In an exclusive interview with cryptonews.com, Alex Tapscott, Managing Director at Ninepoint Partners and Best-Selling Author of Blockchain Revolution and Digital Asset Revolution, talks about Crypto in Toronto, becoming a best-selling author, and the Dollar MilkShake Theory.
About Alex Tapscott
Alex Tapscott is an entrepreneur, writer, and seasoned capital markets professional focused on the impact of emerging technologies, such as blockchain and cryptocurrencies, on business, government, and society.
Alex is the Managing Director of the Digital Assets Group at Ninepoint Partners, one of Canada’s leading independent asset management firms. Among other things, Ninepoint launched the world’s first carbon-neutral Bitcoin ETF (BITC:TSX). Alex is also co-author of the critically acclaimed non-fiction best-seller, Blockchain Revolution, which has been translated into more than 19 languages and has sold more than 500,000 copies worldwide. His latest book, Digital Asset Revolution, was published June 2022.
In 2017, Alex co-founded the Blockchain Research Institute (BRI), a global think-tank investigating blockchain strategies, opportunities, and use-cases. Previously, Alex was an executive at the investment bank Canaccord Genuity. Alex is a graduate of Amherst College (Cum Laude) and is a CFA Charterholder. He lives in Toronto.
Alex Tapscott gave a wide-ranging exclusive interview which you can see below, and we are happy for you to use it for publication provided there is a credit to www.cryptonews.com.
Highlights Of The Interview
- BTC + ETH being the most important technological breakthrough of the last decade.
- The future of NFTs – storytelling and token gated communities.
- The Dollar Milkshake Theory – how the $USD swallows other global currencies
- Cosmos and $ATOM – interoperability and cross-chain bridges
- Large companies embracing public blockchains
Full Transcript Of The Interview
Matt Zahab
Ladies and gentlemen, welcome back to the Cryptonews Podcast. It’s your host Matt Zahab we are buzzin as always, why do I have a huge smile on my face? Well, we have a fellow Torontonian and Canadian on the show today, super pumped to have Alex Tapscott on the show entrepreneur, writer, and seasoned capital markets professional focused on the impact of emerging tech, such as blockchain and crypto on business, government and society. I have Alex’s book right in front of me. If you haven’t grabbed it, do check it out “Digital Asset Revolution. How Blockchain is Decentralizing Finance and Disrupting Wall Street”. I was at my buddy’s place and shut out Mikey G. And it was in his communal library we were playing some pool I saw it I was like I’ve always wanted to get this but I never pulled the trigger couldn’t put it down absolute treat of a book on top of that Alex is also the managing director of the digital assets group Ninepoint Partners, one of Canada’s leading independent asset management firms, and Ninepoint launched the world’s first carbon neutral Bitcoin ETF and that is BITC on the TSX. And he also has another book called Blockchain Revolution, which has been translated into more than 19 languages and has sold more than 500,000 copies worldwide. Lastly, Alex also co-founded the Blockchain Research Institute, also known as BRI, which is a global Think Tank investigating blockchain strategies, opportunities and use cases. What a bio. Without further ado, I’m very pleased to welcome Alex Tapscott to the Cryptonews Podcast. Alex, welcome to show.
Alex Tapscott
Thanks, Matt. Appreciate the long and generous introduction. I’m happy to be here.
Matt Zahab
Pumped to have you on we got to set the stage you know what I mean, you got to do what you got to do. I love when Canadians come on the show more specifically, I love when someone from my own city that I love but also not hate but more love comes on the show. Crypto in Canada crypto in Toronto, you are sort of one of the founding fathers you are at the forefront of this what’s going on in the Toronto crypto scene at the moment, you know, any good stories for me any buzz going on?
Alex Tapscott
Well, Toronto is a city that at the early days was one of the sort of leading areas where a lot of innovation was happening. And I think a lot of people don’t really know that, I’d say today it’s probably a shell of its former self. But I don’t want to say there’s no senior there’s lots going on. But there was a brief period where it looked like Toronto and Canada might actually lead the blockchain revolution might actually be a leader in web3, the entire Ethereum community pretty much was originally Canadian, the founding team of Vitalik Buterin, for example, Joe Lubin, Anthony Diorio and several others, were all based in Toronto, they’re all Canadian, Toronto based people. And, you know, for a brief period of time, a lot of the really exciting developments within the Ethereum community and you know, adjacent sort of ecosystem was happening here. It’s also worth mentioning that even within Bitcoin, there was a disproportionate number of Canadian Bitcoiners a lot of the core Devs are Canadian. We’re a country that, you know, has a great university system has a highly educated workforce, and has a real interest in new technology. And so didn’t totally surprise me that that was the case. But we’re also a country that fails tremendously when it comes to embracing homegrown innovation and promoting our, our homegrown winners. And that’s something that has gonna cost us the reason why Canada, despite all those benefits, is at the bottom of the leaderboard, when it comes to innovation when it comes to r&d, when it comes to you know, new company formation of unicorns. It’s a great place to live. It’s a wonderful country. But there’s so much more that we can be doing to support our innovators and our entrepreneurs. And that’s been true in crypto and web three since the beginning.
Matt Zahab
I follow you on Twitter, and one of my favorite tweets you ever put out is from about a month and a half ago, September 17, right around when the ETH merge went live. And the tweet goes as follows. “Ethereum is Canada’s most successful startup ever, and the biggest tech story of the last decade, but it’s not celebrated that way here in Canada Case in point, the Globe and Mail Canada’s national newspaper barely covered the merge and south of the border. It was led in the New York Times business section”. I think that tweet speaks for itself. Will this ever change? Is it going to take someone like Alex Tapscott to run for parliament and maybe kick Justin turbo out and become new P.M. to maybe get some, some good PR on our homegrown talent? Is that ever gonna change?
Alex Tapscott
Well, that’ll never happen because I don’t speak French. Unfortunately, you have to be bilingual in this country to run for high office. But I think there’s lots that people in the industry can do from the if not from the sidelines from other important areas. Right. So we do have a, you know, a vibrant private sector. There is a big developer community here. We do have a VC industry in Canada, we do have plenty of people who are advocates for this technology. And I think that there’s definitely a role for for people like you and me and others to We’ll make sure that this is an industry that that does take priority. In, in, in business and as well, as well as in government. I mean, ultimately, you know, I don’t want to sound like I’m suggesting the government should be funding or supporting new technology, though, that’s actually how things got started in Silicon Valley in the 20th century with the semiconductor industry. Up until the 1970s, NASA was buying more than half the chips manufactured in the US. So there’s always been a very close relationship between government and industry. But I think mostly these days, what government can do is create conditions for private, the private sector, to succeed and for industry to succeed. And, you know, it’s always helpful when big companies and when, you know, large institutions themselves become model users of a technology when they show a willingness to actually embrace it. For the, for its benefits. If you look at the story in Canada, yeah, it’s true. And the Ethereum merge happened, this was the, you know, the most probably the most important technical sort of event of technological events of the last decade Ethereum itself. And Bitcoin together are the most important technology story of the last 25 years. Ethereum created an entire industry of decentralized applications and innovations like smart contracts, and NFTs which didn’t exist before. And that’s kind of important. And so it made sense that it was the lead story on Bloomberg, it made sense that, you know, Bloomberg BusinessWeek, just last week, on the back of the merge published a 40,000 word, essay, slash book on the subject in the New York Times ran it as the top business story, the whole, you know, a couple of days after it happened. In Canada, it was on page 15, of our national newspaper. And it was a throwaway story about a whole bunch of small companies in Canada hope to help with the rebranding by showing everyone how green crypto is. And I look, that’s an important part of it. I think the greening of Ethereum will help to make it easier for big companies to embrace blockchain and embrace decentralized applications. But that was one tiny sliver of the whole story of what was happening. What was happening was that an organization started by a bunch of Canadians that has a market cap, that’s double the size of Royal Bank, the biggest company in the country, just under underwent one of the most important technical and technological innovations of all time. And that’s something that barely registered in the sort of local firmaments here, and I think that’s a huge, huge testament to just how out of touch our leadership is, with what’s going on in the world. And what Canadians are, are doing.
Matt Zahab
You’re pretty switched on on the whole politics side as well. Do we have any leaders at the moment who are potentially on Team crypto? I know Pierre Poilievre, he’s, you know, a little bit again, he’s, he’s pulling away, but do we have any one who’s actually on Team crypto and who has some some pretty good legit policies?
Alex Tapscott
Yeah, definitely. I think that there’s more happening probably at the provincial level, I think in Alberta, if you look there, as a province see an opportunity to create, you know, more welcoming conditions for us. And part of that something that that’s a narrative that’s played out in the US before, which is, you know, in federal systems like the Canada and the US and our system, tackling more federal than the US meaning that power is supposed to be more devolved to the provinces like provinces are supposed to be like semi autonomous in this country, they do have kind of wide latitude to pursue initiatives on their own, pursue different tax regimes pursue different laws and regulations, as long as they don’t interfere with our Constitution. And even there, there are exceptions. That’s in the sight. So Alberta is taking steps to attract innovation, trying to create laws that make it easier to clarify what we’re crypto assets fall in the regulatory spectrum and so forth. I would say the federal level within the Liberal Party, there’s not a lot of like people taking this seriously. And I think that crypto unfortunately, has become a very partisan issue in the last six to 12 months. And part of that is because of the trucker protests that happened, you know, earlier in February, right now, a lot of some people were funding the protest movement with Bitcoin. And as a result, because the trucker protests was deeply unpopular in this country, a lot of people associated Bitcoin with a bunch of people that they felt didn’t reflect their views, right. And Polly evera, who I think is very intelligent person, and is capable of nuanced took a very, like heavy handed approach when it came to that issue. And basically, you know, put himself on the side of that issue. And as a result, put the Liberals on the other side when they invoke Zach. So basically, like, what’s the state of the discourse around web3 in this country? It’s basically did you support like the trucker protests, which has got nothing to do with anything It’s a completely unrelated subject to the question of do you believe that blockchains are an important technology innovation? Do you think digital assets have the potential to impact a lot of industries? Do you think there’s an opportunity for Canadian entrepreneurs to embrace this technology to create wealth and jobs and, and to drive innovation and to drive tax revenue and to drive, you know, all sorts of other benefits that happen when a country leads in a new industry? That’s the stuff that we should be talking about. And instead, where we’ve taken it to, you know, its base level. So I think that there’s blame to be had to be to be clear, there’s blame to be had on both sides of the political spectrum. When it comes to this. I think that, in general, we need to elevate the discussion. And that starts with serious people understanding what’s really happening here, and so far, I just don’t think there’s a lot of that going on. Frankly.
Matt Zahab
No, I, unfortunately, you and I are in the same era here. But hopefully things change. And again, we do need, you know, we need policymakers, we need people within parliament who do want to shake and bake and do pave the crypto way. I am very curious about your journey into the space in 2017, you co founded BRI, the Blockchain Research Institute, and you worked at Canaccord. I don’t know if that was during that time or before that. But you know, big bank position Canada, one of the best firms in our country and you decide to go the crypto route. Was it sort of the same as most or was there perhaps a different you know, undercover under the table reason why you wanted to jump ship and go to the dark side?
Alex Tapscott
Well, it’s funny, the dark side like is Canaccord was always considered like, its own insurgent in the Canadian capital markets. It’s not really part of the establishment as an independent firm that’s separate from the banks. We were always trying to fight the banks. So we always viewed ourselves as kind of outsiders. So that’s an ironic framing. You know, I joined Canaccord Genuity, in 2008, in September of 2008, which was, as most people might remember, who were old enough, right, as the financial crisis was really, you know, kicking into full gear. I think two weeks after I joined, Lehman Brothers went bankrupt. And I remember that, at the time, my, my firm Canaccord had to make the tough choice of cutting a bunch of people from the staff. Now we were in way better shape than everyone else. Like we weren’t exposed to mortgage backed securities, there were other banks going bankrupt, having to get bailouts, we had to do a little downsizing. And I somehow managed to avoid getting fired, even though I only joined recently. And I had no value to add to the company. Like I was a political science major, and I got this job mostly on my charm and good looks. And so I have nothing really like I have nothing of value to add at all. And I remember going to my boss’s office and just saying, hey, look, I’m just thankful that you didn’t fire me. I haven’t I haven’t done anything with myself. But I appreciate you see the long term whatever. And he’s like, just rolled his eyes and was like, Are you kidding me? Man, like, I didn’t fire you because you’re not worth firing, like I spend money, more money on paper clips, and I spend. Now he’s like, No, get the hell out of my office and keep your goddamn head down. So that’s what I did. For the first four months or something, is the shit was hitting the fan all around me, I sort of kept a low profile and emerged in 2009. And the Canadian capital markets were one of the first to emerge from the crisis. And the main reason for that was there was actually a commodity boom, that happened shortly after the financial crisis, which has an outsized influence on the Canadian economy, because of our extractive industries, like oil and gas and mining. And there was, you know, still big demand out of China, which was still at a high growth phase, and they were pumping a ton of stimulus into the economy. And so commodities were doing really well. So we actually had great years, like from 2009 to 2000, like 12, right in the aftermath of that. So I was at the time working in a sales role. So I was an institutional salesperson, so I would Institutional Equity sales. So I would cover institutional investment companies like fund managers in the US and Canada. I carved out a niche for myself covering a lot of New York accounts. You know, it’s like, better lucky than smart and sometimes the beginner like the beginner’s mind, works really well. Like I was calling like hedge fund managers that were far more informed than I was and way more experienced than I was, and pitching them, like running billions of dollars and pitching them on these like harebrained ideas and like, for some reason, they bought into them and so I like built a pretty decent practice for myself in New York, covering like the hedge fund industry, and with some clients in Toronto, yeah, but basically like I this is sort of a long winded version, but basically in 2013-14 is when I first started to learn about or first heard about Bitcoin.
Matt Zahab
And do you remember the moment like was that a specific email or letter that came across your desk?
Alex Tapscott
It was a head trader on our desk. Who like turned to me because like, I was interested in tacking innovation. You know, I would say like on our teams, one of the people that was more interested in that, and maybe because I was younger, but whatever. And so he turned to me and he’s like, What the hell is Bitcoin because he’s like, I got a call from a client this thing, you know, it’s going to the roof. I think it was like the first run from like, 10 to $150. Like the first round. This is like the first baby run. Yeah. And I was like, I don’t know, what’s Bitcoin. So we looked it up. And I think at the time, we decided it was sort of a little too early for primetime. But then, you know, I couldn’t get it out of my head. And 2014 is really when I started to drill down on it, and basically became convinced that this was like a cool new thing. It was a new innovation. You know, the underlying technology held a lot of promise to maybe change the industry, but I was working in financial services. And I was at a kind of an inflection point in my career. I was 28 years old. You know, it was deciding what I just finished the CFA, I was like Alex Tapscott, Director of Institutional Sales, CFA, and it was like, wow, I’ve like made it. Yeah, it’s like Mom, I made it. But then I was like, wait a minute, is did I ever set out to have a career doing this? Or did I just think this was my first job out of school. And I basically decided then that, you know, maybe I was making a big disastrous mistake, but that this was my first job and that I was going to try some other stuff. And if I came back to the business, and maybe they would take me back then the worst thing that would happen as lose a couple of earning years, but I’d probably end up back on my feet pretty much that was my thinking. And so I started to do some work in the crypto space started first actually a research project that I did with my dad. And there’s this whole story there but how we got started thinking about it because he was interested. He happened to be interested in at the same time that I was interested in it we got together on a ski trip in Montreux and blah,
Matt Zahab
That’s rare. That’s the first time I’ve ever heard someone getting into crypto or doing research with their old man with their parents. That’s crazy.
Alex Tapscott
We are unique in that respect. Yeah, I mean, he’s, he’s older than I am, obviously, but. But he’s someone who’s had an amazing ability to predict what comes next in technology and how it impacts business in the world. So my dad has written 15 books on Business and Technology. Some of them have been hugely influential, like paradigm shift in the digital economy and Wikinomics. And so to me, to, for me to join this project seemed like a great, fun thing to do while I was trying to figure out my next move, and that research became the basis for more work that we did together. And then finally, we decided to put the material together with some new stuff into a proposal for a book, and my dad took it to his literary agent who shopped it around, and portfolio which is an which is a Penguin Random House, bought the rights paid us a big advance and by global distribution and said, Okay, go write the book. So it was kind of like an offer I couldn’t refuse, right? It was like I was looking for something new to do. I wanted to be in crypto, I wasn’t sure what. And all of a sudden, this Opportunity landed in my lap to collaborate with my dad and write a book about this thing that I was really interested in. Now, of course, there are some details like I didn’t know how to write a book.
Matt Zahab
That’s, that’s That’s it what I wanna ask about. Like, again, I that’s it’s on my to do list. It’s something I want to do before I die. What is the process? Like how much of a shitshow? Is it? Like, what’s your software stack? Talk to me about your your, you know. I know, some people use Notion, you know, some people use Evernote. You could be Google Docs die like Google Docs. But what’s your What about? What about your creative workflow? What do you do?
Alex Tapscott
Yeah, so it’s relevant, because I’m actually writing a new book right now, which I’m happy to talk more about. Most people don’t know this.
Matt Zahab
Crypto related?
Alex Tapscott
Yeah, Web3. I’ll tell you. I’ll tell you about that in a second. So Well, I mean, like what technology tools you use, like, yeah, we use Dropbox. And we use Word and we used Outlook. And that was about it. We’re kind of like low tech, when it comes to writing. You just want to make sure you do you have version control, and you don’t lose any drafts. That’s the most, two most important things. But there’s a lot that goes into the research that that’s kind of interesting, you know, with the first book Blockchain Revolution, like we had no idea really what we were writing about. I mean, I’d written this report called The Bitcoin Governance Network in 2014. And, you know, it explained what Bitcoin was and what I thought were some reasonable steps to help Bitcoin be more successful. And that was, you know, I exhausted all the knowledge I had a Bitcoin in this report. And now we had to write 100,000 word book about this, and explain what it meant for business and society and so forth. So we had to interview a lot of people because there wasn’t a lot of, there was not a lot of primary research. It’s not like a lot of academic research or even white papers. You know, nowadays, there’s a zillion startups and protocols with white papers, and there’s, you know, you can go to Vitalik’s blog, or you can go to Andreessen Horowitz, the crypto canon, or you can go to, you know, all of these repositories for information. There’s all these amazing sources today, you know, you can go to Missouri, you can go to the blog, it’s got research, and we have our own research institute, like there’s just tons of stuff back then there was nothing.
Matt Zahab
And you can trust it now, like back in the day, how the like, how do you vet? You know what I mean?
Alex Tapscott
Yeah, it was a lot of like, I mean, I think was such when something is so early stage, and the people behind it are just want to be successful. So badly, they’ll spin any piece of information into like some big positive story. And I think nowadays, it’s matured enough that we can talk about the good and the bad, a little more on right. And so back then, how do you learn about it? Well, you have to talk to people pretty much. And so that’s what we did. So we did over 100 interviews for that book. And back then, people were available. And they still are, I mean, we can I can tell you about what I’m doing right now. But it was a sort of a crypto winter it was it was well before, I think nowadays, we go through these cycles, but we think we know that we will emerge on the other side bigger and better and stronger. But back then there was always that feeling like geez, if I like it made a terrible mistake. And is this technology really not going to work out? In the industry, I think a lot of people were never, never had the kind of confidence that they have now. And so you can talk to anybody. So we talked to you know, the VCs and the founders and the academics, we actually spent a lot of time with the Ethereum community interviewed Vitalik, a couple of times, we were actually in the offices of consensus systems. In New York, when the Genesis block got mined for Ethereum. We were there for the launch. And it was actually our node that our minor, the minor in the office there that actually mined the first block, which is pretty cool. That’s cool. Yeah. But like at the time, I mean, I don’t know if your listeners know about consensus, but basically, you know, it’s sort of like the big dev shop for Ethereum of the early days. And these days, it’s really focused on its partnership with so Metamask for examples of the amount of consensus people that’s something everybody probably knows. And at it’s so it’s an organization today that’s been backed by, you know, JP Morgan and MasterCard or something, back then the office was smaller than the office that I’m in right now. And it was me and four other people. And two of those people are my dad and our editor. So there were like two or three people from consensus. The Ethereum network when it launched, you know, had a market, implied market cap of, you know, $80 million, which was a lot because the token sale price is much lower than that. You know, so this was early days, you know, and honestly, the time just sort of writing the book, we should have just, like, bought as much ETH as we could and then retired, but we’ve done fine, but it’s like, you know, it’s just a ruse, a reminder, just have how early and how far from guaranteed anything was in the industry at the time. So a lot of interviews, and a lot of a lot of hypothesizing you know, we had to basically we described a whole bunch of like imaginary things that didn’t exist. We talked about crypto collectibles, before the existence of NFTs. We talked about decentralized computing and decentralized power grids before the invention of Filecoin, or the invention of a cash or helium. We talked about a decentralized Uber, which has become like a meme and crypto, like who’s gonna invent Uber, we actually wrote it up in 2015 called, we called it Suber we reinvented the startup called Uber like super that was like supposed to be distributed. Uber. So we talked about all these things that didn’t exist yet. And because the whole market was like $10 billion in size and like Ethereum didn’t even launch when most of our work was done on the book, right? So today, it’s a lot different. Today, there’s a lot more that you can hang your hat on, there’s a lot more, not only what’s written, which is, you know, you can write as much as you want, but there’s a lot more stuff going on. There’s a lot more applications there live with users, you know, with assets that have private product market fit, there was no stable coins, you know, there was no $20 billion of NFT sales what we’ve had in the last 18 months there was no you know, Hollywood Studios embracing crypto which is what’s happening now or like big banks or payment networks, it was all very early stage at the time. And so things have changed.
Matt Zahab
It’s been so quick it’s bananas. I gotta get into your creative process there but give me your routine. What do you do? Are you a morning writing guy at lunch after work kind of thing? Like do you have a specific time slot or ritual coffee tea like to do anything to really get in the zone?
Alex Tapscott
I do a lot of research first. And so like, I will speak to a lot of people or will we use a service where we get all our interviews transcribed. So we get all the interviews, transcribe them natural quotes, and then we’ll organize those quotes into like the concepts that we want to use. And then we’ll we’ll fit, I say, We because I have an editor on my project on this one, we will fit the quotes and the concepts that we’ve read in books and other sources into an outline. So you have to like we always start with like a very annotated outline and get a deep, deep outline. So like a 10,000 word outline for 100,000 word book, and you try and lay out as many different things that you want to talk about should reorganize it. So you’ve already got like a, an architecture, a framework that you have for the book, you don’t just start with a blank page and start writing, you have to, at least this is my process. Skeleton, first grade was like very detailed. It’s like the skeleton and the nerves in the marrow and the muscle and you’re trying to add the skin and the eyeballs and the rest of it like your, your your long way there when you can get the big, big, you know, hidden stuff done first. So you start with that, then do a ton of research. And then typically what I’ll do is spend, you know, a couple of days a week where I’m writing a lot, usually Fridays, and Mondays.
Matt Zahab
Lock yourself in the office grind kind of thing.
Alex Tapscott
Pretty much. Yeah. Yeah, we’re, I’m just writing. So I can write, when I sit down, I can write 5000 words in a day, doesn’t mean it’s like, they’re good words. But they’re worth 5000 words. Yeah, you know, and so you can get, but you can only do that, once you’ve done the rest of the hard work. And then the rest of the week, I’ll like, make the 5000 words not sound terrible. And try to make them decent. fit them into what you’re trying to say. And you know, you keep doing interviews, and you keep reading more, and you keep iterating and keep going back and tinkering and readjusting and moving stuff around. And like this. It’s a funny process. You know, I have conversations with, with my editor, who’s, you know, also like research collaborators. She’s She sits in on every call. We do with you know, with interviewees. Her name is Kirsten Sandberg, she was an executive editor at Harvard Business Press for 15 years, and was the editor on Blockchain Revolution. So she’s working with me on this new project as well. And, yeah, we just, we just, we just collaborate. And it’s like an intensive process that consumes your mind. And in nine months of your life, and then in the end, it’s done, and then you hope it’s not a disaster, people like it.
Matt Zahab
Now you got a beautiful book like this to show the world. Now, this book, in particular digital asset revolution, there’s so much in this now, I think it’s great for both beginners and vets in mind, you have no vet, but it’s easily scalable. And it doesn’t go on and on about anything. There’s just so many different areas of crypto, finance, DeFi, you name it, that’s in this book. Is there any particular area at the moment that you know, they get you a little hard that you’re very bullish on that tickles your fancy, I know I’ve seen you on a couple of podcasts on Cosmos and ATOM is any protocol defined layer, whatever you want to call it, NFTs anything that has your eye at the moment?
Alex Tapscott
I would say that I’m really interested right now in like NFT based storytelling and in like token gated communities, and that’s something that I didn’t think I was going to be interested in. I I would say that my because of my background and financial services, I was more focused on DeFi you know, we said in the first book that blockchain has the potential to change different elements of the industry, moving money, storing money, lending money, accessing credit, how we, you know, do identity, how we, you know, get access to growth capital, how we trade assets, and, and so when I saw and things like UniSwap came along, or like Aave or like a compound, and it was like, Oh, my God, these are blockchain based, smart, like decentralized models for lending and for trading. And for all those things I just described. This is so cool. And so that’s something that took like a lot of my focus and NFTs and art and creative content like and generative art projects and things like that I didn’t pay as much attention to and I still frankly think that there’s a lot of like hot air and kind of BS in that space. But I do think that the idea of tokens as membership in new social networks or new communities like token gated communities, and DAOs I think is an amazingly powerful concept. And I’ve also been spending some time looking at and even participating in like I’m not a big NFT whale or like a big bomb like aping into like, like sweeping floors and buying 1000s of people, right do you like buy like a thing here or there? I think it’s kind of interesting. It’s not enough for them. I can really move the needle for me, but I’m just interested in it more like conceptually. And these are, these are projects that I find really interesting. There’s one called the NV3 that I’m really interested in. This is like a small project. But basically the founder is a Hollywood screenwriter, she was on the founding screenwriting team for Stranger Things. She wrote the character of 11 for like four years, and has a new show on Apple TV that’s coming out where she’s the lead writer and showrunner. So she’s like a big deal screenwriter, and so in Hollywood, and has developed this, basically cinematic, a new cinematic universe of 6000 characters with about two dozen lead characters, and you can actually go and buy a character. And it’s basically like imagining like 1977, if you’d be able to like buy your own Stormtrooper or buy Boba Fett or something before, before the movies came out. And so you would get an opportunity to like to have bragging rights over that. But you’d also potentially get to participate in the economic upside, if any, if your character gets used in any content that like makes money. So it’s like having IP rights, which is something that exists with NFTs already. And also you can have a say in the creative process, you know, it can be a community created storyline. So the idea basically is like, imagine inverting the entire Hollywood screenwriting model where instead of the, the studio, having 100% control over the IP, you’re basically turning over control of the IP to the fan base. And the idea is I can’t you know, you live and die in Hollywood, on your fans, and so can your fans by being state economic stakeholders and the environment, the University of creative actually help you to co create, like new stories and to actually, like, participate in that journey. And that’s just the kind of thing that, to me, it’s really interesting, because it’s a reminder that digital assets can be anything. Because Dixon from Andreessen Horowitz says that they’re like containers, you know, you can put if a website is a container for information. tokenism web is extremely a container for value. So what are things that has that have value? Well, you know, money and gold and stocks and bonds and titles and deeds and loans and other things, you know, financial assets and traditional assets, but art and collectibles and IP and you know, our identities, votes in an election and maybe even stories in a cinematic universe. And characters are things that you can own as assets. And the idea of like community owned networks and community on projects, to me is really fascinating. So that’s, like more accurate and more like academically interested in that than anything else. And then in terms of specific protocols, you know, I am very positive on the cosmos space. And part of that may be as a bias. I know a lot of people in that in that community. You know, one of the founders is a friend another Toronto guy, like that’s another one, like the entire cosmos project was started out of Toronto.
Matt Zahab
I didn’t know that. Wow.
Alex Tapscott
Oh yeah, that’s another one. Ethan Buckman is a Canadian kid, not kid anymore. He’s an adult like the rest of us. But, you know, it was a kid from Toronto who had this idea and he and Jay Kwan launched the token sale raise $16 million in 10 minutes now it’s worth $5 billion. And a lot of the founding team was patient Toronto, I actually it’s funny I was I was like, total digression. But Ethan and Jay, once presented to group of white haired Toronto businessmen at this thing called the creative destruction lab at the University of Toronto, and basically, the idea was get a bunch of like rich Toronto people together and have a bunch of kids can compete for their investment dollars, like real life shark tank or Dragons Den. And J and Ethan were in this program, and they got kicked, kicked out, because nobody wanted to invest with them, they were willing to basically like pre sell, like to fund the development of Cosmos, you know, to 10% of the float of all the tokens for like a million bucks or something, which today would be worth half a billion, they’re really different. Or maybe even less at the time, like 200 grand or something like comically small amount. And all these guys were like, I have no idea what you’re talking about, like this is all gobbly gook. Like and they got kicked out. And then nine months later, they did the token sale and raise 16 million in 10 minutes. And now the thing is, I think one of the most important technology innovations, you know, in the blockchain space, and the reason I think it’s interesting is that one of the benefits of, of crypto is the idea that we are dealing with composable pieces, right, like Lego blocks, so you can stick all these different, you know, applications together to create, you know, composable liquidity so you have like, you know, access to more dollars that are being lent to a pool. So there’s, you know, cheaper credit or something like that, like those benefits, and that the pieces can also click together into like a more robust sort of stack of financial applications or web three applications. But the reality is that these are built on disparate stacks. So there’s like the Ethereum side and there’s the EVM compatible side, but then there’s Solana and then there as, you know, app, like Aptos, these other like so called ETH killers, whatever that are coming out. And as a result, we have to rely on technologies like bridges as a way to basically connect these different chains together. And you know, bridge basically, it’s like an escrow account where like, you put a bunch of money, then you get like, wrapped version of a token against it. So the bigger, the bigger the bridge gets, the more bigger targeted becomes now, that’s why we have all these bridge hacks. So basically, having all of these like Ethereum, like protocols where you are beholden to a main chain, like to a global super computer blockchain creates the need for these things. Now, what cosmos is imagining is a different kind of architecture, simply that applications will have all their own chains, they’ll be connected via like a form of inter chain security, because lots of people are staking assets across different chains. They’ve got a vested interest in the whole ecosystem. And as a result, you know, projects will have the ability to have you have composable liquidity without having to rely on bridges, you can have the composability because everyone’s got their own chain. But you’ve got some common set of technology, right? And so to me, that’s, that’s the kind of architecture that like, it just inherently seems to make more sense. If we’re actually going to have, you know, a metal. Let’s say, there’s a Metaverse and there’s a different verb, like your, your, your instantiation of the Cryptos, you have an avatar, that’s an NFT or something and you own it, and you want to move it between different environments. And those different environments are on different chains, like how are you going to do that? It has to be interoperable, and it makes more sense if applications have their own shades, basically. So there was much smarter people in the cosmos community that could have maybe articulated that better. But, you know, that’s just, it just seems to make a lot of sense. So we’re really interested in that concept.
Matt Zahab
On a very qualitative side. I’m a big believer of when the smartest people in the room and people 100 times smarter than you are all preaching something. Mind you, of course, their skin in the game. Yes, a lot of these people who are 100 times smarter than me to have, you know, a healthy bag of ATOM, but at the end of the day, like there’s usually a good reason for it. You know what I mean? Do your research, make sure that they’re not just pumping their own bags, and it all checks out on my end. So I’m a big fan as well. Folks, we’re gonna take a quick break and give a massive shout out to our sponsor the show and that is PrimeXBT I’ve been using PrimeXBT for a hot minute. And I absolutely love these guys as they offer a robust trading system for both beginners and professional traders. It doesn’t matter if you’re a rookie or a vet you can easily design and customize your layouts and widgets to best fit your trading style. PrimeXBT is also running an exclusive promotion for listeners of the Cryptonews Podcast. Use the promo code CRYPTONEWS50, that is CRYPTONEWS50. All one word to receive 50% of your deposit credited to your trading account. Again, that is CRYPTONEWS50, CRYPTONEWS50. All one word, to receive 50% of your deposit credited to your trading account. Let’s talk about some traditional stuff for a bit. The dollar milkshake theory. This is a great one. You had a nice little spiel about this. I want to say a month or two ago. But who’s the guy on Twitter? What is it Santiago fund who’s always bumping it? That one? Yeah, he’s I don’t know his real name. But he is always pushing this, you could explain it a hell of a lot better than I can. I’d love if you could give our listeners a quick little rundown of the dollar milkshake theory and what is currently happening in sort of the macro FX market?
Alex Tapscott
Well, the dollar milkshake theory is not a theory, it’s a fact. And a different name. Before this guy came up with this milkshake concept, I think it’s better just to call this dollar steamroller theory, which is basically whenever there’s like a global financial crisis or liquidity crisis that the US dollar does extremely well. And it does very well at the expense of other assets, and especially risk assets, and especially stocks. So, you know, starts with risk assets, but then it spreads to other currencies. So emerging market currencies are trading at very, like historic lows relative to the dollar. And it’s spread into fixed income because of the concerns around rising rates. And all of these things are interrelated, obviously. And then it spreads into other currencies. So you see, you know, the yen and the euro and the pound trading near historic lows against the dollar. And those are assets that are supposed to be themselves sort of like reserve currencies and world so what hoped is Bitcoin and you know, other crypto, which has a collective market cap of less than trillion dollars, have when you’ve got this giant, you know, million pounds steamroller squishing everything in its sight. So this is something we’ve seen play out and if you want to look to crypto, specifically just point to march 2020. financial conditions were at a historically tight level. Actually, recently, they’ve been almost as almost as tight as they were back then. Which suggests that maybe you were in the sort of the worst of the pain and then an ending is in sight. We’ll see about that. And it happened in 2008. And it happened in 1998 and a half kind of 2001 that happened and it you know, like you could go back through time in modern history, right? Every time there’s like a global financial crisis or squeeze, you know, like 98 It was the long term capital management, the Asian currency crisis and all these like, you know, Asian Tiger Economies, like, you know, Thailand and, and Taiwan and Korea, like the other currencies got completely obliterated. So, milkshakes been around, it’s been the milkshakes been churning for some time, or it gets turned on once in a while. So this to me is really nothing new. So yeah, we need like intervention or, or easing of financial conditions. I thought maybe we were in store for that, like the dollar had rolled off pretty hard going into the Fed announcement on Wednesday. But then the Fed announcement turned out to be not as dovish as people thought. And now we’re in a position once again, where the dollar is retesting new highs. So we’re basically kind of back in the same place. So yeah, the milkshake theory is alive and well, for sure.
Matt Zahab
Why is it called milkshake though?
Alex Tapscott
I don’t know. I think the idea is like you put all these other assets into a blender and then just get like turned into goo. That’s the best. That’s the best I’ve got for why it’s called the milkshake theory.
Matt Zahab
Like it’s sort of catchy. But again, it has to make sense.
Alex Tapscott
I think the steamroller theory is a better idea.
Matt Zahab
It’s weird. Maybe I’ll fire my DM. I’ll see why he why he coined it the milkshake theory. Twitter, we’re both big Twitter guys. You’re way bigger than I am. I’m not big on Twitter. You are big on Twitter. Twitter is the goat of crypto. It’s so much fun to be on such a great place to learn. You think Musk is going to implement some Dogecoin payments or perhaps a Twitter native token now after he removes trading from NYC and has full control over it? You think he’s gonna if he has any tricks up his sleeves?
Alex Tapscott
No. I don’t see any not in the short term. Any sort of potential for crypto integration into into Twitter any more than what we’ve already seen? I mean, they have like NFC. PFPs. Right. provable ftbfs Already, I think, pretty little adoption there.
Matt Zahab
Yeah, the hexagon. But that’s, you know, such a small subset of the overall users. How’s Twitter going to make money besides this eight bucks a month thing?
Alex Tapscott
I don’t know, advertising. How else do social media companies make money? I think I don’t, I shouldn’t like, I should not say with such confidence what Elon Musk will or will not do. Because if history has taught us anything, he said the guy is highly unpredictable. And you know, he’s a creative, very creative person and kind of loves anarchy. So would probably try all sorts of ideas, if it could, you know, shake things up and irritate some people, maybe making a lot of money in the process, right. So I think that if though, if a web three concept, whatever that might be, you know, tipping with Dogecoin, or, you know, some sort of like Twitter token that you can earn as being like a top producer, I think that makes a lot of sense. Like a governance token, Twitter really, in my view, would probably work better as a user owned network is a protocol, where instead of paying $8 a month, people who are contributing a lot of value to the platform actually get compensated back instead. And you might be able to do both, like, it could be possible that the $8 a month is just a way to, like, do KYC and verify people to prevent bots and frauds. But then on the back end, you know, if they had a token that, you know, top producers could actually earn a piece of that content. I think that’s potentially a way that it could be integrated. You know, Dogecoin is payments. I really would not I don’t I don’t know but I would put very little stock in that is any kind of thing that that will work in Bitcoin, or Dogecoin is just a Bitcoin fork, you know, yeah, sure. It’s got a higher TPS, but like it’s not there yet. When it comes to like payments make more sense if there was like, tipping USDC or something that would honestly make more sense than then Dogecoin but like I said, He’s highly unpredictable person, so you do never know.
Matt Zahab
He is yes, you answer. Often on his rocker in the best of ways. Yeah, Alex, this has been a treat and now we’re getting tight for time here. We have a segment on the show called the hot take factory. Let’s put our shit kicking boots on. We’ll jump in the factory. Give me an Alex Tapscott, hot take doesn’t have to be finance or crypto related can be food, politics, sports, geography, you name it. Can you give me give me a couple good hot takes.
Alex Tapscott
A hot take? Well, this might not be a hot take. But I think the Toronto Raptors have a chance of winning the NBA finals this year. I don’t know if anybody cares about sports. But I’ve been watching them play playing the first few games. Yeah, this year, like they’re really starting to click. And I think like we’re one trade. We’re one trade away from being like one of the top two teams in the East. And I think that we could easily make it all the way. So that’s just like a little sports tidbit. You know, when it comes to web three and crypto, the one thing that I’m really looking for looking forward to or keeping an eye on the next year is enterprise adoption of public blockchains. So we’ve been through this before. We’ve talked about like big companies buying into like blockchain as a concept, but then going and building their own consortiums or something like that, or building their own chains. What we’re seeing now is that more and more big companies are embracing public blockchains and there’s a few reasons for that. Number one, the technologies more and more capable and ready for primetime. And so like if you’re Starbucks or Nike or LVMH, or some other big company, you actually see like a path to like getting a business case built on this platform and on this technology. Number two is that I think that that move from proof of work to proof of stake, and the greening of Ethereum, quote, unquote, has definitely removed a key obstacle for a lot of corporate leaders, especially if publicly traded companies that are like consumer facing who frankly, have to worry about these issues. And so they should, about the footprint of you know, what technology they’re using. And then the third thing would be that just the rise of NFTs in general have really lowered the barriers to doing cool stuff in crypto without having to like reinvent the entire wheel, like you can launch an empty project and, you know, engage with a, maybe a community online you didn’t engage with or like engage with your existing customer base in a more sort of novel and creative way. And I think that’s become a really easy way to do it. And I also would just say that, like, I think at this stage, the cat is so out of the bag, that it really doesn’t matter what the price level is in crypto, like we’re gonna see way more web three initiatives in the next little while. And you just have to point to what’s happened in recent memory. Like, just this week, we saw fidelity launching its zero fee, crypto trading platform, we saw Facebook Meta launch NFTs, Instagram, we saw last week MasterCard with a couple of big announcements, you know, so basically, there’s a lot of big enterprises announcing stuff and what would normally be considered the bottom of a bear market, or like, you know, towards the bottom of the bear market. And that I think, is interesting, because the two are two factors are no longer correlate. It’s like, oh, prices are number went down. So like companies are out on crypto, just listen to what the MasterCard, head of payments and risk said he’s like, in five years time, this asset class is gonna be way bigger than it is today. You know, price is not important to us something like the fact of like, the fact that prices are dead today is irrelevant, we’re gonna keep on keeping on with what we’re doing. And I think that’s basically the thesis in a lot of big companies. So, you know, it would be if there was some irony and hope, relying on corporations to be, you know, buyers of an asset or users of a technology that’s supposed to decentralize the economy and decentralized markets. The fact of matter is, like, if you want this technology to change the world, having Global Fortune 50 companies jump on board, it’s probably part of, it’s probably not a bad thing. And by the way, like, this isn’t just about. So it’s like, what does this have got to do with the market and price and value and so forth? It’s like, well, you know, if companies are going to start using networks, like Ethereum, and then a sub substantive way, like in a real way, where they’re, you know, running applications, maybe they want to be, you know, validator, maybe they want to stick ETH, maybe they need ETH to pay for gas fees, you know, to run transactions for their customer base, all of those things are demand side drivers of buying ETH, right. So like, it’s not just a press release, it may just be a press release, or, you know, whatever an opportunity to sort of, like, do some innovative, you know, cost play for those companies. But if it leads to real stuff, and we’re seeing that in a lot of instances, Nike and Starbucks are a couple of examples. Yeah, then it’s going to lead to like a demand side push into the tokens, which is going to drive the entire market value higher as well, right. So this is not, this isn’t just about hand waving. And look, companies are validating our idea. It’s actually they can be net buyers of the actual asset class, which in a way is, is being users of the technology, right? Those two things are interrelated. Obviously.
Matt Zahab
That’s it’s one across the board. I’d love to see that. Kind of go back to the Raps. Gotta go back to the Raps for a sec. What do you what do you think we’re so good? I can’t see. I can’t see is getting past Milwaukee?
Alex Tapscott
Well, I say we’re one trade away from being one of the top two teams in the east. Right. So I think that and then you never know, like in a finals like I think, I think I think there’s a couple of things. One is a trade and then another thing would be Scotty Barnes so like if Scotty Barnes can make a big leap this year, from the season last year, to like a top 20 guy in the league. That means we have two top 20 guys in the league. So I think Pascal is gonna have a light set season he’s already showing that you know, and then you’ve got a supporting cast and I think that yeah, we just were funny team. We’re a bunch of like tall, big, athletic forwards. You know, I don’t know what the missing pieces but I just think that like we could compete and then I think the East is actually stronger than the West this year. I think Boston is still a threat. I think that Milwaukee is obviously like the cream of the crop so far. In the West I Golden State, you know, obviously defending champs but I think I think teams are beatable, like I don’t know, I think I think we’re a decent Dark Horse to make a deep push into the playoffs. I think if you look at the rest of the East other than Milwaukee, I think we can beat them. All right, like, I think Philadephia and Brooklyn’s shitshow. And, you know, Boston’s coming off of the coach just leaving and who knows how they’ll react to that. They’re still very good, obviously. But, you know, there’s just there’s a window of opportunity there that I think is kind of interesting. And then in the West, I’d say like most teams have probably made a regression. The Golden State’s probably about the same as they were so you know, who knows, we might get the final might get to the Eastern Conference Finals and get swept out by Milwaukee, but Stranger things have happened. So I’m pretty bullish on the Raps this year.
Matt Zahab
Love it. Maybe we’ll see a Ninepoint sponsorship on the roughs. That’d be a treat.
Alex Tapscott
Yeah, maybe. Unlikely.
Matt Zahab
Ninepoint takes over the current jersey sponsor, that would be electric. I’d love to see Imagine if ETH did that. I’d love to see a big crypto sponsor for some Canadian I know BitBuy Did some autocentres stuff and whatnot. But Alex, what a three man really appreciate your time. Just incredible knowledge left, right and center. truly appreciate it. Before we let you go. Can you please let our listeners know where they can find you and all of your ventures online and on socials?
Alex Tapscott
Yeah, absolutely. I mean, the best place is on Twitter. As you mentioned @AlexTapscott. You can also check out our website for ninepointdigital.ninepoint.com. That’s where you can learn about our Bitcoin ETF and other initiatives that we’ll be announcing soon. You can also check out our podcast DeFi Decoded on YouTube on the Ninepoint Partners YouTube channel. And wherever you get your podcasts, Apple podcasts, Spotify, you name it. We have a terrific show. On that we typically interview some like break guests. We’ve had a number of people from the cosmos community we’ve had. You know, Anatoly Yakovenko, the founder of Solana, we’ve had the top VCs in the industry. We usually just have great guests on that show. So I’d strongly encourage you to check that out. And yeah, this has been fun, Matt, I really appreciate the invite. I hope we can do it again.
Matt Zahab
Yes, we’ll do round two in person. We’ll get some good content going and we’ll blast that for all the young kids on Tik Tok and we’ll go viral. Alex, appreciate it man. Great time and folks grab Digital Asset Revolution at your closest bookstore or online. And do we have a title for the new book yet? Or is that TBD?
Alex Tapscott
TBD at this point, the web3 book.
Matt Zahab
The web3 book when it comes out Alex will be on for round two Alex really appreciate it man. All the best.
Alex Tapscott
All right, take care.
Matt Zahab
Folks. What an incredible episode with Alex Tapscott. As always I will include everything important and relevant in the show notes. This will be available on everything and if you love this and I hope you did please do subscribe it would mean the world to my team Nice. Speaking of the team love you guys and listeners you are the goats appreciate you love you keep on growing those bags and keep on staying healthy, wealthy and happy. Bye for now and we’ll talk soon.
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