Apr 19, 2019 · 53m · a16z
Five Open Problems for the Blockchain Computer
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In this episode of a16z crypto, partner Ali Yahya explores why top software engineers are migrating to Web3 and breaks down the five critical open computer science problems—scaling compute, storage, networking, identity, and governance—required to build a decentralized world computer.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 4.9 Guest teaching 3.5 Guest disagreement 0.9 The host pushing back 1.0
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 5:37 Correcting host's throughput metric framing
The guest politely rejects the host's focus on transactions per second, explaining that for a general-purpose decentralized computer, instructions per second is the proper framing.
Hardest push from the host ▶ 28:55 Challenging value proposition of decentralized storageThe host explicitly pushes back on why crypto storage protocols would succeed where earlier p2p hard-drive sharing startups using fiat failed to achieve adoption.
Biggest teaching moment ▶ 2:26 Defining decentralization as human control rather than geographyThe guest corrects a fundamental misconception about decentralization, clarifying that it refers strictly to removing single-entity human control rather than geographic distribution.
The host holds their own ▶ 33:16 Citing 2006 Fon router mesh precedentThe host demonstrates strong historical tech knowledge by citing Fon's 2006 Wi-Fi router sharing model as a direct historical precedent for decentralized network bandwidth incentives.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Why Engineers Are Moving to Crypto | 3 | 4 | 1 | 1 | The host sets up the paradigm shift question using personal Google ecosystem examples. The guest educates the host by distinguishing decentralization of human control from geographic computing distribution. | |
| Open Problem #1: Scaling Decentralized Computing | 5 | 5 | 2 | 2 | The guest gently rejects the host's transactions-per-second metric framing, redirecting toward instructions per second and latency. The host contributes informed real-world analogies such as credit card chip-and-pin delays, smart contracts for Airbnb locks, and proof-of-work electricity consumption. | |
| Open Problem #2: Scaling Decentralized Storage | 5 | 4 | 1 | 2 | The host challenges the guest on why blockchain storage protocols will succeed where past hard-drive sharing startups failed. The guest clarifies that decentralization incurs a performance tax and that trust, rather than raw storage cost, is the true value proposition. | |
| Open Problem #3: Scaling Decentralized Networks | 6 | 3 | 1 | 1 | The host displays clear historical tech expertise by bringing up Fon's 2006 decentralized Wi-Fi router monetization model. The guest agrees and outlines modern mesh networking protocols and layer-zero network acceleration. | |
| What Are the Killer Apps? | 5 | 3 | 0 | 0 | The discussion turns to application layers where open-source composability fuels combinatorial innovation. The host extends the guest's gaming asset idea by comparing World of Warcraft character grinding to the ultimate proof of work. | |
| Open Problem #4: Trusted Identities and Reputation | 5 | 4 | 1 | 1 | The guest explains the dynamic between Web2 social capital and Web3 financial incentive trust structures. The host grounds the theory by referencing trust brokers like LinkedIn and Facebook Marketplace friend-of-friend networks, as well as iterated prisoner's dilemma dynamics. | |
| Open Problem #5: Establishing Trusted Governance | 4 | 4 | 1 | 1 | The host contrasts unilateral Big Tech terms of service changes with decentralized protocol governance. The guest walks through off-chain node coordination versus on-chain token voting and highlights voter bribe vulnerabilities. | |
| Conclusion and Call to Action | 6 | 1 | 0 | 0 | The host synthesizes the episode by comparing the current crypto landscape to Bell Labs in the 1950s, personal computing in the 1970s, and Mosaic at UIUC in the 1990s. |
Statements from this episode (16)
Yahya: New computing paradigms initially underperform but succeed via novel capabilities
“And so I think with every successive wave of computation that we've seen throughout the history of computing. Normally, the new paradigm tends to suck at first and tends to be pretty bad at most things that the old paradigm is very good at. But it happens to s…”
Yahya: Crypto decentralization means removing human control, not geographic distribution
“When people talk about decentralization in the world of crypto, they mean decentralization of human control. Not decentralization of, ah, computing in a geographic sense. It's not decentralization in any other way that you may think. Like, the key thing about …”
Yahya: Measure blockchain scalability in instructions per second, not transactions
“So the right metric is not really transactions per second. It's really instructions per second. How many instructions of some computation can you process in any given period of time?”
Yahya: Ethereum ecosystem has the richest developer activity in crypto
“I think some of the things that we are seeing already in the world of Ethereum, kind of the Ethereum ecosystem is maybe the richest so far in terms of actual developer activity on top.”
Yahya: Decentralized systems will always be costlier and slower than centralized
“Decentralized systems will always be more expensive and less performant than centralized ones. There's just an inherent trade off there, and there's an inherent cost to decentralizing a computer system. And so it won't, Replace everything. There will be applic…”
Yahya: Proof of stake can theoretically match proof of work security
“Now the cost of actually participating in consensus and making the entire network work in real terms comes down dramatically. And it's just as secure, or at least theoretically can be made just as secure. And that's a controversial statement, but I will sort o…”
Yahya: Blockchains as general computers is a five-year-old paradigm
“Even if it's been 10 years since the publishing of the Bitcoin white paper, this is still very, very early days, because I think that it's only been recent, it's only recently that, that people have begun to conceive of blockchains as computers, as opposed to …”
Yahya: Decentralized storage will not drastically cut costs for most uses
“So the reason that we need decentralized storage networks is not because they're going to reduce the price of storage by orders of magnitude. At least for most kinds of files and for most use cases, I don't believe that that'll be the case.”
Yahya: Decentralizing crypto networking is one of Web3's hardest problems
“It's very early because this is actually probably one of the hardest problems in the space to tackle. Like, how do you decentralize even the networking layer, the communication between different nodes, and to not have it depend On centralized internet infrastr…”
Yahya: Web3 innovation will accelerate faster than previous computing waves
“The kind of innovation that we're likely to see is, is just, It's combinatorial in nature, and likely more explosive, and will accelerate more quickly than it has in previous, for previous waves of computing and previous waves of technology.”
Yahya: Early successful Ethereum applications are primarily financial tools
“And a bunch of the applications that have worked so far in the Ethereum ecosystem primarily have been financial in nature, have been things that build on top of that initial idea. So things like lending platforms, derivatives, exchanges, things that depend on …”
Yahya: CryptoKitties introduced true digital ownership for the first time
“CryptoKitties is one where, where people became very invested in owning this digital collectible which is, this is something that is fundamentally new. Never before would you be able to directly own something that's digital. This is the first time that that's …”
Yahya: Crypto trust relies on financial incentives, not social capital
“Crypto today has no sense of identity. That people are pseudonymous. People can create multiple addresses and pretend to be different people. People can abandon identities that, that maybe have a bad reputation and move over to new identities that don't. And t…”
Yahya: On-chain identity turns crypto interactions into iterated prisoner's dilemmas
“Whereas if you had identity and if you had reputation, you could turn all of those one-off prisoner dilemma style games into iterated prisoner dilemma style games, which are far easier to solve. You have like the long view of relationships. You can have a trac…”
Yahya: Decentralized networks cannot succeed long-term without protocol governance
“And if it is going to be a complex system that adapts and evolves over time, this question most certainly has to be answered in order for any of this to work.”
Yahya: Crypto will not solve fundamental governance problems, only find workarounds
“These problems have become replicated in crypto as well, and they are, therefore, like, fundamentally difficult problems that have been unsolved for millennia. So, so it's not as if crypto will solve any of that. It'll just have to figure out the right mechani…”