The Blockchain and Us: Interview Alex Tapscott, "The Blockchain Revolution"

Transcript

there's one thing to keep in mind which is that blockchain technology is not the solution to all the problems under the Sun and I think as it matures we will begin to see its potential benefits but also its limitations I'm Alex Tapscott I'm the CEO and founder of Northwest Passage ventures which is a venture capital firm making investments in two companies in the blockchain industry I'm also the co-author of the book blockchain revolution have the technology behind bitcoin is changing money business and the world

started first with financial services and banking and a lot of people actually mistake this technology is what's called a so-called FinTech thing which to be sure it's going to have a big impact on financial services but that's one of many different areas we've noticed it getting lots of attention in the world of technology unsurprisingly but also in things like manufacturing and supply chain management creative industries where the question of digital rights management is a big one and where blockchain technology and smart contracts could ensure that artists and other creators of content get paid fairly and get paid first it's spread to government where perhaps we can finally fulfill the promise of 25 years ago to

use technology to change the way that governments work not just how they deliver services and whether or not we could create efficiencies but also changing the very nature of democracy itself we've seen it spread to central banking where the Bank of England the People's Bank of China the Bank of Canada the Federal Reserve have all said that this technology could hold a lot of promise to make the financial system more resilient more efficient and more inclusive and we've seen it to me this is one of the things that gives me great pleasure really catching on in the developing world the first generation of the internet helped to connect people but it didn't

actually help them to connect into the global economy it gave them a way to access social media but not a way to send money to create a savings account to access a loan to get an identity that they can use to gain access to services and this technology holds that potential but we're also seeing it play out so in India and the Philippines and South America and South Africa and and and elsewhere so to me the opportunity to bring unbanked people into the world and to finally fulfill the promise of technology as a you know rising tide that lifts all boats is something that gives me a lot of encouragement and makes me quite excited about the future are lots of reasons why blockchain made

me not fail I think we're past that point but where it might not reach its potential you know is the technology ready for primetime can it really meet the demands of all of these different use cases that people think it could handle will government regulators move too quickly and create rules and laws that help to stifle innovation or will incumbents and say you know technology insurance financial services see this technology as an existential threat and try to do everything they can to stop it what are the implications for policy when technology removes intermediaries and where we have to rely on a new trust protocol to manage a lot of our affairs

what are the implications of criminals using this technology to move money around to hijack computer systems to pay ransomware etc so they're not without their challenges you have to ask yourself are these all reasons that blockchains a bad idea or are they implementation challenges to be overcome and I think in every single one of them their implementation challenges you know something like technology is it ready for primetime well this is an open source revolution image it should stay an open source revolution to enable us to find solutions to help it scale and already we're seeing lots of exciting developments will incumbents try and

crush it well actually we've seen a lot of incumbents and a lot of governments take a fairly enlightened view of this they don't want to have a repeat of the first generation of the Internet we're vested interests and leaders of the old paradigm fought against change and ultimately lost so maybe this time they'll try and pursue it differently I think the policy question remains uncertain and unanswered but that's something we'll have to address but in each of these cases they're just challenges that we need to overcome so the future is far from certain but I'm optimistic only focus on how to cut cost from your business you may miss altogether what new businesses get created and what new opportunities get created so we see

a lot of examples of banks and consulting companies and other you know big four audit firms talking about how they can strip cost out of the business of I don't know trading in public markets or you know whatever it might be but if you take the example of public markets how can you cut cost out of market that doesn't exist in the future what if the trading of securities happens peer-to-peer in the marketplace that doesn't have the traditional intermediaries of exchanges in brokers and agents and escrow agents and clearing houses and all these other parties that we rely on that's the cost you're cutting out but what if the market can function without them so the important thing for big leaders of big

companies is not just to think about cost but also to think strategically what can this technology enable me to do that I wasn't able to do in the past if it's financial services it could be how do i target the two-and-a-half billion people in the world who don't have access to banking what other markets could I get in others other than financial assets should I be it you know looking at the energy market carbon trading something else how does this technology infuse the Internet of Things and what's the payment mechanism that will happen to animate it and how can I play a role you have to think about the future not about your legacy businesses because your legacy businesses will change by definition there are legacy businesses

what's critical is that it doesn't matter what industry you're in you might think oh I make you know lipstick I'm a cosmetic manufacturer what does blockchain have to do with me well actually it has a lot to do with you if you're an airline what does it have to do with me well you have a complex supply chain you have to deal with fuel it's got a lot to do with you financial services media the arts this is not something that's going to impact one or two industries it's going to affect every industry in the same way that you know the internal combustion engine affected almost every industry the same way the internet affected almost every industry the way the steam engine created new industries so this is one of those big generational technology shifts that will require a concerted and focused response otherwise you'll miss

the boat the internet of things will probably be the best test case for a lot of blockchain technology because if we're going to have millions of or billions or trillions of Internet enabled devices doing everything from driving us around to managing our affairs to monitoring our health they're going to need a way to move and store manage value and data that has value in a way that's secure and private and right now we don't have that and I'm concerned about the ubiquity of data and how it flows in and through your gonna connect the devices I think with a value platform like blockchain we can at least address some of these problems and maybe even create

new opportunities well I try not to deal too much with hypotheticals like that yeah look there's a potential that this technology will create whole new models for how we create value and organize capability especially with the concurrent rise of things like artificial intelligence so if instead of uber you've got Suber so a blockchain uber where a bunch of autonomous vehicles are using a native digital currency to transact and enter into contracts with each other and with fares they don't need to have a profit motive in the same way that a company

does they can operate at a marginal cost of basically zero percent margin so there's no more money being made so what does that mean for all the people that those companies employ well they're probably out of business if they have a competitor that can operate at zero percent profit margin the counterpoint to that is that our rides have all gone down by 20 or 30 or 50 or 70 or 90 percent and we can get around for a dollar a day so what kind of utility and value does that create in the economy so who knows I mean there are lots of positives and negatives I think we're a long way off from a world of idle humanity not having anything to do if anything past technology revolutions have told us to

be humble and making that prediction this has happened a lot in the past you know going all the way back to the invention of the automated loom and the Luddites in England in the early 1800s so we're still going strong and I think that the future will hold lots of surprises for us new business models new ways of creating value new ways of keeping people busy and hopefully it's done in a way that's responsible so we'll see the future is not something to be predicted it's something to be achieved and there are a lot of people working in this industry to try and figure out how to use this technology for good for bad for whatever previous technology

revolutions have created lots of value they've also created lots of problems and I think that invariably that will be the case here but my hope if I had one wish for blockchain is that we can help to use this technology to address some of the specific problems that have been created during the first generation of the digital age where we have rising wealth but not increasing prosperity where as a result of entering into you know by using social media and other sites we're entering into a Faustian bargain where we have to give up lots of our data and that can undermine our privacy where the technology didn't have as big an impact on changing the nature of work and the nature of organizations

and the nature of business models like financial services so the future could be dark and stormy it could be bright and sunny it's up to those who are doing this to figure that out I hope to play a a small role as one of many many stakeholders in seeing that future come to life [Music]