I recently listened to an a16z podcast about crypto. It was an interview by Katie Haun with Marc Andreessen, the co-founder of Andreessen-Horowitz aka a16z. For me, the most fascinating part was not the crypto, but two aspects of the history, one of which I was unaware of, and the other something I don't remember ever having to go through: when commercial use of the internet was allowed, and how difficult it was to get on the internet back in those days.

Just in case you don't know, prior to a16z, Marc was one of the founders of Netscape, the first browser company. And prior to that, he was at the University of Illinois where he led the team that developed Mosaic, the first graphical browser. He then applied to NSF to get a grant to support Mosaic since so many other universities were using it. But NSF didn't fund that kind of thing, so they turned him down. This was the best thing that ever happened to him, and apparently he has that refusal framed on his wall. Instead, Jim Clark encouraged him to move out to Silicon Valley and start Netscape, which he did.

eCommerce Started in 1993

It was illegal to use the internet for commercial activities prior to 1993, due to conditions in the Acceptable Use Policy or AUP. You could use the internet for academic use but you couldn't engage in commercial transcations. Internet traffic started to take off in 1991, 1992, 1993, but the government was holding firm on this.

But in 1993, enlightened regulators and policy makers decided two things at the same time. They decided to amend the AUP to make commercial use legal, and in parallel they decided to hand off the internet backbone to the telecom companies, at the time AT&T, Sprint, and MCI. That solved the economic problem since the government no longer had to pay for it. It was a very forward thinking and enlightened move to make this change since it wasn’t consistent with internet culture at the time, it wasn't consitent with how it had gotten funded, it wasn't consistent with the governance mechanisms. But people in Washington thought it would be a good idea to allow commercial activity. In crazy upside scenarios, it might be a driver of economic growth. Those of you who are older like me will remember than 1989-1993 was a severe recession, grim economic times. I think you can trace the end of the recession and the economic boom of 1994-2000 to allowing commercial use of the internet.

Katie expressed surprise that Marc had called the regulators "enlightened".

My friend Al Gore gets a tremendous amount of teasing for having claimed to invent the internet, I will defend Al Gore’s honor. Al Gore never said he invented the internet, he said he helped to create the internet, and that actually is true. He didn’t write the code but he set many of the policies for the funding of NSFnet which led to the internet, and then he was involved in this process of basically privatization and having it become an engine for economic growth. Along with many other people in Washington on both sides of the aisle, he was in the middle of that whole thing.

I'm cutting out a section here about how the internet was still insecure, with everything in plain text including passwords and credit card numbers. At the time, strong encryption was still a "munition" and could not be exported from the US, which led to a lot of overseas competition for Netscape since other countries were not hampered by US regulations. The feeling was that until that was fixed, buying things on the internet wouldn't really be possible.

The first internet store was a bookstore. It was not Amazon. It was a cult science fiction and fantasy bookstore on El Camino Real in Palo Alto called Future Fantasy Books. Run by a guy who had been running it for 30 years. Another guy, Brian Reid at DEC WRL in Palo Alto, went to the owner of the store and said "Let’s put your inventory online" and of course his first question was "What’s online?". Brian explained. "But I don’t own a computer, I just have a fax machine." So Brian set up the online website at DEC and you could order a book and it would be sent to the store by fax. It turned out there were a lot of people internationally who were interested in science-fiction but couldn't get the books. In two weeks that guy's business doubled. Small absolute numbers but significant. He did then buy a computer, but then, unfortunately, Amazon came along and he went under. So not a totally happy story.

Getting Online

Katie asked Marc just how easy it was to get online in 1993. I think the first time I got online was a bit later, using one of those AOL disks that were ubiquitous in that era. It was later that I got on the "real" internet. I do remember having a 56KB modem so I was online before broadband was available. But I never had to go through the process that you are about to read about.

Yeah, super easy. You just pressed a button! No, that’s not true at all. So I’m a consumer, just a normal consumer, and let’s say I’m totally comfortable with computers. I know how to use computers, I own a computer. It’s 1992, 1993 and I just read about this internet thing and I want to go on the internet. So I go to my computer and look for the internet button but none of the computers for consumers in 1992 and 1993 had any internet awareness at all. They didn’t have the software for accessing the internet, they didn’t have any of that stuff.

So literally what you would do, if you knew to do this, is that you would go to a bookstore…they used to have these physical places where you could buy books…you would buy a book, and the book would be How to Use the Internet. So you’d bring the book home and read the book and there would be a floppy disk, if you remember those, in the back of the book. The floppy disk had the software that you would have to load on your PC in order to get on the internet. If you are technical, this was the TCP/IP stack and all the other networking code.

You then had to go through a 38-step process to basically rebuild your operating system on the fly, as an end-user, to add the internet support. A very complicated process. By the way, you needed to be very careful doing this because if you made a mistake, you would probably brick your computer…forever. It would totally stop working because you were mucking around in the operating system. So you wanted to be very careful through that part.

So then you’d get all the way to the end of that process, ready to go on the internet, and you’d get to "Congratulations. now you are ready to go and buy a modem." So you have to find a computer store and pay them $300, whatever, and you bring the modem home, plug the modem into the computer, and then you had to configure the computer and the modem to actually work with each other and that was like another 38-step process that you had to do very carefully. It was another process you didn’t want to screw up because you are mucking around in your operating system.

So then you’d get all the way through that and you were ready to go on the internet and it would say “Now you need to sign up for an ISP (Internet Service Provider).” That’s who your modem is going to call to go on the internet. This was the era of small, local ISPs. So you have to call the ISP on the phone…remember, you’re not on the internet yet…so you can’t search for the ISP online. You go to the Yellow Pages, find your local ISP, call their phone number, sign up, give them your credit card number, and they give you the code.

So this is basically like four weeks later. Then you hit dial and get a busy signal. That’s how straightforward it was.

The good news is that it set an incredibly high bar for the first people on the internet, and they were incredibly enthusiastic. It was like joining the Marine Corps, it took real effort. You had to really want to use this thing. The bad news was this was patently absurd. So there were several years of work by us and others to streamline this thing to the point it is today.

Listen to the Podcast

This is the page for this podcast. The title is From the Internet's Past to the Future of Crypto if you want to search for it in your podcast app.

 

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