The People and their Protocols
(This was written in a fit of inspiration after I met the IPFS team in the Caribbean. I don’t want to edit it as it captures where my head was at a couple of months ago.)
Three years ago I was drowning in credit card debt and living in a hacker house in San Francisco. There were twenty other guys stuffed into a couple of rooms full of bunk beds. Everyone who lived there was chasing the startup dream—I was living the startup nightmare. I had just gone through a painful cofounder divorce after spending every dollar I didn’t have to get our self-funded cashflow business to profitability. The gritty reality of failing my cofounder—a person I would have taken a bullet for—and the scale of my debt, were weighing down on me.
I had access to enough credit to stay in America as a tourist for another three months so I decided to stay in San Francisco to meet people and learn things. My hope was that I would stumble across something interesting. Every morning I ran through the city and listened to dozens of podcasts on a huge array of topics. Several of the Bitcoin podcasts I was listening to started mentioning something called Ethereum. They described it as a global distributed computer that was inspired by the underlying technology powering Bitcoin. It sounded fascinating, but I had no idea how something like that could work.
In my spare time I was taking a couple of online courses in design and logo work. I had mocked up an idea for a blockchain icon as part of my Skillshare homework which I then shared on Reddit.
One evening I was at a Bitcoin meetup in the South Bay where I saw Bill Tai—the kitesurfing venture capitalist I had been following on Twitter for years. After the meetup, I asked him if any of his portfolio companies were doing interesting things that I could help out with. He told me I should look into what the Ethereum team were doing.
The following week, the hacker house I was living in organised a talk from the CTO of the Ethereum foundation, Gavin Wood. He spoke about the goals of the project and how they wanted to build a blockchain supercomputer which could run programs that couldn’t be stopped. Everyone in the room was fascinated by his talk. I asked Gavin whether there was anything I could do to help as a designer. He said there was.
When I returned to England, I started working on several concepts for browsers, app stores and monitoring tools built on top of Ethereum.
These mockups were used to pitch Ethereum at meetups and to investors. Around this time, the vision for the project started to expand rapidly from a programmable blockchain to an entire rethink of how the internet works. I had only been designing software for a few months and I felt that I probably wasn’t the best person to help redesign the internet.
With bills mounting, I decided to take on freelance work for an agency in Brighton who took a chance on me. I spent less time on Ethereum and focussed my energy on working as part of a team making great iPhone apps. The Ethereum team told me that my work would be rewarded with Ether at some point in the future. I never thought anything of it. Although I didn’t know it then, I had worked for a protocol.
Freedom
At the end of 2015, Ethan Wilding, a member of the Ethereum Project, reached out to me on Twitter.
After some back and forth with Ethan and Vitalik, the creator of Ethereum, I received my Ether.
Then this happened:
A month of work for the protocol has completely changed my life. I am free to travel the world and work on whatever I want. It is hard to overstate the mental freedom afforded by having a cash buffer and not having to work all the time to make ends meet. It has had a profound effect on my mental health and freed me up to do the best work of my life. The people who built this protocol took a chance on me and I am incredibly grateful.
The Exceptional Norm
When the Ether sale was complete, thousands of people had invested in the protocol with their capital and hundreds more had contributed their time.
The first two weeks of the ether sale are over, and we have to date received over 25000 BTC from selling over 50 million ETH.
A total of 6670 transactions have been made, with values ranging from the minimum 0.01 BTC to a high of 500 BTC
Vitalik and his team gave birth to a protocol that over 7,000 people committed to. They effectively held an IPO for their protocol at the start of the project. Since then, thousands more have got involved by trading Ether, writing code, and helping the protocol to flourish.
App Coins
Bitcoin is not just a protocol or money, it’s a new business model for Open Source Software. Prior to Bitcoin, you had to raise money, write software, distribute your product, build a business model, and work towards liquidity. Angels, VCs, salespeople and bankers guided you the entire way, through a maze of tolls and controls.
Naval Ravikant saw this coming months before the Ether sale. The coins that protocols distribute to contributors are like shares in a company. The key difference is that these shares are not locked up by startup founders and venture capitalists.
There are a thousand nightmarish stories about startup employees not being able to afford to exercise their stock options and missing out on millions of dollars. Alex MacCaw and I wrote about this problem in 2013 after seeing many of our friends go through the stressful process of trying to borrow money to buy the stock they had earnt.
The current stock option system is totally broken. It forces people to stay at companies longer than they want to in the hope that a liquidity event is just around the corner.
Crypto-Liquidity
App Coins are totally different from stock options. I was paid for my month’s work and I was rewarded for my belief in the protocol at an early stage. There was no cliff, no vesting schedule, no liquidation preferences, no VC ratchets, no exercise window, just coins. I helped the Ethereum team when they had no money and they rewarded me for that.
The moment I decided to move on to a freelance job, I was free to do so. I didn’t have to stick around in the hope that I would make some huge pile of money in the future.
This model is going to completely change the war for talent. If you’re a smart engineer, you can go and join a rocketship startup and work crazy hours. Alternatively, you can head over to Thailand, live cheaply, and work for App Coins.
Everyone Can Help
The teams that are good at building protocols are experts in networking, cryptography, peer-to-peer transfers, security, and low-level engineering. They are made up of distributed collections of hackers, anarchists, freedom fighters, archivists and engineers. The way they live and work often reflects the protocols they are designing. Distributed teams building distributed protocols.
What I have noticed recently is that the skills that make them so good at protocol design also make them terrible at product design. If you ask them to talk about Merkle trees, they sound like Jedi from the future. If you ask them to talk about a user interface, they sound like an energetic young designer who has just fired up Sketch.
Protocol creators need your help.
They need people to write clear documentation, teachers to help people learn, designers to work on the user interfaces, customer support staff to handle the swelling inboxes, investors to raise capital, and a whole range of other talent to help them build a successful protocol. It doesn’t matter if you don’t write code—you can still contribute.
Millions of Protocols
Bitcoin, Ethereum and Ripple are the first protocols to cross billion-dollar market caps. There are thousands of different App Coins being sold and so many new ones coming down the pipeline. Protocols will follow the startup power law: millions will be started and only a few hundred will change the world forever.
Billions of Protocolers
Every day, thousands of people get out of bed and start working on a protocol.
The miners tend to their machines.
Andreas Antonopoulos spreads the gospel.
Engineers write code and push it to GitHub.
In the future, billions of people will be working for a protocol. They will define themselves by the protocols they work for and how much they can contribute.
Coinification
Imagine waking up in a home you found through RentalCoin. You turn on the lights and the power is allocated by SolarCoin. When you go for breakfast you are eating food that was priced correctly by FoodCoin. When the autonomous car arrives at your home it is running on MoveCoin. You get to your favourite coworking space and start answering calls for the InsureCoin protocol. Every second you work, you are paid in a mix of SalaryCoin, SavingsCoin and PensionCoin, which are all designed to help you stay financially free so you can do whatever you want. When you have worked enough, you head to the doctor for your regular checkup and pay in HealthCoin. Once you get home you see that a package has been delivered by MailCoin which you purchased on a website build on top of the ShopCoin protocol.
AirCoin
As a thought experiment, imagine if Airbnb started issuing an AirCoin that represented 1 share of stock in its company. When you host guests, you can choose to be paid in dollars, AirCoin, or a mix of both. The second that you receive some AirCoin, you have an incentive to see Airbnb the company succeed. You start signing up your friends and helping them learn about how to be a great host. Every guest you host is another opportunity to help the network grow and improve. If Airbnb becomes a trillion-dollar company in 30 years, your AirCoins would be worth around 30x what they are today.
Protocolism
There is something wrong with the world. Eight men hold half the world’s wealth. Capitalism is failing the majority for the dreams of the minority. Everyone is drowning in debt and people are getting angry.
Protocolism might be the solution we need. It harnesses human ingenuity and distributes the benefits far and wide. It can help us build an economy for the 99%.
When a startup succeeds, a handful of people get insanely wealthy. When a protocol succeeds, thousands of people profit. In the future, the great protocols could lift millions of people out of poverty.
Unstoppable Flywheel
When Satoshi Nakomoto mined the genesis block, it set the protocol flywheel in motion. The blockchain concept and Bitcoin protocol have completely changed the way people think about money. It has become an unstoppable force which sucks in talent and capital to create value.
Governments are not sure what to do about protocols. They cannot stop them, but they can slow them down. We need regulators to help us build the bridge between the real world and the world of protocols.
Our plan
Ben, Christian and I have been building a menubar app for your money called Balance. Now that we have support for USD, we are working on support for every App Coin available through all of the exchanges and wallets out there.
We want to build a company that makes products for protocols. We want to build the best interfaces for people to interact with this underlying technology.
We just launched Balance Open, a free, open source wallet that has support for crypto-currencies.
