The past couple years have not been kind to the world of cryptocurrencies. We've had the 60 billion dollar Terra Luna Ponzi Scheme The 10 billion FTX Ponzi Scheme The world's largest crypto exchange. Binance has been charged with fraud and its founder is nowhere to be found and Coinbase is in the midst of a legal battle with the SEC which could bankrupt the company. Despite these numerous disasters, Crypto Bulls still insist that cryptocurrencies are revolutionary new technology that will change the world for the better.

at the end of the day. For cryptocurrencies to have any value, there needs to be tangible use cases that improve people's lives in the real world. Today, no such use case has been proven. When asked about real world use cases, the crypto bulls usually beat around the bush by giving vague answers about Web 3 or decentralization.

One of the most prominent crypto bowls is a billionaire venture capitalist. Mark Andreessen He founded A16z Crypto, a multi-billion dollar Venture Capital fund dedicated exclusively to crypto opportunities. If anyone knows about crypto use cases, it's 10.. in the summer of 2022, he came onto a podcast hosted by an economics professor named Tyler Cohen which is linked in the description below.

Unlike most news anchors who are clueless. Dr Cohen Presses on Driesen on what the much vaunted Web 3 will actually accomplish. Andreessen's failure to give a single coherent answer is perhaps the most damning indictment of the crypto industry today. And so what? I'm hoping and what we're actually seeking at the firm? What we're trying very hard to find.

Um, I'm hoping for example, for a podcast, I'm hoping five years from now, there will be these thriving, you know, call it web 3 podcast environments that will be open and will be. You know it will have the sort of anarchic, uncontrolled kind of element that I Think that I think you and I both like Um. However, we'll have a higher level of trust and will have a higher level of monetary, incentive and economic incentive um than the open networks of the past usually did in this clip. Mark Andreessen is specifically talking about the podcasting industry.

There are millions of podcasters and thousands of creators making a full-time living by hosting podcasts. Most podcasts are hosted on YouTube and Spotify YouTube is an ad supported platform. The podcaster makes 55 of the revenue from ads shown on their podcasts with YouTube Keeping The other 45. Spotify is supported by both ads and subscription payments because they earn high Revenue per user.

Spotify generally pays podcasters a higher rate per listen as compared to YouTube. The trade off is that YouTube has more users so all else equal. You can get generally more views on YouTube than you can get listened on. Spotify.

Either way, the business model is the same. YouTube and Spotify create and maintain platforms which allow podcasters to connect with their listeners. In return, they charge a fee, taking a portion of the revenue for themselves. So why do we need centralized platforms like YouTube and Spotify? Why can't the podcasters just communicate with their fans directly? As a podcaster, you could set up your own website and buy your own servers, but this would be an expensive and time-consuming process which most podcasters don't have the technical expertise to do.

and unless you're already a famous podcaster, no one even knows you. so your website will get zero traffic. You're much better off using an established platform like YouTube or Spotify, which is what the vast majority of podcasters do. Also, despite their near Monopoly positions, YouTube and Spotify do not make excessive profits.

Google does not disclose YouTube's profitability, but many analysts believe that they're barely breaking even and Spotify is still losing money. This is because they have to spend billions of dollars to build and maintain massive data centers, so support the billions of hours of content on the platform, which is viewed by hundreds of millions of people each day. So podcasters already have a pretty good setup. Centralized platforms like YouTube and Spotify have economies of scale, which allow them to host and deliver content far more cheaply and efficiently than if every podcaster had to do it themselves.

But according to Mark Andreessen, he can create an even better platform with Web 3, which will allow for greater levels of trust and monetary incentives. So what is he talking about? But what's the concrete advantage of Web 3.0 for podcasts? So right now you and I may not feel like it, but we are anarchic and uncontrolled, right? Like we can say something, some external Force isn't going to censor us. Why is this a better podcast? If it's done through Web 3.0 why can't we just put it out there? Yeah, well, the most obvious thing is just money. Um, you just you don't get paid right? And so like YouTube YouTube has built-in monetization.

Spotify has built-in monetization. You know a big way that they're able to sort of entice creators over um, is is by paying them. You can tell that Mark Andreessen isn't used to answering tough questions about crypto and web 3. When Dr Cohen asks him how a Web 3 podcast will be better than a traditional podcast.

Andreessen says quote. The most obvious thing is money. You just don't get paid unquote. Right after that, he says quote: YouTube has built-in monetization Spotify has built-in monetization.

unquote. He concedes that these centralized platforms have monetization, so a statements immediately contradict each other. It appears that Andreessen was not expecting to be pressed on this issue, so he didn't have a prepared response. So he starts grasping at straws and gives a completely nonsensical answer.

famously: Joe Rogan You know they're paying him, but it you know, only see the published reports, but you know a very large amount of money to take his content out of the open ecosystem and put it into it. Put it into a closed ecosystem and you know And I'm like and again like I'm You know, good for Spotify like I think that's tremendous. It seems to be great for their business. Um, you know that's all good.

and I'm glad that Joe Rogan's making money. but like he in my like he Joe Rogan should not have to choose. He should not have to choose between being part of an open internet um and basically not having a way to make money. um and then kind of going into a silo and then and then having that be the way that he makes money like that here.

Mark Andreessen says some things that are simply not true and not even close to being true. He's talking about the podcaster. Joe Rogan In 2020, Spotify reportedly paid Joe Rogan 200 million dollars to move his podcast from YouTube to Spotify where it'll be exclusive. Now the only way to watch full-length episodes of The Joe Rogan podcast is on Spotify according to Mark Andreessen Joe Rogan had a binary decision.

Either he could sign the exclusive deal with Spotify and make a lot of money or he could be part of an open internet and basically not have a way to make money. This is a direct quote from Mark Andreessen he said on the open internet Joe Rogan basically does not have a way to make money. This is completely false. Before the Spotify deal Joe Rogan was making millions of dollars per year on YouTube his YouTube show was completely non-exclusive so he was free to post his podcast wherever he wanted with no restrictions.

Obviously Spotify was willing to pay Joe Rogan more to make his podcast exclusive on their platform as this will drive more subscriptions. So if Mark Andreessen doesn't like close Zikos systems like Spotify, how does he propose to make a better system with Web 3.? How does someone like Rogan it doesn't have to be him but a well-known podcast host? How does that person get paid in a better way through Web 3.0 Make that more concrete for us? Yeah yeah. I mean I mean they pick they can pick their business model I mean they can pick their business model. They can decide to be a subscription-based business model.

You know, micro transactions they can pick. You know you can pick whatever model they want. Um, you know they can also have indirect. You know there's this whole this whole new rise of this kind of the the non-functionable token.

Um, you know, kind of this idea of unique digital assets. There's you know, completely different monetization methods that are opening up for media. Um, you know it's entirely possible in the future. For example, you'll have entire you know forms of media like video games and sporting events and music and so forth that will monetize in completely different ways through the creation of you know, unique digital property.

You know they get sold and and uh, And Trades Um, and so you? yeah, it's you know, it's it's yeah, it's look, it's injecting. It's injecting economics. It's injecting at a very fundamental level. kind of Internet Native money, Internet, native economics and incentives.

When Dr Cohen presses him for specifics Mark Andreessen Retreats into vague buzzwords like Nfts or Unique Digital Property. With Web 3, a podcaster can choose to monetize through a subscription model or microtransactions. The problem is, these business models already exist and have nothing to do with Web 3. YouTube and Twitch already have Micro transactions.

Platforms like Spotify and Patreon already have subscription models. But more importantly, Marcon Driesen doesn't explain how a Web 3, subscription or microtransaction business model would even work. You would still need a centralized platform to maintain the data centers that host the content. It sounds like what Andresen is talking about is a hypothetical platform identical to YouTube or Spotify, but instead of transacting in legal tender, they transact in cryptocurrencies.

Although it's hard to tell exactly what he's talking about because his answers are so vague and nonsensical. But it's the key difference. Easier micropayments is the key difference. So being able to sell Collectibles More readily say with the Nft model rather than signed t-shirts, they don't sound very big to me.

They both sound like possible advantages, but as a percentage of GDP, they sound like really tiny advantages. Well, it depends on your percentage of GDP. I Mean it's a percentage of GDP like everything is Tiny compared to like healthcare. Um so so I mean the media industry is quite small, right? Like if you just if you look at slice of slice of percentage of GDP like I don't really look at it as like okay this this therefore has to lead to like an expansion of 100x in the media business.

Like that's not the like. Maybe I think it grows the media business but it doesn't have to like it cost to explode like that. but having it be having it be a better proposition for creators having to be a better proposition for consumers having content come into existence that didn't exist before and then. Also, just as you think about scale, scale on these things is really hard to forecast as it turns out and the reason is just, we live in a world now very different than prior worlds.

We live in a world where we now have 5 billion directly addressable consumers online at any moment for any new thing, right? And if you just look at like just you know. Most recent example of tick tock you know Tick Tock is just. you know, Who knew that short form videos were going to be that big? And it just turns out that 5 billion people is a significant percentage of the like short-term video short form videos. All of a sudden it's this huge business and so the I think these things.

These are unpredictable in the scope that they this the scale that they can reach and I think we might be surprised to the upside about what happens when you start to make some of these things possible here. Mark Andreessen gives a master class on how to avoid a question. It's important to note that today there are no Web3 podcasts. They don't exist.

It's a theoretical thing that Mark Andreessen claims that his company is working on. He says that Tick Tock was far more successful than most people imagined, and therefore, his hypothetical Web 3 podcast could end up being far more successful than most people imagine. But Tick Tock has absolutely nothing to do with web3 or cryptocurrencies. The fact that Andreessen has to divert by talking about Tick Tock is further evidence that he has no rational arguments.

The idea of having crypto based micropayments is absurd on its face. unless you happen to live in. El Salvador cryptocurrencies are not considered to be legal tender. If a podcaster is paid in crypto, they would have to calculate capital gains and losses every time they sell their cryptocurrencies for tax reporting.

This would be a bookkeeping nightmare. As far as Nfts, the bubble has already burst. It is estimated that 95 of all Nfts are currently worthless. It's important to stress that Mark Andreessen runs a multi-billion dollar crypto Venture firm.

The fact that he can't give a single coherent answer about real world applications for cryptocurrencies shows that such real world applications simply do not exist. So whenever you hear people throwing around buzzwords like web3, owning a piece of the internet, or decentralization, know that it's all. Bs All right guys, that wraps it up for this video. what do you think about? Mark Andreessen Let us know in the comments section below.

As always, thank you so much for watching and we'll see you in the next one! Wall Street Millennial Signing out.