a16z crypto show

For the first time, companies can treat AI token spending almost like headcount: allocate more money, deploy more intelligence, and potentially get more work done.

That shift could change much more than engineering productivity. It could reshape how companies form, how teams are managed, how businesses are financed, and who is best positioned to build them.

In this episode, a16z crypto General Partner Guy Wuollet and Head of Engineering Noah Citron join host Robert Hackett to explore the economics of the AI-native company.

They discuss why engineering teams may soon manage token budgets like P&Ls; how AI enables companies to scale labor up and down almost instantly; and whether the future belongs to smaller, leaner businesses run by people who are unusually good at directing agents.

The conversation also covers software-engineering “pod shops,” AI as variable labor, the future of consulting and private equity, and why stablecoins and blockchains may become the default financial infrastructure for AI agents and businesses.

Finally, they ask a larger question: If AI has created so much new intelligence, why has it not yet produced an obvious jump in economic growth? And in a world where everyone can access powerful models, will intelligence matter less than grit, judgment, and agency?

Highlights

00:00 — Intro

4:01 — Why token spending is starting to resemble headcount

4:51 — Deciding how much spend is too much spend

9:04 — The agentic A/B test: How to quantify "return on tokens"

12:05 — The software-engineering "pod shop"

25:13 — Paying deference to the Machine God

26:06 — The rise (or not) of lean, AI-native microbusinesses

28:05 — Everyone's a manager? The new style of thinking for engineers

30:48 — Why AI agents may naturally use stablecoins

34:33 — When AI productivity will appear in GDP

47:49 — Why grit and agency may matter more than IQ

51:38 — How AI could create new paths for startups

54:53 — Innovation, commoditization, and creative destruction

Links:

Guy Wuollet: https://x.com/guywuolletjr

Noah Citron: https://x.com/noahcitron

Robert Hackett: https://x.com/rhackett

Subscribe: https://www.youtube.com/@a16zcrypto

Website: https://a16zcrypto.com/

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Newsletter: https://a16zcrypto.substack.com/

As always, none of the following should be taken as investment, business, legal, or tax advice. Please see a16z.com/disclosures for more important information, including a link to a list of our investments.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Before the internet could become a place to bank or transact, it needed a way for strangers to know who they were talking to, and whether a message could be trusted.

Turing Award winners Ron Rivest, Adi Shamir, and Leonard Adleman helped invent it.

In this episode of First Principles, Rivest tells the story of how they developed RSA, the first practical public-key cryptosystem. Their breakthrough made it possible to encrypt information, verify identities, and authenticate messages across an open network without requiring participants to meet or exchange a secret in advance — laying essential groundwork for the secure internet and, decades later, blockchains.

Rivest joins Tim Roughgarden, Head of Research at a16z crypto and Professor of Computer Science at Columbia University, and Dan Boneh — Professor of Computer Science at Stanford University, a16z crypto Senior Research Advisor, and the “B” in BLS signatures — for a conversation about the origins and future of modern cryptography.

They trace the field from its early days, when most cryptographic research was classified and even the meaning of “security” had not been formally defined, through the publication of the Diffie-Hellman paper and the open problem that ultimately led to RSA. Rivest recounts the night the core idea came together, why the difficulty of factoring made the system plausible, and why no one initially knew whether it would survive sustained attempts to break it.

The conversation also explores the other cryptographic primitives that underpin blockchains and the modern internet. Rivest explains why digital signatures interested him even more than encryption, how he designed the MD family of cryptographic hash functions, and why standards such as RSA, DSA, and SHA were shaped as much by politics, patents, and government pressure as by mathematics.

Finally, Rivest shares his unusually candid views on quantum computing, post-quantum security, and the deeper theoretical possibility that P could equal NP. Either development could threaten the foundations of modern cryptography — but, as Rivest argues, cryptographers have a responsibility to prepare for even the worst-case scenarios.

Highlights

00:00 – Intro: the two problems that could break modern cryptography

01:10 – Why Ron Rivest’s work underpins the internet and blockchains

08:10 – Before public-key cryptography, there was no theory of security

11:05 – The open problem that led to RSA

13:55 – The night Ron Rivest discovered the core idea behind RSA

17:55 – Why digital signatures were the real breakthrough

19:14 – The RSA challenge — and a prediction that was off by quadrillions of years

28:33 – How government pressure shaped cryptographic standards

30:36 – Designing the hash functions that made digital signatures practical

33:26 – The Fiat–Shamir transformation, explained

38:04 – Building a cryptography company before the web existed

42:31 – Will quantum computers ever become powerful enough to break RSA?

48:02 – The cryptography securing the internet, elections, and everyday life

50:11 – What surprised Dan: Quantum giveth and quantum taketh away

About First Principles

First Principles is a special limited series from a16z crypto about the scientific roots of modern computing — especially blockchains — told through rare conversations with the pioneers who helped shape the foundational ideas behind distributed systems, consensus protocols, economics, mechanism design, cryptography, zero knowledge, and more.

People often tell the story of the Bitcoin whitepaper as if it appeared out of nowhere. But the ideas behind Bitcoin — and blockchains more broadly — come from decades of computer science, economics, mathematics, and cryptography. First Principles is a guide to that lineage, as told by the people who helped build it.

Subscribe to follow along:

https://www.youtube.com/playlist?list=PLjQ9HCQMu_8yIg60YAq67HDdvp7E_T5e8

Hear more from:

Ron Rivest: https://people.csail.mit.edu/rivest/

Tim Roughgarden: https://twitter.com/Tim_Roughgarden

Dan Boneh: https://twitter.com/danboneh

Follow a16z crypto:

X: https://twitter.com/a16zcrypto

LinkedIn: https://www.linkedin.com/showcase/a16zcrypto/posts/

YouTube: https://www.youtube.com/@a16zcrypto

Substack: https://a16zcrypto.substack.com/subscribe/

As always, none of the following should be taken as investment, business, legal, or tax advice. Please see a16z.com/disclosures for more important information, including a link to a list of our investments.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Long before onchain markets made mechanism design a daily engineering problem, Nobel Prize winner Paul Milgrom was asking how prices actually form — and how better auction rules could reshape actual markets.

His work helped transform auction theory from an elegant branch of economics into a practical toolkit for allocating scarce resources, from wireless spectrum to digital ads to financial markets.

In this episode of First Principles, Tim Roughgarden, Head of Research at a16z crypto, sits down with Milgrom alongside Scott Kominers — Harvard Business School professor and a16z crypto research partner — for a conversation about auctions, information, price discovery, and the design of complex markets.

Together, they explore Milgrom’s foundational work on auction theory, the famous Milgrom-Weber paper, the Grossman-Stiglitz paradox and the Glosten-Milgrom model of market microstructure, and why understanding how prices form matters for everything from prediction markets to decentralized finance.

They also discuss Milgrom’s work designing the FCC spectrum auctions — including the auctions that helped allocate wireless spectrum for technologies like mobile broadband and 5G — and the later FCC incentive auction, a massive market design challenge that combined economics, computer science, policy, and real-world implementation.

Highlights

00:00 Intro: economics assumptions that are “just wrong”

02:19 Scott Kominers on the genius of Paul Milgrom

05:35 The price discovery problem economics forgot

07:48 The auction theory breakthrough of the 1980s

17:15 Why market microstructure matters for DeFi

24:17 When math teaches economics something new

29:22 Designing auctions people can actually use

32:40 How theory became spectrum auction design

36:22 The floppy disk that helped convince the FCC

41:05 What changed when auctions moved online

45:28 The auction that reorganized television

57:25 Why the best auctions feel simple

1:07:30 What economics and computer science can learn from each other

1:13:22 Futures markets for compute

1:15:12 Paul Milgrom’s advice for builders

About First Principles

First Principles is a special limited series from a16z crypto about the scientific roots of modern computing — especially blockchains — told through rare conversations with the pioneers who helped shape the foundational ideas behind distributed systems, consensus protocols, economics, mechanism design, cryptography, zero knowledge, and more.

People often tell the story of the Bitcoin whitepaper as if it appeared out of nowhere. But the ideas behind Bitcoin — and blockchains more broadly — come from decades of computer science, economics, mathematics, and cryptography. First Principles is a guide to that lineage, as told by the people who helped build it.

Subscribe to follow along:
https://www.youtube.com/playlist?list=PLjQ9HCQMu_8yIg60YAq67HDdvp7E_T5e8

Hear more from

Tim Roughgarden: https://twitter.com/Tim_Roughgarden

Scott Kominers: https://twitter.com/skominers

Follow a16z crypto

X: https://twitter.com/a16zcrypto

LinkedIn: https://www.linkedin.com/showcase/a16zcrypto/posts/

YouTube: https://www.youtube.com/@a16zcrypto

Substack: https://a16zcrypto.substack.com/subscribe/

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Long before crypto made coordination programmable, Nobel Prize winner Alvin Roth was designing markets where coordination could save lives. 

In this episode of First Principles, Roth tells the story of how he helped build systems for some of the hardest matching problems in the world, from where doctors train and where students go to school to how kidney donors can reach the patients who need them. 

He joins Tim Roughgarden, Head of Research at a16z crypto, and Scott Kominers — Harvard Business School professor, a16z crypto research partner, and one of Roth’s former students — for a conversation about how market design moves from theory into the real world. They explore how economic theory becomes practical engineering, whether that's matching riders to Ubers, doctors to medical residencies, students to New York City high schools, or organ donors to people whose lives depend on it. 

They also cover how these same problems show up in today’s crypto networks. Roth explains why markets are not just natural forces, but engineered systems; why the details of timing, congestion, incentives, and trust can make or break a marketplace; and why some of the most important markets are the ones where simply exchanging money can’t do the work. 

This is a conversation about economics at its most practical and profound: how to design systems that coordinate people, solve real problems, and sometimes save lives. 

00:00 Intro: Why market design matters

04:18 The economist as engineer 

08:09 When theory meets the real world 

07:02 Fixing the medical residency match 

15:32 Why markets unravel 

18:22 Redesigning NYC high school admissions 

28:05 The hidden problem of congestion 

34:47 How kidney exchange saves lives 

45:26 How the internet changed market design 

48:25 Airbnb, Uber and smarter marketplaces 

51:28 Repugnant transactions and moral economics 

53:32 When markets need social support 

54:32 The unexpected effects of criminalizing surrogacy 

01:04:58 Preference signals and the job market 

01:18:53 A broken market: resettling refugees and other migrants 

Hear more from: 

Tim Roughgarden: https://twitter.com/Tim_Roughgarden 

Scott Kominers: https://twitter.com/skominers 

Follow a16z crypto: 

X: https://twitter.com/a16zcrypto 

LinkedIn: https://www.linkedin.com/showcase/a16zcrypto/posts/ 

YouTube: https://www.youtube.com/@a16zcrypto 

Substack: https://a16zcrypto.substack.com/subscribe/ *

** As always, none of the following should be taken as investment, business, legal, or tax advice. Please see a16z.com/disclosures for more important information, including a link to a list of our investments.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Before blockchains could reach consensus, Leslie Lamport had to define what agreement even meant when computers fail, lie, or disappear. 

In this episode of First Principles: The Scientific Roots of Blockchain Technology, Turing Award-winning computer scientist Leslie Lamport joins Tim Roughgarden Head of Research at a16z crypto and Professor of Computer Science at Columbia University, and a16z crypto Research Partner Ittai Abraham to trace the ideas that helped define modern distributed computing. 

Lamport’s work formalized some of the field’s deepest questions: how to reason about concurrent systems, how distributed systems can agree despite failures, and how to prove that protocols do what they are supposed to do. His work on logical clocks, state machine replication, the Byzantine Generals problem, and Paxos has shaped everything from cloud infrastructure to the consensus protocols underlying modern blockchains. 

The conversation begins with Lamport’s early work on concurrency and the origins of the Byzantine Generals Problem, and then turns to fault tolerance: what happens when machines crash, behave unpredictably, or even act maliciously? We also cover the feedback loop between theory and practice, the long arc of fundamental research, and how blockchains are inheriting and extending decades of distributed systems work. 

Highlights 

00:00 – Intro: The problem every blockchain is built to solve 

02:52 – Why concurrent systems are surprisingly tricky 

04:40 – The origins of the bakery algorithm 

07:37 – What does it mean for a protocol to be “correct”? 

12:03 – The origins of the Byzantine Generals problem — and what happens when some computers fail 

17:49 – How Paxos emerged from an attempted impossibility proof 

23:47 – Why theory and practice need each other 

33:48 – Government funding, DARPA, and the long arc of foundational research 

About First Principles 

First Principles is a special limited series from a16z crypto about the scientific roots of modern computing — especially blockchains — told through rare conversations with the pioneers who helped shape the foundational ideas behind distributed systems, consensus protocols, economics, mechanism design, cryptography, zero knowledge, and more. 

People often tell the story of the Bitcoin whitepaper as if it appeared out of nowhere. But the ideas behind Bitcoin — and blockchains more broadly — come from decades of computer science, economics, mathematics, and cryptography. First Principles is a guide to that lineage, as told by the people who helped build it. 

Hear more from: 

Tim Roughgarden: https://twitter.com/Tim_Roughgarden 

Ittai Abraham: https://twitter.com/ittaia 

Follow a16z crypto: 

X: https://twitter.com/a16zcrypto 

LinkedIn: https://www.linkedin.com/showcase/a16zcrypto/posts/ 

YouTube: https://www.youtube.com/@a16zcrypto 

Substack: https://a16zcrypto.substack.com/subscribe/ 

*** 

As always, none of the following should be taken as investment, business, legal, or tax advice. Please see a16z.com/disclosures for more important information, including a link to a list of our investments.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.