510 Future of Money and Web3

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns, and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Welcome to Breaking Banks. I’m your host, Brett King. This week, we go to head to Toronto for CIBOS 2023.

And it’s a big deal. Around 10,000 people in Toronto for this event, at least. And we got to catch up with a bunch of people at the Future of Money panel for InterTribe, which of course, InterTribe is the innovation arm of SWIFT, and has been a continuous feature of CIBOS since the late noughties.

For me personally, this is a big deal because if you know some of my history, Bank 2.0 came out in April of 2010. And of course, the rest is history. But I always aim to use the book as a mechanism to get me on the speaker circuit and so forth.

And I ended up as a result of the success of Bank 2.0, doing the closing keynote at CIBOS in October 2011, which was also here in Toronto. I also sat on the Future of Money panel that year with Uday Goyal and a few of the other InterTribe staff and team. And if we look back over those 10 years or so that the Future of Money has run, there’s some really interesting insights.

So this week, we’re going to play for you some of the highlights of the Future of Money panel, as it’s been over the last 10 years of CIBOS conducted all around the world. And then next week, we’re going to show highlights from the Future of Money panel that was actually done at CIBOS this week. So check it out.

I’m sure you’re going to enjoy the insights. And the really interesting piece of this is, as myself and the InterTribe team were going through all of these old clips over the last decade, that there wasn’t a lot that we got wrong. Some of the timing was a little bit off, but most of the stuff that we talk about here in terms of changes and the impact of digitization of the banking sector were pretty well spot on.

So I think you’ll enjoy these glimpses into the past of the digitization of banking and the explosion of fintech in the world as seen through the lens of the Future of Money panel at InterTribe, CIBOS over the last decade. The sending and storing of digital cryptographic data, because that’s all money is now, the sending and storing of digital cryptographic data is not expensive. And this is an unregulatable market.

So if regulations are going to impede and force the cost of these things up, then people are going to move out of the regulated sectors. And they’re going to start exchanging their money and exchanging their value in a system just like Bitcoin. I don’t know whether Bitcoin’s here to stay, but decentralized currencies, now that we have the technology, are not going anywhere.

Banking is no longer a place you go to. Banking is about something you do. And increasingly, what you do with your bank is detached from the physicality of banking.

And the future of banking really is about that, the connection with the customers every day, and making it easier for them to bank every day. And we’ve been built as an industry on making it more complex. So we can hide our fees and hide risk and manage all of those things.

But the new social, transparent world means that those traditional values are being destroyed. We have to work differently. Is there an alternative model, which is more about partnerships, where you embrace some of the new concepts and create a best-of-breed solution? So the bank basically owns the customer relationship, owns the revenue model, and the overall customer experience, but assembles solutions from best-of-breed providers behind the scenes, so they’re not doing everything themselves.

Every CEO of a bank should wake up every morning and ask himself one question, what happens when Apple or Amazon become a bank? And I think that’s what should be scaring people. Whenever a new payment mechanism arises, it tends to be very successful in a new need that hadn’t been served so far. And I’ll give you three examples of that.

We’ve seen that with PayPal and eBay. That was the real source of the PayPal success. We see it in Kenya with M-Pesa.

There was nothing out there and M-Pesa was successful. And I would argue that you see that with Bitcoin serving on the internet, some of the darker side perhaps, but a need that hasn’t been fulfilled till now. And the corollary of that is all of those find it difficult to get out of that niche.

Eventually they do, like PayPal and M-Pesa, but it’s not easy to get out of that. The second belief is really that infrastructures, once they’re there, are fairly resilient in terms of their business model, et cetera. And you see many new technologies that are successful leveraging existing infrastructures, so don’t count them out.

And they’re the example for me with the Apple Pay. I think what they’ve done with Visa and MasterCard is brilliant for Visa and MasterCard as well as for Apple. So don’t discount the existing infrastructures, use them.

And the third belief, and that really has changed since Dubai, and there I’d like to quote Leon Trotsky, who once famously said, you may not be interested in war, but war is interested in you. And I think the same goes for governments. Cryptocurrencies and money may not be interested in governments, but governments are really interested in money.

I believe the blockchain technology and Bitcoin is sort of the emergence of money on the cloud, which will evolve basically through adapting the blockchain technology and other technologies like Ripple to allow a multi-asset economy being managed on the cloud, on a public open source ledger. I think the question is, when will blockchain replace major processes inside banks? Let’s be clear on that. And I still think that will be quite a while before that, even though it’s got great promise.

Because ultimately the way your customer makes decisions has changed, and they don’t want to come to you for a certain set of insights, and then go next door for a certain set of insights. And that is a lesser technology problem and a data problem, and more a comfort challenge, which the industry is being forced to deal with very rapidly. In retail banking, you get back to the ability to safely store money, the ability to move money, and the ability to access credit when and where you need it.

So you don’t need a credit card in the future. You don’t need a plastic card. You don’t need the 16-digit number.

You just need to be able to provide access to credit in a use case or scenario where customer doesn’t have the cash. So ultimately what happens is you strip away that product structure, and you deliver the pure utility that really is underlying the relationship the customer has with the bank. We have to start thinking about identity in different ways, and that is what makes you unique.

And sure, it is biometrics, facial recognition, voice, and things like that. But more importantly, we’re finding out behavior is an incredibly powerful identifier. So with the blockchain and these other ecosystems we’re creating for Identity Rails, things like zero-proof models and so forth will allow us to build progressive models.

And this is where trusted partners, banks, technology players can participate in this together in terms of bringing this key identity data together. Will I take a punt and say which of the companies out here will be multi-billionaires? By then, no. But I do think that the conversation will increasingly become about access, and one of the values we as an industry are measured against will not just be speed, efficiency, regulatory compliance, and security, but it will also be democratization.

In five years’ time, both at Sybos as part of InnoTribe and this whole industry, we are going to see a considerably more interaction with and proactivity from the central banks. Because it continues to be amazing to me that they are effectively at the heart of a lot of these big topics and big decisions, but I think we’re going to see a lot more engagement at an industry level. And it’s happening.

I mean, it’s happening with Bank of England, MAS, HKMA, et cetera. But I think these are big topics that really require a coherent, joined-up approach, and it’s going to have to be industry-wide. This isn’t what is changing the nature of the game.

I think that tokenized money, CBDCs and stablecoins aren’t going to be the story of inclusion because the incentives are all wrong. I think they’re more about control and extraction and continuation of a business model that is very much lost on serving the needs of the entire community. So to me, the biggest story of inclusion in the past decade has been the rise of low-cost payments and microcredits and remittance and networks like M-Pesa and Remitly and Wise.

It’s been the super app. It’s been the expansion of the QR code and the massive networks with Tencent and Ant and Gojek and Grab. These are the things that have improved inclusion.

These are the things that give me hope. It’s likely that we’re going to see more inflation and much more currency volatility because of the geopolitical landscape as well in a context where younger audiences continue to detach themselves from traditional finance in a meaningful way because they don’t believe they can ever afford a home. And if you can’t afford a home, then why do you need a bank if you’re never going to buy one? So I do think that we’re going to see a significant continued increase in these kind of metaverse-orientated propositions from new players.

I think we’re still quite a long way away from the likes of a Facebook or Google or Apple, etc., creating a proposition which is centralized and effective. It will inevitably happen, but not in the next 12 to 24 months. Throughout history, man has had a fundamental desire to trade.

But there’s always been this constant dynamic tension with the middleman. How much value does he bring? Is he worth the cost? Markets and finance underpin our modern world. But today’s financial services industry is still predicated on exploiting information scarcity and limited access to expensive infrastructure.

At the dawn of an age of information abundance, the halcyon days of the financial industry, as we know it, are over. As the banking landscape shuddered in the global financial crisis of 2008, mainstream economists, business leaders and politicians competed to explain the failures. But it was clear their goal was to preserve the status quo.

To talk about wealth, I feel like I have the world’s collective consciousness at my fingertips. Money is not wealth. Money is potential wealth.

But we give it such power that it influences the way we feel about ourselves. We’re more willing to connect with someone who we’ve only seen a profile of online and to trust them in real space or with our time. I would share almost all of my information with complete strangers because I feel there’s an integrity to the way I live.

And it’s fine for other people to know about that. Banks are going to have to evolve to meet the new business models around mediating trust communities. And the ones that do are going to survive and take on a very different role.

A new generation of digitally native intermediaries is emerging. And with this will come a new economy, new systems to store and exchange value, a system immune to the corrosive effects of monetary debasement, artificial scarcity and over centralization. A system that is too small, too simple and too distributed to fail.

A system where complexity is simultaneously hidden away while being harnessed to create value for its users. The global financial crisis of 2008 was just a prelude. A violent tremor heralding two decades of wrenching change.

It marked the beginning of the financial reformation that set to turn the old order on its head and lay the foundations for a new paradigm of user-centric finance. Networked, distributed, intelligent. Even though many saw it coming, our leaders and institutions didn’t.

They were overwhelmed. How long before they realize there is no going back? Change is inevitable. Well, that was the Future of Money panel over the last 10 years at InnerTribe Sibos.

Stand by. We’re going to have a quick break. And after the break, we’re going to be back with an old friend of the show, associate of the show with a new book out.

Stay tuned. This show is brought to you by Alloy Labs. As much as we love talking on the show, we believe that action is more valuable than talk.

Alloy Labs is the industry leader in fearless bankers driving exponential growth through collaboration, exclusive partnerships, and powerful network effects that give them an unfair advantage. Learn more at AlloyLabs.com. Alloy Labs. Banking Unbound.

Welcome to Breaking Banks. I’m your host, Brett King. And this week, we have a returning guest.

And it’s exciting because he’s got his brand new book out this week. So we get the opportunity to dive into that. He is the co-author and international bestselling author of Blockchain Revolution.

Been on the show before, a good friend of the show. He’s launching his new book, Web3, charting the internet’s next economic and cultural frontier. Alex Tapscott, welcome to Breaking Banks.

Brett, it’s a pleasure to be back. And so how have you been, my friend? We haven’t caught up since the pandemic. How are things? Well, things have been good.

Fortunately, those were some slow years. So not a lot was happening in the world of Web3 or the world in general. So yeah, not a lot happened.

In actuality, it’s been a crazy four years. Probably since we last spoke, I had two kids, moved into a new house and wrote a new book. So big changes happening underway in my world, for sure.

Got to keep that content coming, whether it’s DNA-based or paper-based, right? Yeah, that’s right. So where are you based these days? Yeah, so I’m based in Toronto, Canada. But as you well know, as someone who does a lot of speaking gigs, I travel around the world.

Since the first book came out in 2016, I’ve traveled to, I think, 40 countries, every continent except Antarctica. And that’s been interesting for a lot of reasons. I mean, one, it kind of puts your home country in perspective, but also gave me a better appreciation for how globally distributed innovation around Web3 has been and where certain areas are being leaders or where the vanguard is happening.

And it’s happening in some surprising and sometimes unexpected kinds of places like Thailand or Nigeria or some of these other countries. And that’s really opened my eyes more to just how global this all is. Yeah, I think we might be having BitCub on the show in a couple of weeks.

Oh, we’re done. And the head of Binance in Thailand as well. So we’re trying to organize that through the FinTech Association.

So watch out for that one coming up soon. Sort of getting at that, actually, before we dive into some of the themes in the book, who do you think are the geographical leaders in blockchain specifically? Because I’ve got my idea. It’s an interesting question, and it’s one that everyone’s asking.

Where’s the next Silicon Valley going to be? Or where’s the future Web3 hub? And in many ways, I think the next Silicon Valley won’t be a place. It’s not going to be one single geographical location. Silicon Valley was once called a tech Galapagos because of the unique blend of characteristics, talent, capital, universities, government, R&D, big tech companies, and so forth that led to the unique species of technology companies that kind of dominated the first era of the internet.

And this time, I just think it’s different. We’re in a different era. In the 90s, as the first economic frontier of the web was being forged, most of the internet connections were in the States.

Half the world hadn’t made a phone call. The economies of all these countries were far less developed than they are today. And now we live in a world where three quarters of the population has a smartphone connected to the internet, and technology and talent and capital is way more distributed than ever.

So where is this all going to happen? Well, I think the US is going to remain a leader despite all of these forecasts. Despite the best efforts of the SEC to destroy the industry. Well, but despite all the bearish forecasts and in spite of the SEC, what’s so interesting about the US is that Web3 can succeed in the US in spite of government policy, not because of government policy.

But in other parts of the world, it’s the opposite, where if you’re in the UAE, for example, you need to try and create the conditions for that industry to succeed. And you need to lure people to come there, to set up businesses, to invest capital, and so forth. Because absent those incentives, those people may not choose that as their first vocation.

Whereas people might choose to stay in Miami or San Francisco, even with a highly uncertain regulatory environment, for so many reasons, many of them business, but others cultural and social and so forth. And then there are sort of middle countries, countries like the United Kingdom, for example, or Canada, or Singapore, where we’re seeing different kinds of approaches. You know, Rishi Sunak, the Prime Minister in the UK, said when Andreessen Horowitz set up shop in London, that he wanted to make the UK one of the web three capitals of the world.

And I think probably that’s sort of where we end up, not with one single place leading the way, but with different nodes doing different things. So the US will remain the biggest. I know people try to zag on that, but I just can’t imagine a world where that’s not the case.

But I also see there’s a lot more interest out of East Asia. And I think that hubs around places like Singapore, Hong Kong, Tokyo, and Seoul are going to be leaders in this respect. And then there’s the question of, are we talking about leadership in terms of company formation or network formation, investment, and so forth? And then are we talking about usership? And when it comes to usership, that’s going to be far more distributed and far less spiky.

Like, I don’t think it’s going to be concentrated in any single location. Chainalysis does really good work on this. And they point out that a lot of countries where adoption of stable coins or Web3 gaming is highest is in places you may not expect initially.

You may expect places, developed Western countries, quote unquote, to be where people are adopting these tools. But in fact, it’s the opposite. I’m surprised you haven’t said China yet, or Dubai.

Well, Dubai is a fairly obvious one. Well, I did. I said the UAE.

Oh, UAE. Right. You did say that.

Sorry. My apologies. No, I would include Dubai in that group of countries that is making an aggressive, aggressively trying to lure companies in talent and capital so that they can brute force their way into becoming a leader.

Yes. That’s very much Dubai’s way of things. Yeah.

The Chinese thing is much more complex. I think that it’s clear that as a country, look, they’ve had tailwinds for 40 years and now they have headwinds, right? There’s demographic headwinds. The economy is slowing down.

They haven’t got a middle income country yet. Oh, we can get into this debate, brother. This is a debate I’m having online right now.

And I’m actually having it with my co-host for The Futurist, Rob Tersek. Because I have a slightly different view on the economy of China. And we should get into that offline.

But the reason I said China is we just saw Shanghai announce that they’re launching a digital asset register for Shanghai built on the blockchain. All of the biggest banks in China all have blockchain integrated cores now. WeBank, which is the biggest digital bank in the world, has a blockchain core.

And I don’t know of any other sort of market level infrastructure that runs on blockchain like that, that does in China. So I just think operationalizing of blockchain, I think they’ve done very well. Obviously, when we start talking about other aspects of the Web3 world, metaverse, NFTs, DAOs, and so forth, that gets a lot murkier because of the whole CBDC, stablecoin, token issues in China, which I get.

But just pure blockchain, I think they’ve done already some interesting things. Without a doubt. And I think that’s an important distinction.

It’s the old expression, right? Capitalism with Chinese characteristics. That’s how they like to describe their… There’s a market economy, but there’s a strong state and a single party, and that kind of controls everything. So it’s a different system.

And I think in a way, we’re looking at blockchain with Chinese characteristics as well, or Web3 with Chinese characteristics. One of the benefits, one of the many benefits of this technology is it gives you a way to move and store value peer to peer, and to do so permissionlessly across border, between individuals big and small at relatively low cost. And a lot of those things would be attractive to the Chinese government and to the corporate establishment, but some of those things may not be.

And so I think they’re looking at ways to take some of the benefits, real-time settlement, immutable records, smart contracts that can automate business processes, all that kind of technology stuff, and develop it in a way that suits the needs of the state. And you could say the same thing maybe for other countries who also are looking to regulate this technology in a way that suits their needs, and that’s fine too. But I think the Chinese example is definitely unique in that respect.

Now, in terms of where the country is today and why it might be pivoting, well, if the US is closing the door on something, China may want to open a window and try and become a center for innovation in a technology arena that is going to be, in my opinion, one of the key disruptors for the next 20 years. Well, not only does China have to court foreign direct investment, which has done quite well, it has more foreign direct investment in the US today. But it has to solve the demographic crash, right? I mean, the US will have to solve that in the 2040s as well.

But China has to deal with the fact that they’ve long been very skeptical of immigration from a cultural perspective mainly. Yeah, the US could solve that problem with a snap of the fingers if there was a political will. It’s like Canada, where I live, our natural growth rate’s been below replacement for 30 years.

Right, but Canada has a huge immigration program. Right, exactly. Yeah, yeah.

And that’s what’s maintained Canada’s economy for so long. It’s also, despite the fact that in Australia, we have very much the same sort of conversation about immigration as Americans do, Australia would be half the size it is today without immigration. And that has a clear economic impact.

So anyway, let’s jump into some of the book. We’re talking about Web3 today, but of course, Web3 and the technologies involved in this are building blocks of the smart world. I talk about the concept of smart economies, highly autonomous economies in the 2040s and 2050s.

And to do that, we need these technologies. We need stable coins, CBDCs, cryptocurrencies. We need a way to digitize assets.

So early examples of that with NFTs and tokens and so forth. You know, we need portable identity systems, you know, that are immutable and secure. But probably the biggest development we’re going to see, you know, Harvard’s been writing about this recently, is the emergence of autonomous corporations.

Right. And we are seeing the early examples of that today with DAOs. Despite the fact that the first DAO on the Ethereum network was a bit of a disaster, this is clearly the way we’re going.

But what can you tell us about how you think that sort of this autonomous organization or componentized organizations might develop around this sort of autonomous technology? Well, first off, I love that framing that you just provide of what the world might look like in 2040. Yeah, we have to imagine an environment where there are billions of people, companies, autonomous AI agents, smart devices, and new kinds of organizations, as you’re describing them, all needing to, you know, transact, to establish trust, to build wealth, to organize capability peer to peer. And that’s not going to happen with the existing financial infrastructure or even with existing technology platforms.

We need a new operating system, which includes, I think, all those things that you just mentioned. So totally in agreement with you there. DAOs are a fascinating part of this whole story.

So, you know, for your listeners, DAOs is Distributed Autonomous Organization or Decentralized Autonomous Organization, depending on how you ask. And basically they are in, I would say, digitally native organizations comprised of token holders, all working towards some kind of collective action or some sort of end goal. So DAOs can be the organizing structure for new kinds of software applications.

So in DeFi, for example, a lot of projects basically incentivize usership through tokens. So the earlier you are to something, the more you contribute, the bigger a share of the application or platform you can own. And as a result, instead of a cap table with shareholders, you have token holders who have both ownership and governance rights.

And there are lots of advantages to that. If you’re building a software project from scratch, and it’s meant to live on the internet, and it’s meant to be, you know, permissionless, allow anyone to access it, regardless of where they are, then the ownership structure that you put in place needs to be similarly global in nature. So Silicon Valley has known for a long time that in order to attract the people or attract people at all, you need to provide incentives, ownership incentives.

That’s why there’s always been this sort of cliche of very generous stock options being paid to early employees. So DAOs kind of start with the same premise, where if you’re early to using an application, the more people that join, the more useful that application becomes. You’ve helped to build the network effects, you’ve helped to create something more useful, and you should own a piece of it.

So in DeFi, something like a decentralized exchange, if you’re providing liquidity, the more liquidity there is in assets on an exchange, the more useful that exchange is. It doesn’t matter that, you know, an exchange has 500 things you can buy. If there’s no volume in those things, then it doesn’t really matter, right? So that’s one example.

And the difference though with DAOs is that they can do it globally. So if you wanted to incentivize users all around the world using conventional method, like say, I don’t know, like a restricted stock unit or a stock option, you would have to create legal agreements in 50 different countries, you know, translate contracts into a dozen different languages, all to just create the incentive for people to earn a share of something over time. And with a DAO and with a token rather than equity, you can do that much more simplistically.

Now, that’s the promise of DAOs from an ownership perspective. The other thing that’s really interesting is governance. So if internet users are going to become internet owners, owners of the applications and services that they use, then they may have some say in how that thing is run.

And that’s an area of DAOs that right now is showing, revealing, and I think some of the problems with self-governance or with governance in general, which is that, you know, you may have a bunch of token holders, but many of them don’t vote, they don’t participate. And as a result, small cabals of people are able to, you know, shape the direction of organizations, which I should add is quite similar to how it works in corporate proxy voting. You know, oftentimes there’s very few participating shareholders in a lot of important votes, and it’s oftentimes big institutional shareholders that sway the direction of those.

So this is all managed. You talk a lot about the consensus elements here, but the reality is that once those contracts between the different parties are put in place, essentially this business is run by an algorithm or this component of the business is run by an algorithm. Is that an accurate assessment? I would say like the business processes, part of what it does are run by algorithms, smart contracts, but the governance is done in a very human way where, you know, it may be that tokens help allow you to vote on matters, but it’s still people and like people talk to people.

So, you know, you can find out who the other token holders are and they can, you know, agree to vote in a certain way. So this is a consensus. Consensus sets policy, which defines process, which is coded, encoded.

That’s right. Yeah. And the measurement or the performance of that policy, you know, in sense of the operation is in terms of tokens.

Yeah, that’s correct. And I just think that, like the thing I’m describing right now is not a reason why DAOs are a bad idea. It’s just an implementation challenge, which is the idea of incentivizing users of an application through ownership and making sure that everyone who’s contributing value has a piece of the upside.

It’s a very important and very powerful part of the Web3 thesis. But the practice of ensuring good governance is something that has a human element. Well, you know, we are going to have to get better at figuring out, you know, particularly as more and more of our business is running code, you know, is automated, we’re going to have to figure out how to govern, you know, that sort of black box function, you know, particularly if there’s elements of generative, you know, generative elements of AI, where it starts off doing, you know, or doing approaches to execute on the core mission of the contract, but not according to the process we may have defined at the start, because it thinks it can do it a more efficient way or just finds, it doesn’t think, but it finds more efficient patterns in terms of how to do trades or whatever it might be.

I think it’s interesting. I do think that, you know, I think what the Web3 community probably undersells is the fact that every corporation in the 2050s, every leading corporation in 2050s is going to be highly autonomous, right, or have highly autonomous elements to it. So, we have to look at this as, you know, if people are dismissive of the DAO, then they have to be dismissive of that future as well, which isn’t reasonable.

So, even if you don’t agree with the DAO, you have to see it as an experimentation in the stepping stone to the way we have to think about corporations in the future and regulations about governing corporations that are highly autonomous. We don’t have laws in place that defines a corporation without office holders, for example, but we may not have a CFO function, you know, in, you know, we will for now, but, you know, in 30 years, we may not need a CFO function in terms of oversight or fiduciary duty of the algorithmic entity. It’s just, it’s very interesting.

Well, you can explore, I mean, you can tease that out a little bit further. So, if more and more organizations are like DAOs and more of their transactions are happening on chain or all of their transactions are happening on chain, then you’ve created an immutable, transparent record of their finances. And so, you don’t need a CFO or at least you don’t need accountants to, you know, prove that transactions occur.

You have an immutable record that everyone can see and trust. Well, you can also have another algorithm that audits it. Yeah.

Well, I mean, of course, and this is the intersection of AI and Web3, right? Which is that, you know, you have this process, this economic… Now we’re getting into it. This is this way to manage transactions and contracts and to build trust. And then you have this intelligence engine on top of it that can take that and interpret it and build, you know, like value-added services using that, right? And I think that’s where we also see the intersection of AI and Web3.

You know, I just want to say one thing before we move on, which is that, you know, I think right now, all of these technologies, people are viewing as distinct technologies, whether it’s AI or IoT or VR and AR or blockchain and so far. But I think, you know, in much the same way as the term internet expanded from its original kind of definition to describe our whole era that includes many technologies, business models, social behaviors, et cetera. This term Web3, I think is evolving to describe an era that is composed of a group of different technologies.

Now, I’m not trying to slide AI into this. No, no. But I think a lot of what we’re doing, particularly when we start talking about digital assets and decentralized finance, you know, and the blockchain is we are trying to create a structure that is machine readable, right? You know, the digital twin concept and so forth.

This is so the world of AI can recognize, you know, the utility and the, you know, products and services and, you know, elements that we have in society so it can work with them. So it’s all, in my view, you can’t talk about Web3 without talking about artificial intelligence, you know, and you can’t talk about how AI is going to be integrated into society without talking about Web3. I think they’re, as you say, they’re quite complementary.

I do want to get into the book, dude, because, you know, I mean, that’s why we brought you on this week. You’ve got the book out. But yeah.

So I want to talk about identity in a moment. But first of all, obviously, the book is called Web3. It’s just come out this week.

It’s, I’m sure I haven’t checked today, but I’m sure it’s on the bestsellers ranking already. But I, you know, talk about the journey for you in terms of the timing of this, because you could have talked about Web3 five years ago. But, you know, why is now the right timing for a book like this? Is it because it’s just, it’s critical mass or? Yeah, well, it’s a great question.

I’ve been thinking about the idea for some time. You know, the term Web3 is not new. It was coined in 2014, but there’s nothing so powerful as an idea whose time has come.

And I thought that in 2021, 22, while all this innovation was happening, there was a lot of confusion about what Web3 was and what it wasn’t. And I actually think that the events of last year, like the collapse of FTX and Terra Luna and some of these other high profile projects had sort of thrown new mud on the windshield and clouded people’s views even further and sort of hastened my sense of urgency to actually get out and write this book. So my objective with the book really is to reset the conversation about Web3, to help people understand some of the enduring sort of themes and concepts around this technology and why it’s important.

You mentioned we’re hopping into the book, we’ve kind of been talking around a lot of the themes. Well, we’ve been talking about the theme of the book. And we’ve talked, we’ve touched on a couple, we’ve talked about assets and organizations.

So the way that the book is kind of structured is that we look at, you know, Web3, what it is, how it works and so forth. And then we look at the key transformations. What does this mean for assets? What does this mean for people, internet users? What it means to be a person online, how it impacts organizations, what it means for different industries, including financial services, but also gaming, infrastructure, et cetera.

How this is going to intersect with other technologies like AI and the metaverse, and then what this means for civilization. And then we look at the path forward and give some key takeaways. So each one of those transformations, assets, people, organizations, industries, basically you can think of as bigger and bigger concentric circles.

I think the asset is the most important part of this, or it’s the foundational primitive or building block of Web3. The idea that we have a way to express ownership of a digital good online, and we have a way to move and store it and use it and manipulate it to me as the big sort of kernel, the big starting point. But what this means for people, I think is equally profound.

So in Web2, we entered into this Faustian bargain unwittingly. I don’t think people consciously did this, but basically the trade was you would give access to your information and data and time and so forth to these big platforms. And in exchange, you would be provided with a free service like search or social networking and so forth.

And initially this seemed like a good trade because these platforms in the early days were fun and they were novel and they were useful. And the data didn’t seem all that valuable. But I think what we’ve realized is that if someone else is capturing all of our data and using all this information, it means we can’t monetize it.

It might end up in the wrong hands. So one of the really interesting things about Web3 is the idea of a self-sovereign identity. The idea that an individual can own their own data and own their own digital goods and can decide how they’re used, where they’re used and whether they get compensated for it.

And I think that each of those different concepts is really important. So the Web2 model is a kind of digital feudalism, right? Where you provide all this data in exchange, you get access to something like free services, like some cabbages or something from the Lord. And with this new model, we have a different one where it’s a citizen-centric identity where you own and control all these different aspects of you and your life and you decide how they’re used.

So there’s a relationship here to tokens. Vitalik Buterin, who’s the creator of Ethereum, has talked a lot about soul-bound tokens. This idea that we could have a non-fungible, non-transferable token that’s programmed to gather data about us over time.

And that becomes something that we can passport from country to country. We can use it to improve how we access government services, healthcare. We can improve how we access financial services through reputation-based credit scoring.

All of these different things are part of a rich digital identity that you as a user, you as the individual can get to control. And that more than anything is a really profound shift in how we think about our relationship to technology and to the web. Well, it’s great.

I mean, it’s always good to get a new book out. I know how tough it is to write a book. And this is one that’s pretty complex.

And to make the complex simple, it takes a lot of time. You first of all, have to have a deep understanding of each of these areas. So I’m looking forward to getting a copy of it this week and checking it out.

But for those that are joining us here and listening, where can they find the book? Yeah, the book is available wherever books are sold. Amazon, Borders in the UK, if you have listeners, it’s available there. We also have several foreign rights that we’ve sold already.

So it will be available in Korean, Thai, simplified Chinese, Brazilian Portuguese so far. And we’re expecting a lot more translations. For those who can buy it in North America and the UK, the best way to buy the book is in massive volume for yourself, your friends, your family, for everyone.

New York Times, here we come. No, it’s tough, man. It’s tough.

I’ve tried a couple of times, I’ve got close, but about 18,000 these days. New York Times is the holy grail, but you don’t have to be a New York Times bestseller to have a book that- No, but you’re going to get on the top of the Amazon lists and stuff as well. But listen to this.

This is a quote from the back page of the book. And I’m envious because I tried to get this. I tried to get this for techno-socialism, my last one.

This is the quote, with Web3, Tapscott has captured the zeitgeist. We are on the brink of an extraordinary new era where technology can reimagine everything. With clarity of thought and deep insight, this book explores Web3’s immense potential.

Guess who wrote that? Steve Wozniak, co-founder of Apple. What a fantastic testimonial, dude. Yeah.

Thank you. I was humbled and surprised by that. That’s awesome.

Because my agent knows his agent. We tried to get him and he was just, at the time, I think he was sick or whatever, but I’ll make that excuse. But yeah.

Well done. Check it out. Web3, charting the internet’s next economic and cultural frontier.

Alex, how can people get in touch with you if they want to know more about what you’re doing? Yeah. Please connect with me on Twitter and LinkedIn. Follow me on Twitter and connect on LinkedIn.

So, add Alex Tapscott on Twitter and then just Alex Tapscott, I think, on LinkedIn. Pretty responsive. So, please get in touch.

And yeah, check out the book. Fantastic. Well, thanks for joining us today.

Yeah. My pleasure. Every success with the book.

It’s great to see you churning in another one. And maybe, hey, look, I’m coming to Toronto for CYBOS this week. So, maybe we’ll catch up in Toronto.

Yeah. Let’s do it. Yeah.

Great. All right. In Toronto.

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