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14 Jan, 5 tweets, 2 min read
Thesis: the crypto version of any product ends up being far more valuable than the original.

Bitcoin is already more valuable than PayPal and will eventually be more valuable than gold.

And the various defi apps on Ethereum will be more valuable than their fintech cognates.
I had this thesis long ago. It's still in the early stages of playing out, but here's why it should be true.

1) far better developer experience with open APIs
2) far better reach for a true protocol than a corporate product
3) far more token hodlers than traditional shareholders
If you can make decentralized gold, wires, lending, borrowing, interest, derivatives, cap tables, or the like work...why would you *ever* use the corporate version?

It'd be like using Oracle over Postgres. You'd always pick the open version, if you can.
The theoretical base of adoption for the decentralized version is thus far wider than for the corporate version.

And because crypto token now allows that to be converted into *monetization*, you can finance development too (eg with ZCash-style founder rewards or GitCoin, etc).
Engineers will choose crypto APIs over corporate APIs in the same contexts & for the same reasons that they choose open source over closed source.

Technologically, blockchains now enable open state & open execution. That expands scope beyond open source.

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More from @balajis

balajis.com Profile picture
15 Jan
The deeper point is that India doesn’t need to look up to Harvard. Indians are CEOs of trillion dollar companies, soon-to-be VPs, and of course (real) professors at Harvard.

We can build a wholly digital replacement. Declining US institutions aren’t all they’re cracked up to be.
In the same way China ascended from a mezzanine level of skill to becoming the factory of the world, India can ascend from providing a shadow academia on YouTube to producing genuinely world class digital learning institutions.

As the meme goes:
ifunny.co/picture/lFZIX5… Image
India becomes a media superpower.

It’s capable of building digital alternatives to Harvard, Hollywood, and the New York Times. Indeed the people in these institutions often hail from India.

The v2 would lean on modern technology: online learning, AI video, cryptographic truth.
Read 6 tweets
balajis.com Profile picture
14 Jan
If we zoom out of current events or Russia/US for a second, think about the run-up to the Iraq War. Are we sure the US wouldn't invent a narrative about some foreign leader, technologically deplatform them, invade the country, and then say "mistakes were made" a few years later?
That's the kind of not-too-unlikely scenario that has other sovereigns concerned about US tech companies. After Tonkin Gulf, babies-in-incubators, and Iraq WMD, quite a few wars were started by false narratives. Now imagine a national leader couldn't even rebut these. ImageImageImage
If you buy (say) iron ore from a country, that's "decentralized". The vendor can't hit a key to melt the iron after they've sold it to you.

Software is very different. US tech companies retain root access and can kill-switch your communications grid if USG tells them to.
Read 5 tweets
balajis.com Profile picture
14 Jan
Expect many more national bans on American tech companies in the weeks and months to come.

Market caps will crater when deprived of markets. And we will see a complete inversion as states gradually begin favoring crypto protocols over American companies. theguardian.com/world/2021/jan…
The Regulatory Flippening

In the 1990s, the US government fought encryption. Now it mandates it.

Similarly, once regulators realize that crypto protocols exercise *less power* over their countries than foreign corporations, they’ll adopt a protocol-first approach. ImageImage
Many governments already encourage the use of open source over proprietary code when available.

They will eventually prefer crypto APIs over corporate APIs for the same reason. Crypto is what comes after open source: it’s also open state & open execution. brookings.edu/wp-content/upl… ImageImage
Read 5 tweets
balajis.com Profile picture
9 Jan
This is all much bigger than US politics.

It is a matter of national security for India, Israel, and every other country to maintain a sovereign communications channel for their leaders to reach their people directly.

The world cannot be ruled by American corporations.
Every sovereign needs its own basic internet infrastructure: hosting, payments, anti-DDOS.

Over the long term, crypto is the obvious choice for the 80% of the world population that is neither American nor Chinese, as well as large swaths of both Americans & Chinese.
This is now going to happen.

China is already US-independent when it comes to communication & payments infrastructure.

India, Israel, Russia are obvious candidates to go techno-autarkic next. Then perhaps the EU, South Korea, Japan, Brazil.

Crypto is the demilitarized zone.
Read 9 tweets
balajis.com Profile picture
8 Jan
A solo media founder like Rogan or Mr Beast can make as much money as a strong tech founder, with significantly less managerial stress.

Tech created this ecosystem but there’s a historical cultural bias in tech towards media as unprofitable. That changed a long time ago.
Many more angels that invest in people will invest in media founders. Many traditional media people will *become* media founders.

But not necessarily big companies. Just solo individuals or small groups doing content, like Notch doing Minecraft. Because media scales like code.
Increasingly feeling like “keeping the team size as small as possible, even to one person” is the unarticulated key to making media profitable.

Substack and all the creator tools are just the start of this ecosystem.
Read 12 tweets
balajis.com Profile picture
8 Jan
This is exactly why Bitcoin works. A simple monetary policy specifies a hard cap of 21 million BTC. Anyone with a computer can cryptographically verify this to confirm the supply has not been inflated.
This excellent post by @mattyglesias aligns with what a different kind of policymaker — namely the tech CEO — has learned over the years. To get many people to do something, you need to make it as simple and transparent as possible.
slowboring.com/p/making-polic…
For example, if you have a commission plan for your sales reps that they can't rattle off in a sentence, that "policy" is not incentivizing what you want. saastr.com/a-framework-an…
Read 4 tweets

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