Michael Casey - Chief Content Officer & Chairman at CoinDesk | The Internet is Broken

all the different kinds of decentralized stories and projects and companies that you've reviewed over your career. What has worked and what hasn't worked? Well interestingly first big decentralized project that I got interested and excited about was the internet itself. As a computing architecture, as an underlying layer for distributing information in a way that nobody is controlling, it works. Theirium, the second biggest and most important blockchain and a very different one in terms of its functionality. Utility is people that are madly buying the token because they all betting on the next big thing, then flood it with supply and bring the price down because that's not what you're trying to achieve. We've been trying to do this with blockchain, Web3, NFTs and a lot of the stuff isn't working. So I'm trying to identify what are the things that we have to incorporate in the future of the internet. The core protocol change that we are. Welcome to success story. I'm your host, Scott Clary. The success story podcast is part of the HubSpot podcast network. HubSpot has been a huge supporter of the show for over three years now and I'm a big fan of HubSpot because not only do they support the show, they support entrepreneurs, they support founders and obviously building businesses, working with entrepreneurs has been a huge part of my career and building is never easy. HubSpot is not only tools and technology that supports entrepreneurs but they also offer tons of resources and discounts but first what is HubSpot if you've never used it before? It is the platform that unites your entire front office from marketing to sales to support. It's the platform that streamlines your support tickets, it generates more leads, it increases your sales. It is the platform that scales right alongside you. 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Well interestingly, the first big decentralized project that I got interested and excited about was the internet itself. Remember, the internet is built on decentralized architecture. It is designed to not have anybody in charge and there's protocols that run that are indeed that way. Look, as a computing architecture, as an underlying layer for distributing information in a way that nobody is controlling, it works. That layer of the internet is what works. Now, a book that will presumably come to, as we go through this conversation, our biggest fight is all about how the higher layers of that suddenly then re-centralize and the books actually about how we should decentralize, re-decentralize the internet to bring it back to its core principles of having this open open architecture. When we talk about decentralization, we most commonly now focus on things like Bob Chainson, the cryptocurrency world. I think that the one that has truly worked is Bitcoin. Bitcoin has proven that it is a fundamentally decentralized architect. It's one of the reasons why, by the way, regulators in the United States have become comfortable with Bitcoin because there is nobody that they can point to and charge and arrest. Essentially, it lives outside of any control. It's an interesting question, by the way, as to whether or not that would have been possible if it hadn't flown under the radar for its early years, and Satoshi might have been actually nabbed and sort of found out who he was and put into some federal prison or something. There's something about that moment that will allow Bitcoin to become decentralized. Now, you then have this spectrum. I think it's fair to say that Ethereum, the second biggest and most important blockchain and a very different one in terms of functionality and utility, is much closer to being called truly decentralized than any of the others. One's a competitor to Bitcoin, but certainly is up there with that thing. Then you go down the spectrum. There's a lot of others that are holding out a fairly good claim to being decentralized, but the further you go along, you start to realize that they function with the input of certain institutions, the foundations, and others. There's always a slightly quasi-centralized and some of these are not Bitcoin, not Ethereum to a degree, but a lot of the projects are slightly centralized component. The reason why I asked that is because you've looked at so many examples of how decentralization hasn't worked. We can name a couple different founders. We can talk about them too, and the projects they built. When you look at what you're trying to do with project liberty, with the thesis of our biggest fight, you're making the argument that we have to go back to a decentralized internet, and we have infrastructure we have to rework. But we've been trying to do this with blockchain, Web3, NFTs, and a lot of the stuff isn't working. So I'm trying to identify what are the things that we have to incorporate in the future of the internet, your version of the future of the internet that's going to make it. So certainly, the core protocol change that we are highlighting as an example of the kinds of fixes that need to happen in this book, the decentralized social networking protocol, or DSNP. One of the features of it is that even though it actually relies on a blockchain underneath it for a certain amount of data validation and creating a steady state of information underneath that, and it's core, it doesn't have a token. So it doesn't have a sort of a speculative element to it. And I think that's actually really, really important. There's this idea about how you design the tokenomics of a Bitcoin, I think it's a sorry of a blockchain, so that you manage the supply and demand of the underlying token such that it doesn't get overwhelmed by the speculative thing. If there's people that are madly buying the token because they all betting on the next big thing, then flood it with supply and bring the price down because that's not what you're trying to achieve. How you do that algorithmically, so it's not nobody in charge, because then that in itself was a question of decentralization, is a really important question. But I think at its core is like this, you need a permissionless decentralized architecture and that's what within a blockchain contract, a context, a token is necessary for. These other sort of permissioned blockchains have all failed because at the end of the day there's a point of failure in some entity that's in charge and that's really defeating the purpose. The thing is, how do you get to this idea where the token that you need to enable this incentive-driven permissionless system isn't overtaken by the speculative further, and that's where this token of commerce comes into it. I think Ethereum, in fact, is very good to look at because I think there's been an enormous amount of work that figuring out how do you actually manage the token supply and the incentives behind that to keep this thing honest. And so I think that's really an important part of this. And to bring it back to the book and certainly DSNP, I think we feel and the folks at Project Liberty who are behind this is that if you had a token in there and that became the sort of defining feature of the protocol, it would just get overwhelmed by once again all the hype. You don't want this to be the point of this book is not to create yet another get-rich opportunity for people to build trying to change the infrastructure. And yes, you need to have truly permissionless systems that enable that, but where those things lie within the stack are really important. You mentioned that the first decentralized technology that you got interested in was the internet. So obviously you've been around for a while. You've been here, right? Yes. So let's let's talk about how the internet's changed. Like let's talk about what it was meant to be and how it's broken. So I think like to think about the broken part, the journey that I've been on and we've all been on it by the way, but I think as a journalist who whose career spanned really the pre-internet age to now, I used to literally write for a newspaper and the only vehicle we had to get that news out was a physical newspaper. There wasn't many years, by the way. I'm not that old until it was quickly the internet came around and we had to think about that. But I like to think about what was happening at that point. And we were first of all excited, wow, look at all this information that's available to us. And they're not long down the path. In the media industry, we started to think a little bit, oh my goodness, this could be a challenge to our business model. But the mindset we had at the time was we're going to be competed out of this by bloggers and citizen journalists and a whole range of new free-to-air website-based services that are just going to be able to do this so much more cheaply than we can. And I was always conflicted by my concerns was I was thinking, you know what, but this is probably good for democracy, you know, having all the more voices out there who are able to contribute and weigh in on the big sort of public discourse. So I was like, you know, we got to live with this. But come, you know, as we say, the app era, this is post, you know, the worldwide web, the.com boom and all of a sudden Facebook and Twitter, the social media phenomenons were there. And you know, I'd been just writing doing my beautiful job of writing an article or two or three or four every every day. And then suddenly I was also having to put blog posts out and then podcasts and then TV. And then most importantly, I was having to tweet. And you know, we were all encouraged to be on social media because we had to fight to keep the eyeballs on us must compete with the, you know, in the internet, attention grabbing game, right? Why? Because the platforms were now constantly pushing us everywhere else and then you start to realize that, you know, you're actually competing, yeah, not with these alternative news outlets, but with the algorithm itself. Because Facebook wanted your, your eyeballs for the for their own advertisers, not for us. And then when you think one step further and you look at the phenomenon that, I know, maybe some of your readers and viewers will be aware of SEO, the famous search engine optimization concept and anybody in media, I'm sure you will. This will has got has to play this game, right? It's figuring out what kind of change is everything, right? But what are you doing in that process? You're trying to write the optimal catchy thing to keep an algorithm happy. Because it probably also I've seen in your media operation, like, wow, why is this thing not getting any attention right now? Oh, Google, yeah, Google tweaked the algorithm. Of course, it's, but it's not just then it's a social and you're like figuring out what's the latest dance that I got to do on text. So it's all about it. It is, right? So, so we like to talk in the book about how the algorithm in fact is is is is actually a combination of two factors. It's the little software that is written to perform a certain repeated task. But the other half of it is actually biological, right? It's whatever it is that's clicking in our brains that responding to. And if that's not getting enough engagement, then the algorithm itself will tweak to find the next thing that it is and that becomes the re reiterated iterative thing. So these algorithms are one part software, one part biological. And that's really what's kind of scary about this is a human hack that's been going on for 20 years. So you sort of realize that as a journalist and you're like, what am I doing? Why are we even doing this? This is the moment that I think I really realized that in fact, I think probably the the big aha moment of how broken it truly was was in 2016 and there was a famous article on Buzzfeed about this website that these kids literally teenagers in Macedonia had created in the middle of the, you know, a very fraught US election at that time, right? And they'd figured out that to generate a flywheel effect of ongoing shares and retweets and likes and everything that you need to get engagement in this social media environment, all they had to do was just to make stuff up and land it in in a very highly passionate driven group on Facebook. So 2016, and if you wrote an article as these guys did of Obama's birth certificate found in Kenya or Pope Francis endorses Donald Trump. Or in fact, there was also some some that were actually far more targeted at liberals, right? That would say like mass migration from the US to Ireland, you know, Trump flight migration patterns and all these sorts of things, none of which were happening. But because they triggered what people wanted to know amongst their very closed echo chamber Facebook framed groups, they got enormous traction. So think about this, right? I was working at the Wall Street Journal at the time. We had an editor-in-chief below him was a deputy editor, then there was a whole line of sub editors. I have my own managing editor. We had lawyers, we put, we had, we had buildings, we put, we gave people security clearances to go to wars, right? The cost of building and working on finding the truth and ensuring that that truth was delivered was enormous to actually establish and stand up what we were doing. And we were now being competed out of it by a bunch of kids in Macedonia who'd figured out how to gain the algorithm better than we could with complete and utter lies. So obviously, you know, social media platforms, they take advantage of that because that's what drives engagement, it drives viewership. The commercial model is the more people on the platform, the more money we make because they're not selling a product or service. So they've massively capitalized, not just social, like a lot of big tech. Government doesn't keep up with legislation. Government's actually participating in the process, not necessarily out of any nefarious entity, but they all have to, right? They're going to play the same social media because they use that social for their own benefit. Right, so politicians are all themselves participating in the same system. And you have some examples, like you have like a CCPA and GDPR where they're trying to, but it's still slow, right? So now this is, this is like the central thesis is, we got to do something better, we got to rebuild. I think the way we look at things like those, those two well-meaning and obviously earnest and important acts that were, you know, California and the European one, was that, look, trying to solve the right problem, but actually still not low enough down in the stack, right? They're dealing with the surface level problem. Our argument is it's the control of the data that enables those breaches of privacy, that enables the controls that have to be, that need to be addressed. And the solution that we're addressing in this book is the idea that we can build protocol, a specific protocol that enables the individual to control their data, to determine who gets to see what, when and how, their own online activity, their posts, their content, their tracking, everything, and bringing that into your control, so that this concept of your social graph, which is the really the most valuable part of a social graph is this complex network, this web of relationships that you've built over time, with all of your interactions, with everybody, with every institution, with every app, right? That story is incredibly valuable. That's what they use to sell data, because from out of that they extract information about who you are, what you're likes are, what you're dislikes are, and that becomes incredibly valuable where it advertises. So all of that information is hidden. It is you. We make the point, and this is a, I think, one of the most important things we need to start thinking about, that that data is rightfully yours on moral grounds. So this is actually a human right, because in the digital age where all of our lives are online and all being tracked in this way, the distinction between your physical personhood and your digital personhood, for all intensive purposes, has completely disappeared. So the control of that data should rightfully be yours. We want people to rise up and demand this, because that's the human rights aspects of this, because I don't think people think about it until there is a Cambridge Analytica. I don't think people actually are cognizant and aware of the fact that there is. Because it's designed not to be cognizant, right? It's not meant to be intrusive. So I think one of the problems we also face is we all believe that we are in control. We like to believe we're in control, right? No one would say, I choose what I read, I'm not being told, but you know, it's well and truly well established how our dopamine release function works from our adrenal gland and our heads, right? This is now a very well-established chemical fact that this machinery we have in our own brains, which stems from these primitive, you know, fight-and-flight instincts that go way back to, to, you know, the early stages of evolution that are now there are always doing these things. There's an LMK of tremendous psychiatrist that's worked in the realm of addiction. You know, just does very, very well explaining how the dopamine process works. She says that social media is far more extreme in all of this, and that once it's put in your pocket in the form of an iPhone, it is the equivalent of a hypodermic needle in your pocket. So as much as we all like to think we're in control, we're not. And if that's the case, then, you know, then this isn't a breach of our free will. This is an abuse of who we are. So recognizing that is hard, but once we do, we need to take it back. I just want to take a second and give a shout out to HubSpot and the HubSpot podcast network. That's who brings you this show every single week. If you love success story, you'll love some other great podcasts in the HubSpot podcast network like Creator Science. It's one of my personal favorites. It's hosted by Jay Klaus. Creator Science goes behind the scenes of today's top creators. They do interviews and Jay explores how creators like Timmerbin, James Clear, Tori Dunlap, Cody Sanchez are building their audiences today. And honestly, by learning how these creators make a living with their art and their creativity, Creator Science really helps you gain the tools and confidence to do the same. This is where I go from my playbook on how to learn from the best creators. Listen to Creator Science wherever you get your podcasts. So then, so I think that a lot of people, if you ask them point blank, are you happy with the current state of the internet and the current state of how your data is managed? I think most people say no. I don't, but there's no alternative. I know that's what you're trying to accomplish, but there is no alternative. And it's hard to shift habits and behaviors. It's very, very hard to do that. So what's the best way to move people to a better system? What's the realistic way they're going to accomplish? I actually do believe that with the right messaging, with the right conversation and thanks to people who are like, you've got to give us a platform here to talk about this, that you can actually motivate people. And it seems like our default way of framing this is the apathy thing. Oh, people don't really care. I think, I like to think we might be at an inflection point. I really do feel like people are getting really motivated right now. And the stories that we're hearing about, the harm that is being done to adolescent minds and the surge in suicides and all these sorts of problems are starting to make people wake up. So that's one thing. We use the analogy in the book a lot around the American project. And we cite Thomas Payne, who wrote an incredibly influential book published in early 1776 about the fact that the right to divine rule and the monarchy was an absurdity that we needed to all recognize and that we needed to make a choice. Do we want to be subjects or do we want to take charge and have agency of our lives and become citizens? And we all know that sufficient number of American settlers decided that that second choice was the one to go for and the rest is history. So yeah, people might say that comparison is a little grandiose, but given what's at stake, given the harm that's being done, given this same question about agency and control, we say that these five platforms are like feudal lords. This is digital feudalism. We need to rise up. So I think there is the capacity. History has had the capacity over and over again for people to rise up. That's one thing. But the other thing is, and so on, one of the other reasons why we use the American project is an analogy here. We believe, and I don't think it's that hard to stand up from the evidence of economic history, that in fact, if you open up the data and put it in the hands of everybody, we're going to create greater prosperity than we've ever had before. The economic incentives to make this move, not just for individuals, but for companies, for startups, for big companies as well, to then no longer have Amazon as the intermediary between them and their market, right? The business models that will emerge, you know, when Scott has his own data and Michael has his own data, when everybody else has their own data, and we can start to figure out how we build on top of that. Could be phenomenal. There's a historical precedent in so many cases through history, when digital property rights have been transferred to a new class of people. At only any of these moments in history, you think about the invention of the limited stock company or the moment when Deng Xiaoping decided that every Chinese person should own their home, you saw huge grows in prosperity, because when people own something and they have the power of it, they start to create. They start to become innovative. And I think that's what's going to happen when we've got our control over this new digital property, which is our data and our online content. I'm curious how you see this space evolving, because when we look at past decentralized projects, you see a lot of bad actors, because there's a lot of, there's a lot of economic gain. We look at SPF and you broke that story with Quizz. We did, we broke that story, that's right. So you, you want to not incentivize people like that, but then if you look at all of what, a lot of web three is incentivized. Well, let's be clear about SPF as well, right? Like in some respects, what he represented and FTX represented was the antithesis of what the decentralized system is supposed to be. Like, unfortunately, because of partly the evolution of the technology and partly because of people just can't get their heads around how to trust the math of a decentralized exchange. So much of what was built to enable the trading in crypto tokens were actually centralized custodians, but that actually makes them the worst of both worlds, right? Here in the US, if you, you know, trust your money with a bank to look after that, money of yours, you at least have all that, you know, backup of FDIs, see insurance and all the regulations and everything else, an offshore, you know, exchange that doesn't have any of that regulatory framework, all you've got is the custodial risk of that trusted entities, supposedly trusted entity looking after it. That's not crypto, right? That layer. So what, what, what SPF was enabling was the capacity for people to, to trade, um, underneath and to access this through this essentially. Then when you own your Bitcoin, you can start to do something in a decentralized environment, but getting in and out of it, that is nothing to do with crypto, right? That's a, so we need to actually just, so I had, I'll let you go, but I had the second part to that to you. The second part was I know that's nothing to do with how decentralization should work, but my point was how do we incentivize the right behaviors? How do we incentivize? So for example, the model of selling data will no longer exist in the same way that it existed. So what's the way to incentivize entrepreneurs to build and a good, but you can finish a story, it's a good story. No, no, no, I think ultimately that, that's really my point, right? And so, and so we need to think about like what is a true decentralization? And to your point, how do we create models and so which people aren't incentivized to recreate centralized custodial structures on them? When it comes to the data, um, look, I think that in fact, there will be data sales, right? In fact, you know, particularly if we start to form collectives of like data unions and ideas, so you know, something valuable is aggregated again, but under the terms that we control with the communities that we want to work with, I think that there will be companies that that just like individuals will generate their own data and they'll be able to sell that in certain ways, right? What you're talking about, which is what we want to see go away, is the idea that some other entity, this platform, has the rights to the data that the individual or the company or the business themselves are generating on their platform and that that becomes this very monopolized thing. So, you know, when, when that goes away, um, I think that we, you know, who knows how it all evolves? I mean, there is, there is obviously this pattern within capitalism that you sort of have to accept that, you know, things often veer towards monopoly, which is another way of saying centralization, right? Because, you know, everyone's striving to be the biggest. So, the question as a thought experiment might be, okay, we open this whole thing up, what happens next, do we just end up with another version of Facebook in this structure? And it's a, it's a decent question to ask, right? But if you have this underlying tech that is literally structured in such a way that, uh, the control lies with the individual and there's now also an awareness that this is something that we fight for every single day, you know, there are new governance structures that come into place and you put it, policy and so forth. All of it's, I think, part of the solution. It is the tech, it is the awareness, it is the policy, it is the fact that this is the thing and the same way that we have anti-trust laws in this country to protect against monopolies that we start to build a full sort of framework of how we protect people's data. When you, when you look at, like, some of the main takeaways, when somebody reads this book and you wrote it with Frank McCourt, Jr., and I'm also curious why you chose that as your writing partner as well. Well, he chose me. Let's be clear. Oh, okay, thank you. Although to be fair, I, you know, Frank, this is Frank's, you know, life work. And interestingly, I would say it's, it became my life work sometime before I met him as well. And so I think we had a meeting of minds when we found each other. Frank has, you know, put, you know, half a billion dollars of his own money into supporting project liberty and to putting this effort into building this movement and to sort of supporting this new technology. And when I met him, we were at the World Economic Forum and there was a side event that he was sponsoring. And I sat down and I thought, this is the first businessman from the mainstream business, who is not a techie from Silicon Valley. He's, you know, he's not trying to sell me something. He literally cares about this on, on a, a deep and profound level. And is, is, you know, fighting this fight from humanity's perspective. And again, I'm a journalist. That's the sort of stuff I care about. So I found Frank to be a tremendous partner in this. And so when I then was indirectly reached out to by somebody else to say, hey, there's a guy who's writing a book and he's looking for a co-author who could help him. And I said, it's Frank McCourt like, wow, I know Frank. And I, um, yeah, we got to know each other better at that point to make the sort of, to ensure that the marriage was something that we could we could maintain. It was important, yeah, you know, you know, you had to have all those prenuptials in place. But ultimately spent, you know, a very interesting, you know, half a year within plowing through this, um, it's been, it's been tremendous, tremendously rewarding. And I think one of the reasons why that's the case is because there's a, there's an understanding that he brings to this that I'm very, very much on board with that the book is really a vehicle for something far more important, right? We're not here to sell books. We obviously want to sell more importantly. We want everyone to read. And that is that there's a movement, right? This is an opportunity for people to get behind this to do something. This is a book as a vehicle as, as common sense was with Thomas Payne to, to drive a movement. Uh, and that's really I think where we're coming from this. And I want you to just leave like the audience with one sort of final thought on like a central takeaway. Like if you were going to say, you, you pick up this book, you're going to read the whole thing. But if you take away one thing, what is that thing? We can fix this. We can fix it. We have the technology. It's up to you. It's up to you to take charge of this to demand your rights as an individual as a citizen. You know, restore agency for you and for your children, for future generations. The technology is there. The technology is being developed. It's, it's up to us to actually embrace it and migrate to this new model. I love it. Where can people, where do you want to send people? Obviously, Amazon. It's in the show. You can buy it, but we were also where do they see you? Where do they find you? Yeah, I'm okay. So I'm, I'm Mike Jay Casey on Twitter. You can find me on on LinkedIn. I'm, uh, you know, I have my own website, Michael Jay Casey.com. I haven't put anything on there for quite a while. Look, the most important thing is our biggest fight, our biggest fight.com. There's a lot of resources there about the book, about the cause. This is supposed to get involved. The project Liberty, there's ways to get involved. If you're a builder or a developer on, uh, DSNP. So yeah, our biggest fight.com, I think is probably the best place for people to go right now. Michael, you're not taking on something easy. It's called our biggest fight for a reason. That's right. If you were going to an hour biggest fight, our biggest fight is rolling it. Um, if you were going to look at everything you've accomplished in your life and what you're working on at this point, this very, you know, this very moment in time, what would success mean to you? I think it would be the sort of the, the, the emergence of a common alliance, a cross societal movement. Everybody from individuals, teachers, businessmen, uh, developers, like, you know, from all, all races, all creeds, everything, you know, the sign that this is coming together as a real profound meaningful movement. And then of course, the actual migration to this new system that comes with it.