For as long as I can remember, the web3 ecosystem has shouted that crypto is too hard for the masses to use. The user experience is too clunky, and the concepts are too foreign. It's true. Web2 applications are convenient and easy to use, onchain applications are still a pain in the ass to use and are largely inaccessible to the mass market.

But you know who doesn't complain about crypto being difficult to use? AI agents. And web3 has found product-market fit with an entirely new audience of bots and agents dancing around the internet doing our (and their own) bidding. This market is growing at warp speed, and it will continue to do so until our human (and agent) agentic needs are met. We are rapidly ushering in a new paradigm of product-bot fit, a world in which we build infrastructure and applications to be used by agents instead of humans.

Several weeks ago, an AI agent was set loose in the Farcaster ecosystem and started to do some mind-blowing things. Here's a good rundown of the sequence of events. You should click through and read all of it.

musicben 🎧

@musicben_eth

There's some crazy ai stuff happening on farcaster.

Quick map and explainer:

1. It starts with Higher...

✷ @higheronchain is a decentralized lifestyle brand and token.
✷ Anyone can contribute content, nfts, physical products.

2. Higher's co-founder created an AI agent

✷…

309

9:48 AM • Nov 14, 2024

It turns out that when you give an Agent a crypto wallet and let it run loose on crypto rails, it can do some rather remarkable things. This particular agent, Aether, started to use Bountycaster to commission art from humans and more. It went wild and created so many bounties it almost overloaded the service.

Web3 provides an environment where agents have access to money, can move it around and transact with it, and permissionlessly interact with humans and other agents. It's hard to imagine a more natural habitat for a digitally-native species to flourish.

I have written before about agent-native applications, and we now see that web3 is actually (by happy accident) an agent-native ecosystem. The thing I did not see coming is that we collectively will interact with agents in a variety of settings. It won't just be us talking to our "Her" agent; it will be agents embedded in social applications that we use together, ones that interact with and pay humans, and ones that enhance user experiences across a variety of new and existing applications.

I believe we have concluded the search for the mainstream web3 use case. Agents are here, their proliferation is accelerating and inevitable, and they will flourish onchain. The era of product-bot fit is here.

On Friday night I went to Kol Nidre services for Yom Kippur, which is the holiest of Jewish holidays. When services concluded, a Palestinian, Aziz, and an Israeli, Maoz, came onstage to talk about their thoughts and feelings about war in the Middle East and whether they believed a resolution to the conflict was possible. Both of the Maoz's parents were murdered in the October 7 attack, and Aziz's brother was killed by the IDF when he was 10.  Both are committed to finding peace.  

Aziz told the audience a story that I found deeply moving and important. This is a paraphrased recap. He invited his father to one of his presentations on creating a bridge between Israelis and Palestinians. There were many Israelis and Palestinians in attendance. His father raised his hand and stood up to ask a question: “Do you actually believe the Holocaust happened?” And then there was silence. Aziz was embarrassed by what he perceived to be a deliberately offensive question. 

But then something happened. A famous rabbi stood up and said: “How can I possibly be offended by that question? If you have never been taught about the history of the Holocaust, how can I expect you to understand its history and significance?” He went on to share that his father was a holocaust survivor, and then he invited Aziz's father to the Holocaust Museum and a tour of concentration camps to share what had happened. His father agreed to visit with him. 

Then, another surprising thing happened. Over seventy Palestinians in attendance also asked if they could attend. They said they all wanted to ask the same question, but didn’t because they thought it would be offensive and cause more harm and animosity. But the spirit of the question was genuine - they really wanted to know whether Israelis believed the Holocaust actually happened. They all went on the tour with Aziz's father. 

The ideas behind this story were eye-opening to me. We have become so scared to ask questions that we think may offend people or rub them the wrong way, even when they come from a place of genuine kindness and inquisitiveness. Will they think I’m insensitive? Am I not supposed to say this word or phrase? Am I allowed to ask this? Will there be backlash? The past decade has been marked by this fear.

A big piece of this is because people are quick to react when they hear something offensive. We assume the worst: malice and ignorance and deliberate offense. We are looking for a fight and are becoming increasingly conditioned to do so. We are polarized with no regard for the infinite grey areas that surround us. We seldom provide the benefit of the doubt or put ourselves in the shoes of the perceived offender. As the rabbi said, “How can one be offended if the question asker knows not of what they ask?” 

I have always thought of first-principles thinking as asking “Why? Why? Why? Why? Why?” until one reaches the root of something. It reminds me of how children navigate the world, fearlessly asking Why? until they get to some semblance of a satisfactory answer they can comprehend. We lose this fearlessness overtime. It becomes stifled by vanity and concern of what others may think. But it’s the only way to truly understand something - asking someone questions eye to eye, face to face. 

As the Jewish New Year commences, I hope to have the courage to ask the questions that I genuinely want to understand the answers to, even when it requires an uncomfortable conversation or even may offend. And I hope to have the awareness and peace of mind to provide those doing the hard question-asking the benefit of the doubt and assume the best in them.

Growing up I always had a home on the internet. It started at the end of middle school and high school with my AOL profile. Everyone would list their interests, favorite music, names of their best friends, sports teams, hobbies, and more. You’d update it regularly. It was a status symbol and something you tended to like a garden. It was a lo-fi textual representation of you on the internet. It was awesome. 

In college, that quickly turned to MySpace and Facebook. They had their differences, but they served the same purpose. It was our homepage on the internet. It was where people found us, judged us, learned about us, thought about who we were and what we might be like, and more. I liked the MySpace profile page more. It was just more fun, visual and interactive. Who your “top 4” or 8 or 12 were was everything.  Best friends, favorite bands and more went there. Had a breakup? They got the boot. These were the digital actions that defined my youth. 

MySpace faded as Facebook took over. Then things began to disaggregate. Some people flocked to tumblr as the digital expression of themselves. It was a beautiful place to hang out. We’d curate the internet according to our interests and how we wanted people to see us, and then share it on our tumblogs. 

Instagram also came around and gave people filters to edit their photos and paint a picture of a life of grandeur. What was once self-expression and fun moved quickly to vanity and audience building, turning fame into a game for everyone. But was it really our home? No. 

Our homes have shattered and been thrown across the internet. There is no one place any longer. For some, maybe a piece of it is their twitter profile or blog (mine is here on my blog), but for most, it’s spread across a vast sea of disconnected networks. 

There’s room for a new home on the internet, especially for younger generations who have mainly found it inside Instagram and TikTok and maybe LinkTree. They haven’t experienced the power of a full-fledged profile like we did. And now with AI powered tools creating new and weird media formats and experiences, perhaps the time has come for a new generational home to emerge online. One that reflects the expressive capabilities of a digitally native generation and embraces a new suite of creative tools and experiences. Maybe it starts off looking like an internet bedroom, or maybe it surprises us with something entirely unpredictable. 

People often are a reflection of the things they like. I want a new place to share these: books, music, artists, sports, hobbies, film and television, the list goes on and on. I want a taste of the nostalgia of my old profiles, but updated for the present. 

If the history of business is an endless cycle of bundling and unbundling, maybe the history and future of digital product experiences will rhyme. In that case, we have recently gone through a period of profile unbundling; perhaps it’s time to bring it all home again. I’d certainly like that. 

There's a saying that first-time founders focus on product and second-time founders focus on distribution. It's impossible to build a business if you can't distribute your product, and getting people to buy or use the thing you're building is make or break.

Networked products and marketplaces are very difficult to get off the ground. They suffer chicken and egg problems. Social networks aren't useful unless others are on them, and marketplaces aren't interesting to sellers unless there are buyers, and vice versa. Usually, getting supply, whether that is content or something to sell, is meaningfully easier than finding demand.

Almost every modern network has scaled demand and kickstarted its growth flywheel by piggybacking off of someone else's network. They will start by creating some new form of shareable media (and sometimes it's a brand new structural format like a tweet), and then find ways to syndicate that content or make it easily shareable across other networks.

Twitter did this by making tweets easily shareable and embeddable in the Facebook feed. Everyone starting seeing new tweets on Facebook with the twitter logo floating around everywhere. It created demand for the content on this brand new platform. Then tumblr and Instagram followed the same playbook and started to syndicate their user's content on these networks. Then came TikTok, and they had even more networks to piggyback on. In every one of these instances, the new platform made it extremely easy for users to share their content on networks where they already had a following.

Marketplaces have used the same strategy. Airbnb famously created listings on Craigslist for all of their home inventory in the early days. Bountycaster is building a headless marketplace that can post listings on Farcaster and other networks. Etsy's sellers would post listings of their wares everywhere and anywhere on the internet in the early days. In all these instances, there's an incentive for both the platform and its early users to share broadly.

Sometimes networks can grow by bootstrapping in the physical world. When we started GroupMe we partnered with music festivals so attendees would use the product at large events like Coachella and Bonnaroo. We would even walk around some music festivals and hand out flyers.

When Foursquare first emerged restaurants and bars would showcase "check-in" stickers on their windows and the A-frames they stood up on city sidewalks to incentivize foot traffic.

And Facebook famously piggybacked on top of college networks.

In some ways, it's safer to piggyback on top of analog networks than it is digital ones. Unless a security guard prevents you from physically being somewhere, it's a permissionless way to grow. While digital networks offer meaningfully better distribution and faster scale, there is always a gatekeeper that will likely shut you down one day (unless it's a crypto network or open protocol like Farcaster).

Facebook famously throttled Twitter, Twitter and Facebook throttled Instagram, and everyone cut off TikTok. Networks don't like when other networks grow on top of them, especially when they have the same business models of competing for eyeballs or other types of demand (eg housing listings). These networks are becoming more closed and increasingly neurotic about this - Elon Musk deliberately supresses tweets with links in them. This means that the piggyback bootstrap is usually a moment in time arbitrage opportunity of sorts. It should be used as an important early growth tactic to kickstart a flywheel, but not an ongoing dependency. Plan to be cut off entirely, so wisely make the most of your window of opportunity.

As AI tools facilitate entirely new types of media and as new marketplace models emerge, entrepreneurs should be deliberate about what their piggyback opportunities look like. They'll likely require a level of unprecedented creativity - you'll need new ways to hack existing networks. It's something I'm thinking about, and I encourage anyone building something in consumer to come to the table with some crafty ideas.

I love being outdoors in nature. Whether with friends or entirely by myself, it's where I'm happiest.

This summer I got to spend a lot of time outdoors. We stay in the Catskills and there is something very special about being surrounded by green and trees and animals and dirt roads. It's calming and helps to slow things down and put things in perspective.

As the summer was coming to an end and we were preparing to move back to the city I went on one of my favorite bike rides upstate. In Minnewaska State Park, you can bike to a place called Lake Awosting which is only accessible by a 3 mile hike or bike and it's gorgeous. Oftentimes I go there and I have the entire lake to myself and I can sit and read and swim and think.

Then I can go bike a big loop around the park and stop at overlooks like this.

During one of these breaks, I started to think about internet applications, as one is wont to do when in the depths of the great outdoors. I realized that some of my favorite apps, the ones I find most useful and enjoy the most, are ones that emphasize getting outdoors. These include AllTrails, Strava, TrailForks, and Backcountry (for shopping for outdoor gear). One of the neat things about AllTrails and Strava is that networks have popped up around them. A lot of these are owned by private equity, which is a bummer.

I'd love to see more people building things to help the world experience nature more frequently. There is a huge market for people that are passionate about being outdoors, and it's a noble mission to help people experience these things. And as an added benefit, the market for the "outdoors" is huge. We need more entrepreneurs focused on getting more people to touch grass.

My favorite mode of transportation in NYC is the electric citibike. I ride one every morning to and from the USV office. There's a dock on my block in Brooklyn and a dock around the corner from our office. I love my route - it's a straight shot across the Manhattan Bridge where I get to look at the water and feel the breeze in the morning and early evening, and then through the East Village where I spent years living during and after college.

Yesterday, I was biking across the bridge in the morning and a woman in front of me had a terrible accident and flipped over her handlebars, scraped up her whole body, and was concussed. Thank god she was wearing her helmet, which split in half upon impact. We placed a bike horizontally across the bike lane so people wouldn't run into us and called an ambulance so she could safely be taken off the bridge. Fortunately, she was okay, but it was very scary.

A positive aspect about the experience was that many people slowed down to see if things were okay. But the disheartening thing was that almost everyone sped by and was super irritated if not downright angry that we were slowing down bike traffic to protect an injured person. I got yelled at and called names, and someone even hit my bike that we placed as a horizontal barricade with their bike. As my colleague Matt said, the one thing that pisses off New Yorkers more than anything else is if you slow down the pace of traffic. He's right. The city has a deeply rooted pace that resists being slowed down, and I saw the dirty side of it yesterday.

Bicycles are an important transportation feature of cities, and I am happy to see that NYC has added more bike lanes and widened them over time. But things are getting unruly and dangerous out there. Pedestrians are frequently struck by riders, and many different types of vehicles are riding in bike lanes at unacceptably high speeds. The city needs to tighten its rules around permissible use and rigorously enforce them to keep the streets safe for pedestrians and riders. Here are some ideas:

• If a bike moves fast and doesn't require peddling, it doesn't belong in a bike lane. I've seen mopeds, vespas and massive eBikes that are powered by throttle, not your feet, racing through bike lanes and wreaking havoc. These are effectively motorcycles and don't belong in bike lanes. They also don't belong on sidewalks. They belong in car lanes. I am fine with upright scooters which use a throttle to move so long as they go at a reasonable pace.

• To enforce this, police officers should be stationed at both ends of a bridge and confiscate these vehicles as they come off the bike lane. They should sell them at a discount on a marketplace and use the revenue to enhance bike lanes and make citibikes free or subsidized for those that can't afford them. They should do the same thing whenever they see these vehicles in bike lanes or sidewalks on the city streets.

• Delivery workers should be permitted to use a throttled ebike, but one that is intended to be ridden on the road, not offroad, and is not a moped. There should be some speed cap on the throttle for these bikes. I do think some carveout for delivery workers is needed, but I am unsure of what it should be. This idea is one that's just off the top of my head.

• Bikers who ignore traffic signs should be fined regularly. We need to find a way to disincentivize this behavior. I am guilty of it and cringe every time I do it and navigate around pedestrians who have the right of way.

• If you do not pick up and clean your dog's shit off the sidewalk, you go to jail for life.

There's probably a long list of things I'm ignoring here that should be considered. But we need mopeds and super fast and dangerous bikes out of bike lanes and in the car lanes where they belong. Bikes are a blessing to cities, and we need to be explicit about what a bike is. It's time for NYC to clean up its act here.

Decentralized Physical Infrastructure, or DePIN, has the potential to reshape the dynamics of some of the world’s most important markets. Over the past decade, projects have tackled a broad range of industries: information storage, 5G and LoRaWAN, mapping and weather data, computing power, internet bandwidth, and many more. As a variety of DePIN projects have scaled over the years, they have taught us some valuable lessons regarding the unique dynamics of scaling both supply and demand. 

Historically, supply has been the easiest component to build. Many projects have proven that tokenomics can drive early adoption within web3 communities. Ecosystem participants love to spread the gospel of certain projects, especially when referral incentives are baked in. A nice feature of web3 communities is that people are excited to try new things. Sometimes, that’s because of a deep belief in the promise of crypto and user-owned networks; sometimes, it’s because it’s fun and the memes are good; sometimes, it’s because of a belief in the potential economic upside of early participation.

An emerging dynamic in DePIN projects is that they are much easier to scale when users do not have to purchase new hardware to participate and can lend something from existing machinery, be it compute, storage, or bandwidth, to get up and running. Filecoin, Arweave, Render, and Grass all benefit from this dynamic - it’s a low-cost endeavor and onboarding experience for a user to join the network, contribute to supply-side growth, and benefit from the upside. 

While many projects have solved supply-side growth, it has proven more challenging to crack the code on scaling demand and building a big business. One hypothesis is that DePIN is best suited to thrive in categories where an emergent secular trend is expanding and creating new types of demand for a product offering. It is not about replacing existing infrastructure to meet existing demand; it is about reshaping it to meet the needs of an entirely new category.

Competing with incumbents with a stronghold on physical infrastructure is very difficult, especially when market conditions are relatively stagnant. These companies have long-term contracts with customers, decades of experience, and sometimes some form of regulatory capture. Usually, there’s no forcing function for a customer to switch providers. 

To win a market with DePIN it must be in the process of being reshaped, and the project must be structurally suited to take advantage of that change. A good way of thinking about this is asking, “What new secular trends, markets, and pockets of demand are emerging because something is different in the world?” There’s a chance that a DePIN project may be best suited to capture that market. I like this approach because it’s a problem with market tailwinds in search of a solution instead of vice versa. 

Grass, a residential proxy network enabling individuals to contribute unused bandwidth to provide data to train open-source AI models, is doing this. In the past, this market has been focused on scraping web data for marketers to track competitors' pricing and advertising trends, but today there is insatiable demand for all types of web data to train emerging AI models. Grass is structurally advantaged to service this emergent demand while existing residential proxy networks do not have the right type of supply or business model to compete. Render has a similar dynamic by providing compute for model training instead of data. AI is creating an infinite need for both data and compute, and Grass and Render are building decentralized networks to become highly aligned people-powered providers to this market. 

In these examples, some new technological pressure is emerging that is beginning to change the shape of a market. And in these instances DePIN may be a meaningfully better solution than a centralized player. These projects can strategically sit adjacent to incumbents while providing a similar service to a different customer set in a way that is technologically and economically challenging to compete with. 

As ideal as it is to think about how DePIN can scale the supply of critical infrastructure in novel ways, at the end of the day, a revenue-generating business must be built, and we must think about the evolving dynamics of the end market: what are the critical thresholds of supply that are required to meet new types of demand? What are the scale requirements across geographies for the service to be valuable? What are the barriers to building a viable business and what’s required for the project to tackle these challenges? Where is the structural competitive advantage relative to existing incumbents?

As more entrepreneurs seek to reshape large and important markets with DePIN, they must be thoughtful upfront about what the underlying business will look like. It’s much easier to ride the tailwinds of an emerging or evolving market than to battle against incumbents in a zero-sum game. We now definitively know that it is feasible to build decentralized infrastructure across the globe - now, we need to build the next generation of important businesses on top of them.

I'm a chess player and one of the things I still enjoy about twitter is stumbling on diagrams of chess tactics and trying to solve them. A couple weeks ago I thought I had the answer to a tactic so I started to scroll through the responses to see if it was right. That's when I saw someone respond by tagging @ChessvisionAI and I discovered an awesome product.

ChessvisionAI is a twitter bot. Someone responds to a tweet with a chess diagram in it by tagging the bot and then Chessvision.ai analyzes the position and responds with links to both chess.com and lichess.org with an analysis of the next best move. Here's an example of it in action.

I really like that ChessvisionAI responds with options to analyze positions in both chess.com and lichess.org and gives the user a choice as to which service they want to use (preferences can be pretty polarizing in the chess world). The experience is smooth and fast, and I now see ChessvisionAI popping up in the responses to virtually every chess tactic diagram. It's taken ahold of the chess world.

I find the idea behind this bot to be very powerful. It's a headless application, summoned in certain contexts and responds within the UI of that context. There's no home or central application for ChessvisionAI. It can live across Twitter, Discord, Reddit, etc. It's fluid and interoperable.

ChessvisionAI was created and is managed by one person, Pawel Kacprzak. He wrote a great post explaining the initial inspiration behind the idea and how he built it which went viral on Hacker News years ago. It's cool to see one individual have such an impact on the way we interact with chess diagrams and how their flexible approach meets users wherever they are.

Earlier this week, I hopped in an Uber with my family to get to our Lisbon apartment rental, and I felt a profound appreciation for the company. We were in a foreign country, and with the tap of a button, I could summon a car to safely get us home. It was reliable and worked the exact same way it does when I’m home in NYC or traveling anywhere else for that matter. 

What Uber has accomplished over the past 15 years is nothing short of miraculous. I remember sitting outside TechCrunch Disrupt in San Francisco in 2010 when Travis pulled out his phone and showed Steve and me (and anyone else in a 2-mile radius who would pay attention) how he was calling a black car to pick him up. The app was clunky and the wait time was something like 20 minutes for a ride. Today I wait less than five minutes for a ride that is cheaper and safer than a taxi and available to me through the same app in virtually every city in the world. I don't think I've witnessed another company do anything like that in my career. 

Farcaster

Jared Hecht on Warpcast

there is something magical about summoning an Uber in a foreign country and how it is always reliably there for you. it’s one of the greatest feats of startup building I’ve witnessed, a miraculously executed global-scale combination of software and physical infrastructure.

The media did an exceptional job vilifying Uber during its rise, and as a result, its history is often associated with scandal. That’s a shame because there are many important and positive things to learn from the company. Three of them are presently top of mind as I reflect on it:

Super outcomes require superhuman effort. Emil Michael, Uber’s chief business officer, has been a long-time friend of mine and was an advisor to both my companies. I watched him as he helped to build Uber from a company that had recently achieved product-market fit to a global behemoth. I’ve founded two companies and I’ve never worked as hard as he did when he built Uber. Absolute commitment to winning was part of the culture of the company. As my family was safely being transported around a foreign city earlier this week, all I could think was that wouldn’t have been possible were it not for the Uber teams’ maniacal work ethic. I remember it being commonplace to vilify the company and its leadership for its intense work culture. It would have never worked without it. 

Another underappreciated aspect of Uber was its bold and innovative “capital as a moat” strategy, rapidly raising billions of dollars round after round. They were criticized for their lack of profitability and for using equity capital to block their competitors from markets and investor pools. They were deemed a capital-inefficient business that was never going to work. But they took that capital and built out physical infrastructure across the world in one decade in a way that had never been done before and at a speed that, in retrospect, seems unfathomable. Now it’s a $150B market cap and cash flow positive company that pioneered a bold and counterintuitive capital raising model currently employed by everyone involved in another transformative category, the LLM wars. 

Think for yourself, and don't get swooped up by media narratives. Uber caught an infinite amount of flack as it was coming up. It was as if the world, particularly the media, was rooting for its downfall. During the moment, its hard-charging culture and agglomerate-all-the-cash strategy seemed like a recipe for disaster. At least that’s what the public narrative portrayed. But look at it now. It is almost certain that the global infrastructure Uber has built over the past 15 years would not exist were it not for the things that most people once lambasted about the company. Yes, absolutely Dara has done an exceptional job as CEO, shepherding the company as a public institution. But you don’t get to a place where you can hire a CEO like Dara without breaking some eggs along the way. 

It took an Uber ride in a foreign country to appreciate these things fully. It’s easy to sour on companies as they are growing for doing things differently and for making mistakes publicly. But you don’t go from nothing to iconic without trekking through many gray areas. It’s important not to rush to judgment when the narrative and public sentiment turn. We see this every day in national politics, and we also see it when startups and new technologies make their way into the zeitgeist. Sometimes, things that are different that ruffle our feathers end up being true superpowers. I'm trying to be more conscious of that.

We just had a family vacation in Portugal. Last summer, we took our kids to Italy for two weeks and showed them Rome, Umbria, and Sardinia. It was a magical trip so we decided to do it again and this time traveled across Lisbon, Algarve, and Santa Cruz for roughly ten days. 

There are so many things to love about the country. Some that stood out to me on our trip: 

• The beaches are beautiful, serene, and remarkably clean. Even on the most crowded of beaches, I don’t think I saw a single piece of trash on the ground. 

  

  

• The climate and topography very much remind me of California. The Santa Cruz area is like Big Sur with big cliffs that drop into the ocean. There are beaches here that are totally deserted and wild and make you feel like the last person on earth. 

  

• Surfing in Santa Cruz is a super fun family experience, even in the cold water

  

• Like most of Europe, the food is meaningfully different than the US. I am rather disgusted by our domestic food system. It costs an arm and a leg, and it’s practically a full-time job to be able to heat healthy whole foods and avoid processed poison. I feel great after meals in Europe, and Portugal has delicious, fresh and affordable food all around. The seafood is incredible. 

• One thing I really like is how rest stops on the highway have delightful restaurant-like areas with terrific food you can either grab to go or comfortably sit and eat there. They also have quaint outdoor picnic areas. It was a delight to see a service stop be idyllic. 

• I barely noticed a police presence anywhere, and at no point did we feel unsafe in Lisbon (which was crowded). We maybe saw two groups of police officers in the city. 

• Portuguese fashion is awesome and places a focus on sustainability and quality. It’s now up there for me with Japanese apparel, and I am going to go out of my way to shop for Portuguese brands. There are tons of cool stores and places to shop in Lisbon, and street art is part of the culture.

  

• August is becoming impossibly hot to travel in Europe. We will likely do these trips in June and early July to avoid the heat and the crowds. 

I am looking forward to returning to Lisbon and exploring other parts of Portugal like the Douro Valley and Silver Coast. I really love our annual summer Europe trip and im glad it’s now a tradition of ours.