A Conversation with Naval Ravikant and Ryan Shea | Blockstack Summit 2017

all right well thank you everyone so I have the pleasure sitting here with navall oh wait deja vu was wonderful I mean I think we can all say that Neville is one of the greatest minds in the space he has makeup I mean I don't know it's true but I'll spare you any further so what you want talk about well this is the wine version of the conversation yeah coffee version so I was gonna worry a little more about he relaxed all the cameras are off right no okay well I wanted to ask you what do you think about you know generally what we covered this little bit in the last panel but what's going on with what are we actually seeing with this interest in blockchains and token what is happening what is money money is happening everyone thinks they can get rich so everyone's really excited lots of people who here ago didn't know what a blockchain was and where bitcoin disbelievers are now suddenly tokenizing their cap tables and coming up with all kinds of ways to ico literally get an email a day from a company that has no business even thinking about ico saying how do we ico and I try and talk them out of it and three months later sure enough half of them are really working on the token model so that's kind of a bad part the good part is you know whatever works because fundamentally block chains are a wonderful invention it's a-you know the Toshi Nakamoto of whoever he or she or they are you know god bless them because they really created something that humanity they solve the problem that humanity has never been able to solve before and that problem is just it's a governance problem it's how do we organize networks and for those of you have read sapience great book by RR a highly recommended he has a thesis where basically everything is a story money is a story corporations a story the US government's a story if we all stop believing that story tomorrow would cease to exist so humans are storytelling monkeys and the idea that we can unite each other by telling to your stories makes us the most powerful creatures in the world because we're the only animals that can unite across genetic boundaries bees and ant and so on can only communicate within their genetic high but humans can connect across genetic boundary but humans through stories can you know you can get 5,000 people together under this story that they're all Christian and so then they all behave the same way or the stories they're American or they're capitalist or communist or what-have-you so the storytelling power for humans is very powerful and these stories allow us to create networks so money is a network United States the network blocks back is a network communities are networks the problem networks is how you run them how do you organize humans how do you how do you decide who's in charge and historically the answers have not been very good one answer is then that we get a king and authority the most brutal person the one with the biggest stick and they tell everybody what to do another is we have an aristocracy and elite you know it could be the American Medical Association it could be the journalists it could be the university system it could be Congress whatever but the elite tell us how to run our lives another model is well it's a one-person one-vote it's a mob if the french revolution is the commons and that can work in some cases but it doesn't attract you to the commons they're all the cheaters they're Free Riders you know you end up with the classic communist paradise right so the question is how do you organize humans how do you organize networks how do you organize decision making and what satoshi nakamoto figured out was how to do it in an open way like a democracy would but still merit-based we're still based on some actual contribution to the network so for example the Bitcoin network the miners contribute hash power and so this is a fundamental breakthrough what it does is it brings the power of marketplaces which are open meritorious systems and are not the most powerful networks in the world just as any US president has tried to go up against the credit markets for example the marketplaces are very very powerful and what Satoshi did was bring marketplaces into computer networks and from computer networks we'll go out into physical networks so it's a fundamentally different and new way of organizing humans and that is fundamental I mean it took all this development over the last five seven thousand years of civilization to get to the point where we can create a new way of organizing humans and I'm just really happy to be alive at a time when it's being built and so this is fundamental and if all it takes is a little bit of greed to get everybody on board that's fine let's do it you know who let's pay that price but I think money is bringing everybody in but I think the thing that we're all creating is something far larger than ourselves and far larger than money so if you look at it that way then it's not actually it's not actually over hyping it to say that this is the biggest thing that's happening since the invention of the internet and I think it is really I think whatever we're probably over playing the token part and we're probably under playing the decentralized decision-making part the decentralization part is key like the internet when it first came out I want you all to think back those of you around the internet was first getting popularized obviously didn't restaurants was a long time ago 60s ARPANET but when it was getting popularize with web browsers in the late 90s my impression was wow this is going to flatten everything there's going to be no middlemen except the very merit-based there'll be no choke points no bottlenecks and little did I know you know meet your new overlords Facebook's Amazon Google Twitter you know snap whoever they own all your data they have their little digital prisons that they run it's a great system I mean it looks it's better than the previous system right it's better than the Washington Post in the New York Times being the arbiters of truth in the Wall Street Journal or whatever so it is far more democratized but you know you look at Netflix look at Spotify look it's SoundCloud the concentration of power that happens in these middlemen is ridiculous it's so large so there's thin layer I mean if I told you 10 years ago that the entire world's don't have one taxi dispatcher you would have laughed at me right but we there's a version of the world that ends up like that so luckily I think this is an aberration and for a little bit of time I lost faith in the internet because the wall gardens and the centralized monopolies were winning over the democratized you know you want this stuff to be democratized but I think the reason is because the underlying internet protocols were essentially Commons in the sense of tragedy the Commons like everyone can use the common but everyone can amuse the comments so now with blockchains we're building Internet protocols that know how to allocate scarce resources that say no you can't just use all the server power you want all the bandwidth you want no you can't have all the money you want you have to basically pay for this you have to exercise some merit into the system so I think over time we'll see solar grid electric grid self-driving car grids that will essentially be machine running and controlled and administered by blockchains it will be decentralized so I think we're now the direction of the Internet has shifted it has gone from having lots of overly expensive middlemen to having a few thin middlemen and now it's going to go to having no middlemen or just the absolute minimum and the internet is going to become a giant grid so ten years from that 20 years from now the question of like where do you host your files is going to be a nonsense question it's going to be on the Internet obviously right like who's controlling which self-driving car fleet you subscribed to well the internet self-driving car fleet so I think as humans again we create something larger than ourselves and that thing is learning how to organize itself I don't wanna get into AI visions I don't think it's conscious the same level we are but it's an emergent property of us and so that decentralization the arc of the Internet is now bending back towards decentralization which i think is a very very powerful thing and so we're bending towards decentralization it loves that nothing what are you know I think two questions asked are like how could that go wrong like we at least believe that this is happening if it doesn't if it didn't end up happening let's say 20 years from now why was that the case what went wrong and then to when we as we're getting here what are the main benefits that's why that's actually important yeah so how can go wrong well I think with a brilliant of this the brilliant thing this time around is there's of course computer science probably the Byzantine generals problem that was solved that allows us to do all this but there's money attached this time so the incentives are very very powerful if you want to spread a message attach an incentive to it right create an economic system around that message that makes people's lives better and that works so I think in that sense it is a powerful spread vector that's why I was kind of saying in the earlier panel it would be nice to see these block chains actually having a youth case too because the money thing only goes so far without a youth case eventually the money has to translate that utility or allocate utility so how can go wrong well obviously the incumbents that B aren't going to give up power that evil here right if you're a king or a dictator or your nurse the Kratt or you're an elite or you're a big company or you're a regulator or your government you're not going to like most of this you know most of this is about making the individual sovereign not the king sovereign not the elite sovereign so any any anyone who is in a privileged position of power and that is probably like actually most of us in this room are in some sense in a privileged position of power but let's put that aside you know what yeah yeah anyone who's in the privileged power you're descending into a market-based meritocracy for everything and for if you thought you're going to sit on your laurels because you got your degree or you were at a certain part in life or because or could you start a certain institution that's not going to work well for you I think regulators are going to have a really tough time with it I think legislators can have a really tough time with it I think as usual the hope there is that the pace and scope of innovation is so quick that outpaces them you ask like why decentralization matters you know when you're trying to figure out why anything matters you can there's a tendency that we have to let give a laundry list of reasons and sometimes just one or two reasons is big enough so I just want to focus on the really really big ones one big one is you're now going to be in charge of your identity in your data that is super valuable like I know we don't think of it that way but we live in a full surveillance society right now which is really scary thing and it's not there's the NSA service and there's Facebook surveillance and there's Google surveillance and then that I data an identity that they have also creates massive lock-in it creates switching cost makes it very hard for you to leave and it makes it hard for you leaving other subtle insidious ways like Google's not only the largest search engine they're also the largest ad network and Facebook at the big ad network so other people just came in build business to compete with them because they don't the critical mass for advertising because they don't have the data and the whole thing locks into itself so I think you owning your own data and identity is a step towards personal freedom and it for that level censorship resistance is a big deal may not feel like it the people in the United States but to people living in parts of the country or parts of the world sorry where the currency is being debased or you're told what you can and you can't say censorship resistance is a big deal YouTube and Twitter brought down entire governments in the Middle East I would argue YouTube and Twitter brought down the government in United States you know that's the the populace revolts that we've seen yeah that the populace revolt that we saw from the right with all Trump and from the left with Bernie Sanders would not have been possible without social media or crowdfunding because especially Bernie Sanders he raised small dollar number from small-dollar donors and I think from here on out we will never see another elite president in the United States we're not going to see another Clinton or Bush or anyone that looks anything like them elected I think it's all Trump's and standards from here on out scary as that sounds it's all populist because it's all social medias running the show it's decentralization so decentralization in this case you know it levels the playing field it allows many more voices to be heard and it is a form of censorship resistance and in the third reason that I would articulate as to why decentralization matters is because now these systems are open we forget the laundry with territory water it's just three just a graphics tree and they're all kind of very related you know if it's about who owns the thing right yeah that's what it boils down to censorship resistance open development and owning your data identity are just a different wave thing it's open that's all it is okay but what made the Internet's so powerful as compared to every other computer network going to come before you it's open let's say a wide open data important because without open data you don't you don't have permission less innovation you're back to a king or a company owner telling you what you can and can't do and all the innovation comes from a small number of very young people who are breaking rules and the older people in charge don't want to break the rules that's why we have to die for the human race to move forward right it's like the old saying science advances one funeral at a time it's absolutely true technology advanced with one funeral time business advances once we know that the human race advances one funeral at a time the people who are in charge before half they die so we can create a new system and that only happens when you that the young people and it's in a permissionless fashion so it needs to be an open decentralized system D I think if we make it are in very light waves of computing - yeah we should be centralized everything with block chains we're going to decentralize all the things that doesn't mean there will be bottlenecks they're always there always areas where you will have natural network effect what are the most important things to do centro like what are the if you were to say these are like critical level threat this is most eminent will impact society in the greatest way we have to decentralize this isn't it it's a good question I haven't really thought about it before so it's might be exhaustive but I would say money here's a big one right that's happens when everybody who I would say identity is a really big one that's what you guys are trying to do data is a big one and I think people like file coin and the others will sort of help with that you're also helping with that what identity and data are kind of meta right there yeah they're building blocks yes Billy block yeah we're still yeah oh I think me like all agree those are my I would like to see social media decentralized one step further because right now we've traded dozens of newspapers and TV stations and which are very with a green sweater yeah I like to see Twitter and Facebook and snap and those kinds of things decentralized as well just from a personal human perspective or investor perspective when we're picking up money out of it but from a human perspective I don't want my kid using Twitter or Facebook I don't want my kid like farming on the Ducks farm or Dorsey's farm you know love them both but you know some point those those are those are long live information monopolies is what we've constructed and it's going to take a platform shift to displace them and blockchains offer that kind of platform shift now there's a very regular works number one well there's a very powerful network effect like just creating a decentralized social network doesn't mean people going to run onto it but there's a set of people who cannot go on Twitter or Facebook today because they're worried about their lives because of where they live or because maybe they have opinions to say that they you know like like Facebook doesn't allow anonymity so maybe there'll be some anonymous people I don't know it wouldn't necessarily always be for good things like when the internet first developed there's a lot of you know unsavory stuff on there but that's kind of what it takes you have to go through that phase then that positive you're May absolutely yeah I mean at the application level it's hard to predict or for example you know you could take you could take PG&E and you could replace it with a decentralized solar grid grid that's organized by blockchain wouldn't it be great if we kind of all owned the power grid as opposed to having some old state monopoly do it I think as George would tell you sorry to keep pointing out George Gilder you know the history of energy use is in some sense the history of the human species what we do is we extract more and more available power from the environment and put it to use so we are energy consuming creatures so creating a decentralized energy and power grid would actually increase the scope of all human innovation you could have a decentralized communications grid I'm sure you all love Comcast and Verizon and AT&T you know they're wonderful companies but it would be nice if each of us plugged the Wi-Fi access point into our home that then broadcast itself signal and we got paid in Wi-Fi coin based on how much network coverage we were providing and we have to pay out Wi-Fi coin automatically our phones do it on the fly to connect into the grid and then there would be not unlimited because you're limited by the air but there would be a certain amount in physics but you have as much bandwidth as possible and you would have we're going to hear her mention that we're going further back to this fantastic we're gonna need a bunch of those kinds of efforts you could have a distributed anonymity grid which would be interesting for people who are you know trapped behind a firewall or in a place like Iran or something like that so I think there's going to be there's gonna be a bunch of these things these applications are useful it's really hard for me to sit up here and predict it's like sitting up here in 1992 and saying oh HTTP is being put together what do you think we the big apps and by definition anything you predict is going to be wrong right because it's like it's always something new that comes along it's not even replacing the old thing so it may be a better way to look at it wouldn't be what you think is most important for everyone else but what you personally would use I want free media I really want free media I think that free media you know even though you may not want to hear it I think everybody has a right to say something and there's going to come a day when every human being on the world is going to be able to reach every other human being the world and it makes it really hard to commit true in justices when you can shine a flashlight like an artichoke I get sep 2014 like the actual pain and problem I think as a society we'll have to adapt I think a lot of people go get driven crazy by Twitter and Facebook just because now all of a sudden you can have 7 billion people's problems exposed to you where it's normally historically you would only have the hundred people who lived around you in your tribe certainly if like all the stuff that my aunts and uncles forward to me on whatsapp is any indication so we're not quite adapted to all the things going wrong in the world yet but I think the kids will be adapted to it the kids are going to use media in ways that we can't even begin to imagine they already are I mean like I I'm not using snapchat I couldn't figure it out but that already tells me I'm behind the times so do you think it would be safe to say that society will be radically different 10 20 30 years from now that we have someone there Pat and how would he be yeah I mean since we covered a little bit SIA tea follows technology I think I think technology actually leads society like a society of cavemen and cavewomen is very differently organized in our society is and technology allows us to reorganize Society and we'd like to pretend that like society control technology but it can't really the Prometheus story about you know fire being passed down or biting from the tree of knowledge the apple tree that was like the logic of violence over yeah it basically yeah that's right there's the sovereign individual thesis if you haven't read that book it's worth reading it basically there's the thesis there is that the the structure of society actually follows the logic of violence so whoever can commit the most violence they get to organize society and then society has to follow that person and so that might have been a king or a feudal system in the old days and then it might be a nation-state currently but eventually it will be the individual and the individual will organize their own little society because they're going to have ability to hold on to their assets and a waste they don't today they could be taken away through violence I'm not going to do justice to it here right I did 36 weeks on that one never I hate the way back when I was a pretty face tweet tweets don't try to explain that it's a pretty incredible book yeah to myself more than anybody but yeah sovereign individual is a great book I highly recommend it Society I think yeah it's going to look completely different Paul Graham famously said the future is already here it's just unevenly distributed if you look at how blockchain developer teams work for example open source often anonymous individuals sometimes page sometimes not often have holdings in the coin scattered all over the world you know merit-based in a weird way they disagree they fork you know they exist they split off rather than try to resolve it through violence or some other traditional means that's maybe a better way to predict how society is going to be organized and how it is today you can already tell if you're building a company today like ten years ago you would have had to say I'm going to bring together 10 engineers five designers five marketers and put them all under the same roof right that assumption is already disappearing in the blockchain space I think one of the absolute best things about the blockchain space is that it is not concentrated in Silicon Valley I think that is a huge positive and it is an indicator of the democratization that is coming and yeah I get it we get together here but there's also big gatherings of blockchain people elsewhere and we have to utilize makes playful but yeah absolutely and it's good for now but you know when VR catches up all right so you can see this will have virtual conferences right over any kind of squint and you can see the pieces coming together like even even to the extent that we're having the physical conference 90% of the knowledge that you have picked up about blockchains be picked up on Twitter Email document papers white papers slack forums this is just like the last five 10% connecting it to faces in humans what about countries like China the suppress block chance how we're gonna get around that so it's a good question I think there I'm not a protocol developer so I don't have the answers but what I'm hoping is that there's two classes of solutions actually it's really just one class of solutions well - okay one is you make cryptocurrency a part of the Internet itself and the way you do that is today with the reason we have DDoS and we have spam is because routers don't know how to allocate scarce resources like every packet that comes in the route just passive on every packet that every request that hits your server your server is going to respond but in the future if a router has to pay a trillionth of a cent to pass on a packet or has to pay a browser as to page the server obviously requires a new cryptocurrency it doesn't exist yet it has to be stable as we low fees if they clear nearly instantly so it's maybe different layer network but if those kinds of cryptocurrencies are required for efficient networks to operate and eventually those countries will face a choice of do we get left behind or do we just upgrade that's one hoping to pass cash yeah Hashcash was originally designed as an anti-spam solution as part of the Bitcoin protocol like you need one of the primitives the second way it could happen is just that the the abundance that cryptocurrencies allow and create that blockchain allow and create then requires you to adopt them for example even china is adopting market china has public markets the Shanghai market Stock Exchange for example and if my articulation is is correct then block chains are basically creating markets in all digital assets so is China going to decide that no no we don't want market you know there is a there's a conspiracy theory view of the world that the current Bitcoin scaling debate is really about Chinese miners versus kind of international American developers and that we may see a split into a China coin and a u.s. coin or something of the sort right because I think China is very forward-looking I think when they look the cryptocurrencies early on my guess is first they wanted to suppress it or control it because they don't want the capital flight out of the country but then I think very quickly they realize like wow this could be the next gold this could be the next reserve currency and if it's going to be that it's going to displace the dollar because not like we the Chinese control all the gold and all the reserve currency so why don't we just scoop up as much as we can and then next thing you know all the miners are Chinese right so I think that I don't think the Chinese or anti cryptocurrency I think they're in a process of modernizing their state and converting into maybe not a liberal democracy but a much more open society and I think crypto currencies can be part of that if the incentive structures laid out the right way is it that gets to enough next question which is if block chains are the are the base layer what do you see is becoming the layers of of development or the protocol stack for these applications yeah it's really early I mean obviously we have something here called block stacks right you guys are trying to build a stack on top of the Bitcoin blockchain which I think block stack is interesting for a couple of reasons by the way when I invested it was one name so I don't think any of us had any idea of what we were doing and that's not you were still doing identities on top of main coins so I'll give you credit for sticking with the original vision but now it's like a virtual blockchain on top of the Bitcoin blockchain and so there's a couple of interesting pieces there I think of it as like you're kind of being tcp/ip to the basic Bitcoin IP right you're adding more States into the system you're keeping track of identity keeping track of data which is a form of state tcp/ip the session tracking on top of IP so it keeps track of a little bit more state so it blocks like is an example of a layer 2 protocol that is emerging on top of the layer 1 protocol of Bitcoin and is cleverly virtually designed so if something goes wrong with Bitcoin you can move it over to the next one so it's kind of cleverly future proof that way I think we're going to see more of that I mean you look at the classic OSI stack it's seven layers of computing and this probably is a lot more it's just after HTTP it gets too complicated and confusing so people stop trying to create more layers but I think that you guys are a great example of that we're going to see we're going to see more of that like the you know attention tokens advertising tokens prediction markets these are probably not all layer 1 protocols some of them are layer 2 we might even see layer 3 but it's really it's really hard you just have to squint a lot one of the nice things about being a developer in this space were being involved in space again the token incentive so I've seen lots of developers who are into Bitcoin in 2013 they started companies and the companies failed and in any other industry or in any other technically technology endeavor it would have just fail so it's like ok I failed that stuff now it turns out that even if they fail along the way because they were in Bitcoin space early maybe their company failed but they got paid in Bitcoin whatever revenue is a collective are in Bitcoin or they bought some Bitcoin on the side or did it even got to know all the big people and garden on the theory of my Co most of the early developers are actually pretty well off the hell right so in a space like this that is growing it has a powerful monetary incentive it's like if you are the if you want to be early people to figure out how stock markets worked you know whether you bought whether you started the right company or not just because you had that knowledge early on you were just exploiting an arbitrage Inc aynd of an unlevel playing field or at a less well-known playing field I remember the blog post by Fred wolf and that was the no hand effect do you remember that yeah this is the famous thing by Warren Buffett yeah about the clock yeah he says that whenever there's kind of a bold market warrant kind of fits everyone's partying like you know like Cinderella at the ball right there's like called the stagecoach men around there's like great music that great food there's champagne flowing everyone's dressed up it was have a great time and they know that at midnight the stagecoach men are going to turn back into rats and the coaches are going to turn into pumpkins and the wine will turn into water and the whole party will come to an end but they all plan on being out at 11:50 or 11:59 right they're going to rush out the door the problem is the clock has no hands like nobody knows how what what the actual time is and that's kind of the party that's going on right now that that's the Buffett exhibition I actually don't think that's correct I don't think that's true in the block headspace that maybe I was referring to when Fred welcome said there's a time and I think it was 2014 yeah when for when he he went into a meeting with a large number of investors and he said who is who would buy Bitcoin or invest in the Bitcoin startup right now and no one raised their hand and I think that's just something for us to remember it's like right now we're in this in this period of exuberance but there's there's you know there's this period in which there's lots of excitement there's periods in which there's less less public interest I think there's troughs and valleys and we have to make sure that we're in it for the long haul and every remember what we're actually here for and I wouldn't think when things change and when the sentiment changes we have to make sure that we keep going yeah absolutely that's that I think even today that 99% of people and probably 90% of serious financial investors still don't understand what's going on so there's still way more opportunity on the unaddressed side that there is on the address side and yeah just believe it's coming though but fundamentally for the right reasons yeah if you're here and you're here because you love the technology or you love decentralization and kind of what it means for the human race and you know that's its own reward getting paid for it yeah may worth may not but if everything in a long run will work out fine like if you look at the 1999 bubble the exuberance I mean I was there during that bubble I remember in 2000 there were a bunch of bumper stickers around saying dear God please give me one more bubble I'll know exactly what to do this right so here we are all right yep you know yeah but if you were around the 99th bubble you knew was a bubble you knew there was a lot of crazy stuff going on by the way that bubble was way bigger than this one that was a 1.7 trillion dollar bubble at peak here we're not even at a hundred billion dollars total and that one there was also a huge debt bubble associated when there was a lot going on there but during that bubble you knew there was a lot of junk there was the you know the pets calm and there was the web and I don't mean to pick on those companies they were actually later Petsmart and you know instant card and so on turned out to be very valuable so the timing was off their intentions were good but there was a lot of bad stuff from an investment perspective nevertheless if you had you know that's what Amazon was created that's when Google was created that's when eBay was creatives when Craigslist was created so there was enormous wealth creation going on even at that time and I think today the news came out that Jeff Bezos now the richest man in the world saw something like that over yeah or the reticulated in the world I forget what is he just passed Bill Gates and net worth so it when that happened that basically tells you the internet revolution has now overtaken the PC revolution right it's been 20 years for the internet revolution to overtake the PC village a it might take 20 years for Satoshi Nakamoto to overtake Jeff Bezos but I think it'll happen alright I think that's a great note to close on you [Applause]

Channel: Stacks

Views: 120,795

Rating: 4.9478097 out of 5

Keywords: Blockstack Summit 2017, Blockstack, Decentralized Internet, Decentralized Applications, @naval, @ryaneshea

Id: IrSn3zx2GbM

Length: 31min 3sec (1863 seconds)

Published: Fri Aug 11 2017