Written by: Sequoia

Compiled by: Alex

In early 2021, the total value of the cryptocurrency market surpassed $1 trillion for the first time, a figure that even caught the attention of the most steadfast skeptics. By November of last year, this number exceeded $3 trillion, surpassing the market capitalization of any company on Earth. Thousands of developers are now building crypto projects, with most of the activity occurring in the past three years. Today, there are over 7,000 tokens, nearly 12 times the number at the beginning of 2017.

Crypto is undergoing a Cambrian explosion. While we have invested in cryptocurrencies for years, the recent acceleration in the field is astonishing. Last year, more than a quarter of Sequoia's new partners in our U.S./European business were in crypto-related companies. As part of our new structure, we will be more directly involved in governance and token equity. The question is no longer whether cryptocurrencies will achieve mainstream adoption, but how blockchain technology will transform the economy and our digital lives in the next generation.

From experience, we have learned how easy it is to underestimate these shifts. For example, when we first met Chad Hurley, Steve Chen, and Jawed Karim, they had just begun creating YouTube, and we envisioned large-scale scenarios for future widespread adoption. In our investment memo, the best-case scenario was that 30 million videos could be offered daily. This represented a 300-fold increase, which seemed ambitious at the time. But this was two years before the first generation iPhone was released and the rise of mobile phones, which multiplied global video consumption. Today, YouTube serves 5 billion videos daily.

At this transitional moment in cryptocurrency, we have been reflecting on the 2005 YouTube investment memo. We realize how crucial YouTube was not only in defining the development of the last generation of the internet but also in laying the groundwork for the creator economy and what followed. To commemorate YouTube's place in this story and to celebrate the unpredictable benefits of foundational technologies like crypto, we will mint the original YouTube investment memo as an NFT and auction it on OpenSea.

The rise of blockchain resonates with the rise of the internet itself: the direct and free flow of information between people on the internet lays the foundation for the direct and free flow of value on the blockchain. This is not just a technological shift but also a cultural and psychological one that will give rise to new economic realities around the world. In the world of NFTs, anyone can create digital assets, and anyone can invest in them, bringing unprecedented diversity to asset valuation and trading.

We now see YouTube as a turning point that paved the way for our current views on the creator economy. YouTube personalized the concept of digital asset ownership and made the widespread distribution of these assets mainstream. The YouTube investment memo is a time capsule on the cliff of web2. It seems only right to mark it for future generations. What better time than to auction it on the cliff of web3?

In the next phase of digital evolution, the role of distribution gatekeepers will diminish. Creators will gain control over their assets and shift them from aggregators to network participants. But the impact of blockchain goes far beyond the valuation and trading of currencies and digital goods. Decentralized protocols and new entities like DAOs could reshape everything from how products are built to how people communicate and create communities.

We cannot predict the scope of the transformation, nor can we foresee how it will reshape culture. At this early stage, we do not know what factors will catalyze crypto or in which direction it will move. These catalysts could be technological, regulatory, or cultural. It is still unclear whether this shift comes from the new currency diversity in the world or from blockchain-supported decentralized applications—or both.

But it seems clear that blockchain technology is beginning to constitute new protocols for digital interaction at a foundational level. Innovation is accelerating at the application layer above layer 1 blockchains and at the application layer below layer 1: one of the most exciting developments we are seeing is the pursuit of a protocol that allows different blockchains to interoperate smoothly. This work can be compared to TCP/IP for crypto. What this will unlock is beyond our imagination. Early internet enthusiasts knew it would change everything, but they could not foresee trading stocks on an iPhone. The same is true for today's crypto technologies.

Whatever the future of web3 holds, visionary founders will be the ones shaping it, just as Chad, Steve, and Jawed did before them. Our mission is to find the outstanding founders behind the innovations of the next era.

The best way to prepare for the possibilities of emerging technologies is to learn and understand through an insatiable curiosity. So starting next week, we will begin hosting a series of live conversations about crypto on Twitter. We will gain a global perspective on its potential and challenges from the founders and innovators driving crypto technology forward—covering everything from technology and scale to regulation and business infrastructure. We will talk to some of the smartest people in the crypto space, and we are eager to learn in public. If you are a founder in crypto—or just curious—we hope you will tune in and engage with us.

Before the live conversations on Twitter, we wish you a pleasant bidding experience on the 2005 YouTube memo. Proceeds from the auction will be donated to the public goods ecosystem development fund at 0xPARC, which will allocate these funds for the maximum benefit of the crypto community. We will mint the NFT as an ERC-721 token. The auction will take place on OpenSea and will end on Tuesday, December 7. We will not retain any royalty shares—the winner will own 100% of the rights. We are reshaping history, and you can own a part of it.