The Exchanges

Q Okay, but let me challenge there, Eric, for a second, because network effects are very powerful. Usually in a network effect There is one winner because you can't beat the net, you just can't beat a network effect. So you think there will be multiple winners in crypto. You don't think that the network effect on Ethereum is going to just kill kind of a Bitcoin network?

A No, I don't think so. Uh, I think Bitcoin is a great way to hold value. So it's almost like, uh, it's almost, it's almost like, uh, what gold is in the real world, right? Uh, it has digital scarcity. It has the biggest network and that network provides a lot of security. Um, so, so people who are using Bitcoin today to hold value will continue to use that. Uh, and Ethereum is for a completely different purpose. Ethereum is really for a smart contract platform where people are building, uh, building these other applications on top of it. In fact, Lifepeer is built on top of Ethereum. Uh, we use the Ethereum platform to launch our token so that, um, so that people can hold our token and not have to worry about, um, How secure the Livepeer blockchain is because we use, we kind of leverage the security of the Ethereum blockchain.

AI assessment note: “No, I don't think so. Uh, I think Bitcoin is a great way to hold value.”

Q a journalist, and I'm leaving NPR, and I love blockchain, and I'm going to build a live peer competitor, because I just got back from Syria, and I tried to do live streaming, and it was Horrible. So I, I got really passionate. What incentivizes them? Like, why would they create a competitor to you versus just getting involved on your chain and getting your tokens and getting behind Livepeer?

A Yeah. So, so the, the whole, the whole idea of the blockchain is that, um, the participants are actually the stakeholders, right? So, uh, in a traditional application, if you use, uh, something like Facebook live, you know, you are used, you are a user of Facebook live, but, uh, but that's it, right? Um, as, as much as Facebook live grows, you're not going to be benefited by that from, uh, from, uh, from your holding standpoint, right? But in decentralized world, Uh, if you are a participant in Livepeer, you actually learn, earn Livepeer tokens, right? And as the Livepeer network grows, your token becomes more valuable. So as early, as early participants, you are, you are more incentivized to, number one, evangelize the platform. Number two, provide all kinds of different values to the platform to help it grow, because it actually helps your holding to grow as well.

AI assessment note: “if you are a participant in Livepeer, you actually learn, earn Livepeer tokens”

Q I mean, ultimately, like, again, let's say I put in that million bucks now and I make all these fake miners, but they doesn't actually get any real traction. If I go, even if I get a higher value, if I go to try and sell those tokens, basically there's not gonna be any buyers because no one else is using it. Is that what makes the system stay honest?

A Yeah, that, and also if you're spending up a bunch of miners, you're actually providing a lot of computation resources To the, to the network. So for, for a network that works, that has the right incentives in place, um, the network will leverage the access capacity that you provide to the network to, uh, to provide services for people who actually need to use the network, right? So in our, in our case, if you spun up a bunch of miners, all of a sudden we have a large capacity in terms of the amount of transcoding and live streaming work that we can do, and that provides a much cheaper price For people to want to do live streaming, which means a lot more people who want to do live stream will come onto our platform and that you're, you're essentially just providing a value for the platform. In fact, um, a lot of investors will probably want to do this.

AI assessment note: “Yeah, that, and also if you're spending up a bunch of miners”

Q Yep, interesting. Okay, this is a more capitalistic question here for a second. Um, so I understand your answer where that NPR journalist who left is incentivized to just use your platform, because they basically, the more they use it, the more they become an owner, right? They actually become part of the thing, right? Um, Why would someone create a direct competitor, or would they ever?

A Um, that's an interesting question. I think, uh, people will create, uh, competitors if they had a very specific, um, specific belief that's different from what we offer, right? Like a different feature. Yeah, yeah, different, it could be a completely different feature set. Um, but it's hard, it's hard to, um, so, so for example, the difference between Bitcoin and Ethereum, right? You can say that they're competitors because they both support kind of like the money transfer feature. But, um, If you can also say Ethereum is completely not competitive with Bitcoin because Ethereum offers, uh, these, this like smart contract features that, that the Bitcoin use case is not, um, it is not focused on. Right. So, so, and as these networks start to grow, it's very hard to compete with them because of the network effect. Right. So now there is essentially like, so all the code is open source. Anyone can start a new Bitcoin blockchain at any time they want. Um, the reason they will not, um, they will not be successful is because the Bitcoin blockchain now is so big that there are so many miners on the network that there is essentially no incentive for them to switch to a much smaller, newer network.

AI assessment note: “people will create, uh, competitors if they had a very specific, um, specific belief”

Q Are those like AWS, like versions of AWS that are crypto based?

A Um, they're, they're not as much AWS as, um, they're just providing very basic features. Like, um, they're able to, uh, you're able to have an identity, but you're not able to do like super, uh, high, uh, high intensity computation or anything like that. Like that. Um, and I would say they were more like, um, like a front end application. If you think of, um, there are a lot of applications that are built strictly in JavaScript, right? So there is no, there is no backend. Um, so, so if you think of that and, and add, um, add the blockchain to that so that they can, they can communicate over the blockchain, that'll be the type of project that we're thinking, that we're, that we're thinking about. So, so, so with life here, right? Um, if you are, if you are, uh, Creating a decentralized application, and you want to add video streaming to the application, there is right now really no solution to do that, because all the video streaming solutions are centralized solutions, and we are kind of, we're kind of the only solution for you. So imagine if you wanted to build a decentralized application to enable decentralized journalism, right, so say like in the conflict zone, The first thing that gets cut off is, is kind of like, um, these, like, centralized services, but if you're able to build a matched network, similar to, um, um, you know, the, the pro, the protests that happened in H…

AI assessment note: “they're not as much AWS as, um, they're just providing very basic features.”

Q So couldn't I cheat the system by putting in a million bucks and spinning up a ton of computers, right? That, that are basically, they're like fake miners, right? For live beer. And I artificially grow my value.

A Uh, you could, but you will be, I think you will be spending, uh, you will be spending that money away. Um, and I'm sure people are, some people are doing this, right? Some people are kind of like pumping the, pumping the tokens and selling them. Um, and, and, and, but I think eventually over time, so for example, if a, if a big investor come on board, we could ask them to hold their token for a certain amount of time before selling them. Um, it's, you know, the companies do this on IPO level, right? When you, when you go IPO, um, Big investors come on board. They are, um, a lot of them are required to hold a stock for a certain amount of time.

AI assessment note: “you could, but you will be, I think you will be spending that money”