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NET Society is unraveling the latest in digital art, crypto, AI, and tech. Join us for fresh insights and bold perspectives as we tap into wild, thought-provoking conversations. By: Derek Edwards (glitch marfa / collab+currency), Chris Furlong (starholder, LAO + Flamingo DAO), and Aaaron Wright & Priyanka Desai (Tribute Labs)
00;00;15;29 - 00;00;18;06
Aaron
Chris, I heard you're getting a little bearish on crypto.
00;00;18;09 - 00;00;23;17
Chris
You've heard I'm getting a little bearish on crypto. I'm sorry. Did I tell you I had one of the DAO calls this week?
00;00;23;18 - 00;00;25;00
Aaron
Yeah. That's the word on the street.
00;00;25;07 - 00;00;34;06
Chris
I like the word from my lips to your ears. Exactly. And the street's a zoom call. I just want everyone I want to paint a picture for our audience here.
00;00;34;13 - 00;00;37;21
Aaron
It's a nice street. It's a nice street. Don't disparage the street.
00;00;37;23 - 00;00;40;25
Chris
Okay? No, I didn't say it was. It wasn't a nice street.
00;00;40;28 - 00;00;44;06
Pri
The street is really just so you know.
00;00;44;08 - 00;00;46;06
Chris
You live on Zoom Street.
00;00;46;09 - 00;00;46;26
Pri
Yeah.
00;00;46;28 - 00;01;04;25
Chris
Oh. For free. You got to find a better address. You got to, like, go up to Westchester or what? You really got to do free. And we all know what the answer is. You need to find a former like, industrial boomtown in the northeast, filled with Gilded Age mansions that have fallen into disrepair. I need you to have the nicest house.
00;01;04;25 - 00;01;06;28
Chris
And like Akron as a fixer upper.
00;01;07;05 - 00;01;09;13
Pri
That's kind of my next phase. I'm like, oh, I'm.
00;01;09;13 - 00;01;10;17
Chris
So here for it.
00;01;10;20 - 00;01;12;21
Pri
Yeah, I'm like probably three years away from that.
00;01;12;26 - 00;01;16;21
Chris
I cannot wait till Upstate Fixer Upper for me.
00;01;16;26 - 00;01;21;24
Aaron
I thought it was Toledo. Pray you're saying that that that there was a lot of those types of properties in Toledo?
00;01;22;01 - 00;01;34;07
Pri
I mean, pulling up Zillow in Toledo was like, holy, like a breath of fresh air. I was like, wow, I could get land and a house that I just fixed up for $50,000. Like this.
00;01;34;09 - 00;01;57;11
Chris
It's a little wild. I remember a friend of mine is a professor, and he was looking at teaching gigs at the University of Oklahoma, and so his wife was like pulling out all the listings in town. And, you know, they had live in like a two bedroom condo in my neighborhood. And she was like, you know, we could buy the nicest house in Norman.
00;01;57;13 - 00;02;06;11
Chris
It has a giant, 100ft swimming pool with the Oklahoma Sumer logo in the middle of it for the same exact price. Is, our condo here?
00;02;06;13 - 00;02;07;26
Pri
Yeah.
00;02;07;28 - 00;02;14;11
Chris
So, anyway, I'm supposed to be talking about why I'm bearish on crypto. Is that right, Aaron? And a lot of the issue.
00;02;14;13 - 00;02;17;26
Aaron
Yeah. You're avoiding your, your recent conclusion.
00;02;17;28 - 00;02;23;11
Chris
It's not. It's all right. Look, I am not bearish. Bearish. This is like all right.
00;02;23;11 - 00;02;24;08
Aaron
Phew.
00;02;24;10 - 00;02;27;07
Chris
This is me looking at like.
00;02;27;10 - 00;02;28;25
Pri
You're like frustrated bearish.
00;02;29;01 - 00;02;56;28
Chris
I'm not. It's all right. Yeah I'm not even that. I just think people have their heads up their asses and are looking at the wrong tokens. Like I do feel like crypto is a little washed. It's a little it's conditionally dependent on too many things where as I and the tokens of compute have all the agency in the world and have no dependance on other, other, other factors.
00;02;57;01 - 00;03;25;25
Chris
And so as I'm on retiring and as I'm getting out in the world, crypto just looks less and less attractive to me because it's not a weapon I can wield at the same pace. And, you know, like patterns that I'm used to as an operator. And so I guess here, here, I think the problem is I'm equivocating my own personal situation and what I want to be out doing and accomplishing.
00;03;25;28 - 00;03;59;17
Chris
I am I'm applying that into our Dao calls, into our discussions of crypto. And it's coming off super negative that that's what's going on here. Like, yeah, crypto is a bunch of if this then that that really requires this huge amount of like incentives and by an influx of capital, capital flowing into the right sector that, you know, you're allocated into the project that you're using within that space of the project, your bag holding, catching a bid.
00;03;59;19 - 00;04;30;26
Chris
And like, it's really like you're trying to hitch a ride somewhere and you're hoping all these things line up that's going to get you there. Whereas like, AI is a fucking car. It's a car that goes really fast and a car that you barely need to drive. And so when I'm looking, when I'm operating like very, very heavily in AI, in development, and then I jump on these, you know, Dao calls in which we're discussing all these conditionally independent projects and their future, that transition shift I can't do.
00;04;30;28 - 00;04;49;18
Chris
And so it bleeds through and it comes off as like, oh, you're really bearish. And I guess in some ways I am, but it's really more towards like what my own aims and goals are. I find the other class of tokens like you just way better for what I need. And these other things look dumb and slow.
00;04;49;20 - 00;05;05;08
Aaron
Yeah, I think that's a it's it's fair and I the way I play it back is like I do think we kind of see this with developer activity kind of leveling out. There was a big a16z crypto report. Regardless of what you think of A16z, I think they do a great job there, and I think they do a pretty good job overall.
00;05;05;08 - 00;05;23;25
Aaron
And it just shows like developer activity is pretty flat. I do think like in the token wars between like AI and crypto, you know, the AI tokens are sexier. I do think they're in the long run. Like some of that challenge that you mentioned, Chris, that's actually some of the moodiness around crypto and that that's the big question with AI.
00;05;23;25 - 00;05;40;26
Aaron
Right. And just software development. Now that it's getting easier and easier, just like where were the modes like what's going to be the defensible businesses there? And how many of them are there going to be? Is it just going to be, you know, like the large models that just eat the world, you know, or they're going to be enough lanes for that to happen.
00;05;40;29 - 00;05;45;18
Aaron
So maybe we're just speedrunning into, obsolescence when it comes to software.
00;05;45;21 - 00;06;05;13
Pri
I also think, Chris, like, you feel like I think like it's like the shackles of having something happen in crypto. It's just like the barrier to make it successful. And, you know, it's just there's so many limitations or conditions that need to be in place. Whereas like the AI design space and ability feels like limitless. And, you know, you can kind of accomplish a lot of things.
00;06;05;15 - 00;06;20;00
Pri
That said, it's like it's two sides of the same coin with like AI, you could have, you know, total copy, ability to build your own product or world or whatever you want to do. But then there's like a district, you still have to go through the sticky conditional problem, like, okay, who's going to see it? What's going to happen?
00;06;20;00 - 00;06;41;25
Pri
Like, you have distribution, you need awareness and education. Whereas like on the other side, crypto actually handles the distribution. Questions reasonably well because a token a crypto tokens great distribution. But on the other side of, you know, actually making it to that point to get distribution, there's like a lot of conditions dependent on it. I don't know if that made sense, but I think like both have their pros and cons.
00;06;42;01 - 00;07;06;02
Chris
Okay. This is where I'm going to get really contrarian in crypto is not good at distribution. Crypto actually sucks at distribution. I work on a completely different scale than what crypto considers a success, right? The last product I built, I don't know, like 4 million people use it every day. Like today in the year 2025. Like crypto isn't big enough for what I do.
00;07;06;04 - 00;07;29;07
Chris
And you know, that might sound arrogant or cocky or whatever, but like, that's just, you know, my mindset and what I think about. And so sure, crypto can get like 40,000 lunatics, right, who get in early enough to want to believe in your project. And then it hops out. And why does it top out? Because there are no marginal buyers.
00;07;29;07 - 00;07;55;13
Chris
There's no one else who wants to be a lunatic at a certain price level. And then it plateaus and it sits around in this conditional waiting for a miracle type mentality. Whereas like how I came up and how I'm used to operating, you just simply keep making your product better. And you work in this flywheel of like product speed and distribution.
00;07;55;13 - 00;08;20;16
Chris
As your product gets better and more people use it, be more people using it mean more people are paying you. Which see then means you can actually spend more money on awareness, but you can also spend more money on development. And so I like I just view this world differently than other people because, you know, I had to go out and fight like the carrier wars, like I had to go participate in Bloodsport ten years ago.
00;08;20;16 - 00;08;24;15
Chris
And so, like, I just don't see the world the same way crypto people do. Yeah.
00;08;24;15 - 00;08;53;20
Aaron
I think you may not be giving it enough credit. What? There's just shy of under a billion digital asset users and then 50 million users that are in the more on chain active, ecosystem and activity. So it's about a billion total digital asset holders. And then about 50 million kind of like on chain users. So it is still a pretty small market, but I do think it actually has done a pretty good job scaling right and getting distribution.
00;08;53;27 - 00;09;08;18
Aaron
The fact that you know, 1 billion people own a digital asset of some sort is pretty, is pretty notable during this, you know, time horizon maybe is moving quicker than that. I don't know how many total users there are an AI ecosystem, but I don't think it's anything to sneeze at.
00;09;08;20 - 00;09;30;25
Chris
Yes and no. I haven't looked at this in a long time, but like a year ago or two years ago, I like I would keep track of, you know, total like daily active users of all wallets on Ethereum and like Mint Mobile still crushed it. You know, like my my stupid phone company that Ryan Reynolds goes out and sling's like still had more daily active users than like Ethereum.
00;09;30;27 - 00;09;41;13
Chris
And so, you know, like like I said, the scaling is just a little bit different anyway. Like, I probably look like a jerk right now. I should shut up before I alienate like our 42 listeners.
00;09;41;19 - 00;09;43;28
Aaron
Hey, we love our 42 listeners.
00;09;44;01 - 00;09;50;09
Pri
Also, some people in Marfa, we're like, we love the podcast. Like it's my favorite podcast.
00;09;50;09 - 00;10;07;23
Aaron
So I love the podcast. Yeah, Derek, I feel like I'm kind of curious what you think here, just because I think especially recently, you've been straddling these two worlds and thinking about how they can kind of merge together. You think Chris is right, that, you know, the AI stuff is just the Lambo and, what's what's crypto, Chris?
00;10;07;23 - 00;10;10;25
Aaron
The Honda Accord of, of tech right now?
00;10;10;28 - 00;10;17;19
Derek
Wow. Not the trusty old Honda. I listen, I say slow.
00;10;17;19 - 00;10;18;22
Aaron
And steady wins the race.
00;10;18;24 - 00;10;19;28
Derek
Derek. Slow.
00;10;20;00 - 00;10;21;01
Aaron
Steady wins the race.
00;10;21;01 - 00;10;52;12
Derek
Yeah, exactly. I think Chris is bringing up salient points. I, I it's really difficult for me to compare these two things. I just, I see them very differently in my brain. The, you know, blockchains are really, really, really superior to so many other types of database architectures, but they're not really I wouldn't comp them to something like that can be hyper networks, like a consumer product or, you know, AI or the internet.
00;10;52;12 - 00;11;30;07
Derek
It's just it's it's a, it's a it's a ledger. It's a, it's a way to square, you know, numbers, on a database that allow everyone to kind of like, view through it and presumably build things of value that use that type of innovation. That to date has been things like bitcoin and digital gold and stablecoins and, you know, art and protocols that can help facilitate asset exchange and lending and but but inherently like they're not set up to kind of like empower at least like not on their own empower like, you know, whatever.
00;11;30;07 - 00;11;52;29
Derek
How many ever people use Mint Mobile, 4 million people to kind of like, communicate with each other, like that's just not like what it's set up to do. There's like a whole networking world that exists around products and services outside of just like the the what blockchains offer that I think are just a very different thing. And so I when I was listening to Chris, Chris like I don't disagree with him.
00;11;52;29 - 00;12;15;15
Derek
Like there are the surface area of like the network in the scale that you can build with AI right now in synthetic intelligence, it's dude, it's like orders of magnitude more interesting than like how you can, you know, put a protocol on a blockchain like I you're not going to find me arguing against that view. I think it's probably pretty true, but but to me it's like it's not.
00;12;15;17 - 00;12;40;13
Derek
The comparison is not to kind of compare AI and crypto and blockchains. It's, see their unique design like properties and like, figure out how these things can be wielded to reach the type of scale that I think Chris is demanding and, and I definitely think that's possible. I think, you know, so much of this technology over the last 15 years has been building like the scaffolding and the infrastructure to support that vision.
00;12;40;16 - 00;13;16;02
Derek
Very few things have broken out in a meaningful way. I think, you know, we can the ability to kind of like hold and in a sovereign way, like a digital form of gold or like transfer a stablecoin or engage in a trust minimized swap, you know, for trillions of, you know, trillions of dollars have flown through something like Uniswap, for example, globally, 24 seven like there are there are things that have reached the type of like hyperscale that I think Chris is looking for, but admittedly not as much as we have been able to do with just the internet, over the last 20 years, 30 years.
00;13;16;05 - 00;13;37;05
Derek
And so, yeah, I guess, like my reflection on this is like it it's not I don't know if I would ever compare these two things. It to me, the core insight has always been driven by like, how do we take what's unique about crypto, take what's unique about products and services, take what's unique about consumer demand for new things, solving problems that are big and large.
00;13;37;05 - 00;13;57;05
Derek
And, you know, art can be scaled and, you know, to millions of people, steady state. And now take what's interesting about synthetic intelligence and how it's created and how it can be used and operated. And like, you know, when these things kind of come together, what are the new things that can get built, that can reach, you know, the scale of like, what Mint Mobile has been able to do?
00;13;57;08 - 00;14;02;00
Derek
And I think that's definitely possible. And I guess I spend most of my time trying to think through that a bit.
00;14;02;06 - 00;14;11;23
Chris
Yeah, that's a great point. Derek and I look, Aaron kind of put me in a corner to start the show for the sake of starting the show, right. Like I still have a crap that.
00;14;11;23 - 00;14;15;15
Aaron
Wasn't I thought was intentional. Chris I knew I was poking the bear.
00;14;15;17 - 00;14;21;11
Chris
Yeah, yeah. No it's fine. Right. We have to make content. Like we have to give the 42 people listen to the show. Something to listen to.
00;14;21;19 - 00;14;22;20
Aaron
It's 50.
00;14;22;23 - 00;14;41;22
Chris
It's 50, 50, 50 pages. Eight people like I have to play to my strengths. My strengths are like, I go harder, faster than other people, right? And I can't do that in crypto. Other people have other strengths and they can do perfectly well working in crypto. It's a horse's courses thing.
00;14;41;25 - 00;15;00;16
Aaron
Yeah, I think that's fair. I don't think you can go that hard in crypto yet because the user base. That being said, I think if we look back in two years that folks that do kind of push through this period, they're going to be able to go super hard. And it's the same thing with the internet, right? Like it sounds like you want to you want to build what was it?
00;15;00;19 - 00;15;25;16
Aaron
DoorDash. Right. But we're still in that like Cosmo era, or you, you want to build like social media, with crypto. And a lot of folks do too, right. But the user base still, like, is not fully there. But I do think it's like moving at a at a very fast pace. And I do think that thing that it has that I doesn't have is one just a massive ability for capital formation.
00;15;25;18 - 00;15;38;03
Aaron
And like its capital distribution is much stronger. And too like compared to like other financialized sectors and, and movements like fintech, it just moving at a much, much faster clip.
00;15;38;05 - 00;15;58;20
Derek
Can say one thing about that, Aaron, because I think you're spot on and and I think what when you're talking, the thing that's coming up for me is like, are these things interesting to what Chris is doing? And and maybe like, I don't want to gas up Chris's project, Hyperreal Hospitality. But I do think that, like, maybe we use that as the, the vehicle to maybe like flush out the rest of this conversation.
00;15;58;20 - 00;16;37;13
Derek
Like I look at what Chris is doing right now. It's it's incredibly fascinating. It's like a, it's a world building project. It's software native, it's expansive, it's pulling on intelligence and all sorts of different directions. I feel like it's a very unique and differentiated experience when I'm in there and messing around. And but the thought has also crossed my mind, which is just like to, to do to, to really kind of like achieve maybe some of the anchoring that, that I know it can have like around around like being able to establish a provable connection with something or someone or be able to checkpoint in a way that like establishes provenance that we can
00;16;37;13 - 00;16;59;13
Derek
rely on, or being able to pull capital for some weird, esoteric thing inside of hyper real that allows us to kind of like go off on our own adventure. It's going to need something that looks like blockchains and crypto to like, really kind of like make that a peanut butter and jelly sandwich of like the networked product on top, and like this back end infrastructure that can support some of how that networking evolves over time.
00;16;59;15 - 00;17;23;16
Derek
Yeah, I guess like, you know, just a riff of what you're seeing here. And it's like, I think it just I think it gets me back to the point that I was trying to make, which was, it's not like these things are competing against each other. It's just like they are, you know, on the palette that Chris is using to establish this really cool new thing, I think he's going to probably want to draw from lots of different technologies to support the envision.
00;17;23;16 - 00;17;30;02
Derek
And I think to me, crypto feels like an elegant piece of that. But I don't want to overreach because it's Chris's project.
00;17;30;05 - 00;17;55;05
Aaron
I definitely do. I do think they are competing the Derek. Right. Like, I mean, if you think about it, if you're like a crack dev and you were a crack product, you know, builder like like Chris is like you, you do have to make decisions. And I do think like, the eye luster is just really hard to avoid, not just because the market is it is getting more and more robust for it just because it's it's pretty fun to play around with.
00;17;55;06 - 00;18;20;24
Derek
It's true, it's true. I would I would argue, though, that the most cracked devs are agnostic to the types of things, the technologies that they want to play with, and they'll find the best things to support their own vision. Like I would say, what you guys did with Aidan is a perfect example of this. It's like you're pulling from AI, you're pulling from community organization, you're pulling from blockchains as a crowdfunding and, you know, database of record for all of these investments.
00;18;20;24 - 00;18;41;14
Derek
And that that to me is like what the cracked engineers and the crack developers do. And I don't want to. I guess the reason I'm saying that is because, like, I've seen people get nerds sniped by AI, and to me it's like they were operating in crypto and blockchains on borrowed conviction to begin with. It's like they saw other people building with it, and they wanted to take their, you know, try their hand out on it.
00;18;41;16 - 00;18;57;07
Derek
They weren't able to build it anything compelling. And so they're throwing the baby out with the bathwater wholesale. I don't think that's what cracked engineers do. I think cracked engineers are like, wow, there's some really interesting primitives here. I haven't quite figured it out yet, but hey, there's this whole other technology stack that I think I might be able to incorporate with it.
00;18;57;09 - 00;19;11;28
Derek
It offers these things that this one doesn't, but this other thing offers these things that the other one doesn't. And that to me is how magic is made from like products, a product perspective. But yeah. Anyway, I'm, I don't know, I, I'd be curious to see if you guys agree with that.
00;19;12;00 - 00;19;44;12
Chris
Said Derek. I had to give you a slightly different angle of consideration here, right? Because you're thinking about this from a technology standpoint, you're not thinking about it from a customer relationship standpoint. And so my hesitancy right around integrating what I'm building into crypto has nothing to do with technology. It has everything to do with my relationship to my customers and how, it's going to affect my ability to run the project.
00;19;44;15 - 00;20;12;13
Chris
I'm I'm no, like shrinking violet when it comes to this department. Right. I had to please New York City independent wireless dealers. Right. With ultramobile prior to mint, which are like some of the hardest nuts to crack and some of the most demanding, distributors you're ever going to see in the world. I would take them every day, all day, over a discord full of, people who expect you to pump their bags.
00;20;12;15 - 00;20;41;18
Chris
To me, the issue is not the technology. The issue is the long term relationship management and expectations that exist. When you're running a product, you have a certain destination you want to get to in mind, and that to reach it and to provide like, happy service. Right? Like you're doing a very, very complicated balancing act and me getting ten bucks a month.
00;20;41;20 - 00;21;24;01
Chris
Right. And subscription fees from, you know, let's say 10,000 people is a far easier journey to manage than me dropping a token, knowing that those token holders, let's say I get 50,000 of them, 500 of them, actually, you're going to want to engage in my product. 25,000 of them are going to treat this as a two week matter in which the coin moons are a dozen, and then you've got some group that's going to hang around and treat like their engagement with you, their one time sort of pick up of the coin as this lifetime burden for me to make them rich.
00;21;24;04 - 00;21;37;21
Chris
That is actually like why I'm hesitant to engage in crypto has nothing to do with the tech. It's entirely around the relationship between the product and its users. And those aren't users. Those are abusers.
00;21;37;24 - 00;22;03;12
Derek
Yeah I would so to be clear, I think about, I would say about 90% of the projects I've funded at Collab Currency have not launched a token yet, and the vast majority of the support I give them is thinking critically about how to build products inside of blockchain and crypto in a way that is conducive to kind of like, supporting a venture outcome without necessarily like a fleeting token pump.
00;22;03;14 - 00;22;20;03
Derek
I think, you know, maybe that comes as a shock to people, but like, yeah, I mean, the stuff you see on Twitter is usually not the stuff that like the stuff you see on Twitter, just like, you know, this token is pumping or this coin is pumping. It's just like, not what I do as a venture investor. It's not what a lot of venture investors do.
00;22;20;03 - 00;22;43;20
Derek
It's it's the opposite. It's like, how do we build sustainable products and services using like this new technology? So I by no means am I saying like stockholder needs to launch or a hyper real, hospitality needs to launch a token or an NFT and like, throw up a discord and, like, get a community to organize around this thing and, like, pillage Twitter and, like, share the good news about how cool this thing is.
00;22;43;23 - 00;23;05;23
Derek
I think I'm saying something a little different, which is like, there are there are lots of ways to to pull threads, product threads that touch this technology stack. And I think it I think these things are differentiated and complementary to what you're doing. And I think there's that to me is like the exercise. It's not necessarily just like fall into the trap of, you know, CoinMarketCap.
00;23;05;28 - 00;23;09;23
Derek
But yeah, happy to you to expand on that. If that's useful.
00;23;09;25 - 00;23;31;27
Chris
Yeah. And look I think like I've given a lot of thought to this, I understand how I would like a token model to work. And I'm not saying I'm not going to do it right. I'm just saying like these are the concerns and this is the balance. And, you know, when I'm up screaming at curser till two in the morning and I'm back to two and two in the morning, bedtime, guys.
00;23;31;27 - 00;24;01;13
Chris
So, you know, you can breathe a little sigh of relief there. Let's go. Right. Like I, I need a certain velocity in the velocity I need to do what I want to do in the medium term. Right? Like you can't engage with ledgers right now. You can't consider tokens, etc., etc. when the time comes, because I am a very opportunistic sort of operator and I do have a have done will travel mentality, then then it's time to think about like those sort of things.
00;24;01;13 - 00;24;26;07
Chris
And you're right Eric, there are plenty of ways you can engage in that technology that that aren't token oriented. I just happen to be in a position where I would like the world to actually be held in Commonwealth, the, token ownership model, like I think, for like the half human input, half a genetic machine created world stew that I'm after, right?
00;24;26;07 - 00;24;56;12
Chris
Like, you know, we could talk to, I don't know, melody post authorship sort of crap. Like, I actually believe in, like, a post IP true post authorship model in which so many different inputs are creating the media that comes to be that it's impossible to assign ownership of provenance to it in the singular way, and such like token, token rewards and token ownership.
00;24;56;12 - 00;25;24;15
Chris
Actually suits that sort of new model. But like, you know, for, for other projects you work with. Right. Like when you work in the gaming space and you want to, track item ownership on a ledger or when you work in like data availability. Right. And you want to make sure that, I don't know, like your inference or like, and any of the other projects you back right exists on this sort of like sovereign decentralized stack.
00;25;24;15 - 00;25;28;08
Chris
Right. Like those are interesting ways to to engage with the chain as well.
00;25;28;10 - 00;25;44;04
Aaron
Yeah. It's a great point, Chris. Well, I think that I do think that there's like some dynamics like related to this tension that we're kind of exploring. But I do think that I think you're going to see that that distribution or just like the user base kind of expand over the next, you know, next 2 to 5 years.
00;25;44;09 - 00;26;09;00
Aaron
And I do think that the commoditization of, like, AI and software will only get like a little bit more, fraught. Right. Like, didn't I think I read a headline this week that, open OpenAI is like hiring 100 ex investment bankers or something to start to, I guess, rebuild excel for them. And so kind of the boundaries of, of where some of these systems go is it's still pretty hard to know kind of where the edges are.
00;26;09;02 - 00;26;30;21
Chris
And there isn't boundaries. Right. We're still thinking in terms of boundaries because each of these domains are young enough and they're they're nascent enough that to sort of be state of the art or to be contemporary in either, you know, in any of them, you do really need to think, you know, within, within the domain, in the category.
00;26;30;23 - 00;26;54;13
Chris
But ultimately the success is going to come from the intermingling of all of them. And I don't know what the right analogy for this is. Maybe maybe it's movies, right? Like where really old movies had to set a gag a certain way for the audience to get it, or they had to do exposition a certain way because the audience didn't have that worldview.
00;26;54;13 - 00;27;25;18
Chris
And now you have, you know, even in like the largest franchises like the Marvel Universe, you have met a meta meta jokes in which a sight gag is actually a reference to canon, which is like a reference to, you know, like there's a degree of like familiarity that allows you to do more things and you're no longer you no longer are thinking in terms of, oh, this is a Charlie Chaplin slapstick sight gag, but it's also an intertextual meta joke within the lore, right?
00;27;25;18 - 00;27;40;23
Chris
You're able to process all of that right in one little motion, and that's like a five second action on screen that like everyone who gets it, you know, it's a wink and a nod, and then you just move on. And we're not at that stage with this tech at all.
00;27;40;26 - 00;28;05;05
Aaron
No, we're not right. It's a lot like early still, like a lot of early internet. Right. Like the the geeks and and some other folks are kind of there, but it's still not, it's still not fully commercial. And people aren't going to care about how it all works. Right. They're just going to want to know, like, oh, I got something and it's worth, worth more money or oh, I got this and now I can go to fun events or, you know, have some sort of like activation related to it, but we'll get there.
00;28;05;08 - 00;28;10;22
Aaron
I feel it coming into place slowly, but just not fast enough for, for, for you.
00;28;10;24 - 00;28;19;14
Pri
What would you say is the most like, widespread quote crypto, up like top of bitcoin. Bitcoin I guess. Bitcoin. Yeah.
00;28;19;16 - 00;28;21;19
Aaron
And then stablecoins are number two right.
00;28;21;19 - 00;28;32;06
Pri
Yeah I think bitcoin typically I mean I guess I was thinking more of like the app layer. Like like like those are apps. Yeah I mean they are apps. I guess it's like one layer removed from base chain, like what's.
00;28;32;06 - 00;29;00;14
Aaron
And it's, it's probably going to be prediction markets. Right. And probably market now that we, we learned and that was a reasonable question like whether or not they're only useful during election periods or just generally useful. And it seems like they're generally useful, but even there, it's going to be a lot of like a poly market competing with, you know, DraftKings for just kind of like attention and, and, you know, sports and sports adjacent gaming and gambling.
00;29;00;17 - 00;29;24;28
Chris
Okay. Since we're talking about like, A16z articles, we haven't read, I saw one flash up on the timeline that I do want to go back and actually take a look at which, the title was was promising. That prediction is what it what gets us out of postmodernity, right? Like we've all been trapped in this postmodern bubble in which we can only look back ironically, and self reference is like stew of nostalgia.
00;29;24;28 - 00;29;41;28
Chris
And then we're kind of trapped by these larger forces, right? Like that's the problem of like, being postmodern and no one really knows how to escape it. I guess this article, which, you know, I love bringing shit up. I barely read right, is saying prediction is going to be like the new tone of the age.
00;29;42;00 - 00;30;10;09
Aaron
I kind of agree with that, right? Because I think, you know, like postmodern was like, there is no truth. And I think that people want coherence. And I do think that these AI systems are going to be able to provide at least like, like likely coherence around a whole bunch of different categories. Right? Whether that's coming through like a market force, like Poly Market or, or just through like advanced reasoning, which I think we're close to, if not beyond, I do think that you're going to get more coherence on, on different things, which is what I think people want.
00;30;10;12 - 00;30;13;13
Aaron
Like this era of incoherence is like exhausting for everybody.
00;30;13;15 - 00;30;14;13
Pri
Yeah.
00;30;14;16 - 00;30;23;22
Aaron
Like we don't need to deconstruct everything like it's too much. And when you do that, the only thing that's left is just like raw assertions of power. And I think even there, it's like exhausting for people.
00;30;23;29 - 00;30;53;26
Chris
Yeah. Because raw assertions of power wield incoherence as a as a weapon. Right. Like ignorance is an institutionally optimal posture that when you can control the entire environment around you and there's a certain thing you don't want to address, playing dumb works really, really well. And that's again feeds into like this exhaustion in the postmodern era where there is only one customer service rep who actually knows the answer to your problem.
00;30;53;29 - 00;31;10;14
Chris
And if you try to like, drive your way through that org to find that person is a 15 layer cake, right? Like people are tired of that. But that's how health insurance companies intentionally operate, right? Like ignorance is an optimal posture and we're all sick of it.
00;31;10;16 - 00;31;30;00
Aaron
Yeah, completely. But now you're going to have this superhuman intelligence that can least get you up to speed and explain it to you in like, a way, hopefully you understand in a language that probably matches your your favorite language or way to communicate. And I think beyond, just like the raw assertion of power, it also doesn't work well with democratic systems which are based on persuasion, right?
00;31;30;00 - 00;31;48;26
Aaron
Not just like assertions of power. And so I think that as people are able to like, actually know or get like some semblance or resemblance of like what, what's accurate, what's true, it probably will just like simmer everything down. But I think we're getting there. You know, I think, I think it's it's happening.
00;31;48;29 - 00;31;49;20
Pri
It's all happening.
00;31;49;20 - 00;31;57;04
Chris
Yeah, I think, Aaron. What? I think you and me should, like an hour cone of silence for a couple minutes and let Derrick and pre kick it on something else.
00;31;57;06 - 00;32;00;16
Aaron
Yeah, let's do it. Take us in another direction. Guys.
00;32;00;19 - 00;32;25;17
Pri
This is crypto related. Cause I've been thinking about this since like David Phelps tweeted about it. Leah mentioned this to you Aaron as well. But like, you know, he noted that we're kind of in this new era of consolidation. We all know that. But like, you have these like you had this system of these chains that would have grant programs or maybe venture arms that would fund or give grants to companies that would build on chain.
00;32;25;20 - 00;32;46;13
Pri
And now we're kind of seeing a little bit of not like a divergence, but an evolution of that thought, like instead of, you know, having a more decentralized approach of like, hey, people are building apps on this chain X like, these chains are just straight up acquiring new apps. So it's like with stripes, chain tempo, like they have privy in some other app.
00;32;46;13 - 00;33;13;10
Pri
I saw it, I think like Aptos acquired another app and so I'm and base obviously we didn't even talk about the Kobe thing, but like they acquired another app. Echo. Well, I guess Coinbase not necessarily based, but I just, I wonder if we're like in this zone where the chains are sort of just consolidating into more centralization and just going to start acquiring apps to have them on chain, like rolled coin to some extent already did that with their like App Store.
00;33;13;14 - 00;33;31;15
Pri
And they just basically I mean, I guess they have an app store, but I don't not maybe they buy some of those apps. I don't actually know. I feel like they're trying to to put the pieces together a bit because like, consumers don't know what to do on one chain. And so not chains are just taking the lead and trying to build companies out of the chains.
00;33;31;15 - 00;33;40;09
Pri
I don't know if that train of thought is interesting, but you're seeing more of that and not sure what exactly that means, or if that's just like a natural maturation of the space.
00;33;40;11 - 00;34;00;06
Aaron
I think it is. Right? I mean, I think, you know, I think it's pretty standard playbook, right? It's like if you're running an app chain, which is kind of like what Aptos is, where bases, right, like you're going to vertically integrate up like any apps that are gaining traction or you think could gain traction, that are strategically important to getting more users, getting more activity, you know, etc..
00;34;00;06 - 00;34;17;24
Aaron
So I think that makes a lot of sense. I mean, the only thing that precludes like Ethereum or, you know, Bitcoin, to the extent that it moves more towards software, there's nobody there that's going to that's going to do that. Right. Like the community's not going to absorb it back in except through something like the IP or or VIP system.
00;34;17;24 - 00;34;39;07
Aaron
Right. Yeah. So and they're like, you know, you could see like consolidation at the base layer of things like wallets or, you know, account abstraction or, you know, maybe even some of this, like ZK attestation stuff that, that people have gotten excited about. But I don't think you're going to see it. You know, I don't think you're going to see like Ethereum fold in an exchange anytime soon or because, yeah.
00;34;39;14 - 00;35;03;24
Pri
It's just interesting to see Coinbase like vertically integrate like it's like, okay, you have Coinbase exchange. Now they have base the chain. Now they're going to have like a token issuance kind of platform in a way. And so you know and then they have their wallet which allows you know, you to, to kind of interact with, with the chain and, and the token issuance and the different products, like, it just seems like they're moving in that direction.
00;35;03;24 - 00;35;10;13
Pri
And same with like tempo that, you know, makes you wonder if like ether or some of the other chains aren't like thinking in the right direction.
00;35;10;19 - 00;35;38;26
Chris
But this is a classic commodity playbook, right? Like if you're operating a commodity product. And let's be clear, that's what block space is. And I mean, that's what all software is at this point. A lot of people just don't know that yet. But if your core product is a commodity, a you're in, this fierce war of competition that erodes the margins of your commodity dramatically.
00;35;38;26 - 00;36;04;17
Chris
And at a certain point, you have to treat your commodity as, a distribution platform in which all of your margins and your growth is going to come from layering higher margin, value added services on top of your base commodity. And this is this is sort of product one on one. If you're running one of these things. And so there's a big difference between Ethereum and Coinbase right.
00;36;04;17 - 00;36;29;20
Chris
Ethereum can get away with simply being a commodity because it is the sun right. Like it is the primary source of productivity and on which, like everything else, rests and it got there early enough that the value of the commodity money that secures this chain is this global computer has a unique proposition and a unique advantage in which it doesn't have to play that game.
00;36;29;23 - 00;36;54;14
Chris
Coinbase, on the other hand, is an L2 and that L2 is competing with dozens of others and dozens of attempts to come in the future. And it's already premised on being cheap, fast, right? Like that. That's its value add from the very beginning. Therefore, like Coinbase is forced to differentiate from its competition in the only real way it can do that is by layering value added services.
00;36;54;16 - 00;37;16;14
Aaron
Yeah. So I think that's going to continue. Like I think we'll see more in that. And, you know, I think that a lot of these, whether it's Coinbase, Uniswap, Binance, ConsenSys and the MetaMask ecosystem, they're all going to kind of converge, I think Kraken, they're all going to converge on like a standard shape. And I think that that's what's kind of forming and formulating now is like, what is that shape?
00;37;16;14 - 00;37;38;12
Aaron
But I think the like big pieces of it are like wallet stablecoin L2 with an app ecosystem. Probably some like, you know, token launch initiative or platform. I think that that's going to be a bit of it. Maybe custody or a custody solution. And that's kind of the shape of like the, the like, you know, quote unquote, like crypto I guess bank.
00;37;38;15 - 00;37;50;07
Aaron
And I think that's what we're seeing kind of formulate or reformulate. I don't know if it's like banks not the right word. It's more like maybe like, you know, crypto network. Like that's what it's going to look like.
00;37;50;10 - 00;37;51;10
Pri
Yeah.
00;37;51;12 - 00;38;09;22
Aaron
And I think you've seen and frankly, I probably would even throw OpenSea into that. I think there'll be an NFT component to it too. So I just think, I think that that's kind of the maturation of the space. And it's not dissimilar from how we saw like traditional, fiat banks mature. Right? Like some of those banks were banks that their traders use.
00;38;09;22 - 00;38;21;12
Aaron
Some were banks that were asset managers, some were banks that were investment banks. Right. They all kind of started at different points, but they all kind of ended up with a similar shape, at least the big the big bracket ones.
00;38;21;14 - 00;38;51;03
Chris
There's also a different right. Like take OpenSea Uniswap away. Right. OpenSea hasn't made a leap into anything. Whereas Uniswap and all they have sort of created like this network of interoperable liquidity right within their ecosystem that they're they're like fairly protected. They can just live in what they do and just hook into more things and slosh more money between them.
00;38;51;05 - 00;39;03;02
Chris
Right. And a lot of ways like being in of a is now like being in JPMorgan or Citibank, whereas being an open C, it's just like being in toys R us, but mature if you're going to say something.
00;39;03;05 - 00;39;05;24
Pri
That's a yes. I'm sorry.
00;39;05;27 - 00;39;09;10
Aaron
No, it's not Chris. It's not toys R us. It's it's like a platform.
00;39;09;14 - 00;39;19;20
Chris
Update on I'm sorry. You're right. Because toys R us went out of business. Open C is, I don't know, Craigslist, Amazon, eBay, whatever, I don't I.
00;39;19;20 - 00;39;38;28
Aaron
Actually don't think that's true. I think that they started with an asset class where they had pole position, which was entities. They had a lot of competitors try to come in and try to do a better job than they do at that, and all of them failed. Right. But the like crypto native ones blast or you know, you know, Coinbase and NFT gambit I think Uniswap did too.
00;39;38;28 - 00;40;02;12
Aaron
But both in land I think Kraken had one which had like more moderate success, you know, and even some of the the other institutions the last cycle played around there, but like OpenSea still is really the place for that. And now they're expanding into, you know, other asset classes like Erc20. And I think that they're able to do that because they really, at the core, are still the best place to like, search and discover things.
00;40;02;19 - 00;40;22;16
Aaron
And in crypto and digital assets like they're they're a much better version of either scan in my mind. And that's what I enjoy about it. Like clicking around, digging deeper, being able to understand what's happening in this big ecosystem. So I think OpenSea is often misunderstood, but I think that it's going to kick around and I think they'll continue to grow personally.
00;40;22;18 - 00;40;23;07
Aaron
All right Derek.
00;40;23;20 - 00;40;25;15
Aaron
React well yeah Derek.
00;40;25;15 - 00;40;45;06
Derek
So no sorry stance stance Derek I agree with the open sea Derek I think you know I heard this stat that was pretty wild that like 90% of the GMV that's not happening on that platform is around ERC 20 tokens and fungible tokens. And 10% of the GMV is coming from inventory. That is non-fungible. I think this is like the story of good products.
00;40;45;06 - 00;41;04;24
Derek
They figure out a way to aggregate mindshare and distribution and optimize away the inefficiencies, grow those margins, and then find, you know, new levers to pull to expand to new categories. And I think that's what OpenSea has been doing and seems to be working. Are they a Coinbase competitor or are they, you know, who are they competing with at this point?
00;41;04;24 - 00;41;24;21
Derek
Is like a front end for asset transfers. I'm not I don't know where they want to take the product. But yeah, I would say like the death of OpenSea is probably a bit exaggerated. And you know, good teams always find ways to kind of navigate to higher ground. The thing I was actually going to talk about was the neobank thing, it's like, I love this thinking about this stuff.
00;41;24;23 - 00;41;51;20
Derek
And I like to think about it from like, jobs. Like what what what did banks in like banking, traditional banking when we have, like, fiat and paper currency and, you know, whatever gold bricks. And do you know, paper based stocks. What, what it was the infrastructure built like to support custody and payments and lending and, you know, wealth management activities, brokerages sending money from, like, you know, Los Angeles to New York or from New York to London.
00;41;51;23 - 00;42;27;17
Derek
And the cool thing, the cool like part about, you know, digital money and digital technology and digital protocols is like, you can kind of replicate all of these things fundamentally and much more efficient ways with, you know, 99% gross margins and largely code that runs autonomously. And I think the this the fun part about the neo banking story is like we've seen progressions of that, right today, right now, it's like Coinbase and Kraken and like some of these exchanges that aren't banks but are doing all and simulating all of like the banking like activities tomorrow.
00;42;27;24 - 00;42;55;02
Derek
It's it's to me it's like, you know, it's, it's, it's a, and what's the best way to say this? It's like, it's, it's an exercise in, like, reaching your most efficient form. And there's a world where it's like, you know, think these things are settled on chain, and we're using code to underwrite, you know, loans instead of intermediaries who look at identity and, you know, your over collateralization is the first part of that story.
00;42;55;02 - 00;43;18;22
Derek
And, you know, we've got algorithmic liquidity that's like moving from pool the pool to make sure that, like, you can move in and out of anything that you want anytime, 24 seven and, you know, smart contracts and I are helping you. You know, manage your wealth on chain. And privacy is obviously a big part of that story so that we can kind of like, reach a level of obfuscation that, that we've typically had around fiat and banks.
00;43;18;25 - 00;43;35;24
Derek
And so, yeah, anyway, I think like there's two chapters to that story, the neo banking story. I know we went into this open conversation, but I do think that like this neobank and like banking like jobs story is like not done. And I'm tracking it closely and excited about it.
00;43;35;26 - 00;43;57;16
Chris
And by the way, like I wasn't hating on OpenSea when I said they're toys R us. I was trying to make a point, and the point is that Avi and Uniswap do not need to create a Christmas type event in order to put volume through their platform. OpenSea does right, like a lot of open activity right now, is token farming related.
00;43;57;17 - 00;44;27;08
Chris
They've created a Christmas, whereas something like Neobanks, something like are they there? They just have to exist and they have to provide service and the demand is constant. Like that's there's a totally different level, like organization protocol, like utility that that separates it, you know, like what stops JP morgan's global economic activity. Nothing else. Right. That's an entirely different class of being.
00;44;27;08 - 00;44;31;05
Chris
And we should really like compliment of a Uniswap for getting to that point.
00;44;31;12 - 00;44;49;04
Aaron
Yeah, I do I do compliment them. And I think you know what you said Eric. Like good teams kind of figure out a way to higher ground. I think that's kind of what they're doing too. And they'll probably be in a great position. You know, when the NFT market comes back, because they'll be pretty differentiated there, get more users and then, you know, continue that cycle and flywheel.
00;44;49;07 - 00;45;07;26
Aaron
And I do think that journey of like figuring out the right shape of this, I don't I don't like the word bank like these crypto networks. It's probably the better way to think about it. Or like regulated crypto networks is just they sit back and they kind of wait to see what is working and what's not working, and then they double down in that, you know, and I think that that's what we're seeing.
00;45;08;02 - 00;45;20;20
Aaron
I should have added to that. I mean, that I think is also going to be the end game for tether, right? Like tether is probably going to go public. They're probably going to move beyond stablecoins into like exchanges and like all this other stuff. So I think we're going to see it all kind of happen.
00;45;20;23 - 00;45;25;18
Derek
Yeah. While we're talking about tether, I mean, while we're on this podcast, like The New Day.
00;45;25;19 - 00;45;26;25
Chris
By the Chicago Bulls.
00;45;26;25 - 00;45;44;11
Derek
I mean, with all their profits, they're they're expected to make 15 billion in just profit this year with 99% profit margin. And power this, you know, just came out and just said that. So yeah, I mean, the business models that can be achieved here, especially around like efficiency if you can read scale are just like pretty undefeated.
00;45;44;15 - 00;45;50;06
Derek
Tether is just I think you can probably buy three basketball teams with that profit annually. Yeah, exactly.
00;45;50;06 - 00;45;51;16
Pri
Annually they're had.
00;45;51;19 - 00;45;53;08
Derek
Some pretty well pretty well pretty wild.
00;45;53;08 - 00;45;58;25
Chris
Stuff. The other basketball league, is that what we're going to have in 2038. The TVL.
00;45;58;27 - 00;46;00;02
Derek
Basically I.
00;46;00;02 - 00;46;20;02
Aaron
Think this is like the sucking sound that crypto creates. Like the vacuum, right. Like no other bank is going to be able to operate when like so let's say like tether goes public. You know, they buttoned up any lingering issues they had in the business. It's now, you know, clean all under the hood in every different way. You know, they're ready to kind of expand.
00;46;20;09 - 00;46;47;06
Aaron
They're now publicly listed and trading against JP Morgan. Like how does JP Morgan compete against tether. They don't. Right. They look like Disney when Netflix is there or they look like GM when you know Tesla's there. It's they're just going to really, really struggle. And it's going to put a lot of pressure on those businesses. So they're going to have to like increasingly contort themselves and modernize their business to look more like tether, you know, and I think Coinbase is kind of in a better position to kind of compete with tether like a public version of tether.
00;46;47;09 - 00;46;49;11
Aaron
But I think that that's what's kind of happening.
00;46;49;13 - 00;47;11;16
Derek
I mean, incredible, incredible scale. That's how they're has reached largely because like that of Usdc, this like reserve backed stablecoin is basically become like a very lynndie product. It was, first mover. It served like this very core monetary function, and crypto people relied on it, and now they've got less than 100 employees. They're printing money, around issuance.
00;47;11;16 - 00;47;47;12
Derek
And this thing is just, like, so sticky. It's like, involved with, you know, every protocol and product and blockchain and it's it's boring, but it's like totally indispensable as, like a, like the job it does. And that network effect will only grow larger. I'm going to go out on a limb and just say, like one of the reasons why I'm, I continue to be so excited about, like, the early networked crypto art is because I do think that, like, there is a similar path to these things becoming quite Lindy instead of like the base, you know, layer like these monetary functions, like these base layers of culture and, and, and financial culture, you know,
00;47;47;12 - 00;48;14;07
Derek
there are platforms that will become shiny points and objects that will become quite canonical and lend themselves as their network grows. You guys already know which ones I love, but like I, I do think that we're much earlier in that story, and I wanted to loop it back to the culture story here at the very end of the pod because I, I, I love seeing these data points come out around certain verticals because I think you can learn a lot from them and they can point to other things in the future.
00;48;14;07 - 00;48;18;24
Derek
So anyway, that's my that's my NFT coded speech to round out the tether condo.
00;48;18;27 - 00;48;31;01
Aaron
It's a great one. Yeah, I just rent it. So I ran the math. Derek, I leave you with this. The with its 15 billion in profit with 100 employees. So is that 100 and $150 million in profit per employee.
00;48;31;04 - 00;48;41;22
Derek
So it's something stupid like I can't remember. And it may even be less than a hundred employees. I just it could have been like 80. There's there's the whole unit economics of that business are just ridiculous.
00;48;41;25 - 00;48;54;17
Aaron
Yeah. It's it's nuts. So and Chris to go back that's the speed that the speed of efficiency I guess that crypto can provide. Don't, don't don't get too bearish on, on, crypto tokens.
00;48;54;19 - 00;49;08;21
Chris
Yes, boss. I remain bullish in order to stay on the podcast because I have fallen and I am teaching the party line. Thank you sir. Correcting me. Education is complete.
00;49;08;23 - 00;49;11;15
Aaron
Yeah, that was dear Jack Ma reeducation.
00;49;11;15 - 00;49;16;05
Pri
The moment we reprogramed him and he's ready to go.
00;49;16;07 - 00;49;17;10
Aaron
Oh, man.
00;49;17;13 - 00;49;27;20
Chris
Seriously, what I'm ready to do is speed run. Grab me couple slices before I hop on this. Flamingo five Twitter space. Yeah. So why don't we wrap this guy?
00;49;27;22 - 00;49;28;12
Aaron
Let's wrap it.
00;49;28;15 - 00;49;46;09
Pri
Welcome to that society. You have me, Chris, Derek and Aaron talking all things digital art, crypto tech, AI and more. Just as a quick reminder, all these thoughts and opinions are own and not of our employer and also this is not financial advice. Let's go.
00;49;46;14 - 00;49;46;29
Aaron
Bye guys.
00;49;47;04 - 00;50;01;01
Pri
Yeah, I.