Protocols are a geeky topic.It’s way more interesting to talk about applications.People will go on and on about why they like gmail or some other email application.But not a lot of people get excited about SMTP and IMAP which are the underlying email protocols that allow the gmail application to talk to other email applications.Open protocols are at the heart of many of the most important systems that we have.The Internet works because of TCP/IP.The web works because of HTTP.Email works because of SMTP.These are open systems that developers can build applications on top of.There are plenty of proprietary protocols out there too.But proprietary protocols tend to lock in users and drive value to the owners of the proprietary protocol, like Microsoft, Apple, Google, etc. One of the problems we have had in tech is that there aren’t large monetary incentives to create and sustain open protocols.If they are open they cannot be easily monetized by traditional means.However, that is changing with the emergence of blockchain technology and crypto-tokens.

My partner Albert wrote an important post about this last week.Here are a couple paragraphs from that post: Now, however, we have a new way of providing incentives for the creation of protocols and for governing their evolution.I am talking about cryptographic tokens.You can think of these like the tokens you might buy at a fair to get on a ride: different operators can have their own rides and set their own price in terms of tokens.You only need to buy tokens once (in exchange for fiat currency) and then can use them throughout the fair.With blockchains we now have a way of issuing and redeeming these tokens digitally (the underlying blockchain can be Bitcoin or Ethereum or possibly its own as in the case of Steemit).A for profit company can now create a new protocol and create value for itself (and its investors) by retaining some of the tokens.If the protocol becomes widely used, the value of the tokens will increase.For instance, think of a decentralized storage service (a la Amazon’s S3).

Anyone can implement the storage protocol in whatever language they want to as long as they meet the protocol spec.They can then get paid in the relevant storage tokens.The original creator of the protocol will make money to the extent that it is adopted and to the degree they have retained some of the tokens (so they can sell them at a higher price later on).best bitcoin lite walletThis is not hypothetical as there are a variety of such protocols out there, including Storj, SIA and Filecoin.bitcoin course eurThis is super important because the more open protocols we have, the more open systems we will have.acquisto bitcoinIf Twitter had been built and monetized this way, things could have played out very differently.bitcoin scrypt version

In the early days of Twitter, there were third party applications (Summize for Search, Tweetie for iOS client, etc).These were all built on Twitter’s API.If Twitter had imagined itself as a protocol instead of an application, these third party applications would not have had to compete with (or get bought by) Twitter.bitcoin in london ontarioBut at the time, there wasn’t an obvious way for Twitter’s founders and management team to benefit from a protocol-based business model.bitcoin via skrillIn this emerging model, Twitter could have adopted a protocol-based approach and issued a crypto-token, Twokens, that users could earn from things like amassing followers, reporting abuse, etc. Twokens could also be sold by the Twitter founding team to finance their operations.bitcoin konto auszahlen

Crypto-exchanges could make a market in Twokens so that anyone who wanted to speculate on the future value of the Twitter protocol could do so.I am not criticizing Twitter for the approach they took.I was there in the early days and was completely bought into and supportive of that approach.ethereum foundationIt was the one that made the most financial sense at the time.selling litecoin for usdI am also not saying or predicting that some new Twitter competitor is going to emerge using this new model.What I am saying is that we now have a new model that supports a protocol-based business model and I believe we will start to see innovative new protocols emerge that are based on this new business model.Obviously Albert believes that too and so does the rest of USV.As Albert mentions in his post, we are invested in a number of projects that are taking this approach.

It’s a brave new world and we are grappling with what it means for us as investors and how we engage with and invest in this model.But, as I have said many times here at AVC, I believe that business model innovation is more disruptive that technological innovation.Incumbents can adapt to and adopt new technological changes (web to mobile) way easier than they can adapt to and adopt new business models (selling software to free ad-supported software).So this new protocol-based business model feels like one of these “changes of venue” as my partner Brad likes to call them.And that smells like a big investable macro trend to me.Two of the tech world's most controversial figures, Kim Dotcom and John McAfee, are currently involved in an online feud, which erupted over claims of poaching, bullying and stock inflation.A war of words between the two has led to Dotcom calling McAfee "crazy" and a "bully" over his reaction to asking McAfee's Chief Technology Officer (CTO) Eric J Anderson to work for Megaupload 2.0.McAfee, who is infamous for anti-virus software, fleeing police in Belize after being accused of murdering his neighbour and attempting to run for US president, is now at the helm of a penny stock company called MGT Capital Investments – a mobile gaming company that is now moving into cybersecurity and has been rebranded as John McAfee Global Technologies.Dotcom told IBTimes UK in an exclusive interview that the row between him and McAfee has its roots in MGT offering to invest $30m (£23m) in cash and stock into Dotcom's new cloud storage service Megaupload 2.0, which Dotcom rejected because he felt that MGT would have trouble raising the funds.McAfee apparently planned to make a big announcement about the partnership at Defcon 2016 in Las Vegas from 4-7 August and was willing to hand over $500,000 upfront, but Dotcom refused because he felt it was a ploy by McAfee trying to illegally "pump up" MGT's stock value.

Dotcom's reasoning could be linked to the fact MGT's stock value increased by almost 600% and its market value jumped from $6m to $80m in the space of just nine days after McAfee was announced as CEO and executive chairman on 9 May."It'sillegal if you push a stock price up by making non-substantial announcements about fantasy products and investments.He does it all the time.The MGT hype is based on hot air," said Dotcom."I think John needs to be more careful.It's just a matter of time until the US Securities and Exchange Commission takes a close look at MGT."Toadd fuel to the fire, at the same time Dotcom was also interesting in hiring Eric J Anderson, a former Rockstar game developer known online as Eijah and famed for his work developing DemonSaw, an end-to-end encrypted decentralised anonymous information sharing app that is endorsed by McAfee.Anderson was coveted by McAfee for his expertise in privacy and cryptography and he accepted a position with MGT as CTO, but Dotcom was also interested in working with him.

However, it seems McAfee didn't take too kindly to the news, with Dotcom describing McAfee as "going mental" and "making serious threats" about the approach.[Eijah] would have remained with MGT as well.I offered him to manage the Megaupload 2.0 team.It wouldn't have been full time," said Dotcom."John is clearly nuts.He threatened to burn MGT into the ground if Eijah worked with me.There was a lot of screaming and verbal abuse.[Eijah] told me he is scared.That's why I spoke out."FollowingDotcom denouncing McAfee on Twitter, others have come forward complaining about being bullied by McAfee.This has further incensed McAfee, leading to him threatening Dotcom: "And tomorrow I will teach you a lesson: When you start a war you cannot undo it."ButDotcom isn't worried, and is more amused by McAfee than anything else."He'slike 75 years old.He will run out of steam quickly.And after 40 years of drug abuse his dementia will erase everything that happened by tomorrow.He's like Dory [the fish with short-term memory loss in the popular Disney Pixar films Finding Nemo and Finding Dory]," said Dotcom."He