Who is Balaji?
Balaji S. Srinivasan is an American entrepreneur and investor. He was the former CTO of Coinbase, and former general partner at the venture capital firm a16z.
In the latest book, The Anthology Of Balaji, he has shared his thoughts on Decentralization, Crypto and its future and how no one can stop this technology. It can be said that he is a “Decentralization Maxi” and holds Bitcoin in great regards.
He believes that these technologies have the potential to revolutionize not only finance but also tech, media, governance, social interaction, and many other aspects of human society.
Ideas
Let’s cover all the ideas on Decentralization, Crypto & Their Future mentioned in his book.
1) Society goes through cycles of centralization & decentralization
2) 20th century was the centralized century
One of the most interesting things I’ve learned is how much the 20th century was the product of centralizing technologies: centralized broadcast media (movies, news, radio) as well as centralized production (factories) of centralized armies (tanks, aircraft, nukes), which were all run by extremely powerful centralized states. It can be said the 20th century was the centralized century.
3) Computer, Internet, Bitcoin
Technology started enabling decentralization with the personal computer in the late ’70s, then with the internet in 1991, and now with Bitcoin.
4) The year 1950 was peak centralization. Everybody was watching the same shows on television
The year 1950 was peak centralization. In 1950, you had one telephone company, two superpowers, and three television stations: AT&T; the US and USSR; and ABC, CBS, and NBC.Everything was super, super, super centralized. There were just a few choke points in everything, with very little choice. Everything was homogenized. Everybody was watching the same shows on television. Society was all flattened out and smoothed out.
5) As you go backward to forward, things start getting more decentralized
As you go backward to forward, things start getting more decentralized. Moving forward, you get cable television, the internet, blogs, social media, and cryptocurrency. One of the really fascinating things is, when going backward in time, it’s as if we’re rewinding the tape with certain events from the past, now appearing in the future, but out of order.
This is just one interesting theory: our future is our past.
6) centralized → decentralized → recentralized
It’s not so much that decentralization is a panacea. It’s that when you are over-centralized, you decentralize. And then, if people over-decentralize, they recentralize—but around new hubs each time. So it’s bundling, unbundling, then rebundling.
7) Decentralization doesn’t mean an absence of leadership. It means a choice of many leaders.
8) Why does decentralization win in the long run? It’s hard to stop these decentralizing technologies.
With millions of developers and billions of phones, the internet is now essential for daily life, and crypto is built to be international, private, and monetizable without a central entity. It’s hard to stop these decentralizing technologies.
9) You can summon the CEO of Facebook to Congress. You can’t summon the “CEO of email” to Congress. There is no CEO. That’s where this is all going.
10) The state today has a lot less control over kids as they’re growing up.
An interesting thing is happening when kids are plugged into a different network, not the state-approved network, during their nascent years. They’re plugged into their own communities and subcultures. The state today has a lot less control over kids as they’re growing up.
11) Censorship incentivizes decentralization.
12) Crypto will disrupt tech
Crypto will disrupt tech, just like tech disrupted everything else. There is overlap, but crypto is really a different sector down to the base level of how organizations are formed, monetized, and exited. Like the cloud and mobile transitions, it will take decades to fully play out.
13) The terms “emoney” and “digital currency” are vastly better than “cryptocurrency” for quickly conveying what crypto is about. Just as email took the stamp away from mail, emoney holds the promise of eliminating the transaction fee.
14) If the internet was programmable communication, crypto is programmable money.
15) History repeats with crypto.
Crypto is more than an asset class because it transforms the custody, trading, issuance, governance, and programmability of anything scarce. It’s a new financial system, not just some ticker symbols.
The internet subsumed TV, radio, newspapers, movies, and created new kinds of media. Crypto likewise will subsume stocks, bonds, commodities, and create new kinds of assets.
16) People will go from being internet influencers to crypto creators.
Crypto is about digital property rights. By default, you should own your social media account. A platform that can seize it without due process is like a bank that can seize your money at will. Blockchains today protect you against the banks and tomorrow will protect you against social media platforms.
Blockchains provide the technical foundation for a new digital theory of property rights.
People will go from being internet influencers to crypto creators. The difference is crypto creators have property rights on their content. If you don’t own private keys to something, you don’t really own it. Like your social media account, you have conditional access to something that could get taken away.
This is a huge unlock for billions of people on social media. Three billion people are on Facebook, yet nobody controls any digital property rights. Your social media is not just your tweets or your posts—it is your relationship to your friends and followers. It is your ability to earn money without YouTube taking a big cut of the revenue, or just turning it off. Why should this gigantic corporation be able to silence you or seize your assets at will?
17) Every centralized service can become a decentralized protocol
It might take 10 to 20 twenty years, but as blockchains scale, every centralized service can become a decentralized protocol. Times have changed, and the economic terms of the agreement are changing. People are realizing they’re not in control and they’re not getting a cut.
18) Crypto is a spinal transplant for tech industry.
19) On disk → Online → On-chain.
On-chain is like the third level of deployment. Files that only you care about stay on your local disk. Files that are important to others get put online. And files that are really important to others will get put on the blockchain.
When you put information online, you get distribution, sharing, collaboration, etc.
When you put it on-chain, you get immutability, verifiability, monetization, etc. On-chain is not suitable for everything, just like you don’t put everything online. Putting something on-chain is a stronger version of putting it online. It lessens the impacts of link rot, stealth editing, downtime, format obsolescence, firewalls, and many related issues.
20) Financiers and Engineers will use on-chain data more and more
Over the next decade, financiers and engineers will use on-chain data more and more, because it’s the input to every smart contract which is the basis for every investment decision in the cryptoeconomy...which becomes an ever larger share of the global economy. Because all value becomes digital, the entire economy will eventually become the cryptoeconomy.
21) big data → verifiable data
22) One thing people don’t get yet is that crypto is not just the next Wall Street. It’s also the next Silicon Valley.
23) Crypto allows free markets without corporations.
24) Why trust Bitcoin?
You can find out who wrote every line of the codebase and when, where, and why. This is significantly more transparent than many other finance systems we work with on a daily basis.
25) crypto vs financial-services is similar to internet vs telecom
It will take decades to play out, but the economic logic of crypto- versus-financial-services is similar to internet-versus-telecom.
26) Long-term case for replacement
27) The blockchain is the most important development in history since the advent of writing itself.
28) The blockchain contains a cryptographically verifiable, replicated, unfalsifiable, and provably complete digital record of a system. It’s the ultimate triumph of the technological truth
Cryptocurrency has taken truths that were purely political and started to anchor them in technical truths.
29) The technologist builds the decentralized solution.
A shared issue for legacy media and social media is that their content is not open source. Since the content is proprietary, restricted by copyright and API access, the public can’t create its own arbitrary views of the data. What’s the alternative? Decentralized media.
30) Future of media involves oracles and advocates.
Oracles and advocates are two key ideas in decentralized media—factoring things into either pure facts (oracles) or pure narratives (advocates).
Each media outlet could have a version-controlled public list of keywords for which they are clear, unapologetic advocates.
Subscribers and donors could fund the outlet on the basis of their fidelity to the cause. This is using technology for values alignment.
The ledger of record is the combination of all feeds of on-chain data. It subsumes social media feeds, data APIs, event streams, newsletters, and RSS. It’ll take years to build but will ultimately become the decentralized layer of facts that underpins all narratives.
Think of the ledger of record as a decentralized wire service. Every person and organization slowly moves from posting on centralized social media platforms to posting on decentralized protocols like Mirror. Decentralized media will have monetization, permissions, distribution, and programmability built in.
31) “News” isn’t an article; it’s a graph. A graph of posts, images, and videos from many parties.
32) We need to decentralize media.
Just like the open-source culture transformed closed-source software corporations into something more ethical, more open, and more commercially viable, decentralized media would strive to do the same.
Twitter was version 1 of decentralized media and Substack is version 2. Mirror is version 3. We’re moving toward individual citizen journalists and away from media corporations. Perhaps we will see “full stack writers” who go from writing articles to producing movies themselves, like the full stack developer.
After reading this book, my views on Decentralization & Crypto got more optimism for the future and the world we are building.
All the text & ideas as it is from Anthology Of Balaji : A Guide to Technology, Truth, and Building the Future.