on its head. Similarly, we might be inclined to say,

Starting point is 02:16:44 how many professional musicians are there now? What percentage might be able to use this? And that's the wrong way of looking at it. When suddenly it is proven that it is viable to create a financially secure future by creating whatever that means, it opens the floodgates, right? It opens the possibilities. And I think that the early, even though generative art has been around in one form or another for decades, but the experimentation now is just the tip of the iceberg. So it's very much kind of model T. So I'm very excited to see what's coming in the next, I mean, the time dilation with this stuff is bizarre. I feel like I've watched four years of experimentation in the last four months. It's

Starting point is 02:17:24 really pretty wild. The other thing to add to what you're saying is we're probably in this skeuomorphic period right now. I don't know what the native generative art looks like. It's probably too advanced for my artistic sense or something, but just timing wise, almost always we'll look back and say, this is a skeuomorphic period.

Starting point is 02:17:39 They aren't leaning into the software code enough. The stuff you mentioned is like a nice kind of coding thing, but I bet you this is arbitrary code. I mean, you can have, we have one company, Manifold, which is trying to create sort of let smart contracts, NFTs, be like an app store.

Starting point is 02:17:52 And you have different software you can plug and play onto, just like the app store. One of my favorite things to do is look at old computer ads. It's funny because like in the 80s, all the computer ads had this couple at the table doing recipes.

Starting point is 02:18:10 Steve Jobs, as much of a genius as he was like greatest genius of all time he invents the computer invests the iphone and the best idea he had for what to do with a computer in 1983 was a couple organizing their kitchen recipes so what i'm saying of course is he's a genius but it's just really hard to know so the first thing you is, I guess they had like a filing system, whatever. But then what happens, right, this army of people come and they invent the word processor and the spreadsheet. The spreadsheet was a random guy in Boston who just came up with the idea of a spreadsheet and desktop publishing and video games and just this whole wave after wave of cool stuff, which even the inventor, I'm just trying to make a point of how hard it is. And so I think we're probably in the kitchen recipe period of NFTs, which is awesome because there's going to be so much more cool stuff. I don't even know how you got the recipes back then.

Starting point is 02:18:53 They didn't even have the internet. Got it? They had to mail a tape, a giant tape with mail. Mobile phones, the same thing. Remember mobile phones was always like stock and weather. They always talked about stocks and weather. That was it. It turns out it's teenage dance videos on TikTok, tailing a car, ephemeral messaging. No one knew. It's so hard to know. So we're in that period, I think.

Starting point is 02:19:18 We're in the kitchen recipe period. And we haven't even talked about it. We don't need to go deeply into this. But I would imagine there's some percentage of the listenership right now are like, yeah, I still don't get it, right? We're talking about JPEGs and I've, yeah, okay. Somebody on the internet said like, yeah, you can take a photograph of the Mona Lisa, but is it really the same as the Mona Lisa? And like, I don't really get it. But there, I would imagine are going to be all sorts of tie-ins and possibilities and uses for NFTs that tie into the physical world.

Starting point is 02:19:50 So we didn't even get into that. As an example, today you buy a sneaker, right? And now maybe that sneaker was sponsored by Kanye or Jay-Z or whatever, and now there's variations in a sneaker. Well, in the future, maybe you'll buy a unique sneaker, and then you'll get the NFT for that sneaker. And then you'll have the unique copyright to the digital representation in a sneaker. Well, in the future, maybe you'll buy a unique sneaker and then you'll get the NFT for that sneaker. And then you'll have the unique copyright to the digital representation of that sneaker. If somebody wants to use that sneaker in a marketing campaign,

Starting point is 02:20:12 if Nike comes along and says, hey, we want to feature that sneaker, then maybe you get royalties, right? These are just very simple little examples, but it's essentially a social contract or even a written contract that you have with the person that sold you the NFT that can be used to imbue value in all kinds of ways. So an NFT is not really an object, a digital object.

Starting point is 02:20:33 It is a pointer. It is a channel. It is a link, a communication between you, the creator, and the community. And any kind of value can be funneled down that. It can be access into things. It can be recognition and reputation. It can be recognition and reputation. It can be royalties. It can be copyrights.

Starting point is 02:20:50 It can be remix rights. Or it could just be you're just sending them money because you want to support them. So it's completely programmable. We just don't know. So for example, people talk about ticketing with NFTs. And what they mean is like going to an existing event with tickets, like a sports game or music show. Right. But actually that's be more fake. I think the native version of ticketing is you have a Tim Ferriss NFT and now I get to, or let's say I have whatever, some Nike NFT and I get a certain seat at this restaurant. Why do wealthy people invest in

Starting point is 02:21:20 restaurants? They don't invest because they want to invest in restaurants. They invest in getting a good table. Like why not just skip the whole investing part and just have an NFT? Have a bunch of NFTs. I guarantee you in the next six months, we're going to see conventions and other kinds of things of NFT, board apes, and crypto punks. And by the way, if you're a business and you want to find some really good customers, people that own crypto punks are probably really good customers. I think you can see a world where instead of doing the Web2 companies surveilling you and trying to figure out your interests, you're just declaring your interest through NFTs. And so it's done in an opt-in way that's pro-user. The user has the power, but that's a very valuable thing that people will

Starting point is 02:21:57 use for incentives and various other things. I mean, if you have a CryptoPunk, that says a lot about you. Exactly. If you have a CryptoPunk and you're tweeting, then I know that you're an OG into NFTs and you probably know what you're talking about and you've got serious money at stake behind what you're saying. Chris, I thought it might be interesting for folks. I love how I asked my last question 40 minutes ago. So we'll wrap up in a minute. But Friends With Benefits, best name of all time, side note.

Starting point is 02:22:22 But you didn't really explain Friends with Benefits. And I think it's a curious example and permutation of what we're talking about. Could you describe Friends with Benefits, please? Sure. So just to give you context, I... Not the general term, the company. No, I know. I believe very strongly that venture capital, we need to be constantly taking risks. And so one of the things we started doing six months ago is we started heavily investing in this area called DAOs. This is a new type of investment where there really isn't like even in many cases, like a legal entity, and we're buying tokens and other kinds of things. And there's a lot of questions, but it's early, but we want to

Starting point is 02:22:57 be there on the frontier. And I think this is the frontier. So Friends of Benefits is a DAO, which means, as someone said, a DAO, think of a DAO as a internet community with a balance sheet. Okay, so it's an internet community, but they also have resources and can do stuff. In particular, FWB is a bunch of Web3 product developers. So it's a couple thousand people who are really high-end, high-quality product developers. And they're spinning out cool stuff. They have events. We hosted an event in New York with them.

Starting point is 02:23:26 It's like someone, someone on our team said, Oh my God, this new wave of crypto is like a hundred X cooler. Like we're like, it's very different than 2017 and 16, you know, a bunch of computer nerds talking about protocols. This is the coolest people from Williamsburg and,

Starting point is 02:23:40 but which is great, but they're really, it's great. They're great community. They're designers, they're developers. They don designers, they're developers. They don't, they're not sort of hard. Like they really got into this stuff kind of more recently, which is good.

Starting point is 02:23:49 Cause they really got, I think the cultural aspects got them excited. The NFT stuff more than, you know, to them, like money, the money stuff before it was kind of a turnoff and it's just like a cool, I don't know. It's like the university of Utah. It's the homebrew computer club. The homebrew computer club of 2021 is probably a DAO. And we want to join a bunch of them and just learn from these people who are just more in the, they're smart and they're in the trends. And this is how we learn, right? I'd also suggest people check out Aaron Wright. There are other people certainly who speak on this.

Starting point is 02:24:17 Aaron's great, yeah, yeah. But there are different, almost, I suppose you can say categories of DAOs, right? There are acquisition DAOs. One of the better known being, say, Flamingo. Very successful, incredible collection of NFT artwork and assets. So there are different purposes, and that's just going to multiply, I would imagine, over time. Now, quick question on FWB. Did they decide, oh shit, we can't call ourselves Friends with Benefits long-term and they like went from Kentucky Fried Chicken to KFC, kind of, not to be confused with KYC.

Starting point is 02:24:51 I don't know if they've actually tried to rebrand. I just kind of, everyone laughs whenever I say the name, so I guess. Stick to your guns, Friends With Benefits. I love it. It'll go far. Stick with it. All right.

Starting point is 02:25:03 On that note, any final comments, guys? Of course, you guys can be found on the internet, Naval, at Naval, N-A-V-A-L, on Twitter, Chris, at C Dixon, cdixon.org, also A16Z. And I'll include some additional links in the show notes as well as the 30-page or so booklet that you mentioned, Chris, at Tim.blogs.com. Anything else you guys would like to add as closing comments? Yeah, some career advice for you, Tim. When I first learned about crypto, I didn't actually get into it because I was busy with AngelList.

Starting point is 02:25:41 I wrote a few tweets, I wrote a few position pieces, but I really didn't wake up to it until much later when a lot of the gains were gone. And I wasn't fully joking when I said that this may turn into a conversion to a crypto podcast. So don't wait too long. Hill climbing, man. You might be on the wrong hill is all I'm saying.

Starting point is 02:25:59 Oh man, the blind leading the blind. Well, I may need to invite you to co-host Naval. Be careful. We'll see how it works. Well, thanks guys. This was a lot of fun and appreciate you carving out the time. So to be continued,

Starting point is 02:26:13 I'm sure we'll continue chatting offline. And to everybody listening, you can find all the resources, links to everything, books, projects, companies, et cetera, in the show notes as per usual. In this case, Tim.b In the show notes, as per usual, in this case, Tim.blog slash Dixon, D-I-X-O-N. And until next time, be safe out there.

Starting point is 02:26:33 Don't take unnecessary risks. Don't play with any money you can't afford to lose. None of this is investment advice, just for informational purposes only, like this fine podcast. Another reason I like to keep my topics broad and of all Ravikant. All right, everybody. Thanks for tuning in. Hey guys, this is Tim again. Just one more thing before you take off and that is five bullet Friday. Would you enjoy getting a

Starting point is 02:26:57 short email from me every Friday that provides a little fun before the weekend between one and a half and 2 million people subscribe to my free newsletter, my super short newsletter called Five Bullet Friday. Easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things I've found or discovered or have started exploring over that week. It's kind of like my diary of cool things. It often includes articles I'm reading, books I'm reading, albums, perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast guests. And these strange esoteric things end up in my field, and then I test them, and then I share them with you. So if that sounds fun, again, it's very short,

Starting point is 02:27:47 a little tiny bite of goodness before you head off for the weekend, something to think about. If you'd like to try it out, just go to Tim.blog.com. Type that into your browser, Tim.blog.com. Drop in your email and you'll get the very next one. Thanks for listening. This episode is brought to you by Tonal. Imagine having an entire gym's worth of equipment in a device smaller than a flat screen tv something that could fit potentially even in a closet fits in my closet by eliminating traditional weights tonal can deliver 200 pounds of resistance with a sleek design that can fit

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Starting point is 02:29:27 over 48 months. Visit www.tonal.com and for a limited time, get $100 off when you use promo code TIM100 at checkout. That's www.tonal.com, promo code TIM100, T-I-M-1-0-0. Tonal, be your strongest. This episode is brought to you by Theragun. I have two Theraguns, and they're worth their weight in gold. I've been using them every single day. Whether you're an elite athlete or just a regular person trying to get through your day, muscle pain and muscle tension are real things. That's why I use the Theragun. I use it at night. I use it after workouts. It is a handheld percussive therapy device that releases your deepest muscle tension. So for instance, at night,

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The Tim Ferriss Show - #542: Chris Dixon and Naval Ravikant — The Wonders of Web3, How to Pick the Right Hill to Climb, Finding the Right Amount of Crypto Regulation, Friends with Benefits, and the Untapped Potential of NFTs

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Pet Camera - EBO Air 2

The Tim Ferriss Show - #542: Chris Dixon and Naval Ravikant — The Wonders of Web3, How to Pick the Right Hill to Climb, Finding the Right Amount of Crypto Regulation, Friends with Benefits, and the Untapped Potential of NFTs

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