Oct 19, 2023

Alex Tapscott, author of the new book "Web3: Charting the Internet's Next Economic and Cultural Frontier," discusses the biggest benefits and misconceptions about the new iteration of the World Wide Web.

Video transcript

Our next guest is out with a new book that dives deep into the future of Web three. Joining us now to discuss is the author of Web Three charting the internet's next economic and cultural frontier, Alex Tapscott. Welcome to the show, Alex. Happy to be here. All right, we got a lot of people will say we're in web 2.5. I think Jack Dorsey at one point said we were in web five. This book is about Web three. What's the biggest misconception here when we talk about the concept of Web three, the next iteration of the internet? Yeah, I think a lot of people have a hard time sort of identifying or defining exactly what Web three is, right? I mean, we hear about, you know, the read web, the read, write, web, the read, write own. And I think for a lot of folks especially mainstream readers of whom there are many of this book um that sort of framing is confusing. So I think a simple way to think about it is that, you know, if web one basically democratized access to information, it didn't matter if you were in, you know, the Philippines or Nigeria or Canada, you could access the same web. And if web two democratized access to publishing, kind of gave everybody a way to, you know, share their thoughts and insights as well as photos and videos. Then web three empowers us with a new kind of tool kit, a way to you own assets, a way to earn value, a way to move and store money and a way to participate. I think more fully in the global economy. So I think if technology really makes the world flatter, as they say Web three is going to be a steamroller, it's going to flatten the world in ways. I think we haven't really anticipated and I think that's going to have a broadly positive impact on the world. So you you've defined the results of Web three, but can you define Web three itself and, and how your book shows that definition? Yeah, absolutely. So there are several sort of core technologies that are all playing an important role in this. Of course, Blockchain is the foundational technology of web three blockchains, you know, are a way for people and businesses to move and store value, peer to peer, but also to automate complex business processes with smart contracts. And that means basically that this technology is going to be transformational for business. But there are other technologies that are intersecting with Blockchain. At the same time, we are seeing the rise of artificial intelligence, the rise of the internet of things and of course, the rise of extended reality and I think that these technologies are not separate but related. And I think in the same way that the term internet went from describing a very narrow set of networking technologies to really describing a range of technologies, but also new business models and new social behaviors and other phenomena. I think the term web three is a useful one actually for describing this next era of computing and the next era of progress. So Alex, I feel like here's the challenge with Web three and I'm sure you are encountering this challenge as you're promoting a book in that, you know, a lot of people, I mean, we all hear this, they're like, oh, I just don't understand it's so complicated. People keep explaining it. I don't get it right? And I feel like one of the main reasons for that is that they're not seeing like actual use cases in their life, right? Like when you think about, you just mentioned a I, when A I came out, when Chat GPT came out, nobody really cares how Chat GPT works. They just know that they can use it and they understand like what the purpose of it is, right? With Web three, it's like we have to find a lot of time like explaining things and writing books and making explainer videos. So I guess like, can you, is there any sort of like real use case that you can point to very simply to that sort of person that we've all encountered many times. Who's like, what is this thing? Why should I care? How can I use it? I mean, what in your view? I mean, because I'm sure this is coming up in your talks, right? Like what is the actual specific use case that you can point to that someone will be like, oh, like light bulb moment? Web three, I get why it exists or is there just not one yet? Um, well, I think there are dozens of great use cases but I also think that nobody but people don't know about them. Do you know what I mean? Like again, like in crypto, yes, we can point to them. I'm talking about like the proverbial man on the street, right? Like, you know, like they definitely are not aware of dozens of use cases. Well, certainly, I think some of it's a matter of definitions, right? Crypto versus Web three versus Blockchain. And, and I think sometimes we get kind of caught up in this word. So, you know, but basically, you know, web three gives is a way to be owners of the services and the applications that they use online. So we have several examples of this in defi where, you know, in order to um scale, say a decentralized exchange, you need lots of liquidity. So the more you know, active you use a platform, the more you engage with it, the more of it you own and, and as a result, the more say you have and how it's run. Um and that's something that scaled to, you know, billions of dollars of daily transaction volume and also more trading pairs than any exchange in the world. And that's an entirely user owned network. But that example of defi and finance can be applied to lots of other industries. You know, right now, the most exciting area for me in web three is actually decentralized physical infrastructure. I think that this next era is going to require vast amounts of computing power and other resources to fulfill the potential. And I'm not just talking about blockchains, you know, needing to process of dollars of transactions. I'm talking about the requirements for large language models, the requirements for rendering vast open worlds meta versus if you will and all that is going to require lots of resources. So what we are seeing in the world of decentralized physical infrastructure are applying this concept of a user own network to physical assets and those physical assets can be everything from GPUS to even mapping data. And there are so many interesting examples of that. You know, one example I talked about in the book is a project called Hive Mapper. Hive Mapper is to me really a very neat sort of example of the synthesis or convergence of Blockchain A I and IOT and it works very simply. You can buy a dash cam, you can put it on your car and you drive around and as you do, you're mapping the world around you, but you're also earning a little bit as a result and you're not doing it for the money, you're doing it. Maybe because you're interested in mapping and the of earning a little money is interesting to you. But what we've seen from Hive Mappers just in the last year and a half, they've already mapped 5 million kilometers or 8% of the world's surface. So why does that matter? Well, number one user owned networks, if you are creating the value, then you should be able to participate in the upside. But also the idea of harnessing the power of many, many people all working together, all co ordinated can actually create something that's better than what we have today. It doesn't matter how many Google Cars are out there with cameras on them. There's always going to be more cars that aren't Google cars than cars that are Google cars. And so the data, for example, that Hive mappers generating can be more timely and more accurate than what even a centralized web two player can do. So finance decentralized physical infrastructure. And there are of course, other examples as well in the book, I talk about gaming, culture, art and film and TV, and other sorts of creative industries. And there are many, many others too, Alex just to follow up on Emily's question there. You know, how do you see that incentivization happening to get that proverbial man on the street into Web three, you mentioned Hive Mapper, there's Web three gaming, there's decentralized social that various different people have said could be catalysts to on boarding the next million billion people. But what do you see that is because? Right, I mean, we haven't really seen that happen. We've seen some steps taken in decentralized social media, but that kind of tapers off very quickly. Same with web three gaming. Um Hive Mapper hasn't really met the likes of Google Maps yet. Where, where do you see that catalyst? Yeah. Well, I think in this industry there are basically three kinds of people. There are missionaries, there are mercenaries and there are pragmatists and I think within Web three, there are a lot of missionaries and you know, my book is called Web Three Charting the internet's next economic and cultural frontier. And the choice of the word frontier is an important one. You know, frontiers are often pushed by missionaries or early adopters, but generally speaking, they are settled and developed by, you know, savvy entrepreneurs and business people who that, you know, there's an opportunity to build something of value. So they also attract the wrong kinds of people. And right now we're reckoning with that with the trial of SBF and FTX. But I think what we need is pragmatists to enter this space. You know, it's, it's, it's great to have user own networks that, you know, are completely decentralized and you have no central point of failure. And I think that's very important, but we also need to acknowledge the fact that if enterprises and other sort of institutional users of this technology are interested in them, then we need to facilitate that we need to encourage them and educate them. And that's something that I sort of view as part of my responsibility of sorts as an author who's got a book in the market. And what's interesting to me is that notwithstanding the market gyrations that we've seen over the past year and a half and they have been rather volatile. We've actually seen enterprise adoption continuing on a very steady clip. And that's very interesting to me for a couple of reasons. One, they seem unfazed by the fact that the prices are down. But two, what we're seeing is most of the development is actually happening on public Blockchain infrastructure. So I've been around long enough to remember that the days of enterprise Blockchain in 2016, 17 when everyone was saying, OK, we love the idea of using these, these networks where we can have instant settlement and transparent records, et cetera. But we hate the idea of exposing ourselves to these crazy open markets like Bitcoin and Ethereum. So we're going to build our own network and we're going to call them enterprise blockchains. The same thing happened with the web in the 19 nineties. In the 19 nineties, everyone said we love the idea of this internet this way to communicate online, but we don't like the idea of exposing ourselves to the open web with all its like criminals and weirdos. So we're going to build intranets. What we've seen now in the world of Blockchain is something that we also saw with the web, which is that internets failed to scale. And so people move to the public, web enterprise blockchains failed to scale and frankly didn't work. And so enterprises are moving to public blockchains. And so, for example, you know, when paypal launches its stablecoin, it does so on Ethereum or when visa launches merchant settlement, it does so on Solana. To me, that's really exciting. And by the way, like to me, web three can include um big companies and other institutions getting into the web three tool kit as I describe it, right? You don't have to go fully decentralized and become fully web three in order to find these tools useful as a way to say, create new products or, or uh target new customers. Alex. Thanks so much for joining the show and congratulations on the launch of your book. Thanks for having me. That was the author of Web three charting the internet's next economic and cultural frontier. Alex Tapscott.

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