去中心化的角色、中美关系破裂，嘉宾巴拉吉·斯里尼瓦桑

Jason Calacanis (00:00:00): So we have Balaji here. And, obviously, Balaji is an expert in everything. But, Balaji, you're used to being interviewed one on one. I've had you on my podcast a couple of years ago. We had some major great discussions. You've been on a bunch of other people's, but Today, we'll we'll see how you do on on the squad here with 5 people passing the ball. You've you've listened to the pod before. Balaji Srinivasan (00:00:24): Yeah. Yeah. I'll pass. So 20% each or whatever. It's fine. Jason Calacanis (00:00:27): Okay. Perfect. Well, as you will have all in stats, we'll do a thorough breakdown. -- David Sacks (00:00:32): trying to get 20% with this moderator, this ball. Jason Calacanis (00:00:36): Says the guy who has the largest percentage. David Sacks (00:00:39): Look. You're you're supposed to be a non shooting point guard, Jason. Nobody wants to see you brick three pointer after three pointer. Jason Calacanis (00:00:48): Just bring the ball David Sacks (00:00:49): down the court and pass it. Just pass the ball. Chamath Palihapitiya (00:00:52): Just pass it ball. Get out of the way, Jason. Jason Calacanis (00:00:54): That's that's coming from the guy who has 24% of airtime David Saxon David Sacks (00:00:58): from our former allies. I I I fit exactly what I'm supposed to be doing, which is 1 quarter -- Right. -- is statistically proven. Jason Calacanis (00:01:09): your winter's ride. Rainman, David Sachs. And Speaker 5 (00:01:16): I said, open sources to Jason Calacanis (00:01:18): the fans and made discovery. Love you. Hey, everybody. Welcome to another episode of the all in podcast with us again this week, Chamath Paulie Hepatia, the dictator in just a great sweater. And David Friedberg, Chamath Palihapitiya (00:01:36): you should touch this. You have no idea the material that is made from. It's made from, like, the the chin hair of, like, a baby goat. You know, a baby goat that's then -- Really? Jason Calacanis (00:01:47): -- Chamath Palihapitiya (00:01:47): locked by a Tibetan Sherpa. who literally is forced to use lotion and camper to keep their hands soft so that they don't disturb the innate properties of the thread. Jason Calacanis (00:02:01): It's amazing. And available right now, 241@kmart1495. I mean, I'm just going based on the aesthetic some of the look. David Friedberg is back the queen of Ken Wa recently having his office hit by a skunk. Are you okay, David, or are you gonna be okay for the show? David Friedberg (00:02:19): Be alright. Just getting getting used to the condition. Jason Calacanis (00:02:24): But you're on You're on bad at drilling. You did you get hit by the skunk, or just your office got hit by the skunk? David Friedberg (00:02:29): Well, my windows were open. Apparently, it's baby skunk season here in Northern California. So there were some baby skunk playing around. Chamath Palihapitiya (00:02:37): Gosh. Are you sure it's not your returns? Jason Calacanis (00:02:40): Dude, fuck. Oh my god. Oh my god. Speaker 7 (00:02:42): Too soon? Too soon. Jason Calacanis (00:02:43): -- Chamath Palihapitiya (00:02:43): diss it. Jason Calacanis (00:02:44): Way too soon. David Friedberg (00:02:45): And -- Let's move on. Jason Calacanis (00:02:47): From yeah. Definitely too soon. And from a nondescript Motel 8 somewhere in Texas. In Texas. Texas. David Sacks. a coastal elite in Texas on mute. You're on mute, David. Where this is episode 48 you can yeah. David Sacks (00:03:10): I happen to be in Texas. That's correct. I it happens to be a tax free state. No coincidence. Jason Calacanis (00:03:17): Happens to be a state. Where you can carry a gun now. David Sacks (00:03:22): Yeah. Exactly. Jason Calacanis (00:03:24): And women are no longer allowed to make decisions for their own body. So 2 out of 3 ain't bad Speaker 7 (00:03:30): again. Chamath Palihapitiya (00:03:30): What a great place to live. Ridiculous. Jason Calacanis (00:03:34): David, are you considering? moving to the great state of Texas? David Sacks (00:03:41): Well, I'm I'm open to the possibility. Let's just say I'm open to it. Jason Calacanis (00:03:45): You're open to it. David Sacks (00:03:46): But I, you know, I recently ran a Twitter survey where I asked Miami or Austin, and Miami won by about Jason Calacanis (00:03:53): 52%. David Sacks (00:03:54): awesome got about 48%. With over 10,000 votes, it was pretty interesting. Jason Calacanis (00:03:59): And and do you have a preference yourself between the 2? David Sacks (00:04:01): I personally like Miami. I already have a place in Miami, but I'm checking out Austin to serve, yeah, to serve Jason Calacanis (00:04:08): -- Chamath Palihapitiya (00:04:08): How close are you to 11? 2 diligence? Jason Calacanis (00:04:11): 2 just for complete due diligence. So I think at this point, we should just go through the cities that Saks doesn't have a home. Speaker 7 (00:04:19): Can we Jason Calacanis (00:04:19): just that might be easier for us to narrow down some possible location. Alright. Listen. People started haranging us on the Twitter to have some bestie Yesies on the program. And so we decided we were bringing Bellagie Srinivasan. Bellaji Srinivasan. Did I get it correct? I mean, I've been pronouncing your name wrong for 5 years. I mean, you're such a fucking Speaker 7 (00:04:46): ignoramis. -- racist. You are such a fucking racist to name. Listen. Greek names are hard to pronounce. I mean, it's fine. It's fine. Jason Calacanis (00:04:47): -- Speaker 7 (00:04:49): names. Jason Calacanis (00:04:56): Balaji, everybody gets that right. David Friedberg (00:04:57): Bologie. Bologie. Bologie. Speaker 7 (00:04:59): Oh, Bologie. Bologie. Bologie. Bologie. Bologie. Bologie. Bologie. Bologie. Bologie. Bologie. Chamath Palihapitiya (00:05:00): Bologie. Oh, Bologie. Bologie. Bologie. Bologie. Bologie. Speaker 7 (00:05:01): Bologie. Bologie. Chamath Palihapitiya (00:05:01): Bologie. Bologie. Balaji Srinivasan (00:05:01): Bologie. Bologie. Bologie. David Friedberg (00:05:01): Oh, Bologie. Bolog Chamath Palihapitiya (00:05:05): Why don't you all inspire me? Jason Calacanis (00:05:06): Balaji, you've you've listed -- -- David Sacks (00:05:10): just figured out how to say Polly how Patias. So Jason Calacanis (00:05:13): -- I have been Speaker 7 (00:05:14): training the world as a Polyhopatia for years. Sri Lanka names are the Jason Calacanis (00:05:14): only names that are harder than South Asian names. Balaji Srinivasan (00:05:20): or South Indiana. Chamath Palihapitiya (00:05:21): Although Tamil names are pretty brutal. Yeah. Yeah. Balaji Srinivasan (00:05:23): Yeah. Tamil names. Basically, you guys add, like, maybe 1 or 2 more syllables. So I Chamath Palihapitiya (00:05:27): actually And ours end in a vowel. The the Tamil always end in a consonant, which always just then you can just they take liberal license to go on for another 20 minute to those things. David Sacks (00:05:36): Can you guys just drop a few syllables from your names? I mean, like Jason Calacanis (00:05:40): -- Chamath Palihapitiya (00:05:40): We could. We could. Yeah. David Friedberg (00:05:42): But we don't. Jason Calacanis (00:05:43): It's an imitation Chamath Palihapitiya (00:05:45): thing. Jamal Paul Paul Street. No. I Matt Polly. Jason Calacanis (00:05:51): Alright. There's a big tech backlash And it's not just because of David Sachs's comments. A new poll shows that 80% are registered voters. Wait a minute. Wait a minute. Wait a minute. Wait. Chamath Palihapitiya (00:06:00): Before we go I have a question for biology. You are, in my opinion, but I think a lot of people would say, one of the most incredibly well read, thoughtful, you know -- Commentators? Commentators that we have Frankly, like, you know, not just in tech, but I just think generally in our society. I would give you that. I think you're incredible. I'm curious How did you become such a polymath? Was this just one of these things where you've always been curious about everything? Like, just tell us about I'm curious about, like, how you grew up, first of all. And then second, How do you spend a normal day? I I just wanna know those. And then then we can just jump in. I'm just curious because I can't do extremely well read and extremely knowledgeable. Balaji Srinivasan (00:06:43): Well, thank you. I appreciate that. You know, I I try to learn from from everybody. What do I do? I think normal people go to the club or they they go out and have fun. And I I read math books and history books and science books and stuff like that. That's how I have fun. I find that more interesting. Nothing wrong with with going out. People do that. I go for walks and stuff. I work out. But so I I do a lot of that. And I have I I mean, other than that, I just I just read a lot, and I and I I think I remember a a moderate amount. And so I cite that. And for building -- -- really much more complicated than that, but that's it. David Sacks (00:07:27): I think we call that a polymathatea. Jason Calacanis (00:07:32): The only difference is Speaker 7 (00:07:33): to eat. Jason Calacanis (00:07:33): Cheemath would be you. if he could stop going to the club. And he lost that last 40%. Balaji Srinivasan (00:07:40): I will make an observation, which I was actually talking to Saxx about this, which is There's some people who are great at business and learn the tech because that part is necessary to put it together. And there's some people who are fundamentally like scientists or academics and then get into business in order to advance technology. And there's nothing wrong with the 1st group, and I think that's totally, you know, fine and legitimate, like business people first and then they get in tech. I'm really part of the 2nd group. I think where, you know, I'm fundamentally an academic at heart. You know, I spent almost the 1st 3 decades of my life meditating on mathematics and just kind of got into tech relatively later in life than than many others. Jason Calacanis (00:08:19): Alright. And you spent your career building companies. Everybody remembers earned.com, 21.com. That's Balaji Srinivasan (00:08:26): actually doing extremely well at Coinbase. Coinbase Earn is on track for a 100,000,000 revenue. Actually, it's much more than that in terms of GMV. It's broken out separately in their not their s 1, but their quarterly filing. So you can go and check me on that. And the other assets that we added after I joined Coinbase are more than 50% of Coinbase's revenue, again, in their filings. and Coinbase custody and all of its assets come from Rosetta, which is something that we did there. And we launched USDC when I was there. and that is whatever $100,000,000 a day. So they got a lot of value out of that acquisition Jason Calacanis (00:09:03): just And you were the CTO for a while of Coinbase, obviously. What was your take on Coinbase's lend product? The SEC coming in and saying, hey. Pump the brakes. We want a bunch of information and then they've just Brian Armstrong and Coinbase announced that they're not gonna do the lend product. What's your take on that? Balaji Srinivasan (00:09:22): So I don't speak for Coinbase or more. Okay. I'm, you know, in my personal capacity. But I do think that this is sort of the beginning of an era where we're gonna be rolling back the alphabet soup that FTR put in place. That's to say, you know, the the SCC is not set up to go after millions of Crypto holders and developers. They're set up to go after a Goldman and a Morgan just like the FAA is not set up to go after millions of drone developers is set to go after Boeing And Airbus. And the FDA is not set up to go after millions of biohackers except go after Pfizer and Merck. So the entire 20th century alphabet suit that regulatory apparatus is meeting something that it's not really set up for And it's gonna be it's the the problem is not the problem is not any one actor like Coinbase or Kraken or what have you. Their problem is that technology has shifted. And they've got many more people to deal with than many of those are individuals who are more risk tolerant than companies. So So I don't think they're they're gonna be able to maintain the the status quo of a 100 years ago, the statutes that they're citing. I think that's gonna either get knocked down in court or gonna be technologically invalidated. There's gonna be sanctuary cities and states for crypto or there's gonna be international entities like what El Salvador is doing in Switzerland. So I don't believe that that era is going to maintain, but I think there's gonna be a big conflict over it. So we'll see. David Friedberg (00:10:49): How do you think it's different this time, though, apology to the, like, crack down because folks said the same thing going into kind of the Napster era when, you know, everything was basically peer to peer sharing of media files that were technically copyright. And there was, you know, some regulatory regime that, you know, had oversight over that copyright. But then the DOJ got wrangled in, and they went in, and they made an example out of arresting a couple hundred kids like that, and it basically caused everyone to back away and entirely from the market. Similar to kind of what we may be seeing happening in China right now. But is it not possible that we see a similar sort of response this time around where they they kind of take this targeted, make an example approach to kinda share peep to scare people kind of out of the the frenzy that's that's I think driving a lot of people onto these platforms rather than going after the platforms themselves. It's a kind of saying, look. This is this is the violation of security flaws. You guys are getting prosecuted. Here's the 100 examples and suddenly 80 percent of the attention kind of gets vacuumed out. Balaji Srinivasan (00:11:53): Yeah. So I'd say a few things about that. First is I think 2021 is different from the year 2000 in the sense that China is an absolutely ruthless and very competent state. Whereas the US government, I would consider you know, it's a difference between lawful evil and chaotic evil. Do you guys know that from Dungeons and Dragons? Okay. So Chinese government is lawful evil. They are very organized. And they plan ahead and when they push a button, they just execute like like this. Whole of society and they don't leave, you know, round corners or or things left out. The US government is today in 2021, not the Jason Calacanis (00:12:29): 1950 Balaji Srinivasan (00:12:30): US government. The 2020 US government is like this shambolic chaotic mess that can't really do anything and is optimized for PR and yelling online. And that's a whole important topic. But to your so so that's one thing where I think there there's a difference in just steep capacity. But in that's not to say that they're not gonna try with what they've got. The other thing is that so to your Napster point, there was thesis and antithesis, but there was synthesis. That has to say, you know, Napster led to Kazaw and limewire and the bizarre guys went and did Skype, so something legit came out of that. But the more important or more on point thing is it led to Spotify in iTunes. the record companies were forced to the negotiating table. There was Chamath Palihapitiya (00:13:13): a there was a waypoint there that's important, which is Jason Calacanis (00:13:15): -- Speaker 7 (00:13:15): Go ahead. Jason Calacanis (00:13:15): -- Chamath Palihapitiya (00:13:15): when that happened in Napster, we we we ran a company called Winamp, and it was part of AOL. The biggest architectural flaw of Napster was it -- -- Salama's ass. And and well, the biggest problem with Napster was that it was it was not fundamentally peer to peer. And so there were these servers and so, you know, the the simple software architecture decision that somebody had to make was, okay. Well, let's just make an entirely headless product that basically is it it fundamentally appeared to peer, and what the Nutella source code was. We actually released that on AOL's servers without them knowing. It took them a few hours to figure this out they called us. We shut the whole thing down. But in those few hours, it was downloaded about 5 or 6000 times all this open source code that we put up. That was the basis of limewire bare share, and that is what basically just decapitated the music industry. And it was there that then the music industry realized we needed a contractual framework to operate with these folks because they'll just keep inventing technology that makes us impossible. And then that's what sort that's what iTunes was able to do with a 99¢ store. That's what Spotify was able to do after that. But a lot of it started was because of what Balaji said earlier, which is that, technologically, people just will you to push the boundaries. And we we did that in music, and I think that's a lot of why the industry looks the way it does today. David Friedberg (00:14:37): But, ultimately, the the the the premise kinda resolve back to centralized systems. Right? I mean, like, think about, you know, the the the the the Napster concept. It was really supposed to be true to peer, file sharing, and it ended up becoming the iTunes store where everything sat on Apple Servers, and they ultimately searched Chamath Palihapitiya (00:14:54): everything else. That's the reflexivity because, like, what happens is all of these folks you know, you're sitting at Warner Brothers Or Warner Music Or Universal Music Group, you're seeing an entire industry that was worth probably 20 or $30,000,000,000 just getting completely decimated And then there's this psychological thing that happens where first you wanna shut everything down, but then because there's this other thing that is even more evil and even worse and uncontrollable than the thing that you hated, then you actually say, well listen. My enemy's enemy is my friend, and so then you say, well, Fine. Let's find a few partners to work with and we can try to find a way of of living with these technologies. And that's going to repeat to your point biology Crypto is probably now where we're going to see it play out first because that's probably the most important intersection of individuals' desire and a regulatory framework that's outdated where the SEC has some extremely complicated questions it needs to answer. especially even after something today. Like if you're sitting inside the SEC and all of a sudden you see that that China, an entire country, that basically was where an enormous amount of this crypto activity started and originated and was happening can completely turn something off What is our position as a government and as a society? We don't know. Jason Calacanis (00:16:08): Well, let me just fill everybody in for a second on who who don't know what happens on on the taping today on September 24th. Chinese government has announced that doing any transactions in cryptocurrency is now illegal holding it. Apparently, you can still hold it, and this comes after Bitcoin servers being kicked out of the country. So, yes, they've pushed the button. Go ahead, Balaji. Balaji Srinivasan (00:16:29): To Friedberg, I would say, Bitcoin is what kept the record industry honest. And that kind of forced them to the table of iTunes to to Chamath point also. I wouldn't call it more evil. I'd call it more good. And Bittorin also lurks out there as kind of this, you know, peer to peer enforcer that it's a check Exactly. And it's not gone. And in fact, it's a basis for new technologies, and I think this this and their flare up. The other thing is that with crypto, the upside, even though the state wants to crack down or did harder, The upside is also greater, and the global Internet is bigger. And so I think the rest of world, meaning all the world besides the US and China, is a huge player in what is to come. That's India, but it's also, you know, Brazil, it's every other country that's not the US or China. And so that's a new player on the stage. And then third, to to to your point about, yes, China banned crypto confused to it. Well, you know what's interesting is People talk about China copying the US. Nowadays, actually, in many ways, especially on a policy front, the US is copying China without admitting it. but it does so poorly. For example, lockdown. Okay. The Chinese lockdown was something where it wasn't just sitting in your rooms. It was something with like drones with thermometers and central quarantine where people were taken from their families and centrally quarantined and a 1000 ultra intrusive measures that the population by and large complied with. I mean, forget about a vaccine mandate. We're talking about like you can see all the videos and stuff from from out of China. The government itself is published. David Friedberg (00:17:57): Yeah. They they didn't seem real at first. Speaker 7 (00:17:59): They were Jason Calacanis (00:17:59): -- Balaji Srinivasan (00:17:59): They didn't seem real at first. Right. Speaker 7 (00:18:00): Yeah. Balaji Srinivasan (00:18:01): And and so, you know, the thing is that for the US to follow that, it's a little bit like, as a mental image, imagine a life Chinese gymnast going and doing this whole gymnastics routine and then a big you know, lumpy American following and and not being able to do those same moves. Right? The Chinese government, you know, is is, as I said, lawful but they are set up to just snap this, snap that, do this, do that. The US government is absolutely not, and the US people are Whatever Jason Calacanis (00:18:27): you do. Also, our system is a democracy. Is it not like so you cannot just do that. Even if the government wanted to weld people into their homes, we have a democratic state here where we have to discuss these things, and there's a legal framework to it. So it's not even possible. Balaji Srinivasan (00:18:39): In the 19 fifties, 19 thirties, the US was still a democracy but it basically managed to exert a very strong top down control on things. Today, we have something for where for right? Like, under FDR or in the fifties, a very conformist society which was able to kind of drive things through. Even though it's a democracy, it was something where mass media was so centralized that a relatively few relative to small group of people could get consensus among themselves. And then what they print in the headlines, I mean, gonna go and figure out the facts on their own. This gets into the media topic later. So as de facto centralized at the media level, the information production and dissemination level, And then you kind of manufactured consent from there. Today, it's your combining that democratic aspect, the legal aspect with a new information dissemination thing, which is decide blows, I think, a lot Jason Calacanis (00:19:29): of things. Zach, what's your take? David Sacks (00:19:30): Yeah. Well, I'd love to giveologies take on an article that came out this week in The Wall Street Journal. I think it was a really important article him about 4 days ago, and it was entitled Xi Jinping aims to reign in Chinese Capitalism and Hugh Tamau's socialist vision And it the article describes how we we've all seen and talked about in this pod how they've been cracking down on tech giants. They've been cutting down their tech Oleg arcs down to size like Jack Ma, how he disappeared under house arrest. And, you know, and and we've seen that, you know, they stopped the the anti IPO But but this article went beyond those steps and really talked about she's ideological vision. And and what it basically says is that What's going on here isn't just the CCP consolidating power. They actually wanna bring the country back to socialism And what they say is that that within the CCP or at least cheese view of it, capitalism was just something they did as an interim measure to catch up to the west, but, ultimately, they are very serious about socialism. And, you know, reading this article, I had to wonder, well, gee, did we just catch a lucky break here in the sense that, look, they're abandoning or if they abandon the thing they copied from us, which is market based capitalism, They use that to catch up. Maybe this is the way that actually this is the thing that slows them down. And the thing that that historically that it brought to mind is that if you go back into the the 1500 and you compare Europe to China, China the Chinese civilization was way ahead. I mean, it the standard of living was way ahead. Technologically, it was way ahead. Europe was a bunch of squalid, warring, tribal nation states. And then what happened is a single Chinese emperor banned the shipbuilding industry. Any ship with more than 2 masks was banned. David Sacks (00:21:27): And so exploration just stopped in China if they became very inward facing. Whereas, the European states explored and discovered and conquered the new world, colonized the world, and that led to an explosion of wealth and innovation. And as a result, Western Europe, and then it's sort of descend of the United States ended up essentially conquering and dominating the modern world. And so I guess, you know, to bring it back to my question, topology, is there a chance that what Xi is doing returning to socialism? Could this be like the Chinese emperor who banned shipbuilding, or am I reading way too much into the single Wall Street Journal story? Balaji Srinivasan (00:22:07): So my short answer on that is I think it is I think the socialist thing is real, but I think it's better to call it nationalist socialism with with the implications that has. Whereas, I think the US is kind of going in the direction of what I call maybe socialist nationalism, you know, where it's it's like different emphasis in terms of what is prioritized. But you know? And I think in many ways, China is, like, the new Nazi Germany, like the new Soviet Russia. And the decentralized center is gonna be the new America. I can elaborate on that. But basically, with respect to this, One thing I try to do is I try to triangulate lots of stories. So rather than, for example and nothing wrong with the Wall Street Journal you know, a piece like looking at it. But for every w shape piece you read, it's useful to get like, you know, what is c GTN or global time saying even if you discounted just to see what they're saying. And then you also triangulate with, let's say, the Indian or Russian point of view. And by doing this, you I I I feel that it's better than just reading 10 American articles. And, you know, especially reading primary sources. Like, there's a site called reading the Chinese dream, which actually translates primary sources, and then you can kind of form your opinions from that versus like like a quote hot take. Right? I'm not saying you are. I'm just saying that that's what I tried to do. Chamath Palihapitiya (00:23:29): So -- I think we've really gotten China right here. I mean, I think that if you if you look at what's happening, I think we've we've basically forecasted this orchestration of essentially the re vertical integration of China. You know, we have China Inc where the CEO is Xi Jinping and where there is a it it it's it's it's almost like they've they've changed the game where what they are playing essentially is like settlers of Catan or something where the goal is just to hoard resources. And I think that they have enough critical resources for the world, and the clever part of what they did was the last 20 or 30 years they leverage the world to essentially finance their ability to then have a stranglehold on these critical resources. Whether it's ships or whether it's rare earths or other materials -- They leveled up. -- and I think that was the genius. Yeah. They leveled up. They leveled up on our capital Speaker 7 (00:24:24): Yes. Chamath Palihapitiya (00:24:24): And now that all that infrastructure is there and now that we are addicted to the drug, they can then change the rules David Friedberg (00:24:29): of payment anyway. Jason Calacanis (00:24:30): -- with our operating them. It was a brilliant move, but Chamath Palihapitiya (00:24:33): They they allowed entrepreneurs to believe that they could be entrepreneurs. They allowed in an entire society to basically level up -- Or Jason Calacanis (00:24:39): did nobody see this coming chumov? Nobody saw this coming. People were starting venture firms. People were taking cup companies public. David Sacks (00:24:47): They did belt and road while we did nation building in Iraq and Scanistan. Right? I mean, what is Belton Road? Belton Road is there a bill is there creating ports and super highways to extract the resources that Chamath is talking about and bringing them into the Chinese system. And what did we spend our trillions on nation building in Afghanistan? Jason Calacanis (00:25:08): Why didn't we see this coming? Everybody was looking at China, starting venture firms there, you know, embracing it, taking companies public Wall Street, politicians. Nobody saw this coming. David Friedberg (00:25:18): We saw it the the rising Tiger's story has been around since the late nineties. Right? Jason Calacanis (00:25:22): No. No. I'm talking about why didn't we see them cutting the heads off of Chamath Palihapitiya (00:25:26): the answer -- Entrepreneurship. -- they spent because it was not about white people. China was in Sri Lanka. China was in Africa. These are not sexy interesting places to justina Western audiences. They you guys couldn't give a fuck. Let's just be honest. Okay? And so that's why it didn't matter because you we thought we all thought that these are countries that are sort of, you know, squalid 3rd world, developing nation states that don't really matter. They don't necessarily have the resources that matter. But what did China do? They they realized that those folks are the future GDP, those folks are the future population pools, the young that can actually do the hard work, and then they went and they secured again Jason Calacanis (00:26:11): not only do they change -- Now Chamath Palihapitiya (00:26:12): so that's one thing. Hold on. So that's one thing. I think we entirely missed it because as David said, the military industrial complex doesn't look at you know, a a developing nation and say, we wanna be there. It looks at Afghanistan and says, we wanna dominate it because we can actually feed off of that domination. So that's one thing. The second thing is that I think that we misunderstood Xi Jinping's ambition. And I think that that's a reasonable mistake to have made. The first one is an error of just complete stupidity. The second one is something that I think it was legitimate to have missed. Jason Calacanis (00:26:47): And to your point, Jamath, he they not only stole the entrepreneurial playbook, but be colonizing other places and giving them data and giving them resources and building ports in other countries. We thought it Chamath Palihapitiya (00:26:57): was dumb. Let's all be honest. You know, 10 years ago Jason Calacanis (00:26:59): -- No. We did David Friedberg (00:27:00): No. I and the UK Jason Calacanis (00:27:02): -- Previously, I would David Friedberg (00:27:03): argue in a lot of cases, we benefited. So China set up and bought, like, the largest pork production company in Australia. And what do you feed the those pigs? You you feed them soybeans, and where do those soybeans come from? largest soybean exporting market is the United States. You know, we had a tremendous customer in China as they expanded their consumption pattern through all of this investing they were doing worldwide. We were exporting John Deere farm equipment and caterpillar construction equipment and soybean products, and there was a and and our knowledge industry, and there was a tremendous service model and globalization really created, call it, a catch 22 for the United States, where, you know, we were watching the rising tiger, you know, and it fueled in part by this kind of distributed entrepreneurism as that distributed entrepreneurism creates, you know, obviously, the social Jason Calacanis (00:27:53): -- Speaker 7 (00:27:53): Do you Chamath Palihapitiya (00:27:53): think there is an equal amount of dollars that went into western developed nations from China as it went into 3rd world countries? David Friedberg (00:27:59): No. But Chamath Palihapitiya (00:27:59): it's hard relations couldn't give a shit up. But that money Jason Calacanis (00:28:02): is too hard to turn down. David Sacks (00:28:03): There's a mistake in our thinking with respect to the rest of the world that we've been making we make over and over again, and it was all kinda predicted by a a a historian named Samuel Huntington at Harvard in the 19 nineties. He wrote a book called called Classes Civilizations. this this book was written at the same time that another famous book came out called The End of History And The Last Man. And what the common belief was in the 19 nineties in the US was that we had reached the end of history where every country would become Democratic and capitalist. Right? That was the end of history. His Democratic Capitalism. And we believe that the more we win all over the world, spreading our ideals, it would hasten this day where they'd all become Democratic capitalist. What Huntington said is no. you know, cultures and civilizations. These go back thousands of years. These are stubborn things. And what these other cultures really want is not westernization but modernization. And what they're gonna do is they're gonna modernize. They're gonna learn from us as much as they can about technology. They're gonna assimilate and adapt and take all of our technology, but they are not gonna become like us. They're not gonna westernize. And that is basically what's happened over the last 25 years. And so the Chinese have caught up to us And suddenly, we realized, woah. Wait a second. They have not westernized. They are still their own unique civilization. They they they have they have basically the equivalent of a modern day emperor, and and they have no interest in westernizing. And we're like, what have we done? Because now we've allowed them to catch up from a technological standpoint. Jason Calacanis (00:29:32): Bology, why do we why do everybody in the West get this so wrong? Balaji Srinivasan (00:29:35): Well, so a few things. One is political differences aren't public in China, but they are real. So it's it's all the backroom stuff. And there was a real leadership shift from Dang and Zhang and and who to to Xi, you know, the Mao era was revolutionary communist. The dang Zhang Hu era was internationalist capitalist, I think that was real. And then Xiara is nationalist socialist. And it's just different. Like, who did not fully control the military the way that Xi does There's this ad you guys should watch the Chinese military ad. It's called, like, we will all be here or something like that. And the thing about it, it's not just that it's like extremely well coordinated military parade and set to be intimidating and so on. It's The whole thing clearly just falls up to one guy, g. It's not him riding in a car with the rest of the communist party flanking him as an oligarchy. It's just like one guy 2,000,000 person army folds up to him. That is a true consolidation and roll up of power that he's able to accomplish among other things with Tigers and flies going in throwing Boggi Lee in prison, you know, having generals thrown in prison for whether they were actually corrupt or whether they simply you know, dissented or were political rivals. Chamath Palihapitiya (00:30:50): Yeah. Balaji Srinivasan (00:30:50): Yeah. It's it's hard it's hard to know from the outside. You know, in one sense, because so many folks in the Chinese government were taking bribes is almost like an equity stake, and they're province. You know? They're, like, coming up. They're like, hey. You know, hey. Groove, so, you know, give me a cut. Every a lot of people were vulnerable. So he just consult he so it's not something you know, people will say, oh, you know, the Chinese plan for a 100 years. They don't plan for a 100 years. They this huge war in the 20th century to the nationalists of communist. The Ding the Ding transition, you know, his triumph for the gang of 4. That was not something Mao had planned. They're human beings like everybody else, and they had a real leadership transition after 3 hours of continuity. Jason Calacanis (00:31:26): Then -- This is what I think this is the key point you're making, which is I think the reason that this actually flipped and we didn't see it coming is because Xi Jinping decided, I wanna have complete control over the country. These other people are getting too powerful. and we're actually reading into this that there's some crazy plan. It just could be a crazy man, not a crazy plan. Chamath Palihapitiya (00:31:43): I I I really disagree with you. Speaker 7 (00:31:45): Well, Jason Calacanis (00:31:45): why? Explain. But, I mean, he just decided he just decided to basically take away every entrepreneur's company. Chamath Palihapitiya (00:31:52): They were not trying to do they were doing all of this stuff in plain sight. Okay? As an example, you know, we view Sierra Leone. as a place where we make commercials about or we try to fundraise for or we send USAID. They view Sierra Leone as a place where there's critical resources that are dependent on the that the future of the world depends on. And so they will go, they will modernize, they will invest, and they will then own those critical resources. view we view Chile as a random country in South America that abuts, you know, Peru and Argentina. They view Chile as a place where you where there is the largest sources of lithium that we need for battery production in the future. They were doing this for decades right in front of us. And the reason we Jason Calacanis (00:32:34): -- The cunning of capitalism often with Chamath Palihapitiya (00:32:36): the question. -- reason the reason we didn't pay attention is because none of those countries mean anything to us. Balaji Srinivasan (00:32:41): Okay. So I agree with Shamont. And the thing is, though, I'd argue that the blindness actually comes from both ends of the political spectrum. Like, on the conservative end, oh, these are shit hole countries. Basically, you know, you can bleep that if you want, but, you know -- Not Trump's Jason Calacanis (00:32:54): at it. Yep. Balaji Srinivasan (00:32:54): You know, it's something where For example, COVID was only taken seriously once it was hitting Italy and France like China was still considered like a third world country. But it actually also comes from the liberal side in a different like, it's a slightly masked, but it's a condescension of not the military industrial complex but the nonprofit NGO, you know, complex like, oh, the white savior with the NGOs, you know, coming in and you know, you know, pat them on the head kind of thing. They're not a not a big deal. And the the thing about this is, like, the One thing I think is a huge thing for our diplomatic core today is making any generalization about another culture which says that they're not completely good or that they have some aspect to them that doesn't match exactly to the US, you can be called a racist for doing that. And so this is kind of the criticism of Islam. Jason Calacanis (00:33:45): I mean, if you criticize Saudi Arabia for throwing gay people off of buildings, you're not respecting their religion. Chamath Palihapitiya (00:33:51): Can I just say just gave the most precise delineation that I've so I let me just repackage what you said because it resonated with me. Western philosophy tends to view Countries in 3 buckets Bucket number 1 are countries like us. Right? Those are the other Western countries, the G Eight Countries. They feel like we're aligned. And then what happens is you you get this weird thing where then you move into, like, countries where you basically either deal with it with wokism Right? Oh, let me go pat them on the head. Let me go try to save them because it makes me feel better. Or you deal with them as neo cons where it's just like, let me go dominate them and take them to war. And literally, you can take all a 180 odd countries in the world and effectively sort them into those 3 things. And that, I think, is the problem with with the America's view of what we're doing. And so what David said is really true, which is that while we were doing this, We had neocon War, Wokism or, ah, you're our buddy because you're like us. The entire world reordered itself with completely different incentives, and they did it right in front of us. And now we wake up to realize, oh my gosh. That was an enormous miscalculation that we just David Sacks (00:34:58): Yeah. So, you know, if you look at kind of the the history of the west interaction with the rest of the world and let's talk about colonialism. And whether whether you're talking about colonialism over the last few 100 years or even you talk about a microcosm like Afghanistan over the last 20 years, I would argue that there's 3 phases to the west interaction with these other cultures. Phase 1 is sort of domination, right, like Chamath was saying. Phase 2 is assimilation. where the the the the culture that's been dominated realizes that they're behind and they wanna catch up. And so there's a process of Americanization, romanization, and what they're doing is they are learning from us and taking our technology, and it lulls us into a false sense of security that we think they're becoming American eyes or somebody wants their Jason Calacanis (00:35:46): eyes. Right? It's not alignment. David Sacks (00:35:47): It's just they're trying to catch up. Then the 3rd phase is reassertion, where the the dominated country, culture, you know, what have you reasserts its traditional culture and its traditional views because they've modernized but without becoming truly becoming Americanized or westernized. And we are caught off guard by that, and we don't really realize that they never really wanted our culture. They just wanted to throw off you know, American domination or Western domination. And so what they've actually done is use this period to to basically assimilate and catch up. And the the reality is, like, in Afghanistan, they don't have to fully assimilate all of our technology. They don't have to become as strong as us because we are in their land. They just have to become strong enough to basically achieve Speaker 7 (00:36:38): a sense Jason Calacanis (00:36:38): of -- Upgrade their systems. Right? David Sacks (00:36:40): They just have to achieve a defensive superiority. It's not an offensive capability. So it's much easier for them to catch up than we think. And we are always caught off guard by this dynamic, and it repeats itself over and over again. And what you've seen in in in China is you know, 30, 40 years ago, you had the great economic reform of Dunk Shopping. He laid out what they had to do, he said he said, buy your time and hide your strengths. hide your strength under a bushel. That was the the great motto by by Deng Xiaoping. He set that policy for 30 or 40 years. They embrace basically parastrophic without Glossnose. They reform their economic system. They copied us, but but not making Gorbatov's mistake. of giving up any political control whatsoever. And by 2012, they had largely caught up. And so I would say that g was not an aberration. He was a Ria assertion, they had gotten to a point of strength where they were ready for that strong leader who was ready to reassert their basically, their ethno nationalism. And that's the point we're at right now. And once again, we've been played for fools and caught off guard. David Friedberg (00:37:44): Friedberg. But the I mean, one of the one of the signs was his corruption crackdown a few years ago. Right? I mean, that was kind of step 1 where he took all these provincial managers and kicked them out and put them in and started to, you know, clean things up internally where there was clearly kind of corrupt behavior underway. But, you know, I'm I'm a couple points back. I I do think it's worth highlighting that to some degree, you can kind of try and diagnose his motivation or diagnose the motivation as being, you know, rather not too surprising and maybe not too nefarious in the kind of, you know, power grabbing sense, which I think we all kinda wanna bucket it as. But, you know, if there's a population like we're seeing in the United States where when you loosen the screws on liberalism, and, you know, you kind of allow more freedom to operate and more kind of free market behavior, you see tremendous progress. And as I think we've talked about in the past, tremendous progress always yields, you know, a distribution of outcomes amongst the population, but everyone moves forward. Some people just move forward ten times faster and farther, and it causes populist unrest. Right? And we've seen it in the States. I mean, if AOC, Elizabeth Warren, and Bernie Sanders were elected to kind of be the, you know, the triumvirate that ran the United States today, they would probably say, let's end all you know, this capital of them that's creating all this wealth in the United States and progress generally would slow down. And I think that there's been inklings of clearly, there's data to support the inklings of this in China that indicates, you know what, the the the loosening of the screws has allowed tremendous progress, but it's time to tighten the screws because populism and unrest is gonna arise from kind of perceived inequality just like we're seeing in the United States. And you know, I I guarantee or or I can't guarantee, but I would assume that if, you know, certain populist leaders in the United States have the same level of authority that Chinese leaders do, they would probably act in the same way. Jason Calacanis (00:39:43): I I think what we're gonna see next is and I think we should talk about what we think will happen next with China. I think China's on the brink of having a revolution. If you look at what happened to the Uighurs, obviously, you can't practice religion there. Students in Hong Kong can't protest. You can't publish what you want. Founders can't start companies. Now you're not gonna be able to play video games. as much as you want. You can't use social media. And today, you can't have any control over your finance. If you squeeze people across this many vectors, this hard, this quickly. I think Friedberg right. It could result in massive David Friedberg (00:40:17): China is not like a uniformed people and a uniformed culture. Jason Calacanis (00:40:21): Of course. Yeah. But I mean, I would just list in, like, 7 or 8 things they're doing to But there are but there are David Friedberg (00:40:25): many many provinces, many cultures, many differences, many differences of experience, by the way. I mean, you know, the rural population in China doesn't experience much of what I think is driving industry and driving this inequality and perceived inequality. the changes that are underway, I don't think that a a revolution is generally supported unless you have, you know, enough kind of concentrated swell across the population. I don't know how you could see something like that happening, and and it has diverse population as as China. Chamath Palihapitiya (00:40:51): High support China's limits on social media use by children. I could I could use that here for my kids. Jason Calacanis (00:40:57): I clearly, Saxx is letting his kids use whatever they want. I mean, we definitely need to have some of those over here. -- biology. What do you what do you think is gonna happen? Worst case, best case for China in the next two decades. Balaji Srinivasan (00:41:07): Well, so one thought I wanna give is basically that in some ways, this is inevitable because China and India are 35% of the world. Asia was the center of the world. And one way of thinking about it is that America and the West executed extremely well over the last couple of centuries and Asia didn't with socialism and communism and now that they've actually got a better OS it's not like the US really could restrain them. You know? So in that sense, that's also part of their internal narrative in in a way. I mean, of course, Mao killed millions of people there. They screwed up their own stuff, but their narrative is they were colonized by the West. And theiopian wars are patronized as copycats and mascculated on film for decades there, like, heads down and sweatshops. They built plastic stuff. They took orders from all these overseas guys and announced their time to stand up. and take back their rightful position in the world. And that's like that's their narrative. And so it's it's important to not not agree with it, but at least understand where coming from because they want it more, I think. And so I I disagree, Jason, with your with your view that they're gonna have a revolution. I think that's Like, that's the kind of that's a Western mindset where, you know, Australia, for example, is having these COVID protests In China, the harder the crackdown, the less more crackdown like, the easier it makes the next crackdown. It's it's like it's something where Jason Calacanis (00:42:29): It's not giving an easy revolution. That's for sure. But we saw protests. You saw Tiananmen Square. You saw Hong Kong, Chamath Palihapitiya (00:42:34): and you're gonna see Taiwan since. Jason Calacanis (00:42:36): That was 30 years ago. It's still proof positive that if you squeeze people, they will take to the streets. -- taken. Chamath Palihapitiya (00:42:41): Sorry about the the quality of David Friedberg (00:42:43): life in China has accelerated Jason Calacanis (00:42:45): -- David Friedberg (00:42:45): Incredible. -- pace over the past 30 years, the average person in China is so much better off than they were 5 years ago, 10 years ago, 20 years ago, 30 years ago, revolutions don't come out of that amount of progress. Right? When when when your life when you go from $4000 a year in average income to Jason Calacanis (00:43:00): $20,000 David Friedberg (00:43:01): a year in average income Jason Calacanis (00:43:02): -- What happens if they don't have jobs in their recession? Chamath Palihapitiya (00:43:04): The only time you revolt is because of economics. Jason Calacanis (00:43:07): That's what I just said. So what happens if there's a if they have a -- They're growing 8% David Friedberg (00:43:12): a year. The GDP is growing 8% year, the population is seeing an incredible benefit in the combat. Jason Calacanis (00:43:16): -- reverses? What if that reverses? Would you see a revolution then? David Sacks (00:43:20): Well, Jay Kal, I mean, look. I think I think we to Tibology's point about this is, like, a Western mindset. I mean, think about the Arab Spring. We saw all those revolutions with the Arab Spring And we thought, oh, look, they're they're finally throwing off the yoke of oppression, and now they're gonna set up democratic states. And what do we actually get? we actually got religious fundamentalism. Right? Like, we didn't get what we thought. And I think this happens over and over again is that is that, you know, we're we're trying to superimpose our mindset on them. You know, we're thinking, like, that frankly avos, man. Jason Calacanis (00:43:53): Yeah. No. I'm thinking, like -- David Friedberg (00:43:54): People want security, by the way. And security security can come in a lot of different forms, and religious fundamentalism is one of them. And, you know, the the way that we see kind of government operate in China may seem foreign and uncomfortable to us, but it provides enough security to people to know they're gonna have housing. shelter, food, medicine, and be able to do the things that they wanna do to some extent and some limit. You know, it's it's not necessary early an equation that says all humans that don't live like Americans are gonna be unhappy. Balaji Srinivasan (00:44:20): Yeah. Last thing I'll just say is, basically, I think the idea that China will collapse from internal revolution or You know, the US military is, like, really strong relative to China. I think are both actually forms of wishful thinking. With that said, I do believe that we need a strategy for China on a global scale and think the future is a centralized east and decentralized west. And but but I don't think it's gonna be just hey, day s x Machina is gonna gonna solve this problem. Jason Calacanis (00:44:45): No. I don't think the revolution's gonna necessarily overturn China. I think you're gonna see revolutionary moments. David Sacks (00:44:50): Well, so so just just to say one thing in in your defense Jay Cal because everyone's kinda beating up on you. Is I I don't even Balaji Srinivasan (00:44:56): know who's beating up, by Speaker 7 (00:44:57): the way. David Sacks (00:44:57): Just -- No. No. No. No. No. David Friedberg (00:44:58): No. No. No. -- defending Jay Cal. What's going on? No. No. I wanna Jason Calacanis (00:45:01): -- Speaker 7 (00:45:01): Yeah. Jason Calacanis (00:45:01): I'm not saying it's a guarantee of revolution. I think this is gonna be this is gonna be some social unrest. David Sacks (00:45:06): Yeah. Well, look, I the the the the one way in which I agree with Jay Kal is I do think that freedom ultimately is the birthright of every human regardless of where you're born, you know, who you are, what culture you are, But I think the thing that the United States has learned over the last 20 years is the road from here to there is gonna be much more than we think Jason Calacanis (00:45:26): -- And longer. -- David Sacks (00:45:27): and longer. And cultures are very stubborn things, and they're not going away anytime soon. And the transition is gonna have to happen within those cultures. It's not something that we can superimpose. David Friedberg (00:45:38): By the way, I would I would also Speaker 7 (00:45:39): point out freedom is the the birthright David Friedberg (00:45:39): and the want of a people at some point have enough security to feel like they have that luxury. Up until that point, I think that you have to make the decision of does security give me more than freedom And in a lot of cases, security coming with all the costs it comes with may give people more than absolute freedom. And that's a transitionary phase, I think, you know, a lot of people's go through. People's being civilizations and states and whatnot. Jason Calacanis (00:46:06): Anybody have a prediction of what's gonna happen in the next 20 years or we'll move on to Speaker 7 (00:46:09): the next Jason Calacanis (00:46:10): -- David Friedberg (00:46:10): I just can't believe Seth was empathetic to your point, Jake, how that was that was a great moment. Chamath Palihapitiya (00:46:14): It's really insane. Very special. Balaji Srinivasan (00:46:17): I have a few predictions. Yeah. I I think, actually, if you read, you know, the kill chain or similar books, that's by, I think, Christian Bros It's good book where basically it's like, you know, the US military has a perfect record in its war games with China. China's won every round. And, you know, if you if you look at just the fact that with COVID, use military basically suffered a military defeat in the sense it had this whole biodefense program. It's supposed to protect against biological weapons. That didn't work. Afghanistan, huge defeat, Jason Calacanis (00:46:48): $2,000,000,000,000. Balaji Srinivasan (00:46:50): You have this August thing where it looks like France is now pulling off and you know from from NATO or the EU is doing their own thing. I think that China is and then China is really already predominant in many ways in Asia and the US just doesn't care about the area as much. I mean, who wants to start another gigantic war over this? Certainly, I don't think the people of America do. after after 20 years of forever war. And so and China really cares about Taiwan. They really care about their backyard. So whether that's a war or whether that's a referendum on Taiwan or whether it's some unpredictable event like COVID. I don't know. But I I do think that China does have some monroe doctrine like thing that it gets to within Asia where basically it says, you know, just like the US said, hey. You know, we're running this hemisphere. They're saying, hey. we're running this sector of things. Whether that's a military conflict where the US decides to just withdraw, I don't know. And then I think what has to happen is We have to figure out what the decentralized west looks like. An asymmetric response to China because it's going to basically be the number one centralized state in the world. You're not going to be able to combat it head on militarily. It's just you know, it's got like 10 x growth in front of it and it's already a monster. Unless there's some assassination or revolution or something crazy like that that's hard to predict. If it manages what it's got, it's got like it's it's like Google 2010. It's got 10 years of that in front of it. And whether it's a Chinese decade or a Chinese century I think depends on whether we can build the technologies to defend freedom meaning like encryption, meaning, you know, decentralized social networks, meaning these kinds of things because that's only I think kinds of tools that are that are gonna help us, whether it's drones, whether it's other kinds of things, asymmetric defense versus what what they're gonna be. It's not gonna just be a David Sacks (00:48:37): think look. I think that's a great point to end on, Jason, because there's other stuff we wanna talk about. So one one of the things that, you know, Balaji's commented on that I give him, you know, tremendous amount of for is corporate is is the idea of corporate journalism. In fact, Balaji, you're you're the first person I heard that term from corporate journalism, which is a recognition that all of these reporters actually are employees of companies, and they have a company culture, and they often have they have owners the companies do. Those owners often have an agenda. There's often dogma inside these corporations And and it really got me to see journalism in a new light because these journalists portray themselves as the high priests of the truth who are there to speak truth to power. And, actually, they're really just kind of the lowest paid functionalities on the corporate totem pole And and, you know, in contradistinction to what you've called citizen journalists, who are people who are writing what they see as the truth in blogs or, you know, formats like this where they are not getting paid for it. You know, we're doing it because we wanna put forward what what we know to be the truth. And, actually, I'd love to hear you speak to that because I think this is, like, one of the most powerful ideas that I've heard you put forward. Balaji Srinivasan (00:49:58): Sure. So so much I can see about this. The first thing I would do is I'd recommend a book that recently came out by Ashley Rinsberg called The Grey Lady Wink. And the reason's very important and I'd put it up there frankly with top 5 books I'd recommend. I know I've recommended other books. Top 5 books I'd recommend, Great Lady Wing. It goes back through the archives. You know how the the New York Times calls themselves the paper of record. They call themselves, you know, the first draft of history. They've literally run billboards. calling themselves the truth. But it's just owned by some random family in New York. And, you know, this guy Arthur saw burger who inherited it from his father's father's father. And so you have this, like, random rich white guy in New York who literally tries to determine what true for the entire world. His employees write something down. We're supposed to believe that this is true. And I simply just don't believe that that model is operative anymore because I think truth is mathematical truth. It's cryptographic truth. It's truth that one can check for oneself rather than, you know, argument from authority. It's argument from cryptography. And you know one of the things with Bitcoin with cryptocurrencies is given decentralized ways of just checking on that. Now to the point about corporate media, It's they're they're literally corporations. These are publicly traded companies with financial statements and quarterly, you know, reports and and goals. and revenue targets. And so once you, you know, kind of are on the inside of one of these operations, you realize that that hit piece or or what have you is being graded in the spreadsheet for how many likes and RTs it gets on Twitter And if it gets more, they're gonna do more pieces like that, flood the zone with that. Balaji Srinivasan (00:51:32): And if it doesn't, then they're gonna do less. And they're all conscious of this You know, for example, Nicholas Christophe wrote an article. I think it's like a it's the articles no one reads or article someone will read where you notice that his trunk columns get something like 5 x more views than his other columns. It's like his huge ratio. And so at least some folks there are privy to their to their page views. So and, of course, they're looking at their Twitter likes and RTs even if they those are not directly page views. They're they're certainly correlated with pages on the article. So all these folks are literally employees of for profit corporations that are trying to maximize the profits. But we believe them when they mark themselves as the truth, like the NYPD, whereas democracy itself, like the Washington Post, or fair and balanced, like Fox, These people equate themselves with like truth, democracy, and fairness. They weren't exactly around at the founding. Okay? They weren't they weren't part of the constitution in 776. The post offices But these media corporations were started later on and have kind of glommed themselves on and declared themselves like part of the establishment, you know, and and they are not. And the last point and I'll just, you know, give you guys, you know, the the flourishes. But We didn't go and say, oh, BlackBerry do better. Blockbuster do better. Barnes And Noble do better. We just replaced them, disrupted them with better technological versions. And so the idea that, oh, you know, New York Times do better, That's completely outmoded way of thinking about it. We need to disrupt. We need to replace. We need to build better things. We need to things that have, like, on chain fact checking that have voices from overseas that have voices that are actually experts in their own fields that have voices that are not necessarily corrupted by Jason Calacanis (00:53:09): -- What do you mean by? on chain fact checking, Balaji Srinivasan (00:53:13): give an example. This is this is a very deep area, but fundamentally, the the breakthrough of Bitcoin was that in Israeli and a Palestinian or a Democrat or a Republican or Japanese person and Chinese person all agree on who has what Bitcoin on the Bitcoin blockchain. It is essentially a way of in a low trust environment but high computation environment, you can use computation to establish mutually agreed upon facts. And these facts are who owns what 1,000,000 or 1,000,000,000,000 of the roughly $1,000,000,000 on the Bitcoin blockchain. And that's a kind of thing that's I mean, people will fight over a $10,000 jet. you know, when when you can establish global truth over a byte which says, you know, do you have 20 or 5 or 10 BTC? You can actually generalize that to establish global truth on any other financial instrument and that's tokens and that's you know, loans and derivatives, and that's a huge part of the economy. And then you can generalize it further to establish other kinds of assertions and gets a little bit further afield, but not just proof of work and proof of stake, but things like proof of location or proof of identity. there's various other facts you can put on there. So you start actually accumulating what I think of as not the paper of record, but the ledger of record, a ledger of all these facts that Some of them are written by so called categorical. Some of them arise out of smart contracts, but this is what you refer to. And as a a a today model of what that looks like, It's sort of like how when someone links a tweet to prove that something happened, people link an on chain record to prove that something happened. Concrete example. Do you guys remember when Vitalic Buterin made that large donation earlier this year? David Sacks (00:54:52): Yes. Speaker 7 (00:54:52): Okay. Balaji Srinivasan (00:54:52): So -- But remember -- -- you're not. And you wanna talk about that? Explain what how to happen. Chamath Palihapitiya (00:54:56): I think that you basically tweeted out something that was essentially trying to raise money to secure necessary equipment and pharmaceutical supplies to India during a pretty bad COVID outbreak. And then I think you you decided that you were gonna donate some money, and then Vitalic basically stepped up and actually gave quite a large sum. I I'm not exactly sure the exact number, Balaji. Balaji Srinivasan (00:55:17): Yeah. So it was it was an enormous amount in illiquid terms of of this meme coin, these Chibbu coins. But the thing is that everybody when they when they wanted to prove that this has happened because they're so unbelievable, such a large amount of money. He was marked at all the all the over billion when he gave Do you know how they proved it? They didn't link a tweet. They linked a block explorer, okay, like an on chain record that showed that this debit and this credit had happened. And the big thing about this is, you know, we take for granted. When you link a tweet, you're taking for granted that Twitter hasn't monkeyed with it. But guess what? Twitter monkeys do a lot of tweets these days. A lot of people get disappeared. And so it's not actually that good a record of what happened anymore. this is deleted. This guy got suspended. This you know, like, even the Trump stuff, forget about, like, Trump himself, but that historical archive of what happened, you can't link it anymore. It's link rotted. Just from that, like, I know it's one of the 1000th most important things about it, but it's an important Jason Calacanis (00:56:12): thing. In the example of, say, Taiwan and China believing Taiwan is part of the 1 China concept, and Taiwan believes it is a country, and everybody in the world has a different vote on that. How does the blockchain clarify what is the fact about is China a country, or is it a province Balaji Srinivasan (00:56:32): Very good question. It doesn't have to. Well, what it does is it it clarifies the facts about the metadata. Who asserted that it was a country and who asserted that it was a province? and what time did they do so and, you know, what money how much BTC did they put behind that or what have you. So it doesn't give you everything. But it does start to give you unambiguous like proof of who and proof of when and proof of what. And then from that, at least, Yeah. David Friedberg (00:56:57): I mean, like, the way the way I've kind of explained it to family members who've asked is, you know, the the concept of a chain is difficult, I think, for people to that that aren't you know, have don't have a background in computer science really grok. It's like but everyone understands the concept of a database. You know, there's a bunch of data in there except in this case, the the the the data that makes up the database is what's being verified by everyone, and it's distributed. So everyone has a copy of it. Chamath Palihapitiya (00:57:22): I wanna know what you guys think about this week in the Facebook Dumpster Fire. Let's move to something splashy and -- Can Balaji Srinivasan (00:57:27): can you say one thing? There's a book, Friedberg, on what you just mentioned, which is called The Truth Machine by Casey and Wigna, and it gives a pop culture explanation of the ledger of record type concepts I just mentioned. David Friedberg (00:57:37): Which which I don't think I don't think a lot of people grok yet, Balaji, to your point. And and I I think, you know, we're we're shipping past it, but it's a really important point, which is historically databases have sat on someone's servers and whoever has those servers decide what data goes in the database and how they're edited and what's allowed to come out of the database. So in this notion, generally a database with information in it can be held by lots of people who generally as a group kind of vote and decide what's gonna go into it. And that's that's the power of decentralization and how it changes you know, the information economy which drives the world. And it's gonna have a lot of implications. Right? Jason Calacanis (00:58:11): Facebook's worst month ever continues. We talked last week about Facebook having a lee internal leak called the Facebook Papers This is a continuous leak to not only Wall Street Journal, but apparently members of Congress are also getting it in the Leaker And the SEC. And the SEC. And the Leaker apparently works in the safety group according to a congressperson who has been getting it. And they are going to uncloak themselves and that they were leaking this at a frustration that there is human trafficking, democracy issues, and obviously self harm in girls using Instagram and you know, this research. But that's not all. Facebook is admitting for the first time this week that Apple's privacy updates are hurting their ad business and I think the story you are referring to is that 2 groups of Facebook shareholders are claiming that the company paid 1,000,000,000 of extra dollars to the FTC to spare Mark Zuckerberg and Sheryl Sandberg from depositions and personal liability in the Cambridge Analytica saga From the political political article quote Zuckerberg Sandberg and other Facebook directors agreed to authorize a multi $1,000,000,000 settlement with the FTC as an express quid pro quo to protect Zuckerberg from being named in the FTC's complaint made subject to personal liability or even required to sit for a deposition according to the article, the initial penalty was a 106,000,000, but the company agreed to pay 50 times more or 5,000,000,000 to have Zuck, and Samba expired from depositions' liability. Here is the money quote. The board has never provided This is from the group of shareholders suing. The board has never provided serious check on Zuckerberg's unfettered authority instead. It has enabled him, defended him, and paid him pay 1,000,000,000 of dollars for Facebook's corporate coffers to make his problems go HMO? I have one Chamath Palihapitiya (01:00:04): prediction. the Facebook whistleblower. You know, when you are a federal whistleblower, number 1 is you get legal protection, but number 2, which people don't talk about much is you actually get a large share of the fines that are paid by the act of your whistle blowing. You know, there was a couple of SEC claims that I think were settled last year where the whistleblower got paid, I think, like, a 115 odd Jason Calacanis (01:00:29): $1,000,000 Chamath Palihapitiya (01:00:29): or something and just an enormous amount of money. And the SEC has done fabulous job and, you know, using whistleblowers as a mechanism of getting after folks. And, you know, I think the SEC said they've collected almost a $1,000,000,000 since this whistleblower program started that they've paid out or something just an an enormous amount. And I had this interesting observation, which is this person Leaked a bunch of stuff were whistleblower to the senate, to congress, to the SEC, there probably will be an enormous fine This person may actually make 1,000,000,000 of dollars, which will then make every other employee at Facebook really angry about why they didn't leak it for because all, like, I guess, all this stuff was sitting around. And, apparently, now they've shut it down. Right? So that that entire data repository around this whole topic is no longer freely available for employees to peruse. So Jason Calacanis (01:01:18): -- Speaker 7 (01:01:18): Oh, what? Balaji Srinivasan (01:01:19): Under a key tam thing? Speaker 7 (01:01:20): Well, I Chamath Palihapitiya (01:01:21): I think it was more like like, I guess, I all of this data was sitting inside of some Facebook ins internal server. Balaji Srinivasan (01:01:27): No. I mean I mean, what this this leaker makes money under, like, Ketan Busy ad? Jason Calacanis (01:01:32): CC will pay for information that results in Fine. And so they just recently announced that they paid out a $114,000,000 whistleblower payment. That was the highest. ever and that they this whistleblower's extraordinary actions and high quality information prove crucial to successful enforcement actions. I don't think they announce all of these whistleblower payouts. They just pay them. So they're not all Chamath Palihapitiya (01:02:03): top -- That's that's my one observation is I I actually think this whistleblower may make 1,000,000,000 of dollars, so more than any of us made at Facebook, which I think is hilarious. But the second thing which is more important is that there was an article in The Wall Street Journal about how sentiment amongst Americans have now really meaningfully changed. And Jason, I don't know if you have those stats, but this is a plurality of Democrats and Republicans where it's like, 80% of anybody now basically says the government needs to check Big Tech. Jason Calacanis (01:02:32): The Wall Street Journal published an article yesterday highlighting a new poll duct for the future of tech commission, it found that 80 percent of registered voters, 83% dem, 78% repubs, agreed that the federal government quote, Needs to do everything it can to curb influence of Big Tech Companies that have grown too powerful and now use our data to reach far into our lives. findings are based on a survey of 2000 or so registered voters. Chamath Palihapitiya (01:02:55): I think it's a really, really, really tough road that these guys will have to navigate these next few years. Balaji Srinivasan (01:03:01): Can I can I offer some contrary views here? Yeah. Please. So, you know, the whistleblower thing, you know, real whistleblowers in in my view are like Snowden and or Sanjay who are, you know, basically overseas and or or in prison for for telling what the US government is doing. And the difference is, I'd say, they're whistle blowing if accepted and acted upon would reduce the power of the US government. Whereas these, you know, kind of awards and so on. I think they they do distort incentives. It's not like they're giving a $1,000,000,000 to Snowden and for blowing the whistle on the NSA. The military industrial complex is not happy with that. But this money is being given because Garmin is currently mad at Facebook and wants to do something that is like a quasi nationalization of Facebook. Now very similar to what happened in in China where basically all the tech CEOs they they just do it much more explicitly there. There's basically decap it all them say, okay. You're going you know, spending time with your family. In the US, it's done in this sort of denied way and so on. But the the US government getting more control over Facebook is not a solution to Facebook's real problems, it's just gonna mean backdoor surveillance of everything. Every single thing that was pushed back on, every end to end encryption thing that they implemented, now the Keystone cops in the US government not they don't just surveil everything, then their database gets leaked and it's all on the Internet just like what happened under the SolarWinds hack. So I'm not denying that there are, you know, like, bad things about Facebook. I actually think on net it's probably being more beneficial than than many people say. But I don't believe that the federal government is a solution to those problems. I think the solution looks more like decentralized social networking where people have control of their own data. Balaji Srinivasan (01:04:51): not simply the US government quasi nationalizing the thing. Jason Calacanis (01:04:54): So, you know, people bring up this decentralized social network thing and as if it is a better solution. I think you believe it's a better solution. But I I rarely hear anybody talk about, well, if they're slander on a decentralized network, if there's child pornography, if your personal banking information or your you know, you were personally hacked and that information was put on a decentralized social network, that cannot be reversed and stopped because it's decentralized. Correct? Balaji Srinivasan (01:05:21): It depends. You know, the thing is it's basically about Wait. Jason Calacanis (01:05:24): Why does it depend? You said that the blockchain couldn't be changed and that all the facts were permanent. So why does it depend now? Well, for something like Balaji Srinivasan (01:05:32): child porn for example. It's actually being used for that. You're not gonna find lots of people who are running those nodes. It it it is it's something where edge cases are always used to attack something? There's a famous cartoon which says, how do you want this wrapped? And it's called control of the Internet. And it's either protect children or stop terrorists. Right? And so when you we talked about an edge case like that. I mean, the the CSAM stuff, child porn, you know, that was that's used by Apple to justify intrusive devices that are scanning everybody's stuff. The I think the answer to a lot of those things is if if you're doing something that's bad, there's usually ways of going after it that don't involve this gigantic surveillance state that was after all only built. Oh in the last 10 or 20 years, just normal police work that you can do. If they're actually like, you know, a bad guy, there's other forms of police work. You can get search warrants you don't have this completely lawless thing where you just, you know, some guy in San Francisco hits a button and you're digitally executed. And so so, you know, it's not that there isn't any possibility for rule of law. It's just that it has to actually be exercised in this I think we're Chamath Palihapitiya (01:06:42): listen. I think we're a long way away from decentralized social networking actually being the norm or being a solution, Jason. I think we're at the step of actually figuring out and how much tolerance we have for probably specifically Facebook and Google's specific business models. And it's those business models that I think are coming up against privacy. they theoretically now, and we'll figure this out, maybe coming up against mental health and, you know, our child welfare policies and what we all view. But that and those are fundamentally governmental issues that they should adjudicate. And I think the more important thing that I take away from all of this is that we've all kind of let it probably get a little bit too far. And I think now that there's a Palihapitiya, Something's gonna happen. I don't think it's gonna be right. I don't think it's gonna be just. It's kind of like trying to perform surgery with the Rusty knife. There's gonna be all kinds of collab damage. Jason Calacanis (01:07:41): -- specifically to how to police Facebook, Twitter, social networks? Chamath Palihapitiya (01:07:45): I think it's just like social media. I think we've jumped the shark at the point. And so and and I think folks Jason Calacanis (01:07:50): who want to realize that. -- as the solution like biology? Chamath Palihapitiya (01:07:54): I I I do think that that's the ultimate solution for 2 key things. One is The most important thing that we all want is to know what the actual economic relationship we're having with folks that we spend time with this. So when we spend time with friends, That's friendship. There's no economic relationship there necessarily. Okay? When we spend time with a lot of these applications, There is a subtle economic relationship that is actually hidden from us which is that we believe we're getting value for Friedberg really what's happening is we're giving back a bunch of information that we don't know. When you move to a world of decentralization, you shine a light on how people make money and you allow us to vote. Do I want it? Do I not? That single feature will provide more clarity for people than any of this other stuff will because it'll force people to then step into an economic relationship with these organizations. And I think that that's just fair because those folks should be allowed to make money, but we should also be allowed to know what the consequences are and then decide. Jason Calacanis (01:08:54): David, you are a big proponent of freedom of speech. we saw massive election interference, the Russians trying to use social media to create division, other countries doing it to each other. It's not just the US and Russia. It's China and Russia and everybody doing it to each other. Do you believe that something like election interference and those bots would be solved or it would get worse because of decentralization. Are you a fan of decentralization, or would you rather have a centralized Facebook, Twitter, and somebody responsible like Zuckerberg or Jack to to mitigate this for democracies around the world. David Sacks (01:09:27): Well, the the the problem that we have is we do have a problem of social networks spreading lies and misinformation. However, the people who are in charge of of censoring those social networks keep getting it wrong. So they allow disinformation to be spread by official channels, whether it's, you know you know, whether it's a corporate journal. Speaker 7 (01:09:54): Are you Jason Calacanis (01:09:54): gonna say doctor? Are you gonna say doctor Fauci? David Sacks (01:09:57): No. There there there there are so many official channels that get things wrong. We talked last week about the Rolling Stone ivermectin hoax, there's been absolutely no censorship of that manifestly wrong story. There's no labeling of it. But then a subjective opinion like what Dave Portnoy posted about AOC attending the Magalla, which can't be factually wrong because it's just him an opinion. That gets fact checked and labeled. It's bizarre. So the situation we have today is we're not preventing miss information. We're just enforcing the cultural and political biases of the people who have the power, and that is always a problem with censorship. And this is why I agree with justice brandized when he said the the, you know, the sunlight's the best disinfectant. The the answer to bad speech is more speech. we need to have more free and open marketplaces of ideas, and that ultimately is how you prevent disinformation. Jason Calacanis (01:10:52): So decentralized Twitter decentralized social networks, do you think that is too much sunlight and too unruly? The fact that things could be Speaker 7 (01:10:58): spread on there and not fun. Jason Calacanis (01:10:58): I'd like to see what those things David Sacks (01:11:02): look like when we actually have them. We're it's I grew it from out that we're sold some ways off from that. Jason Calacanis (01:11:06): Are we? I mean -- David Sacks (01:11:07): But yeah. But it's -- Can Balaji Srinivasan (01:11:08): I say a few things -- Yeah. Jason Calacanis (01:11:09): -- on that? Yeah. Go ahead. because I think we have these out there. Isn't mapped done out there and other services out there, and they are contending with these very issues. Balaji Srinivasan (01:11:15): So -- By the way, Jason Calacanis (01:11:16): this happening. -- David Friedberg (01:11:17): philosophy was not Sorry. Sorry, Balaji. I I just say one thing before you go, but, like, this this Speaker 7 (01:11:21): general philosophy is is not novel. David Friedberg (01:11:22): You know, the Internet and and the the the order being called the tech platforms were meant to be the response to the undue influence that kind of Americans thought existed already in the media when they emerged in the late nineties. And, you know, you can go back hundreds of years. Like, the state was meant to be the response to the church. And, you know, the media was meant to be the response to the state and propaganda. And then the tech companies were meant to be the response to media. And, you know, now we're talking about decentralization kind of being the response to tech. And and at some point, you know, information accrues in this kind of asymmetric way, and it be call it becomes called that undue influencer. And that I think ends up becoming the the recurring battle that we'll continue to see whether or not this notion of decentralized systems actually is the endpoint or is just the next stepping stone in the evolution that is this constant kind of evolving cat and mouse game of where does the information lie, who has control over it, and who's influencing people ends up kind of being, I think, the big narrative that we'll kind of realize over the next couple decades. But I I I don't know biology if it becomes the endpoint. I mean, it it this is this feels to me part of a longer form narrative. Balaji Srinivasan (01:12:35): Yeah. So I think, like, lots of things look cyclic. If you look at them on like this, If you look from the z axis, this is more like a helix where you do make progress even if it seems you're going in in a in a loop. And so I think, you know, it it's centralize, then you decentralize, then you decentralize. It's like the concept of unbundling and bundling. You unbundle the the CD into individual MP threes. You re bundle into play Right? And so with decentralized media, it's not purely every single node on their own. I think it's more like a 1,000,000 hubs and a billion spokes. And Jason to your point, basically most of those hubs are not going to allow things that 99.99% of people think are like c Sam. You know? As for the other things like, you know, sland or hack documents you mentioned, the thing is current central arbiters will falsely accuse people of these things or enforce them in political ways. It's it the centralization is actually also not a solutions being abused. As as Saks, you know, points out. And in fact, official disinformation early in COVID, which, you know, I had to, like, basically be back with a stick. Fortunately, you know, got some of it out in time, but People said the flu is more serious. The travel bans were overreactions that only Wuhan visitors were at risk that avoiding handshakes is paranoid, that the virus is contained, tests are available. Masks don't help. You know, all that stuff, the surgeon general himself, you know, tweet out. You know, people don't wearing masks. Right? BuzzFeed, you know, Nyt, all these guys got this story wrong and then they rewrote history to pretend that they didn't. So that to me is a much greater danger when you have a single source of truth that's false. Speaker 7 (01:14:08): Right. Jason Calacanis (01:14:08): So we're picking the least bad solution. David Sacks (01:14:11): It's such a good point because I'm old enough to remember when Balaji was right. About about everything related to the beginning of COVID, and I'm old enough to remember when in April of last year, I wrote a piece in favor of mask when the WHO and the surgeon general and all these official channels were saying don't wear masks. So the problem is with with these these with official censorship is that they keep getting it wrong. They keep getting it wrong. And I wanna hold on. I wanna I wanna bring it 11 more one more quick point. Okay, Jason? You mentioned foreign interference on Facebook. I would really encourage anybody who's concerned about that issue. To look up, you can go look, you just Google, the actual ads that were run by agents of the FSB on Facebook during the 2016 election. you can actually see the ads they ran. I wanna make two points about that. Number 1, the ads are ridiculous. They are they are sort of like an absurd, you know, foreigners' perspective on Jason Calacanis (01:15:12): what -- They're meme. They're meme. Yeah. With bad English. Yes. David Sacks (01:15:15): bad English, and it's it's somebody who doesn't understand American culture's attempt to propagandize an American. And you look at it, it's so ham handed. Let me give you an example. It's like in one of them, they've got Jesus arm wrestling with the devil, saints, and it's Jesus saying that I support Trump and the devil saying I support Hillary Clinton. I mean, literally, stuff like that. Okay? It's utterly Jason Calacanis (01:15:40): -- -- you'd see in a Trump rally. David Sacks (01:15:41): It's utterly absurd. and nobody would ever become inspired. The second -- Except for Jason Calacanis (01:15:46): the people at Trump rallies. David Sacks (01:15:47): The second the the second thing about it is that when you actually look at the number of impressions that were created by the sum total of all of these so the so called disinformation of all these ads, it is a fractionally small if in testable drop in the ocean compared to the toll number impressions on Facebook. And so I'm not disputing the fact that somebody in the basement somewhere in Moscow perhaps was running Jason Calacanis (01:16:12): some -- It was proven. It was like hundreds of people. 100%. -- David Sacks (01:16:15): some sort of disinformation operation. that was running ads on Facebook. What what I am saying is that when you actually look at the effect quantitatively and qualitatively, you realize that that whole story was massively blown out of proportion in order to create a hysteria that then justify censorship then justifies the empowerment by centralized authorities Jason Calacanis (01:16:39): to be able to regulate David Sacks (01:16:40): to be able to regulate these social networks with the effect that the people in power end up censoring in ways that do not support the truth, but actually just reinforce their own power. That is what the disinformation story is really about. Jason Calacanis (01:16:56): No. It's not. What it's really about Saks is that Russia wants to pit people like you and me against each other. You're right leaning, I'm left leaning, and what they wanna do is create this moment where you and I are fighting over this instead of fighting Russia. Russia has this as a strategy to demoralize us and this is classic KGB technique. David Sacks (01:17:14): I suggest. Jason Calacanis (01:17:15): So battles back and forth between Americans so we don't fight against David Sacks (01:17:19): Washington in the war. I have no interest in fighting Russia per se. I'm not interested in picking fights foreign countries. Jason Calacanis (01:17:26): And also -- You should want to fight against Russian interference. Yeah. David Sacks (01:17:30): I'm also not engaging in a fight with fellow Americans. I'm attempting to depropagandize fellow Americans who've been led to believe that Russian interference the election was I'm not saying it didn't happen, but Jason Calacanis (01:17:43): they've been led to they've been led but David Sacks (01:17:45): they've been led to believe that it was a much greater threat than it actually was in order to empower centralized authority to engage in some strip over a social network. So I'm trying to essentially deprogram an enormous amount of programming that's taking place. I do not consider that to be fighting with fellow Americans? Jason Calacanis (01:18:07): Well, I mean, the point is you have the GOP recounting votes even to this day saying the election was stolen. And then you have on the left, you have the Democrats saying Russia won the election for Trump. In both cases, these are probably factually incorrect. David Sacks (01:18:21): In our last cast, I cited the piece by Rich Lowry Jason Calacanis (01:18:24): -- Speaker 7 (01:18:24): Sure. Jason Calacanis (01:18:25): -- David Sacks (01:18:25): which he is the editor of national review speaking to conservatives saying that this whole stolen election myth, yes. He called it a myth. is an Albatross. It's it is not it will do nothing but backfire on conservatives and Republicans. I think there are plenty of people who recognize that story to be what it is. We're talking about something very different here. David Friedberg (01:18:43): I kinda just wanna pivot forward a little bit, and I think it's a good question with Balaji on on the line. Jason Calacanis (01:18:48): But -- Yeah. Let's let's let's David Friedberg (01:18:49): assume we we we move forward to this decentralized model where there isn't a central media platform that adjudicates Con and makes it available to to the users of the platform. So now in a decentralized world, take take YouTube, for example. YouTube has an application layer which is the website we all use to access the videos, and there's a recommendation list that pops up. And then all the media that that that exists on the YouTube platform sits on some servers, And so the application is how I'm kind of selecting what media to watch, but that's kind of being projected to me because of the recommendations being made by Google and and and the search function. if you guys remember I don't know if you guys are old enough, but, you know, in the early nineties, we were all on Gopher boards, and we were trying to find information. And it was a total cluster. Right? I mean, there's just, like, no word no way to kind of find what you're looking for. And so search became kind of the great unlock, right, in the use net. And search became the great unlock for, you know, for for accessing content on this distributed network that we call the Internet. Now in the future, if all of the YouTube media is decentralized, and sits on distributed servers and sits on a on a chain or or whatever. What does the application layer look like, apology? Because how do you end up giving users are ultimately gonna have to pick an application or pick a tool to help them access media, to help them access information And there has to be, to some degree, a search function or an algorithmic function that creates the list of what content to read, or are they simply subscribing to nodes on the network and that's kind of the future of decentralization where there's no longer a search or recommendation function, but there is simply a subscription function. And I think that that to me is kind of the big philosophical question because from a user perspective, people want things easy and simple. They wanna have things recommended to them. David Friedberg (01:20:32): They wanna have a bunch of a list of things, and they click down the list and they're done. I'm not sure most people as we saw in web 2.0 when there were all these, like, you know, make your own website stuff and you had RSS feeds, and that all died because it was complicated, and it was difficult, and it wasn't content for most people, they prefer having stuff presented to them. So do we just end up with, like, 10, 20, 30 subscription applications that create different algorithms and different kind of access points for the content, or are people just living in a subscription universe in a decentralized world when it comes to media? Balaji Srinivasan (01:21:01): It's a great question. So I think First, we have some vision of what that world looks like already because if you think about block explorers and exchanges and wallets, and much of the rest of the crypto ecosystem, they are all clients to the Bitcoin and Ethereum and other blockchains. Right? So, you know, I wrote this post called, yes, you may need a blockchain where, you know, people have said, oh, blockchains are just slow databases. And that's like saying the early iPhone camera is just a poor camera. Yes, it was worse on one dimension image quality. but it was far better on other dimensions, namely the fact that it was ubiquitous. It was always with you. It was free. It was bundled. It was programmable. It was connected to a network and so on. And so, blockchains, yes, they have lower transaction throughput but they are a 1000 x or more on another dimension which is a number of simultaneous route users. That's to say it's a blockchain is a massively multiplayer database where every user is a root user. Thus meaning everybody can read the rows in the Bitcoin blockchain. and anybody who has some Bitcoin can write a row that's a debit or a credit to to someone else. Anybody with compute can mine blocks. Okay. So it's it's open and permission list. Similarly for a decentralized social network could operate in a similar way, whereas, let's say, something like Twitter, or PayPal, the root password is not public, nobody Calacanis it. And so what this leads to to kind of continue your point is basically I think there's basically been 3 arrows of the Internet. The first was p to p, which was, you know, peer to peer. Right? And so individual nodes are point to point communicating and that's FTP, and it's it was Telenet before SSH. David Friedberg (01:22:45): MPIT address. Yep. Balaji Srinivasan (01:22:46): s yeah. Exactly. Right? And so the great thing about this is open source is peer to peer. It was fully programmable. You could see everything. Right? Then because of search, because of social, because of the rise of the second era MVC model view controller, essentially many protocols like social networking or search are not efficient if every node is pinging every other node. You can't ping every other node with the index of the web. You can't ping every other node with face looks entire social graph when, you know, you go and message somebody. You you want a central hub with their photos and stuff so you can just send a few packets back and forth. Right? And this led to that or, you know, the last 15 years these gigantic hubs, the last 20 years these giant hubs, the search and social and and messaging. 2 set of marketplaces, hub and spoke architecture, and these hubs have global state and they're highly monetizable. You can make 1,000,000,000 of dollars off them as many of our friends have. Right? David Friedberg (01:23:39): By the way, the the early peer to peer version failed. Right? Kazaw, Juice I mean, you know, the alternatives didn't really work out. Right. The hub and spoke. Yeah. Balaji Srinivasan (01:23:47): Yeah. Yeah. Exactly. Right? So, I mean, Victoria did exist during this time. It's not like it was 0, but generally speaking, this was the era of hub and spoke NBC dominance. And now we're into a 3rd architecture which I call CPC, client, blockchain client. And so desktop clients have a blockchain that they communicate with. For example, I have a wallet, you have a wallet on your client, and then the Bitcoin blockchain intermediates us. I debit and credit you. Okay? That's a different architecture than both MVC and CBC. It actually combines the positive qualities of both. It's decentralized and open source and programmable like peer to peer. but it also has global state and it's highly monetizable like MVC. So it combines the best of both worlds and it has some something that's very new which is not open source where it's open source code, it's open state where it's open state database. Like, open state means the back end is open also. So all the applications that get built out, essentially, our clients that seem back end that seem Bitcoin or Ethereum or would have you back end. And then you kind of exchange between them and the true scarcity now comes not from locking in your users, but from holding a currency. It kind of gets reduced. The IP gets reduced to its minimal viable thing, which is holding that cryptocurrency and what you can do with that. David Friedberg (01:24:57): But so give me the me give me the media analogy. Right? So where does your media sit and how do I, as a user, have an experience on what media to to view and to access. Like, think about because, again, like, just speaking in a in a in a layman's term for folks maybe to understand you know, most people, I don't think, understand the dynamics of what underlines a social network as much as they understand the user experience of browsing YouTube. Right? So Jason Calacanis (01:25:19): -- David Friedberg (01:25:20): Yeah. -- what is the what what is my in and browsing the decentralized version of YouTube, what does that experience end up looking like in this decentralized world? Right? who who ultimately adjudicates the algorithm that defines what my recommended videos are that I'm gonna be accessing from these kind of, you know, different nodes. Well, I think the idea Speaker 7 (01:25:39): is you Jason Calacanis (01:25:39): can bring your own. You can pick 1. There'll be a library of them. David Friedberg (01:25:41): Well, that's my point. It's like the picking function is what doesn't didn't work in web web web point o or what 0.9. Right? Balaji Srinivasan (01:25:47): Like -- So we'll take a take a look at so first of all, that state could potentially so today, blockchains are not very scalable. But tomorrow, they already they actually they're they're improving very rapidly. If you're if you're following Matic if you're following Polygon and If you're if you're looking at what Solana is doing, like you can do a lot more on chain in 2021 than you could in 2020. It's it's kinda like bandwidth. It just improves every year. So more applications will become feasible like search indexes. Moreover, blockchains actually suggest to your specific point about search indexing Blockchain's actually radically simplify Surgeons to such a point that they're a dark horse competitor to Google. What I mean by that is Google Index the Open Web because Open Web is open. And then social networks were like a dark web, you know, to them where that's why they were so mad. Google was so mad. It couldn't acquire Facebook. Right? Because couldn't index it. It couldn't index Twitter, had to deals with them. That's all on their, you know, on their servers. So the social web is even harder to index than the open web. But block explore or blockchains and, you know, block explorers which are like search engines on top of them, blockchains are easier to index in either the open web or the social web. And the reason is many of the problems associated with indexing just go away. For example, just one small problem. As you're probably aware, When you're indexing the open web, let's say you've got a 1,000,000 websites you're crawling. Each one of them, you only have you only have a certain bandwidth amount total. So you have to figure out, okay. Do I recrawl this site or this one? Which one is gonna freshen? Okay, does this update every day or not? So you have to run all these statistical estimators just to figure out when to crawl a site. All that goes away, for example, in the context of a blockchain where you just subscribe arrive, and you get a block of transactions. Jason Calacanis (01:27:25): Everybody's got the real time index, and they could there's no advantage being Google and having to surf on free break. We had a wrap. 4, bestie Chamauth, David Sacks, Friedberg, and our bestie Balaji, Thanks for coming on the pod, and we will see you all next time on the all in the podcast. Bye bye. Hawaii your winter's ride. Rainman, David Sachs. I'm going home. Speaker 5 (01:27:52): And I said -- We open sources to the fans, and they've just gone crazy like that. Jason Calacanis (01:28:02): what air winter's driving. Our grown air's running. Besty's hardball. I'm on 13th. Balaji Srinivasan (01:28:08): That is my dog Speaker 8 (01:28:16): We should all just get a room out one big huge order because they're all these useless. It's like it's like sexual tension that we just need to release them out. Jason Calacanis (01:28:24): What? You're the bee bee. What? You're David Sacks (01:28:27): a thief. Jason Calacanis (01:28:28): What? What? Where did you get Merckies are back?