The Pomp Podcast - #1317 Alex Tapscott | OG Bitcoiner Explains What He Is Excited About Now

Episode Date: February 27, 2024

Alex Tapscott is the author of a new book, "Web3: Charting the Internet's Next Economic and Cultural Frontier." Alex has been in the bitcoin and crypto industry for a long time. In this conversation, we talk about the current adoption of bitcoin, AR/VR, NFTs, metaverse, Web3, regulation, and how artificial intelligence plays into all of this. ======================= Base is making it their mission to bring a billion people onchain. But what exactly is Base? It's an Ethereum L2 offering a seamless experience for both builders and users. With near-zero gas fees and rapid transaction speeds, Base is shaping the future of the onchain world. Base is a canvas for everyone, with hundreds of apps in the Base ecosystem, whether you're an emerging creator, a seasoned developer, or someone exploring the onchain space for the first time, Base is designed to bring your ideas to life. So, if you're looking for a platform where the future of onchain is being built daily, Base is your destination. Join in and make onchain the next online. Learn more at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠base.org⁠⁠⁠⁠⁠⁠ and follow along on Twitter at @BuildOnBase to see cool things to do onchain, everyday. ======================= BetOnline.ag is a proud sponsor of the the Pomp Podcast. Use crypto to bet on sports, play poker and enjoy casino games at BetOnline. Visit https://promotions.betonline.ag/pomp and use promo code POMP100 to receive a 100% matching bonus on any crypto deposit. BetOnline boasts no crypto transaction fees, and processing is anonymous, instantaneous and secure. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Alex Tapscott. He's the author of a new book, Web3, Charting the Internet's Next Economic and Cultural Frontier. Alex has been in the Bitcoin and crypto industry

for a long time. He's seen many different cycles, and his new book covers a whole bunch of stuff. But where he sees the adoption of this disruptive technology occurring, we go over Bitcoin, AR, VR, NFTs, and how artificial intelligence plays into all of this as well. Alex spends a ton of time thinking about the future and how technology can both improve our lives, but also some of the potholes in the road that we should look out for. I always enjoy talking to him because it feels like I get to peek into that future. And this conversation was no different. Here is my conversation with Alex Tapscott. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments.

You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by BASE. BASE is making it their mission to bring a billion people on chain. What exactly is BASE? It's a layer two offering a seamless experience for both builders and users with near zero gas fees and rapid transaction speeds basis shaping the future of the on-chain world base is a canvas for everyone with hundreds of apps in the ecosystem whether you're an emerging creator a seasoned developer or someone exploring the on-chain

space for the first time base is designed to bring your ideas to life so if you're looking for a platform where the future of on-chain is being built daily base is your destination Join in and make on-chain the next online. Learn more at base.org or follow along on Twitter at buildonbase. Again, that's at buildonbase to see cool things to do on-chain every single day. This episode is brought to you by BetOnline. Do you like making a profit from sports betting? Well, set yourself up to take home the most profit possible using crypto to fund your sports betting, casino, and poker account at betonline.ag.

You can avoid costly transaction fees, get your payouts lightning fast, and do it all securely and anonymously with the highest deposit and withdrawal limits in the industry. If you want to get in on the action, do it the smart way with crypto at BetOnline.ag. Head to the website, sign up with promo code POMP100 to get a 100% bonus on your crypto deposit today. If you go and you deposit, they'll give you 100% bonus if you use promo code POMP100. BetOnline. The game starts here. BetOnline.ag. Go check them out today. the promise of what bitcoin actually has provided well i think overall we're still pretty early bitcoin is an asset class is widely held by a lot of people as a store of value um but is not used

as often as a medium of exchange and i think that is in large part a function of the fact that we're still early in the adoption curve but a lot of other respects um you know bitcoin's made an enormous progress you mentioned that i've written a couple books on this you know i like a lot of people got into the space 2014-15 with bitcoin this is well before the word blockchain or web3 you know entered the vernacular there was this one asset and at first i thought i was investigating a new financial technology but i kind of quickly realized that uh bitcoin and the underlying blockchain was a general purpose technology that could potentially usher in a new era of the web and at the time the value of bitcoin was i think like five or six billion

dollars there were some other coins around at the time you know i think litecoin had launched by then ripple and others but we're talking like 10 billion dollars so to put that in perspective that's smaller than the market cap of like under armor or the gap like if bitcoin was was a publicly traded company it wouldn't have made this s p 500 right it would have been considered like a small cap so very early and now you fast forward to today the assets over a trillion the whole market cap of the asset class is uh near nearer to two trillion dollars and i think that bitcoin and blockchain is really starting to shake the windows and rattle the walls of a lot of industries and the longer it lasts the more likely it is to succeed and to continue to grow so i think it's

uh it's um anti-fragility has been one of its great strengths and i think that it's got a bright future what do you think are the areas that bitcoin needs to most improve you mentioned medium of exchange are there other things that you see as uh either areas of improvement maybe potential headwinds that need to kind of be navigated or potential pitfalls, things as to why it could fail or big risks that lay on the horizon? Well, I've been a big Bitcoin fan for a long time. I wrote a book about the technology in 2015. A few years ago, I launched one of the first ETFs on the Toronto Stock Exchange. People don't know this, but Bitcoin and Ether ETFs have been allowed in Canada since 2021. We raised over $200 million in that financing.

so i've always been a big fan but yeah there are definitely limitations today still to i think it fulfilling its uh potential i think that right now this renaissance that we're seeing of layer twos built on bitcoin and of nfts and other functionality i think is something that should be welcomed i think it's a very exciting development but i know that there are some people in the community who view it basically as you know kind of network clutter um as you know crowding out block space for other kinds of better transactions i think that's a flawed way of thinking i think that if you want a technology to succeed and by definition you know bitcoin is a technology an open technology then you have to allow all sorts of open innovation and

exploration and innovation so to me that is number one which is that let bitcoin be bitcoin let the platform be used as both a medium of exchange and store of value but also as a general purpose technology which is frankly what got a lot of people into this space way back in the day And then I think, obviously, we need to just continue to make it easier for people to onboard to the technology. And I think that's something that we're already seeing play out. You know, I interviewed Alex Gladstein from the Human Rights Foundation relatively recently, and he provided some interesting data. What he says, basically, is that, you know, there's like the golden billion, right? people in the world who live in places like the states like you or canada where i live or maybe

western europe japan and a couple of other places who have access to financial services who aren't worried about governments expropriating their money who you know don't worry about hyperinflation inflation is a problem but hyperinflation but then the remainder of the world lives in a place where access to financial services is spotty where it's difficult to find ways to store and move value and where local institutions including governments and banks can be very corrupt so that is the area where you're actually seeing the greatest adoption so far of bitcoin but also web 3 more generally including you know applications like stable coins for example or d5 or even nfts you know nft adoption is higher in places like the philippines and thailand than it is

in the united states stablecoin adoption is higher in places like turkey and nigeria than it is in germany or the united kingdom uh ownership of bitcoin is higher in places like venezuela than it is in places like uh you know canada for example so all of these different examples have something in common which is that these are parts of the world where um access to finance is spotty where access to economic opportunity is spotty and the ability to plug into a permissionless network or network of networks including ethereum and others is a superpower right it's a way to put yourself in a more level playing field with other people around the world and so i see that as being the primary driver but even still today it's relatively um small scale so to me that's very

exciting because it means that there's still quite a runway ahead of us now when you look at um kind of the next epoch or so if you will of uh the crypto industry we went from bitcoin uh and this you know great innovation on technology uh with blockchain technology then we added in smart contracts. And that led to this explosion of activity, excitement, innovation, et cetera. What's interesting to me is those early versions have continued to gain steam. They continue to be bigger assets, more developers, more activity. And now also Bitcoin is starting to borrow some of those ideas and try to bring it back to Bitcoin as well. And so talk about kind of that maybe second bucket, which is a lot of the smart contract platforms, a lot of these decentralized

applications, et cetera, which I think really this last book that you wrote is kind of more focused on uh you know trying to unpack what's happening in that part of the industry yeah absolutely so my new book is called web 3 charting the internet's next economic and cultural frontier and the book basically explores how blockchain and other technologies are converging to create a new kind of internet and a new kind of web you know every once in a while a new technology emerges that changes the world transforms the economic power grid and the old order of human affairs and we've seen that in history you know the rise of the computer before that the television the radio the internal combustion engine and so forth and i think today we're actually in this

really weird and kind of exciting and perhaps perilous period where there's not one but several new technologies all emerging at the same time so the first of these is blockchains blockchains are the first digital medium for value they're ushering in a new era of the internet and in the same way that the bitcoin network allows you to move and store value in bitcoins blockchain networks like ethereum allow you to basically move and store value in any kind of asset right tokens are like websites for value they can be programmed to represent basically anything stocks bonds votes titles deeds art you name it but the second big technology of course is ai we're in this period where uh computers are really allowing us to reimagine or to rethink what we thought technology

could do and what people could do when empowered with these kinds of tools then you've got the rise of virtual reality and augmented reality or what what's now known as extended reality this apple vision pro i don't know do you have one of these things yet uh i don't have the apple vision pro uh but i've tried some of the other you know the oculus and many others which uh almost seem like you know cheap man versions uh at this point of uh how good the apple vision pro is seems like that and maybe we're like one more iteration away from this becoming a mass market product but it's pretty clear at least to me that the internet is moving from a two-dimensional medium to a spatial web right to a three-dimensional internet and that can include um you know virtual

reality where we're consuming content we're in virtual worlds but also the web itself being imprinted on our physical landscape and then the final of these technologies is you know the internet of things and that's a term that's been around for a while but i'm not talking about you know smart home monitors or things that measure your glucose i'm talking about devices that can think and can do transactions thanks to ai and blockchain so all of these technologies are coming together and my view basically is that in the in the way that the term internet you know went from describing a pretty narrow set of technologies that were involved in like networking to describing much more than that like i think when we use the term internet we're talking about new business

models new cultural behavior other technologies you know smartphones cloud web browsers and so forth um and even new social behavior all of these kinds of things like we consider all that the internet to me web 3 is about the convergence of these technologies blockchain is clearly the most important. It's foundational to all of this. But I think that as time progresses, we're going to stop talking about there's the Web3 bucket, and the AI bucket, and the this bucket, and the that bucket. And we're going to see it all as coming together as under one umbrella. Now, when you see this kind of explosion of innovation and the melding of it together, are there one or two examples that you point to where you're like, this specific application or

this specific development really highlights how entrepreneurs or builders are going to leverage all of this to build things that solve a problem for someone? Yeah, absolutely. Well, so my background is in financial services. I worked in investment banking with what people would call TradFi nowadays. And when I first looked into this, I thought I was investigating a financial technology, not a general purpose technology. And I still think that in financial services, that's where a lot of the rubber is really hitting the road. I think that stable coins, for example, are a clear product market fit where everyone in the world wants a way to move and store US dollars, but the majority of them

can't access a US dollar bank account. Enter stablecoins, which give people a way to do that. It's a US dollar utility that's now widely used in many different parts of the world. So I think of that as an interesting example. Stablecoins are also an on-ramp to DeFi and to other financial primitives that are being developed in the world of Web3 that give people a way not just to move value, but to store it, to access credit, to fund and develop new investments and new companies, to insure against risk, to organize financial information, and so on and so forth. And it's in that world of what's known colloquially as DeFi that I see a lot of really exciting innovation.

But what's really interesting to me about Web3 isn't just the way in which it sort of creates new ways to do things that we do today. but in the way in which it maybe creates things that weren't possible previously. And so I think about the rise of AI and the rise of Web3 or a blockchain and how these things are converging. And we've done a lot of work on this. I'm a co-founder of the Blockchain Research Institute, which has conducted over 150 projects looking at the convergence of technologies like AI and blockchain and others. And I think basically at every single level of the AI stack, there is an opportunity to introduce blockchains and to introduce these Web3 primitives. I won't go into them in too much detail, but you may have already covered on the show this whole notion of decentralized physical infrastructure.

That basically, in order to fulfill the promise of AI and frankly, the metaverse and all these other things, we're basically going to need as much computing powers as humanly possible. We're going to need to marshal all the resources at our disposal. But we also want to make sure that these algorithms and applications aren't all controlled by a few very large companies that manage the clouds, right, the computing power that enable them. And so enter decentralized physical infrastructure. So there are really interesting projects like the cache network, for example, or the render network that we feature in the book, where basically you create an incentive to pool computing resources together. And these decentralized clouds, in many cases, can outperform centralized clouds. They can do so at lower cost, but they also decentralize power in a way that I think creates a better footing for the industry to grow. So I think that's one area that, to me, is very, very fascinating.

And then another one that I'm very interested in is culture, cultural industries. You know, for centuries, technology has been a tailwind for creators, for cultural creators, right? You know, in the medieval times, not to go too far back in history, but in medieval times, we used to basically rely on patrons to support great cultural works. You know, the Medici's or the King of England or something like that. And oftentimes the art reflected the goals and the ambitions of the patron, right? There were tools of political power as much as they were expressions of creativity. And in the industrial age, finally, we had ways for creators to sell their works one to many. So they could make a lithograph or sell a paperback novel or later cut an LP or sell a CD and so forth.

And the 20th century to me sort of, in a way, is a golden era for creators where they didn't earn the majority of the income, but they got to participate in the creation of wealth from selling one to many, right? So if you're a songwriter and you wrote a hit single and sold a million copies, you could expect to make about 50 grand, right? five percent if those singles sold for a buck a piece back when people used to buy records but these days technology is less of a tailwind and it's more of a headwind so number one is the web was supposed to make it easier for creators to access their fans and to cut out the middlemen and this is something that was part of the big promise of web one right of the first era of the web but the only problem is web one and the internet as we know it isn't a medium for value it's a medium for information so the web took this thing that was an asset like a cd or record that

you could sell copies of and turn it into basically a printing press for information where you can make copies and copies and copies and the value that you received went to basically zero so the web itself has become a problem for creators and now platforms sit in the center and ensure that creators get less and know less about how their work is monetized than ever before and now you've got the rise of ai so i'm not an ai doomer i don't know how you feel about this i'm personally very bullish on ai but a lot of estimates that i've read say that you know in a few years time 90 maybe more of all content that we see is going to be synthesized right whether it's film or tv or music but it's going to be based on data based on learning from existing ip right from the work

of existing creators so in that environment we need to create ways for those who create cultural content to get paid fairly nfts are an area that i'm really excited about and have been not withstanding the ups and downs of the market i think the idea of being able to prove ownership of a cultural artifact is an incredibly empowering and powerful technology and innovation and i see lots of other ways in which creators can can benefit um you know we have this way to trace and track the movement of value in these networks on on chain and we should be able to do the same thing for for ip for royalty rights and so on and so forth so there's lots of really interesting i read a recent research report that that shared uh shed some light on this that basically 1500

patents have been filed for blockchain and ai and a lot of this is around data integrity and and ensuring creators get paid and it's still early like i don't want to over promise on this but it's an area that i'm very excited about as well when you think about the different technologies um nomenclature seems to be something that gets highly debated so if i say to someone hey is the metaverse going to be a thing all of a sudden you get very very controversial highly debated uh responses some people are big bulls some people are big bears if i say to you do you think that you know arvr is going to be a thing some of the people who say no to the metaverse may say yes to arvr and now it kind of looks like those things are actually going to be the same

thing uh in a weird way and so how as a uh individual who thinks through building companies writing books investing capital how do you kind of clear out noise from signal and really evaluate what is the thing that people are talking about and will it be valuable in the future or not well it's a terrific question and it's something that as a person who writes books about this i think about a lot because i think if everyone's not on the same page no pun intended to start then it makes the discussion really difficult to have. And I think that the metaverse is a perfect example of this. So I don't know that people have a clear definition of what that is.

I think for a lot of folks, when they think about the metaverse, they think about donning a headset, putting on a virtual reality or augmented reality headset and entering some virtual space where they go to be entertained, to play games, to socialize, to spend money, to occupy their time, right? And I think a lot of times when we think about this, we're imagining a world that is curated or enabled by some big company like Facebook meta or by Apple or by Microsoft.

You know, eventually there'll be a headset that allows you to access the Xbox library and so on and so forth. To me, this is not the metaverse. You know, the metaverse concept comes from a book called Snow Crash, and there have been lots of examples throughout history where people have explored this idea of a virtual alternate reality. Sometimes it's sort of benign. Sometimes it's really cool, like Ready Player One.

Sometimes it's very scary, like the Matrix, right? This idea that we're plugged into this shared reality that keeps us from seeing the world as it truly is. But ultimately, what the metaverse is to those people and to those companies is basically like a virtual world where you go, where you spend money, where you play, where you interact, but you don't really own your own assets. You don't control your own identity. You don't have privacy. Anything you buy or earn in those environments can't be taken with you outside. They're closed and they're gated communities,

basically. They're walled gardens. So to me, that's not really like the metaverse, even the positive or the negative version. To me, that's just virtual Disneyland. It is a theme park, a place where you go to to play by the rules of some company have fun enjoy yourself and at the end you leave kind of with nothing and that's fine there's nothing wrong with theme parks you know i've heard disneyland is very fun i haven't been since i was a little kid but basically like if we're trying to create some new shared reality to fulfill some vision to give the metaverse a second life if you will then we need to get some things right and i don't think any of these visions really contemplate that at all. And the good news is that we actually have a very simple template

to do that. It's called the real world. So the three things I think we need to actually create the metaverse or to fulfill the vision is number one, a reasonable right to privacy. I think that that right, which is protected by law and the constitution in the United States and in Canada should extend to the virtual world. You shouldn't have in companies that support, you know, your experience online shouldn't have perfect vision into every bit of information about you. Number two is that you need to have property rights, right? You need to have the ability to own and control your own assets. And that's something that we already have, you know, in the real world, like life, liberty, and the pursuit of property. Property rights are foundational to the liberal

capitalist democracies that we all enjoy today. That doesn't really exist online. You know, people spend a hundred billion dollars a year on virtual goods and experiences and so forth that they buy, but they don't actually own. At best they're renters, but really they're just borrowing it for a period of time. So we need to have a way to enshrine digital property rights. The good news is that blockchains allow us to do that, right? We can own our own Bitcoin. We can control and own our own stable coins. We can also own and control our own digital identities, our virtual goods, things we buy and earn in environments like virtual worlds and so on and so forth. So all of this now exists to add an ownership layer for the web. And that's incidentally

why they call web three, the read, write, own web, because it adds this level of ownership of control to the experience of being an internet user. And then the final thing is freedom to transact, basically economic freedom, like in the same way that, you know, you can do business between individuals, between companies across state lines in the United States, you should be able to conduct business and do transactions peer-to-peer or peer to another company and move between the state lines of the metaverse, right? Right now we have this federated metaverse where we've got all these different environments controlled by big companies, but you should be able to move goods and value, goods in the virtual sense, between these different environments seamlessly. And

currently that doesn't exist either. So to me, I'm just very concerned that whatever we get in these virtual worlds and experiences will do very little to push humanity forward. All it's really going to do is to, I don't know, perpetuate the Web2 economic model, but do so with virtual reality. And to me, that would be selling the vision short. So I hope that we can get some of this right. And the good news is that there's a lot of Web3 metaverse platforms and protocols that are trying to do exactly that. Now, this idea of owning via property rights is historically been something that creates massive prosperity for many societies and civilizations. When we think about it in a digital form, we're giving property rights,

not necessarily to some societies that don't have it. In the United States, we have property rights, but now we're giving it in a different form factor in this kind of digital world. And so how important are individual borders, nationalities, or even maybe like the differences between you and i when we get into a digital world you know one of the things i've always thought about is on a blockchain we're all just kind of a random string of letters and numbers and so uh talk a little bit as to like yes you're giving property rights but the quote-unquote receiver of the property rights now looks much more um like the other uh people in that you know kind of ecosystem that market participant and the reason why that becomes interesting is like with

the rise of automation and machines you can very quickly see they are going to be transacting in digital assets and so now all of a sudden you're giving property rights not just to people but you may be giving them to machines as well and the blockchain or these assets don't know the difference whether it's a human or it's a machine all they know is they're moving from one wallet to another wallet based on whatever the market participant is doing yeah well geez that's a really fascinating kind of idea and thought experiment um you know people have property rights you're you're right but other other entities have property rights uh like corporations have property rights and corporations have legal personhood so um to me it's not beyond the realm

of possibility that you can have uh inanimate objects or devices that have the same kinds of property rights as as individuals do i mean let's say you had a self-driving car that was self-owned because it could earn money from the fares that it generated if it was incorporated as a legal person which it could be right then it could have property rights in the same way that like a company or an individual had um so i think that it's a strange i don't know where we're headed exactly um i love that idea and i think it's it's one that probably is going to come to a head not just from a technology perspective but from a legal perspective and philosophical perspective as well but um your other point was another one that i find equally fascinating you know in the

introduction to my new book i basically said that say that you know technology they say that technology makes the world a flatter place right that the spread of technology improves access to global markets uh access to opportunities and so on and so forth thomas friedman said that you know the world is flat uh the reality of course is that the world today is not flat um the world is deeply divided and unequal but it is true that technology has made it much more connected than ever before so my view basically is that yeah technology makes the world a flatter place then web 3 is going to be a steamroller it's going to flatten the world in ways that we scarcely imagined right like the internet the first era of the internet um web one and web two uh democratized access to information

and uh democratized the ability to publish right to share information your thoughts your ideas and so forth those are pretty revolutionary concepts what web 3 does is it democratizes access to ownership ownership um where maybe to your point those rights may not exist in the legal uh sense in the places where those people live let's say you live in a country where there's a dictator who can expropriate your assets but on chain and in the in web 3 you have a program programmatic right to ownership now i think not to get too philosophical but the political does supersede the the technological in certain contexts like if someone knocks on your door and you know demands your private keys or they'll throw you in jail for the rest of your life then you start to see

the power of the state monopoly on violence but in general the idea that we have a way to express property rights digitally is incredibly powerful and i think that we are entering a period in time where there's going to be access to opportunity in a way that has not existed previously i think of dows as a really interesting example of this you know decentralized autonomous organizations um in in web 3 and defy and some of these other areas a lot of organizations begin first as these internet native entities right i don't want to call them companies but in some respects they kind of function like companies but the difference is that with a company you know delaware c corp if you're a startup you might be able to access stock or offer stock to like your

best employees or maybe everyone who goes to work for your company but there's no easy way to cut your users your vendors your partners contributors and so forth uh as cut them into the ownership of the of that platform and with dows you can like if you wanted to start a software project today and make it available in 50 countries and make it so that anybody who used it could access ownership you know over time as the more they use it the more they earn because they're adding value to the network they're helping the network effects to scale um how would you do that today with a company like you couldn't you'd have to have you know legal agreements in place in 50 countries and translate them into 20 languages and you'd have to have lawyers enforcing the terms and so forth

but with tokens with it with the dow you can create an easy way for users of a platform to earn ownership in the form of a token and that token can have you know governance rights to say and how that platform is run it can have economic upside it could pay distributions you know i've seen lots of really novel concepts in practice where as a token holder you can receive you know stable point dividends from the output of a certain network all of that um i think creates lots of questions and challenges from a legal and regulatory perspective but the technology tools exist and are in practice today and i just think that that is something that's really exciting because the web is global web 3 is global duh because it's all part of the same thing and now

we've got a toolkit that allows anybody to participate but also to uh share in the wealth that is created so we had a way for everyone to participate to share information to access information now we have a way to share and access and the value creation to me that more than anything else is the most powerful concept of web3 what is the thing you believe is most likely to occur that most people do not yet think is going to happen whether it is ai related crypto ar vr like we look out into the future you have very high conviction but you know the rest of the market uh does not um it's a really good question you know i think that what people don't fully appreciate like people talk about tokenizing the world and you know how we can put real world

assets into tokens. My view is that most economic activity will happen on blockchains. Most transactions, most assets are going to be internet native or on-chain assets. And look, some of those things are not, that's not possible. There are physical assets in the real world where what you're putting on chain is sort of title to those assets. But in a lot of other senses, that's really not the case. If you look at stocks and bonds, I do return to finance because it's an area that I'm comfortable with and I've known my whole life, but the global stock market combined has a market value of $100 trillion. Those assets aren't claims on some physical assets. They're claims on ownership of cash flows that a company pays out. They're a contract. They are a legal

fiction, right? And assets like stocks and bonds and other financial assets, securities, all of those things can be represented as on-chain assets. So I just think that today, and I also think that's part one and then moving forward a lot of as I alluded to in the last answer I think a lot of future kinds of companies and projects and organizations will begin themselves as digitally native right where they won't have a foot in the real world where there's like you know a stock that trades on the exchange and then some you know version of it that trades on chain everything will be on chain and so to me like where are we where are we going we're going to a world where there's hundreds of trillions of dollars of assets um that that uh exist on blockchains and transact

backed on blockchains and it's like the re the question is like well why well the reason why is that they're just better it's instant it's peer-to-peer it's real-time it's auditable searchable and it's offers more flexible kinds of organizational structures right tokens are as I said earlier kind of like websites in the sense that they can be programmed to represent anything I've heard an interesting analogy that tokens are like containers for information right or containers for value. So in the same way a shipping container can contain furniture and clothing and computer parts, a token can be programmed to contain anything. And because it's programmable, it means it can represent an almost infinite number of configurations.

In the same way, like a website can be an infinite number of things, right? It can be, you know, where you access the sports scores, but on also your social media page, it can be, you know, a government health website, whatever. So to me, the idea that the world will be tokenized has become a cliche, but it's something that I've had high conviction on since day one. what is the thing that everyone is excited about that you think they should not be or they are overvaluing will happen in the future? Jeez, that's a really interesting question.

I'm not sure that anybody is over-hyping anything right now. And that's not because I'm sort of Pollyannish and I think all of this stuff is great. I think that probably today, what I find really interesting about the moment that we're in, and i mentioned you know blockchain ai um extended reality and iot is that they all seem to be hitting an inflection point at roughly the same time in innovation there's like in theory there's this concept known as an s curve right which i know i know you're familiar with where basically

in the early days it's a lot of capital and time that goes into developing a new technology but there's relatively little economic output but then at a certain point it hits an inflection point where for every unit of time and unit of capital, it creates an exponential amount of economic growth. All of these technologies that I've discussed are all basically, you know, hitting this inflection point. They're all overnight success stories that are many decades in the making, right? People talk about this with blockchains, you know, when are we going to get more real world use cases? What are hundreds of millions of people going to use this? You know, blockchains have only been around for like 15 years, really. If you look at these other

technologies. They've been around for decades. You know, AI began with Alan Turing in the Turing test. You know, the 1940s and 50s predates the transistor. The virtual reality, extended reality, there have been examples of that throughout history, going back to the 1970s and 80s. You know, connected devices, the idea of, you know, an internet of things, and again, a concept that is many decades old. But all these things are ideas whose time have finally come again, and they're all converging at the exact same time so to me like the tech the tech hype is real what i think people are probably under appreciating or maybe under valuing is the potential both for positive like the ability for these technologies to unlock an era of human flourishing and

productivity and prosperity but also the downside of it as well like i think that as a species we are not ready for a world where 99 of content is synthetic and where deep fakes are photorealistic and where you know you can get a call from a friend or a loved one saying they've been kidnapped with a deep fake video of them holding today's newspaper and it's all bbs excuse my uh french but it's like you know are we ready for a world how do we figure that out how do we prove identities how do we prove data how do we prove humanness like all of those challenges i think that we're so far away from figuring that out but like the technology is accelerating it at an ex exponential rate and so like we're not going to have time to figure this stuff out and i think that's going to

create a lot of chaos in the world but at the same time i think that all these things taken together um can help to bring humanity to a new level of prosperity that we have not enjoyed or experienced so far so you know you take the good with the bad you mentioned chaos in the world and one of the things that uh seems to be developing is that on chain in the digital world there's a lot of certainty you understand when the blocks will be created you can uh cryptographically prove certain things have occurred uh there's not a lot of debate it's very binary like either one or zero it happened or it didn't um the exact opposite is like accelerating in uh the off-chain world there's way more uncertainty there's way more chaos that feels like things are becoming uh less

uh structured and predictable and so do you feel like those will continue to pull away from each other or can the on-chain world actually pull the off-chain world back towards a kind of cleaner predictable certain future well you've i think really neatly described the potential to bring a whole bunch of certainty to this area that is exploding in growth and becoming more uncertain and i could take that question in several different directions like obviously the world i think appears to be getting more unstable um you know trust in our institutions is collapsing people are living in self-reinforcing echo chambers where the you know purpose of news is not to inform but to provide comfort like all that is happening but i think like when it comes

to tech specifically the question is what is the risk or challenge posed by by ai you know how do we determine or prove humanness in a world where um you know deep fakes and synthetic content uh can recreate a person from the perspective of another with a high degree of certainty and how do we prove that an ai model is sourcing the correct data and how do we assure that if that data is owned if it's ip owned by someone that they are receiving uh recognition and compensation for that work and all of this you know and i could go on and on but like in all these cases there is this disconnect as you point out between this proliferation of activity but it needing to be anchored in truth and i think that to be able to figure out how and trust truth and trust like how

do we trust that the data is accurate how do we know how can we prove the truth of who owns it and so forth and i think that's where the um the the synthesis or the convergence of these technologies is going to occur but like it's not a it's not like they're on a collision course and this is going to happen no matter what right like technology doesn't just work and it doesn't just create positive outcomes it's a tool that can be wielded by people who have good intentions and bad intentions it can have positive and negative you know societal economic cultural um outputs and so it really depends on how it's wielded so if there's anything that i want to um sort of leave readers with with the new book it's that this is a new economic and cultural frontier

like all frontiers it's got its fair share of risks as well as rewards and like any frontier it's populated by some of the most ambitious and smart and brilliant people but also by a fair share of of hucksters and criminals and you know ne'er-do-wells and um it comes with with its fair share of at-falls and so if you're going to enter into this new frontier if you want to help to lead this next era you need a guide uh you know and that's what i hope the book does but i also want people to leave you know reading having read the book feeling like leadership is their personal opportunity i i think it's pretty obvious now at this point that leadership doesn't come from the top down in in the economy it comes from the bottom up or the outside in you know it's not just

random guy in the street but like entrepreneurs innovators users first movers can come from anywhere and i think with web3 they can also be anywhere in the world and i think that that's something that should feel really empowering for people like if you feel the world's moving quickly you want to play a role in it i think there are ways to do that but i again like i think that to go back to the original question you know these things don't just happen on their own They require people to actually take the reins and to steer the technology and to steer our culture in the right direction. Now, when this comes to fruition, how does regulation play into it? Well, that's a question that I chuckle just because how much time do you have?

I mean, it's a very fascinating and challenging area, right? So within the world of financial services, for example, something like a stable coin. So even a stable coin, which has shown clear product market fit and is widely used, and it's clearly providing a real utility to people, is an area that's deeply contentious. And for those who understand the business model of stable coins, I'll just explain it really briefly. So stable coins are minted when people deposit cash on hand with the institution that mints the stable coin.

and that can mean basically that they're sitting on billions of dollars of value of money which they go and invest into government securities now what would be really great is if the holder of the stable coin could receive the interest that the collateral earns from the treasuries and other assets that the issuer buys but right now they can't because if they did that it would be like a security and because it's security then it falls under a whole other suite of regulation But the upshot of that is that the people who use this asset can't actually participate in the full value of it, right? And I know that seems like kind of an arcane example, but you're talking about billions of dollars of interest income that people can't participate in because of regulatory uncertainty, right? So that's like one tiny example amongst many.

I think the biggest, one of the big sticking points, and I talked about that DAO example, is that it would be great to be able to launch a project from scratch and to make it available to anyone to use and to earn ownership in. And the more you interact with the platform, the more value you create, the more you earn. But as a practical matter, you know, what are people actually owning? A lot of founders go to great pains to point out that their tokens are not securities. But in my view, there's a lot of elements of them that are, and I actually think that's a really positive thing. The idea that you can have ownership of something and participate in the upside if it creates value, and as a user, be a stakeholder in how it's run and governed, to me is an amazing concept. But the legal and regulatory infrastructure for DAOs just does not exist. And I think that more than anything, more than the technology, is the biggest cap on its development and on its growth.

Right. So on the other hand, there are many examples where regulation is useful or necessary. And I think it's because I think the first two examples are ones where a lack of clarity has led to value not being created. I think there are other examples where it can be created. Now, I think that figuring out the balance between these two things is very, very tricky. And I think that it's something that, at least in the United States today, there isn't enough serious discussion happening about how to set the conditions or to lay the foundations for this next era of the web to succeed. And I think as a result, that makes it an economic opportunity that could be lost or forfeited just through inaction. like the web web three inclusive of all these other Technologies it's the US is to lose like come on you got all the tech you got all the capital you've got the universities you've got

all of this going for you but if you don't create the regulatory framework then money and assets and organizations are going to move offshore and that's what's already happening today so I think that there are opportunities for governments to take a proactive role in helping to accelerate about the adoption and to accelerate capital formation and accelerate innovation. But it requires the political will to do it. And I think in some parts of the world, that political will is there and in others, it's not yet. When we view the future as you're describing it, One of the questions that I think we can end on is, are people skilled and trained in a way that can make it happen? What I mean by that is like some of these technologies are new.

And so we've seen a huge, you know, in the crypto world, solidity, right? All these people have to go and kind of get up to speed on certain technologies. But is the workforce prepared to build this? Or do we just need time to pass? and a lot of younger people who grew up with these technologies and it's more inherent and it's less about retraining the existing workforce and it's more about the new workforce growing up um you know an easy example is growing up with a cell phone is very different than learning it at 40 or 45 um and so how do you think about like the workforce's ability to build this

stuff well i think i have a lot of faith in humanity to uh embrace a new technology um you know luddites notwithstanding as a species that's the thing that separates us from everybody from everyone else everyone else meaning other creatures on this planet is our ability to use tools and what are tools if not technology um you know whether it's you know a primitive hand axe or a personal computer it's a form of technology that enhances and augments human ability so i do think that people will adapt, that much I'm sure of. But I also think that technology innovation can sometimes be the vanguard of deeper cultural, social, economic upheaval. And I think that for leaders of today, that's something that scares them, that it's not so much that they need to

learn how to use solidity, it's that this technology might shake the foundations of their reality, that it might lead to their organization being disrupted or their role in the workforce changing. Back in the 1970s and 80s, they said that personal computers would never take off. And the reason for that was that managers would never learn how to type. Typing was something that secretaries did. And so what did they mean by that? wasn't just that managers wouldn't learn how to type or managers wouldn't you know developers

wouldn't learn how to use solidity it was that by learning how to type they were doing women's work right this was challenging the the sort of um status quo of this of this sort of sexist stratified workplace that had existed until then so that's something i i think has been true forever because that new technology can act as this harbinger of deep deep structural change in the world and it's that more than the ability to adopt new skills or to prepare the labor force that i think creates this resistance creates this um ambivalence from a lot of people about embracing new technology it's not that they're afraid of learning a new skill it's that they worry that whatever status they have in the world could change now some people are really comfortable

with that they're comfortable with change i think a lot of entrepreneurs and founders are like that but most people are not you know they seek uh comfort instability and so i think that that's something that as a society we have to keep in mind for sure where can we send people to find you on the internet or find the books yeah well the book again is called web 3 charting the internet's next economic and cultural frontier it's been out for a few months it's a wall street journal bestseller you can buy it on amazon or wherever you get books and you can follow me on me on Twitter at Alex Tapscott. Love to continue this conversation online. Alex, I appreciate it. As always, I've learned a ton today and you made me think more deeply about stuff. So I really hope

that people listen to this and they get as much value out of it as I did. And we definitely do it again in the future. Terrific. Thanks.