Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the significance of proving correctness over going direct?
We don't just want to go direct. We want to prove correct. And in a sense, what the blockchain is, is like an armored car for information. We can transport that information on chain. So easy to verify, difficult to fake becomes a critical thing in any system that deals with strangers, which is lots of systems. Literally, fake photos almost justified some crazy war on Brazil in the Atlantic.
Chapter 2: How is blockchain described as a vehicle for information?
The point is to trust us. The point is to not have to trust us. The point is to have a system by math that anybody can look at. And the reason that they would trust what we're doing is they don't have to trust what we're doing. They can cryptographically verify it, put out your own opinion, but prove the facts, okay? And how do we prove the facts? Cryptography, mathematics.
That's a property of all human beings, not some New York media corporation.
As the cost of creating content approaches zero, the cost of verifying it is rising just as fast. The result is a growing breakdown in trust across media, hiring, and online communication, as synthetic content floods systems that were never designed to handle it. In response, a new stack is emerging built on cryptography, on-chain data, and verifiable records.
Instead of relying on institutions to assert truth, these systems aim to make truth provable. In this episode, I speak with Balaji Srinivasan, angel investor, entrepreneur, and author of The Network State, about what replaces trust in a world of infinite content.
Back live in the Situation Room with A16Z, New Media General Partner, Eric Torenberg, and we have Balaji Srinivasan, the founder of Network State, who is our first special guest live in the Situation Room. Balaji, welcome to the Situation Room for the very first time. Thank you.
Well, thank you. And technically, by the way, I'm the author of Network State, founder of Network School, NS.com. But I'm also an investor in MTS. Wow. How about that? Eric is going to RT that or something like that after this. So I'm very pleased. Eric and I have been talking about media stuff for a long time. Eric's been crushing it. And this is looking gonna, looks like it's gonna be fun.
Go ahead, Theo. Yeah, but Baljit, why don't you contextualize where we are right now in this media moment, right? We've been talking about where tech fits in, how tech needs to build its own media landscape. We've also been talking about how the New York Times has continued to groan.
How do you kind of make sense of where we're at in 2026 as you've been on this sort of, you know, 10 plus year quest to not just understand the media landscape, but also build within it? That's right. So, okay.
Essentially, there's a long version and there's a short version, which is tech and media actually share a common root in that we're both about the collection, presentation, and dissemination of information. So the collection of information, like they're sourcing our data, presentation, user interface or articles, dissemination, distribution, whether on social feeds or newsprint or what have you.
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Chapter 3: What challenges are posed by synthetic content in media and hiring?
or a radio license, all of which cost many millions of dollars, you could talk to your neighbor in the 80s or 90s, but nobody could hear you, right? With the advent of social media and Twitter and blogs and so on and so forth, all these voices that previously had no distribution had distribution, which caused a cacophony and all of this kinds of chaos in the 2000s and 2010s and early 2020s.
And there was a counter-reaction that tried to censor all those voices and a counter-counter-reaction that uncensored them with Elon's purchase of X. And that has brought us to the present day. And one of the consequences of that was the media was, though we didn't set out to do it, like Twitter set out to basically be tweeting breakfast, right?
Facebook set out to like share likes and poke people or what have you. And those ended up disrupting classifieds and disrupted legacy media, disrupted print media. There's a great graph of the print media disruption. So as a consequence, imagine like a kid who just grows to be 6'6", 250 in an elevator and squashes everybody against the wall, right? That's like what the internet was, right?
Where we just like grew and just added all of this, you know, muscle mass and we didn't mean to do it, right? But we became really, really, really, really big and went from cute gadget makers and toaster makers to, in my view, the single most important force in the world that's still underestimated. You know Orwell, right? the, you know, the writer, obviously.
Yeah, so he had this saying, which is, it takes an enormous effort to see what is in front of one's own face. And what's in front of our own face, basically every single moment of the working day. The internet?
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Chapter 4: How is the concept of decentralized trust introduced?
The internet. That's right. You know, what's upstream of AI? The internet. What's upstream of drones? The internet. What's upstream of your finance feed? The internet. What's upstream of the data center spend? The internet. It's internet first, right? In the sense of mobile first or micro first, internet first, internet first. Where's your community? It's internet first. Where's your business?
How are you sharing your business? Internet first. How are you finding information? Internet first. So that is actually the organizing principle. Like, you know, fish can't see water. We swim in a sea of electrons. And that was not the case in the 80s and 90s, right? We have essentially been teleported into the matrix right now. You watching this, hearing this, you are in the matrix.
Shout out to all the fans, all the viewers. Yeah, all the fans. Exactly. That's right. We're monitoring the situation where? On the internet, right? So the global internet, you know, the closest precedent to it, by the way, just to digress on this for a second, is the ocean. And the reason is, you know, there's something called the law of the sea.
The law of the sea governs how, you know, because you have ships that are going from Britain to Hong Kong to Brazil and so on. And so you have international waters. And what country controls that? And you could very legitimately have something that was thousands of miles away, but it's flagged British or Portuguese or what have you.
And so for hundreds of years, there's something called the law of the sea that kind of governs that. Like when you're sending a packet. from one port to another port, what law governs that? And we actually use the same words today. When you open up a computer, you have one port and it's sending packets to another port, right? And so how can that information, how can those packets be sent?
What can they do? And so on and so forth. The rule of code on the internet is like, you know, the new rule of law. It is the new law of the sea. And you can think of the cloud as like the new oceans in this way, right? Ideally a demilitarized zone, but of course there's also navies, right? So with that macro context, let's bring to this moment.
You know those zombie movies where like, you know, at the end of the movie, the zombie opens their eyes and like claws their way back like this, right? Okay. So there's a guy who's a good guy named, he's a good analyst called Philip Lemoine. Okay. He's PHL 43. All right. And maybe we can put this link on screen. Can we do this? Hold on. Let me send you guys a link. Okay. Can you guys see that?
Can we project that on screen? Let's take a look. PHL 43 is a very smart guy, good poster, French guy. Okay. And tell me when you got this on screen. All right. I'm screen sharing. Can we get this on screen? There we go. All right. So I like both Nate and Nikita. Okay. And they were basically talking about LinkedIn boosting. And Philip found something important.
So if you scroll down and look at these graphs, just click the graph, the first graph or the second graph will say it. All right. So essentially, like a zombie movie, Basically, the New York Times, their distribution collapsed after peak woke in 2020, 2021, 2022. And after Elon took over X and he de-boosted them, they basically went to complete zero 2024, 2025.
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Chapter 5: What challenges does Balaji identify with legacy media?
There's a lot of great stuff about X. But as I said, if we go back to my original post here, you know the thing, we haven't been serious problem.
We haven't been serious problem.
Yeah.
Yeah, we have a 9-series problem. So the thing is, we have to understand that this zombie of NYT is getting back up off the mat, that they are getting traction again, that they are going to, especially with this war, in my view, it's given them a sword. They're going to be attacking all of us. They're going to be yelling at tech guys.
They're going to be calling us all kinds of names, whether you were for the war or not, right? And so post this on screen, this thing that I just posted. So you can come back to this post.
So the issue we'll need to address with cryptography and AI is some people have started linking to legacy media news sites simply because the URL has a built-in form of validation in it and they can't tell what's true on a social media that's just optimized for views. Right? So that's why I said the SQL to go direct is prove correct. We must prove correct, not simply go direct.
Yes, put out your own opinion, but prove the facts, okay? And how do we prove the facts? Cryptography, mathematics. That's a property of all human beings, not some New York media corporation. Okay. People don't have to trust the tech zillionaires. They don't have to trust us because they don't have to trust us. They can just look at it on chain, right?
And so we turn crypto and cryptography, just like there's cryptocurrency, we call this crypto information, right? Information is built in verification and validation. Okay. Now, by the way, you know, tutorials are actually a pretty good place to start on this. You know why?
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Chapter 6: How does cryptography play a role in verifying information?
When you go through tutorial, you actually verify it line by line in a way that you don't for most content. right? Because you're like typing that into, you know, an editor or you're, you're trying to replicate each step. Like even a recipe actually has a built-in verification to it that most content doesn't.
It's not like, you know, if you read some article on Egypt, it's not like you're flying out there like Indiana Jones and verifying every line of the story. You know what I mean? Right? This is gentleman amnesia, you know, um, Like, do you guys know what that is? Maybe you can put that on the screen. Do you want to explain?
Yeah, basically this idea that you read something in the paper, you think it's deeply retarded, and you're like, wait, I know about this topic. They're totally wrong about this. But then when you think about, when you read other things they write about that you don't have expertise in, you sort of give them benefit of doubt and assume they're right about that. That's exactly right.
And don't go to Wikipedia because Wikipedia is itself a terrible source for everything. Only Grockipedia, baby.
We're Grockipedia only in this household.
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Chapter 7: What is the significance of decentralized media?
It's Wiktionary. So I hope they make a Grocktionary because Wiktionary is actually really good.
Yeah, I know. But we need, we definitely need, we definitely need Groctionary, right? So here we go. Hold on. Elon, if you're listening to this, Groctionary. Honestly, by the way, Elon, it's actually absolutely insane that, like, Grockopedia is a world-class thing. And for many people, like, it's literally, it's better than Wikipedia.
For many people, they'd find it hard to remember it in the top 10 of things from rockets to cars to boring company and so on. By the boring company, you know why that's actually way more important than people think? Why? Iran has actually got a form of defense where they've actually put all of their bases.
They built these missile cities, these subways, basically, giant subways that are filled with missiles. And so they've got underground bases. And so for both offense and defense, we're going to see a lot more in the way of underground cities. So lots of cities are going to put more and more of their stuff underground because standoff missiles have kind of changed the military, you know.
And actually, I think New York City got its first approval. I can't believe they got an approval for this for like a 80-story underground skyscraper kind of thing. And so in a sense, the underground world is like the encrypted world. All the satellite footage can't see what's happening underground because ā
underground and um there's a lot of actually space under the earth and that direction for things underground and in the water and maybe under the oceans a whole with modern engineering we might be able to do a lot more than people people think right
So the boring company is actually potentially a much, much, much bigger thing than people even realize beyond just tunnels for cars and self-driving cars. It might be tunnels for cities and for homes and so on in the medium to long term. Also, you know the term air rights? Have you heard that term? No. I think so. When you're buying property, right? Property has, you know, cadesters.
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Chapter 8: How does Balaji propose to rebuild trust in information?
Yeah, so it's like boundaries, like the latitude, longitude coordinates in XY space that define what you're actually buying if you're buying property. In cities, you also have air rights, which add a Z axis because you're going up in the air and you might build a skyscraper. And can you build upward in this way?
Because if, you know, are you casting shadows on people nearby and taking away, you know? So... Now you have, let's call it subterranean rights, which are ground rights. How low can you drill into the ground without, you know, obviously you can destabilize things near you and whatnot. So there's engineering considerations. That's going to become a big thing. Anyway, coming back to the stack.
So Elon, Grokopedia. So we got Gelman Amnesia. We got that on screen.
I hope Elon is watching this, by the way, because are we the biggest live on X right now? We might be. Yeah. We might. You can at mention. Yeah, there we are. I think so. Bigger than Alex Jones. So how do we check?
Is there like a trending tab live? I don't think so. Maybe. So, but, well, let's not, let's entertain the audience. So, if, yes, all right. So, actually, can you look at the thing I just sent you? Not that one, the, I put it in the Zoom chat, pbs.twimage. Get this out. The general amnesia effect is as follows. You open the newspaper to an article and sub-subject, you know why?
Well, Murray Gelman is a philanthropist. And this is Michael Crichton talking, the late Michael Crichton, late great Michael Crichton. In Murray's case, physics. In Michael Crichton's case, show business. You read the article, see the journalist has absolutely no understanding of the fact that the article is so wrong it actually presents the story backward, reversing cause and effect.
I call these the wet streets, cause rains, stories, papers fold them. In any case, separation or amusement, multiple errors, and turn the page to national and international affairs, right? So then, you know, like, you know, you can hit X and close out of this, right? So the point is, basically... This is something where whatever you ā if you actually model it, right, NYT was the center.
And how would you know something about Japan in the 1980s or the 1990s or the early 2000s? NYT would have a reporter, and they would present it to you because you'd have a description to NYT. And how do you know about what's going on in Turkey or in the nuclear industry? hub and they would essentially intermediate everybody's perception of each other, like a hall of mirrors in the center.
The Japanese guy would only know through one of these centralized news agencies, right? So you think of it, they call it the media in part because it mediates your experience of reality. It's like a shimmery mirror into the shimmery hall of mirrors. And of course, that power of controlling that centralized hall of mirrors where everybody perceives everybody else through this smoky looking glass
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