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Aaron Levie
@levie
Firstly I think this analogy works against the point. Netflix moved away from effectively a “decentralized” model (fulfillment centers, slow product innovation) to a “centralized” model of cloud-based streaming where they could own the whole UX.
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Balaji
@balajis
In 2000, Netflix mailed DVDs. They knew streaming was the future. But they also knew bandwidth was limited. In 2022, many web3 entities are partially centralized. They know decentralization is the future. But blockspace is limited. Need Nielsen's Law for blockspace.
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Aaron Levie
@levie
Secondly, if you’re a founder and think you’re Reed Hastings, maybe you can pull off a transition like this. But otherwise, building for one product architecture knowing you’re going to swap it out for something entirely different is quite a high wire act.
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Balaji
@balajis
Replying to
@levie
Binance already did it with BNB. Significant volume moves on Binance Smart Chain. And DEXes already did this to CEXes. Uniswap, dy/dx, all do significant volume. The latter point is most apposite: the decentralization transition is at the ecosystem level, not any one company.
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Aaron Levie
@levie
Replying to
@balajis
Yes for very simple universal data like money and trading I think this works, and the yield is there to be worth it. For most apps I don’t think you could get there alive 🤷‍♂️.
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Balaji
@balajis
Replying to
@levie
🙂 Well, if you spot us money and trading, that's not just every fiat currency via stablecoins and CBDCs, but also NASDAQ, NYSE, CME, all stock exchanges, all derivatives, much of the Bloomberg Terminal, and much of Wall Street... ...but I think it may be even bigger than that.
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Aaron Levie
@levie
Replying to
@balajis
I’ve never argued against DeFi as I’m not close to that market, so I’m indifferent and the market can decide the use cases there 👍. I’m only close to “general” software innovation we’ve come to expect from the web, that can’t be delivered in a decentralized fashion at scale 😀.
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Aaron Levie
@levie
Replying to
@balajis
Yes and the point is the “value of the data” is extremely high in finance because the data is literally money, and so decentralization can both be afforded and may be warranted to speed up regulation. I think we’re extrapolating too far to general consumer apps. 🙏❤️
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