Balaji Srinivasan: Applications: Today & 2025

[Music] this week we're gonna hear about applications and first speaker is going to be apologies for New Boston he's joining us remotely from zoom and he's gonna talk to us about applications today and some that we we think are exciting on the near term horizon okay so with that I'm gonna get straight into the presentation so we can turn it over to bajji he's gonna join us on the screen here there is hello hey biology so my name is Balaji Sreenivasan I've got a new project at Nakamoto comm which you can check out this feel like a crypto blog but today I'm going to talk about cryptic applications just to give a little overview of who I am just a rare photo of me in a suit you know me like last time in a few years and my background so you know in Stanford grad PhD in electrical engineering Emison Chemical Engineering I founded a genomics company which ended up selling to myriad for a 375 his general partnered Anderson on the sold crypto company to called earn calm to coin basin service CTO and it basically being an early crypto person and venture investor an angel investor and so on then I meant Twitter at apologia so if you have any questions about the talk you can just DM me there or ask me so have happy answer questions okay so just jumping in um say I want to talk about kind of crypto applications in you know in 2020 and then also beyond like you know things are at scale in 2020 and then beyond that point before we we we get to those applications I want to talk through a little bit of the history of how we got to the present moment um and some some kind of underpinning concepts behind all crypto projects and then talk about the applications kind of with that with that mental framework it's the first history um let's talk briefly about why bitcoin is invented in the first place and this may be obvious to some of you but for those for whom it's not on let's go through this quickly so the idea is you know if you start with physical cash something you take for granted with physical cash is if I go and I hand Jesse a dollar bill then I no longer have that dollar bill and Jesse has it and we take for granted the fact that that dollar bill can't be in two places at the same time it's it's a physical object you can only be in one place at a time so if we try to translate that naively into the digital realm and we take the the serial numbers on that Federal Reserve Note and we say hey well that's a that's a unique identifier why don't we email that why don't I email that to Jesse the issue is that I still have a copy of the serial numbers and I can go and email it to Kim Mort or to mark or to Ben and so there isn't an inherent form of scarcity in the digital realm um unlike in the physical realm where that that dollar bill is actually only in one spot at a time so so naive digital cash doesn't work this is called a so-called double spending problem because there isn't a native form of scarcity and the way that we solved this part to the invention of Bitcoin and still used you know very very frequently today is to have a central trusted party a bank or a financial institution which takes in debit from a and then goes in credits be okay and by doing this we've now introduced a a third party into the equation and I'm we're trusting this the central actor are trusting them to debit a into credit B and with that trust comes power because they you know this this kind of institution can for example deny a payment or it can credit itself you know it would quantitative easing you know via be a central banking system but from a computer science topology it's generally inelegant to have a privileged node if you can avoid it and so what Satoshi Nakamoto did was still to come up with a decentralized data structure the blockchain and essentially had something over here where we're basically miners so so rather than having a centralized actor a bank that was debiting and crediting Satoshi replaced it with the D central network of these miners who each compete to debit a and credit B and if any one of them decides for a reason not to try to mine a transaction the other ones will mine that transaction because anybody who Minds the transactions gets rewarded in Bitcoin for doing so and so a critical mass for them would have to collude in order to stop a from transmitting money to B and they're highly incentivized to to not do that and so this is kind of the magic of Bitcoin is it replaced the centralized actor a bank with a bunch of competing you know entities called miners that that carry out the same transaction approval processes and also the money money generation process okay so that's that's kind of why bitcoiners invention is to give an analogue a physical cash that solves the presence of a digital analog to digital cash that solves the presence of the central actor okay now this entity over here this blockchain is something that got abstracted out and you know basically once you've solved a problem of having a database of all the money in the world where all the Bitcoin in the world you can do lots of other things you can think of the blockchain is a tamper-resistant database for storing things of value so of course you could use it to send a receive Bitcoin with development of aetherium about five years after the launch of Bitcoin this is a new blockchain that essentially was more programmable than than Bitcoin so writing a program in Bitcoin is like an assembly language like thing over here but to use if your iam solidity you know it looks more like JavaScript and actually it's kind of like JavaScript in the sense of it's easy to shoot yourself in the foot with solidity but nevertheless it was more accessible to write programs with and why'd you why'd you want to write programs well so you know rather than just debit a and credit beef you might want to debit a and then credit B today and C tomorrow and deed X Thursday and E if some condition is hit and so and so forth right that's what like smart contract programming is and so because you could write you know more sophisticated contracts in the theorem that led to the ico boom and you know the I see a boom in 2017-2018 was kind of like the dot-com boom where um stars raised millions in some case of billions of dollars and you know folks realtor a is you know 35 million dollars in 30 seconds all kinds of money flowed in and like the dot-com boom there's a boom and bust and many of those you know coins that got funded it dropped like 90% or more and this though was was something where if you're just looking from a technological standpoint the capital formation rails that were put in place were you know the an IC o---- is like the simultaneous disruption of venture capital Swift crowdfunding and cap tables because you're you know you're doing startup investment you take all these international wires they're in large numbers of people do it at the same time and you have something called a capitalization table or cap table which is the it's kind of the system of record which says who owns what stock that kind of thing was also pulled into the watching with these icos so it's actually very important technologically even if not all of these companies are successful then after 2018 2019 or 2020 now we're in you know we're in the crypto winter in 2019 2018 and now we're kind of leaving in the summer for innovation where you know a lot of the the decentralized finance stuff which we'll get to is really starting to work on you've got interest you've got loans you've got we've got all these applications and things are starting to work in crypto it's kind of potentially laying the ground for the maybe the next boom so um all right that gets us to the present day now let's talk about some concepts and start with technological concepts so you know one thing we touched on earlier is you know a blockchain is a database for storing things of value so you know digital gold and and you know cash but also tokens like an indie ICO boom um digital assets as well also you know in-game items or real estate you know these are called non fungible because you know one piece of real estate is not the same as another whereas one dollar bill is fungible it's equivalent to another and then there's like identity right so present proof identity to demonstrate that you possess an asset so um you know cash you know equity alternatives digital assets identity these are all things where you can kind of store them in a blockchain because they're they're valuable things you know with the identity for example this is kind of a subroutine that was even required for Bitcoin or theorem in the first place you have to present to effect digital signature to show that you owned Bitcoin or theorem before you could move it and so um this is being factored out as its own thing and just like if you can do identity theft well then identity is a valuable thing to steal so that's kind of thing that you might want to store in a blockchain in some fashion so that's one way of think about blockchains then you can also think of them from a different angle in terms of a protocol so you know bitcoin is a protocol and these crypto protocols have turned payments into packets and I mean that in the most literal sense you know here is TCP transmission control protocol here's IP and Internet Protocol and bit critical runs on top of that and you can actually see a block over here and it's basically fully packet driven transmission of value that reference to your bank because in these bytes you don't see you know like the USA or the Netherlands you don't see Wells Fargo or HSBC don't see countries you don't see Bank names you just see bytes um it's really an intranet native way of sending money which is cool because once we develop internet wait of needed ways of sending um books and music and you know songs and things like that well we got the internet revolution so it's pretty impressive third concept once once you've turned you know payments into packets that means that machines can now hold and send money so you can paste in a string of bytes over here and voila now you can actually have a script that like sends money right and that's completely new you know you can actually have a script that makes money for you when you sleep this is like you know an intelligent agent that people talked about for 20 years it's actually there now you can own these primitive intelligent agents that go around or more sophisticated actually and we do trade some Dex's and are essentially you know decentralized exchanges and are essentially making money for you just by trading online it's a script that actually holds the money itself intrinsically so concept number four you know one way of thinking about it is there's you know my friend Matt Wong has a great tweet which is um crypto is underrated from the outside and overrated from the inside ok so how is it underrated from the outside well um in many ways block scenes have actually already PO technological improvements 10 X's in various areas for example 10x gold 10 X Swift so tanks gold why because bitcoin is lighter or faster cheaper to transport on the 10 X Swift you know theorem clears in minutes in any country pair where Swift takes days Swift being international wire transfers on tanks larger than Kickstarter so you know a large crowd fund in 2015 was like 10 or 15 million but in 2017 you know it's like four billion dollars which is like 100x increase and regardless of what those things are are that are being funded simply the mechanism to move that much money and form that pool of capital is remarkable and then in terms of you know like Delaware right um you know you can hit enter and slid the in seconds actually have it incorporated into the blockchain and in minutes and you can set up something that looks a lot like a corporation on in the sense of being able to receive money distribute it have quote binding contracts at the block's unit forces and whatnot and essentially this this is much better than Delaware in many ways because when people go to Delaware to incorporate a company that can take days and in many ways you know people talk about a measure of economic freedom being the time to incorporate with smart contracts you can 10x that too so this gives you a flavour blockchains of 10x many financial primitives and one 10x is a big deal but a lot of them you know taxing gold and wire transfers and VC and crowdfunding and cap tables and incorporation that's actually a truly structural change and worth worth paying attention to even if hasn't rippled out fully yet okay um additionally you know the the the Crypt of space actually already created many millionaires and a few billionaires um so the founders of coins the miners who run you know large server farms or the exchanges that this analogy has used frequently but I would compare the present moment to roughly 2000 in the internet because in the 90s there was this infrastructure phase and you had Yahoo and you had a o L and people everybody had heard of the internet but not everybody use the Internet in you know 2000 on a daily basis and that's very similar to kind of where crypto is everybody in finance everybody in tech as as heard of you know blockchains most people have heard of Bitcoin even if you're non-finance protect at the infrastructure phases there you've got the coins and the miners and the changes the applications are being developed or come to six concept so blockchains give you a choice of who to trust so before you had to store money at a bank you didn't really have a choice and afterwards you can still start at a bank or at an exchange like coinbase or even locally on your computer and I think this is a better framework than saying trust lists the goal is not to trust no one it's about having a greater choice of who to trust with custody of valuable assets so number seven blockchains enable internet scale cap tables so before um you'd have something like this like a spreadsheet basically which said what's a cap table it's a capitalization table it is essentially who owns what shares in the company so Emily Wilson owns two point six one eight million shares of common stock Jake Pappas here owns 180k of series seed a and B stock right so this is a like what a cap table is and you know it can be said that a cap table is the most important data structure and technology because it underpins every company right this you know modest-looking Excel type spreadsheet is who owns what percentage of the company and right now that's basically held on you know Google Drive or maybe a car TOCOM which is an improvement and and then it's like you know this this file is the basis for for millions of dollars being made an IPO that's how property rights are managed it is far superior alternative is what the blockchain offers where you can have 50 thousand a hundred thousand million people who are token holders and you can actually see every transaction back and forth on you know your internationally tradable transparent liquid and so on around the clock from day zero and the blockchain is keeping track of who holds what rather than you know someone making a scriveners error you know locally with with an excel file so that's that's a pretty big deal not just the automation of a scaling of it from a few hundred people to tens of thousands or beyond so you know I think of blockchain first as like the the new mobile first where you know blockchain competitors are arising for many legacy businesses in p2p payments and messaging and crowdfunding all the payment type stuff um but also in other areas like you know for example DNS you people wouldn't have thought that you could you know launch competitor city and ass but you can so handshake ENS you know things like this are actually competitors to the DNS system and um you know folks like you know brave are using this to launch competitors to Chrome which have crypto built-in and you're seeing like a flowering of innovation across many different verticals with crypto powered competitors and you know that's why I'd say like you know blockchain first is kind of like the new new mobile first it's like a it's a technology that gives you balances it gives you encryption it gives you a number of primitives to work with so as a 9th concept um we think of block chains as a tool that founders and and and engineers can use to break Network effects so if you take a network like Facebook it's that scale you know billion users or what-have-you it's got a present value over here and the thing about that is if you launch a new network well it's not Facebook no one's on it so why would you use it well now you've got a new tool which is you can issue your users tokens and the tokens have upside which declines as number gets larger so now you actually give a financial upside to early adopters and this curve can offset this one so now you've given like some value to people for joining early that's a very important concept because this is kind of like giving equity out to your your employees or you know selling equity to your investors except you're issuing tokens to your users and while tokens aren't equity on the upside of them is something where users can work and they can they can appreciate right so so this is really interesting and it's kind of turning your customers into investor like entities and and that's something I think will be a very big deal for breaking these network effects like the the scaled social networks or two set of marketplaces I think block chains are gonna transform social networks in general you know before in the last ten years we've been liking and poking and messaging each other and afterwards we've been doing you know on paid messaging surveys tasks etc and I think this is a major transition from just you know like making friends to haha making money online right and I think that's that's important because it starts to actually increase the substance of what we're doing online it's not just I'm just wasting time or communicating there's not wasting time but it's pure information goes to transactions as well finally just as an 11th point I think that the blockchain is a partial move away from the cloud to where it's privacy so um you know ledger sold its million Hardware wallet for storing Bitcoin you know this is something where anything that gets to like a million units like this I think will probably eventually get to a billion might be bundled with phones like you have a phone you have a charger you might get a hardware wallet alongside it and basically what is a hardware wallet it keeps your private keys locally it protects them and you can think of them as like an anchor that may lead to other data also being encrypt and move locally like out of the cloud and you know onto devices and the way that would work is basically that your keys might be kept locally even if the the bulk of the data is remote it's only decrypted when you present your private keys and and for applications like Dropbox or Gmail that's actually very feasible to do for the most part because um you can have a relatively dumb data store in the cloud and then presenting your private key to decrypt it such as the cloud provider can't see it and it's decrypted you know for example client-side there's many modalities that are like that I think um you know hardware wallets are gonna be a big part of pulling some data and some privacy locally um now let's talk about you know some some concepts on the other side of things so we talked on the tech side let's check on the community side so basically um you know building anything in crypto you have to really understand the communities whether it's Bitcoin maximalist or aetherium holders or the XRP army um you know these are folks who are you know that they have assumed Fiat part their identity is bound up in holding this currency and it's actually kind of interesting it's like um you know the folks who live in the u.s. value of the dollar folks who live in Japan Valley the yen on their geographic location is actually more salient for their identity formation but when you've got folks who are on the internet um it's actually sort of like currency first as the formation of their identity they're like bitcoiners or atheria MERS or what have you and you know one way of thinking about what that does is if you just took three you know random people off the street each of them could win or lose on their own and so you know they have no inherent economic linkage if you have n people you have to the end possible win-loss combinations but three people you have to the third or eight possible than loss combinations however if they all hold Bitcoin well suddenly they're economically aligned such they all lose together or they all will win together and this is an important concept where basically you know if their holders none of them can win unless they all win so block trains take us from what I consider the slippery slope to the crypto cliff you know before you'd have like a registry like the Spain and Catalonia fight or the dot can't demean somebody could lose a law catchman it can be shut down by the Spanish government you might still keep your calm to me and so you don't really care if it happens to them it might you know we might feel bad but it's not really your problem however if someone's en esta may in a sea is that really means interfering with if you're in blockchain so it really is your problem isn't a theorem holder and I think that's really important dynamic which turns us from you know the slippery slope where one individuals rights can be abrogated at a time to the crypto cliff where to seize one person's crypto is to seize everybody's that's a pretty big deal so block chains allow for experiments and self-governance and with block chains any any sufficiently large group of people can now choose a monetary policy choose an economic policy on that that suits them and so I think we're seeing this really amazing thing where rule of law is being actually encoded and one of the things this results in is that block chains make macroeconomics and experimental science um so whatever your thesis on the economy whether inflationary deflationary de mirage or what-have-you before this have to be studied in the context of like video games with with virtual points like advert Castronovo de la the pioneering work here but now crypto has just taken that next level and you've got actual billion dollar or larger economies where you can just set the monetary policy and see what happens so macroeconomics is finally becoming an experimental science because people are opting in and you can quick run these experiments at large scale I'm very important to think about these things begin to the applications it'll prompt you so tens of millions people and billions of dollars are now invested in these experiments the companies the wallets the percentage of folks the market cap right these these are things where you know lots of folks are you know the valuations are fairly high they're not trillions it's not hundreds of millions or billions using it but it's definitely tens of millions and so what that's resulting in is you know there's concept of the laboratory of the states you know that different states in the u.s. experiment different legal regimes like some will legalize medical marijuana and others will have you know different laws on right to try laws or things like that this is kind of like that where you have different coins with different monetary policies and they're like a laboratory of lab chair of the states so that kind of you know brings us to applications right so everything I just said is useful context furnishing what kinds of applications you build with crypto why was invent in the first place what has been done historically what can be done with it et cetera why don't we go into specific applications starting with the ones that are already got scale as of 2020 so the first group are the ones I already mentioned exchanges miners and you know like like issuers have made millions or billions of dollars right these are these are folks who are at a billion plus in revenue or in or inequity sales or having these are like the infrastructure parts the second group that is at reasonable scale are the Hardware wallet so Ledger's at you know 100 million plus revenue at least in 2017 and that's about an order of magnitude less but it still is definitely rising it's a curve to watch and we'll probably built into kind of hardware devices over time a third group that's it's already at scale and train 20 that's worth mention of is our stable coins so a stable coin is you know like what it sounds like I'm like a you know Bitcoin or a theorem it doesn't wobble doesn't have high volatility on a stable coin is is flat pegged at one point oo USD and in theory it could be pegged to something else but usually it means stable and USD value and there's now a few different stable coins out there and they have different ways of doing that peg some will say they have bank account deposits of US dollars that will back the peg and others will you know have some asset on hand whether aetherium or something else which is volatile and oscillates but which where they say that they're the net value of that is enough to support the peg so stable coins are at significant traction I mean five billion dollars nominal stored value is actually fairly high and defy so decentralized finance is also at a reasonable scale so since you know late 2018 it's really been soaring it sounded like a billion dollars in stored assets there's website d5 pulse which you know I screenshot it you know a little while ago and you know like all these things are just rising relatively quietly but but folks are you know doing well in the space there's bugs there's a serious you know issue like a like a few days ago but but in general the vectors is up okay so those are things that are at scale in 2020 which are exchanges miners issuance hardware wallets seeable coins g5 okay then what's the stuff that is up-and-coming stuff that has you know green shoots in 2020 and might be big by 2025 this is a this is gonna be a long list of things um and you know happy to answer questions but and I'm not saying every single one of these is successful but some of the may be okay so um privacy coins um oh and by the way just let assume I'm an investor in everything on this and everything in crypto because I can I'll you know I hold lots of privacy coins I hold I'm an investor in lots of these things but you know trying to give a neutral neutral kind of thing so privacy coins um you know so - Manero z cash these are trying to add a layer of privacy over Bitcoin um where essentially you know Bitcoin transactions are by their nature transparent in the blockchain um - Manero and sea cash in particular are using different technologies - to obscure that so people have actual financial privacy similar to the difference between HTTP versus HTTP right number two lending an interest so compound and make er you know compound is basic somewhere you can earn interest on on the blockchain maker you can you do lending and it's actually this interesting system where you can put down some etherium and so long the theorem price doesn't go down you get some US dollar equivalent that you can go and do something called Dai Thai in terms of scaling there's a ton of stuff that's happening lots of companies doing this some of these are quasi applications in their own right like the cosmos SDK but there's a bunch of different ways to try to scale blockchains and you know these technologies may stack on top of each other on the you know some of them are exclusive but many of them are complimentary so together these will allow for higher throughput blockchains and that's an important thing to think of as you're developing applications decentralized coal storage so casa Hodel so basically they're getting some traction interesting company where they're similar to coinbase in in some ways but they basically resolve a paradox where you know thesis is people want to store at home the antithesis is you know they they don't they don't know how to do that technologically it's like productized not feasible the synthesis is you you know store at home but you have a service that's helping you do that right so decentralized coal storage another application Stark where so you know this is SAS for gas right basically you know smart contracts are on chain the charge for each API call so you know right now when you when you set up an API you have to set up a stripe billing layer and quite a lot of stuff but it might be the kind of thing where just put a snippet of code there almost like a lambda a tailless lambda function if you're familiar that put a snippet of code on chain and just set a billing and tada you've got a function that can just execute and make you money um so that's what I call sass for gas another kind of thing so insurance so basically when smart contracts fail in theory you can get a payout now many of these things are themselves written in smart contracts so you don't know if that'll that'll actually work but it's you know it's it's certainly an interesting concept Multi wallets right so this is something you know my crypto I think is one of the best of these but basically beyond just send and receive there's buy sell sign vote stake register and what-have-you and these verbs you know and by a verb I mean action I think are gonna come to all wallets so secure already so Zen go is the first it's like a like insemination on security which uses face ID for save and restore and I think you're gonna see this kind of innovation or it becomes easier and easier and crypto eventually becomes easier to use and harder to lose but then then your traditional money over time new financial instruments so FOMO 3d and pulled together these are two examples from what 3d was this interesting game theoretic thing where if you were the last person to deposit money send money to this address you'd get the pot but if somebody else sent it then they went ahead of you in the queue and so the game theoretic thing is if nobody else is sending it then you should send some money but if other people are saying some money then you shouldn't send some so it's kind of unstable equilibrium and eventually a guy won by just flooding the blockchain with transactions um have the etherion blockchain of transactions and then you know putting their transaction into take the the rest of the money out it was very clever pool together is kind of a different model where it takes folks lottery like instincts where they want to quote gamble money on and instead what they do is they kind of give you lottery like payouts for saving my so you know you could win 1644 every week just by saving your money and it's clever because it's it's kind of something that takes lottery like instincts and couples them to actually a pro-social behavior of saving money which is very clever so these are things that I think would be difficult to do in the traditional financial system but that now we're starting to see versions of this in this very promising area so watching games in other promising area so for table we'll be talking about this but you know there's variants of this um you know that have micropayments built in some of them that merge eSports and crypto others that you know have in-game potions or things like that and so you know maybe it gives a new you know definition to pro game or you just wrapping up the crypto by playing these games right um crypto social networks like you know voice and twitch or two of these but there's a ton of them these are still in their infancy there's lots of different theories on how decentralize they need to be should they be you know decentralized at just the currency levels they be decentralized at the application level we have to figure all this stuff out but but some of these are things where the application centralized the coin itself is decentralized and just kind of go with that so then decentralized ENS so ENS unstoppable block stack handshake these are essentially domain names that you can programmatically register and then work with and you don't have to go through DNS and that itself is actually kind of useful where whom you can deploy a website and actually get accustomed to me and just for that website it's actually fully deployed which actually better for testing than the current paradigm of staging and test amines um automated market making now I'm actually kind of bearish on this but it's worth mention you know think it's like you know swap or the concept of bonding curves you know they're trying to give liquidity to the longtail such that anybody can come up to effectively as a smart contract and and and get a fair price from it back the tricky part with this is there's various kinds of market manipulations in theater that you can do outside of that smart contract and you know we'll see if these survive with long term I'm wishing them well um but and it's worth mentioning to understand the concert like an automated you know like like market maker um but but we'll see if these work decentralized identity so you know three box is good there's like decentralized odd identity but these are essentially folks who are trying to use you know aetherium or other cryptocurrencies for sign-on and not just payments and so I think this something where you might need to see like the equivalent of a fiat exchange which lets you exchange if you have currency for cryptocurrency wanting to see something similar which lets exchange fiat identity like driver's license or passport for a crypto identity of some kind then you know personal tokenization so Rubin broken off and did something with cn SL Spencer Dinwiddie is launched a token so folks are issuing tokens for their time or some function of your time like a consult I think this is actually a pretty important and big thing Mutual's and Guilds so mullick now and get coin so these a lot of people to vote with our funds for like the direction of protocol development and they attempt to incentivize like you know collective action and you know we'll see if these work I think the fundamental issue is folks who are investing you know their money in something there you know to simply improve the protocol there's always a free rider problem where the person who doesn't invest the money can still benefit from improvements to the protocol so we haven't yet solved that one possibility is you're a corporate entity or you're you know very interested individual and you want to steer the protocol in this direction versus that direction and so like voting with your wallet for development is an interesting model like wow key pointers work um founders rewards so just like scaling this is a it's kind of a technology or business model thing you should be aware of us designing applications so Z cash pioneered this concept of Founders Award where people get a cut of the Z cash mining and other folks are getting this as well at B CH and others or they're trying something like this and this is a new business model for funding developers from awards and interesting because it gives a model for example for progressive decentralization you know you can have a Founders Award which you know in the first few years and then it kind of draws off over time and after ten years you don't get any more without the community re-upping you and that's kind of like a ten-year vest but for a decentralized protocol and it's a clever way of making money for the founders for for developing this thing that's still having it be you know decentralized in many other ways so on chain bounties settees o s-- you know basically had this concept where the developer bounty constantly get coin but putting it on chain which think is a novel not what kind of concept um clients for gaps so like inside app for example it makes it you know easy to interface with with all these defy applications kind of like a coin base layer on top developer tools so alchemy and bison trails improved aps for gas general performance improvements if you're you know just sending tons and tons of transactions down to you know the blockchain you might want some of these as kind of an intermediary um Oracle's in prediction markets so erasure augur shall select chain-link and stuff like that basically right now you can only really bet on prices on you know the Tyrian blockchain directly but if other kinds of data feeds are put in there then you can place bets on those an augur is live and folks are trying that out other folks are trying different kinds of Oracle's as well to place the data on country and so you can make bets on it um Dow's so this is worth a mention kind of you know the simplest version of this are the intelligent agents we mentioned earlier but you could have these organizations with you know the a and dows whether they're actually autonomous or what-have-you is TBD but but essentially it's something where you know trading money all these changes is kind of like pure internet arbitrage and I think you're gonna see that with it with with intelligent agents then you're gonna see more besides that community or an organization so these are collectives like cooperatives that are owned by their users and I think you're gonna start seeing that become a lot easier to do with crypto like like a group it doesn't have to be like a normal corporation it could be a thousand folks in a group decide to set up something that's producing good for the members and and that's kind of cool it's like a fusion of groups and capitalism and so on online so that kind of brings us to the close you know I surveyed a ton of different kinds of applications there the goal is just to give a sense of how broad the spaces and I'm happy to answer any questions or take them maybe just so you can you can tell me yeah thanks bajji I'm gonna try and actually join the zoom meetings that you can see folks during the QA let's see if that works oh wow lots of people there's lots of people okay cool well thank you for that presentation that was great so yeah let's open it up to Q&A does it does anyone have questions and in order for Balaji to hear you we're enough to give you the mic so hold your questions he gonna mic hi my name is America one of the cyber codes wins I'm really interested in the trend of d5 but I saw something very curious where an artist was Tolkien was they were using her NFT to collateral for a loan do you see a trend of collateral just collateral owns because I feel like one you must have money to like participate in defy but if you have assets maybe that's a entry to get into the space yeah it's a great question fundamentally that depends upon the price for that asset and the issue is that you know currently you know the way to make or something like that is working is with if theorem is collateral and there's a large and robust in global liquid market for what one ETH is worth but if you have a painting or digital painting or something like that um your you can use as collateral if and only if you have a large enough market to give a price on it now that might be just one person but that person would have to have some kind of binding contract they'll buy it back at a certain amount on such that the the person will extend you credit I think it's possible I think these markets have to become deep enough to provide pricing for for non fungible assets high in the you know past you know 15 years with internet companies a lot of value capture has come from either data monopolies or attention and I'm curious for the crypto applications coming up over the next 5-10 years do you see any like large themes of where value capture is gonna come from well it's a great question um so I'm actually very bullish on tasking in general so like um you know we did it earng you know earn has gotten to several hundred million dollars as in sales under coinbase earn where all of these crypto issuers are yes for example if you're a new user to coin base you can get like one hundred eighty dollars in free crypto at Quinn base earn and the reason for that is all of these asset issuers are basically paying users to do tutorials and tasks and learn how their coin works like send a private transactions e cash or take out a loan make or die and so on and so forth so that's cool because it's the better than free economy rather than just try to hack your attention people are actually paying you for it um and I think that's gonna be a major area of tasking and I think that's gonna go from hundreds of millions of sales and in the last few years to billions and eventually tens of billions so that's kind of one area in crypto uniquely enables that for a lot of reasons but one that I think is really underappreciated so if you think of stripe um you know stripe is a multi-billion dollar company like 30 billion dollar company because it improved over PayPal on pay ins right you know setting up a forum to just receive credit card payments people thought of as a solid problem is actually a huge pain with PayPal and stripe you know made that much better and therefore pay ends but if pay ends on the internet were hard hey outs are even harder and one way of thinking about that is if you just think to yourselves okay how many websites have you put a credit card in to it's probably dozens if not hundreds we say how many websites have you put your bank account into to get paid that's actually much smaller right that's probably like you know maximum five to ten and usually not even that maybe if you're an Airbnb host the new bird driver maybe PayPal has it coinbase has it but not too many websites have your bank account information because I'm a website of your bank and free she can debit rather than credit so improving pay outs on the internet is something crypto does since with earn for example we could pay out ten thousand people by hitting Enter right so that's why I'm very bullish on tasking and earning and so on in general and I hope that actually helps make the internet more positive some because right now there's a lot of fighting on and it would be better if folks accumulated you know ten thousand dollars rather than ten thousand likes you know I think that's like one major area I could give others but that's why hey Balaji thank you for the presentation I have a question for you with regards to social so I see sort of a lot of Dallman on one side with signal and with organizations like matrix but there's a version of the future where you'd imagine every email has you know an amount attached to it or every tweet has a stake to it and you can filter based off of some kind of economic incentive do you think that future will come definitely and here's why I think or last several years um you know different parts of email have been factored out right so you know emails between friends have gone to Facebook emails within companies have gone to slack um emails kind of to strangers I mean there's sub stack and that's kind of coming back but there's Twitter and so on for that um so so really the primary use of email today is for two things first it's for things like receipts password resets you know that type of stuff right and you know what people call transactional email um and a second it's inter inter per email so you are a sales rep contacting another person at a.com trying to get their attention now I think that channel because you're proposing a commercial transaction much of the time is something where legitimately you could put a dollar sign on the edge okay so because it's a commercial transaction you could put a dollar sign on the edge and it's not unreasonable whereas with a friend you know paying them for their attention wouldn't seem right you know for a co-worker paying them for their attention may not seem right unless it's a very very large company um you know where you know maybe there's some bonus or something you're doing um but for a stranger who you're proposing a business relationship with it's not an unreasonable thing to do and so moreover if you think about email your email inbox is a to-do list that somebody else is writing so if they want something to go to the top of your to-do list simply paying you to get to the top of two lists is actually good now of course there's tweaks to this many folks um who are wealthy enough may not actually care about it from a um from a money standpoint but they might care about it from a signaling standpoint and so they could just elect to donate all the money that they received to charity and maybe donate $50,000 a year to charity simply to sort messages by priority so that a stranger who really needs to reach them can do so and so that's some way that you can use it for prioritization and still do good at the same time and that's actually what a bunch of a 16z partners did with their own dot-com they donate to black girls code donate to worthy causes people gets to top their inbox so I do think we're gonna see another version of that when deciding which apps to include on the 2025 list whether what we're some criteria you were using was it mostly based on usage right now or kind of from first principles etc oh um I think you know so 2025 it's basically a grab bag of stuff I've been paying attention to almost trying to be broad and pick a bunch of different things everything from hardware wallets to privacy coins defy new chains etc etc um I actually probably you know what I undercover maybe is new chains but those are almost sometimes the most covered you know you can just scroll down Quinn market cap and take a look at them um basically I thought of them all is things that I could see some version of that concept working if not the specific company you know like I'm pretty sure crypto games for example are gonna be a thing by 2025 just people want to make money on eSports crypto lets you monetize better you know that seems like an obvious thing so yeah I'm bullish on most of those trends but it was just kind of a grab bag of things I thought useful to mention like I could probably do another 20 slides frankly um but just you're just kind of a selection hey I'm just wondering what you think crypto is going to do for like the future of work and employment because I know you mentioned tasking sounds kind of like you're thinking that like employment will be sort of unbundled with like bounties and other things like that so how do you think about that in terms of the way people are going to actually be employed by companies in the future yeah it's a great question so I mean the thing is that um so I do think that there's gonna be a huge scaling up of micro tasks for machine learning training and the reason I say that is we haven't yet you know so we've been using machine learning you know to Train things like image recognition and and and and stuff like that but we haven't done is asked experienced doctors and lawyers and I mean there's there's folks who have trained certainly medical imaging machine learning but we haven't gotten all this information out of the brains of skilled people and eventually you know for example a bunch of lawyers annotate a contract as that language is non-standard this language is standard um you know a number of let's say photographers say oh that photo is bad this photo is good there's actually a ton of stuff we still are going to be doing in terms of taking skilled information digitizing it and pulling it in um and and eventually what that does is it allows you know the doctor just focus on the really hard cases and the audio diagnosis can take care of other things Kosovo's talked a lot about this so so I think there there will be an avenue for that kind of like much much more in the way of training data uh but you know it's it's hard to fully fully fully factored out a job into only micro tasks um because there's a lot of shared context right it's it's something where you know I think you could make it work for programming first where you'd have a github repository you have 500 open bugs then you put 100 bucks on each of them and you put for a few thousand dollars out there and you let the Sharks devour it right that's to say on each of those like you know get up itself actually has get up bounties now or bounties it's called something else get a rewards or what have you and the the concept would be you put fifty thousand dollars out there a hundred bucks on each ticket and just let the piranhas all the open source developers try and go and solve them and maybe that'll work up but you're also gonna need some kind of approval process so maybe you need another 50,000 dollars to pay reviewers of those tasks and what-have-you so I think it might work in programming first it might work in books I think we need some real innovations in kind of MapReduce for labor before that works and that's non-trivial I think it's feasible but non-trivial hi thanks for the talk my name is Jeff I guess my question is so blockchain offers a lot of really interesting possibilities for identity and really in like a very different way that then real world identity works today and I was hoping maybe you can just expand on what you think the opportunities there are yeah so so I gave a talk on this called the pseudonymous economy and the concept is that in the pseudonymous economy people earn under one name they speak under another name and their real name is yet a third game right so you treat your real name quote-unquote you know and I put it in quotes because you know real name is a state assigned name um you know you can't sequence somebody's genome and determine their real name I'm you can determine you know like like their blood type and other kinds of things by you know from the blood you cannot determine their real name so you know your if you treat your real name as a social security number and you might say well that's really a typical Balaji why would someone do that well and give you an environment where hundreds of millions of people do that every day and that's read it right like hundreds of gnomes of people are effectively pseudonymous all day on Reddit and they just use whatever name suits him they build up reputation under that name and they can switch other names and what-have-you and like the one convention all these people on reddit go by is that daxing bad right mapping the real names the physical person is bad in one of the reasons for this is you know kind of half joke about this but I think by like 2040 or there abouts dachshund will be like consider like when the worst things you can do because um if you dock somebody you get their address you get their address then you know you can like you know who they are you can never cause harm to them in the physical world so I think that you're gonna see a huge burgeoning of pseudonymous identities not just for communication which we've already had over the last 20 years but for earning and so people will live their entire lives for the most part pseudonymous lee and they will say nothing controversial under the pseudonym that's earning and then they'll have all their controversial stuff for their pseudonym that speaking and then they will file their forms on yet a third pseudonym which is just you know the or the real name which is the government identity and you know this is already actually happening among you know Gen Z of which I'm sure some of you have either are or have you know siblings who are where you know they have Finn's to Graham and Orinda R insta right so if insta is there like fake Instagram and rinsed azure real Instagram and on the fake Instagram they're under a fake name but they're being there Bill Self you know and on the rinse des they're under a real name but they're being their fake self because they're posting photos and Sunday best with mom and dad or whatever and they're not living it all hang out so this kind of multiple identity order as opposed to multiple identity disorder is kind of already there among you know younger kids um and and so I think that's basically where society's going and I think Krypto is gonna help with that because they allow people to burn under those different identities which really closes look cool okay great but thank you very much Balaji we appreciated the recent ation [Music]