- Dalton Caldwell and Juan Bonet discuss their work at Protocol Labs, a YC company focused on projects like IPFS and Filecoin.
- Protocol Labs aims to improve and upgrade software and protocols on the internet, particularly in terms of how information is distributed and power is balanced.
- IPFS (Interplanetary File System) is a peer-to-peer protocol for moving any kind of content in a distributed way, using content addressing and cryptographic verification.
- Filecoin is a project born out of IPFS that incentivizes the distribution of content by creating a currency to mediate the market for storage.
- Filecoin also introduces a proof-of-work function that requires participants to store files in order to have power in the consensus.

- Filecoin consensus relies on the amount of storage provided rather than CPU power
- Proofs of storage, specifically proof of replication, are used to verify content storage
- Filecoin incentivizes mining and allows for the sale of storage on the network
- The founder discusses the timeline and initial idea behind the company
- Usability is a key factor in the success of distributed systems
- Peer-to-peer technology has potential but has faced challenges in usability and engineering
- The IPFS project aimed to create reusable tools for peer-to-peer applications
- The founder applied to YC with plans to build IPFS, Filecoin, and Protocol Labs
- The company's business model involves taking a portion of currency from decentralized systems

- The speaker discusses the problem of datasets and versioning, leading to an exploration of how information moves on the internet.
- They mention the previous wave of peer-to-peer technology, including Mojo Nation, and how it had promising ideas but faced challenges.
- The decline of peer-to-peer technology was influenced by factors such as copyright infringement, the rise of the cloud, lack of digital currency, and hardware limitations.
- The current wave of peer-to-peer technology is different due to advancements in tools, hardware infrastructure, and the availability of smart contracts.
- The speaker emphasizes the importance of use cases and the potential of Ethereum's trustless computing capabilities.
- The closest analog to the consumer demand for free music during the Napster era is not discussed.

- The peer-to-peer wave in blockchain technology is not driven by consumer use.
- Blockchain tech was initially being built in New York and Europe, ahead of Silicon Valley.
- Bitcoin and Ethereum allow for the creation of financial instruments cheaply and with free verification.
- Filecoin aims to utilize unused storage and incentivize people with financial rewards.
- The blockchain industry is not focused on a single goal, but rather solving various problems.
- Smart contracts, like Filecoin, can be seen as a way to create clear rules and verify transactions.
- Blockchain technology has the potential to revolutionize the financial world and reduce legal costs.

- Companies can benefit from using blockchain technology to simplify and streamline transactions, reducing costs and legal complexities.
- Ethereum allows for the creation of various financial instruments and contracts, such as insurance policies, with minimal coding.
- The current barrier to widespread consumer adoption of blockchain applications is the lack of user-friendly interfaces and experiences.
- The ICO craze drew attention to the potential of blockchain technology, but the underlying foundational work has been happening for the past two years.
- Venture capital is not suited for long-term investment in high-risk, foundational technology, creating a funding gap for large-scale infrastructure projects.
- Building something as free, open, and successful as the internet today would be difficult due to a lack of funding and potential centralization.

- The development of protocols like TCPIP and DNS required significant time, effort, and funding to create something abstract yet functional.
- Venture capital funds typically focus on clear application use cases and may not support this type of foundational research.
- Projects like OpenAI and Google Brain receive funding despite having no immediate practical use.
- The lack of funding for foundational research has created a gap in innovation.
- Bell Labs serves as an example of an organization that was able to innovate over decades with deep investment and a focus on cost reductions.
- Bell Labs ultimately failed due to factors like the break-up of the Bell monopoly and the brain drain to Silicon Valley.
- The budget for Bell Labs was significant, reaching billions of dollars in today's terms, highlighting the need for substantial funding for foundational research.
- Google Brain is seen as a modern example of an organization focused on cost reduction and innovation through deep investment in machine learning advancements.

- The speaker discusses the potential for new and cheaper innovations, which can result in financial gain.
- They compare Google Brain and X to Bell Labs, stating that they focus on shorter-term valuable projects.
- The speaker believes that more capital and reach are needed for larger scale fundamental research.
- They highlight the similarities between the internet and Bell Labs in terms of open-ended collaboration and problem-solving.
- Funding long-term endeavors on the internet can be achieved through protocols like Bitcoin and Ethereum.
- The speaker emphasizes the importance of the value created by these projects and the potential for significant returns.
- They caution against investing too heavily in cryptocurrencies and advise diligence in understanding the underlying value being created.
- The speaker discusses the differences between investing in startups and basic research, noting the importance of team and vision.

- Dalton Caldwell and Juan Bonet discuss their work at Protocol Labs, a YC company focused on projects like IPFS and Filecoin.
- Protocol Labs aims to improve and upgrade software and protocols on the internet, particularly in terms of how information is distributed and power is balanced.
- IPFS is a peer-to-peer protocol for moving content in a distributed way, using content addressing and cryptographic verification.
- Filecoin incentivizes the distribution of content by creating a currency to mediate the market for storage.
- Filecoin introduces a proof-of-work function that requires participants to store files in order to have power in the consensus.
- Filecoin consensus relies on the amount of storage provided rather than CPU power.
- Filecoin incentivizes mining and allows for the sale of storage on the network.
- Usability is a key factor in the success of distributed systems.
- The IPFS project aimed to create reusable tools for peer-to-peer applications.
- The decline of peer-to-peer technology was influenced by factors such as copyright infringement, the rise of the cloud, lack of digital currency, and hardware limitations.
- The current wave of peer-to-peer technology is different due to advancements in tools, hardware infrastructure, and the availability of smart contracts.
- The blockchain industry is focused on solving various problems and has the potential to revolutionize the financial world and reduce legal costs.
- The current barrier to widespread consumer adoption of blockchain applications is the lack of user-friendly interfaces and experiences.
- Venture capital is not suited for long-term investment in high-risk, foundational technology, creating a funding gap for large-scale infrastructure projects.
- Funding long-term endeavors on the internet can be achieved through protocols like Bitcoin and Ethereum.
- The speaker emphasizes the importance of the value created by these projects and the potential for significant returns.

- The speaker discusses how Bitcoin and Ethereum are different from Bell Labs but still showcase innovation and exchange of ideas.
- Filecoin is a specific service and business with a shorter-term perspective, while IPFS is a large-scale infrastructure project.
- The speaker mentions the detour of building CoinList, a platform for compliant token sales, which will be valuable for the ecosystem and Protocol Labs.
- The protocol for Filecoin has been rethought and upgraded to solve important problems.
- The speaker highlights the credit assignment problem in open source projects and the need to reward contributors.
- Solving this problem could change how open source projects are built and allow people to focus on their work without needing a day job.
- The speaker proposes using a fair and accurate way to propagate rewards back to contributors.
- The idea of slicing a cake fairly is suggested as a possible solution, but the speaker questions whether it can be gameable.
- Human intervention may be necessary in the process, such as peer reviews and manager reviews.

- The author discusses the importance of feedback in large companies and governments, but emphasizes the need to prevent gaming of the system.
- They propose the idea of using algorithms to make fair and unbiased decisions in areas such as grant funding and open source projects.
- The author suggests that this could lead to a new economic model that challenges traditional notions of worth and value.
- They acknowledge the challenge of getting people to trust and accept algorithms as fair, but believe that it is possible with provable algorithms.
- The author criticizes the current system for allowing capital to accumulate and centralize, and calls for a fairer distribution of value.
- They see potential in experiments like Ethereum's distribution of Ether, and believe that finding a solution to this problem could lead to a rewiring of how we value and allocate resources.

- The speaker believes that Ethereum's model of distributing value through Ether is a step in the right direction.
- They acknowledge that wealth distribution in crypto is currently concentrated among early adopters and want to fix this problem.
- The speaker suggests the possibility of issuing tokens to contributors and sharing the value created by Protocol Labs with them.
- They emphasize the importance of careful consideration and research in implementing these ideas.
- The speaker wants to reward early contributors to the IPFS project and divert some of the return from Filecoin to open source work.
- They express caution about mixing money and open source, but believe Ethereum's model is a good example to build upon.
- The ultimate goal is to create a system where people can be rewarded across company lines for their contributions to decentralized networks.

- The speaker believes that many talented individuals who work at companies like Google could contribute to projects through open source, but are currently restricted due to conflicts of interest.
- The speaker mentions that cryptocurrency networks, like Ethereum and Bitcoin, can better reward individuals who have made significant contributions to the field of knowledge work.
- The speaker discusses the development of Protocol Labs as an organization that can conduct deep research with collaborators from different organizations and ensure fair rewards for successful collaborations.
- The speaker addresses a question about Filecoin's data storage network being disaster-proof, mentioning the use of IPFS and erasure coding to ensure data resilience.
- The speaker mentions that details about the Filecoin sale will be released soon and discusses the plans for CoinList, a token sale platform created by Protocol Labs.
- The speaker emphasizes the importance of CoinList in finding high-quality projects and solving the problem of filtering out scams and noise in the cryptocurrency space.

- CoinList is working on helping project creators showcase their technical strengths and value against projects with more marketing but less technical depth.
- Accredited investors are a major part of CoinList, but not all sales will be limited to accredited investors.
- CoinList is exploring options for crowdfunding and involving people who cannot directly invest in presales.
- Filecoin aims to address the growing need for storage as data generation increases exponentially.
- Filecoin is not a replacement for Dropbox, but rather a replacement for cloud storage providers like AWS.
- Filecoin offers decentralized data storage and market dynamics that enable anyone to sell their storage and make a profit.
- Filecoin plans to compete with companies like SIA and Storage by leveraging its user base from the IPFS project.

- The speaker discusses the release of a new protocol that offers different guarantees and solves different market needs than other networks.
- They anticipate that people may mine on multiple networks and that tokens and rewards will drive people to mine on specific networks.
- The ability to cross-list storage depends on the protocol, and some things will be cross-accessible while others won't.
- The speaker explains the concept of proof of replication and how it prevents fake storage and ensures uniqueness.
- IPFS can mitigate DDoS attacks by retrieving content from different sources and making it difficult for attackers to target specific machines.
- The speaker mentions private IPFS networks as a way to protect content and prevent DOS attacks.
- Decentralization is valuable in cases where centralized agents can be brought down, such as with Slack or Google Docs.
- The speaker emphasizes the importance of infrastructure and data flow in determining the advantages of decentralization.
- Ethereum's smart contracts allow for the elimination of trust and power in transactions, providing advantages over centralized systems.
- Decentralization can optimize the process of providing cheap storage and content distribution to the world.

- The speaker discusses the differences between Bitcoin, Ethereum, and Bell Labs in terms of innovation and exchange of ideas.
- Filecoin is a shorter-term business while IPFS is a large-scale infrastructure project.
- The speaker highlights the credit assignment problem in open source projects and proposes using fair and accurate ways to reward contributors.
- They suggest using algorithms to make fair decisions in areas like grant funding and open source projects.
- The speaker criticizes the current system for allowing capital to accumulate and centralize and calls for a fairer distribution of value.
- They believe that Ethereum's model of distributing value through Ether is a step in the right direction.
- The speaker suggests issuing tokens to contributors and sharing the value created by Protocol Labs with them.
- The ultimate goal is to create a system where people can be rewarded for their contributions to decentralized networks across company lines.
- Filecoin aims to address the need for storage by offering decentralized data storage and market dynamics.
- The speaker discusses the release of a new protocol for Filecoin that offers different guarantees and solves different market needs.
- They explain the concept of proof of replication and how it prevents fake storage and ensures uniqueness.
- IPFS can mitigate DDoS attacks and protect content through private networks.
- Decentralization is valuable in cases where centralized agents can be brought down.
- Ethereum's smart contracts eliminate trust and power in transactions, providing advantages over centralized systems.

- Decentralization has advantages over centralized services in terms of optimization and cost reduction.
- Markets allow individual actors to leverage optimizations that may not be optimal for others.
- Decentralization of power and choice affects the kind of optimizations people may want to do.
- Projects to pay attention to include Ethereum, OpenBazaar, Zcash, 0x, LivePeer, Tezos, and Numerai.
- Research on proof of stake is also worth following.

- Decentralization offers advantages in terms of optimization and cost reduction compared to centralized services.
- Markets allow individuals to pursue optimizations that may not benefit others.
- Decentralization of power and choice influences the types of optimizations people may desire.
- Projects such as Ethereum, OpenBazaar, Zcash, 0x, LivePeer, Tezos, and Numerai are worth paying attention to.
- Research on proof of stake is also recommended.

Juan Benet is the founder of Protocol Labs (YC S14). They’re working on IPFS, Filecoin, and CoinList - https://twitter.com/juanbenet

Dalton Caldwell is a Partner at YC - https://twitter.com/daltonc

Read the transcript: http://blog.ycombinator.com/ipfs-coinlist-and-the-filecoin-ico-with-juan-benet-and-dalton-caldwell/

YC's podcast is hosted by Craig Cannon - http://twitter.com/craigcannon

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 at YC, and Juan Bonet, who's the founder of Protocol Labs, a YC company that's working on IPFS, Filecoin, and CoinList.

If you're just getting into cryptocurrency, I highly recommend listening to episode 244 of Tim Ferriss' podcast, which does a pretty good job of covering all the terms and explaining how they all connect to each other.

And before we get started, I want to let you know that this is a really long episode, so it's pretty much broken up into 3 parts.

Part 1 starts right after this, and it's Juan's explanation of IPFS and Filecoin.

Part 2 is our conversation with Dalton, and that starts around minute 11.

And part 3 is Juan answering questions from Twitter, and that starts around 1 hour and 40 minutes in.

Let's just start with a description of all the

So protocol labs is a research, development, and deployment lab for networks that I started to really build the IPFS project and build Filecoin and create a place where we could create the kinds of projects that could turn into something like IPFS or Filecoin or other things.

I really wanted to build an organization that someone like Satoshi could have seen as a way to build a project through.

It'd be like, oh yeah, instead of doing this on my own anonymously, I could go and build my own protocol apps.

And it was born out of a personal frustration where when I was starting the IPFS project, I didn't have such an organization that I could go to and go and build a project there.

Really I think the only option was either university or Google, and in the university case it would have been killed in the publisher perish world where like, hey, this is way too ambitious, focus on this 1 little thing and maybe publish that and move on to the next thing.

And it would have not been an implementation project, similar to how the web could have never really been built as a grassrooting project.

And then the flip side, I think this kind of tech is stuff that Google might be interested in funding from the perspective of Google funds a lot of protocols and funds a lot of research, but it also kind of runs counter to basic Google positions around control of data and how information flows and all that kind of stuff.

And it's like indirect opposition, so it's stuff that probably shouldn't have been funded or in direct control by Google.

And it's the kind of stuff that has the potential to really rebalance power on the internet.

And so I figured I would start an organization separate.

And so Protocol Apps is really a group that is trying to create a number of these projects and protocols around things that we think are broken on the internet.

The charge that we have for ourselves, the mission that we have is to go and improve and upgrade a whole bunch of the software and protocol machinery that we have running the internet, both in low-level actual internet part, or the web and more user-facing pieces.

And we have a very open-ended kind of perspective of like, hey, we just want to improve computing in general and improve the pipeline of going from research to a product that people use.

It just happens that for now and for the next few years, we're super focused on how information moves around the internet, how to distribute it better, how to change and rebalance power associated with information, give people sovereignty of data, and just make the internet more efficient, make it route around things like attacker and hostile censorship, make it so that information has more permanence, a whole bunch of questions around this.

And the 2 projects there are, 1 of them is IPFS, the Interplanetary File System.

It's used by a ton of organizations, and both businesses and projects, and blockchain networks, and governments, and so on.

And it's used in a whole bunch of cases around, you know, I think a short way to describe it, if that's the saying, hey, it's a large scale content addressed content distribution thing.

And, you know, like the, it's a protocol, it's a peer to peer protocol for moving around anything, any kind of content, files, data, hypermedia, whatever, in a peer-to-peer way.

And with proper content addressing and cryptographic verification and all this kind of stuff, and a whole bunch of tooling around the guts of making all of that work, which is peer-to-peer networks and the ability to work across a whole bunch of different transports.

And there's no end to the really important pieces of the peer-to-peer machinery that you have to build that the IPFS project was really about.

And that's used by a ton of people both in the blockchain space and outside.

And it's used in the blockchain space because it fits really well with the model of you have authenticated data structures and you have hashes and you address things that way.

And it's used outside because people want to distribute things in a better way.

People want to address things by what they are, not where they are.

Like it's really time, it's kind of like it's time for the internet to move from location addressing to content addressing and in a big way we've been appointed to do so and we have to slog through the really hard work that is doing that and we're doing it and it's great and we're succeeding but there's more to go, There's a lot more to go.

What's the current status of making it all human readable?

Because I knew that was an issue early on.

So yeah, so human readable names are an interesting question.

Human readable names should map to content and people should use them when they know and are aware that that name is now subject to a consensus protocol.

In a way, human readable names either require a consensus protocol that is global scale and makes everyone agree on what the value of a name is.

Or their relative, meaning like, I think there's like a GNS, which is like the new naming system, which is relative on like a trust graph.

So, you know, And it kind of maps more to how humans think about names, where I might call a friend Jeremy, and I know him as Jeremy, but he actually might have a last name as well, and he might have other names that he goes by on the internet, and other people call other people Jeremy.

And so GNS is an interesting, or the approach of using trust graphs and so on or social networks to name people is a really interesting and good 1, but it doesn't give you URIs or names that you can print on a billboard that a ton of people can look at and enter into their computer Which is the whole point of human readable naming?

And so, you know, you really are stuck with consensus And so when you're stuck with consensus, you either have something hierarchical like DNS and so on or you have something like blockchain naming, so like Namecoin or ENS or Blockstack.

And you have a situation where human readable naming is important for people to type, but I think we have this massive addiction to human readable naming where it shouldn't be used in a lot of places because it brings in a whole bunch of baggage around, hey, now you need a consensus system, now you need a network stack, now you need a whole bunch of things that normally you shouldn't need to just address or point to some information.

And so, we still want hashes to be the main thing that people use to link to things.

Just maybe allow human readability as an entry point to all of that.

Do you want me to describe Filecoin first or do you want to dive deeper?

So then, the Filecoin project was born out of IPFS as a way to incentivize the distribution of content in the IPFS network.

And that's where You think about the problem of storing bytes of data in the world, and you have a situation where there's a lot of people with disks, and there's a lot of people with data, and it's effectively a market where people want to buy storage, and some people want to provide storage and provide a valuable service.

And so in the old peer-to-peer tradition, people would just do resource sharing and kind of try and hope to achieve a right balance.

It's been shown that that works for some use cases but doesn't work for others.

And what was really missing there was an understanding that this is actually a spectrum where on 1 end, some people contribute massive amounts of storage and don't really need to use the network very much.

And on the other end, you have people that are contributing or asking for massive amounts of storage to store all their data and don't plan to contribute any storage.

And so this is basic, like, hey, introduce a currency, and then now you've mediated this market.

And so that's what Filecoin is about, is creating a currency that can mediate this market.

Now, there's a whole second aspect to it, which is you can look at a network like Bitcoin as an entity that managed to get tons of people around the planet to amass massive amounts of computing power to maintain the Bitcoin blockchain, all of the Bitcoin mining that's going on, and can you create a different proof of work function that maintains a blockchain that instead of just trying to crunch through hashes and find the low target, that also causes a valuable side effect.

And that valuable side effect is, hey, you have to store a whole bunch of files in order to have power in the consensus.

And so a way of framing it is that the Filecoin consensus, if you want to participate in the Filecoin consensus and maintain the Filecoin blockchain, what's counted is not your CPU raw power as your influence over the consensus, but rather the amount of storage you are providing to the rest of the network.

And so for that, we use proofs of storage and specifically a new kind of proof we came up with, we I guess discovered, which we call a proof of replication.

And so that checks and verifies that content has been correctly and independently stored, you know, independently in like, you know, doesn't mean like different physical hardware, but rather it means that a different array of bytes somewhere is being used to sort of this and you can't deduplicate that.

And that you can't cheat it in that, like you can't generate, like you can't pre-generate a lot of the content and cheat.

Like there's a whole, that's like a very specific problem.

But the thing there is, Filecoin with this different work function can organize massive amounts of storage to then sell in the network.

So you get a lot of people to mine the currency, and you have a very strong incentive to mine the currency, and then you can sell all that storage, that supply that comes on to users.

And so that's a, you know, mediate this, it's a blockchain-powered decentralized storage network is the way that we can think about it.

So my first question is, maybe start with a timeline of you as a founder, what your initial idea was, why you started the company, and just how we got here.

And so it was probably 2013, late 2013 or so, I've been working on a whole bunch of knowledge tools.

So this means software tools that can help you learn faster or help scientists figure out what's in papers and so on better.

And I found this really annoying problem which is data sets, like scientific data sets were not well versioned, were not well managed and so on.

And There's a whole bunch to that problem, but it struck me as this hugely lacking thing that computer scientists have Git and we have versioning, and we also have BitTorrent and we know how to move around large content volumes of data very efficiently in a peer-to-peer way.

And so what really seemed to be missing was this sort of combination of Git and BitTorrent that would enable these datasets to be distributed worldwide, well-versioned, and so on.

And so that sent me on a path of reengaging 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 distributed systems and networking.

And so at the time I had been looking into things like wireless networks and wide peer-to-peer networks like Skype works and so on.

And it always struck me that that was a very untapped area of potential.

It just seemed, I think the potential there was vastly underutilized.

A lot of the problems with usability, I don't know if you know my whole background, but my first company, iMeme, that I started was a peer-to-peer.

And so a lot of these ideas keep recycling every few years.

And 1 thing that we noticed is how hard it was for users to get the negative side effects of having something that is peer-to-peer.

BitTorrent worked pretty well, but even Skype, Skype kept it really, you didn't know there was peer-to-peer.

And unless your upstream bandwidth was saturating and you got a nasty letter from your ISP or something, you had no knowledge as a user.

And So sort of my takeaway during that era was that usability always trumped the elegance of peer-to-peer models.

And then when I saw YouTube take off, YouTube is exactly the sort of thing you would expect to be built on top of BitTorrent, but in fact, it was entirely centralized and they were streaming everything themselves.

But holy cow, because it worked so well and Flash video worked so well, the culmination of those events happened.

And so my kind of knowledge going into this, even going back to your story in a second, is usability to me is such an important concept to have these distributed systems get used by end users?

Guy Podjarny Absolutely, without a question.

And I mean, very, I think, famously, I think, Drew Housen has even pointed out how there were a whole bunch of clunky, sync, file sharing sync things that really just did not work.

And the big thrust of Dropbox for a while was just get usability right, get the user experience flawless.

It almost doesn't matter what you do underneath the hood as long as you make sure the UX is great.

Yeah, because I'm sure back in the day everyone was like, well we have our sync, that's good enough.

Right, but then there's this other fundamental difference which is that yes, absolutely, building these systems is hard and you have to pay attention to the UX, but there's a whole bunch of places where economically it makes a ton of sense to do something better and to do something that has a different arrangement.

I think there was a period of time basically from 2003 to 2009 or so where peer-to-peer was sort of dead.

And I sort of call this the peer-to-peer winter, similar to the AI winter.

There's been a series of AI winters, that was kind of like the peer-to-peer winter.

And there probably were more peer-to-peer winters before, because peer-to-peer is actually a pretty old concept.

A lot of people have been struggling with the differences between making things peer-to-peer or centralized since the beginning of the Internet.

So I think there's a whole bunch of reasons why a lot of the companies failed that were getting built around that time, or products failed, and why there were very few success stories.

So I think Skype and BitTorrent were probably the biggest success stories from that entire time.

And yeah, I think Skype didn't really talk about peer-to-peer very much and BitTorrent, aside from Blizzard and a few others, it was mostly used for moving around a lot of movies.

And so I think that said though, it doesn't, like the actual CS behind it, like the actual engineering reasons for choosing to do something peer-to-peer make a ton of sense.

This actually connects very well with Protocol Labs as a company because the key thing is to understand deeply what the benefits of using some technology are, what are the underlying – from a research and theory perspective, what is the theoretical difference between doing 1 thing 1 way or another, between centralized models or decentralized models, between doing things peer-to-peer or doing things in a hierarchical, well-structured way.

And those different properties can give you a different range of opportunities.

Now, peer-to-peer is a lot harder to build with because you don't have a lot of control.

When you build centralized things, it's a lot easier for people to get going.

It's a lot easier for, you know, lots of established ways of doing things and so on.

I mean we can enumerate all these but like it's easy to roll out a website.

And I would argue that it's easy to roll out a website today because you're working on top of decades of centralized engineering, whereas we haven't had the same level, deep level of engineering on the peer-to-peer side.

So the majority of groups that end up going into peer-to-peer end up having to create a lot of stuff from scratch because it either hadn't been done or had been done in a way that wasn't reusable.

And this was actually 1 of the big thrusts of the IPFS project in general.

It was create a huge toolkit that people can use to build applications in peer-to-peer land without having to reinvent everything from scratch.

It was like this really huge frustration for us.

It's 2013, 14 at the time, and we have to go back and rewrite tons of normal peer-to-peer stuff that could have been written 10 years before, mostly because the language and tooling had changed.

We couldn't reuse a whole bunch of the libraries that were out there.

Or the libraries made a whole bunch of assumptions about reality that were broken.

I mean, very famously, A lot of people, just from the engineering perspective, things like assuming that you are going to be working on top of TCP and that the port that you have is a TCP port and that it's not a UDP port or whatever, or even that you don't have some other transport, right away can make a library completely unusable for a project, like years down the road.

Like what was the thing you applied to YC with?

I applied to YC with with the plan of doing You know this of building both IPFS and Filecoin and a company called Protocol Apps I mean it was right away from the beginning it was like this large-scale plan of going to build a whole bunch of different things all around distributing peer-to-peer systems, all about decentralization, and with a business model of taking a portion of currency.

And this was in 2014 when this was a very new thing, people weren't doing this.

There was basically Ethereum and a couple other groups that had also gotten to the same conclusion.

And I mean, aside from a few side projects that we've started and so on, and basically like delaying our timelines in terms of software taking a lot longer to build than expected, we've pretty much followed the plan in that from the beginning we had both IPFS and Filecoin.

And I guess connecting to what I was saying earlier, So I had this problem around datasets and versioning and so on.

And that led down the rabbit hole of really thinking through how information moves in the network, how information moves on the internet in the first place.

How does addressing, How do we do addressing in general?

It turns out with HTTP and so on, we do all this location addressing stuff that works very well for a certain kind of use cases, but absolutely terrible for a bunch of other set of use cases, and introduce a whole bunch of brittleness to the infrastructure.

And so this whole set of exploring the set of ideas that had been well-trodden by lots of groups before me and before the current wave of peer-to-peer.

And it had a lot of the primitives in there, right?

Like I ran a node and I had storage space on my PC and like I had fast internet.

So I was not familiar with Mojo until I chatted with Zuko about it, and it turns out Mojo pioneered all this.

I completely drank the Kool-Aid, and this was in 1999?

You had the beginning of, you know, Kinemily had just been, the first major large-scale DHT had been deployed.

You had a bunch of people building peer-to-peer networks like Kazaa, which then turned into Skype and a whole bunch of other things.

It was the moment where everyone was getting connected to the internet.

You could now build huge, large-scale infrastructures and so on.

And it just kind of, again, there was this peer-to-peer winter.

There's a whole bunch of reasons why that happened.

And people could sit around debating, but I think it had to do with the fact that the first primary use case that people were using Peer2Peer for was copyright infringement.

And that being not a viable strategy for a lot of companies.

Another thing was it was right around the same time of the rise of the normal cloud.

So Google and other companies were investing very deeply into building large-scale distributed systems.

And they were building hierarchical structures, And they ended up funding a ton of work down the road in a bunch of labs.

So a lot of the labs that were doing peer-to-peer research switched entirely to doing cloud infrastructure research.

And so, that's another avenue, it's another point.

And then I think probably third or fourth, where third was there was no digital currency.

So you couldn't actually pay people correctly.

You had the beginnings of cryptocurrency.

So you had the beginnings of digital currencies, but they were still very unproven and still, I think, relied on significant trust in a bunch of places.

So you didn't have the same level of trustlessness that you have with something like Bitcoin.

And I think the properties were not quite there yet with digital currencies.

I think another 1 was just the hardware around that people had did not warrant a peer-to-peer structure yet.

Meaning It made sense for a number of use cases, but a different set of use cases didn't make that much sense.

It's interesting to think about computing and normal computing problems this way, because a lot of people always get hung up on how things scale.

But when you actually think about the total magnitude of data in a problem, sometimes you realize, oh yeah, just throw that into 1 server, and you have 1 server, and maybe you replicate that to you have 5 servers that are all full copies of the index, and you're done.

You don't have to build a very complicated distributed system to deal with this, because your total amount of data is way smaller than the latest disks, right?

So let's think about this, just to put this in context.

In a lot of ways, history is repeating itself.

I've heard Marc Andreessen say this before, that Webvan, he'll keep funding ideas that didn't work over and over again because eventually they'll work.

So Instacart and Webvan So it seems like a lot of these ideas are well known to researchers and computer scientists We're trying them again, and there's a bunch of things that are different and you listed a few of them But to enumerate them so I understand it's just the tools are better.

So just the tools are better to something about the hardware infrastructure of like bandwidth plus CPU.

Computing changed, like just the numbers, the actual raw numbers that people have, either just in disks.

Yeah, well it's not just Moore's Law because you have to account, so you have accelerating returns in computing, in storage, and so on, not so much in bandwidth.

So an interesting point to compare is realizing that storage is decreasing in cost super rapidly, whereas bandwidth is not.

And bandwidth, it always feels like the internet is really slow because we continue building larger and larger applications and larger media, but then we can't get to the moving it around as much as...

So there's this trade-off between storage and bandwidth where storage is significantly...

It's getting cheaper at a really rapid rate, whereas bandwidth is not.

And because of that, what you end up with is the feeling that constantly you're saturating your pipe, and that constantly the internet is slow, and so on, but you're just putting a lot more data through it.

And bandwidth 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 stuff to consumers.

I mean, like already if you look at how large companies move data, they do not send it over the internet.

They send it over packages or move it around physically in some other way.

If you do data center to data centers transfer, you have

a direct fiber line and it's not actually on the internet.

So if you have fiber, yeah, if you have like some really fast, you know, uplink or, you know, some really fast link, not really an uplink because you're in the core, some really fast link between 2 data centers, then yeah.

But like for example, if you're a company and you're trying to put a ton of data into Amazon, Amazon will say, hey, just ship us a hard drive and we'll put it on for you.

So there's packet switching and then there's also package switching.

Like I was trying to, I did the enumeration.

Am I forgetting any other major factor about why this time, like, we're running the same play again, but this time it's going to work?

I think that when you think about what the projects are trying to do and what they're building and what applications people are going for.

So I think maybe Mojo was 1 exception in that they were really far ahead thinking about cryptocurrency and resource sharing and all this kind of stuff.

Yeah, because remember it was hard drive space.

Again, as a user, it was like, I could rent out my hard drive space, I could rent out my CPU side.

It was bandwidth, CPU, you earn mojo from each of those things.

So if you think about people like, There were a few people around at the time, especially like the Cypherpunks mailing list, like you can go back and read a bunch of ideas that have just become reality in the last few years.

There were definitely a lot of people already thinking about the things that we're doing now, but nowhere close to doing them.

And so there's 1 big difference between this wave and the last wave is that being able to access a range of applications that were kind of dreams and ideas back then but were kind of far away makes this wave actually quite different in goals.

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IPFS, CoinList, and the Filecoin ICO with Juan Benet and Dalton Caldwell