Naval Ravikant14:04
Yeah, I put up a tweet recently for the references. I said that the three most important epochs of the internet were first the web, second mobile, and third blockchains. And obviously this is going to be controversial, lots of people jumped in my comments to tell me how I was wrong. But look, to say anything interesting, you know, you kind of say something that's half true or at least partially true. Nobody knows the exact future, nobody knows exactly how the internet is playing out. Obviously there will be other acts, like VR/AR will probably be quite interesting when it arrives, and AI, which I think is a little overhyped, you know, if it materializes, would be a total game changer, especially AGI. But I think the thing that's most interesting that's going on right now in technology is blockchains. And by blockchains, I mean these decentralized consensus mechanisms that enable us to form everything from corporations to networks to protocols to products that are operated by the community of users underneath or interested users underneath, as opposed to being owned by centralized entities. And so the first wave of the internet, we saw the creation of classic web companies. In the second wave of the internet, we saw Apple and Google basically take over by the App Store and the Play Store, and also a few other behemoths like Amazon and Netflix and Facebook and so on rise up. But now I think the most interesting action is going on blockchains. And Bitcoin is the obvious one, which is we're literally redefining what money is and moving it onto the internet, as opposed to having it be in the possession of any single government or small group of people. And I think there will be hugely beneficial repercussions to society for doing that. But then with Ethereum, we're building an entire decentralized stack of Wall Street on top. All the things that Wall Street does, or London or Shanghai or Hong Kong or New York do with all their financial institutions, is being done better and easier and smoother on this decentralized finance stack. It doesn't quite work yet, it's a Rube Goldberg machine, but it's getting better and better. One analogy I made was I think that DeFi, decentralized finance, and smart contracts are like building castles made out of math, you know, that are floating in the sky and freely trading with each other. This is like this old city-state model of free trade and impregnable protection of property and privacy, which is kind of a fantasy. But that's really, if you go back in human history and you look at when humans have made great leaps forward, it's been in city-state models, whether it was Greece with Athens, Sparta, or whether it was Renaissance Italy with Florence and so on. But I think we're building the virtual equivalent of that using blockchains. And I think we will also see huge advancements in decentralized mechanisms for building decentralized social networks, for building decentralized, you know, they call it non-fungible tokens or decentralized registries of items and assets, both digital and pointing to in the real world. And we will see decentralized new game worlds. And eventually, to my mind, a blockchain is actually a precursor for a metaverse. Let me tell you what I mean by that. Like when VR/AR really, really takes off, it's going to have to be global just like the internet was. It's going to have to be permissionless just like the original internet was. It's going to have to be censorship-free for people to dream and to create and to imagine, as opposed to trying to fit into, you know, whatever the local boss thinks that you should and shouldn't do. It's not going to be owned by Mark Zuckerberg. Mark Zuckerberg and his crew are not going to create the next internet because we just won't have it. Nor by Jack Dorsey, nor by Jeff Bezos, nor by any of them, nor by Tim Cook. Benevolent dictators, so they might control the hardware that lets us in, but hopefully there will be competing hardware standards and they will let us into one large decentralized open space. And that decentralized open space is going to need to know how to allocate resources, how to pay for things, how to protect users' data and privacy, how to interlink with each other. And these are the kinds of distributed consensus problems that blockchains are extremely good at solving. So I'm pretty confident that not only are blockchains the most important thing going on right now, but they're also the fundamental layer for whatever comes next. Now, due to their design, they're basically venture capital done in public, right? The way these companies work is they create a protocol, then they IPO, and then they raise money. Like literally their first act is an IPO, and then after that the investors start coming in. Whereas the classic tech model, which is closed to the average investor by regulations, basically makes people like me wealthier and keeps you from doing venture capital investing until it's really late in the game, and then the company IPOs and most of the appreciation is gone. And I might have made 100x or a thousand x, and you get to fight for 20 a year. So with blockchains, because the currencies built on them are permissionless, they IPO on day one. So what you're seeing is venture capital in action, unregulated, with lots of scams and pumps and dumps and lots of clones and forks and really bad actors. And 99 percent of it is junk, as opposed to normal startups where 90 percent is junk. So it's even worse than the normal setup. So to people it looks really scammy and looks really worthless. But this is kind of an IQ test, it's really going to differentiate the capable people from the incapable people. So you know, the vast majority of what happens in blockchain then is going to be terrible. But I believe that there will be a piece emerging out of that, and I think we've already had a few huge hits around Bitcoin, Ethereum, DeFi, and so on. And now we're seeing with NFTs, and soon I think we'll see with social protocols and with gaming protocols. We're going to see massive revolutionary shifts, and it's a major technology that by the time the shift materializes, it's too late for the incumbents. When the iPhone showed up to Nokia and Ericsson, it must have looked like Martians had just landed, you know, from space with battleships, and there was just nothing they could do. If you're sitting at Nokia and you were told, 'Hey, let's go make a Nokia phone to compete with Apple,' you would just weep because there's nothing you could literally do. You'd have to write this massive software stack and build a touchscreen phone, and you know, it just was impossible. It was a computer, which was just a whole different thing. So I think the same way that when blockchain-based technologies really become frictionless and well-implemented and seamless, that they're just going to overwhelm the current technologies that they're facing. They'll just be so much more capable, unimaginably powerful compared to what we have out there in the centralized models.