The Blockchain Revolution, Two Years Later - Alex Tapscott

Transcript

[Music] hello and welcome to the blockchain and us we're pioneers and thought leaders talked about their journey in blockchain technology crypto assets enter token economy and I'm your host manuel staggers if you enjoyed this podcast please give it a top rating and review on iTunes and feel free to follow me on Twitter at Manuel's dagger this episode is brought to you by the card Finance the cart is the leading switched digital wealth manager providing its products and services to individuals family offices charitable organisations banks and asset managers its investment strategies lead the way they harness the

largest know-how and only a digital investment advisor can to learn more please visit w-w-w storage crypto storage offers a proprietary solution to enable professional storage of crypto assets the storage is secure both physically and digitally on the highest grade hardware security modules with detailed configuration possibilities for individual based access control to learn more visit WWF no storage CH my guest today is Alex Tapscott a writer speaker investor and advisor focusing on

blockchain technology and crypto currencies Alex and Don Tapscott together wrote the best-selling book blockchain revolution how the technology behind Bitcoin is changing money business and the world in 2017 Alex and Don founded the blockchain research institute in Toronto which is a think-tank investigating blockchain strategies opportunities and use cases and now to the interview hey Alex thanks a lot for taking time today thank you Metro Alex we met when I made my documentary the blockchain and us and then your book blockchain revolution had just come out and since then a lot has happened in in this space so what are the main changes

that you've seen well first of all I want to say thanks for having me on the show and congratulations on the success of the documentary the block I actually was reminded of it recently because I think it's a great source for people and my sentient symptom the youtube link and i realized that you have almost 400,000 views of this film on YouTube which is really incredible thanks Alex so your film came out a year ago I think roughly and baktun revolution actually came out two years ago so when by the time your film had come out I actually was able to reflect on one year since the book had been released and tried to assess it or what happened what had changed what had we got right and what have we got wrong and now it's great to be able to do that again because it's not only the one year

anniversary of the blockchain and us it's also the two-year anniversary of blockchain revolution and also this month June of 2018 we will be releasing a new edition of the book with two new chapters so I think when we spoke last time the whole crypto asset market was worth maybe 50 or 60 billion dollars most of that value was still in Bitcoin though theorem was emerging seemingly out of the blue as another big contender in the crypto asset universe but the whole ecosystem was still relatively nascent and what we what we've seen basically over the past year is transformations in a few different areas so the first area and the most obvious one is in the fund raising space so the

amount of money raised to date prior to your film coming out I think probably would've been in love you know 200 to 300 million dollars I'm basing that off of the number for 2016 which is 165 million in token creation events or icos as they're known and in 2017 the number was in the billions of dollars and it's impossible to know how much but it was probably in the range of sort of five to seven billion dollars and it's continued so basically unabated throughout 2018 so what's happens in some film came out is that the entire venture capital world has been completely transformed now basically if you're a company or a project and you need to raise funds you don't have to go to Silicon Valley or to your local PC or to the bank you can tap into a global marketplace and have your

community or your user base fund your growth and that is a profound and important innovation that's leading to some big changes in venture capital right and also to interrupt I mean that's exactly the one thing that's missing in the film right I see us because that was so fresh back then and but now of course a lot has happened so yeah absolutely and it's funny I mean we I've been talking about icos in various forms for a few years and we just didn't call them I cos in the book we call them global blockchain IPOs and we talked about aetherium and augur two projects that are had creational token creation events that you know eventually led to the launch of some big things easier and bigger than then on earth but what I think a lot of people have missed in the past year

focusing mostly on the asset price appreciation and on the speculation and a lot of these tokens is that there's something more profound occurring which is that the infrastructure and the nascent application ecosystem for this new internet of value which we talked about is now emerging and it's emerging in these distributed protocols and these distributed applications and what we've done over the past few months basically is to really try and analyze all the things that have changed and so much has changed that we decided to add it to the book and basically re-release the book with at least 75 new pages of material so cool I mean can you talk about what kind of changes you were making to the

book yeah sure so when the book came out originally the whole value of the market was about 10 billion dollars and it was mostly Bitcoin that theorem had just launched months earlier we were actually there for the creation of the Genesis blog and consensus offices which we talk about in the book but beyond but beyond that there wasn't really much else happening on the concept of distributed applications and you know enterprise blockchain and smart contracts digital identity and all of these uh you know important concepts were fairly at early stage and and and pretty theoretical and to be clear that it's still early in a lot of these areas but what we've seen over the past couple years is a lot of pitch changes so the nutrition of the book looks at a few key areas the first one is the emergence of the crypto asset

world so basically you know what are these different crypto-fascist what do they do how are they and they work and why are they important we spend some time talking about smart contracts so we spend time with Nick Szabo trying to look at how the smart contract universe has evolved significantly compared to anything else right and and we've looked at digital identity systems that are being used and created and we looked at enterprise blockchain adoption which is something that was very very early stage and very new when we basically wrote blockchain revolution you know you may recall in the 2016

frame it was Bitcoin bad blockchain good and now we're starting to see it much more nuanced perspective which i think is born born of a better understanding of the industry which is that well actually these distributed systems that have tokens things like Bitcoin in etherium might actually be the most powerful the most trustworthy the most secure platforms that big companies and governments can use and as a result they're embracing and adopting that technology so that's a big shift as well which we cover in the book mm-hmm cool are there things also where you found that some of the predictions or some of the views that you had in the book that you had to revise them well I mean certainly there are some companies that we covered in the book which we thought were very promising at the time that

didn't pan out and you know that's true when you're writing about early-stage technology in any industry honestly you know for every Google there's 20 search engines that don't work out but in the 1995-96 those other ones might seem more interesting but the point is that the underlying concept of you know search engine ended up playing how it became hugely disruptive so I think was we see some of the hat in the book where you know certain companies or certain use cases you know maybe the team's ultimately didn't succeed or their plans did not unfold the way they thought they did and someone else took over but the underlying ideas and themes themselves have played out quite closely of what we talked about which is great and we we

talked about how you know governments could issue their own crypto currencies we didn't expect it to be Venezuela who would be taking the lead there now we thought maybe it would be you know the ECB or the Federal Reserve or something like that but in retrospect with hindsight being 20/20 as it is it actually makes perfect sense because you know a government that's under sanction that has a bunch of captive resources like oil might want to create a different payment system to sell its you know most valuable commodity which is an interesting kind of concept that's come and played about recently so yeah I mean gosh we're work we're eager to well you were to say where we got things

wrong pleased to say where we got things right but really it's just been amazing that a book that that was pretty bold and what it predicted may have been too conservative in some ways which is kind of interesting interesting I mean I just wanted to ask about that you know have you can also gotten some criticism for your optimism I mean even though you said it's maybe a little bit earning on the conservative side but I mean I'd say it's very optimistic about what that's this technology can do but have some people criticized you for that yeah sure I mean people criticize you've heard lots of things haters gonna hate but the the thing about our book is that I mean we're we're optimistic about what the technology could do but we're not techno

determinists you know we're not saying just because bakhtin exists means the world is going to become a better place we talked about all the reasons of watching fail we dedicated an entire chapter to the 10 showstoppers that could you know make this whole thing not worthwhile governments could try and crush it or the companies can try and you surf it criminals will continue to use it undermining its legitimacy you know it could be a job killer it could create all sorts of other problems I mean the technology couldn't scale there's lots of reasons why blockchain and time might not might not have succeeded and even today I think a lot of those are open questions so I'm not saying that it's a done deal at this point but I think there are reasons to be optimistic but it what we said in the book was that and I've said since is

that you know technology is just a tool right it doesn't have any moral agency it's not a good guy or a bad guy right I mean you know think about the first technologies like fire or for example can be used to heat your home and it can be used to burn it down or burn down your neighbor's home burn down your enemies so the same thing can be applied to any technology I mean even the internet was this you know distributed democratizing technology that ended up basically getting captured by a bunch of massive data aggregators who control absolutely a few key industries and know everything about us and undermine our privacy and you know it's not to say that the internet hasn't created lots of value along the way or that people don't

willingly enter into this bargain where they give up all their information in exchange for free services they do but the point is that it didn't quite play out the way people had expected yeah an externality threat that people underestimate yeah they underestimate the externalities and they also underestimate the unintended consequences you know the externality of us giving up data is a cost borne by society but not by the companies but I'm not sure that's true I mean I think the big externality of a crypto space would be energy use which you know to support these systems we need to burn a lot of energy and I'm not suggesting that that's going to be the case forever but at least for the time being it's an

issue that I think the community itself doesn't really spend enough time addressing head-on which is that you know if we're going to scale these systems it's not enough to say that well you know big brick-and-mortar banks also use energy or you know money that's deflation or that's inflationary also sort of burns value along the way we have to address the fact that that Bitcoin and other proof-of-work currencies and networks do use up a lot of a lot of power hmm yeah exactly and it may be a problem if it used less power right I mean it'd be exactly a fail-safe mechanism that you need to use a lot of energy to to change what's in the blockchain so I mean that's certainly true I mean maybe that is the trade-off that we're making but we shouldn't if that's the case then we

can't be delusional about it we need to you know admit it and and find ways to scale it within those within those restraints um you know I mean yeah I mean I'm surprised that people think of me as an optimist I'm always quite sort of negative on a lot of things I mean I look at the what happened last year with the ICO space and I did say that it's an important innovation for entrepreneurs and it's going to be disrupted for venture capitalists and that's true but if you look at the quality and the distribution of these icos I think a lot of them are you know not particularly high quality that there are a lot of people who might find themselves on the wrong side of the trade holding something that they thought was valuable but it was

worthless and the work was because you know they were misled in some fundamental way by the team that was doing the project so I think that the the marketplace today is not without its risks it's not without its inefficiencies it's not without its problems but you know on balance I think that the innovation has been positive yeah cool yeah and I think you said that also when in our last interview you also said if big companies only focus on cutting costs with the blockchain then they'll miss all the opportunities I mean have you seen that pan out as well yeah absolutely well what I have seen actually is most companies looking at blockchain as a way to reduce friction and cost within their enterprise and what I said to you in the

last interview is basically if you only focus on what on cutting costs then you might miss how this technology could disrupt your underlying business or even the whole industry that you operated and cutting the cost on the margin will be irrelevant when that whole revenue stream goes away and I think today we've seen enterprise adoption and awareness this technology increased significantly and that's been terrific and but when I talk to people in the enterprise a lot of them come to me with most mostly within it with efficiency ideas not with innovation ideas and that's something that actually led us to the creation of the blockchain research institute which one we spoke last time was you know six weeks old and and now has been around

for a year and a bit and counts as its members you know 50 large enterprise members and our goal with the blockchain research institute is to help companies get past that that mind space where they're only thinking about how this can you know make it make efficiencies happen or reduce friction within their enterprise we're trying to explain to the Minar explain them help them in their journey in developing strategy and then developing or identifying opportunities to apply the technology to their business so I think that things are changing to go back to your original question I think more and more companies are thinking strategically I hope that our work in the space is

having some impact in that regard but there are lots of other groups that I think are helping move things along as well and I still abide by that initial assessment which is quite simply that you know innovating yourself that the marketing is not going to be sufficient because what a lot of companies don't realize is they're standing on a burning platform where the cost of sitting still or staying put is actually higher than the cost of taking a leap and so they should be thinking about how to get off this burning platform as quickly as possible yeah it's easier said than done no kidding I mean I spoke to some of these companies who have pilots running with blockchain technology and and many

of them said very similar things you know they said it's easy to get a pilot off the ground that where you can kind of fly under the radar it cost very little and but then you know you get some early results and then you have to go to management and get real budgets to get you know to the next step and that's where the problems start in some cases I mean what kind of arguments have you seen that have you know been the winning arguments there well you make a very good point which is that it's easy to stand up a pilot inside of an organisation and typically the organizations that are doing a lot in blockchain usually have some champion inside of the organization and that champion is you know either someone who's operating inside of a business unit or they're you know on the

innovation team or they're someone who's taking up the personal you know you know mantle of leadership and is just trying to get something done and all of that's admirable but I think if you need if you if you really truly want to innovate inside of a big organization with all those challenges and you just out learn you need to have buy-in from the top I mean the the c-suite needs to be on board with this otherwise the pilots will not turn into real lasting transformations that's just the way it is they'll get shelved and then people will move along with business as usual so going back to the the blockchain Research Institute we have you know members who our point of contact inside of the organization can be someone who's

either in the CEOs office or the CEO or the Oh or some other c-suite executives themselves and I'll give you a really interesting example so FedEx is a member and my my father Don Tapscott you started the blockchain Research Institute with me and and runs it was talking to the chief information officer of the company who's legendary guy has been you know rated as one of the top CIOs in the world for many many years over his sort of 20-year tenure as FedEx and when he started to talk about blockchain with Dawn he said oh my god thank god we're having this conversation because Fred Smith has been on my tail about

this thing for six months Fred Smith the CEO and founder and and you know the guy who created FedEx cool and so you know Fred Smith is someone who has been in the logistics Parcel parcel shipping supply chain you know just-in-time delivery business for 40 years and that businesses transform many times over because of Technology and you know FedEx is looking at blockchain as an opportunity to radically disrupt how supply chains work right instead of you know your most your best piece of information being whatever the latest person said has occurred everyone could be operating on the same common ledger transactions in the same common ledger of information and you

could know with 100% certainty that a good package in one location had gone through all different checkpoints and was arriving on time and that all duties and levies were paid and that the goods were not counterfeit and that they weren't tampered with through integration with us some IOT technology sensors and tamper proof packaging and the like and so now you've got a system that could basically take supply chains and turn them into asset chains where we're not really thinking about the chain of custody we're looking at actually assets themselves and how they move through the system so Fred Smith the CEO gets it and he's a kind of guy who I think would probably completely upend the way his information systems work in order to get an edge because to

cutthroat business and there's new kinds of competition from Amazon uber and God knows who's at who answer me something who is prepared to innovate and disrupt himself and to you know protect what spits and I think that's a great example of an FedEx is doing this you know not just through the VRI membership but also through a number of pretty pretty important projects and they're collaborating with startups and they're working with consortiums and they're doing all sorts of great stuff so that to me is a perfect example of what's required you know if it's just someone in the innovation team was doing a proof of concept or a pilot I mean that's that's good and there's nothing wrong with that but how are you going to take that and make it a big transformation for the enterprise you need to have you know innovation first

of all be a culture of the firm but you also need to have buy-in from the top mmhmm yeah that's the challenge right I mean it's certainly easy if the CEO comes to you and says hey you know I read about blockchain technology make a pilot and see what we can profit from that but it's usually the other way around right where it may look like it's kind of taken off and then the budget dries up and you don't really get the results you promised and these things die right I mean some of these Papa pilots died and that's unfortunate sure I mean you know you can say that in 1995 blockbuster had launched a home delivery system for you know VHS and DVDs they may have found that you know internet connections were too slow and that

people didn't understand how to use the interface and that you know the profit margins on such a business were prohibitively low and they might have said well that was a stupid pilot let's give up and then you know Netflix came along and sort of perfected that but the bigger innovation was not in this initial pilot or this initial sort of step in using the technology it was actually something much more profound and Reed Hastings at Netflix understood this like Reed Hastings from the very very beginning saw that once the technology was sufficiently scalable then he could deliver all of this content over the Internet and this you know mail order thing was really just a

stopgap along the way and you know it's sort of an interesting thing where buster not didn't even do any of that to be clear like I'm saying like they were actually very slow to do anything by the time they got around to it they've been completely disrupted but it's easy to see sort of pilots in early-stage nascent technologies maybe don't pan out the way you think they will and that's out there because you're setting your sights to not far enough or not ambitious enough which is obvious or you're not seeing I know how as the technology scales the the application and use case will become more and more valuable that makes seven I mean there's certainly many industries that would like to see blockchain

technology and cryptocurrencies fail I mean especially here in Switzerland right you still see a lot of reluctance from the traditional financial sector to acknowledge that cryptocurrencies are something that's interesting and something that could also help them yeah I think that crypto currencies and spark contracts and blockchain technology broadly defines pose an existential risk to the business I need to be better you know if you have a payment network that allows you to move value peer-to-peer then we don't need a lot of services of a bank if you've got a marketplace for the creation of new capital for companies through icos then investment banking and venture capital begins to become a lot less relevant if you've got

decentralized exchanges where you know wallet to all the transactions are possible basically meaning we're not you and I enter in a transaction and it executes peer-to-peer without a centralized intermediary then all of a sudden exchanges like the Nasdaq TMX ice and others begin to start begin to look not as interesting as well so yeah I think it's there's there's a potential to completely upend every single part of this industry and you know we're seeing it actually play out which is the most gratifying amazing thing but it's not like you doomed no matter what I still think that there are lots of opportunities for financial institutions to create value in this industry but

they just have to understand that it might not be in the same way that they were in the past mm-hmm you know like I I think that if you look at crypto assets as an asset class I mean there were hundreds of billions of dollars it's a massive opportunity and it's still in an efficient market and right now there are huge institutional clients of banks all around the world that are trying to get exposure to this asset class so that's one I mean there are lots of startups that are still looking to be connected the old financial world I need an on-ramp but an off-ramp yeah to bring hiad into this ecosystem they all have difficulty right I mean it's not easy to get yeah that's right so Bank so so why I mean are they just trying to postpone the inevitable are they trying to cut their

own competition out I think that's you can that eventually that's going to try losing's I know but I think eventually that's a losing strategy I think you know you need to maybe if you had customers that were in this industry you learn a thing or two and you'd figure out how to actually use this technology rather than try and hide from it so what I said to you in the or in the book and I think maybe last time is that you know focusing only on the way thing the way you know on making things work better today is going to prevent you from potentially seeing how it could change things profoundly in the future so the way to think about is not to focus on the on the earnings line like on the cost line but talk think about the revenue line what are the what are the

possibilities for new kinds of businesses that can be launched and and enabled with this technology and it's not an easy it's not an easy question to answer and I don't pretend to know exactly how that is going to play out but what I'm saying is there are ways and that people just need to figure it out let's take a quick break for a message from our sponsors the cart finance take tradition into the future harnessing a combination of cutting-edge technology and personal advice in the service of your personal interests the card cuts through the financial noise and focuses exclusively on scientific and evidence based investing to give investors a better understanding

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dedicated independent and highly flexible multi signature framework all transactions can be independently reviewed and approved on a dedicated tamper-proof hardware the hardware security module the tamper proof signing devices and the tailored software solution are all developed by leading Swiss providers with vast experience in finance and IT security to learn more visit WWF destroyed CH have you in your experience working with with with PRI have you seen some industries being more open to this than others yeah sure well I don't know if certain industries are

more open than other industries I mean some FedEx right and seems like FedEx is doing really well with their blockchain pilot looking into all kinds of IOT applications while on the other hand with many of the financial sector players it's still somewhat of a hard sell right because it seems to be direct competition for FedEx this may be something that it's just kind of you know helping their existing value chain already like you said it transforms the value chain into asset chain that's a really nice thing to do but for the bank is more like a head-on collision coming there you know I think anybody who became a member of blockchain Research Institute did so because they're serious about this stuff and you know my interactions with all of them has been really terrific and but that doesn't

mean that we don't have conversations with lots of companies that stay you know what we're not interested and they usually say that for one of two reasons one is blog Tina's not a strategic priority for the company we actually just don't have any interest in this and we see that sometimes but a bit less often than we did before but the other one is where actually we actually know everything there is to know about this and your your Institute you know it's not going to be value-add which to me is a very surprising and odd thing to say because you know we're on the forefront of a new paradigm where all this new IP and new information and new technology is being created and it's impossible for one company or one organization to have

a monopoly on all of that it's a ridiculous you know basic premise for an argument and you know the evidence is everywhere I mean your proprietary blockchain might be interesting but it's got nothing on aetherium or Bitcoin or icon or a onor cosmos or any other public distributed system that's out there so that kind of overconfidence that we see actually typically comes out of companies in the financial services industry and you know not to make a gross generalization because I have lots of friends in that industry and we have members from that industry and I think they're all terrific but there are definitely people who seem seem that they know everything we'll

just about them because you know if this whole if my whole experience in this industry has taught me anything it's that you need to be humble because there's so much that you don't know and there's lots more that you don't know that you don't know and every day is a part of a new discovery right and that's the joy of being in something new is that you're curious and you've got hunger for knowledge to the best kind of space to be in and I think that's the kind of open innovative approach that that big companies need to take as well well it's certainly attracting very bright minds this whole block chain space I think yeah we're seeing a lot of people defecting from big companies to join crypto companies which is kind of interesting I mean it's such a vibrant

space and so someone said it someone said it to me really well they said all right maybe I read this on Twitter that there this crypto industry attracts the brightest and best people and also the worst people look at these I SEOs there are a lot of people who see this as a get-rich-quick scheme an opportunity and don't really understand or buy into whatever the underlying technology is but see it you know a gold rush happening or easier year to cash in but then on the flip side you've got the most talented people in Silicon Valley Wall Street from the world of consulting technologists developers academics you know all kind of flocking and converging on it so my money's with that group succeeding over the others I mean

fingers crossed what is your you're located in Toronto Canada yeah how how is that as a location for for somebody who wants to be at the forefront in this field Toronto is pretty impressive and it wasn't always impressive as a technology hub but it has become more so over the past couple of years so I think there's a couple of reasons for that a lot of the some of the founding members of aetherium and many of the early participants in that tokin event are from the region and you I mean not to name all the names but there are you know there are people who are actual founders of etherion but then there are lots of others who are kind of

close to the project who who were in an early stage and what's interesting about that is that it's created this massive wealth effect that has enriched a bunch of people many of whom are you know technologists and developers and entrepreneurs and they're looking to recycle those funds into you know the community at large and so the in Canada we actually have a pretty good venture capital community I think you know in 2017 venture capitalists deployed around 3 billion or three and a half billion dollars in the Canadian economy but that's not including all of the money that's being put into companies from basically you know family crypto family offices in crypto individuals who have

made money so it's really gratifying to see people who've done well early looking to you know support the next generation of entrepreneurs and also build up their own projects in their own businesses and so if you were to ask anyone um you know what what are the sort of big hubs for crypto I'd be surprised that toronto didn't fall into the top line honestly um you know the ethereal summit was held here a couple of weeks ago that had a couple of thousand people and there are events regularly in toronto that sell out more than a thousand people their meetups every other week or every week you know there's dozens of startups in the city and Toronto and Canada is a great place to live and and you know start a company I think so yeah you know I don't want to

sound like that you know tourism ad for the city I've been I've been around the world see a lot of places and you know there are tons of other places you could be doing this but I think Toronto is pretty good mmm cool are you also working with the government there so the blockchain at the blockchain research institute the government of canada the government of ontario in the city of toronto are all members so we have been working closely with them as members of the organization and we you know in our own way try to help bring together key stakeholders to convene people in the industry to try and figure out some of these more difficult questions so two weeks ago the VR I posted a regulatory Roundtable

which actually drew people from governments and regulatory bodies all around the world not just in Canada which is great and also private companies and you know law firms and other stakeholders that sort of have a vested interest in this whole space also coming to hash hash out and talk about key issues and these are not problems that get solved overnight they require a lot of consultation but the fact that the government's in Canada are eager to learn that they are working closely with the private sector that they're you know not trying to just you know that they want to be deliberate deliberative before they act I think is a really encouraging summit and yeah I think that the governments in Canada can appreciate that

this is an opportunity to create an innovation economy in Canada and that they should be doing everything we can to make blockchain and in the industry successful one other thing I'll add which is you know Canada is one of these economies that's done very very well over the decades and centuries that because of it there's a lot of reasons but one of them is that we've got lots of natural resources but that's sort of you know the basis for an industrial age economy not the abases for an Information Age economy so natural resources are still important obviously we've got lots of oil and gas and other things but creating and nurturing human capital and training and nurturing the next generation of startups is is more

important long term and there's no industry where were further ahead in the world then in the crypto and blockchain space now how did you get into into all of this Bitcoin and the whole blockchain topic I mean was it through your dad dawn it was actually sort of by accident you know I I was interested in I learned about Bitcoin for the first time in 2013 and you know I was reading it was it was basically when it moved from reddit to you know Bloomberg and I was working yeah I was working in in capital markets at the time that investment bank and so I was not you know one of the first early guys

to be into this stuff but I did pay attention to early and you know the more I learned about it and the underlying technology the more I began to wonder whether or not Bitcoin and blockchain could actually help to adjust problems that I was seeing day to day in my own industry you know maybe if you could use the blockchain to create cash for the Internet you could also use it to enable all sorts of other kinds of digital assets and I was thinking about stocks and bonds and other currencies and lots of assets and to make a long story short my dad and I were on a father-son ski trip one winter in 2014 and he asked me what

I was up to and I told him I was you know I'm still working obviously but interested in this new thing he said you know I'm interested in that stuff too how would you like to collaborate on a paper for this program that I'm running and I said yeah that sounds great so I did a lot of heavy lifting on that and he helped and that paper became the first of many things we ended up doing together and then all of that work became the basis for the book cool so in the spring of 2015 the tender age of 28 I think I put my job to write a book but having never written a book and with no idea what was going to happen if I you know was employable or if I could get a job after that but I was pretty

convinced that this was the beginning of something pretty cool and I wanted to be a part of it and you know obviously in retrospect three years later it was the best decision I ever made fantastic what was it that excited you about Bitcoin I mean you said you said before right you saw some applications in your own work but was it also did the whole ideology that excited you about it well not directly like I wouldn't say that I was I was or or am someone who thinks that governments are bad or that fiat currencies are all inherently intrinsically worthless I don't believe that but you know I started my career in 2008 right after the financial crisis really kicked into motion my first week

on the job was after Lehman Brothers went bankrupt and you know my firm in its first two weeks kind of 20% of the workforce and I saw a lot of you know people who were my age kind of getting left behind I was very fortunate in that I was able to basically sneak beneath the radar my first year and maintain my employment seriously my first boss said that the only reason didn't fire me is because I wasn't getting paid enough to justify it but anyway this is I was 22 years old you have to met you know twenty two defaults from 2008 the whole world is going to hell in a handbasket yeah but my point is this which is like you know technical as a society we have you know inherently been putting more and more

trust in technology and in lots of different ways and if you look at how human beings mishandled and mismanaged the economy throughout the 2000s and the lead-up to the crisis it there is part of me d-damn that you know wonders like maybe we'd all be better off if there wasn't so much moral hazard if there wasn't so much conflict of interest if there wasn't so much greed if human beings were maybe less involved and in how the economy is managed or at the very least if technology could offer some aspect of a solution and so that is what I do like about about Bitcoin you know the idea that there is this thing where you need to have consensus of the network in order to you know push any new developments where no single entity

has control or autonomy where everyone needs to reach consensus I mean to me all of that is really fascinating it's not an ideology that I you know buy into religiously but it is something that resonates with me and of course it's one of the reasons that I I find this this space so engaging Alex who are your role models interesting I don't really have any role models other than my dad honestly and I mean there are people who I admire deeply and helped me throughout my life and throughout my career you know I my men even people my family are role models in a way but from a professional standpoint you know I think

I do you know I have learned a great deal from from the work I've done with my dad just from you know living and that you know growing up with him there are lots of people who in my life who who I value their opinion and whose insights have helped me grow as an individual but there's nobody you know in particular that I seek to emulate in any meaningful way other than my dad our cool are there things you know about blockchain technology or cryptocurrencies that that you think just now you're understanding what what it really can do or what it really means I think we're barely scratching the surface and I think that there are

things that I think I understand today which I definitely know I don't and we'll see how this all will see how this all plays out you know I I have been skeptical about certain aspects of this industry and my skepticism has been proven to be incorrect and things have happened faster than I thought that would so III don't know we'll see what do you see on the horizon for the next maybe six months up to two years I think the three big areas of innovation in the whole space are going to be in the security token space so basically digitizing the entire world's assets and

focusing specifically on securities such as stocks and bonds the second aspect is the proliferation of non fungible tokens or crypto collectibles so I think that there are lots of digital assets for crypto that are that are and will become crypto collectibles but there are lots of assets in the physical world where we can use non fungible token technology essentially to track trace and manage assets in the real world and then the third area is obviously the migration from proof of work to proof of stake and what that represents what that means for the world you know to your earlier point about energy use this is going to be the the big test and challenge for the industry which is you know can these systems not all them but you know things

like Casper can they make the delete to proof of State and what will that look like and so those are the three things I'm most excited about in terms of other areas of interest obviously I'm very curious to know what governments do on this I think that you know the Venezuelan government sort of but you know harbinger of things to come it's not that it's not that it is not the event it's sort of like the preamble the event event itself is going to be a much bigger more important country looking to do something along these lines and and that's something that I'm anticipating with both great excitement and also some potential fear and dread so we'll see um but yeah I mean I could I could go on but those are

for ISM I'm pretty I'm pretty excited about mmm cool when do you think there will be some kind of tipping point you know where blockchain technology will be almost unnoticed you know under running like an undercurrent under a lot of processes that people use every day without even understanding that they're using it I think we're still a long way from that I think you know the in terms of tipping points we've hit a few tipping points you know we've hit different points in terms of adoption of crypto currencies we've hit tipping point a tipping point in the VC world with icos so there's a couple examples of that and when will crypto and blockchain become so ubiquitous that it's like the air breathe and we don't even notice it ten

years you know okay that's soon oh that's soon I mean I think that's a lot can happen in ten years right I mean you know the Internet itself is still visible and we're not at the point now where the Internet has disappeared Eric Schmidt the CEO of Google said that you know in five years this is a couple years ago five years the internet will will not exist or BOE will disappear and what he meant was that it will become so ingratiate ingrained in our lives that we will cease to notice it and so blockchain you know he's good it's got a long way to go but you know if I were to be a bad ticker to take a stab at a bet I'd say yeah okay interesting if I mean imagine there was no Bitcoin right Satoshi Nakamoto had never written

that white paper and there was no blockchain technology what do you think would you be doing um I'd probably be doing what I'm doing or what I was doing beforehand honestly which is idea you know what I do today is not that different one that would than what I did before I mean when I was working in investment banking I was you know working very closely with entrepreneurs were looking for growth capital to scale and grow their business and that's similar to what I do today as an investor and as an advisor in this phase and as someone who works closely with a lot of different startups so my passions are similar it's just how they play out that would have been different but I think that you know if Satoshi hadn't created Bitcoin somebody would have come

along and created something substantially like it because it was an idea whose time had come socially politically technologically all the conditions were right for a great leap forward and all I could say is I'm glad he did invent it and I'm glad I'm here where I am today and not somewhere else cool I mean I really enjoyed this conversation it's always cool to speak with you and that was a lot for your outlook and your insight and thanks a lot for your time today thank you that was great thanks so much for joining us today more info on our guests and our sponsors isn't the show notes of this episode and on the podcast website the blockchain and ask.com to help people find this podcast it's important that you download subscribe and give it a top rating and

review on iTunes or on the podcast platform of your choice i'm manuel staggers and i thank you very much for listening [Music]