Speaker 1: You're listening to Bloomberg BusinessWeek with krol Messer and Tim
Speaker 1: Stenebek on Bloomberg Radio.
Speaker 2: Imperfect for this. I was kind of doing some search
Speaker 2: through some Bloomberg stories. Ola Karif and Nate Lanson of
Speaker 2: Bloomberg News.
Speaker 3: They report it.
Speaker 2: They are great in early twenty twenty two about how
Speaker 2: crypto enthusiasts dream not only revolutionizing money, they want to
Speaker 2: reinvent the Worldwide Web as well. Their vision, which goes
Speaker 2: by the name Web three, is a decentralized environment built
Speaker 2: on cryptotechnology, which swarms of independent collaborators take back control
Speaker 2: of the Web from giant tech companies. So it's a
Speaker 2: threatned him to the likes of Meta Potentially platforms Twitter,
Speaker 2: These are the ones that maybe are at risk.
Speaker 1: So with that in mind, there's a new book out
Speaker 1: and it gets into Web three. It's all about quote
Speaker 1: charting the Internet's next economic and cultural frontier. Here to
Speaker 1: talk about his latest book back with us. We're very
Speaker 1: pleased to have Alex Tapscott. He's also the co author
Speaker 1: of Blockchain Revolution and he's the co founder of Blockchain
Speaker 1: Research Institute. He's right here in our Bloomberg Interactive Brokers
Speaker 1: studio Alex, how are you.
Speaker 3: I'm terrific. Thanks for having me.
Speaker 1: It's good to see you again. I'm not trying to
Speaker 1: be rude.
Speaker 2: Okay, you're gonna be harsh.
Speaker 1: I'm going to be harsh right off the bat. The
Speaker 1: kind of joke this year is like, you know, we're
Speaker 1: not talking about Web three or the metaverse anymore. We're
Speaker 1: talking about AI. Right, So why is this the moment
Speaker 1: to write another book about the blockchain and Web three?
Speaker 3: Well, it's true that there are many different technologies that
Speaker 3: all are emerging at the same time. AI is one
Speaker 3: of them, but there are others, you know, blockchain, the
Speaker 3: Internet of things and extended and virtual reality. And the
Speaker 3: thing is these technologies are not separate. They're actually related.
Speaker 3: In the same way that the term internet went from describing,
Speaker 3: you know, one narrow set of technologies to describing new
Speaker 3: business models, new social behavior, and the whole range of technology.
Speaker 3: I actually view the term web three as being the
Speaker 3: term that best captures where we're going, what that's next
Speaker 3: digital age is going on.
Speaker 1: Okay, so before we get to that, you should explain
Speaker 1: Web one and Web two for the uninitiated.
Speaker 3: Yeah, for sure. So Web one basically was a medium
Speaker 3: for the presentation of information on static websites.
Speaker 1: So think like dot coms, So think like the New
Speaker 1: York Times deciding to put their newspaper on the Internet.
Speaker 3: Yeah, exactly like a way that you can access information,
Speaker 3: but you can't interact with it. You can't collaborate, you
Speaker 3: can't post your own content. It's pretty static. It's one way.
Speaker 3: And though it was it was relatively simple, it's still
Speaker 3: revolutionized things because it was this first digital medium for information.
Speaker 3: Web two, which came about around this sort of early
Speaker 3: to mid two thousands, took one leap forward, which is
Speaker 3: the web became social, it became interactive, It became a
Speaker 3: platform for people to communicate and to collaborate online. And
Speaker 3: after Facebook, enter Facebook and the mobile app store, And
Speaker 3: in a way, it also became kind of two point
Speaker 3: five dimensional, right. It went from this thing that we
Speaker 3: accessed on desktop computers to a thing that kind of
Speaker 3: traveled with us in the world. And you know, a
Speaker 3: lot of people in the Web three world are very
Speaker 3: bearish on Web two, and I think that the track
Speaker 3: record is a bit more mixed. So you know, when
Speaker 3: it comes to Web two, it's undeniable that it created
Speaker 3: tons of value you, certainly for shareholders of companies like
Speaker 3: Google and Facebook, but it also expanded internet connectivity to
Speaker 3: billions of people and in a way gave gave a
Speaker 3: voice to sort of marginalize people. People who didn't have
Speaker 3: a voice had a way to publish content and information
Speaker 3: that change, you know.
Speaker 2: Right, we talked about the Arab spring and different things
Speaker 2: as a result of social media.
Speaker 3: So Web three takes us where in your view, Web
Speaker 3: three takes us to a new layer of the web,
Speaker 3: which is what we call the read write own web. So,
Speaker 3: without getting into the technical jargon, the keyword there is own.
Speaker 3: What Web three enables is for people to be able
Speaker 3: to own the asse class of the digital age, to
Speaker 3: own their own data, their own identities, and their own
Speaker 3: digital creations and their own digital goods. And so what
Speaker 3: that means, Like any previous technology, it's going to be
Speaker 3: big for business, but it's also going to in my opinion,
Speaker 3: change culture and society. Why is it big for business, Well,
Speaker 3: it's big for business because blockchains and Web three represent
Speaker 3: sort of the first digital medium for value, a way
Speaker 3: to move value peer to peer without the need for
Speaker 3: an intermediary or a middleman. And so what I think
Speaker 3: that's going.
Speaker 2: To be also says it cuts out a lot of business.
Speaker 3: Too well potentially, But there are always as with any technology, like,
Speaker 3: there are always just as many opportunities for reintermediation as
Speaker 3: there are disintermediation in my in my opinion, and one
Speaker 3: great example of this that we see happening right now
Speaker 3: is in the world of stable coins. So these are
Speaker 3: in the news because PayPal just launched the stable Well
Speaker 3: we can get to that in a second. PayPal just
Speaker 3: launched a stable coin visa is enabling merchant to merchant
Speaker 3: settlements with stable coins, and you know, they had to
Speaker 3: wait to see that this business could grow to the
Speaker 3: point where would impact them. And today, you know, the
Speaker 3: stable coin market is well over one hundred billion dollars
Speaker 3: and companies that issue stable coins make a lot of money,
Speaker 3: and they do it in a relatively boring way which
Speaker 3: would be familiar to any Bloomberg Radio listener, which is
Speaker 3: basically that when someone wants a stable coin, they're usually
Speaker 3: depositing money. They're getting a stable coin, which is this
Speaker 3: digital medium to move money all around the world, and
Speaker 3: then the issuer can just take that money invests at
Speaker 3: risk cree Now in the like Silicon Valley Bank, and now,
Speaker 3: of course they'd be wise to keep a lot of
Speaker 3: that in you know, short term treasuries rather than elongated
Speaker 3: treasuries to avoid duration this match. But they can make
Speaker 3: a lot of money, so you know, in my view,
Speaker 3: like a company like PayPal, which was a pioneer in payments,
Speaker 3: but it's seeing all sorts of outside pressure from like
Speaker 3: Apple and Shopify, now has this very unique opportunity to
Speaker 3: reach into the Web three toolkit, pull out this new
Speaker 3: thing called a token in this case of stable coin,
Speaker 3: and potentially you know, save their business.
Speaker 1: So are they still doing that given that we're still
Speaker 1: in this crypto winter? It seems like interest around this
Speaker 1: has died down so much since we well, I mean,
Speaker 1: stop talking about crypto.
Speaker 3: Yeah. Well, I think that from the outside looking in,
Speaker 3: every technology revolution looks like an overnight success story. The
Speaker 3: reality is that they're usually decades in the making. And AI,
Speaker 3: I think, is a good example of that. You know,
Speaker 3: the first AI.
Speaker 1: Would you consider AI part of Web three?
Speaker 3: I would consider AI technology that's foundational to the Web
Speaker 3: three era. So you know, I think the term Web
Speaker 3: three still mostly comes to the in like blockchain related applications,
Speaker 3: but I think over time, we need a term that's
Speaker 3: going to help us to capture all of these transformations
Speaker 3: that are happening. And I think also what's interesting to
Speaker 3: me about this era that we're in is that people
Speaker 3: think of these all as discrete areas, right, I mean
Speaker 3: even the nature of your question is want I get
Speaker 3: a lot, which is it's not about Web three, it's
Speaker 3: about AI. It's like, well, it can actually be about
Speaker 3: more than one thing at once.
Speaker 2: No, that's fair. I agree, Like evolving innovation technology, they
Speaker 2: tend to kind of crisscross each other. How do you
Speaker 2: though scale it? I mean, right, Web three its foundation
Speaker 2: is being decentralized, so how do you scale that?
Speaker 3: Yeah, it's a great question. So in Web three, I
Speaker 3: think there are missionaries, there are mercenaries, and they're pragmatists.
Speaker 2: How do you know the difference.
Speaker 3: Well, you're looking at a pragm with this right now
Speaker 3: as we speak. So there are people who bring a
Speaker 3: missionary zeal to this, and those people are essential to
Speaker 3: any new thing. And I describe Web three as a
Speaker 3: new frontier. And so when you're on the frontier, missionaries
Speaker 3: are good to help sort of lead the charge because
Speaker 3: they're willing to step into the known. And then there
Speaker 3: are mercenaries that want to take advantage of the new
Speaker 3: new thing and maybe make some money. And when it
Speaker 3: comes to Web three or AI, they'll come in and
Speaker 3: out and you know, we won't hear from them again.
Speaker 3: And then there are pragmatists. In order for Web three
Speaker 3: to reach its potential, I do believe that the underlying
Speaker 3: infrastructure needs to be decentralized. But in the meantime, it's
Speaker 3: okay that there are big companies like PayPal or Amazon
Speaker 3: or MasterCard or even City Bank, which just announced it
Speaker 3: wants to tokenize its client assets stepping into this space.
Speaker 3: If you really think this technology is going to make
Speaker 3: a difference, and then you want to see it in
Speaker 3: the hands of as many people as possible.
Speaker 2: Just like the infrastructure, just kind of move to a
Speaker 2: different model, but it's kind of the same model in
Speaker 2: some way.
Speaker 3: Well, it depends when it comes to you know, the
Speaker 3: like tokens, which is one component of Web three. The
Speaker 3: fact that they're a way for people to move in
Speaker 3: store in businesses. I should add, for people in businesses
Speaker 3: to move in store value peer to peer just by
Speaker 3: its very nature, reduces the need for an intermediary. Now,
Speaker 3: I'm it.
Speaker 2: Would be like me doing Venmo. But I don't have
Speaker 2: to have the bank, right, I can just do it directly.
Speaker 3: Yeah, and you'd be able to do it anywhere around that.
Speaker 2: But I have to have a token to do it.
Speaker 3: Yes, well the token can be a dollar and somebody Okay.
Speaker 3: That's the thing about where we are right now is
Speaker 3: that some of the early versions of these, you know,
Speaker 3: new innovations, are foreign to people. But as the technology matures,
Speaker 3: they're going to find product market fit and and in
Speaker 3: a way, like one of the ironies for me of
Speaker 3: Web three is that one of the first killer apps
Speaker 3: is a US dollars stable coin, which is funny because
Speaker 3: when you think of bitcoin, you think of a technology
Speaker 3: that was supposed to disintermediate banks and reduce the need
Speaker 3: for governments. But the US dollars is one of the
Speaker 3: first killer apps.
Speaker 1: I still think of something like a housing in the
Speaker 1: housing market, like title insurance. Yeah, why does everybody have
Speaker 1: to pay thousands of dollars?
Speaker 2: That makes complete sense. The provenance of a piece of
Speaker 2: art like things like that make completely.
Speaker 1: But like, why are we still in a time period
Speaker 1: where if you buy a new place, you still have
Speaker 1: to pay thousands of dollars rather than this, you know,
Speaker 1: a title being available on the blockchain just in case
Speaker 1: the title doesn't exist, right.
Speaker 3: I completely agree with you. And you know, when it
Speaker 3: comes to those kinds of hard assets, it's a difficult
Speaker 3: problem to solve its. I wish that I could say
Speaker 3: blockchain and web three is going to solve that. The
Speaker 3: reality is that you know, you've got records data about
Speaker 3: who owns what that are stored in you know, the
Speaker 3: records offices of local counties and towns and so forth,
Speaker 3: and so you have to get the data going in
Speaker 3: correct before you can get the outcome correct. But I
Speaker 3: think when it comes to digital assets, and I think
Speaker 3: that digital assets will soon come to represent more assets,
Speaker 3: it's much much easier. And I'll give you just one
Speaker 3: great example which I think fifteen seconds, which shows how
Speaker 3: AI and web three interact. There's a writer strike right
Speaker 3: now going on. We should be able to track the
Speaker 3: IP and who owns it that goes into these large
Speaker 3: language models as a way to ensure creators get paid instantly,
Speaker 3: and there's a way to do.
Speaker 2: That with the companies they work for own it. Now.
Speaker 3: No, in some.
Speaker 2: Cases we're going to have to continue this Okay, so
Speaker 2: enjoyed it. Alex Taps got his new book Web three,
Speaker 2: charting the Internet's next economic and cultural frontier.
Speaker 3: So much more to talk about.