Ep. 136 – Unlocking the Blockchain – with Alex Tapscott
On this week's Innovation Engine, we're pleased to welcome Alex Tapscott back to talk about unlocking the blockchain. Among the topics we'll discuss are how far blockchain technology has come in just a few short years, what your company may be able to learn about organizing teams from a company called Consensus, and why blockchain may represent the “Internet of value.”
Alex last joined the podcast about two years ago, when the book he co-wrote with his father Don had just been published (Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World). Alex and his father Don also co-founded The Blockchain Research Institute and, in 2014, Alex wrote the seminal report on governing digital currencies for the Global Solutions Network program at the Joseph L. Rotman School of Management at the University of Toronto.
Listen to the Episode
Interested in hearing more? Tune in to the full episode below:
What has changed in the world of blockchain over the last two years?
- Since publishing Blockchain Revolution, Alex has seen a huge explosion of interest, insight, entrepreneurship, and development in the space, “which I think has accelerated, if anything, our projections on what this technology could mean for the world.”
- The fact that the value of the whole cryptocurrency ecosystem has grown from around five billion dollars to almost $500 billion today is evidence that there's something real going on.
- “What's going to emerge from this is the next generation of the Internet, and that's super exciting for us.”
What does it mean that blockchain is creating the “Internet of Value?”
- Basically, blockchain is the first digital medium for value, in the same way the Internet was the first digital medium for information.
- When you use the Internet today to send share information, you're not actually sending an original, unique thing. You're sending a copy. For most kinds of information, that's a benefit. But when it comes to things that have value – things like money and financial assets – being able to send or sell a copy of something is a really bad idea. As a result, we've always had to rely on intermediaries to sit between parties and transactions involving things have value. But with blockchain, we can transfer things of value peer-to-peer.
There's a chapter in Blockchain Revolution called "Reinventing Financial Services" that talks about how blockchain will alleviate some of the pains that existed in that industry. How can blockchain help fix that?
- At one point, the financial services industry was incredibly advanced… but it hasn’t been updated in 40 years. Technologies that date back to the 1970s still help a lot of the industry operate and run.
- For example: When you go to the store and pay with a credit card, it's actually a process that involves more than a half a dozen intermediaries, and the value takes days to settle (plus it costs the merchants a few percent of the sale). Although the front end is digital in the sense that you use a card reader and it seems like the payment is being completed, “what's happening behind the scenes is this Rube Goldberg machine-like process. It's kind of like digital wallpaper on an old house. What blockchain promises to do is basically rebuild the house; to change the plumbing of how we move and store values, in the world.”
What value might blockchain offer companies in the near future?
- “There are companies like Maersk, which is a big shipping company, or Walmart, which is itself a huge supply chain and also the biggest grocer in the world, looking to use this technology to reduce the chances of fraud, of corruption, of value being lost, and importantly, friction in their value chains.”
- When people were originally talking about blockchain, it was about Bitcoin and then it was about financial services. People are beginning to realize that it is a general purpose technology – similar to the Internet, the PC, or the smartphone – that is going to have an impact on every single industry. “It's not about financial tech. It's about all tech, and technology's having an impact on everything.”
Learn more online:
- The Blockchain Research Institute
- A16z on Cryptocurrency & Blockchain
- Jason Lopp’s Bitcoin Resources
Read up on the blockchain:
- Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World by Alex Tapscott and Don Tapscott
- The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Michael J. Casey and Paul Vigna
- The Truth Machine: The Blockchain and the Future of Everything by Michael J. Casey and Paul Vigna
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