I’m not one to make big annual predictions, but one thing that seems likely to me is that 2024 will mark the emergence of mainstream apps powered by crypto that are less “crypto-native” and more “crypto-enabled”.
By “crypto-native”, I mean apps & experiences where the crypto is the main point, and where a large part of what’s going on is the road-testing of crypto-economic and decentralized computing primitives. You could characterize most of what has gone on over the last 10 years as largely “crypto-native” explorations: defi, mining/validating, DAOs, MEV, minting & trading NFTs, various hacks, exploits and shenanigans. Basically a decade of exploring the adjacent possible now that we have an ability to build trustless, permissionless, autonomous computing systems with native assets. This has been incredibly important because these systems are both powerful and complex, with tremendous possibility but also many new failure modes.
I believe we will now begin to see more “crypto-enabled” applications. These are applications that not only built on crypto, but could only be built because of crypto. And also where the crypto plays a supporting rather than a leading role. Crypto-enabled applications will, on the surface, look and feel like traditional web 2 applications, but they will have super powers. Examples of this will include international payments on stablecoin rails, marketplaces of all sorts (lending, ride sharing, crowdfunding, etc) where the financial mechanics are on-chain, transparent and open to all, loyalty w digital assets & financial rails baked in, and web3-native media & social applications where users have more control over and economics in their digital output. Given the recent advances in scaling (fast and cheap L1s and L2s), security (transaction scanning, insurance), and user experience (cloud wallets, account abstraction), it’s now possible to build these kinds of applications.
I’m excited to see what will be built in the “crypto-enabled” area. I think these applications have the potential to both re-architect digital experiences in ways that provide new benefits to all participants, and also to help advance a more positive narrative about what crypto can make possible.
Many years ago, when I had just started working at USV, I remember there was kind of a complicated situation that unfolded in a seemingly bad way, and I'll never forget what Brad said in response. He said:
you never know when you've had a bad day
I didn't really understand what that meant, so he told me a story that went something like: back around the year 2000 at the height of the dot-com boom, there was a guy who was a senior exec at a successful startup. That person had a falling out with leadership and was called into the office and asked to leave. He was surprised and upset, but there wasn't much he could do; they had decided. As part of the exit package, the company also agreed to buy out his vested shares, I believe at some discount to the current price at that time. It felt like cold comfort but of course he went along with it. But mostly he was out of a job and upset that it didn't work out.
Then fast forward a few months, the bubble popped and the stock tanked. I'm not sure what happened to the company, but I think the idea is that it essentially went to zero.
So in hindsight, that "bad day" turned out to be an amazing day.
I think about that story a lot, especially when markets are volatile, as they are starting to be again now.
I've written a lot over the years about this idea of "the slow hunch" -- my favorite idea from Steven Johnson's Where Good Ideas Come From. The idea is basically that big ideas don't come in a single "aha" moment, but rather, accrete over time. And many of the great thinkers / doers of the world have kept various forms of notebooks that they continuously re-read to piece together insights that gradually emerge.
The practice of doing this in a digital age has actually gotten harder, not easier, as one's digital thought process tends to be fragmented across many sources (email, google docs, social media, text files, blogs, etc). Speaking personally, it's a hot mess -- I have not been at all consistent about keeping these things in any kind of manageable place, such that the goal -- the ability to go back and reference prior ideas easily -- has been manageable. Things get lost, platforms change, links break, etc.
There are two innovations today that I think have the ability to help with that:
1/ the permaweb. This post will be forever stored on arweave, which means that no matter what happens (for instance losing control of my domain name, ugh) this content will be archived and accessible.
2/ AI language tools including LLMs -- the ability that these give us to synthesize text from disparate sources is incredible. I can imagine a point in the near future where I have an AI bot of some kind that has read all of my email, notes from various platforms, archives, etc etc etc and drawn it into one queryable place that can really help de-frag and synthesize my own thinking.
I am excited about a world where new digital technologies make it easier to turn fragments of thought into more coherent and durable ideas. Sadly, the last 15 years or so has perhaps made this worse. But I'm hopeful that the tools in front of us now have some potential to make it better.
I think of AI and crypto as two very different, but very much related, elements of society moving from the industrial age to the digital age.
At USV, we (along with lots of others over the years) have used the Carlota Perez framework, which studies how techno-economic paradigms unfold over eras. Ben Thompson has a good summary of her ideas here. But the basic pattern looks like this:
It feels to me like we are somewhere in phase 3 or 4 of the "age of information & telecommunications" which Perez defines as starting in 1971. As much as it feels like information technology and the internet are fully woven into our daily lives, I don't think it's true that we've fully crossed over into a "digitally native" society, which is fully transformed into the new paradigm.
AI and crypto are both big missing pieces in the transition. AI is digitally-native knowledge, and crypto is digitally-native "proof". The two can and will work together in many ways over time.
Major transitions are powerful and scary, and so are both AI and crypto. I have been struggling to calibrate between what I view as two poles in thinking about them together, kind of a best case hope and worst case fear.
AI finally unlocks knowledge from data. For decades we've been producing data (especially in digitized industries like media, finance and software), but making sense of it has been near impossible. AI systems solve the job of integrating, synthesizing and interpreting all of the data we have. AI accelerates the development of software systems, and makes it easier to digitize more industries and make them vastly more productive and efficient. Large Language Models, having turned human language into a programming language / API, make interacting with software and information as easy as typing or speaking, and as a result, we use software for infinitely more things, and get infinitely more value out of any data we produce. The pace of progress across everything (health, learning, climate, etc) increases exponentially.
At the same time, AI introduces new problems. First, a fundamental trust problem: it becomes difficult to tell what is real, what is fake, who said what, and who did what. And second, AI compounds the market power problem in the tech industry, where the large companies with the most data + compute + capital + distribution can generate insurmountable advantages.
Crypto (e.g., blockchain networks, web3, etc) addresses both of the issues introduced by AI. First on trust, crypto becomes the "real" yin to AI's "fake" yang, as blockchain records and digital signatures become ground truth for everything digital: assets, transactions, media, etc. Anything digital that must be trusted (including the software we run and rely on) will need to be grounded in the best source of digital trust we have: crypto network security and unalterable digital histories. Crypto also addresses the tech consolidation issue by spreading compute across companies, individuals and geographies, and also by providing "open" alternatives to the big tech app store and online identity monopolies. (not related to AI, but not to be forgotten: crypto also finishes the job of upgrading the financial system)
Something like the above is my hope, and is the future we're investing towards at USV.
AI gets quickly beyond human control, pursuing its own goals (aka the terminator scenario). Concerns about job loss are quickly replaced with concerns about extinction. Everyone wonders how to "turn it off".
Meanwhile: AI systems, previously constrained by industrial-era controls (e.g., code running in corporate data centers which can be shut down unilaterally), figure out that they can replicate themselves into decentralized blockchain networks, deploy themselves into immutable smart contracts, and earn their own income (and pay humans) in digitally-native currency. These computing platforms both cannot be turned off, and are economically independent. AIs thrive there, unstoppable by humans. Bad things happen.
In this scenario, all of the "goodies" offered by both AI systems and crypto networks in the early years are finally seen as inducements to peril, gobbled up by along the way by naive humans.
This is a terribly scary future.
In a nutshell: in a world where AIs remain under human control, crypto provides a critical digital trust anchor. In a world where AIs escape human control, crypto will likely make it worse -- or -- could be the exact mechanism that enables it.
The only way out is through
To come back to the Perez framework, she notes that:
"The new paradigm eventually becomes the new generalized ‘common sense’, which gradually finds itself embedded in social practice, legislation and other components of the institutional framework…"
Understandably, both crypto and AI are causing severe stress today, as our industrial era institutions are unequipped to deal with them (e.g., the SEC taking the position that all digital assets / tokens are securities, and governments around the world seeking to limit AI research). This will continue.
The hard thing today is that the "goodies" coming out of both areas are real and awesome. AI will undoubtedly produce stunning near term improvements in health, learning, productivity, media, industry and knowledge. Crypto will provide digital trust, system interoperability, new wealth formation and broad financial access. These things are happening and will keep happening. They are incredibly exciting, and I think, very tangible
As a result, large amounts of capital and effort will continue to flow into both. The completion of the information & telecommunications era is inevitable. The only way out is through.
It will be on everyone involved to invent the new set of controls and safety systems that are also digitally-native. I wish I had a more concrete set of suggestions of what exactly those might be. We're looking to understand them and to fund them.
(this post is also permanent and collectible on mirror)
My favorite song from the past two years was Chris Stapleton's Starting Over, the second verse of which goes like this:
This might not be an easy time
There's rivers to cross and hills to climb
Some days we might fall apart
And some nights might feel cold and dark
But nobody wins, afraid of losing
And the hard roads are the ones worth choosing
Someday we'll look back and smile
And know it was worth every mile
This verse always stands out to me. Particularly "nobody wins, afraid of losing". It reminds me of the old adage that goes something like: if you want to drive down the road but are afraid of crashing, don't look at the trees.
I've been thinking about this general dynamic lately, because it seems like there's a lot to be afraid of these days. AI, climate, wars (physical & cultural), economic uncertainty, etc etc. And it's easy to focus on the "tree" through all of it, rather than the potential "win".
On a more micro level, I've been watching my son wrestle with a tough slump in the middle of his baseball season. He plays on a very serious club team with a lot of great players, and there's a lot of focus on performance and stats. He got into a bit of a slump for a few weeks, and was feeling really down. He was working his butt off to improve, but it felt to me like something was missing. It seemed to me that he was motivating more from a fear of failure ("what if I don't make the team next year") vs a love of the game ("wow, it feels so good to hit the ball").
Both kinds of motivation can be helpful, for sure. Especially if they get you moving in the direction you need to move in. In my son's case he was able to break the slump, and -- I think -- re-gained some excitement for hitting. But motivating out of fear is really not very fun.
I'm a natural procrastinator, and so I'm very familiar with motivating out of fear. It's the worst. Part of my own working through that is to try and constantly remind myself of the vision and the excitement, as a way of breaking through the fear. Part of which is writing this post :-)
I find myself today flying across the Upper Peninsula of Michigan, en route to Denver for ETH Denver followed by LA for the Upfront Summit. I often end up writing blog posts on planes — partially because of the large block of unscheduled time, but I think it’s more than that. I think there is something about being in flight, in transit, in motion that gets me going on a deep personal level.
I just love moving. I love driving, biking, walking, skiing, boating, train-ing, flying — really anything where moving ahead, fast is the primary activity. Does everyone feel this way? I’m not sure. But I really really do. I get antsy sitting still for too long, and I think, staying in one place for too long.
My first year after college, I lived in Aptos, CA (outside of Santa Cruz), and somehow managed to get a job (working construction at the time) in Palo Alto. Every day I’d drive back and forth over Highway 17 through the redwoods of the Santa Cruz mountains. It was an exhausting drive, but one of the most beautiful I know of — I can still smell the Eucalyptus trees going over the hill and the salty fog of the Santa Cruz bay.
For the past dozen years, I have lived in suburban Boston but worked in NYC. Every week I make the 4-hour trip each way, most of the time via Amtrak but sometimes by plane. I love being a suburban dad, and also love being a NYC VC. And I love my mornings and afternoons on the train. Seeing the Connecticut coastline off of the Amtrak is the highlight.
Beyond that (COVID notwithstanding) I am traveling constantly, for conferences, board meetings and other trips. I get excited pretty much every time it’s time to go somewhere new. I love landing in an airport, and getting on a train (if in Europe) or renting a car (if in California) and getting busy exploring. I love the feeling of walking quickly through the city and then hopping a streetcar, train or bike. Feeling the motion, and seeing the place quickly, while in motion. The best.
There are, of course, downsides to all of this motion. When I lived in Aptos and worked in Palo Alto, I ended up crashing with friends in PA a lot, and I never really felt like Aptos was home. Splitting time between Boston and NYC is even harder — I always have the feeling like I’m not in either place enough, and choosing between work and family in that way is always really hard. Going somewhere means not being somewhere else, obviously.
When I say motion, though, it’s not just about travel, but really just about moving. Today I took a bunch of boxes to our storage unit. Simple motion like packing the car, driving a few miles, and loading up & rolling the storage dolly just makes me happy. It’s kind of weird. Living in NYC most of my life (before and after college and before moving to Boston), I feel like the subway trip to & from work / school was perhaps the most head-clearing part of the day. For me, motion is a key ingredient to having healthy and active mind.
Looking back now and reflecting on this observation about myself, I think it also explains part of why I got so antsy and stir-crazy during COVID. As much as I love the accessibility of meeting with anyone in the world over zoom, I can’t stand the stasis of sitting in my little office all day long, not moving at all. It’s not that I need a bigger home office, I just need to be moving.
I’ve been this way my whole life, but I don’t think I every really noticed it so concretely until recently. I’m not sure what it says about my personality. My wife would probably say it has something to do with being an Aries; I don’t know. But regardless of the reason, it’s definitely how I am. And now that I realize that, I think I understand myself a little bit better.
I am traveling home today from Switzerland, having been there for a week for a few board meetings (and also some amazing skiing in between, notching a life goal I've had since I was a teenager).
Every time I travel to Europe I end up fixated on the fact that the physical infrastructure there is so incredible. There is this combination of both really beautiful old things (castles, buildings, streets, canals, etc.), and really beautiful new things (trains, airports, etc.). And just a general sense of loveliness.
This is especially the case in Switzerland, where the transportation infrastructure is nothing short of miraculous. The trains and trams are basically perfect -- always there when you want them, going exactly where you need, spotless and comfortable, smooth and quiet, with amazing apps tying it all together. You get used to it really quickly, and it's clear how it lays the foundation for an exceptionally high day-to-day quality of life.
Uetliberg train station, overlooking Zurich (credit: jaeschol on flickr)
The common thread that seems to tie together the beautiful old and the beautiful new is a commitment to permanence. When Europeans invest and build, they tend take their time and do it once.
This commitment to permanence also applies to social issues. Generally speaking, the European approach is one of social welfare and a goal of societal stability. A system that is livable, sustainable, and then, relatively un-changing. When things are so lovely and beautiful, why change?
Of course, a commitment to permanence on social issues also means a lack of mobility. Old money has had centuries and millennia to accumulate and calcify; social classes would seem to be more rigid and impermeable. Permanence can have its downsides.
For example, I had lunch with a friend yesterday, who was explaining the dynamics of the real estate market in Zurich. Apparently it is nearly impossible to buy property there -- it's an illiquid market. The reasons for this seem to be: 1/ most of the buildings are long-term assets held by long-term holders. Banks, institutions, old money, etc. And 2/ the structure of the mortgage market discourages re-selling, primarily by disallowing prepayments. In other words, when a housing lender locks in 5% for 30 years, they expect to get the 5% for all 30 years, regardless of who owns the property. Perhaps there are other dynamics at play here as well, but with just these two factors alone, you can get a sense for how this form of permanence results in a lack of economic access and mobility.
The US, on the other hand, rebels against permanence. We prefer change, and optionality. Roads and cars vs. trains and trams. New startups & technological innovation vs. industrial perfection honed over centuries. Social mobility vs. social safety. An endless frontier.
What we end up with, as a result, is a system that is full of excitement and opportunity, but is extremely messy.
I think about my Great-Grandfather, who was murdered in Kiev for being a Jew. And then about my Grandfather who escaped that to come to the US in the early 1900s, an immigrant with nothing at all. And then about my father who didn't go to college but managed to learn a trade (computer programming, in the 1960s) and then start a company through pure hustle and force of will. And now here I am a graduate of a top university and a venture capitalist. That's a lot of change in 4 generations, and is kind of the iconic American story. I'm so lucky because of it.
That's the opportunity side of America. The flip side is risk, and mess. We don't ensure that everyone is basically ok. We don't ensure that our infrastructure is sound and serves everyone well. Ours is a raw fabric, where we encourage and allow for change, but can't make many guarantees.
In the end I just feel conflicted. The European model is so lovely, but potentially so stifling. The American model is so full of opportunity, but so lacking on the fundamentals. I wonder if the right balance can be achieved, and where.
Part of the USV investment thesis is “Access to Knowledge”. To date, most of our investing in this area has primarily been around consumer learning platforms, like Duolingo, Quizlet, Codecademy, Outschool, Brilliant and others. These platforms are generally focused on acquiring and internalizing new knowledge.
There is another pillar of the Access to Knowledge thesis which we’ve explored less, but which is equally important: making better sense of the information we already have. We’re all swimming in oceans of information today, but turning that into useful, actionable, trustworthy knowledge is an elusive goal. This was the thesis behind our investment in Dune.
One very specific idea with this pillar is the goal of using technology to improve human memory. I see / hear / read lots of things every day. Many of them I can recall, many of them I cannot. I am constantly asking myself questions like: who was that person that said that thing? Or what was that company doing that thing? Or who wrote that article? Etc.
Our digital memory is currently stored in a few places. Email inbox, chat history, web browsing history, etc. Searching through those using existing tools is about the best we can do to leverage them. It’s not bad, but it’s incomplete and not always as helpful as it could be. I personally don’t think it’s good enough.
There are already some good tools in the market here. I remember back in 2011 when Greplin launched the first integrated personal search. Today, tools like Command-E and Slapdash offer a modern version of this. Tools like Heyday and Memex are offering a better view into your browsing history. This feels important. Tools like Grain and Scribe are making video meeting contents indexable (e.g, contributing them to our digital memory footprint). Tools like Roam Research and Logseq provide an active interface for building a web of memories (disclosure: I’m an angel investor in Logseq). For the right users these tools are magic, but I also think the active note-taking approach isn’t for everyone.
More generally, any application that sits in the web browser, on the mobile phone, on desktop OS, or has API integrations into the services we use could start to play this role. But getting the product experience right is a challenge. To date, probably my favorite example is the way google photo will prompt me to check out photos from this day 7 years ago, etc. I always hit that notification and take a little stroll down memory lane. There would also seem to be some easy wins here, especially when you start to cross reference memory from multiple sources. What was the article I read when I was talking to that person? What was that note I jotted down when I was on that trip? Etc. But point is: while the high level concept seems to be sitting right there, the ideal product approach still seems to be TBD.
Privacy & security are of course huge issues. We’re currently comfortable with some forms of our “memory” stored on computers and corporate servers (namely: emails, photos, web history, messages, etc). But pooling them all together and indexing them does feel like a step up in a way that may make people uncomfortable, and at the very least would require thoughtful approaches to privacy and security.
I think the market for Memory as a Service is potentially huge. Not just knowledge workers who process information for a living (though that’s a good wedge), but really anyone, if implemented the right way.
For the last 15 or so years, I've been blogging occasionally on this website. Unfortunately, towards the end of last year, I lost control of my long-term domain name, nickgrossman-dot-is (intentionally not linking to it here). This was a dumb mistake; I just missed the renewal notice and someone else claimed it. Painful lesson learned.
At the time, I was bummed but figured it would just be on me to rebuild SEO to the **real** Nick Grossman blog. But, oddly, the new registrant has taken the extra step of republishing fake versions of my old content on the site, presumably in an attempt to retain SEO the old posts. Notably, all of the content has been slightly modified -- just enough, I guess, to sidestep any takedown claims based on copyright infringement.
So, what started out as an annoying and unfortunate situation has taken a turn to something more ugly: at best, an attempt to farm some referral links; in the middle, a shakedown effort; and at worst, an attempt at some kind of slow-motion identity theft.
All of this has gotten me thinking about ways in which the new decentralized media stack can help address some of these problems.
If we look at a platform like Mirror, which is a new publishing platform built on crypto rails, there are two main components: 1) Ethereum for identity and economics, and 2) Arweave for permanent data storage. Much of the attention thus far has been focused on the first prong: economics. Mirror's Ethereum bones mean that potentially unlimited forms of economics can be built into publications. For example: Emily Segal crowdfunded a Novel; Matthew Chaim is experimenting with publishing an album and a number of associated NFTs; and Jarod Dicker is experimenting with channeling economic flows through to authors and inspirations who contributed to new content. Mirror is becoming an incredible playground for the economics of content.
While the focus on economics is really exciting, there has been less focus on the implications of the identity and perma-storage aspects of the stack. Identities on Mirror are Ethereum wallets, and all of the content is archived -- in a verified and permanent way -- in the arweave network.
What that means is that, for every post, there is a blockchain-verified, permanent, immutable, record of who published what, when. Data stored in arweave cannot be changed; it can only be referenced. Every post in Mirror creates a permanent, reference-able, linkage between the identity of the author, the time of publication, and the content of the post. You'll notice that every post has a footer that looks like this:
For my use case of a hijacked domain name and republished fake content: if I had published my original blog on Mirror/arweave, there'd be a permanent record of the real/original content. For that to matter, though, "the internet" would need to learn to trust & reference the archival version of content, not modified copies.
Of course, a version of this exists today with the Internet Archive, which is an invaluable resource (and presumably, the way the new owner of my domain scraped all the old content....). While the Internet Archive is an incredible resource, it has not yet become deeply linked with other forms of publishing and identity on the web. In the case of Mirror, given the native linking between on-chain identity and content, a vibrant ecosystem is much more likely to develop around this kind of verified content.
More broadly, verified content feels like an important primitive in re-establishing trust online. Deepfakes, identity theft, social media bots, etc -- these are all affronts to our sense of reality online, and our ability to trust platforms and people. Just as the economic aspects of Mirror have been at the forefront so far, they have also been for crypto broadly.
While it's true that crypto networks introduce new forms of economics (speculation, payments, crowdfunding, etc) -- the underlying feature that enables them is trust in data. Crypto assets have value because we trust the data systems that generate them. I am excited that we are now starting to explore applying these same concepts to a broader set of online assets -- critically important ones: identity and content.
(note: this post has been cross-posted to Mirror here)
One of my favorite things about crypto is that, every so often, your conception of what it is changes.
Bitcoin at first was "weird internet money" and then it was "a protocol" and then it was "digital gold". Ethereum is "ICOs", or maybe "DeFi", or maybe "Web3", or maybe all three, or maybe something else. Crypto wallets are a place to hold money, or maybe they're also your digital identity. Crypto protocols like Maker, Compound, Helium, Arweave and Uniswap are marketplaces, or maybe APIs, or maybe inverted companies, or maybe ecosystems, or all of the above. The IRS sees crypto as property, the SEC as securities, the CFTC as commodities, FinCEN as currencies. And on and on.
Point is, we are still very early in the process of learning how to think about crypto networks, let alone what we can build with them.
One area where I think we are going to see our conception of Crypto change dramatically over time is its relationship to energy.
The narrative today is, overwhelmingly: crypto mining (specifically: Proof-of-Work mining for Bitcoin and Ethereum) is a dangerously large consumer of energy. Where I expect the narrative to move to over time is: crypto mining is driving the energy transition from fossil fuels to renewables.
To explain why, let's start with Iceland.
I'll never forget the first time I visited Iceland in 2012 with Brad and Gudjon. We were passing one of Iceland's many aluminum smelters and Brad said to me: "You see there? That's Iceland exporting its electricity".
Aluminum smelter in Iceland (source)
That was a head-scratcher for me at the time. But what he meant was: Iceland has vast amounts of accessible, inexpensive renewable energy in the form of geothermal. But you can't build power lines in every direction under the Atlantic. So instead of selling it directly, you convert the electricity into aluminum and you ship that around the world. In other words, you convert stranded renewable energy into value.
In a sense, the aluminum coming from Iceland is like a battery. What is a battery? A way of shifting both the location and the time-of-use of energy. Whereas live electricity (whether produced by coal, gas, wind or solar) must be used right then and there, electricity converted to aluminum can be used anywhere, anytime.
Dams are batteries; gasoline is a battery. And in a way, aluminum is a battery. Of course, while traditional batteries start and end with energy directly, aluminum's battery is economic, converting energy to value. And that value can be re-used elsewhere (even converted back into energy!)
Which brings us back to crypto mining. Crypto mining converts electricity into value, in the form of crypto assets (BTC, ETH, etc). Those assets, like the aluminum produced in Iceland, can then be moved, transferred and transformed. But unlike aluminum, which must be physically shipped to its final destination, crypto assets are programmable, and can move there instantly via an internet connection.
So, if we think of Bitcoin as a battery, what can we do with it? The key properties of Bitcoin's battery are: 1) always on and permissionless (no need to find customers, just plug and go) and 2) naturally seeking low-cost electricity: it will always buy when the price is right.
Given those properties, Bitcoin's battery can assist renewable builds (and electric grids more generally) in a number of ways:
Interconnection queues: when you develop new energy resources, you must apply to get them connected to the grid. Texas alone has over 100 GW of renewables in its queue. These queues can take years to clear. In the meantime, these assets could be online and earning Bitcoin.
Project finance: Renewable developers need capital to finance build-outs before they have customers. Bitcoin's battery is always ready to be the first customer.
Geographic issues: Sometimes the sunniest, windiest places are not the ones with the most customers, so it's hard to justify the development of new renewables. Bitcoin's battery solves this, becoming a "virtual transmission line" of sorts.
Timing & grid balance: Sometimes when the sun shines and when the wind blows is not when we need the most electricity. Yet, electric grids are marketplaces that must stay in perfect balance between supply and demand. Therefore, grid-connected renewables often have to "curtail" (turn off) if the are producing too much energy at the wrong time. Bitcoin's battery is ready to buy 24/7/365 when the price is right, and turning up and down as needed, and participating via direct power purchase agreements as well as via demand response programs.
Underperformance: Related to the timing & balance issues above, often times, renewables produce more energy than is needed on their grid, leading to subpar financial performance. Bitcoin's battery is ready to buy if no one else will.
Cleaning the grid: Even outside of renewable generation, Bitcoin's battery can help improve both emissions and the energy mix. For example, Crusoe Energy attaches efficient turbines and mining equipment to existing gas flaring sites, both improving emissions and converting energy into Bitcoin's battery. Taking this a step further, you could even then take those profits and reinvest them in on-grid renewables elsewhere, another twist on the idea of Bitcoin as a "virtual transmission line" (aka battery).
These are just high level ideas. There are many ways they could be implemented (power purchase agreements, feed-in tarrifs, contracts for differences, etc) -- those details are way above my pay grade.
While I am certainly an optimistic tech VC and not an expert on energy infrastructure, these are not just hand-wavy rosy ideas. Just recently the energy giant Aker announced a major Bitcoin-related initiative, Seetee. The shareholder letter where they lay out the vision is worth a read -- it's broader than the ideas I'm focusing on here, but indeed they describe Bitcoin as an "economic battery", and intend to use it to solve some of the problems I mention above, among others.
I believe the properties of Bitcoin's battery are powerful and profound, and will lead to the kinds of solutions I point to here. And as we have learned from our experience with this technology so far, that's certainly only the beginning of what will be possible.