Notes

• Overview: [[Balaji Srinivasan]] discusses about crypto applications in 2020 and also beyond that point to 2025. Also includes a history of how we got to the present moment, and some underpinning concepts of all [[crypto]] projects.
• 1:45 Talk begins
• 2:20 Why [[Bitcoin]] was invented in the first place. It represents the latest step in a progression of digital cash: #money #payments #Ankified
  1. Physical cash: A hands B cash and B no longer has it.
  2. Naive digital cash solution: A sends B serial number via email, but A still has a copy, so this doesn’t work
  3. Centralized digital cash: A bank C acts as trusted intermediary – debits A and credits B.
  4. Decentralized digital cash: Centralized bank C is replaced by decentralized networks of competing miners updating a [[blockchain]].
• 5:25 [[blockchain]] is the fundamental innovation behind [[Bitcoin]]. There are many blockchains; for example [[Ethereum]], which is more programmable than bitcoin and allows for [[smart contracts]]. Allows for more complex transactions than simple "debit A and credit B".
• 8:06 Technological concepts underlying [[blockchain]] projects
  • [[blockchain]] is a database for storing things of value. Although slower than centralized databases, they provide tamper-resistant shared state in an adversarial environment.
  • 9:15 [[Bitcoin]] is a [[protocol]] – you can open [[Wireshark]] and see raw packets updating the underlying [[blockchain]]. Entirely packet-driven without reference to a bank. So, machines can now hold and send money.
  • 13:30 [[blockchain]] means having a greater choice over who to [[trust]]. Previously you had to store money at one of a few banks; now you can store at a bank, exchange, or any computer.
  • 13:54 [[blockchain]] enables internet-scale [[cap tables]]. Cap tables are tables examining who owns what percentage of a company. #Ankified
  • 16:10 [[blockchain]] breaks [[network effects]] because token upside is inversely proportional to network effects. For example, competitor to Facebook could issue tokens to new users, giving value to early users that decline in value as the network size increases. Turns customers into investor-like entities. #Ankified
  • 17:30 [[blockchain]] will transform [[Social Networks]], moving from liking and poking and messaging to real value being create (paid DMs, surveys, task)
  • 18:00 [[blockchain]] is a partial move from [[the cloud]] toward more privacy. Users increasingly keep private keys local and private, and this will be an anchor leading other data being encrypted and moved locally. The bulk of data will still be remote, but it will only be decrypted when you download it locally.
• 19:15 The [[blockchain]] community
  • A blockchain community is economically aligned. "If they’re holders, none of them can win unless they all win". #incentives #[[crypto cliff]]
    • For example, with [[DNS]] if someone seizes a lol.cat domain, you keep your .com domain so you don’t really care. In contrast, seizing a person’s .ens domain means interfering with the [[Ethereum]] blockchain. "You now have a monetary incentive to defend another’s rights". He calls this the [[crypto cliff]]. #Ankified
  • 21:30 This allows for experiments in [[self-governance]]. Suddenly, [[macroeconomics]] becomes an experimental science. "If [[federalism]] meant the laboratory of the states, [[decentralization]] is creating the laboratory of the networks.
• 23:08 Applications: 2020, i.e. what are the successful things currently built with [[crypto]]?
  • These are things already built at scale at 2020: [[exchanges]], [[hardware wallets]], [[miners]], [[issuance]], [[stablecoins]], [[defi]]
• 25:30 Applications: 2025, i.e. the stuff that’s up-and-coming and might be big in 2025 in [[crypto]]? #[[startup ideas]]
  • [[privacy coins]] (e.g. [[Dash]], [[Monero]], [[ZCash]]).
  • [[Lending]] and [[Interest]] (e.g. [[Compound]], [[Maker]])
  • [[Scaling]] (e.g. [[Starkware]] and many others)
  • [[Decentralized Cold Storage]] (e.g. [[Casa]]) helping people store at home that don’t technically know how to do that, so this provides services that allow you to do that.
  • [[SaaS-for-gas]] (e.g. [[Starkware]] and others). Smart contracts that are on-chain and charge for each API call. Right now you have to do a Stripe billing layer, but maybe put in a code snippet and you have a function that executes and makes you money.
  • [[Insurance]]
  • [[Multiwallets]] which add more functionality than send/receive, adding new verbs like buy, sell, sign, vote, stake, register, etc.
  • [[Security]]
  • Novel [[financial instruments]]
  • Blockchain games
  • Crypto [[Social Networks]]
  • Decentralized [[DNS]]
  • Automated Market Making
  • Decentralized [[Identity]]
  • [[Personal Tokenization]]: issuing an equity-like token for your time or some function of your time.
  • [[Mutuals]] and [[Guilds]]: Attempt to incentivize collective action (e.g. [[Moloch]], [[Gitcoin]])
  • [[Founder’s Rewards]]: New business model for funding developers from rewards (e.g. [[Zcash]], [[BCH]]).
  • On-Chain Developer Bounties (e.g. [[Tezos]])
  • Clients for [[dApps]] to make it easy to interface with these applications (e.g. [[InstaDApp]])
  • [[Developer Tools]]
  • Oracles and [[Prediction Markets]]
  • [[Decentralized Autonomous Organizations]] – semi-autonomous programs, many of which make you money.
  • [[Community-Owned Organizations]]
• 36:33 Q&A
  • Internet companies have captured a lot of value from [[data monopolies]] or [[attention]]? Where do you think the value capture will come from for the [[crypto]] applications in the next 10-15 years?
    • Balaji is bullish on [[tasking]]. "It’s the better-than-free economy. Rather than trying to hack your [[attention]], they are paying you for it".
      • [[crypto]] uniquely enables this for a lot of reasons, but one big reason in ease of [[pay-outs]]. [[pay-ins]] are hard, and [[Stripe]] has succeeded by making them easier, but pay-outs are even harder. As an example, think about how many sites where you’ve entered in a credit card to pay for something (pay-in). Probably 50-100 sites. Now, think about how many sites you’ve entered in your bank account information to get paid yourself for a service? Probably no more than 5, possibly none, because a website with your bank account information could potentially debit as well as credit. #[[pay-outs vs pay-ins]]