Alex Tapscott and his father Don are two of the most recognizable thought leaders in blockchain. They’ve also been supporters of ICON from early on. Don signed on as an official advisor to ICON ahead of the token sale, and the pair wrote ICON into the intro to the latest edition of their book, Blockchain Revolution, three times.
Last week Alex was in Seoul – his second trip here – to speak at TV Chosun’s Global Leaders Forum. Fellow Iconist writer Robin J. Wolf and I met up with him in the lobby of his hotel to ask him about the future of blockchain, his impressions of Korea’s blockchain scene, his beard, and of course, what he thinks of ICON now.
What follows are the more interesting excerpts from our full interview, which lasted nearly an hour.
The Iconist: First, I want to say, I dig the beard. Is that just for Movember?
Alex Tapscott: No, I’ve had it for like almost a year.
The Iconist: Okay. The press photos still show you as the clean shaven kid.
Alex: I know, people see me with the beard and ask “Wait are you the guy we hired to come give this talk?”
The Iconist: Can we talk a little bit about ICON and how you got involved in it? Why you were so up on the idea of ICON to begin with?
Alex: Yeah I was first introduced to ICON through DAYLI Financial, which is a subsidiary of Yello Group. I was interested in the work that DAYLI had done, They were a super innovative financial technology company that was creating a whole bunch of great products and services.
When they announced that they were planning on doing a blockchain project, I was very interested in that. I was then contacted by my friend Min Kim who asked me to take a look. Now, at the time, I was running a big cryptocurrency investment company and so I was looking to make strategic investments in projects that I thought were really compelling or interesting. ICON was one of them.
What I liked about ICON was that it was part of a broader trend of new platforms that were emerging to try and address some of the limitations of existing blockchains. And they were focused on a couple of the specific areas that I thought urgently needed to be addressed.
What I liked about ICON was that it was part of a broader trend of new platforms that were emerging to try and address some of the limitations of existing blockchains. And they were focused on a couple of the specific areas that I thought urgently needed to be addressed.
One was scalability and the other one was interoperability, which most blockchains at that point, and still today, by in large aren’t really able to achieve…
The other thing that I thought was really interesting about it – I knew that the DAYLI Group had an outsized reputation in Seoul and they were making an impact, so I liked the idea of having exposure to a project that was a regional leader and had a potential to become a global leader.
The Iconist: You mentioned specifically interoperability. With interchains that’s really the point of it in the end. But I haven’t personally seen enough progress on that with any of the interchains. Have you seen any real-world use cases?
Alex: It’s an incredibly difficult problem to solve. I think that’s the big issue.
I think there are few projects that are making big progress on that front. ICON is one of them, AION is another, Cosmos is another, and Polkadot. I think that AION and ICON are further along than any of the others. Most of those other platforms that I just mentioned haven’t even launched yet. But, yeah, it’s a difficult problem to solve.
The upside here of what they’re trying to achieve is not only to run assets along different blockchains but to actually be able to run applications across different blockchains. Basically being able to have a smart contract that runs on Ethereum be able to talk to runs on ICON. It’s a difficult problem to solve, and I think they’re doing a pretty good job.
The Iconist: What do you see in the longer run with the interchains?
Alex: I think what you’re going to end up with is a web of blockchains, basically. I’m skeptical about most of these new platforms. I think that it’s unlikely that we’ll end up in a world where there are dozens or hundreds of separate platforms and separate governances, but I think that there may be a few. And are going to be the technology, the layer that allows them to talk to each other…
The Iconist: I guess that one of the questions with interchains is if they’ll connect private blockchain versus public blockchains and how you connect the two. That’s something I’ve heard quite a bit from the ICON team.Â
Alex: I think that private blockchains are useful in a lot of different environments, but I don’t think that they’re going to be stand-alone entities. I think they’re going to be based off of public blockchain infrastructure and that’s just a logical thing.
During the early 1990s, a lot of companies were very interested in the Internet, but they didn’t want to expose themselves to this open network that was seen a little bit chaotic and was still trying to figure itself out. So they hired tech vendors to build really expensive intranets so that they could have shared workflow and share information, and messaging, and email, and everything else.
Intranets didn’t really take off in the same way that the internet did. But rather, what we saw was all sorts of CRM software solutions, SaaS, other things built on top of the internet. So I think the same thing will happen on top of public blockchains is that you’ll have private implementations that will run on public infrastructure. And that requires these platforms to have some level of customisation, which is I think it’s the real reason why a lot of them launched in the first place.
If you look at Bitcoin, it’s a single-purpose device. It does one thing really well: It allows you to store and move Bitcoin. But it doesn’t allow you to do anything more than that really. And so, projects like Ethereum – the first to launch – and some others like it have tried to build a general-purpose blockchain.
I think that that’s the next logical step: To build a general-purpose blockchain that’s customizable enough that you can have private and public type implementations.
There are lots of reasons why you might want a read and write access only blockchain, where only certain participants can even use or see what’s happening in a given marketplace…
The Iconist: Let me come back to a couple of things that you mentioned before, because I think they’re important. One was around the issue of pricing. Right now icon is still 5 to 6 times the ICO price.
Alex: 4x
The Iconist: Is it 4x today?
Alex: Well, the market’s just getting absolutely annihilated.
The Iconist: I didn’t even check the coinmarketcap before I came in today.
Alex: Yeah icon was at like $0.60 now it’s at 47 or…
The Iconist: Wonderful, great way to start the day.
Alex: I know. It was actually last night I checked and I was like “ugh”
The Iconist: You still have a large holding of ICON, I suppose.
Alex: Yeah I’m a big investor in ICON, and I have a lot of faith in them. But you know, if the whole market’s selling off, then something like ICON is going to do poorly as well. The general market, as a whole, is so early stage that there is not a lot of differentiation in how these things perform.tings.
If Bitcoin’s up, then everything’s up, and if Bitcoin’s down, then everything is down. I think that that’s going to change over time because there’s going to be more fundamental reasons to invest in these things. And as there are, it’ll be easier to value what’s doing well versus what’s not doing well. Projects that are failing will become less valuable and projects that are succeeding will become more valuable which is a logical thing, obviously, but we haven’t really seen that so far.
The Iconist: ICON recently debuted a couple with the Seoul Government. One was ICON Vote, another one was ICON ID. You obviously have an opinion on this because you wrote a big op-ed in the New York Times the other day about moving elections onto blockchain… Why are the people who say that blockchain technology is not ready for this yet wrong, and why are you right?
Alex: I think that there are two criticisms. Number one is that online voting at large is not a good idea, and number two is that blockchain is the wrong technology. On the first point, I agree (laughs). That was the premise of the article actually. Most solutions that we’ve created or have been composed have been built on a technology infrastructure that is actually not suitable for voting.
A vote is a lot like a payment of money. If you vote, it’s important that your vote be counted, that it be counted for the person you intended and that you vote only once. Kind of like if you were to send money to someone, it’s important that you don’t send the same money twice. When it comes to blockchain voting, there’s already a number of proofs of concept of this, and a few examples of it put into practice where it’s worked really well.
It’s important that we start by trying early in lots of different use cases: non-deliberative polls, corporate votes, other sorts of nonconsequential examples to battle test the technology before rolling it out.
In terms of what does the future hold for online voting, I just look at what happened in this election, and every single day I’m reminded of why it’s a good idea. It’s like Winston Churchill said about democracy, “It’s the worst political system except for all the others.” Maybe that’s the thing with blockchain voting. It may not be without its challenges, but if you look at the way that things work today, it’s a complete disaster.
In Canada, I actually spent two years as an advisor to Elections Canada on their Advisory Board where we consulted them on elections best practices. There are a number of problems with the way things work in the US. The fact that they have paper ballots and they use voting machines is one of a hundred problems. It may not even be the biggest problem. Using this technology could dramatically improve the transparency and auditability of the outcome, which especially given what we’ve seen happening in Florida and Georgia and some of the congressional districts where there are questions about how votes were reported, where they were tabulated, who was recording them, what kinds of machines they were in, whether or not those machines were tampered with. All of those things are problems that can be overcome by using blockchain.Â
The Iconist: You mentioned that there were already several successful examples of implementing blockchain into elections processes. Could you share some?
Alex: In voting, not necessarily in the elections process, Votem, did this for the Rock and Roll Hall of Fame and the National Radio Hall of Fame.
It’s a very interesting use case because the Rock and Roll Hall of Fame basically asked people to vote on who they wanted to join the Hall, and one band in particular did really well, the band Chicago. They got 150 million votes, which you know, I don’t care how much you love the band Chicago, there are not 150 million people in the world voting for Chicago. So someone had basically been able to print votes by spamming the system.
So the Rock and Roll Hall of Fame did something different. Using Votem where they required people to create their unique individual identity which were they tied to a single vote. They had about a million or two million votes cast in that example, and Votem did an audit on the outcome. To the best of their knowledge, there was no example of fraud or double spending.
One of the criticisms of online voting also is that if you and I are sitting here, and instead of going to the polling station, you say I’ll pay you $20 for your vote. That’s not something that can be easily overcome. It’s an example of one of the limitations. But you have to balance.
This is one of the things we talked about with Elections Canada is you want to balance the net good with the net bad. The more people who participate in the democratic process, the more legitimate the outcome. The data says that people who typically don’t vote because they can’t get to polling stations are young, or they work two jobs, or they’re new immigrants, or they’re poor, so as a result the outcome is disproportionately representative of certain kinds of groups and under represents others.
So if you can get a hundred new people to vote and one person is bribed for their vote, that’s net positive. Maybe that’s a controversial thing to say, but in the end, the more votes, the better, honestly.
The Iconist: Nouriel Roubini came out saying that not just crypto, but the underlying technology of blockchain is bullshit. I’m sure you’ve read his opinions on this. Do you have any particular ?
Alex: Well, I’ll put it this way. People a lot smarter than Nouriel Roubini have said that Bitcoin is bullshit… Like Warren Buffett said Bitcoin is bullshit. So we can respond to that. Nouriel Roubini is a provocateur and he is a “permabear”. If you’re negative on something for long enough, you’re going to be right eventually.
He was negative on the market for 20 years, and then the financial crisis came along and everyone thought he was a genius. But everyone forgot that during those 20 years, he was bearish in the biggest bull market of all time. So, I don’t know. He’s just one of those guys. I don’t have a problem with someone voicing their opinion. It’s up to people to demonstrate that it’s wrong. But I’d rather respond to Warren Buffett than Nouriel Roubini on something like that.
The Iconist: What have your impressions been of Korea over the past few days?
Alex: I like Korea a lot and I’m really curious about this market because it seems to me that blockchain is a bigger deal here than it is almost anywhere else on a per-capita basis. I think there’s greater awareness, there’s clearly greater adoption, there are a lot of really interesting startups.
It seems to me that there are also a lot of big companies and governments more willing to use the technology to be a model user rather than to just talk about it than anywhere else that I’ve seen.
You know, I was sitting down with an executive from a big Korean company who said basically that they had 47 different blockchain projects underway and 59 developers. When I asked him to describe those different projects, because sometimes you hear that companies got lots of pilots and things, they are really amazing use cases and really clearly articulated. And I was thinking, if I were to speak to the same guy in a same kind of firm in a different country, I would have gotten a different kind of response. Now, maybe it was just this one company and this one person, but there’s enough of those data points that I’m really really optimistic and hopeful about Korea as a place for blockchain.
During the World Cup, we did a bracket where we pitted all these different places against each other and asked people to vote and we combined that with some of our underlying criteria for what makes a good blockchain innovation city. Seoul finished I think 7th out of 10. But I would be prepared to move it up the list because I think it’s got a lot of the different factors to be successful.
The Iconist: What was number 1 on the list by the way?
Alex: New York
The Iconist: Really I would have expected Zug or something
Alex: Zug is number 4. Zug is really interesting. It’s benefited a lot from regulatory arbitrage, basically by making it easy to domicile and do business there. It’s attractive to a lot of companies and a lot of capital and a lot of people. But it’s also a canton of 25,000 people versus a metropolis of 10 million for New York or Seoul or something like that…
It’s like when people say why isn’t Malta on the list? Because it’s Malta. It has certain things going for it but generally speaking, for the same reason that Jeff Bezos relocated Amazon to New York and DC and not to like Detroit, you need to have people, capital, transportation, ideas, universities, entrepreneurship, and companies. Not a lot of places have this combination of different factors.
What’s interesting about blockchain is that because technology is more evenly distributed and because this is a technology itself, which is decentralizing, you see a lot of places other than the Valley demonstrating leadership. Because we’re talking about a technology that’s going to change value industries like financial services versus information industries like publishing…
If you’re the government in Korea, you can either push people out or you can bring people in. If you can create the conditions for this industry to thrive, then people will relocate. They will come to Seoul to do business.
The Iconist: OK, so Seoul came in 7th. To move up that list, what are some specific policy recommendations that you have?
Alex: I think that you’ve identified the main lever that can be pulled because there are some things that are harder to change than others. One thing you can change is you can create regulations and policies.
So I think the solution is to create a second option to the traditional securities laws and regulations to make it easy for companies to do token sales and understand what the rules of the road are.
It’s about finding a balanced solution that enables the innovation to work while also protecting the integrity of capital markets and protecting investors. Not protecting investors like being their mommy or something. It means just allowing them to make informed decisions with real information that’s been vetted. Does that make sense?
I don’t pretend to know exactly how that shakes out. I think that’s the only way to do it. Otherwise, you end in the scenario where companies are offshoring their token, their foundations because they’re worried about the rules. Any big company that wants to do a token sale is not going to do it unless there’s some level of clarity on this issue.
Also, I think you need that anyway because most of the value that’s going to be created from most of the origination that’s going to occur I think in the next few years is not going to come from utility tokens, it’s going to come from financial assets like stocks. It’ll be companies issuing equity on the blockchain basically. So you definitely need to have rules in order to do that.
The Iconist:  I think you’ve been known as somebody who is a big advocate for blockchain technology. What we’ve seen here in Korea is that maybe last year or earlier this year every company – every startup – tried to move onto the blockchain whether or not they had any business doing so.
Alex: They have an expression for that here; it’s called a reverse ICO. I’ve heard that expression used in a completely different context. A reverse ICO I think of as a company that did an ICO and realized its project didn’t need a token so converted back into equity or returned capital to investors.
What happening here is that technology companies are launching blockchain solutions where they may not need one. I think that’s a combination of things. One is that the technology is still really exciting and there are lots of use cases. But also, it’s a funding window.
If you can raise 10 times the amount of money during a token sale than you could in a venture capital financing round, then you’ll do that even if it may not make the most business sense.
So, I think the whole period from October or November of last year to March of this year was bad for the industry; it was an unhealthy thing because where we are today is light years ahead of where we were 18 months ago or two years ago in terms of the value of the assets, the progress of the technology, and the number of viable use cases.
On the other hand, because we’ve benchmarked ourselves to this all time high, everybody feels down in the dumps. So I would like to see the next phase of growth to be a little bit more steady and a bit more thoughtful than what we’ve seen.
