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