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Chris Dixon is the founder and managing
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partner of a16z crypto andrion
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horowitz's VC fund for crypto and web3
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startups he's also the author of a new
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book read write own building the next
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era of the internet we're having a lot
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of Silicon Valley people on uh of late
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we had aen Lee on last week welcome
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Chris thanks Ken thanks for having me so
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uh so it's been a a rough couple years
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for crypto and blockchain but you're
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still making a case for it in this book
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um actually Scott has two in a lot of
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way but why don't you why don't you
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explain why you're still a Believer yeah
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sure so I mean in the book I try to
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explain what I would call the productive
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aspects of blockchains and why I think
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that blockchains can help us um return
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the internet to its original ideals as
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being an open and Democratic Network
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which is why I got involved I've been
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involved in the internet for 25 years I
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got excited by the early ideals of the
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internet and you know look if you fast
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forward to today the internet's become
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very Consolidated the top five tech
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companies account for half of the nas NC
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100 market cap top 1% of social networks
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95% of traffic you know Google and apple
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have a duopoly on mobile operating
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systems I'm sure you both have talked
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about this plenty it the internet I
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worry the internet's at risk of becoming
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like 70s broadcast TV or something where
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you have three channels um and I think
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that's bad for the world I also think
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it's bad for our business you know we're
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in the startup business um we we want a
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dynamic internet but you write about uh
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blockchain technology and this is a
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quote from you this this is a chance to
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create the internet you want not the
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internet you inherited it's something we
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talk about a lot like that the same
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companies are in charge um what is that
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what do you mean by that it when you say
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there's lots of opportunities for
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Innovation here uh that starts from
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Ground Zero presumably versus starts
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with Google in charge or Microsoft or
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whoever I I'm guessing that we somewhat
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agree on the problem um meaning having
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five companies control everything is um
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not ideal um I think there's different
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ways one could think about solving that
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and so for example a lot of people talk
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about regulation I believe there is a
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role for regulation um I think you know
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we'll see what happens with doj and
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apple and things like that um I my
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proposal is to also try to do it through
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Innovation and by and and through that
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we want to create a new wave of Internet
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services that return power to the edges
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of the network and so to give you an
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example one of the reasons that social
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networks are so powerful is you're
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locked in right they have Network
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effects so you know I know I think you
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switched recently to threads um and when
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you did you had to give up your audience
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right you had to go build a new audience
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I I'm still over there because I got
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there first but go ahead but okay so you
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maybe maybe you're the exception but
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generally you're locked in right to
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these networks so like and especially if
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you're like a creator for example and
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you build a business on Tik Tok or
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Instagram and and you don't like the
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fact that they changed the algorithm or
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did some other thing you're locked in
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and so one of the key aspects for
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example in uh in these new
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blockchainbased social networks which is
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one category we're investing in is a
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user owns his or her identity and they
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own their follow followers in the same
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way you do in the email world right so
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if on email if you have a newsletter on
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substack and you don't like substack you
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can switch and you can take your
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followers with you so that's just one
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example of how a different architecture
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by empowering users with ownership this
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is the read write own that's what I mean
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by ownership is is a user controls their
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followers not the service that that
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change in architecture I believe can
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have sort of profound Downstream
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consequences on on the ultimate control
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of these services and the economics and
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you know these these networks I don't
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think we knew this 10 or 15 years ago
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but today we know they control the flow
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of global money you business culture
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politics they're very very important um
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and I and I don't think that having four
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or five people whoever they might be
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maybe you know at one point you like the
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management one point you don't I just am
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fundamentally against the idea that five
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people can control those things I think
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that they should be more like the early
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web you're talking to people who like to
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own so Scott go ahead Chris good to see
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you so and this may be the wrong
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bucketing but I think of blockchain in
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terms of front- facing applications as
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bucketed into three areas there's the
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tokens you know crypto there's nfts and
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there's Dows um Dows haven't really
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gotten any traction nfts I think have
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lost 90 plus percent of their value I
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think I'm being generous there and the
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the token Market's been kind of loosely
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speaking in terms of market cap and cut
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in half even with its Resurgence from
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its peak what talk about those three
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categories where do you see the
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opportunity yeah so I think with Dows so
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a couple things like I mean there there
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are active Dows um a lot of them are
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around these defi protocols so for
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example Unis Swap and compound and um
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maker are what's interesting about them
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is they're their networks in the same
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way that Facebook is a network but the
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users control those networks um and
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those are networks that have active Unis
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swap had trillions of dollars in trading
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volume and the users decide how to
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upgrade the code um admittedly that is
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early those are experiments in my book I
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have a section on what I call Network
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governance where I talk about this and
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my argument is essentially that it's a
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um a very powerful new way to design
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Community governed systems I I don't
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claim that we've fully figured it out I
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I think that it it requires a lot more
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work to evolve nfts like the nft
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standard was the was finalized in 2020
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then we had this you know big rise in
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the market last year in 2023 there were
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$8.6 billion in sale so I think the sort
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of decline has been exaggerated but how
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much of that 8.6 billion do you think is
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is false Flags is people trying to Pump
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Up the Volume according to we have a
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data science team and I asked them to
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pull these numbers and they they they
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believe that's removing wash trading if
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that's what you're referring to um so so
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so they do believe that but look
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admittedly that you know it's hard to
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get the exact numbers but but um I think
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that's a pretty accurate number um and
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so um the so nfts so and look I think
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nfts went through I the way I kind of
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look at these things is like the
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internet we all I think live through the
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internet bubble right I kind of began my
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real career post internet when everyone
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thought the internet was over and the
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way I view it is a lot of these new
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technologies go through these Cycles
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where people get overly optimistic and I
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think that probably happened with nfts
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and now I believe they're overly
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pessimistic all right let me let me ask
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you about that because you talk about
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the casino culture of crypto which has
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become the dominant narrative and
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obviously the law the binance thing s
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bankman freed Etc talk about the less
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nefarious side and what about the impact
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of that those those cases
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and also the SEC did approve Bitcoin
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ETFs a few weeks ago that the price of
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Bitcoin has been falling the casino
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stuff yeah so overall it's sort of in
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that moment and I would agree with you
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there was a lot of real scammy stuff at
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the beginning of the internet for those
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who weren't there um and it went on for
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quite a while for quite a while actually
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um but talk about sort of that how to
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shed it because I think people think of
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it now with FTX even though they made a
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great investment in anthropic it was
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mostly not a good story for crypto or in
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general in my book book I have a long
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section where I talk about this what I
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call the casino and I am and I'm again
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very against it and I think it's
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destructive I think it's destructive
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primarily to Consumers who are victims
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of things like FTX but I also think it's
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quite destructive to what I'm trying to
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work on which is to to build a
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productive side of these Technologies
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but look the way I would describe it is
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a blockchain is a tool tokens are a tool
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right and just like any tool you know
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you can a hammer can build or a hammer
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can destroy and there's two sides to the
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tool and I i' I think there's been lot
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of attention paid to the casino aspect
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there are you know like we have dozens
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of startups in our portfolio who are
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working on the on the productive side
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and I and I the reason I wrote the book
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partly was to tell that story because I
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do think it's a bigger story than people
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realize I I also think that we need um
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more proactive policy we've been calling
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this for this for years since before FTX
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to put guardrails around the casino
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stuff to eliminate the offshore activity
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I look I was involved I mean the reason
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we were not investors in FTX is I was
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involved with coinbase for years
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coinbase contrary to I think some some
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popular perception it was heavily
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regulated their Bank secrecy act
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regulated they do full kyc and all
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customers there's a there's a whole
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series of regulations they're audited
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they're public us company um binance FTX
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there's a whole series of companies that
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were offshore not audited all these
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other kinds of you know all these
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running exotic prod products I mean
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that's the kind of stuff that I think we
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need to clean up and have very clear
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rules what about the Bitcoin ETF it does
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sort of introduce consumers to it in a
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safer feeling way you know if I'm
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getting it from Fidelity I certainly
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trust them more than even coinbase for
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example yeah and and I think I think the
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bigcoin ETF was a I mean in my mind is a
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net positive in the sense of it sort of
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more institutional acceptance oh you say
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net positive what what's the negative no
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it's good sorry I mean it's good overall
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I look I I'm very focused on the Utility
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side of building applications and so
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it's a new Financial instrument so it's
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for me it's less of a focus that's what
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I mean um and it's just not you know
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like I would love for to more of the new
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Cycles to be focused on hey this person
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just came up with a cool new way to
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fight deep fakes this person just came
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up with a cool new business model for
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Creative people I think specifically
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with the rise of AI I see a lot of
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blockchain applications as the counter
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measure in many ways so like just to go
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back to maybe if I could talk about the
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def fakes for a second the um you know
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we're now going to have an internet a
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wash with fake video a wash with you
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know very Advanced fishing um yeah we
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have it actually yeah we probably have
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it um talk to Taylor Swift this week
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Taylor Swift can you can simulate
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people's voices perfectly now they can
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take your voice from the podcast yeah
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they can they can then call I actually
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had a partner Martine who they called
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someone called his parents using his
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voice to try to get money this is
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actually like a real thing happening so
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in that world we need to use I believe
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tools like cryptography to authenticate
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things and I think you know for example
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one one way to do that is you one thing
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a blockchain's very good at doing is
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storing an immutable audit Trail and so
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you can have an immutable audit trail
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that says this video is attested to by
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you know it came from Caris Wisher um
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and it was attested to her by her as an
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example and so it gives you this ground
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truth in a world in which you lose that
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I think also blockchains allow for new
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business models for Creative people in a
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world where like generative AI will put
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significant downward pressure on you
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know the ability for let's say an
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illustrator to sell things right if you
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can just go to a mid Journey or
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something um and so you know I think it
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becomes more important um in in an AI
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world so when I think about U kind of
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the consumer facing Tech technologies
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that it built so much value in Tech and
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I think about the leadership there I
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think about the original gangsters I
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think about Gates and jobs and then the
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new you know the new guys and they were
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all guys Brin Paige Bezos these say what
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you will about them were they're all
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Visionaries and and I and I would argue
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at their core they were all I'll go on I
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think they're good people and the the
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two kind of iconic figures in blockchain
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are either in jail or going to jail and
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and my question is who are the new who's
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the next generation of leadership that
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you would point to that will quite
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frankly to sort of clean this mess up
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because right now from a public
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perception standpoint it feels like a
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levered Ponzi scheme I think there's
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just two very different worlds Scott so
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I think there's the the SP SPF world and
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then I think there's you know like
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people like vitalic bararan and
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bethereum well you mentioned Brian
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Armstrong or you alluded to him I think
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look I think look Brian like Brian got
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you know he got Flack for years years
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for being slow I mean their market share
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got low single digits um they were
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getting crushed by binance and FTX if
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you talk to any Silicon Valley VC it was
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like why is coinbase so slow stocks
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aren't crazy they're doing really well
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now and then and and Brian like Brian
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kept I I mean I think what he did was
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admirable he really kept his head down
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he never changed what he does he invests
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very heavily in security and compliance
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um and and you know he's not he's not he
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hasn't gotten all the market share yet
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but I think that approach has proven
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correct I think Brian has done a great
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job I think there's folks like metallic
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and there's a lot more like there's
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these conferences like you go to Devcon
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it's an ethereum conference and there's
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like tens of thousands of very Earnest
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kind of you know um uh thoughtful
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technologists and it feels to me kind of
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like I don't know 2005 web 2 movement
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when I was you know I was part of that
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and you go to these things and and yeah
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and look they weren't I mean like you
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never know who the Larry Page is at the
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time I mean obviously Larry pagee is I'm
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sure brilliant and everything else I
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didn't know him over time these folks
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will emerge I do I do I would say I
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think there's a very strong productive
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positive movement that I think just gets
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kind of crowded out by all of the you
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know the coverage of the casino stuff um
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but I think it very much exists and
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that's why look that's why I wanted to
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write the book I wanted to go through in
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detail and explain this and make the
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case let me ask that then I was just
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looking at coinbase stock which is up
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recently but it's certainly down from to
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2022 like quite a bit like or 2021
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especially um when it was in the you
00:12:56
know what is it two I was 330 2 and then
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it's now 131 it was down in the 80s and
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70s and stuff like that that using them
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not as an example of you know Scott
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called them the AOL of blockchain but
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nonetheless um it's that a good thing no
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I don't think so it was for a while it
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was a great thing for a while it was
00:13:17
great though it wasn't um but but it has
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been around for a while and the main
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does it have to be mainstream because AI
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suddenly is everywhere mainstream you
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know it's it's it seems ubiquitous every
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everywhere does it have to be mainstream
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or just where the electricity where the
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in where the where the I don't know the
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drywall or whatever I don't know yeah I
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in my book I analogize blockchains to
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Steel in the sense of like it's a it's a
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building material right because people
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sometimes say what problem does it solve
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and I really see it as a building
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material for building better internet
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services so I think ultimately if the
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movement that I'm part of succeeds it
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will be it won't be some parts it will
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be visible the fact that you can hey
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there's a social network where I can
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exit you know there's a I can sell
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digital merchandise as a musician
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directly to my fans like you'll see
00:14:03
parts of it but you won't see all the
00:14:04
plumbing and I think most of the
00:14:05
plumbing is behind the scenes and it and
00:14:08
by the way it may may happen with AI too
00:14:09
maybe AI is just sort of baked into
00:14:11
everything I think it's probably a
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likely outcome AI feels more like the
00:14:14
internet right it feels more like or a
00:14:16
web or or something like that but if you
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if people wanted to get into crypto
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right now where would you tell them to
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start I think look I think there's a lot
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so some examples of things I'm excited
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by we have um a few things around music
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so there's a project called sound XYZ
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where musicians so musicians today don't
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make money on the internet they make
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very little money on streaming a lot of
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them if you ask them we'll say they go
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offline and they tour and they sell
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merchandise um to to support themselves
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and so um there's various projects like
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sound XYZ that let you musicians sell
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backstage passes and digital merchandise
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to their consumers and add additional
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income stream so that's one interesting
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area there's a social network called
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foraster that's a lot like kind of
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something like Twitter or Facebook
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except the user controls their name and
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their followers and can move around and
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developers can hack on it car you
00:15:03
remember early Twitter how it became
00:15:04
like a developer platform like I was
00:15:06
very excited by Twitter at that point
00:15:08
those are two examples um the the um
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look there's also stable coins are quite
00:15:14
popular um in the developing World there
00:15:16
were something like $600 billion dollar
00:15:17
in stable coin transactions last month
00:15:19
so there also other you know as I
00:15:21
mentioned nfts I think are bigger than
00:15:22
most people realize that there's yeah
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there's a bunch of interesting games
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that are launching like we have one at
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sort of as Style game called pirate
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Nation where you have nfts is digital
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Collectibles Eve online the the popular
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is a very popular video game they're
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launching an nft version soon which
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let's kind of have more of a
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peer-to-peer economy where users can
00:15:41
create spaceships and sell them to their
00:15:43
users so I think there's a really
00:15:44
interesting wave of new companies that
00:15:46
are much more accessible um Blackbird is
00:15:48
one in New York where it's a restaurant
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um it's actually the founder of resi and
00:15:52
eater um Ben lethal you may know him
00:15:55
experienced entrepreneur yeah so he's
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doing an nft it's like a restaurant
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thing where you can use nfts as a way to
00:16:00
kind of reward loyal loyal patrons um so
00:16:03
I I feel like we're having this kind of
00:16:05
out of the downturn there's a there's a
00:16:08
it feels to me like a lot of people are
00:16:10
kind of saying hey we got to really
00:16:12
level up our game and have really great
00:16:14
product experiences and we're seeing a
00:16:16
an exciting wave and like I'm excited
00:16:18
about it there was a fear that a lot of
00:16:20
these crypto projects were essentially
00:16:23
VC's financing a group of intelligent
00:16:26
guys who had found something they
00:16:29
thought claimed was new
00:16:31
technology the VC fund would lend its
00:16:34
capital and create this project they'd
00:16:36
issue a coin because and then kind of
00:16:39
leveraging the fact this fomo of Main
00:16:41
Street Americans who wanted to
00:16:42
participate in what was hot they then
00:16:45
buy these coins and because there's no
00:16:47
SEC
00:16:48
requirements on uh lockups or even
00:16:51
disclosing when You' sell these coins
00:16:53
that then these VCS would basically dump
00:16:55
their entire stake and that these
00:16:58
projects s were not financing any sort
00:16:59
of growth or underlying technology they
00:17:02
were essentially Just An Elegant
00:17:03
transfer of wealth from mainstream
00:17:06
investors to the limited partners of VCS
00:17:09
do you think there's any truth to those
00:17:10
claims I think it's possible I think
00:17:13
that look I mean I would just say that
00:17:14
probably the number one thing that we
00:17:15
have asked for and pushed for in policy
00:17:17
for years is longer lockups okay so we
00:17:20
have 10e we're we're Venture F all of
00:17:22
our funds are Venture funds including
00:17:23
the crypto funds they have a 10-year
00:17:24
life cycle um we push for long lockups
00:17:27
in the deals we do
00:17:29
but we don't have unlimited Market power
00:17:30
if we go push too hard they will do a
00:17:32
deal with somebody else right and so we
00:17:34
have I think the number one thing that
00:17:36
the policy makers could do to improve
00:17:39
the space would be long lockups on every
00:17:41
project because I believe in that that
00:17:44
real technology takes years to build and
00:17:45
you need to avoid that yes I look I
00:17:47
think all sorts of things have happened
00:17:48
but Andre hasn't hasn't been subject to
00:17:50
these lockups or self-imposed them we in
00:17:53
all the deals we do we have multi-year
00:17:54
lockups I'm sorry I just want to clarify
00:17:56
this when you invest in a crypto project
00:17:58
and there's a coin issued you have a
00:18:00
self-imposed lockup on when you can sell
00:18:01
those coins the lockups in the term
00:18:03
sheet it's it's a term in the term sheet
00:18:04
yeah we do and the founders do so the
00:18:06
crypto projects you you funded in the
00:18:09
last few years you have not sold coins
00:18:11
you still own those coins we have 94% of
00:18:13
the coins that we bought we hold in all
00:18:14
our crypto funds today so wouldn't that
00:18:16
indicate that andreon has taken an
00:18:18
enormous draw down or loss on these
00:18:20
projects given what's happened in the
00:18:21
crypto Market we're ra I'm not allowed
00:18:23
to talk about our returns but I mean we
00:18:26
we have 94% of our of our tokens yeah I
00:18:29
mean think it's a venture capital is a
00:18:31
highly volatile market and then my last
00:18:32
case is just give us what you feel is
00:18:35
the most compelling use case for
00:18:38
consumers or or or Enterprise say it
00:18:41
doesn't even have to be now but in three
00:18:43
years what what do you think the use
00:18:44
cases are outside of speculation sorry
00:18:47
to keep pushing my book but I have seven
00:18:48
sections at the end of the book where I
00:18:50
go through seven uh like deep into seven
00:18:53
areas of use cases and I talk about
00:18:55
social networking I talk about Finance I
00:18:57
talk about uh media businesses like nft
00:19:00
media businesses um I'll just give you
00:19:02
one kind of maybe a flavor of a cool
00:19:04
idea that I like um as that's one of the
00:19:06
sections which is an area called
00:19:08
collaborative storytelling and that the
00:19:09
idea there is it's kind of Wikipedia
00:19:11
style is um uh internet fans get
00:19:14
together and create narrative universes
00:19:16
like the next Harry Potter and the next
00:19:18
Marvel and they get rewarded with tokens
00:19:21
proportionate to their contribution um
00:19:23
and then they go and they the that the
00:19:25
narrative universes they can create can
00:19:27
then be made into licens and made into
00:19:30
movies and comic books and other kinds
00:19:31
of things like that's a cool new idea
00:19:33
that just sort of couldn't exist before
00:19:34
you had crypto but there's just like a
00:19:36
bunch of there's games I have a section
00:19:37
on games in the metaverse like I look I
00:19:39
think that very clearly we're going to
00:19:41
have you know the so-called metaverse I
00:19:43
know it's jargony is but it is a thing
00:19:45
that's going to happen and whether I'm
00:19:47
not talking just strictly about VR
00:19:48
headsets I'm talking about people
00:19:50
spending more time in 3D worlds the
00:19:52
video games and things like this that's
00:19:54
just we're going to have more and more
00:19:55
people in 3D worlds they're more
00:19:56
persistent um um it becomes a bigger
00:19:59
part of our lives and I think an
00:20:00
important question is how is that
00:20:01
metaverse structured is it structured
00:20:03
with like one company owning it like
00:20:04
does fortnite own it or is it structured
00:20:06
like the web like where there's a bunch
00:20:08
of different you know like it's an open
00:20:09
system and you can add a component to it
00:20:12
um like that that's another important
00:20:14
you know area that I'm focused on um I
00:20:16
think as I mentioned before like in a
00:20:18
world of generative AI um let's talk
00:20:21
about your business the media business
00:20:22
um you know the internet has operated on
00:20:24
an implicit Covenant between
00:20:25
distribution like search engines and
00:20:27
social networks and
00:20:29
uh websites right what happens in a
00:20:30
world where you go to a chat GPT and you
00:20:32
just get an answer you don't have to
00:20:34
click through anymore right so we're
00:20:36
very soon entering a world where you
00:20:37
don't click through anymore and you
00:20:38
don't go and I was on the board of stack
00:20:40
Overflow for years stack Overflow data
00:20:42
was used to train a lot of these systems
00:20:43
and now stack overflows traffic is way
00:20:45
down right so so how do we train how do
00:20:47
we create content in the future how do
00:20:48
we reward content creators so you know I
00:20:50
have a section in the book on this about
00:20:52
like different things people are working
00:20:54
on and ideas for like new ways to use
00:20:57
blockchains to to create business models
00:20:59
in in a world of AI systems that give
00:21:01
you the answer one of the last things
00:21:02
I'm sorry I just noticed Larry fin who
00:21:04
was a big um detractor of Bitcoin and
00:21:07
stuff of course has done an about face
00:21:08
and is calling himself a big believer of
00:21:11
course they have they filed paperwork
00:21:12
for an ETF too at blockr so it's I think
00:21:14
the finance stuff and the speculation
00:21:16
might be a little calmer with these new
00:21:18
you know it's part of that it'll be part
00:21:20
of that presumably that will still I
00:21:22
know you're not in that area you're in
00:21:23
the tools part but as a speculative tool
00:21:26
of ownership I think it's this will
00:21:28
change it quite a bit a lot of people
00:21:30
feel like um and then they're limiting
00:21:33
yeah I think the sort of institutional
00:21:35
yeah the institutional people are really
00:21:37
piling in a lot more because it feels
00:21:38
safer and that makes sense that makes
00:21:41
sense from a lot of perspectives anyway
00:21:42
uh really fascinating book actually and
00:21:44
we love to we love to own we Chris we're
00:21:47
owners um and you know I am you know I'm
00:21:49
like tired of selling my stuff to other
00:21:51
people um anyway again Chris Dixon he
00:21:54
one of my favorite Venture capitalists
00:21:56
and that's a very short list
00:21:58
um and uh the book is read write own
00:22:01
building the next ear of the internet is
00:22:03
really worth your while to read it
00:22:05
thanks Chris thanks Chris good to see
00:22:07
her again yeah thanks God thanks K you
00:22:13
too