"hey this is Craig Cannon and you're listening to Y Combinator's podcast today's episode is with Dalton Caldwell who's a partner YC in Wamba net who's the founder of protocol labs a YC company that's w..."

"and it's ones explanation of ipfs and file coin part two is our conversation with Dalton and that starts around minute 11 and part three is one answering questions from Twitter and that starts around ..."

"that you know someone like Satoshi could have seen as a way to to build a project through it be like oh yeah instead of doing this on my own anonymity I could go and like the open protocol apps and it..."

"internet and so you know figured I would I would start an organizational separate in the protocol apps is really a group that is trying to create a number of these you know projects and protocols arou..."

"them is hype if that's the interplanetary filesystem it's a used by a ton of organizations and you know both businesses and projects and you know blockchain networks and and governments and so on and ..."

"and we're committing but you know there's more to go there's a lot more to go with what's the current status of making it all human readable because I knew that was an issue early on Oh like a making ..."

"consensus and so when you construct with consensus you either have something hierarchical like DNS and so on or you have something like watching naming so like namecoin or ENS or blocks acts and you y..."

"a spectrum where on one end some people contribute massive amounts of storage and I'm not and you know don't really need to use the than I would very much on the other end you have people that are con..."

"you get a lot of people to mine the currency and in you know you have a very strong incentive to mind the currency and then you can sell all the storage that supply that comes on just to users and sel..."

"sent me on a on a on a path of ree-ree engaging with a whole bunch of stuff that I'd been thinking about prior like many years before a lot of peer-to-peer stuff so I did my background is in industry ..."

"flash video work so well the culmination of those events happened and so my kind of knowledge going into this of even for the you know going back to your story in a second is usability to me as such a..."

"because the key thing is to understand deeply what what the benefits of using some technology are what are the underlying you know from like a research and theory perspective like what is the theoreti..."

"would argue that it's easy to roll out a website today because you're you're working on top of decades of centralized so children yeah whereas we haven't had the same level deep level of engineering o..."

"bunch of libraries that we're out there or the library has made a whole bunch of assumptions about reality that like we're we're broken right like um I mean very famously like I a lot of people just i..."

"beginning it was like this large-scale plan of going to do build a whole bunch of different things all around distributed peer-to-peer systems all of odd centralization and with the business model of ..."

"terrible for a bunch of other set of use cases and introduced a whole bunch of brittleness to to the infrastructure right and so this this whole like said about exploring the set of ideas that had bee..."

"promising it was like the moment where everyone was getting connected to the Internet you can now build like huge large-scale infrastructure and so on and it just kind of you know again like there was..."

"probably third or fourth where third was there was no digital currency so you couldn't actually pay people correctly like you had abroad have trusted you you have the beginnings of kripacharya like mo..."

"make that much sense like it's interesting to think about you know computing and normal computing problems this way because a lot of people always get hung up on on how things scale but when you actua..."

"massively so just the tools are better - something about the hardware infrastructure of yeah like bandwidth plus CPU computing change like just that you have numbers the actual raw numbers that people..."

"you're just putting a lot more data through it yeah um and then with is just not improving as fast and so eventually we're going to get to a point where it might actually be cheaper to ship around stu..."

"I could rent out my CPUs like there's three things it was bandwidth CPU you earn mojo from each of those things this rate so if you think about people like there were a few people are rounded of time ..."

"and so when people think about peer-to-peer and what was working really well with peer-to-peer networks at the time it was mostly pretty simple period appear structures that you know that definitely t..."

"their output right and like you have a way to verify that all the computation with them correctly and you call this concept let's try to use the same thought experiment there was in there's infinite d..."

"financial instrument extremely cheaply and with you know almost free verification of correct proceeding of this financial instrument which is not normally a consumer need ok well let's take another li..."

"you just look at so before getting all of the the excitement around centralization just think about Bitcoin as a way to incentivize people to add a bunch of hardware to a network there's been nothing ..."

"idea of you saying saying create a very strong financial incentive for people to do something around the planet and you then couple it with building some other kind of resource sharing Network somethi..."

"important motivator is also the fact that like data is completely centralizing the whole bunch of providers and we get a lot of businesses and and people highly concerned about this that we want to di..."

"but it doesn't make sense to try and like box it in to say like hey there's one thing that the entire industry is trying to do like in fact when it's like completely different than the entire inch it'..."

"thing than than than the early peer-to-peer time the fact that that ipfs platform happened to relate a lot to the early period of pure goals is a side effect the majority of the watching world does no..."

"this is sort of an aside but I read I read YC applications for all this stuff and I I'm trying to understand what the best use what do you wear do smart contracts help you it's a founder this is a lit..."

"and start writing a something that behaves like equity or something that is derivative or you know all of these kinds of financial instruments that would take you a ton of time to kind of think about ..."

"that like there's in the beginning so there's like you can you see a ton of assets being creator in ethereum that have a bunch of different kinds of properties but they're they're fundamental like the..."

"the kinds of things to start seeing and there's a big bottleneck right now which is that you know the fundamental innovation is one around so that let me rephrase this because it only gets characteris..."

"about giving your data to everyone nobody really cares about trust nobody really cares about just like running these kinds of transactions everyone has you know some easy way to to use a mobile app ev..."

"another case not so well but I think what can be said about the whole space is like we're seeing projects emerging that are about building large-scale infrastructure that might take years to build out..."

"and so you have to go and figure all that before historically it wasn't the government that funded all this stuff that's right so so one of the and this is you know part of why and building collapse w..."

"amazing generality of something like tcp/ip like part part of what's beautiful about tcp/ip a DNS like that whole era of protocols was that people worked super hard for months and years at a time to t..."

"but like the closest equivalent to that are things like open AI or Google brain and all that where like there's absolutely no practical use of that stuff but man there's a lot of money in grant resear..."

"both went through major major funding issues right if Elon hadn't been they're finally wealthy both projects would have probably failed yet and and here you know you that is a clear example of somethi..."

"and the lab is a great example like I part of the reason that I started Burke lab is to try and recreate kind of the spirit of of the labs in in an organization at least focused around around networks..."

"but I think something a bit different I want to draw an analogy between what happened at the labs in Google brain so Bell Labs was about constructing massive cost reductions for Bell so the reason tha..."

"front and so the the funding that Bell could feed into funding tens to hundreds of researchers thinking about all these problem the specific problem on it on a ten year time horizon to try and get tha..."

"researchers to to achieve these kinds of innovations and so that unfortunately like the model of why Bell Labs the question is around why the labs ultimately failed and fell apart have to do more with..."

"happening in the West started to drain a lot of people out of the labs and out of Boston and so this you know known as it's like brain drain and part of that what what happened there was not only were..."

"gross revenue 1 billion so in 1 minute yeah I wanted to have million so yeah I was like yeah all right so I was like tours minded off so exceda something like 10 to 100 that's a lot better that it's a..."

"know very cut they're still kind of far away and I think it'll take you know much more not only capital but also like reach of that organization to be able to like undertake some of these larger scale..."

"you get a lot of people thinking about problems you you have a lot of people talking about problems and discuss not only talking about potential solutions but trying them out and so on and so the peop..."

"allows people to remain very close to the the actual protocol layer and to think deeply about the protocol itself and his concerns without having to think about a product or a service on top so this i..."

"and you know they kind of ten years old now almost right so it's sort in 2008 doesn't that look like yeah and so like you know it's roughly ten years old and yeah I mean I think I think maybe you coul..."

"that point like you the valuation of something like material gets yes as high as something like Google and Apple and so on and who knows maybe it's maybe it is worth that but I don't think it's quite ..."

"because it's really hard to lose money there's a very big you know kind of honeymoon period right now yeah a ton of people are have just finally understood the massive value that can be generated by t..."

"that a whole bunch of important things are getting built and you can if you find them you can fund them and you can be part of them and can help create them and create massive massive value and the pe..."

"alike so we're making mixing so many we're basically so many different topics which is awesome by the way I rarely get to get to get this deep into into a lot of conversation a lot it I just I don't m..."

"we've had a whole bunch of like detours right like we've had you know we ended up building this whole platform called coin lists so you can you can go in and and have token sales and so on because lik..."

"when people first saw it has solves a whole bunch of important problems and we had for a brief period of like you know a month and a half something akin to like a Bell Labs feel of like four or five p..."

"very specific problem in in this like an economics problem it's the it's also an AI problem it's the credit assignment problem which is that if you have a set of agents that are participating in a set..."

"mean how can we just like propagate reward back so that you know all of those people now no longer have to like worry about like other data I think you know like really just focus on this thing but ca..."

"intervention whatsoever it's a purely algorithmic answer I think it's fine to feed in human intervention along the way you know there's interesting research done on large companies and governments whe..."

"quickly learn that they can just like give each other really hydrating into that will have the translate really big boosts and promotions and so on or like you know greater rewards you have to get som..."

"do at first pass approximation if we can do that turn that in turn algorithm then I claim we could fix a whole bunch of cap tables around the world that like really screwed up and you can fix a whole ..."

"job and this job is mediated by you know kind of like a whole bunch of external forces and it prevents a ton of people from allocating their work to what they think is actually most fundamentally valu..."

"way to allocate worth would anyone accept it like essentially the tricky part is not the technical challenge it's getting people to ever believe a computer is fair or ever like what if the algorithm s..."

"long time it's taken in over 50 years this is like the first plans to do this up here but now we have computers that write better than humans and pretty soon they're going to start getting deployed an..."

"necessarily generate or create a lot of value right there's a very big difference between capital and value that is not correctly on like the value of a dollar today does not equate to like just raw f..."

"small scale I think that we were beginning to see a few experiments in the direction I see things like whether theorem was able to do with its own resources and in being able to like just give a lot o..."

"completely you know super high risk unclear that was going to work out and so on and they've seen returns that are higher than most startups like higher than than what their distribution would have be..."

"running some experiments right because you don't want every project to end up at some weird local maximum we're like okay companies are using this now value will accrue to me I can jump to the next th..."

"this is a long term thing I think this is this is like a the kind of research project that protocol apps could fund that is one of those long term innovation things and we actually don't think we need..."

"to do it like we're going to create this whole path or network and I will generate a ton of value and and a whole bunch of people like the miners in the park network they're going to get a ton of a to..."

"it's like it should not be undervalued like that's I it's extremely difficult to find communities where not only is that valued by everyone around but it's also greatly rewarded right and like that th..."

"of like a wrecking ball in that a ton of a ton of I know a lot of researchers that encrypts on game theory and so on that understood the crypto world and then either got a bunch of Bitcoin or ether an..."

"things like that like how do we build vertical ABS an organization that can do deep research a bunch of different directions with a bunch of collaborators around the planet in a bunch of different org..."

"helping project creators highlight their technical strengths and their you know the the create the value they propose in ways that like let them shine against other projects that could probably spend ..."

"will certainly be able to do that because there's some thousand legal questions there that we need to solve and additionally we want to involve crowdfunding as well we think that it's very important t..."

"looking at crowdfunding we're also looking at other ways of potentially involving people that you know for whatever reason they can't directly invest in the presale but maybe we're perhaps they can th..."

"here and like how much I don't even know how much service this has but it has a lot and I use a lot of a lot of data by having applications that you know download video or whatever or you know when yo..."

"storage offerings in a sense and the thing here is there's a certain set of features that fat one will bring that other things don't have so being able to have decentralized data means that you know i..."

"right and like that on its own is like an interesting interesting reason for people to opt in to something like five coin and and so yeah I think about it kind of like an algorithmic market say instea..."

"provider so there's actually a possibility where SIA and storage make sense as you know route route content to them because if those networks provide kind of like a tiered structure okay we'll see wha..."

"intractable in others ok cool that's a good answer next question Erik Tang asks where do you see is the most immediate industry slash text stack slash use case for being decentralized so what are the ..."

"that you could have a room full of people with laptops open on flack or on a Google Doc and they can't work together because they're super computers which I again like let's be clear here like these c..."

"contract allows you to cut out trust and power all over the place and have a very clear thing that people agree to that is enforced by a computer not by courts that are slow and expensive and I think ..."

"person in the world who says oh I have a clearer idea of how I can get cheap power cheap connectivity cheap storage cheap disk whatever and enabling them to bring in and create a service right and so ..."

"then a major player would have and you know they don't have enough power that they could service everyone in the world but they could you know at least contribute that piece and if you if you collect ..."

"so numr is a a hedge fund run with that kind of decentralizes the the data modeling so the predictive power of the models is a centralized so like individual participants can come in and contribute di..."