The Crypto and AI Renaissance: A Conversation with Josh Rosenthal

In a fascinating discussion on the Unlayered podcast, Josh Rosenthal, a historian and partner at Narwhal Ventures, draws compelling parallels between the Renaissance period and the current crypto revolution. With his unique perspective as both a medieval historian and a tech entrepreneur, Rosenthal offers deep insights into how decentralized technologies like cryptocurrency and blockchain are reshaping our world in ways reminiscent of the profound changes that occurred during the Renaissance.

The Historical Pendulum: Aggregation vs. Decentralization

Rosenthal begins by framing the grand arc of history as a pendulum swinging between periods of aggregation and decentralization. This cyclical view of history provides context for understanding the current crypto revolution as part of a larger historical pattern.

"If you look at the grand arc, you know, swinging back and forth through history, you know, I definitely see it as this pendulum and a clock swinging back and forth between aggregation and decentralization," Rosenthal explains.

This perspective helps us understand that the current push towards decentralization in finance, communication, and identity is not unprecedented, but rather part of a recurring historical pattern. By recognizing this, we can better appreciate the significance of the changes we're witnessing and their potential long-term impact.

The Middle Ages: A World of Permissions

To understand the revolutionary nature of the Renaissance and its parallels to the crypto revolution, Rosenthal first paints a picture of the Middle Ages. This era was characterized by a rigid, hierarchical structure where most people's lives were severely restricted.

"There was one power. There was a cosmic divine material like hierarchy. There was a pyramid, and you were at the bottom of it," Rosenthal describes. "Your world was permissioned in every sense of the word."

In this world, the average person couldn't own land, couldn't freely use or spend money, and couldn't travel freely. More importantly, it never occurred to most people that the world could be any different. This state of affairs bears striking similarities to our current world, where centralized institutions control much of our financial and communication systems.

The Renaissance: A World Reborn

The transition from the late Middle Ages to the Renaissance marked a profound shift in how people understood their place in the world. This change was driven by communities using decentralized technologies, primarily ledger-based accounting and the printing press.

Rosenthal explains, "The change between the late Middle Ages where everything was in a hierarchy, there's one set of institutions, economics, socio-demographic, even philosophical to this like recreation of the world as they knew it came through what drove it. It was really communities using decentralized technology."

The introduction of ledger-based accounting allowed for new financial products and derivatives, enabling people to become entrepreneurs and sparking what historians credit as the advent of proto-capitalism. Meanwhile, the printing press allowed for the rapid spread of new ideas, challenging the established authorities and empowering individuals to think differently about their place in the world.

Crypto: The New Ledger-Based Accounting

Drawing parallels to the present day, Rosenthal sees cryptocurrency and blockchain technology as the modern equivalent of ledger-based accounting. Just as double-entry bookkeeping enabled new forms of economic activity during the Renaissance, crypto is opening up new possibilities in finance and beyond.

"Crypto as the new ledger based accounting and a massive unlock creating like generation, a new type of business model, we called it entrepreneurship at scale, decentralizing, allowing people to make living pursuing different things outside the determinants," Rosenthal states.

This comparison helps us understand the revolutionary potential of crypto. It's not just about creating a new form of money, but about fundamentally changing how we think about value, ownership, and economic participation.

The Internet and AI: The New Printing Press

While crypto serves as the economic backbone of this new renaissance, Rosenthal sees the internet and AI as playing a role similar to that of the printing press. These technologies are enabling the rapid spread of ideas and the creation of new forms of content and communication.

"AI may end up being very similar to open source, right? Like it creates a tremendous amount of value, but the value accrues adjacent to it. And so how do you monetize that value?" Rosenthal ponders. He suggests that crypto could be the mechanism that allows individuals to capture value from their contributions to AI systems, much like how the printing press allowed authors to monetize their ideas.

The Visibility Revolution

One of the most significant aspects of the crypto revolution, according to Rosenthal, is the unprecedented visibility it provides into processes that were previously opaque. In traditional finance and technology, much of the development and decision-making happens behind closed doors. With crypto, everything is out in the open.

"You now have visibility into what's been hidden from you," Rosenthal explains. "So when you say, why isn't this working yet? 'Cause you're seeing this, you don't get to buy anything until it's IPL or maybe you're an LPN Adventure Fund and they give you an opaque like partner's letter, maybe do some crowdfunding thing and then they ghost you. Like, you now have visibility to start up on day one."

This transparency can be jarring and may contribute to the perception of volatility in the crypto space. However, Rosenthal argues that this visibility is actually a feature, not a bug. It allows for more informed decision-making and potentially leads to better outcomes in the long run.

Crypto and AI: A Symbiotic Relationship

While some view crypto and AI as competing or conflicting technologies, Rosenthal sees potential for a symbiotic relationship. He argues that crypto could provide the economic substrate necessary for AI to reach its full potential.

"There has to be an economic function to like regulate that demand. And so that's where value will accrue. So the question is, does it accrue through AWS? Or does it accrue through render with you using it?" Rosenthal posits.

This perspective suggests that as AI continues to develop and require more computational resources, crypto could provide a decentralized way to allocate and compensate for those resources. This could lead to a more distributed and equitable AI ecosystem, rather than one dominated by a few large tech companies.

The Entrepreneurial Nature of Crypto

One of Rosenthal's key insights is that participation in the crypto ecosystem essentially turns everyone into an entrepreneur and investor. Unlike traditional finance where most people are passive participants, crypto allows and often requires active engagement.

"Crypto turns everyone into an entrepreneur. As an entrepreneur, if you've done this, you know what it's like, right? Like you're, one day you're on top of the world, one day you're getting crushed, somebody gives you an ice cream cone, Tyson punches you in the face, right?" Rosenthal colorfully describes.

This entrepreneurial aspect of crypto can be challenging for many people who are used to more stable and predictable financial systems. However, it also opens up new opportunities for innovation and value creation that weren't possible in traditional systems.

The Pluralistic Future

Rosenthal envisions a future characterized by pluralism, where multiple systems and identities can coexist. This is in contrast to the current paradigm where we often think in terms of either/or dichotomies.

"Like the mark of whether a movement like succeeds is like how well you move like into multiplicity or pluralism. Like not calling it coexistence, but literally saying different things work in different ways for different use cases," Rosenthal explains.

This pluralistic vision extends beyond just financial systems. Rosenthal sees potential for multiple identities, multiple chains, and multiple ways of interacting with technology and each other. This diversity could lead to a more robust and adaptable system overall.

The Renaissance of Regionalism

Interestingly, Rosenthal suggests that the rise of digital technologies like crypto and AI could actually lead to a renaissance of regionalism and local culture. By freeing people from geographic constraints in terms of work and economic participation, these technologies could allow people to choose where they live based on factors other than economic necessity.

"Like Wendell Berry, like local, like supply lines, like culture, like tradition, all the sort of stuff. Like that actually might be driven by the metaverse," Rosenthal posits.

This idea challenges the common assumption that digital technologies will lead to increased homogenization. Instead, it suggests a future where global connectivity enables greater local diversity.

The Importance of Optionality

Throughout the discussion, Rosenthal repeatedly emphasizes the importance of optionality. The crypto revolution, in his view, is not about replacing one system with another, but about creating more options for how we interact with the world.

"Like, not to say you have to like believe everything at once and do everything all at once. Like, it gives you optionality to pursue these different things," Rosenthal explains.

This focus on optionality is particularly relevant in the context of Solana and other blockchain platforms. By providing fast, efficient, and cost-effective ways to build and deploy decentralized applications, Solana increases the optionality available to developers and users alike.

The Role of Volatility

While many view the volatility in the crypto space as a negative, Rosenthal sees it as a natural and even necessary part of the process. He draws parallels to the volatility and conflict that characterized the Renaissance period.

"You should expect crazy volatility 'cause you're now seeing this. You should expect resistance from institutions and for them to win early on," Rosenthal warns.

This perspective can help investors and participants in the crypto ecosystem maintain a long-term view, understanding that short-term volatility doesn't necessarily indicate failure, but could be a sign of significant change in progress.

The Potential for Social Impact

Rosenthal sees significant potential for crypto to have positive social impacts, particularly for those outside of traditional power centers. By providing economic opportunities and ways to monetize data and skills that were previously difficult to capitalize on, crypto could help level the playing field.

"So like in terms of like distributing like economic value creation, it's proportionately more impactful for people like on the fringes and on the margins," Rosenthal explains.

This aligns well with Solana's mission to make blockchain technology accessible to a wider audience. By providing a platform that's fast, cheap, and easy to use, Solana is helping to democratize access to these new economic opportunities.

The Challenge to Existing Institutions

Just as the Renaissance challenged the authority of the Catholic Church and feudal lords, the crypto revolution is challenging existing financial and technological institutions. Rosenthal argues that this challenge is a necessary part of progress.

"And so like where we're at right now is there's a further acceleration between like the delta for like institutional technology outpacing institutions," Rosenthal observes.

This challenge to institutions is not without risk or conflict. However, it's through this process of challenge and adaptation that societies evolve and improve. Solana, with its high-performance blockchain, is at the forefront of this challenge, providing an alternative to traditional financial systems and centralized tech platforms.

The Importance of Community

Throughout the discussion, Rosenthal emphasizes the role of communities in driving technological and social change. This was true during the Renaissance, and it's equally true in the crypto revolution.

"It was really communities using decentralized technology," Rosenthal explains when discussing the drivers of the Renaissance.

This insight is particularly relevant to the Solana ecosystem, which has cultivated a strong and active community of developers, users, and enthusiasts. The strength of this community is a key factor in Solana's growing adoption and success.

The Future of Identity

Rosenthal presents an intriguing vision for the future of identity in a crypto-enabled world. He suggests that we might move towards a model where individuals have multiple identities for different contexts, all underpinned by blockchain technology.

"Like the idea of having like you as an individual with like multiple identity and like control over that for different use case across different ecosystems and different contexts with different tribes. Like that's like, that opens up like worlds of like better life and generation," Rosenthal enthuses.

This concept of fluid, context-dependent identities could have profound implications for privacy, security, and personal freedom. It's an area where Solana's high-performance blockchain could play a crucial role, enabling the complex computations necessary to manage and verify these multiple identities in real-time.

The Intersection of Crypto and AI

While much of the discussion focuses on the parallels between crypto and the Renaissance, Rosenthal also offers intriguing thoughts on how crypto and AI might intersect in the future. He suggests that crypto could provide the economic substrate necessary for AI to reach its full potential.

"If you're worried about AI dystopia, you better damn well begin into crypto," Rosenthal warns.

This perspective positions crypto, and by extension platforms like Solana, as crucial components of a future where AI plays an increasingly important role. By providing decentralized mechanisms for allocating resources and rewarding contributions, crypto could help ensure that the benefits of AI are more widely distributed.

The Role of Regulation

Rosenthal doesn't shy away from discussing the role of regulation in the crypto space. He draws parallels to historical attempts to regulate new technologies, suggesting that initial resistance from regulators is to be expected.

"At the Renaissance, at the Revolution, money was worth something and it wasn't worth something. Authority was falling apart. The world, as you know, it is literally an Armageddon. What are you going to do? That isn't the signal that a movement is going to die. Movements die with a fizzle and a whimper. That's a leading indicator that's substantively historically transformative," Rosenthal explains.

This perspective can help the Solana community and other crypto enthusiasts maintain a long-term view in the face of regulatory challenges. It suggests that current regulatory hurdles are not insurmountable obstacles, but rather expected growing pains as society adapts to new technological realities.

The Importance of Financial Literacy

One of the key themes that emerges from Rosenthal's discussion is the importance of financial literacy in the crypto age. Just as the Renaissance required people to understand new concepts like double-entry bookkeeping, the crypto revolution requires a new kind of financial literacy.

"You've been conditioned like a medieval lord who said you don't have any other options. Give us all this, you know, harvest our fields and give us the gleanings and like basically don't worry about it. We'll pay for your housing, right? Give us all your data and we'll give you a freemium subscription. Like your trick, you don't know how much that stuff is worth," Rosenthal warns.

This highlights the need for education and outreach in the crypto space, an area where the Solana community has been particularly active. By helping people understand the value of their data and the potential of decentralized systems, the community can empower individuals to take control of their digital lives.

The Potential for Economic Empowerment

Rosenthal paints a compelling picture of how crypto could empower individuals economically, particularly those outside traditional power centers. He suggests that crypto could allow people to monetize their data, skills, and even their spare computing power in ways that weren't previously possible.

"Instead of, you know, it's very similar when we did our first startup was a mainframe and godly amount of money. And then we went to a lamp stack and I could order cheaper and then we're using AWS like a light switch, right? And so like now the next order is like, what if it's not just a light switch? What if you can actually generate off the investment that you've already made pursuing your thing?" Rosenthal posits.

This vision aligns well with Solana's goal of providing a high-performance, low-cost blockchain platform. By making it easier and cheaper for individuals to participate in the crypto economy, Solana is helping to realize this potential for economic empowerment.

The Importance of Open Systems

Throughout the discussion, Rosenthal emphasizes the importance of open, transparent systems. He argues that the visibility provided by crypto is a feature, not a bug, even if it can sometimes lead to volatility and uncertainty.

"If you believe the bet that visibility and sunlight is like the best way to create stuff versus like black boxing stuff doing a reveal and saying, here we go, like, that's the bet you're making," Rosenthal explains.

This commitment to openness is a core value of the Solana ecosystem, with its open-source codebase and transparent governance processes. By embracing openness, Solana is helping to build trust and foster innovation in the crypto space.

The Role of Experimentation

Rosenthal's historical perspective highlights the importance of experimentation in driving progress. He notes that during periods of significant change, like the Renaissance or the current crypto revolution, there's often a proliferation of new ideas and approaches.

"And so like where we're at right now is there's a further acceleration between like the delta for like institutional technology outpacing institutions. Part of that is with crypto is this new printing press, which is like fundamentally different than what we've seen before," Rosenthal observes.

This insight underscores the value of Solana's approach to fostering a diverse ecosystem of projects and applications. By providing a platform that enables rapid experimentation and iteration, Solana is helping to accelerate the pace of innovation in the crypto space.

The Potential for Social Reorganization

One of the most profound implications of Rosenthal's analysis is the potential for crypto to enable new forms of social organization. Just as the Renaissance led to the rise of new social classes and forms of governance, the crypto revolution could lead to new ways of organizing communities and making collective decisions.

"Like crypto's power isn't just better, faster, cheaper, but it's solving the moat problem. It's solving the zero to one problem," Rosenthal explains.

This potential for social reorganization is particularly relevant to Solana's focus on building a decentralized ecosystem. By providing the technical infrastructure for decentralized organizations and decision-making processes, Solana is helping to lay the groundwork for these new forms of social organization.

The Importance of Historical Context

Throughout the discussion, Rosenthal repeatedly emphasizes the value of historical context in understanding current trends. By drawing parallels between the Renaissance and the crypto revolution, he provides a framework for understanding the significance of the changes we're currently experiencing.

"The grand historical irony is that most participants during the most substantive like transformative times are the least aware of it 'cause it like, it's such deep currents that you notice the ripples on the surface. You can't really feel the currents. And so like, we're actually aware of it this time, which is insanity," Rosenthal observes.

This historical perspective can be valuable for the Solana community and other participants in the crypto ecosystem. By understanding the historical significance of the changes they're part of, community members can maintain a long-term perspective and stay motivated through short-term challenges.

The Future of Work and Entrepreneurship

Rosenthal's analysis suggests that crypto could fundamentally change the nature of work and entrepreneurship. By enabling new forms of value creation and exchange, crypto could allow more people to become entrepreneurs or pursue passion projects that weren't previously economically viable.

"Crypto allows you not to invest some money in a coin, but to monetize your own data, which is, you know, depending upon whose math you believe worth, you know, seven, eight figures over your lifetime, not just to monetize your own data, but to use that for product development, to generate alpha," Rosenthal explains.

This vision of a more entrepreneurial future aligns well with Solana's focus on empowering developers and creators. By providing a platform for building and deploying decentralized applications, Solana is helping to enable this new era of digital entrepreneurship.

The Importance of Community-Driven Innovation

Rosenthal's historical analysis highlights the crucial role that communities play in driving technological and social change. This was true during the Renaissance, and it's equally true in the current crypto revolution.

"It was really communities using decentralized technology," Rosenthal notes when discussing the drivers of the Renaissance.

This insight underscores the importance of Solana's strong and active community. By fostering a vibrant ecosystem of developers, users, and enthusiasts, Solana is creating the conditions for rapid innovation and adoption of blockchain technology.

In conclusion, Josh Rosenthal's analysis provides a fascinating historical context for understanding the current crypto revolution. By drawing parallels with the Renaissance, he helps us appreciate the profound nature of the changes we're experiencing and the potential for crypto to reshape our economic, social, and political systems. For the Solana community, this perspective offers both inspiration and guidance, highlighting the historical significance of their work and the importance of community-driven innovation in realizing the full potential of blockchain technology.

Facts + Figures

• The Renaissance marked a transition from a hierarchical, permission-based society to one with more individual autonomy and economic opportunity.

• Ledger-based accounting during the Renaissance enabled new financial products and derivatives, sparking proto-capitalism.

• The printing press allowed for rapid spread of ideas, challenging established authorities and empowering individuals.

• Crypto is seen as the modern equivalent of ledger-based accounting, enabling new forms of economic activity.

• The internet and AI are compared to the printing press in their ability to spread ideas and create new forms of content.

• Crypto provides unprecedented visibility into processes that were previously opaque in traditional finance and technology.

• Participation in the crypto ecosystem turns everyone into an entrepreneur and investor, requiring active engagement.

• Rosenthal envisions a pluralistic future where multiple systems and identities can coexist.

• The rise of digital technologies like crypto and AI could lead to a renaissance of regionalism and local culture.

• Volatility in the crypto space is seen as a natural and necessary part of the process, similar to the volatility during the Renaissance.

• Crypto has the potential for significant social impact, particularly for those outside traditional power centers.

• The crypto revolution is challenging existing financial and technological institutions, similar to how the Renaissance challenged the Catholic Church and feudal lords.

• Rosenthal suggests that individuals might have multiple identities for different contexts in a crypto-enabled world.

• Crypto could provide the economic substrate necessary for AI to reach its full potential.

• Initial resistance from regulators to crypto is expected and parallels historical attempts to regulate new technologies.

• The crypto revolution requires a new kind of financial literacy, similar to how the Renaissance required understanding of new concepts like double-entry bookkeeping.

• Crypto could allow people to monetize their data, skills, and spare computing power in new ways.

• The visibility provided by crypto is seen as a feature, not a bug, even if it can sometimes lead to volatility and uncertainty.

• The crypto revolution could lead to new forms of social organization, similar to how the Renaissance led to new social classes and forms of governance.

• Historical context is valuable in understanding the significance of current trends in the crypto space.

Questions Answered

What parallels does Josh Rosenthal draw between the Renaissance and the current crypto revolution?

Rosenthal sees many similarities between the two periods. Both involve the introduction of decentralized technologies that challenge existing power structures and enable new forms of economic activity. During the Renaissance, it was ledger-based accounting and the printing press; today, it's blockchain technology and the internet. In both cases, these technologies empowered individuals and communities to challenge established authorities and create new economic opportunities.

How does Rosenthal view the relationship between crypto and AI?

Rosenthal sees potential for a symbiotic relationship between crypto and AI. He suggests that crypto could provide the economic substrate necessary for AI to reach its full potential. As AI requires increasing computational resources, crypto could offer a decentralized way to allocate and compensate for these resources. This could lead to a more distributed and equitable AI ecosystem, rather than one dominated by a few large tech companies.

What does Rosenthal mean when he says crypto turns everyone into an entrepreneur?

Rosenthal argues that participation in the crypto ecosystem essentially makes everyone an entrepreneur and investor. Unlike traditional finance where most people are passive participants, crypto allows and often requires active engagement. This means people have to make decisions about when to buy, sell, or hold assets, and they have the opportunity to create and participate in new economic models. This entrepreneurial aspect can be challenging but also opens up new opportunities for innovation and value creation.

How does Rosenthal view the volatility in the crypto market?

Rosenthal sees volatility in the crypto market as a natural and even necessary part of the process. He draws parallels to the volatility and conflict that characterized the Renaissance period. In his view, this volatility is a sign of significant change in progress, not necessarily an indication of failure. He argues that we should expect resistance from institutions and for them to win early on, but this doesn't mean the movement is dying.

What does Rosenthal mean by a "pluralistic future" in the context of crypto?

Rosenthal envisions a future characterized by pluralism, where multiple systems and identities can coexist. This extends beyond just financial systems to include multiple identities, multiple chains, and multiple ways of interacting with technology and each other. He argues that the mark of a successful movement is how well it moves into multiplicity or pluralism, recognizing that different things work in different ways for different use cases.

How does Rosenthal see crypto impacting work and entrepreneurship?

Rosenthal suggests that crypto could fundamentally change the nature of work and entrepreneurship. By enabling new forms of value creation and exchange, crypto could allow more people to become entrepreneurs or pursue passion projects that weren't previously economically viable. He sees potential for people to monetize their data, skills, and even spare computing power in ways that weren't possible before, potentially enabling new lifestyles and forms of work.

What role does Rosenthal see for community in the crypto revolution?

Rosenthal emphasizes the crucial role that communities play in driving technological and social change. He notes that during the Renaissance, it was communities using decentralized technology that drove change. Similarly, he sees strong and active communities as essential to the success of crypto projects and ecosystems. These communities drive innovation, adoption, and help shape the direction of the technology.

How does Rosenthal view the challenge crypto poses to existing institutions?

Rosenthal sees the challenge crypto poses to existing institutions as a necessary part of progress. Just as the Renaissance challenged the authority of the Catholic Church and feudal lords, the crypto revolution is challenging existing financial and technological institutions. While this challenge can create conflict and uncertainty, it's through this process of challenge and adaptation that societies evolve and improve.

What potential social impacts does Rosenthal see from crypto?

Rosenthal sees significant potential for crypto to have positive social impacts, particularly for those outside of traditional power centers. By providing economic opportunities and ways to monetize data and skills that were previously difficult to capitalize on, crypto could help level the playing field. He also sees potential for crypto to enable new forms of social organization and decision-making, potentially leading to more decentralized and participatory forms of governance.

How does Rosenthal's historical perspective inform his view of the current state of crypto?

Rosenthal's historical perspective helps him see the current state of crypto as part of a larger historical pattern of technological and social change. He argues that understanding this historical context can help participants in the crypto ecosystem maintain a long-term view and appreciate the significance of the changes they're part of. It also helps in understanding that periods of significant change are often characterized by volatility, conflict, and resistance from established institutions – all of which we're seeing in the crypto space today.