Ali Yahya, a16z crypto
Inverting the power relationship between software and hardware.
Last week we were lucky to host Ali Yahya for Icons dinner. Ali leads crypto investing at a16z crypto and has been behind some of the fund’s landmark bets, including Solana and LayerZero. His core belief - blockchains aren't just about finance. At their core, blockchains invert the relationship between hardware and software, creating global public computers that unlock a new way of building software for the world.
Here's the list of insights we learned from Ali:
1. The ultimate value that crypto provides is that it inverts the power relationship between software and hardware. All of Web2 is hardware-driven and isolated, while blockchains are public computers maintained by thousands of computers. This allows building better software for the whole world.
2. Adoption in the U.S. was held back for years by regulatory resistance. Early on, many thought the wedge into mainstream would come from gaming, NFTs, or entertainment. With the new administration, the entry point has shifted back to crypto’s most natural application, finance. Finance is just the beginning.
3. Crypto and AI overlap in two powerful ways. First, crypto provides a coordination layer for unused GPU supply, which is critical as AI compute demand keeps skyrocketing. Second, it serves as a verification layer, essential in a world that’s about to be flooded with deepfakes.
4. Sharing idle computation resources is an exciting frontier. Ali is optimistic, but it’s still a really hard problem: hardware availability is inconsistent globally, machine performance varies, and verifying contributions remains a big hurdle.
5. Decentralized LLMs won’t match centralized models in raw performance anytime soon. But they do carve out a unique niche in use cases where privacy and trust matter more than scale, and that niche could prove critical.
6. Payments are a very natural use case for crypto, but the question is always: where does the value flow? If corporate chains onboard everyone, they stop being neutral infrastructure. That’s a fundamental risk.
7. Crypto cards make sense right now as wrappers around blockchains, but ultimately payments should flow directly from wallets without those intermediaries.
8. ZKVMs are powerful for compute-heavy use cases and bridges, but they don’t make sense everywhere. For something simple like payments, the overhead is unnecessary.
9. Visa/Mastercard charging 3% is one area where crypto payments can disrupt. But probably not the immediate first use case - we already see companies using crypto in the backend for treasury management, and crypto being used to solve cross-border transactions.
10. For people trying to enter crypto, there are really two strong starting points. One is finance, the most natural entry and the one with clear adoption. The other is deeply technical expertise.