A16Z Partner Dialogue with Naval, Founder of Coinlist: The Miracle of WEB3.0

“The smartest people, what they do every weekend now is exactly what everyone else will do every workday in the next ten years.” ——Andreessen Horowitz partner Chris Dixon

Recently, “The Tim Ferriss Show” hosted by angel investor and popular podcaster Tim Ferriss invited Chris Dixon, partner of A16Z , and Naval Ravikant, known as “the originator of equity investment.” This podcast involves many hot topics, such as the miracle of Web3, Friends with Benefits (FWB), the unexplored potential of NFT, etc. The time for the complete podcast is more than two and a half hours. In order to facilitate reading, we have divided it into four parts. .

A16Z Partner Dialogue with Naval, Founder of Coinlist: The Miracle of WEB3.0

The following is the first part (the content has been deleted):

The miracle of Web3

Tim Ferriss: Chris, I would like to quote what you wrote in a blog post in 2013: “The smartest people, what they do every weekend now, is precisely what everyone else will do in the next ten years. Things to do every working day.”

I want to ask two questions. The first is, how do you determine that a currency based on mathematics like Bitcoin belongs to the category of what smart people do on weekends, and what you are currently interested in paying attention to?

Chris Dixon : This can be traced back to the Silicon Valley legend about Steve Jobs and Steve Wozniak going to the Homebrew Computer Club. They are smart people. If you talk to them, you will find that they really understand What is a personal computer, they have very deep thinking. By the way, many of them involve actually talking to people rather than trusting second-hand sources. I really firmly believe that one of the most important things you can do is to talk to many people. This is where I get all the information. It is to talk to entrepreneurs and talk to people smarter than me.
…By the way, many places are now on the Internet. This is on Discord and Reddit. Many things I did in 2013 came from Reddit.

Naval Ravikant : This is the current definition of frontier. There was a time when this word represented the wild west. It used to be the people of the conqueror and sailing age. Today, the frontier feels like the frontier on the Internet, and on the Internet, the frontier is in Web3 and encryption, because it is the least regulated, most decentralized, least permit-free, and 24*365 self-financing market. Hackers from all over the world can participate.
You can be anonymous or pseudo-anonymous, or just use CryptoPunk as your personal data. No one has to know who you are, what matters is the output of the code. If it works, you can make a lot of money. Satoshi Nakamoto may eventually become the richest person in history, and may be completely anonymous. This is not the only one. On this decentralized anonymous boundary, huge wealth is being created and disappearing. Now, I think we see that “Web3” is beginning to attract all talents.
All the smartest people in Silicon Valley seem to want to switch from working 9 to 5 to the 24*7 Web3 world and figure out how to participate. Every non-Web3 company I participate in will call me and ask me questions about tokens or the perspective of Web3. Obviously, some companies are just making money, but there are also some reasons for this attractiveness of open source, open platforms, portable data, user privacy, user control, keys, and networks owned and generated by the community.

How to define Web3 and why it is a dimensionality reduction blow to Web2

Tim Ferriss: Chris, can you give a definition about “Web1”, “Web2” and “Web3”?

Chris Dixon: Web1 is what we call the Internet era from 1990 to 2005. The key to Web1 is that it is dominated by open protocols. So the Internet has a protocol called HTTP, and email has a protocol called SMTP. These are prototypes, and these are the platforms you built at the time.
So if you are Larry and Sergey, and you are building Google, then you are building it on top of HTTP, right on the Web. This network is open, which means that no one controls it. From the perspective of Larry and Sergey, this means that they know that if they build a successful product, a successful search engine, they will own and control it. You can’t let others come and say, “I want to take 50% or let you close the door.”
This is the Internet, it is open. Similarly, in economics, for example, if you talk to entrepreneurs or investors, they will say that they like to invest in countries where the rule of law is predictable. The same is true for startups and entrepreneurs, who want to build on a platform they know they can trust.
So, this is the great thing about the Internet in its early days. You can have so many incredible innovations and investments. I think most people today would agree that it was the golden age of innovation. But these products are limited in a sense because they are often read-only. I tend to call it “skeuomorphic” , that is, people take things from the offline world (such as magazines) and then put them on the Internet.
You can look back at the web in the 90s. It’s like a magazine. You don’t have things like social networks and user-generated content, and you don’t have almost the same content. The so-called “Web2” has been around since 2005, when there were two competing models. Let’s take Twitter as an example. There is an open protocol called RSS. Obviously, what it does is to compete with Twitter.
I mean, it still exists, but it is not as popular as Twitter and Facebook and everything else. In the 2000s, there were some open ways to build social networks, and then there were some closed ways to build them. For various reasons, I will not go into all the details, and many of the closed methods are related to ease of use. I think this is Web2, and open protocols only limit their functions.
If you want to build a website in 2008, suppose you want to simulate the functions of Twitter, you have to find a web hosting provider, buy a domain name, and do a lot of other things, which are all very technical. And on Twitter, you click a few times, choose your name, you are there, and your friends join. Then the advent of mobile phones accelerated the development of the whole thing. We now have about five companies controlling the Internet.
Therefore, Web3 is emerging. According to my definition, it is an Internet owned by users and builders, and token is an integral part of it. The new concept of token is the key concept of Web3. It is a bit historical, derived from the movement started by Bitcoin. Although, I think this is another branch of genealogy or something else.
Many things are actually built on an encrypted network called Ethereum , and there are other alternatives. The biggest innovation of Ethereum is that it is fully programmable. This is a computer… This is a very powerful computer with new features that the previous computers did not have. One of the things you can do above is that you can create something called a smart contract that will continue to run in a certain way. You can also create something called tokens, which can be fungible (homogeneous) like cryptocurrencies, or non-homogeneous NFTs.
The reason why tokens are so important is that they now also provide a mechanism through which value and control can be given to users and builders, rather than simply to centralized companies. Therefore, you can now use open protocols and use this new philosophy to build something that looks and feels like Facebook or Twitter, where the value or control rests with the web user, not the company, because there is no company, right? You will see more and more such products. Initially there will be some kind of research and development organization to help create these protocols, but over time, they will gradually disappear, just like Bitcoin does not have a company, and Ethereum has a support for research and development. A non-profit foundation, but there is no Ethereum company.
I believe that the most important Internet products in the future will be created in this new way. Why is this happening? One, it will be better. If the drivers on the Uber network have Uber’s value and can participate more in value creation, as well as the control and governance of the system, wouldn’t it be better? I think this is obviously a good thing for society.
I also think it will be the winning product because people like it. If you look at these people in the Web3 community, they don’t want to see Web3 companies and crypto companies spending money on marketing, including Coinbase . I have been on the board of directors for many years without marketing. Why? Because the token is self-marketing. When someone bends and owns something, they want to talk about it, they want to spread the gospel.
So, I think Web3 is not only better for the world, but it will also beat Web2 because it will be more popular because people will be very excited when they actually participate.

Tim Ferriss: If you agree, I want to try to explain it in a Muggle tone, and I hope you correct it. First of all, I will say that I am relatively new to this field, but as you said, once it starts to fall or sink, I will feel something, which may sound strange, but it is like a physiological acceleration , I have not been able to sleep well for a week.

This situation only happens to me every 5-7 years or 5-10 years, because I started to see some possibilities, some beneficial social changes, etc., and others are not only possible, but in a sense The above is already a by-product of this paradigm shift. So tell me if this captures some essence, and then any one of you can correct it.

Therefore, one might think that Web1 is read-only (mainly read-only) and is open. Then we have readable and writable Web2, but as we have seen, it has become more centralized because of big companies. Like you said, except for the domain name, you cannot own anything, cannot control your own destiny, you have few rights, and your reputation is not transferable. If you are on a platform like Twitter, you can choose not to use it. , But it is centralized. Many people will use these platforms for reasons such as convenience and ease of use as you said.

And Web3 seems to introduce a lot of things, including property rights and decentralization. Based on what I have personally seen, I want to give you a specific example, just to point out a very small group. I have clearly seen the benefits, that is, artists.

I want to talk about this because I have friends with photographers, friends with graphic artists, and musicians. They are financially paralyzed by the new crown epidemic. When they can’t tour, when they can’t do things (because of these music streaming In media services, each broadcast can only bring them $0.01 in income), they created unique assets in the form of NFTs and started projects, and their future was completely changed as a result. I want to emphasize some things for everyone. For example, the writer’s model and the musician’s model have some royalties, but you can pay a little money first, and then you can get some percentage of meager income from the back end. But with smart contracts, as you said, if we think of Ethereum as a world computer, with smart contracts, you can pre-set certain things to happen automatically, instead of relying on collecting most of the profits. Middleman.

In the traditional art world, if you are an artist, your work is resold, and then resale occurs again, and then resale… You will get paid once, and this is the end of the story. Now, artists can get part of the income from these secondary sales, or a large proportion of them, and all of this is done automatically. They don’t have to trust an agent, broker, or curator to pay for their expenses. They don’t have to audit accounting, because all this happens on the blockchain.

So I just want to give an example. Can any of you talk about this in detail, or give you another example that you saw that excites you?

Naval Ravikant : Yes, I just summarize what you said, because I think you have approached it in the right way. But basically what you are talking about is that the digital private key enables digital private property. So we finally have private property on the Internet. We don’t need middlemen like Spotify, or even studios and record companies to determine who owns what private property, and put it together with their database entries and their lawyers. shared.
Each of us can do this on our own, and Chris has been teased on Twitter for this. Each of us can have a part of the Internet, but this is absolutely true. We can create digital scarcity, which is a very powerful thing. Therefore, we can have digital scarcity and digital private property. In the context of Web3, there are three key things you have mentioned, but I want to summarize, let the audience really understand Web3.
In the normal model, we are accustomed to thinking of computer programs as applications run by third parties, who control the code, own the data and own the platform and economic benefits, and then all we get are leftovers. We posted a tweet, we posted a blog post, maybe we can get a little shekel (a silver coin used by ancient Jews) from Spotify, maybe we got some likes and retweets on Twitter, but it’s not a lot of. The owners of Spotify are richer than the creators and musicians on Spotify.
This is not an attack on Spotify, they are just a symbol of the whole thing. We have gone through such a transformation, just like Web1, well, who won? Microsoft, perhaps Netscape and Google are the big winners of Web1. Then Web2, who won? It’s Apple, Google, and maybe Facebook. Will Web3 also be controlled by large companies?
No, the beauty of Web3 is that for the first time, all data is public. The data does exist in the blockchain or distributed system, but it is safe. Its security is actually much better than the way these companies protect our data, because every data is protected by our own private key. Therefore, each of us now has a safe in the cloud, and we can selectively access these safes with our private key when needed, and then close them again.
Therefore, they will not leak in the next big company hacking incident. Then, who owns the Web3 platform? As Chris said, its contributors own the platform, not the company owns the platform. In the end, developers like this because the code is now open, not closed.
So, this is a crazy concept, a revolutionary concept. We transformed the application from a closed code, enterprise-owned platform to a contributor-owned platform, open source, and users own data. So now these things have become completely composable. One of the reasons why the Web3 revolution is so non-linear, so unexpected, and so fast is that open source code means that these applications can be plugged into each other like Lego bricks.
Connect these Lego, you can use them to build anything you want, this is how the code on Web3 works, this is how the data on Web3 works, this is how Web3 ownership works, I can own what I contribute For a small part of each platform, this is definitely a revolution.

“Composability” is to software what “compound interest” is to finance

Tim Ferriss: Naval, you just mentioned the word combinable. What does it mean and how do people use it?

Naval Ravikant : The beauty is that all of this is open source, right? So it is not even an API anymore. I don’t have to access via a very limited API, I can connect to the code wherever I want to connect.
Then, in open source, each problem only needs to be solved once. So, if someone has built a good version that solves a certain problem, I will reuse it and then reuse it. Maybe I will fork, I will improve a bit, maybe I will put it in a slightly different system, but fundamentally speaking, each problem only needs to be solved once. Therefore, composability means that it is like Lego bricks, or actually digital Lego bricks, I can copy Lego bricks and build on them. Therefore, to competitors, this is like a composable type of thing, suddenly all applications and Web3 can be combined to create any application needed. For example, there is an innovation in DeFi called Automated Market Makers (AMM), which does not require exchanges to pay market makers and other companies to ensure liquidity in any market. In Web3, you can use code To achieve, once you implement this in your code (for example Uniswap), anyone else can copy it, and then it can be inserted into any new application. For example, if you take a look at the upcoming Web3-based games, they will have the entire market economy. They will have hosting solutions in which NFTs can be built. This will be completely composable, because any part from any other application can be plugged into any other application without permission.
So you are building a building, which is almost like building a civilization or a city. They are composed of interconnected applications, rather than islands where data is not portable, code is not portable, and users are not portable. So this may be longer than the definition you want, and Chris can give you a better explanation, I’m sure.

Chris Dixon : I like to say that “composability” is to software what “compound interest” is to finance. This is a magical thing. If you keep it running, it will usher in a growth similar to the hockey stick curve. . Related to what Naval said, one thing I think people who are not in the tech industry might underestimate is the dominance of open source software. Open source software originated from curiosity in the 1990s. In the 1999 antitrust case, I happened to be looking at a thing about Microsoft. At that time, it was all Java, not Linux. Of course, what actually happened is that Linux is the winner. 99.9% of the world’s code is run with this open source software. So almost every server you talk to in the data center is Linux, and your Android phone is Linux. And most of the software on the iPhone is open source.
How does open source win? This is composability, which is what Naval said, you only need to solve each problem once. What Web3 is doing is taking this level of rapid innovation and applying it to Web services other than software. Because one thing software can’t do is that it can’t run by itself, right? It relies on a company to operate. So many technology industries today use open source software, add a little extra proprietary software to it, instantiate it, run it, and charge for it. This is software as a service, which is great, they provide value, and they should make money from it. But the key factor driving its development is the composability of open source software. And now, we want to extend it to the new field of Web3.

Naval Ravikant : Yes, composability even surpasses software, even if this is its usual way. It has even entered the media. For example, today, if I want to build something on the “Star Wars” platform, I have to reach an agreement with Disney, but in the open source and composable NFT world, artists basically give up this concept, yes, you can always Right-click and save the image or code, and then modify it, you can build on it. Therefore, people will build games, they will build cultural art, new meme, new music on top of NFT, and the underlying NFT will generate more value because it is becoming more and more popular now. In the final analysis, the value of a piece of art or media is directly proportional to the surrounding community, who is using it, and who is promoting it.
Therefore, it has the idea of ​​cracking down on copyright and intellectual property rights. On the contrary, it created the most powerful meme in the world, the meme in music, movies and books in a broad sense, not just the small network meme we are familiar with. The media themselves have also become composable. The greatest artist will have the largest circulation. Therefore, if you have good ideas, you should want to spread them as far as possible.
This is why I will never charge for content, and anyone with a good mind and a good idea should not charge. You should not limit the way, you should want people to reimagine your ideas. For example, Akira the Don remixed what I said into the music, and Smart Nonsense can use it to make videos and cool animations, and Jack Butcher can make visualizations. It’s all free, and I don’t need to do anything. This is all the composability surrounding the media. Right now, I have no potential monetization mechanism. However, if I want, I can publish NFTs for the original content, and there will be collectors who will pay for it. And my content is becoming more and more famous, so this is an example of composability beyond software.
Composability is a very, very powerful concept. If you want to, for example, I know that many of your listeners create a lot of content. They are content creators and innovators. If you want to make your content as public as possible, don’t hide anything. If you have good ideas, you want to spread them as widely as possible, and you want others to use their own content to create them, create new memes and new ideas.

Tim Ferriss: So I want to add something here, like you just did, to provide some spices and details for some examples. And further explain why these things keep me awake at night.

Naval Ravikant: By the way, “The Tim Ferriss Show” will become an encrypted podcast.

Tim Ferriss: No, it won’t. I promise everyone that even if I’m drawn into deep water and swirled into a whirlpool, I can walk on the water. I won’t draw everyone to me, but these Things are very important, and I think it is very worth exploring. This excites me because I have seen a lot of excellent creators and musicians struggling because they are not good at marketing, but they have hardcore fans, maybe a small group of hardcore fans, but they have some hardcore fans.

Many listeners know the article “1000 True Fans” written by Kevin Kelly. I know, Chris, you also wrote something about this article. You can find it on kk.org. I have been recommending this article. What Web3 allows you to do is to align your interests with collective interests and other true fans by allowing fans to own the digital assets you create, right? What excites me is that I have seen many experiments. So we are talking about some of the advantages of Web3. Compared with the Web2 era, Web3 is very easy for many companies and projects to achieve escape speed.

For example, if they are raising funds, they may raise a small amount of funds once or twice, and then they have a token, and they can control their own destiny through a collective of stakeholders, right? Besides, if we look at examples like Bored Ape Yacht Club (boring ape), you can see composability, right? Therefore, someone will take their unique boring ape out to create a coffee company or a craft brewing company. I have never seen anything like this before. Of course, if you are a young, tech-savvy intellectual property lawyer, then your services will be needed. I am very happy to catch up with the progress. But the fact that all these experiments can be carried out at such a low cost at the same time, which means to me that the ecosystem will produce a lot of things through natural selection, evolution and different types of reorganization, which will be very, very exciting. Even if 98% or even 99% end up as rubbish, it doesn’t matter, because the winner, just like finding Amazon or Google in 1999 or 2000, will eventually become very influential. Maybe I just drank too much, I don’t know, but this is how I feel.

Chris Dixon: Yes, like Bored Apes, they also recently released Mutant Apes. They made 100 million US dollars through this method. As far as I know, they did not raise venture capital, but only through Issuing an NFT made 100 million U.S. dollars. This is a different economic model, which goes a step further in obtaining commercial rights.
And the next stage, where few people are currently playing, is to let the community create a narrative. For example, communities like Wattpad. Imagine the next Harry Potter. The future Harry Potter is owned by NFT holders. They can write all kinds of interesting novels, and then they can vote to decide what becomes a classic and what is not, right? Imagine people’s enthusiasm for Star Wars and all other types of communities. Now imagine that they own part of it and control part of it. This is about to become very, very interesting. I think there hasn’t been so much creative energy since the 90s. I don’t think the mobile Internet can compare with it.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/a16z-partner-dialogue-with-naval-founder-of-coinlist-the-miracle-of-web3-0/
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