Given the turmoil in the crypto sector, some people say the blockchain revolution has been permanently cut off at the knees. Others think market setbacks and implementation challenges will eventually be overcome, potentially enabling the mass adoption of a decentralized Internet 3.0, or Web3, that will revolutionize how people work, play, and earn a living.
So, what should executives think?
According to organizers of an upcoming Ivey Academy workshop on blockchain and Web3, forward-looking organizations should always explore new technologies because disruptive technologies come in waves and future-oriented leaders need to understand the building blocks of each new wave in order to “recognize it’s coming impact on the market, their industry, and their organization.”
Meanwhile, Alex Tapscott—portfolio manager at Ninepoint Partners and co-author of the bestselling book Blockchain Revolution—argues that even leaders who aren’t thinking long-term because they are too busy simply surviving today’s challenges should be acting like true believers in Web3.
In this Ivey Business Journal interview, Tapscott discusses what has happened since the publishing of Blockchain Revolution, along with his new book Web3: Charting the Internet’s Next Economic Frontier. And for nonbelievers, he explains why he thinks betting on a decentralized future is as deadly practical as Blaise Pascal’s wager on God.
IBJ: Alex, years ago, you and your father, Don Tapscott, published Blockchain Revolution, which became an international bestseller. It highlighted what was billed as a “profound technological shift that will change how the world does business—and everything else—using blockchain technology, which powers the digital currency Bitcoin.” Your latest book about Web3, which refers to the next generation of the Internet, is billed as a guide to everything from the metaverse, NFTs, and decentralized finance to decentralized autonomous organizations (DAOs) and self-sovereign identity. The first three are generally well known, but what is a DAO?
Alex Tapscott: Decentralized autonomous organizations, or DAOs, are digitally native organizations owned and governed by their members and users. DAOs begin with the premise that to attract the best people you need to give them ownership. But while traditional Silicon Valley ventures use equity to provide upside to employees, DAOs can use tokens that can be earned or distributed to anyone on a global scale. This is already taking place today, especially in the world of decentralized finance, or DeFi, which is in essence the financial services sector for Web3, where everything from how we move and store value to how we trade assets, access credit, and manage risk will be revolutionized. DeFi should not be confused with Fintech, which essentially just improves how we access existing financial services using robo-advisors or other new tools. Fintech is useful, but it’s sort of innovation at the margin while DeFi is about re-imagining financial services from the ground up.
IBJ: What is a good example of a DAO mixing things up in the world of finance today?
Alex Tapscott: I can list a dozen examples, but I’ll pick one of the best, a decentralized exchange called Uniswap. Operating on the Ethereum blockchain, it allows users anywhere in the world to trade various assets without an intermediary. Rather than having a centralized order book as you might find on a traditional market like the Toronto Stock Exchange, Uniswap connects buyers and sellers in a peer-to-peer market. Now, all exchanges need liquidity in order to be useful. Uniswap provides it via its community of users who can earn rewards by supplying the exchange’s liquidity pools. Long-term users are rewarded via airdrops of UNI tokens, which enables community ownership over the protocol, while allowing stakeholders to vote on protocol changes. Thanks to the network effect, the usefulness of the system increases as more people use it. As a result, during its relatively short history, Uniswap has often seen more dollar volume on a daily basis than well-known centralized exchanges like Coinbase or Kraken, and despite the crypto market’s recent challenges, the market capitalization of the UNI token is still somewhere around US$3 billion. So, it’s a very interesting experiment in user adoption and scaling, and a good example of Web3’s potential to drive serious financial sector innovation.
IBJ: OK, thanks, now what about self-sovereign identities? For people unfamiliar with the term, can you give us a quick definition?
Alex Tapscott: Before we dive into that great question, it’s helpful to understand what it meant to be an Internet user during Web1 and what changed with Web2, so I will highlight that first. The terms “Internet” and “the web” are often used interchangeably, but they’re actually different things. The Internet was created in the late 1960s as a military defense project that aimed to create a communication network that would survive a nuclear attack. It didn’t become a public tool until after Tim Berners-Lee came up with the idea for the World Wide Web in 1989.
IBJ: For readers who don’t know Berners-Lee, he set out to facilitate information sharing between the world’s universities and scientific institutes while working at CERN. And he achieved this by merging evolving technologies, data networks, and hypertext into an easy-to-use global information system, which became the web, what we now refer to as Web1, right?
Alex Tapscott: Exactly. But while Web1 launched the dotcom era, it was a pretty limited platform that basically just enabled the digital broadcasting of information that had traditionally been distributed in print or appeared as ads in magazines or newspapers. Web2 represented a huge step forward because it introduced new ways to shop, network, and collaborate. And a big part of that revolution was a valuable thing called UGC, or user-generated content, which includes information ranging from what people do and where they go to what they think and purchase, and so on and so forth. All of this data essentially created a digital me and a digital you and a digital version of everyone else who uses the Internet. But in the Web2 world, this information isn’t necessarily owned, or at least not controlled, by us. It is controlled by social media networks, search engines, and e-commerce platforms, along with companies, government agencies, and other organizations we interact with. And this virtual version of you and me, as it turned out, actually knows more about us than we do because it remembers where we went and what we bought and what it cost along with how we searched for it and the number of clicks we made while searching for things.
IBJ: And not just the last thing we searched for, right?
Alex Tapscott: Right. The data retained is from today and years ago and all the time in-between. And that’s problematic, and not just because it can fall into the wrong hands. The information we are talking about is extraordinarily valuable, which is why the most valuable companies in the U.S. market today are built on it. But despite the value of the information that Internet users create, they don’t have the means to monetize it because of relationships with online platforms that we sort of stumbled into. Web1 was fun and open, but it was limited, and anarchy sort of ruled. With the rise of Web2, order was created, but Internet users entered into a sort of Faustian bargain. We agreed to a system of digital feudalism by basically giving away our data in exchange for free services. And I think people are belatedly realizing that this was not a totally fair trade. While the privacy issue still seems less important than I think it should be, the economic issue about not being able to monetize our data is a driver of Web3. The future as I see it will basically invert the model from digital feudalism, where we are basically giving away all of our data in exchange for services, to a form of self-sovereign identity where you control and own your data, and you decide how and when it’s used, and if it is used, then you can get compensated for it.
IBJ: How would this work?
Alex Tapscott: One of the building blocks of Web3 is a thing called a digital wallet. In the physical world, wallets contain more than just your bank and credit cards. They contain your identity along with other things unique to yourself. Digital wallets that are used to store Bitcoin and other cryptocurrencies can do the same thing. So, instead of giving away your data just to do something online, imagine storing everything from your location and fitness data to your surfing and shopping habits in a digital wallet that enables you to decide what to share and on what terms when doing things online. This doesn’t mean pictures of your pet will suddenly become valuable in Web3. It just creates a more balanced relationship between Internet users and big platforms. If something about you is of value to them, you might as well get compensated if they want access to it.
IBJ: A lot has happened since you published Blockchain Revolution. What did you get wrong or fail to anticipate?
Alex Tapscott: Well, I think anybody who writes a book about a new technology does so with an open mind and focuses on its potential to change things. If not, then what’s the point? But it also requires the author to imagine a world that doesn’t exist yet, but could. And when we wrote Blockchain Revolution, we were pretty optimistic, but not blind to potential limitations or adoption challenges. We actually had a whole chapter about what could go wrong. In that chapter, we talk about things like what would happen if the technology doesn’t scale, or the user experience remains clunky. We also talk about how the revolution could be held back by the resistance of incumbents seeking to maintain the status quo. We noted open-source platforms might prove impossible to govern effectively and that early adoption of blockchain by criminals might ruin things for everyone else. And we talked about the potential impact of government policy. Regulation is a precondition for most industries to scale because most companies will not invest without knowing the rules of the road. But regulation of emerging technology must be thoughtful. And we noted governments might fear blockchain or misunderstand it and seek to prevent it from reaching its potential. All of these things were valid concerns at the time, but we chose to see them as implementation challenges to be overcome because of the potential we saw in blockchain technology to create a whole new class of innovative companies and organizations while flattening the world, improving economic inclusion, and making it easier for people to move and store value. When looking back, it is fair to say some things have failed to meet our expectations while others have exceeded them.
IBJ: What’s an example of where things exceed expectations?
Alex Tapscott: When we wrote Blockchain Revolution, most of the things that we were talking about were completely hypothetical. Bitcoin was really the only existing use case out there worth talking about, and it was kind of single-purpose. The other uses cases we talked about were extrapolated from what we were seeing in really early-stage projects. And we talked about things like maybe finding ourselves in a world in which creators get paid for their digital artwork. And that was before NFTs created a market worth billions of dollars.
IBJ: OK, so where did your expectations fall short?
Alex Tapscott: The music industry moved slower than we expected. There are some interesting Web3 music platforms like Audius, which is an early-stage decentralized alternative to subscription services that rewards artists that trend within the platform with a native token. But generally speaking, our expectations for this industry have not yet been fully realized.
IBJ: What else?
Alex Tapscott: When writing Blockchain Revolution, we expected financial services to undergo a big upheaval over the next decade because we saw banks leading enterprise adoption. But while there has been a lot of finance-related innovation with the rise of decentralized finance and the introduction of things like stable coins, banks and other traditional financial institutions are not leading enterprise adoption of blockchain in a big way. Instead, they have been playing a game of wait-and-see while some big non-financial companies like Microsoft and Nike have gotten serious about Web3 strategies.
IBJ: As we have discussed, the Internet started as a read-only environment, which is why Web1 had relatively limited applications, then we shifted to an interactive read-write environment that enabled online collaboration, social media, and shopping thanks to the World Wide Web. We’ve all experienced this transition, but not everybody has a solid understanding of where things could be headed, so can you briefly describe—without getting into the technology that enables it—what will change in our home and work lives if Web3 reaches its potential as you see it?
Alex Tapscott: Web2 didn’t replace Web1. We still use computers and browsers to access information, so that hasn’t changed. But we saw the rise of the social web and user-generated content while smartphones and other portable devices introduced mobility. Big platforms also became big-data aggregators. That’s probably the most lasting legacy of Web2. Moving forward, Web3 will not replace Web2 or kill Facebook or Google or any of the big companies forged in Web2. But Web3 will bring a whole new layer to the Internet experience by turning users into owners. For Web3 to work, of course, people will need to become comfortable with owning, earning, storing, and moving digital assets. So, it is possible that Web3 taps out at, say, 400 million people, and never becomes something widely used by everyone. But I’m of the view that human beings are capable of all sorts of surprises, and that user behaviour can change very quickly.
IBJ: Do you think generational change will be a deciding factor?
Alex Tapscott: I think that a lot of what’s in play is generational. For many young people today, how they present themselves online is an increasingly important part of their persona. And if presenting yourself online to them involves Web3 assets, platforms, and networks, the innovation I am talking about is going to happen and the user experience will change.
Alex Tapscott: Well, I think people will find that they have more privacy along with more control over their data and the ability to earn money from that data. They’ll have a whole new set of financial tools that make it easier to store value and move it peer-to-peer across borders. Everyone will have new ways to earn money and many of us might end up working for a DAO, which will seriously benefit people in places where local markets don’t offer a lot of employment opportunities.
IBJ: What else?
Alex Tapscott: Creators will have new ways to connect with fans and directly earn money from them, while fans will have a whole new way to experience the creativity they enjoy.
IBJ: Is this where the metaverse comes into play?
Alex Tapscott: Yeah, if the metaverse emerges as envisioned, work and play will benefit from an immersive shared-reality experience. And this experience will enshrine demand for digital property rights that enable people to move digital assets between virtual worlds. Otherwise, we end up in a world of virtual Disneylands—where you might be able to play a game, and buy and sell stuff, but remain fundamentally beholden to individual platforms because your assets can’t be moved.
IBJ: So, I can tell my nephews that they will eventually be able to take their favourite sword and suit of armor from Assassin’s Creed Odyssey and use them in Grand Theft Auto?
Alex Tapscott: Yeah. That’s the dream, I suppose. That and being able to sell their Assassin’s Creed armor to someone else, using a peer-to-peer blockchain transaction without involvement from the videogame developer.
IBJ: Years ago, the potential of data warehousing was initially hyped by highlighting a use case involving a major retailer that reportedly improved the sale of beer by simply placing it next to racks of diapers after data suggested fathers on the way home from work were tasked with getting baby supplies. This story was made up. Today, some people question the hype around blockchain use cases and Web3. Instead of a revolution transforming the world, they see a blockchain market dominated by failed projects, bankruptcies, vaporware, and unscrupulous operators. Some people in this camp of negative Nellies even question the need to solve the Byzantine generals problem, which requires that truth be established trustlessly. In other words, they question the feasibility of, and need for, a blockchain revolution that requires the mass adoption of what they call low-liquidity tokens. What are the critics missing?
Alex Tapscott: In 1993, half of the world’s population had never made a phone call. Today, technological tools and capability are more distributed than ever before. Meanwhile, governments around the world are way more sophisticated about industrial policy and about technology policy than they were in the past. And there are plenty of countries around the world looking to catch up to the U.S. market by encouraging investment in blockchain innovation. In the United Kingdom, for example, the prime minister recently stated he wants to make the U.K. one of the world’s Web3 capitals. That’s just one example. So even if one jurisdiction tries to put the brakes on the blockchain industry, it’s not going to die.
IBJ: So, the critics are not taking a global view?
Alex Tapscott: Well, the critics sort of fall into one of two camps. The first sees the need for centralized control over markets and the services they provide, arguing anything else leads to a dangerous increase in speculation while creating new ways for criminals to avoid law enforcement. This blinds them to the potential of what can be achieved in terms of economic growth by letting innovators experiment. And the other camp of critics focuses on the technology, arguing it is too slow and cumbersome, so why not just trust traditional databases along with companies like Google and Facebook to take care of things for us. And that’s more of a solution-in-search-of-a-problem critique. But in the early stages of a technology, there are always critics who see the innovation as being useful to only a few hobbyists. And these critics are often proven wrong because final use cases are not always obvious. Ask yourself what was Twitter or YouTube trying to solve when they were invented based upon user-generated content. So, why not let people experiment while recognizing it takes time for technology to reach its potential, right? We didn’t go from Tim Berners-Lee Tim inventing the World Wide Web in 1989 to Uber in a day.
IBJ: OK, so now a technical question. Does Web3 as you see it function using a single dominant blockchain? If so, is this dominant blockchain decentralized like the one introduced by the original Bitcoin?
Alex Tapscott: Well, without decentralized blockchains we end up with hyped-up databases controlled by a single company, and then we don’t have Web3 at all. We end up with the virtual Disneylands that we discussed earlier. Virtual amusement parks are nice, but they are not representative of new frontiers, which require decentralization to open. I don’t know what blockchain will deliver Web3, but I think we need as much block space as possible and so I see a scenario in which several platforms merge to deliver it. Like the Internet, Web3 will be a network of interconnected networks.
IBJ: By block space, you don’t mean block size, which is a major area of industry dispute?
Alex Tapscott: I am not talking about block size, per se. Rather, I am saying we need more blockchains and more network capacity than we currently have. If I’m right that trillions of dollars of value could move to these systems, we will need more capacity, just as we need more cloud-computing capacity to handle more and more information flowing online.
IBJ: Most people believe Bitcoin today is pretty much the same as the Bitcoin used to make the first real-world transaction in 2010, when 10,000 Bitcoins bought two pizzas. If truth be told, there are at least three versions of Bitcoin supported by competing blockchains and communities that each claim association to the original Bitcoin while insisting competing ventures are scams. The forking of Bitcoin into multiple versions arguably happened because people attracted to trustless systems don’t work well enough together to sustain a single blockchain long-term. Whatever the case, today’s blockchain ventures all claim to be the way forward. As a result, companies and organizations interested in developing Web3 offerings ironically need to figure out which decentralized trustless system to trust or consider a centralized system that limits the potential of Web3 applications. Thoughts?
Alex Tapscott: Well, in a way, I would say that’s sort of the beauty of these networks, where stakeholders are free to disagree and fork to go their own way based upon their own version of what works best for the future. But if you look at the value of the competing versions, there’s really just one Bitcoin with some much smaller varieties worth a fraction of its value combined.
IBJ: So, just to be clear, we are talking about Bitcoin trading under the BTC ticker, which you say is the Bitcoin the market talks about while the others are simply competing versions with much smaller market caps, right?
Alex Tapscott: Yeah, that’s right. But I would add that disagreements within the Bitcoin world will not have an impact on the evolution of Web3 as I see it. Bitcoin is a really interesting and useful technology and asset class. But the BTC community doesn’t really aspire for it to go far beyond its current use case, so it isn’t where I see things opening up the Web3 frontier. And that’s not the case in other communities that support other blockchains like, say, Ethereum, where there are developers trying to build decentralized platforms for social networks and gaming and streaming, and much more, in addition to various financial services. And this is where innovation related to digital assets and blockchain is more experimental, and, frankly, more exciting.
IBJ: In your book, you list numerous challenges that could disrupt the ability of Web3 to reach its potential. What are the most significant?
Alex Tapscott: I would say the most significant challenge at this point probably relates to adoption, meaning will Web3 grow into something that everybody uses. We know for a fact that Web3 applications can seriously benefit a huge population of people, including ones exposed to hyperinflation or suffering from being underemployed or lacking access to bank accounts. But adoption will ultimately come down to the usability of Web3 tools and consumer comfort levels with things like digital wallets. When thinking about what could go wrong late at night, I sometimes worry that adoption could play out like in the video game industry before smartphones. In other words, Web3 could become a huge market in monetary terms while still only attracting a relatively small number of global users. That would mean the first phase of Web3 would reach some kind of plateau with 300 or 400 million people participating while the rest of the world sits on the sidelines because using wallets and passwords to earn and control digital assets involves too much friction or feels foreign. That’s a legitimate risk, but like other risks, I consider it an implementation challenge that isn’t much different than the one faced by the Internet in its early days. I remember my dad showing people how to surf the web on a show hosted by Pamela Wallin in the 1990s, and the demonstration he gave was very intimidating to a lot of people. And this says to me that challenges to Web3 adoption can be overcome with time and tool improvements.
IBJ: What other challenges do you think about late at night?
Alex Tapscott: The history of disruptive technologies is another occasional late-night worry because there are times when momentum becomes an unstoppable force and there are other times when the widespread commercialization of a new technology doesn’t happen despite its immense potential. Nuclear power generation is an example. It could have basically helped solve climate change while providing our power needs as the auto sector electrifies. But high-profile disasters at Three Mile Island and especially Chernobyl damaged public perception of this technology so much that decades later we’ve got this lingering bias that negatively drives public policy. And I sometimes worry recent high-profile disasters in the crypto space will inflict the same kind of reputational damage on Web3.
IBJ: So, are you saying that FTX and other scandals could prove to be Web3’s Chernobyl?
Alex Tapscott: I am saying that’s a question, one that I thought about a lot when the FTX scandal broke. Like nuclear power, the decentralized nature of Web3 represents a better way to do things, but negative perceptions that could negatively impact public policy must be overcome. History clearly says this can happen. Trains used to derail all the time, killing lots of people, but these disasters didn’t stop trains from revolutionizing transportation. Given the potential of what we are talking about, FTX will likely be viewed as sort of a footnote in the history of Web3. But it is an issue.
IBJ: What about quantum computing? Does it pose a serious threat to the blockchain revolution by threatening to make current encryption methods obsolete?
Alex Tapscott: Well, here is where I risk being accused of talking from both sides of my mouth. I know people have raised concerns about quantum computers arriving on the scene and breaking blockchains, but that’s amongst the least of my concerns. If we get quantum computers that work at scale, we’ll unleash all sorts of new capability and productivity, but while I am not writing it off, I don’t see this happening anytime soon. I’m just not sure quantum is imminent.
IBJ: But in the meantime, you see the potential of Web3 as something more likely achievable, or at least in a shorter timeframe, right?
Alex Tapscott: Yeah.
IBJ: What about patents? Over the years, many people have claimed to be Satochi Nakamoto, the inventor of Bitcoin, including Craig Wright, a controversial Australian who has spent years building up a war chest of patents as the chief scientist at nChain. Long story short, nChain is a Web3 company controlled by Canadian billionaire Calvin Ayre, who promotes a blockchain fork known as BSV while insisting its token is the only legitimate version of Bitcoin. Pointing to a LexisNexis report that implies nChain is one of the world’s most dynamic innovators, Ayre essentially argues the company is the only viable venture in blockchain town. But members of the BTC community insist Wright is a so-called Faketochi who can’t be trusted. Critics also question the value of Wright’s patents along with the relevance of the LexisNexis report, which a spokesperson says was based on changes in patent data, not “subjective” judgements. Whatever the case, as Forbes recently warned in a feature entitled “Satochi Or Not. Here He Comes,” the nearly 4,000 patents that Wright controls, or has pending, could potentially force computer programmers around the world to stop using open-source software unless they “pay up.” So, without getting into Wright’s dispute with his critics, which has sparked numerous high-profile court battles, do you think navigating patent issues needs to be taken much more seriously by Web3 developers who consider blockchain an open-source technology?
Alex Tapscott: I honestly am not up to speed on the industry spats you mentioned, but I see zero impact on the evolution of Bitcoin to date. And as far as patent issues go, most blockchain and Web3 projects are open source so communities can build on them. So, given the industry’s open-source mantra, I don’t see patents being a sticking point unless something changes.
IBJ: Given all of the above, what factors should business leaders consider when deciding whether or not to be an early adopter?
Alex Tapscott: Well, before even thinking about strategy, the first thing to do is get educated.
IBJ: And what’s the best way to do that?
Alex Tapscott: They can buy my new book, and get one for all their employees, friends, and relatives. But seriously, there is a wealth of information out there, including industry reports. Just dive in.
IBJ: A lot of what exists out there is untrustworthy, not to mention misleading propaganda published by bad actors. Is this an issue?
Alex Tapscott: You clearly don’t want to be misinformed.
IBJ: OK, so while it is still early days, do you think educating yourself via trustworthy executive development programs is worthwhile, given the misinformation and propaganda out there?
Alex Tapscott: Sure. No harm in that.
IBJ: What other advice do you have for people looking to understand the opportunities you see in this space?
Alex Tapscott: Personal engagement is just as important as finding trustworthy sources of information. So, get a wallet, buy a digital asset, move it peer-to-peer. Play around with blockchain applications to see how they work, and you’ll get an idea about existing strengths and limitations. Anybody can do this. In 1994, you could read a 300-page book about the Internet, or you could buy a personal computer and get a modem connected to your phone line, then simply try typing something into Netscape Navigator to see what happens. Simply jumping in as an early user enlightened a lot of people about the potential of the Internet early on. That’s what business leaders should be doing today despite the fact that we are still in the relatively early days of Web3.
IBJ: Doesn’t it make sense for some organizations to take a wait-and-see approach, given that the initial impact of Web3, like the early Internet, will not be equally felt across all industries?
Alex Tapscott: All business leaders should be knowledgeable about where we are potentially going with the rise of Web3 so they can have a thoughtful action plan. Back in the 1990s, a lot of companies across a lot of industries—think Kodak, Borders, Tower Records, Blockbuster, and JCPenney—were standing on a burning platform and didn’t see it. They could have moved earlier to fend off the disruption of retailing, camera manufacturing, and video distribution, but concluded changing business models to be early adopters of emerging technology was riskier than staying what proved to be a doomed course. So, the big question today is which companies are standing on a burning platform. And that’s a pretty good reason to be vigilant about becoming educated and trying to keep up to speed with what’s happening today.
IBJ: In other words, you can’t tell if you should be an early adopter until getting a feel for whether or not you are at risk of being disrupted. Right?
Alex Tapscott: That’s my way of looking at it. It is basically like Pascal’s wager.
IBJ: Can you explain the reference?
Alex Tapscott: Sure. Pascal’s wager refers to a pragmatic argument for accepting the existence of God that was presented by Blaise Pascal, a 17th-century physicist, mathematician, inventor, and philosopher. He said living with faith is the most rational thing you can do because if God doesn’t exist you lose nothing, aside from perhaps giving up some worldly pleasures, while the potential upside down the road is huge because you end up in Heaven. Meanwhile, if you dismiss God outright, and find out you are wrong down the road when you die, you end up in Hell. And that’s what it is like when it comes to believing or rejecting the hype surrounding new technologies that could prove to be material to your businesses in the future. In other words, if the critics of Web3 and blockchain are wrong, then the downside to not exploring the possibilities I see today could be enormous.
IBJ: So, you are saying why not hedge your bets, right?
Alex Tapscott: Yeah.
IBJ: What other takeaways do you have for people interested in the potential of blockchain and Web3?
Alex Tapscott: The full title of my new book is Web3: Charting the Internet’s Next Economic and Cultural Frontier for a specific reason. Exploring some frontiers requires superhuman strength or vast amounts of capital in order to overcome the related challenges. Think climbing Mount Everest or venturing to Mars. But history says the most economically bountiful frontiers are tamed by everyday people driven by a desire to do something different. And that’s why a lot of the innovation we are talking about isn’t necessarily going to happen top down, or even at big-name companies. Innovation in this space is coming from everywhere, and it’s happening kind of all at once, around the world, and it is currently being forged by developers and technologists, along with everyday users who don’t control big purse strings or big companies. In a way, this is how major technological innovations have always been pushed because big-name companies have traditionally had big blind spots. Xerox missed an opportunity to commercialize the graphic user interface. Microsoft missed its chance to dominate the web browser. The list of examples is long because leaders of old-paradigm business models have a hard time embracing change. In fact, they often react to change with hostility, and that prevents them from seeing around corners. That said, today’s executives are in a really tricky position. On the one hand, they need to ensure that they don’t dismiss potentially game-changing technology, but on the other hand, they don’t want to be responsible for investing too early in a technology as it is maturing. This presents a classic dilemma. It is often economically rational for well-run businesses to ignore new technologies, especially when most major customers aren’t asking for it. But focusing on the present risks waking up one day and finding your organization on the back foot because of dramatic changes driven by fringe players. So, strategy development today is a balancing act, and managing it at the very least requires awareness of what the future could look like as a result of innovation in blockchain solutions and the Web3 space.
Hubert Pun and Roberto Armena, “How Web 3.0 Has the Potential to Transform the Freelance Economy,” Ivey Academy (blog), June 5, 2023
Hubert Pun, “Understanding the Basics of Blockchain: Cryptocurrency, NFTs, and Digital Disruption,” Ivey Academy (blog), Feb. 2, 2023.
“How Blockchain Technology is Already Shaping the Future of Business,” Ivey Academy (blog), Jan. 17, 2023.