This interview argues that technology is moving the world from the industrial age to the knowledge age, and crypto is key to a decentralized future. Guest Albert Wenger thinks Bitcoin and Ethereum each have a 20% chance of being the ultimate winner, but over 80% chance belongs to a project not yet started or unheard of. He highlights three holdings: Bitcoin (censorship-resistant wealth, but not necessarily the final answer), Ethereum (better team handling, similar odds to Bitcoin), and Patreon (lets users voluntarily pay, fitting zero-marginal-cost logic).
Union Square Ventures managing partner Albert Wenger discussed on the Invest Like the Best podcast how technology is driving the world's transition from the industrial age to the knowledge age. The core argument is that, with the proliferation of zero marginal cost distribution and computing power,
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Guest: Albert Wenger, Managing Partner at Union Square Ventures, author of World After Capital.
Main Thesis: Technology is driving a transition from the Industrial Age to the Knowledge Age, where attention replaces capital as the scarcest resource, and cryptocurrency is the key infrastructure for a decentralized future.
Core Judgment: Albert Wenger believes that the dominant cryptocurrency may not have emerged yet. Existing projects (e.g., Bitcoin, Ethereum) have a 20% probability of becoming the ultimate winner, while there is an over 80% probability that it belongs to a project that has not yet been started or is unheard of.
Albert Wenger argues that humanity stands at the cusp of a transition from the Industrial Age to the Knowledge Age, driven by two unique attributes of digital technology: zero marginal cost distribution and the universality of computation.
Wenger divides human history into three eras: the Foraging Age (constraint: food), the Agricultural Age (constraint: land), and the Industrial Age (constraint: capital). Each technological breakthrough changed the "constraint," thereby reshaping social organization, beliefs, and lifestyles. Now, digital technology introduces a new constraint—human attention.
Wenger emphasizes that digital machines are fundamentally different from any previous machine. First, zero marginal cost. The cost of replicating a digital copy approaches zero, which is "a division by zero error in economics," upending traditional market structures based on marginal cost. Second, the universality of computation. Any problem that can be computed can theoretically be solved by a computer, from driving a car to diagnosing a disease. When these two combine, it means that once a capability (e.g., diagnosis) is realized, it can be replicated infinitely at zero marginal cost.
Wenger warns that we are repeating the mistakes of the late Agricultural Age: using the framework of the old era to understand new technology. Back then, aristocrats viewed the steam engine through the lens of "land," only imagining tanks and warships. Today, we view the computer through the lens of "capital," only thinking about how to build the next Facebook or Snapchat, rather than how to maximize the creation and sharing of knowledge. He points out that Facebook's value lies in "monopolizing your attention and reselling it as advertising," which runs counter to the goals of the Knowledge Age.
Wenger believes the core value of cryptocurrency is that it provides, for the first time, a way to maintain state without a centralized database, making a truly decentralized internet possible.
Wenger traces why the internet became centralized. The HTTP protocol is stateless, making it extremely difficult to build features requiring "state," like a shopping cart. Netscape's invention of cookies solved the problem but ultimately evolved into massive databases maintained by centralized companies (e.g., Facebook, Amazon). Blockchain solves this fundamental problem by allowing all participants to collectively own the database.
He is particularly bullish on self-sovereign identity applications. Currently, our online identities (Twitter accounts, Gmail addresses) are controlled by large corporations and can be revoked arbitrarily. Blockchain can empower individuals with complete control over their identity, which is the cornerstone for building a future online world that is not easily controlled by large corporations or states.
Regarding investment, Wenger believes the current market is in a "rational bubble" phase, similar to the 1990s internet bubble, attracting significant capital to build infrastructure. He judges that perhaps only a dozen protocols will survive in the end, and they must be able to truly scale and be meaningfully decentralized. He states clearly:
> “I think there's an 80-plus percent chance that the sort of dominant long-run blockchain is either a project that's currently being undertaken or one that we haven't even heard about yet that hasn't maybe even been started yet.”
Wenger proposes that to avoid the bloody violence (e.g., the two World Wars) that marked the transition from the Agricultural Age to the Industrial Age, we must create conditions for a smooth transition through three freedoms: economic freedom, information freedom, and psychological freedom.
1. Economic Freedom (Universal Basic Income - UBI): Wenger argues that the essence of UBI is to provide economic freedom, allowing people to not be forced to accept any job just to survive, thus enabling them to freely try new things. He suggests this could be achieved by shifting money creation from the banking system to a UBI system (e.g., moving from fractional-reserve banking to full-reserve banking). He notes excitedly that blockchain technology offers the possibility of building a global UBI system without requiring state action.
2. Information Freedom: Wenger points out that the supercomputers in our pockets (smartphones), when running apps like Facebook and Amazon, are entirely serving these companies, not ourselves. Information freedom means making the device "work primarily for me, and secondarily for Google, Apple, Facebook." One specific legislative proposal he offers is: any company with over 1 million consumers must provide API keys to its users, allowing users to use automated tools (e.g., bots) to compare prices across platforms and reorganize information feeds, thereby breaking the monopoly of centralized platforms.
3. Psychological Freedom: Wenger argues that our adversary is the company that "employs trained psychologists" to design how to maximize the monopolization of our attention. If we do not actively invest in our own psychological capabilities (e.g., meditation, putting down the phone, deep reading), then even with economic and information freedom, we will not be truly free. He references Kahneman's "System 1" thinking, noting that we are being designed to be "unconscious, without engaging rational capacity."
| Position | Guest's Stance | Key Data |
|---|---|---|
| Bitcoin | Neutral (likely to survive, but not unique) | 20% probability of becoming dominant; possesses antifragility; is "censorship-resistant wealth." |
| Ethereum | Neutral (more likely than Bitcoin to become dominant) | 20% probability of becoming dominant; the team's approach to the project is superior. |
| Sift Science | Bullish (Case Study) | B2B network effects case study; reduces fraud by aggregating customer data. |
| Clue / Nurex | Bullish (Aligns with investment philosophy) | Broadens access to knowledge/well-being; provides reproductive health information/services at low cost for women. |
| Patreon | Bullish (Business model case study) | A model allowing marginal users to be free while high-value users voluntarily pay. |
| Skillshare | Bullish (Business model case study) | Subscription-based, marginal usage is free, aligns with zero marginal cost logic. |
1. (Albert Wenger) The current dominant cryptocurrency may not have emerged yet. Support: Bitcoin and Ethereum each have a 20% probability of being the ultimate winner, but there is an over 80% probability that it belongs to a project that has not yet been started or is unheard of.
2. (Albert Wenger) Zero marginal cost is a "division by zero error" in economics. Support: When the cost of replication approaches zero, traditional market structure theories based on marginal cost become invalid, forcing a rethink of pricing and business models.
3. (Albert Wenger) The universality of computation means any human-computable task can ultimately be replicated by machines at zero marginal cost. Support: From driving to diagnosis, all input-output processes are computation. Once machines surpass humans, their capabilities can be replicated infinitely.
4. (Albert Wenger) We are repeating the mistakes of the late Agricultural Age, viewing tools of the "Knowledge" Age through the lens of "Capital." Support: Back then, aristocrats viewed the steam engine through "land"; today, we think about using computers to build the next Facebook, not how to maximize the creation and sharing of knowledge.
5. (Albert Wenger) A simple piece of legislation could break the monopoly of tech giants: mandating the provision of API keys. Support: Requiring companies with millions of users to provide APIs would allow users to use automated tools to compare across platforms, returning power to the user.
6. (Albert Wenger) The essence of Universal Basic Income (UBI) is economic freedom, not welfare. Support: It allows people to not accept any job just to survive, enabling them to freely try new things, which is key to a smooth transition to the Knowledge Age.
7. (Albert Wenger) Our adversary is the attention predator employing psychologists; psychological freedom is the foundation of the three freedoms. Support: Without the ability to actively manage one's own attention, neither economic nor information freedom can make you truly free.
8. (Albert Wenger) One possible explanation for the Fermi Paradox is that alien civilizations, after reaching our current stage, become addicted to devices, forget to innovate, and are ultimately destroyed by their own problems (e.g., asteroids, climate change). Support: This is a vivid analogy, warning us of the civilization-level risks that attention scarcity might bring.