Crypto Startup School: A new type of computer drives waves of innovation

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Editor’s note: Andreessen Horowitz’s Crypto Startup School brought together 45 participants from around the U.S. and overseas in a seven-week course to learn how to build crypto companies. Andreessen Horowitz is partnering with TechCrunch to release the online version of the course over the next few weeks. 

In week one of a16z’s Crypto Startup School, a16z general partner Chris Dixon discusses “Crypto Networks and Why They Matter,” giving an overview of the crypto space, the transformative implications of its technology, and the potential for crypto networks to lead a new wave of innovation. And in his talk on “Blockchain Primitives: Cryptography and Consensus,” Dan Boneh, a professor in applied cryptography and computer security at Stanford, provides an introduction to the cryptographic foundation of blockchains and how developers can use them to build new types of applications.

Dixon says that crypto is poised to become the next major computing platform. Like mobile phones and the web before it, crypto offers opportunities for entrepreneurs and developers to build new networks and applications, due to the decentralized blockchain technology that underpins it. He describes blockchains as a new type of computer — a virtual computer that runs on a network of physical computers, with encoded guarantees that it will continue to operate as designed. Just as the rise of mobile phones enabled an explosion of innovation on top of that new computing platform, crypto presents an opportunity for the next such “idea maze,” he says. “Our feeling is this is an incredibly rich design space.”

The architecture of crypto enables new possibilities, Dixon says, starting with digital currency but expanding to general computing and community owned and operated networks. In combination with the digital primitive of tokens, which align incentives among network creators and users, this sets the stage for exponential innovation over the next decade that should echo previous eras of tech growth. “When a lot of really smart people who know computer science start thinking about computer science problems and have an economic incentive to do so, those computers tend to get a lot better.”

In the second presentation in week one, Dan Boneh explains the layers of crypto, including the consensus layer, and how Satoshi Nakamoto’s bitcoin whitepaper proposed a system that enables an unlimited number of participants to contribute to a blockchain without authorization and still come to verifiable consensus. He also talks about cryptographic primitives, how mining works, how blocks are added to the blockchain, public and private keys, and zero-knowledge proofs. These unique features provide a fertile ground for open-source developers.

The application layer, Boneh says, is where a lot of the excitement is, with a “thriving ecosystem” of applications running on the blockchain in the area of decentralized finance (DeFi). While technical, Boneh’s presentation is accessible to those who don’t have a background in cryptography or consensus mechanisms.