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Tim Meaney returns to the Postlight Podcast, and he’s ready to talk DeFi. This week Paul, Rich, and Tim have a heated discussion about new trends in blockchain and cryptocurrencies. They draw parallels between crypto and conspiracy theories, and Tim explains why the protocols around DeFi are something we should be looking at beyond its current financial applications.

Transcript

Paul Ford In fact, this podcast, if you were billing for it, it would cost about $1200 an hour, it’s an expensive podcast. [Rich laughs] You’re welcome.

Rich Ziade It’s not very expensive, Paul, but go ahead. [Tim laughs]

Tim Meaney You divide that $1200 however you want, listener. [music fades in, plays alone for 15 seconds, ramps down]

PF I’m Paul Ford, co-founder of Postlight.

RZ And I’m Rich Ziade, the other, the less famous co-founder of Postlight.

PF That’s not what it’s about today. Let me be the internet for a minute. “Hey Rich!”

RZ Yes! Internet?

PF “You wanna buy something?” 

RZ Sure. 

PF “You want to read something?” 

RZ Sure!

PF “Look it up, go get it.” Now let me get, let me get you up to 2021. “Ethereum! Ethereum! Ethereum! Bitcoin! Bitcoin! Bitcoin! $58,000. Bitcoin! Bitcoin! Bitcoin! Bitcoooiiin!” Okay, that’s the internet now. You know who else is like that? 

RZ Who?

PF Our friend Tim Meaney. [Tim laughs]

RZ Tim Meaney is the only three timer on the podcast. And I have a feeling this won’t be the last one because Tim Meaney is going to be mining rare metals in two years. And we’ll have him back on explaining why that’s what we should be buying. [Paul laughs]

PF You get to have your friends on. Tim, come on in, come on in, how you doing?

TM Speaking of rare metals, do I get a watch for my third appearance or something like a plaque? Maybe one of those cool little glass—

PF You get a Casio calculator? 

TM Ah, I just bought one. 

RZ For those that don’t know, Tim is an old colleague and old friend. I’ve known him for many, many years, thinks on our wavelength and a lot of ways about technology. 

PF And well, let’s be, Tim is enthusiastic about change in the world of technology. He gets really into it. And he’s he’s usually pretty ahead of the curve.

RZ He also shares our fascination with culture and how it intersects with technology. Right? So, so it’s a couple of weeks ago, and usually I’ll get an image on chat of him, like holding up a glass of whiskey, which is like, Oh, hey, Tim, which doesn’t mean much more than enjoying life. Then he said, “so are you in?” and I said in what? And then he threw out a couple of acronyms. And then he said DeFi to me, and then he said, “Okay, you’re behind, but this is gonna resonate for you.” So Tim, let me set it up this way. I’m gonna set it up with where I understand things to be because I frankly have not paid attention to this part of the world. I understand blockchain, I understand the integrity behind it and how it sort of self enforces would in a very nice way I don’t know under also understand the blockchain can be used in many many ways. One way is a sort of virtual currency like Bitcoin but can be used for anything, right, to store contracts to store files to score deeds on properties, store, I should say. And I watched Bitcoin go bananas. And then I watched Bitcoin kind of take a dive. I’m talking three, four years ago. And lately I’ve been hearing about how Bitcoin is more real than it’s ever been, and then it’s worth a lot more than it’s ever been. And then you’ve got those articles about, you know, the journalists who was supposed to research Bitcoin, he bought a dollars worth like 20 years ago, or whatever it is, and sold it off, and now would have been a millionaire. So I have my views, but I’m gonna I’m gonna sit on my views for a second here. So catch us up, we know that Bitcoin is the real deal.

PF Oh, and we should also—quick ethical disclosure. Tim’s a client, Tim is one of the, he’s a stakeholder and one of our clients said. SageSure. So we should just say that out loud, so that people know. 

TM Thank you.

PF Alright, so Tim, what the hell is DeFi? What are you talking about?

TM Alright. So there’s a lot going on here. Let me first throw it back to you, Rich. You started a company in 2005?

RZ Correct. 

TM What was going on in 2005? And why did you feel the need to start a company? Give just a little narrative about what happened on the web prior to that. And then what was going on in 2005? I promise I’ll relate it back to where we are today with crypto.

RZ In 2005, I was living down in Georgia, in Atlanta doing some work, some consulting work for Georgia Tech Research Institute. And, I was a refugee of the .com boom, I was part of a company. It’s actually how I met Tim Meaney. Way back in the in the late 90s. I just been in love with the web and the standards around the web. I’ve been reading a lot about the web and its impact and its influence and whatnot. And then this sort of weird undercurrent kicked in and it started with Dave Winer wrote a post I wrote a post about XML RPC. And it was a probably 180 words and I understood all of it and I saw like, literally a door opened up in my brain that the Web is going to evolve from a publishing platform to effectively an operating system, right, essentially and then Tim O’Reilly comes out with the Web 2.0 essay. And you’re starting to see stuff like what used to be called Ajax with very dynamic experience. I was like, okay, this is crazy. So this at this time, I’m in Georgia in an apartment, I quit my job, literally quit my job, came to New York and said, rest, this is 2005 that Rest and XML and simple interfaces are going to power the world one day. And I started a company with Tim Meaney, people don’t know this, probably it’s all come full circle. But that was the, that was the the thought shift. Right?

TM Okay. So many analogies with where we are right now 2021 crypto. The boom, everybody flooding in and ’99 all kinds of capital flying around. Everybody thinks they’re going to get rich, it busts, but people stick around. And the people who stick around, start building in the case of ’99, those are browser companies, standards bodies. And a couple of years later, all of a sudden that starts to bear fruit, and it creates another cycle. The 2017 crypto boom, brought a lot of money, a lot of eyes and it got really weird and crazy. All of a sudden, every celebrity had an ICO. ICOs themselves were bizarre and weird, was like, let’s just create a coin out of every possible asset. And turns out that wasn’t a great idea. But what stuck around in 2018, and 19 and 20 is starting to bear fruit. And what stuck around was protocols and standards and innovation happening. DeFi is a decent analogy to remember that moment in Google Maps. What was that 2008? The first time somebody linked you to the new relaunched Google Maps on the web. And it was like, whoa, this is possible on the on the web, this sort of dynamic behavior? People don’t realize that if you weren’t a web person back then, how awesome a moment that was. It was because you can see you can see with your own eyes, what was interesting about what was going on on the web, and everybody thought, Oh, I can internalize this and make this mine. What’s happening now with DeFi or NFT’s, have you heard of the NFT boom? Non-fungible tokens?

PF Get us all the way in there, man, assume we know nothing.

TM So crypto and more specifically, blockchain have found two use cases that are bearing fruit that are working and that are interesting, and it’s art. And its finance. Kind of weird and strange. If you think back to the web in the 2003 to 2005 era, it was like commerce and music and communication. The use case so far with blockchain is art, which is NF T’s, which is basically an artist making digital art and selling it on the Ethereum network. And it’s one of a kind. It’s immutable, because it’s on a blockchain. And I can own it, like a baseball card. I can own that art, it’s mine. The blockchain insists that it’s mine. It can never change. I can sell it. Now we can transact. So art in NFTs, total booming economy, 10s of millions of dollars, one just sold for $660,000 last week, a piece of digital.

PF Alright, what sold?

TM It was a super rare, they’re sold kind of like baseball cards, where they’re like packs, and then they get mined. And the most rare one kind of emerges. And the most rare one just transacted for like $660,000 in this one little subculture of NFT’s. So that’s all happening on the blockchain. And the other thing that’s happening on the blockchain is DeFi. DeFi is basically why do we need central authority to transact finance? Why do we need Wall Street?

PF I want to break you for one sec. I want us to ask that the fundamental question but Tim, how deep are you into this?

TM My interest level is very high. I happen to invest in it. But I think that’s the least interesting thing going on with crypto is buying it as an asset. It’s the least interesting.

PF I feel like you still, your house is still, there’s like a mortgage from the bank. We just need to know, you’re okay? [Rich laughs]

TM I’m okay. Okay.

PF You got kids going to college, you got kid, I get a little worried. I get a little worried.

TM I’m gonna make a prediction. Six weeks from now, you guys are going to be as deep in this rabbit hole as I am. Because it’s so matches your aesthetic about how you think about technology and culture. It’s shocking that you’re not there yet, but we’ll get there.

PF So we’re talking about Ethereum of a lot now, right? So different currency. We’re talking about smart contracts, what the hell is a smart contract? 

TM Alright, so Bitcoin is a singularly amazing innovation, right? It’s the idea that you don’t need a bank to send a financial asset to somebody. That is a staggeringly interesting idea that got launched on the world in 2009. And really hasn’t changed since. And we don’t know who had the idea. And it’s going pretty strong considering it just hit $58,000 for a fake internet money coin. So that concept that was birthed onto the world—

RZ Just to jump in here for a second. It’s still, you just said you said earlier, you know the idea that you can use this currency to transact, but you really can’t. If I want to buy a house with my Bitcoin money, I still have to sell my Bitcoin to someone else who wants to buy some Bitcoin, turn it into actual fiat currency and then go buy my house, I can’t go buy a house with Bitcoin, we’re not there.

TM It’s such a liquid market that that’s almost a moot point, you can immediately sub second turn your money into USD and buy a house with it. So, but you’re right, right now, the use case of Bitcoin hasn’t proven out yet to be, we’re going to transact as a currency, it’s more of a store of value. 

RZ It’s more of a rare mineral. It’s a rare mineral.

TM It’s like gold, it’s literally gold. Except if you’re trying to escape a country with your assets, it’s much easier to hide Bitcoin than gold, right? It’s literally a store of value. It’s inflation proof. It can’t get devalued over time, because there’s only 21 million of them, period. However, there’s a kid back in the, you know, the 2013 era who’s like playing around with Bitcoin and blockchain and thinking, why does this just have to be about currency? Why can’t it do anything? Why can’t I write an application on this idea of peer to peer decentralized networks? And that’s what Ethereum is. It says, alright, I’m going to take the underpinnings of the blockchain technology, Bitcoin, but I’m going to let anyone do anything on it. Just like the open web was back in 2004. Do whatever you want. There’s no gatekeepers. There’s nobody to tell you you can or can’t do it. That’s the aesthetic of Ethereum do it. You can do whatever you want.

RZ Is Ethereum another currency, like, can I look up its value today?

TM So Ethereum is a network. It’s powered by a currency called ETH, which is what makes the system run, it provides the incentives to put your computer into the network and participate. Remember, the whole SETI thing people would like connect their computers to search for? 

PF And look for aliens?

TM They look for aliens.

PF Using your home computer. 

TM So the payoff there was you felt like you were helping Earth humans find aliens. The payoff of Bitcoin is that you’ll mine transactions to get rewarded with Bitcoin, the payoff in Ethereum is your transact in order and validate transactions in order to earn eth. And eth is now a $2,000 asset.

RZ ETH is an asset itself, right? 

TM Correct. 

RZ Alright. Now, you mentioned the term DeFi, explain that. D-E-F-I, what is that? 

TM So decentralized finance. So it’s the idea that take a bank, I want to go get a loan. So I go to a bank and a bank is a centralized authority, right? What if I want to get a loan in a manner that’s decentralized, peer to peer? What if I did? That would be hard to do. But protocols have been created that sit on top of Ethereum, once called Aave, which provides a pooling mechanism for people to put their collateral in, their digital currency, and people to borrow against it and earn interest, all happening on the Ethereum network, all powered by ETH. And all just happening in a trustless environment. I don’t even need to know who you are, okay. And I can earn interest against the loan, or I could provide capital to other people to borrow.

RZ So let me say this back to you. So I’m understanding it. I’ve got $1,000 worth of Ethereum, I want to borrow against that $1,000.

TM Or maybe you want to earn interest by staking it into the network and earn 7% interest.

RZ Okay, so you could put it in the network. So Tim shows up. He’s like, I want to borrow $50,000, you could actually collect all the fractions of that 50k for many people to give you the loan, and then they would earn interest on lending you the money.

TM Yep, that’s exactly right. All happening without your local or local bank and $5 billion have been transacted in that way, like over the last couple months.

RZ Alright, so this is fascinating. There seems to be less friction in this environment. So things are actually happening. So help me here. Okay? I open and this is total coincidence, I opened Twitter this morning. And there’s this cat animation, Paul, of a rainbow flying out of its ass through space. And it’s called Nyan Cat. I don’t even know how to pronounce it. 

PF Nyan Cat.

RZ The original creator of Nyan Cat posted his original GIF. Essentially, he’s essentially certifying that this is the original and he put it on a site called foundation.am where people are selling digital art and you buy that digital art. I don’t know what the currency is they’re using the by though?

TM There’s a few different networks that transact NFTs, I bet it’s Ethereum. Let’s say it’s aetherium or ETH. It’s ETH in this case.

RZ So ETH currency, you can buy the one sole official representation of Nyan Cat on this network, it goes up starts at about $15,000 – $20,000 I guess of equivalent ETH.

TM Yep. 

RZ And now it has crossed $500,000 to purchase this piece of digital art, which means a marketplace took hold, it was like an auction. Sounds like what foundation is it’s an auction site for digital art. And this thing skyrockets, there’s nothing to put on my wall. And that’s not the point. 

TM We’ll get there in a minute. 

RZ Yeah, so there’s nothing to really do. All I have is a certificate. And well, it’s some virtual certificate of some kind. That tells me that tells the world that you don’t own it, I do. I’ve got it. Rich Ziade owns that cat, I’m having trouble wrapping my head around the idea that I’m going to be able to resell this thing for $2 million in three years. In fact, I would even put forward that the purchase is fiction, because the money that it was used to purchase it is itself fiction. So the $500,000 is itself based on it, which is a bubble, right? Like that’s how bubbles take hold, right? Because bubbles are essentially an ad hoc pact of trust that a network of people is making, such that the value is elevated, because as soon as that that trust is punctured, a collapse occurs, which has happened since the beginning of time, right, in economies around the world, and the thing about bubbles is this as they get bigger, the skin, the layer that holds the bubble together gets thinner, and when you puncture it, it pops. Now I’m not saying this is a bubble, but what I’m saying is this is a bubble.

TM Okay, so it probably is a bubble, may or may not be. You just said something really interesting. You said the ETH and the art are fictions. Guess what else is a fiction?

RZ What?

TM Everything. 

PF “Fiat currency!” “Social reality!” Oh, come on!

TM No, no, give, give me a second. A Michael Jordan rookie card that just sold for X million dollars. What’s that? It’s a piece of cardboard with a little bit of paint splattered on it in a perceptible format that looks like Michael Jordan, that just sold for $2 million. Is that more real, because it’s on cardboard? The art has value because someone perceived it to have value, just like the Michael Jordan rookie card did. Now as for “can I put it on my wall one day?” Of course, you’re going to be able to put it on your wall one day. But that’s less important than you owning something that has value present to your fellow humans, your friends. You have your friends over in 2038 and your Nyan Cat v1 is projected onto your wall. You don’t think that’s cool? That’s not as cool as having a piece of Van Gogh in you know, 1930 sitting in your parlor? It’s just as fictional and just as real at the same time.

PF Yeah. Okay. Alright. So that part of the economy where non-fungible art assets make sense and can appreciate value like, okay, fine. It’s the same kind of nonsense as that other part of the economy that we like to make fun of around the art market. But yeah, it’s real. Absolutely. People are going to, you know, maybe there’s a crash and Nyan Cat is worth $2. But it’s not worth negative $2. It’s not worth zero, it’s worth something, people are gonna think it’s worth something, that’ll happen for a while. But I’m just sort of like, alright, yeah, but you know, I buy groceries. Just like, you want to get a good sandwich. Like, when are we gonna get there, man, like, everybody talks about I’m going to be grumpy for a minute, every DAP, every distributed app, every DeFi app. It’s just more financialization, like, I look at smart contracts, and it’s just banking. Like, it’s just like, okay, so everybody’s, you know, when do you tell me that this is, here is what the web, let me do it, let me put things online. And then it let me buy books, and then let me buy furniture, and then let me get shoes, and then easily send the shoes back. Those are really good things for me. Overall, they might not be good for the economy or the world at a macro level, but boy, are they great sometimes. But here’s, here’s what I’m getting at, right, which is just like, I’m now in year 3 or 4 of “don’t worry, the decentralized apps are going to be really exciting and motivating. And they’re gonna be really interesting, and you’re gonna see them.” What I see, again, and again, is marketplace apps. I see charts like these are tools that let you do things with Ethereum, and the thing that you can do with the Ethereum is transact and you can monitor the transactions.” And I’m like, but I don’t want to do that, I want to get my shoes. 

TM I think this is a really fair criticism. And I’m actually not here to defend or advocate DeFi or NFTs. I don’t buy any NFTs personally, I don’t participate in DeFi. I think they’re use cases that show an example of what can happen on a protocol like this. And the protocol is interesting to me. And the thinking behind the protocol is really compelling to me. Who cares about the art? Who cares about Aave? I don’t collateralize my loans. I actually think it’s kind of weird, to be on the grumpy side for a minute. I listened to a bunch of crypto podcasts and it’s kind of weird that like finance is the thing that gets everybody jazzed up, like collateralized loans is like the super hot cool thing. It’s like, can’t we find a more interesting use case, to your point, but it is what it is. It’s a real use case that’s happening.

PF VCs love to create markets, they don’t actually want to create new value, they create a new kind of middleman. This is like flawless because you literally upload the code to GitHub and it runs, people start running it in their binding rigs. And now you’ve you’ve created a marketplace without actually having to actually create a marketplace or buyer sellers like those show up as well. Yeah, it is absolute catnip to the like, the ultimate Silicon Valley ethos. 

TM The interesting thing for me is, boy, what a crazy idea. First of all, what a crazy idea Bitcoin was. It’s up there among the craziest ideas, seriously, when you really think about it.

PF Well, I always I think it’s a joke that went out of control, right? Like, it was just like, “We’ll show the central bankers what to think!” It was just like, ha, this will never work. And then it worked. 

TM How prescient the thinking was that went into it. Think of other apps that launched in 2009. How many times have they been revised since then? Every week since 2009. This thing hasn’t been revised in its thinking, once. It’s astounding.

PF It’s essentially a computer virus that went completely out of control carried by a human minds.

TM It also understood the human mind, you know, the whole thing about halving? Do you know what that is? Every four years, the reward structure for Bitcoin mining, which is the thing that powers the network gets halved, it gets chopped by 50%. Right? So the reward structure decreases over time, however, the value goes up, right? So the idea and what naturally happens after having is the price goes up? And what happens to humans when prices go up? They go crazy. They start having FOMO and they start doing what’s happened over the last three months with Bitcoin, which is like Tesla, you know, putting 1.5 billion down.

PF Yeah, I mean, it’s a relatively small subset of humans that are getting into this.

TM Oh, there’s, I’ve been on, I’ve been to two friends houses in the last two weeks, I’ve never had a conversation about technology with and both people one of them said, out of nowhere, turned to me and said, “Tim, I’m sure you know something about crypto, how can you help me invest?” And the other person said, “I want to set up some crypto assets for my son, can you help me?” But wait one last thing about the halving, real quick. The oppression aspect of the having he built that in there because he knew what would happen that the marketing of Bitcoin would be the having prices going up is what markets Bitcoin. He called that out. Yeah, by the way, I’m saying he only because he in the white paper uses the word he, it could be they, it could be she, we have no idea who it is. The fact of think that forward and have it play out the way like, how do you, what product launch has ever done anything similar to that?

RZ Here’s, I think your observation about having an about creating this perceived bump in value all of a sudden is a really valid one. Do you know what Bitcoin and crypto makes me think of? Q. QAnon, and I’ll tell you why. I think when humans need to affiliate, fundamentally, they need to connect with others with like values. 

TM And they want to believe.

RZ And they want to believe but not only do they want to believe Tim, when they fall into that cohort. And they have a shared belief, they defended furiously, because they’re on the same team, right. And when they defend something so furiously, they control the value of that information as far as they’re concerned. And what I see in the crypto world, the investment they’ve made, is not in raw materials, I used to have this belief, this can’t be real, because it’s not based on raw material. Because ultimately, if you peel back the dollar all the way to its roots, it’s oil and wood and and and natural gas. And the raw material for crypto is the same raw material that fuels conspiracy theories. And that raw material is affinity to one another, and that we are willing to crash and burn together to defend that value system. And I think that’s what is at play here.

PF And I think it’s really easy for people to be like, well, there is no gold standard in America. But ultimately, the dollar is referendum but the economic growth into the United States. And you can have all kinds of opinions about that. But there’s been some real growth in the last 50 years, really, it’s not fooling ’round. Yeah, that dollar. The dollar is a big part of that. And so then I get to crypto and it does feel that way. It’s like as kind of pseudo gold. That’s like because the world is made out of lies. This at least will be true.

RZ Well, not only is it true, there is an absolute, I’m utterly fascinated if you sit down with someone who’s all in on Q, and they’re impenetrable. They’re absolutely impenetrable. Like people I’ve seen I saw a report yesterday that was on 60 Minutes. Guys a psychologist knows how to peel back anything, lost his mom. He’s like, I can’t talk to her. I can’t communicate with her and he’s utterly broken. He’s sad and broken because he can’t get through. He’s like my mom is utterly lucid, smart woman. It’s that she has found a marketplace, she has found a social economy that she has latched onto that is more powerful than her son. And that is what this is to me.

TM So let me try to thread a little needle for you, Rich. I think you might totally be right with what you said about Q and I think that might be right for the people defending it as a currency and as a store of wealth who want to get rich. My angle on coming on here and and texting you not last Friday. I’ve been texting you prodding you about this for like six months. Is the underlying technology and the aesthetic of there are no gatekeepers who can tell me what I can do is what the web was before there became a lot of gatekeepers.

RZ It’s a great analogy. 

TM That is what I think is interesting. And there will be versions of things that emerge on this style of thinking that I think are going to be incredibly powerful that hopefully aren’t about collateralized loans, or Nyan Cat GIFs.

RZ Yeah, real value.

PF Alright. Alright. To that end, I want to propose an exercise Okay, you’ve got three extremely Senior Product people on this podcast. Okay, go I put a link in to DAPP, DAPP.com/daps. Okay, let’s all go there on our web browsers. So what is a DAP? Tim, you tell me what a DAP is. 

TM DAP is a program that runs decentralized. It doesn’t run on AWS a server, it runs on the blockchain. It runs on everybody’s computer on the network.

PF Blockchains. They’re the new operating system for how work will be done in the future. They’re decentralized. Very cool. Oh, good. Here’s a listing of all the decentralized apps that I can run. As product people. Either one of you going first. What do you make of this giant list of things?

RZ William Shatner?

PF There is okay. Explain. Because I saw it too.

RZ I think he put out like a lot of still photos of himself as original, like certified digital assets, and started selling them or something. I don’t know what I’m looking at here. I’ll be honest, they all have clever names. And the logos are interesting. And I could see I could tell which ones went to a branding firm and which ones didn’t. But I don’t know what I don’t know what this is.

PF So this is the entry point though, right? So like, well, we talked about this being the operating system, because I’m going to tell, I’m going to talk a little out of school, I’ve probably had 8, maybe 10 blockchain oriented companies come to postflight and saying, Hey, we want you to help us with our app and our platform, very smart people very thoughtful. They’re getting their branding done, and they’re well funded and ready to go. And then they make a little joke, they’re like, yeah, yeah, we’re gonna we’re gonna pay you in fiat. And I go, that’s good, because that’s what we accept. And every single one of them screwed, in the clinch, it’s over, every single time. It’s like meeting after meeting. And I’m like, Okay, these these guys mean it. They’re serious. They really want to get this work done. And our close rate is quite good. Our blockchain close rate is zero. I cannot. And I no longer believe that the problem is Postlight, I think that they think they want product work. But then they kind of get to this messy place, and it doesn’t really work. Anyway, there’s one exception. We did great work for Filecoin through a third party. And I really did like what we did for them, it was about uploading assets into the Filecoin network. 

RZ But that was like a grant that they had or something.

PF It was a small project.

TM Looking at this list back to your product question, and as a product thinker, the first thing that comes to my mind, by the way, also, as someone who came on here to say, this is interesting and worth your mind space is why? Why does this need to exist on a distributed decentralized network? Why? It probably doesn’t. But there are some things that do. Look at BitTorrent compared to Netflix or Bitcoin compared to gold. Surely among all these crazy things going on, there’s a lot of just people chasing a cash out or a dream. 

PF First of all, like gambling makes sense, a gambling product on a decentralized financial network makes perfect sense to me. Whether it’s ethical or not, is up in the air. Different people are gonna have really strong views either way. But there’s no doubt in my mind that that is a sensible application of this overall structure, right? Games, I can see too, probably connected.

RZ Games! We love games. I do think the acceleration that’s happened here is because of the pandemic, to some extent, just as the acceleration of Q of people being isolated and alone and needing to connect happened during the pandemic, but we don’t have to use technology to realize the power of human affinity to one another. Just go look at Liverpool fans. Go look at what it means to wear certain colors and sing a song in the stands at a Liverpool game. And how meaningful that is, for it is their existence. There are documentaries out there about towns in the UK, who don’t have, like this is how they connect, how they connect to each other. It is absolutely necessary for them.

PF Well you know, it’s funny. It’s one of the one of the best reviewed apps here is Socios.com, which is the official fan engagement platform for FC Barcelona, Juventus, Paris, etc. Here’s, let me I can bring this home, I can bring this home. We’re talking about product, right? When you really what happens is this world keeps trying to say, look at all these exciting products, these DAPs, we got it, we got it, we got I don’t know where to install them. I don’t know what they are. They’re actually all either apps, it’s the only thing we really have going here as a protocol, is a protocol that’s working, just like HTTP is a protocol. So I think what Meaney is at here. I think where Tim is—

RZ I think that’s kind of Tim’s point. That’s Tim’s point, which is this is an open protocol to do interesting things as humans.

TM Without a gatekeeper.

PF If you think about the early web, the early web was like, yeah, it’s like, oh, my god, check this out. It’s a lot of little animated hamsters dancing, while the hamster song plays in the background, right? Everybody’s like, “Oh, my God, this is the best thing I’ve ever seen!” right? And then from out of that, now, you got Facebook, and you don’t have democracy anymore. So things are great things work out real good with this stuff. What you’ve got is HTTP. But what’s happened is they’ve skipped all the steps in between, right? So now what remains to be seen? Because I mean, look, I’ve been looking at smart contract software for a long time, it’s hard fail to know what the hell to do. I’d rather just go ahead and put stuff in the database and cross my fingers that I would, you know, try to get an Ethereum, smart contract, right? what you’ve got is a protocol, you’ve got HTTP. And then you’ve got a world that has decided that they’re going to bootstrap, everything to happen with the web is going to happen here. But it’s going to happen without all the intervening steps. And I think what is going to happen, I believe this I do believe this is real, is that all the intervening steps will get done, and some good people and a lot of bad people will make an unbelievable amount of money. There’ll be a couple boom bust cycles, and then it’ll kind of be part of normal life, except when we realize it’s been used to do something terrible, like destroy voting rights, share pornography, you know, or whatever, then it’ll be a huge, a huge discussion again, and again, and again and again. But it feels like yeah, okay. 

RZ That’s the classic story of humans creating a thing they didn’t know where it was gonna take them. And then it goes and takes them there. And next thing, you know, we’re in outer space. We don’t know why, right?

PF What’s interesting about this is that the financialization is built in. And I actually think this is a pathology in our culture that we have to financial is everything because we don’t know how to take care of ourselves. But like, regardless, this one is, this one is like, okay, the web was great, but it didn’t know how to financialized absolutely every single human interaction. So they had to build a analytics platform, and Facebook and Google showed up and they sold ads, we’re gonna do this. But we’re going to build the financialization so that artists can sell their stuff directly, right, and they’ll get all the money or a little tiny bit will be taken off the top, but they’ll get all the money, they’ll get to hold on to it, and then other people be able to resell it, and ownership will be absolutely irrevocable. The world doesn’t work that way. I don’t think it’s exciting. I actually don’t think the world is incredibly super motivated to work that way. I think artists would love to not just get reamed by Spotify every single day of their lives, like, right, like, I think there’s just like, “Okay, can I get a break?” Like, I think people are coming to this going, can I get a break? Or can I get in on the next new thing. But I really do think like, the protocol, Tim’s argument, that this is a protocol is really, really meaningful, because the protocol did blow up the world with the web. But the attempt to consistently jump in, you know what this reminds me of? Remember, like, IBM shows up and they’re like, okay, we’re gonna put the web services languages in here. It’s gonna be like SOAP and stuff. And it all looked like all the old object relational modeling tools that they’d been using before. They just tried to jam whatever had made them a billion dollars before.

RZ It failed! Vistal and SOAP. And I remember I was reading, I read the spec in 2000. And I was like, Oh, I guess that’s the end of the web.

PF I gotta tell you what, I don’t think any of the blockchain people have the stomach to do too much real product work. I think Coinbase does, Gemini, like I think some of the big trading platforms do. 

RZ The truth is SOAP comes out. Microsoft, Microsoft gets behind it, IBM gets behind it. It’s so cumbersome and ugly and bloated. And it’s based on like, this weird offshoot of like corba. And it didn’t go anywhere.

PF Well, it’s XML, just like one of the worst technologies to throw together.

RZ Let me make a case for how it can come together. So failed on the first go, right? But then XML, simple XML through the verbs that power the web shows up, and then it’s got more steam. And then XML is like, Oh, this thing is too busy. How about JSON and it just kept going from there. So Can this be productize? Can this get to a better place? It may be able to. I will say I do like the anti, the centralization poison pill that seems to be built into this because centralization is business in the ass again and again and again, right over and over. It starts right with this glorious story, but it’s kind Straight listing or self destruct before it gets too centralized. I’ve seen people route around that though, right? Like you could argue driving cabs is not centralized. But if you build the experiences around the transactions, you are effectively putting a layer of centralization around it, right? Uber doesn’t control everything, but it controls the interface, the human interface to those cars. So you could argue it’s still decentralized, but it’s not anymore because you got to pay their toll booth, right?

TM Coinbase. Coinbase is an example.

RZ Coinbase is an example. And as a commercial entity, it’s going to be motivated to do what it does. Tim, I’m disappointed because I thought you were going to be a juicy target. I thought you were going to be crazy town. And all in, but you’re as expected. You know, Tim is observing this world. And there are some interesting things happening. But I want to pose a question to you attempt to close this out. If your boss came to you and said, Tim, we’ve hit some bumps. But I got to tell you eight years ago, we bought a lot of crypto, and I’m not going to pay you your $100 a month, but instead I’m going to pay you $200 a month and in Bitcoin for the next year. Are you cool with that?

TM Absolutely. It’s a liquid market. 

PF Yeah, I don’t see that as big risk.

TM If I was going to be paid in some weird art that I couldn’t transact…Bitcoin is just immediately transactable, so yeah.

RZ Okay, I’m going to pay you in Bitcoin futures at 3x value, meaning you have to, they’re locked. 

PF So what’s the, what’s the time period?

RZ Three years.

TM Yeah, three years. It’s the probability of it being higher than today. That’s actually an interesting question. Is Bitcoin higher today?

PF If it’s 3x, who cares? Right. You’re gonna be okay. Here’s the thing I will say, like Ethereum, a lot of conversation. I got 1935 DAPs here listed on DAPP.com and that is not a lot of DAPs.

RZ Hold on, you’re saying DAP, people aren’t going to go to DAP, because they’re driving in their cars. What is DAP? It looks like a list of things, Street Fighter is on there. I don’t know why.

PF It’s an application of the protocol. It’s not really an app you can download, right? Like it is. 

RZ No, but what is it?

TM It’s an app that executes on the Ethereum network and does something.

PF It’s a protocol user, but they call it apps because they want to pretend that this is a real ecosystem. But half the links take you to websites where you can do things and invest, use your codes, and half of them are apps that are somehow connected to it using Ethereum.

TM In the case of Street Fighter, it was a huge NFT launch that just happened with all the Street Fighter art being sold. And they probably raised a staggering amount of money. If you googled what they actually raised, I betcha it’s a big number,

RZ Would you buy a digital art?

TM I’m not into the NFT thing. I’m not into it. I’m interested in learning about it. And I’m interested in the fact that artists are kind of flocking to it. And it is providing a mechanism for artists to make some money right now. I think culturally, there’s a lot of interesting things going on there. And it’s not unlike baseball cards to me, the idea that people collect something, and think it will have future value, which is adjacent to art, I think there’s a lot of raw ingredients that are interesting. But I’m not I haven’t gone down that rabbit hole yet where I’m buying like v1 GIF of, you know.

PF Here’s where we’re at, we got to either nail down the use cases and say it’s for this not this, or everybody needs to stop talking about this being the operating system, because I’m looking through DAPs, I’m gonna say something real stupid to people in the blockchain world, but not stupid to people who aren’t. There’s no word processor. There’s no PowerPoint, like you talk to me about the things I do in an operating system. And I think it’s like these are the things that do to really into blockchains do.

TM Well, let’s get let’s get back to what a blockchain is, right? It’s a decentralized record that’s shared and immutable and permanent. So a word processor in that concept. I’m not sure maybe somebody will make it make sense. Maybe a book in that concept makes sense more than a word processor.

PF If you look, my friends, and I’ve funded them, and I love them at the Brickhouse. It’s an experimental experimental publishing network have published into Ethereum, they’re trying to create, because as a direct response to Peter Teal coming after Gawker, they’re trying to figure out ways to keep permanence on blockchains. Now I get it. And I actually, I really liked that idea.

TM So there you go. So that’s a application of the idea of a shared immutable record that PayPal can’t swoop in, or Peter teal can swoop in and and, and erase it.

RZ So storage of asset. I think this is less about software, like we don’t need the Ethereum to run the word processor. The artifacts, the assets, the art, there is value.

PF The financialization runs ahead of the product decision. So you got this like platform I think that’s really useful. And then everybody financialized is it to death and then they’re like, but check it out with these DAPs it’s like he never did the work. Let’s be clear. This what pisses me off about  the whole thing.

TM The use case. 

PF They got to the billions of dollars in the trillions of dollars or whatever it wherever it is today, right? I’m sure it’ll be worth even more by the time this podcast comes out. But he never did the work in the middle where like you actually need to make a product that people want to use. They’re just like, oh, there’s so much potential.

RZ That’s the Wild West, right? That’s the .com era like we always get ahead of our skis, when it’s a new thing, we always get real stupid. Next thing, you know, Street Fighter shows up. Here’s the case, I think could be very useful, right? Like, the fact that my credit report is stored on I think three agencies is insane. It’s vulnerable. It’s kind of bananas, that my reputation as a buyer, and as someone that may seek credit is stored in three private companies. Each of them have to get checked when I go buy a car, whatever I need to do. Absolutely ridiculous. So is there opportunity there when people pay good money for a credible representation of my credit that’s impenetrable? Absolutely. Like that’s, that’s when I start my ears perked up. But I think right now, I think to Tim’s point, I think people are like literally feeling their way through this and seeing where value lies. And I think people are connecting.

PF I know, it just sucks to me. I love animation. And I like to see what people get up to when they get up to things in a decentralized way. It just feels like we’re having the bubble before we even shipped the first problem.

TM That replays ’99, though, right?

PF No, you’re right. That is and I have said this a lot. The people who were left after everybody went home, sat around, and they literally went each other’s apartments and are like how do we build a better, and they did. And so you know, it’s the easiest thing to me is like, Wow, look at this. Look at that they failed. But No, we didn’t. There was we got a lot done. They were good. API’s are stuff we use every day there is that cohort did change the world. So yes, I believe it, it’s just friends, you got a lot of product work ahead of you. And it’s not just going to be smart contracts. It’s a lot like no one knows how to install this thing. And if you’re in the bubble, you can’t believe how dumb everybody’s being by not jumping up. But most people are just going like, wow, it’s a number that goes up and down. You got to have more product than that, you have to have a product is bigger than the number going up and down. unless you’re an index fund.

TM All really good and fair criticism of what’s going on. My last point is we focused on gatekeepers like PayPal, and like Apple not letting me get my app on. There are other gatekeepers in the world, like your communist government, or some future versions of Earth where the gatekeepers, when you want to do something and your ability to do it over all the computers connected to each other provides you the ability to do that, there is dormant latent value there. But we’re not talking about here that could become really powerful in the future. You live in Venezuela.

RZ This is a great point, I think is Lebanon is having a conversation about this right now. Speaking of which, where the currency has disintegrated effectively through corruption and external powers exerting their own interests over Lebanon’s. And there’s a lot of conversation about it, because they can’t get their money out of their out of the bank. Right. So that broke down.

TM There’s an angle and blockchain again, put the currency to decide which is they cannot stop it. Whoever they is, they cannot stop it. That is a powerful idea.

RZ Or manipulate it, even.

TM They can’t manipulate it and stop it. That is interesting and powerful.

RZ That is interesting. This is a great discussion.

TM So I’m hiring for my new blockchain startup. If you want to join me. No, I’m just kidding. I am hiring at SageSure. Super fast growing awesome, innovative insure tech. So you can always ping me for that, but I’m not hiring for aforementioned. 

RZ Give us an email address.

PF Yeah! How do people reach you?

TM Just hit me up on Twitter, if you’re interested in design, front end engineering, the integration of financial services, in this case insurance with technology. We’re doing some interesting things on some interesting technologies. Hit me up on Twitter, @TimothyMeaney. I’m also at SageSure, Tim.Meaney@SageSure.com and we are definitely hiring pretty aggressively.

PF You might think to yourself insurance technology. I don’t know if that’s the next step in my career. But they’re doing really, really complicated work in the real economy, making genuinely interesting products to help people buy insurance.

TM And we specialize in markets that are distressed where people are struggling to get insurance, usually because of some kind of peril, wildfire, earthquake, hurricane. So there’s definitely some interesting things we’re doing.

RZ A voucher here for the culture and the kind of people that work there. We’ve been working with them from the beginning of Postlight. It’s a great group of people. So we’ll include Tim’s info in the podcast details. Great discussion, Tim. I’m going to—

PF Are you going to buy any? 

RZ You know, for all I know, dude, like, you know, you have these portfolios, which are essentially just like funds, inside of funds. I might already own one. 5% expose.

TM If you own Tesla. You already do.

PF I love going into the socially responsible index fund and just breaking that down. [Rich & Tim laugh]

RZ You have so little control over what’s going on.

PF Exactly.

RZ Tim, thank you. Thank you for opening our eyes here. Fascinating discussion.

TM I can bring it all together. Instead of getting a rare metal watch or a glass little thing from my third appearance, I think you should create some NFT’s and send me one into my Ethereum wallet.

PF Okay. Alright. Alright.

TM Someone else who knows how to do that. I assure you.

RZ I don’t think we can promote ourselves on this episode. I think we just say visit Postlight.com.

PF No, we’re good. Visit SageSure! A Postlight client. That’s right. Yeah, yeah. If anybody needs us, you know where to get us.

RZ We’re also hiring, not to compete with SageSuge. You might be at different points in your life.

PF Or you can come work at Postlight and work for SageSure. You can win either way. Either way. Great time to get in touch. If you’re an engineer, designer or product manager, we would love to hear from you. We’re building a good, friendly, very, very quickly growing diverse team of folks who like this work. So get in touch to tell your friends.

RZ Tim, thank you.

PF Let’s get back to work.

RZ Alright. Have a good week, everyone. 

TM Thanks, guys.

PF Bye! [music ramps up, plays alone for 3 seconds, ends]