Bringing Web2 to Web3 and the Future of Decentrali

What is up guys welcome back to another episode of the Divi Crypto Podcast and today I am joined by the ecosystem lead for NFT and gaming at Protocol Labs John Victor. How's it going John? It's going great thanks for having me. Yeah, yeah I'm excited to kind of get into everything IPFS and Filecoin but before we get into that let's kind of go through your backstory.

What's your origin story for getting into crypto slash web 3? Yeah, so I guess it started probably around 2013 in a very normal way. I think Bitcoin had that first big like run up that broke through in the mainstream. At the time completely confused about what Bitcoin was. The number was going up. I was like, oh I should pay attention to this. At the time I

mean broke college kid didn't have enough capital to put anything meaningful in. But that was like the first time crypto sort of like permeated my brain space. Fast forward to late 2015 early 2016 I was working my first job and one of my co-workers was super into Ethereum at the time. They actually lost money in the Dow hack and despite that they were still super bullish

on Ethereum and it was because of that co-operator that I really started trying to pay attention and understand what were people doing with smart contracts. What was actually going on in the space? It felt like it wasn't just money that people were talking about. It was this whole set of applications and people kept talking about it as if it was the future. So in standard style,

I'll do in my own research. I just sort of went into the rabbit hole. Just trying to understand what was getting everyone else so excited. So listening to podcasts, listening to lectures on YouTube, reading white papers and during all of that I think I came up with the conclusion that smart contracts were definitely unique. Still couldn't fully conceptualize what they were going to be useful for.

But during that process and doing that research I came across a talk, one Benei who's the founder of Protocol Labs gave one of his talks about IPFS. And while that isn't a blockchain in and of itself, I'm not sure if your listeners are familiar. IPFS totally made sense to me because of the work that I was actually doing in my normal job. So I worked for

this company called Palinzeer where a lot of the work that I was doing was that we did was in distributed context. So you couldn't always assume that there was connectivity, that the applications that you were building were going to be sinking into the broader web. And so building applications with sort of this assumption that you had to think local first was sort of like already ingrained.

And IPFS is a way of just upgrading the web in general to say, well, what if it wasn't your specialized applications, but it was literally everything that could think in this way. That was sort of like the big brain blast. And it was because of that that I kept a tether to both and also what was going on in the web three space. And so yeah,

I mean, I kept a pulse on things through end of 2015 through 2019. And in 2019 during like, I guess, the last tail end of the bears, like middle of 2019 or so. That was the point where I was like, damn, like, although things seemed to have gone down a bunch, there's still all of these people who were really excited and passionate about the stuff that

they're building. And for me specifically, I think when we think about, like, what is the thing that it means to build a decentralized web and the promise of a decentralized internet, that was something that I could still see that there's people who were super passionate and that felt like, yeah, an opportunity to go make an impact. So you want to go where there's the most opportunity

and where per unit of life force, you can have the biggest impact. And that's what drew me in. Very cool, very cool. And for everybody that's listening, you know, something that's really important that John mentioned is the infrastructure that a lot of the products that I'm going to be doing, and I'm going to be doing it. So I think the projects that our household names are

using for, for example, hosting the majority are on AWS. So it is like a centralized sort of back end. And the front end is just sort of this, you know, sort of system for monitoring and different token and moving around and whatnot. So I think there's so much to be unpacked here with the importance of decentralized storage and how that works. But I'd like to start

with protocol labs, like how, how that begun. You mentioned that briefly, but let's talk a little bit about what, what you guys are doing. And then we can talk about file coin a little bit, a little bit more. Yeah. So protocol labs was founded in 2014, one who's our CEO. He's been in the crypto space for a while. I think you can go find talks from

like the first e-pebcom, but even before that, like in the Bitcoin space as well. But I think if you sort of looked at what protocol ads has been working on, it really follows this sort of like very logical thread of like, what does it take to build a decentralized internet? And as you start pulling on that thread, you start seeing more and more problems pop up.

And then you realize that there's other things that you need to build in order to enable the outcome that you're looking for. So the big idea with IPFS was, well, what if we could change the way that the internet moves data around? So as most people are familiar, I'm sure. When you go to like a normal website, you'll like almost do muscle memory type in HTTP,

like or HTTPS, call on slash slash like www.google.com or something. And what's happening behind the scenes is your computer is taking that URL. And it's actually converting that. It's going through like DNS. It's going to convert that into some machines IP address. And it's going to take your computer is effectively asking for the internet to take you to that computer. And on that computer to go

in and find a specific piece of data. And we call this location based addressing because that URL that the HTTP bit is referring to isn't telling you what the content is that you're looking for. It's telling you where to go to go find that content. And so of course, that works really well in the web. But of course, you might have run into some of the

pieces of friction that come with that. Where sometimes you'll go to a URL and like the content that you're looking for isn't there and you'll get a 404. Or maybe that content has switched out. Someone's going to do a main name. And now the content that you thought was there is like different. It may be owned by someone else. If they might have put something else

at the homepage that you thought you were looking for. And so like the big idea with IPFS is to say, well, what if we didn't ask the internet to take us to specific locations? What if we could just ask the internet for specific pieces of data? So instead of saying like, I want to go to this specific like website. And I hope that the data is

there that I'm looking for. I just asked the internet and say, Hey, I'm looking for the specific piece of data. Whoever has it. Can you please serve me? And so IPFS does this with this thing called content hashing. So we use basically a fingerprint of the content as the unique identifier. And then regardless of whether that's data coming off of your computer. So if like you've

been to a website recently and it's cashed in your brave browser. Or if it's coming off of a computer that's hosted by someone else or it's coming off of a decentralized storage network, your computer doesn't care. The data can come from anywhere and it can be passed over whatever network. Whether that's through the normal internet, whether it's through radio signals, it can be passed over whatever.

And so the whole idea with IPFS is to really just say, rather than having these central points of failure, where we're putting ourselves in a position, where applications, almost through necessity, you have to be gatekeepers and like host their own infrastructure. And you have to like tie yourself to specific servers to run these like powerful things that we all sort of rely on. If we can

create applications that uncouple the data layer from the application layer, you can now have a lot more flexibility. And then you can just create a lot more flexibility in where that data actually lives. And it can actually be controlled by users. It can be stored in whatever ways it makes sense. So if you feel back the layers, IPFS was sort of like the first really big

idea. But as you start trying to build up a system, you realize, oh man, there's all these other problems that sort of pop up. So one of them might be, well, if I can store the data anywhere, how do I make sure that someone has the data? It's not that I know for sure that this application developer has it. I need to have some sort of

way of knowing that the internet in totalities holding on to the data. And that's where like Filecoin comes in as an answer to that question, where Filecoin creates both through cryptography and economic incentives, a structure where you can actually verify that there is some number of copies of pieces of data on the internet. They can build open services around storing, retrieving and transforming that data. Very

cool. Very cool. Yeah, I've done my fair share of research on our weave and Filecoin and all the different projects that are brilliantly working on solving this. I guess one kind of fun curveball that I can throw to you is how does, what is the disadvantage to having decentralized storage right now and how can we work on improving that? Yeah, that's a great question. So I

think one thing people probably sort of intuitively understand, but maybe you don't think about as often, is decentralization is a tax, right? We're introducing inefficiency, but we're doing it for a specific reason. So we pay the decentralization tax in order to get a different type of efficiency. Like if you think about Uniswap as an example, you pay this tax in terms of running things on Ethereum,

but the efficiency that you get is you get the liquidity of literally any person who wants to contribute into this protocol. And in the same way, when we introduce this decentralization tax in terms of decentralized storage, the liquidity that we're going to be going to be going to be a little bit more complicated. So the key thing is that we get is in terms of anyone

can contribute this hardware into this like Massive Ego system. And so what we actually see with Filecoin, if you set up the incentives correctly, is you can actually use these incentives to bootstrap massive amounts of hardware to comes to these systems. So Filecoin has been in existence since October of 2020. And in that time, it's a mass about 18 epabytes of storage capacity somewhere around there.

And to put that in context, that's like the amount of hardware that Google made in 2015 was able to summon. And so any individual company trying to do that would be impossible. But when you're saying it's 4,000 individual companies working together, well, that actually becomes a much more tractable problem, which is sort of what we see. And so like, I think the important piece here is

not saying that decentralization is inherently better. It's saying that decentralization comes at a cost, but it gives us additional superpowers, which is the sort of coordination, like social coordination across all of these untrusting groups. And I think like the big bet I would have for most of what three is that with the different efficiencies that we get through technological improvement, through research, is that we can

remove and move down that cost of decentralization while retaining the benefits. And so I don't think that means that today we're at the stage where everything is like 100% perfect. We're building a like we're building an entirely new version of how you can think about services on the web. But you can see sort of like the path of the mountain of like what are the use

cases that are better served today by decentralized storage that are just like areas that the traditional cloud infrastructure is sort of like sort of ignored. And those are the places where we have the first opportunity to sort of like tackle things. And then as the improvements land, we can sort of climb our way up the mountain to tackle more and more use cases to slowly eat

into the line share of what are people actually doing on the web. Yeah, very well said. And I do really like the idea that it's like a cooperative game, you know, in a way that because I major in game theory, or economics and specialized in game theory. And I always really loved seeing this kind of thing play out in the space because having having 4,000 people,

for example, or companies contributing to a network. And having an incentive there is a beautiful thing that, you know, everybody sort of co-opting together to make this thing come true or reality. So where are we at today? Like what's the stage of like you you do a great job of mentioning, okay, this is where Google was. But where are we today in terms of decentralized storage

on Filecoin? And where do you kind of see us getting to a stage that's, you know, mainstream adoptable style storage? Yeah. So I will use another analogy. I think so to maybe set the stage of what is like the full vision of Filecoin. I think the vision of Filecoin is very tied to the vision of IPFS. Where IPFS is really, it's not IPFS doesn't mandate a

specific storage layer. And that's actually a feature. You can use IPFS with RWEE, you can use it with just centralized infrastructure, you can use it with whatever. The vision of IPFS is let's content address the world. And in so doing, we can uncouple data layers from application layers, which means you can use data and store data wherever. The story with Filecoin as a compliment to that

is to really think about how do we build open services where through the power of basically what we get with Flotchains, we can create the incentive mechanisms to build open services as all incredible alternatives to traditional cloud. And so in that vision, it's not just storage that we're talking about because storage is just a fraction of what people do. It's storage, it's CDNs, so the distribution

of content, it's compute, so it's like the transformation of content. And then it's being able to do the permissionless interface between all of these things. And so if you think of where Filecoin is, we're very much in the first standing. I would say the analogy I use quite a lot is folks follow Tesla. We're in Tesla's Roadster era right now. The point of the first Roadster

wasn't that you've solved everything. In fact, the Roadster had many drawbacks in a number of ways. It had terrible range, it was expensive to manufacture. It was very awkward in a bunch of the design decisions. But the point was that you can make an electric vehicle that was fun to drive. And between the Roadster and the Model 3, what you've had was a bunch of 10%

improvements to the drive trains, the battery chemistry, aerodynamics, heat exchanger. And when you step up all these 10% improvements, you get 100% better car, with better margins, cheaper to make a factor. And I think that's what's happening with decentralized storage. So with Filecoin, a lot of our goals have been truly to say, like how do you build credible alternatives to the cloud? And I think one

of those problems requires solving scale, which arguably Filecoin is the only decentralized storage project that is actually operating at Internet scale. The fact that I can use Google at a meeting point in history as the comp is, I think, like telling, because you can still verify the Filecoin blockchain on a normal laptop. And this has to do with how Filecoin uses zero knowledge proofs in a

clever way. But effectively Filecoin has solved the scale problem that, and now we're working on, well, how do you unlock more and more use cases for it? So on the storage side, I think, the exciting things to keep an eye on are some of these improvements around how you do the storage process, sealing as a service, snarks as a service, things that remove some of the

friction in the storage providing process. And then you also have these other services that are coming online in the next couple of corners with the retrieval market computer for data. So doing, being able to do some of that transformation I was talking about, as well as smart contracts. So you can start writing programs to say, hey, I would like to always make sure that there's n

number of copies of my data on the Internet. If one of those copies falls off, please automatically retryger another copy to be stored. Or when new data lands, please pay for someone to run this transformation. So run some job on top of it and then store the outputs. Or I would like to, like, sort of like in a Netflix style thing. I would like to smart

contract to pay for both the storage and the distribution of this content. So I can, like, hyper locally, cash this with, like, my users, things like that. So I think, like, the power, of what we're looking at is across, like, both the services that are getting built out. So storage or treeble compute, making those services more efficient, making sure all of those can scale out. But

then also the Web3 side of those things, where it's like, with all of these open services that anchor into the same blockchain, being able to use smart contracts to do things like schedule those services to run, automate the payment, build more creative, primitive, surround those if I want to have a storage future. So I can, like, book out storing, like, a terabyte and a number of

years. You're able to do that sort of thing and hedge prices. So I think it's like a much more expansive vision. And we're very much in, like, the first, maybe second inning, one might call it. But yeah, lots to go. Very cool, very cool. And shifting gears a bit, you know, you are really spearheading the whole front on NFT and gaming with the ecosystem. So I'm

curious to get your take us to where that's at with development. You know, we know that that's, like, at the moment, if we're a gameSpot, that is the trend and we're kindam, so let's get put onirm.com, so let's say you have beta providers, so that there will be something on the screen on the .com, you know, DOS, because it's so incredible here. And that's the same

topic that worthy of development, and about, like,system.com now and activate the context. I see so. Right. And I don't think that's like a ding on anything. I think it's sort of, like, what happens when people discover something new? I think you get this wave of excitement. Sometimes there's, like, a little bit of over excitement. And now we might be in, like, the trail of disillusionment where

people are, like, overly bearish. Truthfully, in the way, I see NFTs. NFTs are digital bearer objects. And I'd highlight that middle word of bearer, where we've had digital objects before. Like, you can go by a skin in Fortnite or whatever. But the idea that it's a bearer object, where it's the user who's bringing these, like, these objects around the web, I think, is something that we

haven't really seen. Maybe people have experienced this, if they, like, use their phone to sign up for something and import their context from their phone book. But, like, we've had very limited context where, like, users are the ones that are truly in control of their data and what that actually needs. So I think with NFTs, part of the reason why, I think, a lot of web

two folks get this wrong, is they hyperfix it on the use cases of today, where they're, like, oh, it's just profile pictures. This is so silly. Who's paying whatever for a JPEG versus thinking more expansively about what does it mean to have a digital bearer object, where, like, the thing that we are basically talking about is, like, inventing paper to some degree. And, like, yeah, in

the beginning of, like, so when we think about what is the full scope of what things will use NFTs, I think it's much broader than what people are generally giving a credit for, at least in the mainstream. And I think that's largely just because people haven't interacted with it or thought super deeply about what does it mean to have this sort of be primitive. And so,

if we do accept that, like, having digital bearer objects is actually useful, then we have to start thinking about, well, how do we scale these systems out? Using decentralized storage isn't so much, like, a toy thing. It's actually kind of requirement when you think about NFTs. If you don't want your NFT to, like, break in some number of years, you need the ability to have content

addressability because then you can swap out the storage layer if needed. You need something, like, Val. to make sure that there is someone who's holding onto these copies, not just taking it on faith, but as someone said that they're going to serve this content, that it's going to be there. And I think, like, these are the important primitives where, especially for decentralized storage, the things that

we have to think about are both, like, what are the guarantees that we're offering for folks, and how strong are those guarantees? But then also, are we limiting what people can do with the medium? And so, what we see on the gaming side is even in this time, like, the trail of disillusionment, we're seeing people still push forward quite a lot. So, NFT storage, which is

a project in our ecosystem, I think is about, like, two or three X to the amount of data that's being stored on it from the beginning of the year. So, despite, like, the bear market, like, people continue to build. And I think what we're seeing is people are doing more and more interesting things with NFTs. This projects, like, Mona, that are building full-mettifers worlds that you

can go explore as NFTs, we're seeing games look at integrations in different ways. It's not just, like, game objects. It's being important, being able to import your PFPs as, like, ways of bringing new customers into their game environments. I think you're seeing people experiment in different ways and having the ability to build, like, whatever application, regardless of size, is, like, a really important property. And that's

where things like Filecoin, where it's literally engineered to serve Internet scale things, is turned out to actually be, like, pretty useful. I think the other thing that's been interesting that we've seen inside of, like, the gaming sphere is people now looking at decentralized technologies, not just for, like, the NFT properties, but also just as, like, ways of distributing games themselves. So it's really interesting. We've been

working with the team that's been trying to basically leverage some of the properties of Unreal Engine 5 to be able to reduce the footprint of games, just using decentralized storage and IPFS and content addressability, so that you can download on demand, the components of a game that you need to play it, rather than downloading the full, like, 50, 100 gigabyte file that you might need to

do otherwise. And so I think this is, sort of, like, the Pinsertack, like, we have, like, the very web-3 native reasons why game developers are sometimes picking up their heads to look at the infrastructure that we're building. But I think you also now have people looking at it, or just from first principles, of, are there opportunities to just make things easier, and uncouple yourself from having

to distribute your game binaries through, like, the Steam Store. If you can use decentralized storage to push out updates and, like, patch, patch your games, that's just more efficient. And it means that you as a developer aren't coupled to one specific institution in order to, like, interact with your players. So I think, like, there's a lot going on, I think, even despite the bear, like, builders

will continue to build. And I would expect that a lot of these things will pay off in, like, the next year, two years, like, as Mac, like, we're an unprecedented macro-economic conditions, but, like, the thing that's actually quite fascinating is just, like, the first principles. Like, are people doing things for the right reasons, or are they doing it for, like, short-term game, and, during a bear

market, the short-term game that feels less relevant for folks, and say you're left with the builders who are, like, actually doing interesting things, which, to me, is the compelling part. Yeah, totally agree. Not a bear market, a build market, I think, is what people call it, because it's where the people that didn't get attention has much so during the bull market with all the sort of

hype, and the sort of euphoric, speculative investing, and all that stuff. I think that the people that really do deserve the attention, the builders, start to get it during these bear markets when there's a big flush out. And I wanted to get your opinion on just what you get excited about, because, you know, you have a really extensive background, with volunteer, you know, working on a

vialcoin and protocol labs, and I want to understand what you're excited about, outside of the projects that you're building, because we've covered a lot of ground here, with NFTs and gaming, and just the stage that we are. So when you get up in the morning, what is it that just gets you super excited, super hyped when you check your phone, and you're just eager to learn

some folks have given about, like, why content addressing? Again, not because of, like, specific decentralization principles, but just from, here's how you can sort of see the trends of computing, and why this might be, like, a better way of designing systems. And the reason that gets me super excited is, this is again, it's not saying that, like, the stuff that we're working on is just purely,

like, from some philosophical position, though I think those are good reasons. It's not the only reason. It's saying, like, not only is the philosophical reason aligned correctly, but as you think about the future of, we're going to have more data-rich applications, the cost of storage is moving down, the cost of compute is moving down. When you look at how applications are designed, I think there is

really good first principles reasons for why the ways in which these systems are being designed will be how the future of the internet works. And so, to me, that gets me very excited because it's like, all the things that I get to work on every day is moving that faster, or that reality towards us faster, which is obviously quite fun to feel like you're making a

difference. The other side that's interesting to me is when I see things happening in other ecosystem where you can sort of see the parallels and where things might be going inside of our, like, the Web 3 world. So, I think one of the interesting features of DeFi, if you go listen to traditional media talk about DeFi, people sort of see that there's some compelling stuff going

on there, but the question that comes up quite a lot is, okay, but is it turtles all the way down? Like, is it just people flipping tokens back and forth to each other? What is sort of like the thesis with DeFi overall? I think a standard answer inside of Web 3 would be, yeah, well, once the world adopts crypto rails, so once we have maybe more

stable coins that are coming from different currencies, people will trade, and these will be the settlement rails for the world. And I think that's like one compelling version of the future, but in my realm, the reason that gets super exciting is when you start thinking of other services that natively take crypto payments. I think this is like what Web 3 infrastructure can do. So, for Filecoin,

as an example, we have 4000 businesses that all are tied to our crypto economic rails. There are 4000 businesses that accept Filecoin as payment, and they're offering services that real world services that people want to use, which is like storage, and seeing there are more be retrieval and compute. And I think when you start thinking about DeFi, the interesting feature of DeFi, and finance in general,

right, the point of Wall Street is not just to speculate on stuff, although that is a large portion of what some people do. Wall Street is to raise financing for real world goods and services, like businesses that are trying to do things. And I think DeFi's complement will be a lot of these open services, where being able to do the core financial stuff that people are

already building, but apply it to specific services that also operate on these same rails. And I think this is, again, to use the same term, like the Pinsertack. As people have done all this DeFi innovation, the pairing of that with open services is going to be, I think, a pretty compelling thing, even for the traditional folks who are currently looking with squinty eyes at this entire

space, where, yeah, there's real applications that will make incredible amounts of sense. So that to me is like the other super compelling area where you can sort of squint out your things or value. I like that. Looking at it with squinty eyes. That's a great way of saying. Well, those are all the questions I have for you, John. Where can people go and learn more? Yeah.

So if you're trying to learn more about Valcoin, you can head over to the Valcoin website, Valcoin.io is the website is the same for IPFS. It's IPFS.io. Or if you want to hit me up on Twitter, my handle is John Finvictor with NoVal. So JN, THN, VCTR. Just shoot me a DM and I'm happy to answer any questions. Awesome. Awesome. Well, wherever you guys are listening

on iTunes or Spotify, the links that John mentioned will be in the show notes. But thanks so much for coming on and sharing everything that is IPFS and Valcoin. John, thank you.