Cycles of Computing, Now and Next

a16z general partner Chris Dixon and Proof Collective co-founder Kevin Rose take a tour through current tech trends in web3 and beyond, from NFTs and art to AI, copyright, communities, the growing tech scenes in LA and NYC, and more.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This week, we have a special, brand-new episode for you, courtesy of our newest podcast, Web3 with a16z, which is hosted by Sonal Choksi, the longtime former showrunner of this podcast. And this wide-ranging hallway-style conversation from Web3 with a16z, Chris Dixon, founding general partner of a16z crypto and former entrepreneur himself, sits down with Kevin Rose, the co-founder of Proof Collective, as well as co-founder of DIG, former investor at GV, and longtime entrepreneur and podcaster. They talk about how, as veterans of Web 2, they've come to the Web 3 movement and dig into tech trends both in Web 3 and beyond, including NFTs and art, AI, the evolving role of modding,

• 0:44Speaker 00

  copying, and copyrights on the internet, tech's expansion from Silicon Valley to LA and New York, and more. We hope you enjoy this episode. And if you want more on the latest in Web 3 trends, be sure to subscribe to our podcast, Web3 with a16z, wherever you listen to your pods.

• 1:07Sonal?

  Welcome to Web3 with a16z, a show about building the next generation of the internet from the team at a16z crypto. That includes me, your host, Sonal, and also our occasional co-host, Chris Dixon. This week, we were both in Los Angeles, where we recorded some more episodes coming your way, including this all-new episode, which is a hallway-style tour through hot topics involving yet also going beyond crypto, such as art, AI, the evolution of mediums, including blockchains, quantum computing, other areas. Our guests also do a deep dive on NFTs, communities, debates around CCO and licensing, and copyrights on the internet, and artists' royalties, and more, plus discuss the role of brands.

• 1:51Sonal?

  They also discuss computing cycles and technology, recent past tech history, and the transition from building in Web 2 to Web 3, as both of today's guests were observers and builders through both movements. So we have Chris Dixon, founding general partner at A6Z Crypto and former entrepreneur, in conversation with Kevin Rose, who, among many other things, co-founded the social news site DIG in the early 2000s and is now co-founder of Proof Collective, which launched Moonbird's PFPs and Yudao recently and more. As a reminder, none of the following is investment, business, legal, or tax advice, nor is it directed at any investors or potential investors in any A6Z fund. Also, please note that any A6Z investments and portfolio companies

• 2:36Sonal?

  mentioned are not representative of all A6Z investments. You can see a6z.com/disclosures for more important information, including a link to a list of our investments. So with that, the conversation begins for the first 10 minutes with how Kevin got to Web 3, as well as a setting of Los Angeles, since we recorded this in our LA office.

• 2:56Chris Dixon?

  Great. Welcome to this week's edition of Web 3 at A6Z. Thanks for being here, Kevin.

• 3:01Speaker 03

  Yeah, it's great to be here. I'm glad we're doing this in person, too.

• 3:04Chris Dixon?

  Yeah, I know. It's nice. It's good. It's good. And you just moved here recently.

• 3:07Speaker 03

  Yeah, just a couple of weeks ago. There's just so much going on in LA right now. It's crazy how many founders I hear and talk to that are actually leaving the Bay Area. Or when they're starting something new, they're like, I'm going to do it in LA first, which is really sad to kind of see that happening, but I get the reasons why. I mean, Bay Area was my home, you know?

• 3:27Chris Dixon?

  You were there for a decade plus?

• 3:30Speaker 03

  2000 to 2013. So it was a good tranche.

• 3:36Chris Dixon?

  I used to visit a lot from New York, but then I moved in 2013. And now I'm pretty much mostly like New York and LA. I find that those have kind of a more diverse, creative set of people. I think, I don't know, my kind of pet theory on it, I guess, is that the Bay went from kind of the pirates to becoming the Navy. Like, it won. And there's sort of Google and Facebook. And I just find it, I think the Web 3 thing is a great example, where I find a much more positive energy towards it in LA and New York than I do in the Bay Area.

• 4:07Speaker 03

  Yeah, it seems like... With such a tech geeky like focal point for the Bay Area, once that was won, it was like, okay, what other industries are going to be reinvented? And a lot of them aren't there, right? So it makes sense that media and everything else is going to tease us down here.

• 4:23Chris Dixon?

  So sort of as the tech gets deployed more deeply in the world, it spreads. I also think, and I had never spent much time in LA before, but the sense I get is it used to be a very kind of monoculture, you know, Hollywood and at least anecdotally, like as you said, a lot of tech people I know who moved here. It just seems like it's just much more kind of diverse, similar to New York. I think New York also, my theory of New York is it used to be so dominated by Wall Street and the kind of decline of it just has like a more, you know, just many different interesting industries, including tech. It's gotten pretty good in New York.

• 4:51Speaker 03

  Yeah, I mean, I love that about LA. I remember, do you remember when it was like, okay, snapped, oh no, it was MySpace. MySpace is down there. Like, okay, well, it's that one little rogue like tech company that's down there. And there was like a few little smaller things.

• 5:02Chris Dixon?

  And then Facebook crushed them, which was sort of the, that would be the Silicon Valley narrative, right? Like, once the real tech people came, right?

• 5:08Speaker 03

  Exactly. And then we had the same thing with Snapchat being down here. And then, but for some reason, I just, um, NFTs and media and a bunch of startups are deciding that, you know, the Bay Area, the high rent prices, a lot of the politics that are out there and all of that, like they want a little bit more room to breathe and places to raise a family and LA has a lot of that.

• 5:28Chris Dixon?

  Yeah, I used to always think of LA, like 10 years ago, LA startups were kind of like MySpace, like maybe they, they understood culture, but they didn't build a great product. They didn't build a great tech. They had a lot of like influencer, you'd always hear these influencer pitches, a celebrity involved, but then the product would be really janky or something.

• 5:44Speaker 03

  Yeah, it's right. Cause I remember when, I think it was MySpace was built on like ASP, like Microsoft ASP or whatever. And I remember just being like, of course it is.

• 5:51Chris Dixon?

  It's funny. Yeah, so it's definitely changed. I think it's also, as you said, the tech has just matured. Like it's almost, you can just off the shelf build a good website now. And so it just doesn't matter. Like it doesn't differentiate you the way it did a decade ago. Cool. So you and I, I think, are some of the few web two people that are also web three in crypto. I'd love to hear just more about how you got into that.

• 6:11Speaker 03

  Yeah. Well, you know, I was dabbling in crypto way back in the day, like everyone else. You know, the same classic story of I forgot my wallet. Exactly. You go look back at those old tweets and you were like, uh, how you were buying it, you know, sub a hundred dollars. And of course they hit 300 and everyone sells and it's the same story. So that was a lot of fun. You know, that led me to like meme coins like Dogecoin, which I was a pretty active participant in what was going on there.

• 6:38Chris Dixon?

  From the beginning?

• 6:39Speaker 03

  Close to the beginning. So I became friends with the team over there and I really loved what was going on socially. Like the tipping aspect of it, the, the kind of charity side of things. Like it was just a fun experiment. All the bots that were created to facilitate tipping. It was performant at the time. There was a lot to love with that culture that was being built. So I always paid attention. Uh, when I was at Google Ventures, I led some of our crypto deals, but you know, I always stayed close to what was going on. I saw with my web two hat on, I'm like, there's no way this is going to become mass adopted by consumers. In terms of, does it pass the, my mom can send me crypto easily test.

• 7:19Chris Dixon?

  So the user experience wasn't there?

• 7:21Speaker 03

  The user experience was not there. I mean, to have to like copy and paste these massive long wallet addresses. And you know, a lot of the kind of rough edges that need to be sanded down. And quite frankly, a lot of those still exist today. So just curious. But then this web three thing started to kind of take root and I would say the DeFi that was really brought me in. So just rewriting the entire financial stack was really interesting to make it more efficient. So that was the first use case where I was like, aha, okay, it's more than just speculation. There's actually real products that are being built here.

• 7:54Chris Dixon?

  So this is kind of like the DeFi summer period, like 2020.

• 7:57Speaker 03

  Exactly.

• 7:58Chris Dixon?

  Uniswap, Compound, DAVE.

• 8:00Speaker 03

  Exactly. So I just started playing around with all of those and trying out a lot of the crazy DGEN stuff that was out there. Losing some money and you know, just, just kicking the tires on a bunch of different things. And then, you know, I was. Lucky in that I had minted some of the early CryptoPunks. And it was just like, my buddy was like, hey, these are things called CryptoPunks. They're NFTs, or I don't even know if they were calling them NFTs at that point. But it was like, these little things you can mint on the blockchain. It's like, okay, cool, like, let me get 10 of them or whatever, right? And so I did that, immediately forgot about it. It was in a wallet called Parity, which was not using the standard mnemonic phrases for restores. So I lost them. Eventually was able to reclaim them. It was a nightmare getting back, but, but that was my first kind of introduction to NFTs.

• 8:42Speaker 03

  Started doing a podcast about crypto during DeFi summer, because that's the way I learned. You know, having great founders on, I just can pick their brain. And it gives me an excuse to sit down one on one and really have on, you know, all these great people that were building a whole slew of the top projects at the time. Then NFTs, I had heard about Art Blocks, you know, a couple of years back. And I was like, well, this is interesting because it's capturing a new form of art. Like this, this idea of generative art being captured for the first time. And I've always been kind of like a fan of art in general. And I'd seen some generative art displays before the blockchain in that you'd go in, you see a computer hooked up, you see something cool on a screen. Some people would buy them, they'd break down, the artists would have to come out and do some repairs or whatever it may be to make these things work long term.

• 9:28Speaker 03

  So generative art, I believe, has really found its home on the blockchain, largely because traditionally, this was something that required just a ton of maintenance and setup. And they were beautiful. Like you'd see these great interactive displays and all kinds of fun things could be done with them. But it was-

• 9:44Chris Dixon?

  We had one in the office once, but it's like a really expensive setup.

• 9:47Speaker 03

  Really expensive, it breaks down, then you're like, okay, how much is it worth? Like, is Art is still alive? Are you gonna come repair it? Like, what's gonna happen? And there's two levers here. It's one, it's anyone can create. So it's a universal, you know, P5 JS, what they're using for the majority of it. It's a language that anyone can pick up, literally in like a half hour. I was creating some really fun stuff with P5. And then a standardized platform for publishing it. And I was like, whoa, this is being captured and kind of solidified into the blockchain for the first time. It's not resource dependent. Like, you don't need to have a special set of hardware, external hardware to make this happen. Just display them on your computer. And then lastly, it's this awesome little, like it or not, it's a pull the slot machine.

• 10:31Speaker 03

  So people love that idea that when I pull the slot machine handle and I click mint, there's that surprise and delight that comes with the reveal. So all those things coming together, great art, along with a little surprise and delight. And then also just some old school generative artists that have been doing this forever, finally came on board and said, I'm going to start producing, you know, really interesting artists that you can look back and say they've had amazing generative careers for the last 20 plus years. And now they're doing this cemented in the blockchain, proven provenance and scarcity around this drop and all the things that you want out of an NFT and now it's collectible. And it was clear to me that you see a bunch of other great platforms that emerged

• 11:12Speaker 03

  where they were doing really creative things that just were creating a new medium for art. You know, artwork can be manipulated based on time of day, the stock price, external oracles. Like it was clear that this was going to be a real durable thing over the long term. Right. And so in seeing that, I was like, okay, well, let's do another podcast about that and have a lot of these great founders on. So had all my favorite artists on those first few episodes and started collecting and just saying, okay, I'm just going to start buying some of this stuff. Built up a pretty decent portfolio there. And at the time I was at True Ventures. And so I was like, we need to start, you know, backing some of these companies. And so that led us to, you know, I led the rounded art blocks and quantum art.

• 11:51Speaker 03

  And we probably did another five or six NFT specific investments, some that were fractionalizing art. Just some really interesting things there. And then I was like, well, gosh, I'm watching all these people doing really creative things. I'm an entrepreneur. There's a lot of blue ocean here, which, you know, you can't say the same for anything else that was going on prior to that. Let's go build. Let's just, let's just go and spend a little bit of time. And so my partners at True were like, okay, yeah, I mean, this is you. Like, why don't you go and spend a little bit of time building? And so that led me to the creation of the Proof Collective Pass. And then that exploded. We sold out immediately. It was a Dutch auction and that led to eventually Moonbirds and kind of where we are today.

• 12:31Chris Dixon?

  Nice. Just curious, when you personally buy NFT, you know, I kind of think of buying NFT as a sort of a mixture of different motives. So there's. There's the collecting motive. There may be a financial, like you think it's going to go up. There's a social aspect to it. You're joining a community. Maybe you're interacting with the artists themselves. Maybe there's a patronage aspect to it. It's funny because I hear these skeptics, like you're not really buying the copyright. Of course, and that's the same with physical art. You don't get the copyright when you buy it. You're buying a physical thing. And I'll just say for myself, I never was interested in physical art. NFTs seemed obviously much more interesting and I feel like an emotional connection to them.

• 13:13Chris Dixon?

  So we're investors in Foundation, which is more artsy kind of NFT site. And I, early on, a couple of years ago, bought a bunch of NFTs there. And what I found, it was sort of the patronage aspect was interesting. I was DMing with the artists. I work in venture capital. I don't normally talk to artists. You and I went to a NFT event a few months ago and there were all these NFT artists, again, like it's a different, you know, experience for me.

• 13:38Speaker 03

  It's refreshing a little bit.

• 13:38Chris Dixon?

  Yeah, it's really refreshing, actually. And it's a way to be supportive in an organic way that doesn't feel transactional, right? Like I'm buying your art. I'm not making a donation. I'm supporting you the way you want me to. So anyways, that's a long-winded way of saying like, I'm curious, what was your kind of feeling when you started collecting and buying these entities?

• 13:57Speaker 03

  Well, I think there's a handful of checkboxes that I look for when I want to collect a piece. First is, am I visually attracted to it? Because there are a lot of friends and flippers and people that just get in just for a quick return.

• 14:08Chris Dixon?

  And they're just sort of like, the meme is trending or?

• 14:10Speaker 03

  Yeah, the meme is trending. I'm going to jump in and in 48 hours, whatever, two weeks I'm out.

• 14:15Chris Dixon?

  Whereas you're sort of buying it for the?

• 14:17Speaker 03

  Decades to come. Yeah. And, and the reason I have to be attracted to it is because in a down market, if that thing's chopped in half or by three quarters, I'll still hold on to it because I think it's beautiful, right? And so that, that's an easy one. I'm drawn into the art. I love it. The second piece is, who is the artist behind it? In that I want them to have like one of two spectrums. They either have to be a great promoter in that they have to have the right Twitter presence and carry themselves well on Twitter. Or they have to be just weird as shit and just be on the other end of the spectrum, like an ex copy that doesn't talk to anybody, that tweets out weird stuff.

• 14:51Chris Dixon?

  Myth around them or something based on their

• 14:54Speaker 03

  Yeah, exactly.

• 14:54Chris Dixon?

  Security.

• 14:55Speaker 03

  The X copy thing is funny because if you DM with him, you know, and you're a collector, he'll get back and he'll chat with you a little bit. And then sometimes you'll ask him a question and he won't get back to me for like, you know, three or four weeks. And I'm like, oh, I love that. Like he's, he's setting the hook even deeper. He doesn't care about money. He's super mysterious, you know? There's something, there's something cool about that. The other pieces, how often are they releasing new pieces? Are they a machine that's just going to flood the market? Or do they have a great paced cadence about them to where they're, they're thinking about this over the long term? It's they're not just in it for the quick buck and they're not just doing anything and everything for anyone. So that's another big piece. A couple more pieces. I look at what other prominent kind of tastemakers in the space are collecting that artist. So, you know, is there the Cosmos of the world?

• 15:40Speaker 03

  Is there, you know, there's probably I'd say a dozen or so really well respected collectors. I look at their wallets and say, are they also collecting this artist? And then I'll have conversations if they're not and saying, hey, what do you think of this artist? You know? And then the last piece of it is, are they doing something new and exciting and novel? Or is it just iterative type work? And so, you know, X copy was really interesting because what I did is I used the Wayback Machine and I went to his Tumblr account. And he was doing this genre of glitch art 10 years ago. And like, that was way prior to any of this being on the blockchain. And there's so many people that have come in and copied that style, but they have no back catalog. They just, they're doing it because it's a hot trend to be a glitch artist right now. Right? And so that was something I was really drawn into.

• 16:24Speaker 03

  Another great example would be Tyler Hobbs with this QQL drop that he did recently. So Tyler Hobbs is probably best known for the Fedenza series. Fantastic entrepreneur, great coder, decided to do a new drop where you could, as the collector, use the algorithm to generate as many pieces as you want. And he would give you visual tooling, like an interface to tweak some of the parameters of the algorithm. So the way I like to describe it is it's, it's, it's that classic like bowling alley with the little kid stoppers on the side. So the ball is still going to hit some pins and it's not going to go in the gutter, but it's going to produce a decent output. Right? And so you You as the collector, pick that final one and say, okay, I'm ready to mint this one. And then you spend the token, you burn it and you actually get that output.

• 17:09Speaker 03

  It's really cool because you're picking the output, but then there's the extra additional aspect where if you get someone that is also well-known, that is creating the output and has additional value on top of that. So other collectors or other artists have joined and said, this is the one that I'm minting. Now you get a combo, Tyler Hobbs, plus another additional artist that picked that piece. So it's a really fun project.

• 17:30Chris Dixon?

  I think one interesting thing is that, you know, historically, new technology tends to enable new media.

• 17:36Speaker 03

  Right.

• 17:37Chris Dixon?

  And I think one of the mistakes people make is kind of skeuomorphism where so YouTube comes along and there's sort of two, there's CBS coming and putting whatever TV show they have on YouTube. And then there's the new native YouTubers, right, which is the new genre, new form of media. And fast forward, it was the YouTube native stuff that became kind of the most significant and most important.

• 17:58Speaker 03

  Right.

• 17:58Chris Dixon?

  I was seeing the other day that Dude Perfect, it's like three guys who mess around. They have more YouTube followers than all the major sports leagues combined.

• 18:07Speaker 03

  That's crazy.

• 18:07Chris Dixon?

  So like, who would have thought that in 2005, right? Everyone just sort of had this skeuomorphic, oh, it's going to be football. No, it's going to be three people dunking each other that's been watching video games and all these other kinds of new things. And so I wonder with NFTs, if a similar thing will happen in things like generative art and whatever else, I'm sure there'll be a million things that I can't think of.

• 18:26Speaker 03

  Right, right.

• 18:26Chris Dixon?

  That people will come up with that are native to the internet and native probably to NFTs as well. Right to the fact that NFTs have scarcity, you know, are on a blockchain, have smart contracts involved.

• 18:40Speaker 03

  Proven problems.

• 18:40Chris Dixon?

  And then the business model, right? I mean, cause like you had sort of native internet, things like memes are sort of an internet native media form. But you never had a real business model, which should really add a lot of energy and. And kind of momentum behind those art, like now you can make a living this way.

• 18:56Speaker 03

  Right.

• 18:56Chris Dixon?

  It's not a side project.

• 18:57Speaker 03

  Right.

• 18:57Chris Dixon?

  And if you can lean into it, what do you do? Right? Like you could imagine this really interesting kind of creative renaissance.

• 19:03Speaker 03

  Well, absolutely, especially because now the artists are kind of going out and deputizing other artists. It's like this cyclical thing where you're seeing the artist pour money right back into the ecosystem.

• 19:12Chris Dixon?

  Oh, that's great. Yeah. I think I saw that in some of the stats and some of these sites. I think they were talking about that, that some high percentage of collectors are also artists.

• 19:19Speaker 03

  Right.

• 19:19Chris Dixon?

  Which seems like a really healthy kind of phenomenon.

• 19:22Speaker 03

  Absolutely.

• 19:23Chris Dixon?

  That's interesting. So, so let's talk about Moonbirds then. So you decided you're going to go fully in, like why, you know, what was sort of the vision?

• 19:29Speaker 03

  Yeah, so the idea there was that, you know, we, we'd created this 1,000 member pass with the Proof Collective pass.

• 19:36Chris Dixon?

  Sort of a membership in this.

• 19:37Speaker 03

  Exactly.

• 19:38Chris Dixon?

  Artist collective collector club.

• 19:39Speaker 03

  It was like, if you join this collector club, if you hold one of these passes, you get access to the Discord, all the events, private, smaller collaborations that we do with artists. So we're leveraging a lot of our artist relationships. And we have our own products around that too, with grails and some of the other things that we created. And we do about a drop a month to the members. So they get some type of interesting new artist or new artwork almost every month. So that, that was a real success in attaching utility to, you know, membership, this idea of a token gated community, right? And we wanted to do that at scale, a larger scale, with a different mandate to kind of go in and create our own PFP. Cause frankly, the Proof Collective is a picture of almost like a credit card turned sideways that says Proof Collective on it.

• 20:24Speaker 03

  And nobody wants to rep that as their Twitter icon. So we were like, okay, let's just start with an experiment. Let's see what would happen if we created, we would pick owls because Moonbirds are owls and they're these wise, all seeing, all knowing animals. And we went in there and, um, you know, launched this and to our surprise, it blew our expectations in secondary volume and it just went, went absolutely nuts. And I think it was largely because we had already delivered a lot of product on the Proof Collective side. And so people knew if we were going to launch this new thing, it wasn't just going to be someone that puts up a roadmap with the where things don't get hit, but we're actually product builders in the space. And we had a much bigger vision in mind for what this could be.

• 21:03Chris Dixon?

  For those who haven't seen it, it's easy to find, but it's kind of pixelated, retro looking.

• 21:07Speaker 03

  Yeah, more of the 8-bit style, like front-facing.

• 21:09Chris Dixon?

  And like, how did you think about that and the owls? And is there kind of a, you know, a lore around it?

• 21:15Speaker 03

  Yeah, a lot of thought went into it in that we wanted to, you know, do a classic 10,000 collection that, you know, kind of was pioneered by the CryptoPunks. So the attributes that we designed were specifically built with utility in mind. So different types of attributes will unlock different types of things over time. And one of the things that I wanted to figure out is how you can reward dedication and commitment to a community. And, you know, I'd seen a lot of this being done in this whole slew of different ways. One were kind of blanket drops to the entire community. And we know that's just a very expensive thing to do. So we introduced another mechanic called nesting.

• 21:54Chris Dixon?

  So like specifically, what is nesting?

• 21:56Speaker 03

  Yeah, so once you purchase a Moonbird off the secondary market, you have it in your wallet. And it's just sitting there like any other NFT asset. If you go to our website, the Moonbird's website, there's an area that's called nesting. And if you go in there, it shows you, once you connect your wallet, the Moonbird's sitting there. You highlight it, you choose, I'd like to nest it. That disables the transfer function, still stays in your wallet. You can do a call to the contract to disable it anytime you want, even if our website wasn't up.

• 22:24Chris Dixon?

  So this is different than Web 2 and Web 3. The transfer function you're referring to is a smart contract. So the Moonbird is actually a, you know, it's a database record, but also a piece of code that exists on the Ethereum blockchain. And so you're actually changing it within the Moonbird itself. This is different, like kind of conceptually than in Web 2, where you just have like the website and the server. You don't have this third thing, the Ethereum blockchain.

• 22:47Speaker 03

  Right, exactly. So now we have on record when that started. And we can do the math and figure out how long it's been nested for. We can watch for un-nesting and re-nesting events. We can watch for it being transferred to different wallets if we want to. There is a transfer function on our website that allows you to transfer from one wallet to another without un-nesting it. Just so people want to keep their streak, but they're moving to a hardware wallet, things like that. But essentially it's a way to say, I'm committed to the community. I'm locking this thing up, I'm nested, and now it allows us to enable different nesting tiers and rewards that come with the benefits of locking it up. So it removes a lot of the supply out of the ecosystem. If you look at just all the top projects, you know, they'll

• 23:28Speaker 03

  be in the pretty high, single-digit amount of available inventory for sale. Ours is, you know, 2% or something like that. So it's quite a bit lower than everyone else. Nesting was a way to say and signal to the world that you're committed to this project over the long term. And so we count down to the second how long it's been nested for, and then you hit different tiers of upgraded nests over time. And then you get different rewards and access based on the tiers that you hit. And so, you know, as you graduate to these other nest levels, more and more things unlock.

• 24:01Chris Dixon?

  Yeah, it's proportionate to your kind of time commitment.

• 24:03Speaker 03

  Exactly. So that's, that's kind of what we're trying to do with the nesting piece of it. And it's worked out quite well. I mean, we threw an event at NFT NYC, and if you had one of the wizard or witch hats on top of your moonbird, you got a private magic show with David Blaine, which was amazing. We had him come and there was like, you know, 75 people there and, and he just blew everyone's minds.

• 24:24Chris Dixon?

  Nice, nice. So with respect to NFTs, obviously you're deep in the kind of art space and PFP space. Like, what do you think more broadly, like next five years, like gaming NFTs, you know, redeemable things for physical objects, kind of more traditional collecting? Like, I'm just curious, what else gets you excited around NFTs?

• 24:42Speaker 03

  Yeah, I think when Instagram drops their minting of NFTs, which is coming soon, that's going to be interesting to see how that plays out.

• 24:49Chris Dixon?

  I don't know how they're doing it, but I just worry, whenever you graft new things onto old, you get weird behavior.

• 24:55Speaker 03

  No, agreed. But I wonder if there's any depth there. You almost have to forget it's an NFT for a second and think it's a celebrity collectible. They'll sell it in two seconds, especially if there's Apple Pay enabled. I mean, Apple's going to take their 30% cut, which they came out and announced. And I think that's on purpose because they know Instagram's dropping something soon. Would I do Instagram NFTs? Absolutely not. But I think it unlocks a different generation and a different group of people to NFTs, which I'm excited about because like, on board. More users and they set them up with a wallet for the very first time. So that is interesting to me just because it's expanding the pie. So back to the next five years, I think there's going to be a little bit of a battle around secondary royalties. Some people are starting to sidestep them.

• 25:37Chris Dixon?

  This is like the pseudo swap debate and things.

• 25:39Speaker 03

  Exactly.

• 25:40Chris Dixon?

  Like there's new kind of marketplaces where you.

• 25:42Speaker 03

  Pay zero or pay what you want.

• 25:44Chris Dixon?

  5% fees, just for those who don't know, like on marketplaces like OpenSea, if you do a secondary transaction, you buy a T for somebody typically 5% of that sale price will go to the original artist.

• 25:56Speaker 03

  Right, exactly.

• 25:57Chris Dixon?

  There's new marketplaces that kind of get rid of that feature.

• 25:59Speaker 03

  Yeah, and so there's a couple of ways to approach that. One is artists are going to fight back, definitely, and there'll be tooling that says, yes, you can sidestep us because it's smart contracts and there's ways around it. You could put wrappers around it.

• 26:12Chris Dixon?

  You can, in theory, do it in the smart, like this is an interesting thing, too. And there's reasons people haven't put the royalty in the smart contract, right? So that you can transfer to your own wallet and like you can transfer to a smart contract system. But I wonder if, I don't know, I feel like it's TBD as to whether there are, there may be technical solutions to some of this.

• 26:31Speaker 03

  One that I thought was pretty interesting is that especially for pre-existing collections that have already been minted, is that there's this idea of tracking if things are moving through these networks of no royalties. And if they are, you really can't do anything except for the artist can choose not to reward those collections in the future. I think that will start to happen. Also, I believe that with larger mints, additions, things like that, if you're doing, if you're an artist and you're doing a piece of 500 or a larger collection, you'll hold back 20 for yourself or 100 for yourself and you may have not done that before. But now you have a way to go out and sell those directly on the secondary market.

• 27:05Chris Dixon?

  Interesting. Let's talk about CC zero. So just to explain, there's a common source of confusion around NFTs. People who don't understand them think you're creating additional scarcity or you're adding a copyright onto something. That's not the case. The mental model I would use is that copyright is sort of a different layer, an independent decision. Selling NFT, you're selling a blockchain record, you're selling a proof of ownership. In the same way that when you buy a physical painting, you're buying that physical painting, completely separate as to whether you own that physical painting, that that physical good is a question of copyrights, totally separate questions, right? They don't overlap anyways. And so there's something called CC zero, which is Creative Commons is an organization that standardized a lot of different copyrights.

• 27:48Chris Dixon?

  And one thing I want to mention is that we believe that like any artist should be able to pick whatever copyright they want.

• 27:53Speaker 03

  Absolutely, 100%.

• 27:53Chris Dixon?

  So this is all about choice, but CC zero is one choice, which says essentially there are no restrictions that anyone can reproduce this media, create derivative works, sell those derivative works, do anything they want. The image is public domain. I think, I forgot what license you started Moonbirds on, but you switched it to CC zero a few months ago.

• 28:14Speaker 03

  Yeah, it was still a restricted license. We could revoke it at any time, but it gave users the commercial rights to go out and monetize.

• 28:20Chris Dixon?

  So it's kind of similar to the Board Apes license.

• 28:22Speaker 03

  Exactly. That's what we modeled after.

• 28:24Chris Dixon?

  And then you, and then you went and switched it to CC zero.

• 28:26Speaker 03

  That's right. CC zero summer, we kicked off with a bunch of projects that launched under CC zero. I think the hard thing for us is that we kind of stepped on a little bit of a rake and that we announced it without having a conversation with the community first. So I think we could have done a better job on the communication front. Certainly if I had a redo or reover, when we did this announcement, I would have changed a few things there. And the thinking there, which got me pretty excited was that there's two ways as a project, especially as a PFP project, it's all about the game of relevance, right? It's like one part of it is serving your community, other is kind of furthering the meme to increase relevance through a whole slew of different things. And these can be like these cultural moments that you have, whether you're the Board Apes

• 29:07Speaker 03

  and you put Eminem on stage for something, they can be through product driven releases that wow the community, a bunch of different ways that you can stay relevant. One of the, the things that we are, we have finite resources, you know, we have 28 people and of which there are just a handful of them that are going out to support ongoing efforts with the community, working on partnerships and all kinds of fun things. But the idea with CC zero is you're saying, Okay, if we free up this IP and we allow anyone to do anything they want with it, hopefully it will create a lot of derivative type projects that have value, that bring more eyeballs on the project and point to that true north,

• 29:49Speaker 03

  that original project as being like the most important thing, right? The original asset for that project.

• 29:57Chris Dixon?

  Sometimes people cite the Mona Lisa as an example here, right? Like you can reproduce the image all you want. And in fact, reproducing it makes it more iconic.

• 30:04Speaker 03

  Right.

• 30:04Chris Dixon?

  And if anything, increases the value of the original. And this is true of all kind of artwork.

• 30:08Speaker 03

  Right, exactly. Well, I mean, you can go out and buy a very first edition, you know, an early edition, first print of Sherlock Holmes.

• 30:14Chris Dixon?

  Yeah.

• 30:14Speaker 03

  And, you know, major movie studio took it, remade it into a movie because it was public domain.

• 30:19Chris Dixon?

  Yeah.

• 30:19Speaker 03

  And it increased the value of that original work, right? It's pointing back to that original piece. And so.

• 30:24Chris Dixon?

  This is generally how things work in the physical world. And you and people like you and I and NFT folks assume that will, you know, we believe that's the similar logic in the digital world.

• 30:33Speaker 03

  I think it's important to note that this isn't something that everyone should adopt. Like, there are going to be a lot of artists that say, I want to retain the rights to my work. And I had a great chat with Eric from Art Blocks about this, the founder. And he was like, you know, chromie squiggles, like, I don't want to see that being used as a hate symbol or anything else. And I want to, you know, I want to hold on to this. And actually, I really got to say, I do like a lot of what you all did and recently around those new licenses that you released. Cause I, I thought that was something we were thinking about. Like, is there a license that says, okay, go do very creative things with this? But guess what? No hate speech, no, you know, and carve out two or three things that you certainly no one wants as part of their project

• 31:15Speaker 03

  and launch it under that license. I wish you had had that license a few weeks before I went out with CC0.

• 31:20Chris Dixon?

  Yeah, just for people that don't know, we put out a thing we called Camp Evil License. We can link to it. And it's just an idea. It's on GitHub. The license itself is public domain, so we encourage people to fork it and change it. But we went out and kind of a standardized set of licenses that would give the creator a choice of different sort of menu options. You could be CC0, you could reserve all the rights, but the goal of the license is to make it simple and standardized and permanent. So like one thing concern people have had is what if I go and build a business on the Moonbird? And what if you then pull the rug under me by saying I can't do it, right? So we wanted to come up with a license that would survive M and A and other kinds of things.

• 31:57Speaker 03

  Right.

• 31:58Chris Dixon?

  And then one thing we put in as an option. Was the revocability over hate speech. Again, it's an option. All of these things are options, just to be clear. That, you know, the creator should have more options. And I think it's always good to have standardization and clarity.

• 32:11Speaker 03

  Yeah.

• 32:12Chris Dixon?

  For both the creators and the collectors. I mean, obviously, we're all anti hate speech, but could you have unintentional consequences of these clauses? And we'll see how it plays out.

• 32:21Speaker 03

  Yeah, I like the little matrix you put up there showing all the pros and cons of each one. They were really thoughtfully done. It was funny, X Copy did a tweet where he said something along the lines of, I'm paraphrasing. He said, you know, all those hate groups out there looking for those CC zero projects, like, like, how many hate groups are out there? But it would be funny to think that, like, some extremist group out there in the middle of nowhere is like, okay, let's check the license. Okay, this one's CC zero. Yeah, we're gonna go with that one.

• 32:45Chris Dixon?

  That's fair. While I'm in the middle of doing all these awful things.

• 32:48Speaker 03

  Yeah, I'm building this nuclear weapon on the side here. Let's, let's check to make sure we're compliant.

• 32:52Chris Dixon?

  Fair enough, fair enough. Well, like, in like, what is hate, you know, that, that would be an extreme case. Maybe there's something, you know.

• 32:58Speaker 03

  Right.

• 32:58Chris Dixon?

  I don't know, more disorganization is not great. And they're using this squiggle on the book cover.

• 33:03Speaker 03

  You know, maybe some.

• 33:04Chris Dixon?

  Yeah, I don't know. So, but it's a good point. That's a good point.

• 33:07Speaker 03

  Yeah, but yeah, on the CC zero front, it's a choose your own adventure. You really have to pick it. And I think a lot of the stuff that is just straight duplicate, you know, just straight clones. Like, we've seen this. We've seen moonbirds that have turned the other direction instead of facing the right way. They're facing left and they're moonbirds with a couple of zeros in them and whatever. And it's like, those are just like.

• 33:27Chris Dixon?

  What was the big CryptoPunk thing where they're flipped?

• 33:29Speaker 03

  Oh, yeah, there is another CryptoPunk one. And, and those are just, you know, we laugh at them and we know that long term, you know, it's sadly, or not sadly.

• 33:36Chris Dixon?

  Doge was a fork of Bitcoin, right?

• 33:38Speaker 03

  Right.

• 33:38Chris Dixon?

  And so like, you got, if you fork it, you've got to add something. It's either technical or cultural.

• 33:42Speaker 03

  Right.

• 33:43Chris Dixon?

  Like Doge added, Dogecoin added the cultural twist, right?

• 33:46Speaker 03

  Otherwise, it's just spam and it falls away. And I actually don't hate them. If it creates another little mini press cycle and a few people pick it up, like, oh, God bless.

• 33:54Chris Dixon?

  But it's cooler if they do more than just flip it. And they actually have their own kind of new set of memes, right?

• 33:58Speaker 03

  Well, those are the ones that are going to be durable and lead to bigger and better things, which I think we're pretty excited about.

• 34:02Chris Dixon?

  There was this great blog post about how low fidelity NFTs allow for more kind of derivative creativity. And I think of it like, what if you had like a moonbird that quote, interoperated between two different games?

• 34:14Speaker 03

  We're seeing that happen.

• 34:15Chris Dixon?

  Yeah.

• 34:15Speaker 03

  3D, 3D moonbirds are being built.

• 34:17Chris Dixon?

  And one of the cool things is because you're low fidelity, because it's pixelated. You can imagine one game embodying it in their art style. It's sort of unopinionated about the art style.

• 34:26Speaker 03

  Yes.

• 34:26Chris Dixon?

  Someone else embodies it in a, you know, in a cell shaded rendering or something and someone else in some hyper realistic rendering. And by making it CC zero, you're just sort of saying, hey, like, again, I go back to the games industry, you know, remixing, modding. I always think about, have you read Masters of Doom?

• 34:43Speaker 03

  No, I haven't.

• 34:44Chris Dixon?

  Oh, it's a great book. So it's Carmack and Romero and they created Doom and often, you know, there was sort of the first big 3D video game.

• 34:51Speaker 03

  Oh, yeah.

• 34:51Chris Dixon?

  And then they also invented, it's amazing what they did in one game. They invented multiplayer gaming. But I would actually argue that even cooler thing they did is two other things, shareware gaming. So like, that was, that was mind blowing at the time. There was like a few other small company, but giving away.

• 35:03Speaker 03

  Apogee before them.

• 35:04Chris Dixon?

  Yeah, that's right. That's right. That's right. Apogee. And they were friends. They were all like in this little cluster of companies. And then modding. So that he actually included like a C compiler in there to mod it. It's like mod me, right? That was revolutionary too, right? And I think of modding. I go to places like Steam where it's like the Wild West. It's creative. It's cool. People are modding. And I think it will be a similar thing here with media. That's what you're encouraging, right? You're saying CC zero, mod me, make games, fork it.

• 35:28Speaker 03

  Right.

• 35:28Chris Dixon?

  Make parodies, like let the internet do its thing, right?

• 35:31Speaker 03

  Exactly. And if you're doing it right, and most of the mods are.

• 35:35Chris Dixon?

  Yeah.

• 35:35Speaker 03

  They want to always respect the original.

• 35:38Chris Dixon?

  Yeah.

• 35:38Speaker 03

  And what they do, like we saw with 3D Moonbirds and, and some other projects that are creating more, more higher fidelity versions of what we have, they say, hey, if you own the original, come and prove it off your wallet and you can get this mint. And you can get it for free or next to nothing. Cause why wouldn't you want that community happy? If you're doing something that's based off of that community, you want to make sure that community is happy. So you always do right by them, which is what we're seeing a lot of. It's really accelerating the inevitable. Everything's going CC zero, whether we like it or not. It's only a matter of time.

• 36:05Chris Dixon?

  The way I think about the internet is a copy machine. It's going to copy stuff.

• 36:08Speaker 03

  Right.

• 36:08Chris Dixon?

  And you can either build a business model that's aligned with that, or you can fight it and eventually probably lose. Like in my mind, video games are at the frontier. They're, they're the one form of media that gets this. So as an example, streaming.

• 36:20Speaker 03

  Mm hmm.

• 36:20Chris Dixon?

  If you know this, but Nintendo fought it for a long time. Cause they're like, it's copyrighted. You can't just stream my stuff. And eventually they realized, like everyone in gaming has realized that the benefit of the increased attention outweighs the quote copyright infringement.

• 36:32Speaker 03

  Exactly.

• 36:33Chris Dixon?

  And I think it's going to be the same logic for all visual media and probably for music and all forms of media. Maybe outside of, you know, long form movies or something, but all the other kinds of internet native media forms, I would expect to follow the same logic, right?

• 36:46Speaker 03

  Right.

• 36:46Chris Dixon?

  You're fighting for attention.

• 36:47Speaker 03

  Exactly. You're fighting for attention. And there's two alternatives to this model then, really. One is to say, we're going to hold all the rights back for us and we're going to go and build our own characters.

• 36:56Chris Dixon?

  Us being the company.

• 36:56Speaker 03

  The company. We're going to go and build our own characters, our own worlds, our own everything. We'll hold that and that's how value will accrue to these NFTs. That's like very much, and Gary will be the first to admit this, that's a Gary Vaynerchuk V Friends model, where he holds it back all the IP, but just, you know, today he announced that some of his plushy toys are going to be in Toys R Us, right? And so that's one path to go down it. And that's not in our core DNA. We're not going to go out and build video games. That's just not who we are, right? And so the other path is to say, okay, the users own that, but they then have to figure out how to monetize it on their own, right? And how to like further that. And this idea, I believe it's a flawed one, to think that there's going to be these licensing deals that happen to the individual. The

• 37:40Speaker 03

  reality is that most people are never going, unless you have an ultra rare board ape or something else, like they're not really ever going to get any licensing deals because if you're a big brand and you want to play well with this ecosystem, you go out and you buy an NFT because you have the budget, right? And it's what we've seen today. When you see Tiffany's or Budweiser or any of these big brands that play in the world of NFTs, they don't actually license anyone else's IP. They go out and buy one of the NFTs because why would they spend marketing dollars on something that they don't own, right? So this is a chance for them to go out and we've already seen and are talking to brands that are okay with it being CC zero and they want to go out and they still see the value in buying and holding one of the NFTs because it's theirs and it's provable

• 38:25Speaker 03

  by the blockchain. So the beautiful thing about this is it's actually very Web three native because it says, the source of truth is not, you know, the trademark office. It's not a centralized organization. The source of truth of actually who owns this is looking on the blockchain and saying, where does this point to? So that's a pretty powerful thing to think about, embrace.

• 38:45Chris Dixon?

  I find with the Web three concepts, for a lot of the behaviors, you have to kind of invert things and this is what throws people off. And so like same with copyright, the copyright's the right to sue. It's a sort of scarcity mentality. And the internet really kind of is much more about this sort of abundance mentality of like, my ownership is not the right to sue, I'm not stopping something, but I am receiving additional things.

• 39:06Speaker 03

  Right.

• 39:06Chris Dixon?

  Like airdrops, like invitations. I think that we're just at the very beginning stages of that. So to give you an example, like, I think a very common thing that will happen in the future is unrelated parties, a brand, a restaurant, or whatever, my sports team will do airdrops to existing NFT communities. Because at some point, that community, the fact that you own that thing is partly you own it, and that's important in and of itself, but partly it's this incredible opt-in kind of data source, right? Like, it says all these things about you.

• 39:38Speaker 03

  A lot of things.

• 39:38Chris Dixon?

  And, you know, hey, if I'm not related to Moonbirds, but I'm having an event for early tech adopters in LA, wouldn't I want to give a free pass to the Moonbirds community, as an example?

• 39:49Speaker 03

  Right.

• 39:49Chris Dixon?

  Or some other interesting community? But, you know, I also think it's the way the internet should have done kind of ad targeting, right? Like, the wrong way to do ad targeting, which is where we are today, is all of this surveillance, you know, tracking my phone, I just, you know, all the settings in Google and Facebook app today. The right way to do advertising is let people choose what to make public and then, you know, give them offers or awards or whatever it might be.

• 40:12Speaker 03

  Yeah.

• 40:13Chris Dixon?

  Accordingly.

• 40:14Speaker 03

  You can choose your audience, right? You can say, hey, I'm really trying to target women here, so let me go to the World of Women project. And there's a bunch of these different projects that collect and have really passionate communities behind them. And if that community is about health, we have one subset of Moonbirds, it's all from Japan, from Tokyo, you can go and find out exactly which holders are part of that, what we call the sub-parliament. And parliaments are like this also, you know, gathering of birds, oddly enough. And so, they've like, started to like, create these sub-parliaments, and you can target them in a non-evil way and provide value back to them in some sense.

• 40:49Chris Dixon?

  That's cool. There's a lot of talk in the NFT world of creating the next quote Disney. Like, do you think at some point there will be like a significant sort of media activity around Moonbirds?

• 40:59Speaker 03

  A lot of it's up to the community, and, you know, we're definitely not video game producers or filmmakers, but we- Have a lot of community members that dabble in that world. And that's the beauty of the CC zero models. We're saying, hey, take these assets, let us support you. And that can be via grants from the actual Dow and go out and build on our behalf. Because a lot of you are probably better at this than we are. There's another piece where this Dow will be equipped with an NFT treasury as well. So it kicked off with 2 million USD worth of ETH. And then we're transferring some of the moonbirds that we have from our company wallet. So they can use those for collaborations. They can use those for any way they see fit.

• 41:39Speaker 03

  It's also a piece of art that if the art increases over time, they could choose to sell it for more ETH if they wanted to, to roll funds back into the Dow as well. We have 35% of ongoing royalties going back into the Dow. So there's continued support and a

• 41:52Chris Dixon?

  These are the secondary sale royalties.

• 41:53Speaker 03

  Secondary sales.

• 41:54Chris Dixon?

  That's very cool. So you want to make sure it's sort of a bottom up.

• 41:58Speaker 03

  Exactly.

• 41:58Chris Dixon?

  It comes from the community. Maybe you support them with money.

• 42:00Speaker 03

  Or the scaffolding, or the structure for it. We're going to continue building the tooling and everything, but we're going to let them do the heavy lifting on that side. Now, that's not to say we're going to do a ton of things on the BD side. So we can go do partnerships with sneaker companies and different big brands and do that all day long. But again, we're leveraging a third party for that, albeit a big brand.

• 42:20Chris Dixon?

  I think it's really smart. I think that there's things that are well done by a crowd and things that aren't, right? Like BD, maybe someday BD, we've done well by a crowd, but today it is, most of these partners expect a more traditional interface of legal contracts.

• 42:33Speaker 03

  Right.

• 42:33Chris Dixon?

  Lunches, all that kind of stuff.

• 42:34Speaker 03

  Exactly.

• 42:35Chris Dixon?

  Whereas like demand signal seems like a no brainer, that it should come from the crowd. And today, very much of it doesn't. Creative things feel like they should come from the crowd.

• 42:43Speaker 03

  And especially linking up creative, a big job of ours is we will have someone raise their hand and say, you know, I'm a 3D animator that does X, Y, and Z, and I work on, you know, and they put in some very big brands that they work on. But I lack this skill. I can't do this. And so it's connecting those dots, bringing them together in the community and say, okay, now that you're connected, you've brainstormed, you put together a template of what you want to do. Let's go fund you at the Dow level.

• 43:09Chris Dixon?

  So yesterday you had an announcement. Can you tell us about that?

• 43:12Speaker 03

  Yeah. So the Dow announcement, it's something we let people Know was coming, but Dao is are always really tricky in that people either have no idea what they are, but they may have heard of them, or they've interacted in the Dao and that has been a really poor experience for them, and it hasn't worked, or they have interacted with some of the best Dao's out there and sing their praises. And so it's interesting in that you kind of have to do a little bit of education and bring people up to speed on what it's for. And so we want to, when we launch this Dao, it's not just about here, take the keys. It's about here, here's a new seat at the table for you as a community. Here's some funds to go do amazing things, but let us throw on some professional rigor on top of this

• 43:57Speaker 03

  in terms of project management, in terms of helping you vet the ideas. When we launch our Dao, you'll see if something, a proposal that's come through has the green light from us. It's not to say if we give something a yellow light or a red light, it can't get approved because ultimately that'll be up to the Dao. But at least it lets them know we've taken a look at it. We've had a conversation directly with the founding team. We think this is a solid idea. We think it has a high likelihood of completion. And you know, it's kind of like the Kickstarter mode in that we've all backed some stuff that hasn't worked and we've backed some stuff that's been amazing. I have this amazing pepper grinder, by the way, from Kickstarter. Do you know which one I'm talking about?

• 44:31Chris Dixon?

  I don't.

• 44:31Speaker 03

  Oh, it's, I'm gonna send you one. It is the coolest thing I've ever had.

• 44:34Chris Dixon?

  I gotta get that. I was a personal angel investor in Kickstarter. I was into that from sort of early on and still am. I've mostly backed books. You'd like this if you haven't seen it. It's this European designers who have taken like all of like Newton and Euclid and all these like classic books and done them in like a cool, modern way. And it's just kind of stuff that would just never exist.

• 44:54Speaker 03

  Right.

• 44:54Chris Dixon?

  What publisher would publish that, right? But it just turns out there's a thousand people on the internet who are willing to fund it. And then the other Kickstarter story is we invested in Oculus. And what the community was good at was the demand signal. Like I wouldn't have known that in 2013, you know, there was that many people excited about VR. But it's very hard for a community because they don't have the resources to do the tech diligence, as an example. It's just not, they're not positioned to do it. Like you have to have a bunch of PhDs or whatever and like probably get in person and do a bunch of stuff. So anyway, so as an aside, I always thought it'd be cool to figure out a model to combine those things, right?

• 45:28Speaker 03

  Right.

• 45:28Chris Dixon?

  Because it's ridiculous to me, you did venture capital, that we're sitting there trying to predict what the community wants.

• 45:34Speaker 03

  Right.

• 45:34Chris Dixon?

  When you could just go out and ask them.

• 45:36Speaker 03

  Right.

• 45:36Chris Dixon?

  Right. But on the flip side, we're pretty good at diligencing the supply side of things. Anyway, it sounds like you're kind of. Developing a DAO model that tries to get the best of both worlds. What you're doing is combining the best of what the sort of the centralized part can do and what the decentralized part can do.

• 45:50Speaker 03

  Yeah, I like what you said, though.

• 45:52Chris Dixon?

  I've always been interested in things like the prediction markets. I think it's ridiculous, the idea. And actually, a lot of our investments now in Web three stuff is around like media and movie. We've got a few in the movie area and the idea sort of harness the wisdom of the crowds. I think there's so many areas in the world. Like, I do think there's a role for expertise, like as I was mentioning, like diligence in technology. Like, there are people that know more about computer science than other people in the crowd, right? But anything that's demand signal.

• 46:15Speaker 03

  Right.

• 46:15Chris Dixon?

  I think it should not be done. Demand signal and then also creative. I believe a lot of creative stuff is just, it's like, like my theory, for example, on, and this maybe relates to Moonbirds, right? Storytelling. Are there people that are great at coming up with stories, you know, of course, right? There's great writers. But I also bet you that there's a million people who have one great story in them. Right? And maybe they don't have a hundred, but maybe they have one. And right now, they're not, their stories are not surfacing.

• 46:42Speaker 03

  I think AI is gonna help that a ton.

• 46:44Chris Dixon?

  I think AI is very exciting. I mean, technology typically democratizes things, right? Like, so crypto and Web three are doing it through new incentive systems and AI through new capabilities. Like, you could make a movie, maybe. I think they're really close to having text to video now, not just text to image synthesis.

• 46:59Speaker 03

  I think AI is gonna completely change the NFT game, by the way.

• 47:02Chris Dixon?

  Yeah.

• 47:02Speaker 03

  I really do. Well, I feel that there are a lot of people out there that are wildly creative, but cannot put, you know, pen to paper, mouse to pixel, or however you want to create it, but their brains work in that creative way.

• 47:15Chris Dixon?

  So now they're prompt engineers?

• 47:16Speaker 03

  They're prompt engineers. And it's not just prompt engineers in that if I say, give me a horse with a red hat, that's not art. But if I, it's gonna be, it's almost like you'll track the amount of prompt interaction. Like, you'll say, this person spent, this was a piece of art that was created with, you know, 1,500 different prompts that went into it, where there'll be refinement that's done. I think the refinement piece is gonna be really interesting.

• 47:39Chris Dixon?

  Yeah, cuz you know, I, so probably like, you know, I had Dolly access or have that access. And I mean, it's an amazing, amazing, the technology is mind blowing, what they've done, Dolly and the other kind of, you know, stable diffusion and all this. But I found myself personally, after a few days, kind of running out of things. And it's probably just, I assume it's because of my own lack of creativity.

• 47:59Speaker 03

  I think it's the limitations of the tool.

• 48:01Chris Dixon?

  Maybe, but maybe you need something that's sort of helping you refine the prompts and suggest things. And again, I was saying that not that it's not, I mean, I think it's an amazing tech, but more just to your point that you need, it's not the end of it, right? Like, there's a whole ton more you can do on the prompt side.

• 48:15Speaker 03

  Yeah, it's early days there. I'm thinking out, you know, five, 10 years from now, it's just gonna be, it's gonna be a killer app. And for me as a collector, you know, speaking to our earlier conversation about what you collect, I've gone back and bought early AI NFTs. They look horrible, but that's, you'll look at that and you'll be like, look how bad that AI was.

• 48:34Chris Dixon?

  Have you seen, like, if you go back on YouTube, this is really cool, is, uh, I think it was 1975, the first computer graphics was a hand.

• 48:42Speaker 03

  Oh, interesting.

• 48:43Chris Dixon?

  If you've seen this, it was like, you should go check it out, you'd like it. But it looks like, you know, was it called Battle Zone? You know, it's like this green, like, lines, like vector graphics. And it's the same kind of thing. So you think that, you know, these will be kind of interesting, iconic, kind of early.

• 48:58Speaker 03

  Collectibles? Yeah, I mean, Robbie Brod with some of the early GAN stuff that they were doing out of Nvidia on SuperRare.

• 49:05Chris Dixon?

  It's really cool with the, with the image synthesis stuff. You know, I actually started an AI company, whatever it was, 15 years ago, and have followed the space for a long time. I don't think anyone you talked to in the past would have had generating artistic images at the top of their list of things. I mean, you would have thought we're gonna automate, well, mostly analysis, right? Like, that's how people thought of computers.

• 49:25Speaker 03

  Medicine, for sure, which you have.

• 49:27Chris Dixon?

  Yeah, medicine, or you break down some, you analyze a computer program. Turns out, like, I think they're farther ahead in generating images in movies than they are in analyzing computer programs. Like, it's just kind of, it's not what you would have expected, right?

• 49:38Speaker 03

  Do you think there's gonna be a tipping point here really soon? I feel like things are accelerating. Is that just me because I'm getting excited about art? Or are we seeing that in general?

• 49:45Chris Dixon?

  On the AI specifically, I think it's accelerating. And by the way, separate thing, like, which I believe, which is, so if you go back and look, as you were there, as I was, to the last kind of major computer cycle, mobile social cloud, right? You had these three trends, you had the same kind of thing where people, I mean, you were there early, people thought it was buzzwords and this and that, you know, like, it was sort of overblown. It turned out to be underrated, I think, just the impact. And the three trends reinforced each other, right? So. The fact that, you know, social networks were the killer app of mobile phones, but mobile phones allowed them to go from the desktop from a hundred million people to five billion people. And cloud is what enabled those systems to run.

• 50:23Speaker 03

  Oh, for sure.

• 50:23Chris Dixon?

  You couldn't have a billion people interacting without cloud. So I think what happened, like my mental model is you had three, maybe sort of probably exponential processes in and of themselves. But then they combined and you created this kind of hyper exponential process, right? And I would argue it's crypto, which is going to create a new architecture for creating these systems and incentive systems. AI. And then I think the third is usually an interface and you could say AR, VR, maybe it's IoT, kind of like embedded devices and cars, whatever, you know, kind of that takes you from five billion to 200 billion, right? And then I would also argue within each of these areas, you have like AI alone is probably going at an exponential rate and that's because the algorithms are getting better. You have got just all the smartest people, a lot of the smartest people at, you know,

• 51:08Chris Dixon?

  Google, et cetera, are working on this stuff. The distributed systems are getting better. They're just, they're just simply like, you can count how many neurons are in these neural networks and it's just going up and probably will continue till hit some point, but like it's not there. It's like a Moore's law type thing.

• 51:21Speaker 03

  And specific chips, right? Like of the tensors of the world and everything.

• 51:24Chris Dixon?

  And it's happening at every level. Exactly. Purpose built chips. But I think my understanding, I'm not an expert, is a lot of it is also just how do you kind of shard the problem across multiple machines? But there's a whole, you know, there's just a ton of smart people doing that and that's what these models are. They're just sort of like GPT-4, I keep hearing about it's already like, they just taken it and added another 10,000 machines or something, you know?

• 51:42Speaker 03

  Right. And yet Ethereum still had 30 transactions a second or something.

• 51:45Chris Dixon?

  Yeah, they've got to catch up. Well, the other thing I'll just throw out there, because this is a favorite topic of mine, is that if you go back since World War II and you look at computing cycles, they tend to happen every 10 to 15 years. So, you know, advent of computing, 1945-ish, and then mainframes, mini computers, PCs, internet, mobile, you know, the iPhone was 2007. So we're 15 years into this one. So, and you've seen all of these like kind of early eruptions, like even the AI stuff, it's amazing, but you haven't seen it deployed for the most part that broadly. Like it's still kind of in the, you know, these demos and things. I think we're like, just from a time perspective and just sort of like, I feel like there's this kind of like building crescendo of all of this stuff is getting better and better.

• 52:30Chris Dixon?

  And a lot of people potentially are underestimating it and it's all gonna just kind of come together and reinforce and we could be entering like, and then you add in stuff I don't really understand, but like the stuff going on in biology and you know, quantum computing.

• 52:43Speaker 03

  I mean, it seems like it's an amazing experiment, but very little practical application.

• 52:47Chris Dixon?

  In the quantum side?

• 52:48Speaker 03

  Yeah, is that gonna tip or?

• 52:50Chris Dixon?

  So it's not an area I spend focus on personally, but I have, you know, friends who do and I talk to them. And my understanding is it's following kind of a, you know, kind of a Moore's Law-ish thing where you can predict it. And I see it more from the cryptography side. So some of the people on our team work on post-quantum cryptography. So essentially, right, all cryptography on the internet, everywhere, both in, you know, crypto, but it's just, you're talking to your bank, that cryptography is based on the fact, on an old principle, which essentially goes back to Euclid, is that it is very computationally fast to multiply some prime numbers together. And it takes a really, really long time to go the other way, to go from the composite to the pieces. And that's just based on, you know, this kind of core math principles. And one of the things quantum computing does

• 53:34Chris Dixon?

  is it essentially, these architectures, you can now go back really quickly. And so all of that stuff falls apart. And so people like Dan Benet, who works with us, he's a professor at Stanford, have developed new forms of cryptography that are resistant to quantum computers.

• 53:49Speaker 03

  Yeah.

• 53:49Chris Dixon?

  Because it all depends on which curves you use and you have to really diligence it and things like that. The smart people that I know that do this think that quantum computers are coming, well, they exist and they're getting better, but it's about 20 years away.

• 53:59Speaker 03

  Hmm.

• 54:00Chris Dixon?

  Is what they tell me. And like, the plan is essentially to do kind of an upgrade, kind of like a Y2K type thing, if you remember that. I don't know what the modern equivalent is. Has there been a big computer upgrade since that? I don't know. But essentially, it'll be like that. We're like, hey, we gotta get together. There'll be a bunch of consultants.

• 54:15Speaker 03

  Our A teams are gonna stop working. Or I guess in this case, it'll be like our Venmo or something.

• 54:19Chris Dixon?

  But like, we should have enough visibility into it. Now, the wildcard, of course, is maybe somebody already has this stuff, maybe the NSA or China or who knows? And I don't know. Anyway, so it's an interesting topic. So I just think that there's, you know, there's sort of two ways to look at the world today. Like, one is, Sometimes what you see on Twitter, which is like everything, you know, it's the end of history. Computing is mature. You know, there's a lot of negative tech stuff. The other one is possibly we live in like the age of wonders when like computing is finally like getting over its toddler phase. And like all this like incredible shit's about to happen.

• 54:51Speaker 03

  I feel like the next 10 or 15 years, like that's gonna happen. I'm pretty excited about it.

• 54:56Chris Dixon?

  What year was, what year did you start to dig?

• 54:57Speaker 03

  2004.

• 54:58Chris Dixon?

  Oh, so you were in the very beginning, pretty much, yeah. Cause I think that, to me, that phase was really cool, like kind of the primitive development.

• 55:04Speaker 03

  Oh, for sure. Ajax happened and we were allowed to update websites without leaving the page.

• 55:08Chris Dixon?

  That was, and that was like a crazy innovation. People have no idea. You literally before that were hitting reload and it was just a static thing. And like, I remember originally it was called the port 80 trick or something. It was like you had to keep out, you know, you keep HTTP port 80 open and then Ajax. And now people don't know what that is. I guess it's all just baked into the React and everything else. I call it primitive development. I remember the beginning of the web two thing with the whole idea of tagging was a new idea. I don't know. You guys came out with a Flickr or Delicious.

• 55:32Speaker 03

  Delicious did.

• 55:33Chris Dixon?

  Yeah, yeah. But that was a new idea. I mean, it sounds crazy now, but like a lot of these, I mean, there were hints of it, like social networking and things like this. Default to public, like all the design patterns, right? And then you kind of had, I think of it as you had that phase, which was to me the best phase, cause it's really creative. And then you had the second phase, which is more the execution phase and you have the Zuckerberg's, et cetera.

• 55:52Speaker 03

  Then you had the cloning phase, which is everyone taking someone else's idea and just copying it. Finally, for the first time, I'm so grateful this happened, the community pushed back. Remember when Instagram, they were rolling out all these new features that were just clones of TikToks?

• 56:04Chris Dixon?

  Yeah.

• 56:05Speaker 03

  And the community was like, wait a second, no, we don't want you to change anything further. And I was like, yes, for the first time, they're finally squashing some of this straight copying, you know?

• 56:14Chris Dixon?

  But yeah, you had that kind of primitive development. And actually it was nice about that era, that's why I was asking about the year, is that at that point, it was still, the internet was still very much out of fashion as a business. And therefore it self-filtered for people that actually liked it, right? And it created this culture around it. You were on the west coast then.

• 56:31Speaker 03

  That's right.

• 56:31Chris Dixon?

  I was on the east coast. I kind of regret it just cause I didn't get to see the west coast side of it. The east coast, there were like literally like 20 people. It was small, we'd go to these meetups and like.

• 56:39Speaker 03

  Same thing was happening on the west coast.

• 56:40Chris Dixon?

  I assume the west coast was much bigger, no?

• 56:41Speaker 03

  It was, it was bigger, but it was like, you know, when we would get together, there's many a parties.

• 56:46Chris Dixon?

  I remember, I remember, and probably Arrington had at his house.

• 56:49Speaker 03

  Arrington would have all kinds of meetups.

• 56:51Chris Dixon?

  I remember when I first saw TechCrunch and it was like. It was like this thing that exactly what you're describing. You get together your friend, you talk about it. And it was like this cool, it felt like this new movement, but then someone actually wrote it down. And it was like this different moment. Wow, someone who's like clearly an enthusiast is now writing in this excited voice about this new stuff.

• 57:07Speaker 03

  Yeah. So I remember the first time I heard, I a hundred percent remember the first time I heard the words web two is when I was building DIG. We were a few months in and Jason Calacanis called me up and he's like, hey, I run weblogs, Inc. You know, we have Engadget, all this stuff. Like we noticed you're sending us some traffic. Like you would you want to come and join the Engadget thing? And I was like, but we're kind of building this thing. It's not really, we're not. And, and he goes, well, you're very web two. And I was like, is that a software upgrade that I haven't applied? Like I literally thought I hadn't applied a patch to one of my servers or something because we were hard racking our own servers back then. Because there was no cloud.

• 57:41Chris Dixon?

  So I go, shit, I got the, I haven't upgraded the web.

• 57:43Speaker 03

  Exactly.

• 57:45Chris Dixon?

  That's funny.

• 57:45Speaker 03

  Ridiculous.

• 57:46Chris Dixon?

  That was, I think it was like O'Reilly who turned, like there were these conferences that kind of started that way.

• 57:50Speaker 03

  Jumpetel. Yeah.

• 57:51Chris Dixon?

  Well, and then you had all these, I think what I think ended up being head fakes, like, which I think web three could potentially actually make real things like mashups. You remember this? So this was essentially composability, we call it now, you know, which is what if web services were like Lego bricks? And you could recombine them and do cool stuff.

• 58:08Speaker 03

  That was happening a little bit prior to that too, though. Remember Dogpile?

• 58:10Chris Dixon?

  I don't think I know.

• 58:11Speaker 03

  Dogpile is when, uh, it was the first search engine to combine search results from like four different search engines all on one interface. So it had like AltaVista and Yahoo and like a few of the others all on one.

• 58:21Chris Dixon?

  People were more, they were more, well, back then, I think, so I think of it as like technically, of course, they could have done all, kept doing this stuff. It just at some point, the business model pushed people to silo, right? And to say, no, you have to stay on my site so I can put ads on there and do all these other things. But anyways, you're one of, as I mentioned before, you and I are some of the few people that have been sort of web two and web three. How do you think about web three product development?

• 58:44Speaker 03

  It's definitely changed a bunch in that Web 3, maybe it's because I'm getting older at the same time, but I just feel like Web 2 was all about coming up with the best formula for locking in eyeballs for as long as possible, right? Somewhat in a very evil ways.

• 59:01Chris Dixon?

  Yeah, that is what it is.

• 59:02Speaker 03

  And Web 3 is very much about setting the stage for the meme. Like, how do you further the meme? How do you, how do you? And by the meme, I don't just mean something that is a flash in the pan and is funny for 24 hours and goes away. It's like, it's building these cultural moments that have lasting impact that if you can become big enough.

• 59:25Chris Dixon?

  Yep.

• 59:25Speaker 03

  And, and if you've established yourself enough as being unique and novel and something that others duplicate, what will happen is you flip from a project that requires constant maintenance and feeding to something that requires no external dependencies. And so CryptoPunks is in that genre.

• 59:45Chris Dixon?

  Dogecoin.

• 59:45Speaker 03

  Dogecoin is in that genre. Like CryptoPunks, they were known for something.

• 59:48Chris Dixon?

  Yeah.

• 59:49Speaker 03

  They were the industry first, right? They started an entire, you know, hundreds or thousands of collections that were spawned off of that original idea. So when you think about building, you know, I think all of us are looking for that thing, that what is that thing where we will be our front and center Wikipedia entry about our collection that solidifies us in this place where we flip to not needing any external dependencies? Not to say that we wouldn't still continue to build for the community, but it's, it's a special thing when you can cross that chasm. And back to product development, back in Web 2, you could kind of like launch something, go away for six months or eight months, come back with another iteration or version, and that was okay. This space is so wide open and there's so much blue ocean that you're rewarded for being

• 1:00:34Speaker 03

  a little bit crazy and a little bit chaotic. And some of the best projects, they solidify themselves as bigger players by being a first in something, and that means not just copying someone else's playbook. Like what made CryptoPunks what it is today or Board Apes what they are today is not going to make Moonbirds a household name and a household brand. We can't just copy their playbook. We have to go about it in a different way. I mean, the cool thing is that there is so much that can be done with the programmable nature of the blockchain and what is possible. And there are very few people that are competent in doing it well. That it's, that's why I got back in. I'm like, well, now's the time to take a lot of these learnings and bring them into Web three.

• 1:01:14Chris Dixon?

  So going back, another question about difference between now and then is just as you're sort of building your company. And I don't know to what I send this is Web three or just the fact that you have more experience now, like, how is it different than before?

• 1:01:26Speaker 03

  Yeah, I would say a lot is the same in that, well, I mean, a lot has changed in terms of just the infrastructure that you need on the backend. It is more challenging, as it's always been, to hire great engineers and especially around the security required for smart contracts.

• 1:01:40Chris Dixon?

  You think it's more challenging than?

• 1:01:42Speaker 03

  Than Web two?

• 1:01:43Chris Dixon?

  Yeah.

• 1:01:43Speaker 03

  Yeah, a hundred percent. I mean, Web two.

• 1:01:45Chris Dixon?

  Just fewer people into it.

• 1:01:46Speaker 03

  It was just something where, you know, once Rails hit and a few other frameworks like Django and a few others like really took off. It became really easy to hire engineers, like those bootcamps just like cranked them out, right?

• 1:02:00Chris Dixon?

  Yeah, so sort of pre Web framework.

• 1:02:02Speaker 03

  Yeah.

• 1:02:02Chris Dixon?

  Engineer hiring, where you have to actually build the whole thing.

• 1:02:04Speaker 03

  Well, it was just, it was hard to scale things. I remember, uh, who was it that wrote Memcache? I can't remember, but it was all the early caching stuff and we were like on the bleeding edge of that stuff because we needed to cache. Our pages weren't cached initially, like there was like, there was a lot. MySQL wouldn't do too many writes at once, like especially with digs. A dig was a write, so it was a write to a database and it was, it was just a nightmare, but a lot of those problems have been solved. The problems today that exist are largely around, you know, finding competent smart contract engineers. Thankfully, we acquired the divergence team who's been awesome on that front. But yeah, I would say it feels like there's just more flexibility in what is accepted and what can be done. And in creativity that is there. So it's a very exciting time for entrepreneurs to get involved in the space

• 1:02:48Speaker 03

  because it's not like the app world where, you know, to build an app these days, it's just so crowded.

• 1:02:53Chris Dixon?

  Yeah.

• 1:02:54Speaker 03

  And there's so many broken pieces of Web three that it requires a lot of people to come in and really figure out these problems. You know, like the wallet hacks and just like the UI UX issues of so many different products that expect you to be almost an engineer to understand how to use these things.

• 1:03:10Chris Dixon?

  What about just in terms of like team building and things like how, how are you doing it differently this time?

• 1:03:15Speaker 03

  Well, we've grown fast, but at the same time, just when we hire in this world, it's a little bit of a combination of pedigree and background, but also this built in kind of inherent love for Web three. I don't want an engineer just because they're a senior engineer at Google. Like, that's not interesting to me. Now, if they have that, and on nights and weekends for the last six months, they've been writing smart contracts, that's really exciting. So, you know, our team is composed of just a slew of different, I have, you know, engineers that are art blocks artists, have done drops on art blocks, their virgin team has done multiple art related drops. It's just product managers are not, you know, I hired one from Coinbase.

• 1:03:57Speaker 03

  He was frustrated because all they were doing was hiring ex Instagram folks to build the Coinbase NFT product, and they just had no experience in Web three. And he's like, I own a Moonbird. Like, that was part of the interview process. He's like, you don't understand, I'm really deep in this. And like, I'm like, that's the type of person I want to hire. And I think the mistake a lot of companies are making is they're just throwing Web two talent at Web three problems. And unless you're really in there kicking the tires and playing with this stuff, you're just gonna try and shoehorn something in and do what you've always done in Web two, and it's just not gonna work for this crowd.

• 1:04:31Chris Dixon?

  Interesting. We used to have a rule on our crypto fund that you had to have lived through crypto winter, which was our kind of proxy for saying you actually believe, right? Because the theory was if you lived through a winter, because it made no financial sense.

• 1:04:41Speaker 03

  Right.

• 1:04:42Chris Dixon?

  You know, so you must have done it because you believe. At some point, we decided we had to relax that because some people were, some of them were too young. And then also, we just thought, like, there's many paths to kind of get into something. We didn't want to be overly rule bound on that. But it is, I do think that an important strength in good Web three companies, funds, et cetera, is this kind of true believers, people deep in the space, people who, I think fundamentally, like, do you see, you know, you have these critics out there who list the various issues, like, do you see that as an opportunity? Do you see it as some kind of core deficiency or something? And you want to hire people that are attracted to the fact that there's a lot of design space. And they want to be creative and they want to have impact.

• 1:05:27Speaker 03

  I mean, for me, it's just a chance to reexamine and reboot the entire incentive model around the web, which is just very exciting because I think it rightly aligns, it puts way more power back in the hands of the consumer.

• 1:05:40Chris Dixon?

  Yeah.

• 1:05:40Speaker 03

  And gives them a way to participate in some of these networks in a way that's meaningful, where value accrues to them versus to a Fortune 500. And I think that is a radically new model and one that I want to play a part in.

• 1:05:52Chris Dixon?

  Nice, nice.

• 1:05:53Speaker 03

  Thanks for having me on.

• 1:05:54Chris Dixon?

  Yeah.

• 1:05:54Speaker 03

  Really appreciate it.

• 1:05:55Chris Dixon?

  Thanks for, thanks for being here.

• 1:06:00Sonal?

  Thank you for listening to Web3 with A6nZ. You can find show notes with links to resources, books, or papers discussed, transcripts, and more at a6ncrypt.com. This episode was produced and edited by Sonal Choksi, that's me. The episode was technically edited by our audio editor, Justin Golden, with Seven Morris. Credit also to Moonshot Design for the art and all thanks to support from A6nZ Crypto. To follow more of our work and get updates, resources from us, and from others, be sure to subscribe to our Web3 weekly newsletter. You can find it on our website at a6ncrypt.com. Thank you for listening and for subscribing. Let's go.