Co.int podcast
Collective Intelligence podcast speaks to Ray Chohan
In this podcast, Alex Shkor speaks with Ray Chohan.
Ray is a founder of West & VP New Ventures and the co-founder of Patsnap ($400m under management): a unicorn that counts Tesla and NASA amongst its clients and manages millions of intangible assets. Ray is a huge fan of Web 3.0 and a Web 2.0 leader who understands the business potential of Web3 technologies.
Listen in to hear how and why Ray decided to get involved with Web 3 technologies, in addition to tokenization of digital assets and how the tech can bring value to economies worldwide.
Listen in to hear how and why Ray decided to get involved with Web 3 technologies, in addition to tokenization of digital assets and how the tech can bring value to economies worldwide.
Ray Chohan
Episode highlights
• how and why Ray decided to get involved with Web 3 technologies
• tokenization of digital assets and how the tech can bring value to economies worldwide
• tokenization of digital assets and how the tech can bring value to economies worldwide
Episode transcript
Intro: Welcome to the Collective Intelligence Labs podcast where we talk with the world's best leaders about an inevitable transition to the Web3 century creative economy. Please welcome your host, CEO of the Collective Intelligence Labs, Alex Shkor.
Alex: So, Hi everyone! Today we have with us Ray Chohan, co-founder of Pet Snap leading R&D intelligence software and unicorn company. Ray is a big proponent and investor in Web3 industry. And I think Ray is a perfect example of a profile of a successful IT entrepreneur, who got deep into Web3 space.
And from my personal opinion, this is exactly the profile of a person who we need more in the Web3 space in order to push adoption to the next level. Tell us Ray, how can we bring more people like you to the industry? What is still missing in crypto for people from enterprise to come on the massive scale? Oh, maybe you can just start with sharing your story on how you got into crypto.
Ray: Oh cheers, Alex. Really looking forward to this conversation today. So I think it might be useful just to kind of set the stage and share with the audience how I ever ended up exploring this rabbit hole in the first place.
So probably like most folks, especially folks from a B2B enterprise background, similar to myself. It would have been in 2017 actually, Alex. I'm always curious and listening to certain podcasts, consuming certain content. If our memory goes back to 2017, it would have been what Q2 and things started really picking up pace in terms of price action, noise especially around Ethereum and Bitcoin and some of the other funny saying now traditional assets. I call it BOGs. so ETH and BTC, just the noise and trying to understand that technology.
So initially just off podcast, and what really caught my attention back in 2017. It would have been, Alex, the concept around smart contracts. So just the underlying principle around smart contracts, smart contract economy, Blockchain and smart contracts could potentially enable that underlying narrative really resonated with me, Alex.
Alex: And actually I think, was a trigger for many people, especially in legal tech. And I think this buzzword smart contract… hence Buterin doesn't like it anymore. I think it was like, it's actually a really good idea to PR it this way. Yeah, I see how, how it brings you to the space, especially from IP perspective and legal frameworks, which smart contracts are bringing for like legal tech. And for advancing the IP industry?
Ray: I couldn't agree more, it was definitely that underlying technology, and then connecting it with what I see within, obviously the IP space, the whole kind of umbrella of legal tech. Also Alex, your personal experience, right? Whenever you purchase a house, or ever make a large purchase, the actual process of people, paperwork, and 15 conversations, it's not much fun, right?
So, when you learn about a potentially game changing, and revolutionary capability, like smart contracts, like wow, holy shit, I can't wait for this technology to be released. To be fair, I was just a fan of what it was, being because like, please hurry up, can you build this because this would be really useful. I don't have to speak to five, six people in the value chain. Those people are getting paid commissions in that value chain, which is really annoying because you sometimes don't need them.
And for code to be law, I really love that phrase, that really caught my imagination. So that was the initial genesis of my journey down the wonderful world of digital assets, Blockchain stroke call it crypto.
Alex: Got it. So, let's talk now about a nice balance. So, imagine if in the future when Web3 really takes off in like, we will have really massive adoption, and at some point, obviously existing IP assets will be on the chain and tokenize these NFTs and it's maybe not even will be patents anymore. How do you think it will affect industry? So, what do you think this change will lead to for patent system itself?
Ray: Really good question. This one I have been pondering for quite a while. So, see my organization, we're kind of the one of the world leaders in providing analytics to stakeholders who have exposure to patents, who work with the asset class, and also the surrounding teams who are involved in innovation. And we do kind of more of that broader body of work around innovation, intelligence, that's kind of our space, but with patents always close to our heart.
So, to your question, do I see the underlying system which has been around for well over 100 years? Do I see that changing anytime soon, within the next five to six years? Probably not! These things take time, that these are fundamentally institutions. They are public, private institutions, and government organizations.
So, the actual patent system? Yes, it can be highly inefficient. But it has served a lot of innovators well, over the last 150 years. So, I don't see it disappearing anytime soon. Do I see this system evolving and adapting to the world of Web3? Yes, I see that, what that will look like in the first innings, how that's provisioned in the first innings.
There's a couple of ideas being kicked around. I think there's some really interesting companies like IP, we're doing some really positive work in this space.
Also, companies like molecule.to who have launched a really compelling concept around early-stage biomedical research and launched the first ever, I think tech transfer based, Dow decentralized autonomous organization, I think that's pretty cool, where you're enabling early stage researchers to actually have ownership within the fundamental R&D and then have upside and economic upside upon success. I think that's really interesting.
So, I think in the first innings, we are going to see this convergence of Web3 eating away and improving part of the IP system. I don't think it will boil the ocean in one go, I think no one's going to do that. To be fair, not even bitcoins doing that with the monetary system, right. Everything is done in gentle baby steps, and you incrementally add value, win hearts and minds, including governments, and, and then take people on, on the journey.
So that's where I see things from an IP standpoint. The good news within the IP space, this is specifically patents, trademarks, maybe federated data rooms within R&D projects, that's potentially low hanging fruit.
And from what we see in the market, customers are open, they are fertile for deploying this technology to enhance R&D, improve openness around their IP strategy and innovation strategy. So, I do see things picking up in the next 24 to 36 months.
Alex: Yeah, thank you for sharing these insights. It's actually, what I really like about this conversation, like what I think very valuable to share with the rest of the audience is that you guys in Patna also started from the Tech Transfer industry, right? And in this also was the first kind of entrance point to the market of IP and RD intelligence.
And looks like we might have the same thing with NFT and DeFi, is just like a bit different type of change, because like it's much more in the change of world business process of R&D and because you need to put these assets on chain, you need to find a new, totally new way for commercialization through DeFi, through like tokenized assets.
Do you think these similarities have some, any of some foundational reason? Or is it just like, happens to be the same way as you guys did?
Ray: Good questions. I've reflected on this one for quite a while. I think the tech transfer community and ecosystem is probably a really fertile place to start, when you're launching new technology, new workflows, new ways of doing things.
So, I think as a beachhead, it's compelling. It worked well for us, especially in our, what I call patent analytics 2.0 phase that was back in 2012, 2013. Right? Also working with that community, you're kind of at the top of the funnel, right? Government funded early-stage research, academic research, where that goes, be it a license, be it a spin out company from a university, which is basically an incubator, you're right at the beginning of that funnel.
So, at the early stage, to start moving your assets onto a blockchain, to start from day one on launching your research or your early-stage company through a DAO and tokenizing it of the, I think it makes sense, right? It's at the beginning of the journey.
So, if you kind of start with that form factor, as that spin out company scales and hit certain milestones, or that technology further develops and it's got people knocking on the door to license it, because it's a really compelling technology. I think if you start off with a Web3 form factor from the roots of tech transfer, it's a healthy place, right? It's a very natural place. The barrier to entry with tech transfer is low, because we're at the beginning of the story, be a license, be at a federated data room, be it a tokenized, small spin out company from a tech transfer office.
Alex: Totally agree. And it's fair, there is an export, I think about this and like, they are basically much more focused on creation of value and Web3 unlocks even more opportunities to create value and capture value kind of automatically when your assets are tokenized.
Now let's switch back to DeFi a bit. So, like it's actually one of the first use cases which took off in Web3 space. And I'm just wondering, what do you think about this, not really popular, but still a widespread opinion, that DeFi is not really a use case of Web3, because it's just an infrastructure for other use cases. And basically, the reasoning behind this idea is that world financial space is just an infrastructure for real use cases, real industries.
So, in my opinion, I really think that once we bring real assets on chain, whatever it can be like an applied DeFi tools for this, it can really accelerate adoption of Web3 space. What do you think about this? What do you think about DeFi and about considering it as a use case or not?
Ray: I mean, DeFi as a, obviously, a stream of Web3 is compelling Ryan, and it's people talking about the DeFi summer, but it seemed like it ended up being the NFT summer rather than the DeFi summer, whether we can come to come on to NFT's later on. But I think DeFi, if you look at it from the first principles standpoint, it has huge potential.
I mean, if you look at Uniswap version three right, in particular version three, which is a lot more user friendly, and is getting a lot more adoption, and obviously you see Metamask improved their digital wallets, but fundamentally, what DeFi is doing in a really elegant way, in particular Uniswap, I think they've got a really elegant solution. And they're one of the leaders in this space, it basically collapses all of the financial infrastructure behind certain yield products, various financial instruments. Literally, is a few clicks of a button, and you're cutting out so many middlemen out of a process, right?
So many people skimming off the top of a financial process, which is what fundamentally traditional banks do. So, what excites me about DeFi is, yep, there's all this noise around price action and yield. And to me, that's all just a bit of fun and noise. All of that stuff's really noise to me, Alex. Well, what, what I really love is the fundamentals behind DeFi is how you can collapse all of that backend infrastructure, which is in traditional banking, and through a Web3 methodology. Remove all that noise, remove all that cost, remove all of that friction, and just pass value back to the user and the customer. I think that's what we need to really focus on.
Frankly, it's bullshit. If you really unpack it, certain financial instruments, certain financial products, and you look out who is getting compensated, what throughout that process, if customers really knew they would be horrified. And I think DeFi removes that, that's what I think is spectacular about DeFi.
And if you look at total value locked in, it's always floated between what 70 billion to what, 98 billion at its peak, so it's tiny if you compare it to traditional finance markets, but it's, I think it's the underlining tech which is really compelling.
Alex: What do you think is important to have as a next breakthrough for DeFi as well? Like is it like security issues, like you heard about all these hacks in DeFi projects and the money stolen so obviously, you know like, we have these infrastructure in centralized finance whereas they pay a lot of for, for this infrastructure and basically justifying their fees.
But at the end of the day, with DeFi we have a smart contract, open-source smart contract deployed, which can be used by anyone. Anyone can deploy their own version of V scope. And it's, as infrastructure becomes really cheap, but there's still some risk in place, there still risk that your money can be stolen, right?
So maybe this is what we need, like, some better security or what, what do you think?
Ray: Yeah, I'm gonna say the big scary R word, which no one really likes, but we have to face it, and boy, it's coming soon is Alex, we need regulation, we need to embrace regulation.
So you are right. Out of all of the DeFi projects, there's some really good projects out there. But there is sadly, and this always happens, the web was like this in the early 90s, well, in the mid to late 90s, and maybe even early 2000s. There is a Wild West component to Web3, in particular DeFi. So we did see some hacks, we did sadly, see people lose funds.
So I think what needs to be done now, and I think it will happen in the next 12 to 15 months is that this space will get regulated in North America, and Europe. And I think they're really thoughtful protocols, which have good investors and have good teams that will partner with regulators to then provision and shape regulatory framework, which fits within DeFi. That's gonna take time, right? That's, it's not gonna be easy. I mean, it's that simple there.
Because each, you're going to have the financial traditional regulatory bodies who've got their incentives. And then likewise, with the entrepreneurs within Web3, and all the customers have their view on the world. What I'm saying is, we have to, this has to happen. Everyone's got to grow up and try to meet in the middle somewhere.
Alex: I totally agree. So, I am also a big proponent of friendly regulation of crypto. To have this friendly regulation, we just need to work closely with regulators and suggest what and how it needs to be regulated, because there's no way that crypto will not be regulated at all. Obviously, any financial infrastructure has to have some regulation to protect investors, to protect users. But
Ray: On that point, I mean, it's happening right now, right? I mean, you got Gary Gensler, digging in, digging his heels quite publicly. In the last three, four weeks, you have everyone freaking out and blowing up on Twitter, and now even LinkedIn a little bit, and all over YouTube, and all the main social media platforms.
But to me, this is a good thing. We now have to, for example, I think what Coinbase are doing, trying to lead the way on, they're building out this framework right proactively. I mean, even though the SEC haven't engaged with them and reply to their emails, or their phone calls. They're taking it on their own back to say okay, we're going to build out a framework, we're going to send you guys a proposal, we've worked seven days a week for the last bloody three months, trying to build out a framework for you guys to review.
Let's now partner together to figure out what is the security? What is the commodity? What does the framework actually look like? So, I think you have to act like Coinbase, trying to be proactive and positive, and actually approaching the right institutions with, with a proposal and say look, this is the icebreaker. Let's get talking, let's sit around the table. Let's get our teams working on this. I think that proach is really thoughtful, and it's great for the wider community.
Alex: And I think you know, what also triggers when I hear. It's also an opportunity for smaller countries like El Salvador, for example, to become faster and regulate crypto, but just don't have that big user base compared to the United States and everyone who wants to work with the United States as a business.
But what do you think about this, was this the initiative of El Salvador, or obviously just taking bitcoin as national currencies is just a small step? It sounds big, but obviously, it's not like adoption of whole crypto projects, but it might be a good start. Do you think it will lead to something bigger or do you think other countries will follow this path?
Ray: Yeah, I think, when we look back in 10, 12 years, what El Salvador like, did last month in terms of officially making it legal tender, I think it is a moment in terms of nation state, adoption, and backing. So, if you learn what happens in Latin America, in Chile, Argentina and Spain Pacific, sadly in El Salvador, it's horrific how their currency gets debased, people can lose their life savings because the banking system has so much exposure. It's insane, right? The whole plumbing and infrastructure there, on the way it used to be.
So, for a lot of people in El Salvador, you speak to folks in Argentina, you speak to folks, even here at Cyprus in 2013, the banking crisis there, you speak to folks in these countries, when they go down the Bitcoin rabbit hole and, and understand it's potentially a revolutionary safe, cryptographic store of value, and a way to predict their wealth, they immediately understand it.
So, I think what El Salvador have done, it is a moment, it does mean something.
Actually, for a lot of these emerging markets, and emerging countries, specifically Latin America, who are doing some amazing stuff around gaming, Web3, I get so many inbounds from entrepreneurs within Latin. It's brilliant the ecosystem out there in terms of early-stage companies is pretty hot what's happening in Latin America.
And they're really hungry, because they feel like they're behind the curve, right? So actually, El Salvador making Bitcoin legal tender being a trailblazer around the general regulation around digital assets. This is actually an economic development opportunity for these emerging countries. The way they're seeing, it's how the US capitalized on the internet in the mid to late 90s.
For a lot of these governments, they're like, holy shit, this is our time. A lot of the countries have a much bigger, have a lot more noise, much larger population.
Because we're smaller, this is actually an advantage, we can get in early, we can make this a big moment in our story in terms of economic development and enabling wealth creation. That's what I love about Web3. It's really here right now.
And if you jump in early, it can help some of the smaller nations who have amazing talent, amazing academic infrastructure, certain parts of that. It could be certain pockets emerging within Europe. I know Estonia are looking at a few things. So, this is a wonderful timing opportunity for the smaller folks.
Alex: Yeah, I hope some, some of these folks will listen, either to this podcast or somewhere else, and like take this advice seriously and start exploring how to bring more value to their country with Web3, with regulation of Web3, I'm sure it will be very well paid off like, in long term.
I think actually, education is one of the most important things to focus on intellectual space, not only because of bringing government employees and likes to our side, but also to just have more developers in the Web3 space. You know, like, there's so not that many people actually yet,
Ray: If you can compare it to the Internet, what in terms of users where we are in Web3. It depends how you classify users, right? Because this term is so loose and broad, but what you hear in the market circle 150 million in terms of users, developers, people who are feeding into the ecosystem, but let's look at real users, right? Metamask, which is the main wallet, has 10 million monthly active, active users. It's fucking tiny. But I think that's the one you got to really look at.
Alex: So, Hi everyone! Today we have with us Ray Chohan, co-founder of Pet Snap leading R&D intelligence software and unicorn company. Ray is a big proponent and investor in Web3 industry. And I think Ray is a perfect example of a profile of a successful IT entrepreneur, who got deep into Web3 space.
And from my personal opinion, this is exactly the profile of a person who we need more in the Web3 space in order to push adoption to the next level. Tell us Ray, how can we bring more people like you to the industry? What is still missing in crypto for people from enterprise to come on the massive scale? Oh, maybe you can just start with sharing your story on how you got into crypto.
Ray: Oh cheers, Alex. Really looking forward to this conversation today. So I think it might be useful just to kind of set the stage and share with the audience how I ever ended up exploring this rabbit hole in the first place.
So probably like most folks, especially folks from a B2B enterprise background, similar to myself. It would have been in 2017 actually, Alex. I'm always curious and listening to certain podcasts, consuming certain content. If our memory goes back to 2017, it would have been what Q2 and things started really picking up pace in terms of price action, noise especially around Ethereum and Bitcoin and some of the other funny saying now traditional assets. I call it BOGs. so ETH and BTC, just the noise and trying to understand that technology.
So initially just off podcast, and what really caught my attention back in 2017. It would have been, Alex, the concept around smart contracts. So just the underlying principle around smart contracts, smart contract economy, Blockchain and smart contracts could potentially enable that underlying narrative really resonated with me, Alex.
Alex: And actually I think, was a trigger for many people, especially in legal tech. And I think this buzzword smart contract… hence Buterin doesn't like it anymore. I think it was like, it's actually a really good idea to PR it this way. Yeah, I see how, how it brings you to the space, especially from IP perspective and legal frameworks, which smart contracts are bringing for like legal tech. And for advancing the IP industry?
Ray: I couldn't agree more, it was definitely that underlying technology, and then connecting it with what I see within, obviously the IP space, the whole kind of umbrella of legal tech. Also Alex, your personal experience, right? Whenever you purchase a house, or ever make a large purchase, the actual process of people, paperwork, and 15 conversations, it's not much fun, right?
So, when you learn about a potentially game changing, and revolutionary capability, like smart contracts, like wow, holy shit, I can't wait for this technology to be released. To be fair, I was just a fan of what it was, being because like, please hurry up, can you build this because this would be really useful. I don't have to speak to five, six people in the value chain. Those people are getting paid commissions in that value chain, which is really annoying because you sometimes don't need them.
And for code to be law, I really love that phrase, that really caught my imagination. So that was the initial genesis of my journey down the wonderful world of digital assets, Blockchain stroke call it crypto.
Alex: Got it. So, let's talk now about a nice balance. So, imagine if in the future when Web3 really takes off in like, we will have really massive adoption, and at some point, obviously existing IP assets will be on the chain and tokenize these NFTs and it's maybe not even will be patents anymore. How do you think it will affect industry? So, what do you think this change will lead to for patent system itself?
Ray: Really good question. This one I have been pondering for quite a while. So, see my organization, we're kind of the one of the world leaders in providing analytics to stakeholders who have exposure to patents, who work with the asset class, and also the surrounding teams who are involved in innovation. And we do kind of more of that broader body of work around innovation, intelligence, that's kind of our space, but with patents always close to our heart.
So, to your question, do I see the underlying system which has been around for well over 100 years? Do I see that changing anytime soon, within the next five to six years? Probably not! These things take time, that these are fundamentally institutions. They are public, private institutions, and government organizations.
So, the actual patent system? Yes, it can be highly inefficient. But it has served a lot of innovators well, over the last 150 years. So, I don't see it disappearing anytime soon. Do I see this system evolving and adapting to the world of Web3? Yes, I see that, what that will look like in the first innings, how that's provisioned in the first innings.
There's a couple of ideas being kicked around. I think there's some really interesting companies like IP, we're doing some really positive work in this space.
Also, companies like molecule.to who have launched a really compelling concept around early-stage biomedical research and launched the first ever, I think tech transfer based, Dow decentralized autonomous organization, I think that's pretty cool, where you're enabling early stage researchers to actually have ownership within the fundamental R&D and then have upside and economic upside upon success. I think that's really interesting.
So, I think in the first innings, we are going to see this convergence of Web3 eating away and improving part of the IP system. I don't think it will boil the ocean in one go, I think no one's going to do that. To be fair, not even bitcoins doing that with the monetary system, right. Everything is done in gentle baby steps, and you incrementally add value, win hearts and minds, including governments, and, and then take people on, on the journey.
So that's where I see things from an IP standpoint. The good news within the IP space, this is specifically patents, trademarks, maybe federated data rooms within R&D projects, that's potentially low hanging fruit.
And from what we see in the market, customers are open, they are fertile for deploying this technology to enhance R&D, improve openness around their IP strategy and innovation strategy. So, I do see things picking up in the next 24 to 36 months.
Alex: Yeah, thank you for sharing these insights. It's actually, what I really like about this conversation, like what I think very valuable to share with the rest of the audience is that you guys in Patna also started from the Tech Transfer industry, right? And in this also was the first kind of entrance point to the market of IP and RD intelligence.
And looks like we might have the same thing with NFT and DeFi, is just like a bit different type of change, because like it's much more in the change of world business process of R&D and because you need to put these assets on chain, you need to find a new, totally new way for commercialization through DeFi, through like tokenized assets.
Do you think these similarities have some, any of some foundational reason? Or is it just like, happens to be the same way as you guys did?
Ray: Good questions. I've reflected on this one for quite a while. I think the tech transfer community and ecosystem is probably a really fertile place to start, when you're launching new technology, new workflows, new ways of doing things.
So, I think as a beachhead, it's compelling. It worked well for us, especially in our, what I call patent analytics 2.0 phase that was back in 2012, 2013. Right? Also working with that community, you're kind of at the top of the funnel, right? Government funded early-stage research, academic research, where that goes, be it a license, be it a spin out company from a university, which is basically an incubator, you're right at the beginning of that funnel.
So, at the early stage, to start moving your assets onto a blockchain, to start from day one on launching your research or your early-stage company through a DAO and tokenizing it of the, I think it makes sense, right? It's at the beginning of the journey.
So, if you kind of start with that form factor, as that spin out company scales and hit certain milestones, or that technology further develops and it's got people knocking on the door to license it, because it's a really compelling technology. I think if you start off with a Web3 form factor from the roots of tech transfer, it's a healthy place, right? It's a very natural place. The barrier to entry with tech transfer is low, because we're at the beginning of the story, be a license, be at a federated data room, be it a tokenized, small spin out company from a tech transfer office.
Alex: Totally agree. And it's fair, there is an export, I think about this and like, they are basically much more focused on creation of value and Web3 unlocks even more opportunities to create value and capture value kind of automatically when your assets are tokenized.
Now let's switch back to DeFi a bit. So, like it's actually one of the first use cases which took off in Web3 space. And I'm just wondering, what do you think about this, not really popular, but still a widespread opinion, that DeFi is not really a use case of Web3, because it's just an infrastructure for other use cases. And basically, the reasoning behind this idea is that world financial space is just an infrastructure for real use cases, real industries.
So, in my opinion, I really think that once we bring real assets on chain, whatever it can be like an applied DeFi tools for this, it can really accelerate adoption of Web3 space. What do you think about this? What do you think about DeFi and about considering it as a use case or not?
Ray: I mean, DeFi as a, obviously, a stream of Web3 is compelling Ryan, and it's people talking about the DeFi summer, but it seemed like it ended up being the NFT summer rather than the DeFi summer, whether we can come to come on to NFT's later on. But I think DeFi, if you look at it from the first principles standpoint, it has huge potential.
I mean, if you look at Uniswap version three right, in particular version three, which is a lot more user friendly, and is getting a lot more adoption, and obviously you see Metamask improved their digital wallets, but fundamentally, what DeFi is doing in a really elegant way, in particular Uniswap, I think they've got a really elegant solution. And they're one of the leaders in this space, it basically collapses all of the financial infrastructure behind certain yield products, various financial instruments. Literally, is a few clicks of a button, and you're cutting out so many middlemen out of a process, right?
So many people skimming off the top of a financial process, which is what fundamentally traditional banks do. So, what excites me about DeFi is, yep, there's all this noise around price action and yield. And to me, that's all just a bit of fun and noise. All of that stuff's really noise to me, Alex. Well, what, what I really love is the fundamentals behind DeFi is how you can collapse all of that backend infrastructure, which is in traditional banking, and through a Web3 methodology. Remove all that noise, remove all that cost, remove all of that friction, and just pass value back to the user and the customer. I think that's what we need to really focus on.
Frankly, it's bullshit. If you really unpack it, certain financial instruments, certain financial products, and you look out who is getting compensated, what throughout that process, if customers really knew they would be horrified. And I think DeFi removes that, that's what I think is spectacular about DeFi.
And if you look at total value locked in, it's always floated between what 70 billion to what, 98 billion at its peak, so it's tiny if you compare it to traditional finance markets, but it's, I think it's the underlining tech which is really compelling.
Alex: What do you think is important to have as a next breakthrough for DeFi as well? Like is it like security issues, like you heard about all these hacks in DeFi projects and the money stolen so obviously, you know like, we have these infrastructure in centralized finance whereas they pay a lot of for, for this infrastructure and basically justifying their fees.
But at the end of the day, with DeFi we have a smart contract, open-source smart contract deployed, which can be used by anyone. Anyone can deploy their own version of V scope. And it's, as infrastructure becomes really cheap, but there's still some risk in place, there still risk that your money can be stolen, right?
So maybe this is what we need, like, some better security or what, what do you think?
Ray: Yeah, I'm gonna say the big scary R word, which no one really likes, but we have to face it, and boy, it's coming soon is Alex, we need regulation, we need to embrace regulation.
So you are right. Out of all of the DeFi projects, there's some really good projects out there. But there is sadly, and this always happens, the web was like this in the early 90s, well, in the mid to late 90s, and maybe even early 2000s. There is a Wild West component to Web3, in particular DeFi. So we did see some hacks, we did sadly, see people lose funds.
So I think what needs to be done now, and I think it will happen in the next 12 to 15 months is that this space will get regulated in North America, and Europe. And I think they're really thoughtful protocols, which have good investors and have good teams that will partner with regulators to then provision and shape regulatory framework, which fits within DeFi. That's gonna take time, right? That's, it's not gonna be easy. I mean, it's that simple there.
Because each, you're going to have the financial traditional regulatory bodies who've got their incentives. And then likewise, with the entrepreneurs within Web3, and all the customers have their view on the world. What I'm saying is, we have to, this has to happen. Everyone's got to grow up and try to meet in the middle somewhere.
Alex: I totally agree. So, I am also a big proponent of friendly regulation of crypto. To have this friendly regulation, we just need to work closely with regulators and suggest what and how it needs to be regulated, because there's no way that crypto will not be regulated at all. Obviously, any financial infrastructure has to have some regulation to protect investors, to protect users. But
Ray: On that point, I mean, it's happening right now, right? I mean, you got Gary Gensler, digging in, digging his heels quite publicly. In the last three, four weeks, you have everyone freaking out and blowing up on Twitter, and now even LinkedIn a little bit, and all over YouTube, and all the main social media platforms.
But to me, this is a good thing. We now have to, for example, I think what Coinbase are doing, trying to lead the way on, they're building out this framework right proactively. I mean, even though the SEC haven't engaged with them and reply to their emails, or their phone calls. They're taking it on their own back to say okay, we're going to build out a framework, we're going to send you guys a proposal, we've worked seven days a week for the last bloody three months, trying to build out a framework for you guys to review.
Let's now partner together to figure out what is the security? What is the commodity? What does the framework actually look like? So, I think you have to act like Coinbase, trying to be proactive and positive, and actually approaching the right institutions with, with a proposal and say look, this is the icebreaker. Let's get talking, let's sit around the table. Let's get our teams working on this. I think that proach is really thoughtful, and it's great for the wider community.
Alex: And I think you know, what also triggers when I hear. It's also an opportunity for smaller countries like El Salvador, for example, to become faster and regulate crypto, but just don't have that big user base compared to the United States and everyone who wants to work with the United States as a business.
But what do you think about this, was this the initiative of El Salvador, or obviously just taking bitcoin as national currencies is just a small step? It sounds big, but obviously, it's not like adoption of whole crypto projects, but it might be a good start. Do you think it will lead to something bigger or do you think other countries will follow this path?
Ray: Yeah, I think, when we look back in 10, 12 years, what El Salvador like, did last month in terms of officially making it legal tender, I think it is a moment in terms of nation state, adoption, and backing. So, if you learn what happens in Latin America, in Chile, Argentina and Spain Pacific, sadly in El Salvador, it's horrific how their currency gets debased, people can lose their life savings because the banking system has so much exposure. It's insane, right? The whole plumbing and infrastructure there, on the way it used to be.
So, for a lot of people in El Salvador, you speak to folks in Argentina, you speak to folks, even here at Cyprus in 2013, the banking crisis there, you speak to folks in these countries, when they go down the Bitcoin rabbit hole and, and understand it's potentially a revolutionary safe, cryptographic store of value, and a way to predict their wealth, they immediately understand it.
So, I think what El Salvador have done, it is a moment, it does mean something.
Actually, for a lot of these emerging markets, and emerging countries, specifically Latin America, who are doing some amazing stuff around gaming, Web3, I get so many inbounds from entrepreneurs within Latin. It's brilliant the ecosystem out there in terms of early-stage companies is pretty hot what's happening in Latin America.
And they're really hungry, because they feel like they're behind the curve, right? So actually, El Salvador making Bitcoin legal tender being a trailblazer around the general regulation around digital assets. This is actually an economic development opportunity for these emerging countries. The way they're seeing, it's how the US capitalized on the internet in the mid to late 90s.
For a lot of these governments, they're like, holy shit, this is our time. A lot of the countries have a much bigger, have a lot more noise, much larger population.
Because we're smaller, this is actually an advantage, we can get in early, we can make this a big moment in our story in terms of economic development and enabling wealth creation. That's what I love about Web3. It's really here right now.
And if you jump in early, it can help some of the smaller nations who have amazing talent, amazing academic infrastructure, certain parts of that. It could be certain pockets emerging within Europe. I know Estonia are looking at a few things. So, this is a wonderful timing opportunity for the smaller folks.
Alex: Yeah, I hope some, some of these folks will listen, either to this podcast or somewhere else, and like take this advice seriously and start exploring how to bring more value to their country with Web3, with regulation of Web3, I'm sure it will be very well paid off like, in long term.
I think actually, education is one of the most important things to focus on intellectual space, not only because of bringing government employees and likes to our side, but also to just have more developers in the Web3 space. You know, like, there's so not that many people actually yet,
Ray: If you can compare it to the Internet, what in terms of users where we are in Web3. It depends how you classify users, right? Because this term is so loose and broad, but what you hear in the market circle 150 million in terms of users, developers, people who are feeding into the ecosystem, but let's look at real users, right? Metamask, which is the main wallet, has 10 million monthly active, active users. It's fucking tiny. But I think that's the one you got to really look at.
Alex: Yeah, it gives a signal of what the industry's current stage is. Because I think you know, like, even if we compare it with the internet, it looks like if we have 10 million right now, like on Metamask, it will be like maybe half a million at internet early days, because like, Web3 promises to be much bigger change, much, much bigger splash on, on, on the water, and come into this like, question about Web3 adoption and how it was orchestrated in the internet days, early internet days, and compare it to what's happening right now.
So, we see now this battle between infrastructure players, like Layer 1, Layer 2, data providers, and so on. And it seems to me that a similar thing was in the beginning of the internet, there were many infrastructure providers before we had major use cases, but after all, the biggest winners are those who came up with the most scalable and most appealing for early users use cases.
And for example, Amazon is a good example of this one, it's infrastructure provider already, but it started just by selling books.
So do you think this is something which can happen as well to the Web3 space that some company which will have the most breakthrough use case like in a real industry was a, was a most of connection it was really industry will eventually decide on what infrastructure to use for Web3.
Ray: I mean, if we just take a couple of steps back, this is how people call it a myth, right? Infrastructure phase leads to the application infrastructure cycle phase, right? I recommend everyone check out a really good post by a chap called Packy McCormick. It's notboring.co. And he has a brilliant, I think one newsletter a week or two, called the interface phase, and specifically looks at Web3.
And he actually talks about how within Web3, this myth of we need infrastructure phase, then app phase, what's actually happened, and it happened in the internet, we sometimes had an app phase before there was infrastructure.
So, if we look at, let's say, Web3 in particular, so in 2017, we had the crazy stuff around crypto kitties, prediction markets, like augur. But actually, later on, we had upgrades within side chains, para chains, drive chains, certain new ERC standards that came later, right.
So sometimes we have an application stage where people just get too excited, build out an application layer, but the actual picks and shovels and plumbing isn't there. But then the infrastructure is built in due course.
So, this kind of thesis on, you have an initial infrastructure phase, and then an app phase, sometimes actually isn't the case, sometimes have an app phase, jump the gun and get really excited, nothing wrong with that they just get really excited. But then what that leads to is what, really high gas fees, poor coordination between DAOs, scams. Sadly, a lot of hacks where the infrastructure isn't there, but the apps there. So that's what I'm observing. Within Web3, you're kind of getting a mix.
What is good now, though, especially from say, and correct me if I'm wrong, Alex, second half of 2018, some really strong infrastructure being built out. Yeah, that's right. The likes of Solana, Polkadot, really picking up pace. You've got LTS like Arbitrum. And a bunch of others.
I actually think 2018 and 2019 was a really strong phase for the infrastructure, part of the story. And that was the quiet phase, right? When all the price action was down, it was never covered in the press.
To be fair, I actually think 2018 and 2019 were good years, because it was nice and quiet, no freaking price, action, noise and all hype and craziness. People were just doing the work.
Alex: I think it also was triggered mostly by NFT right now, because it's kind of a next driver for use cases and maybe like, maybe the next use case which will be like a breakthrough for the world Web3 industry.
Ray: But it's interesting. Obviously, we've had this huge hype cycle around non fungible tokens, NFTs, but, and I could be completely wrong here, I actually think this hype cycle's got some legs. Yeah. These are legit businesses.
Specifically, what's happening within social tokens? You've got teams like Socios, SoRare within Premier League soccer, La Liga Soccer. Alex, these are legit businesses with legit revenue with legit investors driving legit customer value and fat fandom and fan engagement.
So, this time round, the hype cycle around NFTs actually, obviously, there's some there's a lot of fat around the hype that will get trimmed away, but the fundamental pillars around growth within the NFT space and what open sees doing and all the other players, this has got legs,
Alex: I think it's kind of you know, like, we're getting like use cases which are closer, closer to real industries and like NFTs are closer and actually infrastructure for NFT also has been built for last, like four years because CryptoKitties were like way earlier and nobody was talking about NFT at that time.
And now everyone talks about NFTs. It looks like it's very got into synergy with creator economy and creator economy also got a boost from startups like Patreon and others who like we're really focused on how to unlock creative potential of like specific group of people, specific industries.
And it looks like more and more industries from, from the creator economy, adopting NFTs for their use cases in like in it's also been populated with OpenSea, and they basically did push on the industry. They did trigger many people to start exploring what is crypto?
And, here I want to ask you one question like. For example, we have many people who are still skeptical like Bill Gates, Buffett, and maybe they have their own interest in being skeptical. Maybe they have some bets against crypto. And they have the financial motivation of being skeptical.
Ray: Yeah, that's an interesting one. Obviously, you've got some of them, I mean, it's amazing. It's spectacular what they've achieved, right, Bill Gates. I mean, he's an absolute icon. Warren, when it comes to capital allocation and investing. Those are Michael Jordan's of their respective industries, right? Absolute legends. First and foremost.
However, I have more understanding and compassion from where they come from. You just have to take a couple of steps back. Warren Buffett, I mean, what is he 90? His memories are of the nifty 50. I mean, even before that, right? He's an absolute legend. His returns are spectacular. As I say, he is a Michael Jordan on investing. Yeah.
But the way he would have been coached and raised in the world of investing is solar systems away from Web3, right?
So, I just think at that age, the capacity to maybe have the incentive, have the motivation to learn about this new world and embrace it, and go down the rabbit hole. It's probably not really there. Also, he has to talk his book, right? He has to talk about Berkshire Hathaway's book, he can't go on CNBC and say, Yeah, this is the future of yep, BTC is the new store value when he's probably got a huge gold position. Like he has to talk his book, right?
He's got 1000s of shareholders, his business has been around for multiple decades, he's not gonna go in public and start raving about a new technology which basically, at an exponential level could impact his book. And that's just not going to happen.
So that I understand that to be fair. If I was in his shoes, I'd probably do the same thing. And then just go, have my McDonald's, have my ice cream and have a lovely evening, right? Why am I gonna have that headache? Especially in your 90s?
Like, and to be fair, I actually think he's super curious. Like, because he's a really dynamic person and someone I really respect and admire. I actually think secretly, he does look at this, but he can't publicly talk about it. Cuz he's really bright. He reads a lot. If he's, he's an amazing individual. To be fair, I think secretly, he knows what it really is. But he's like, God, amazing technology. I wish this was 50 years ago.
But now I've got all the shareholders and all these investors and all of this social pressure, I can't go on CNBC or Fox or, and get really excited about this probably caused me a lot of headache, and I don't want that headache at 90, relax.
With Bill Gates. I actually think he's just got probably more of a thoughtful, patient way to look at this. So, is he exploring this, looking at Web3 as a whole. I probably think, I think he is, I actually think, directly or indirectly, he's probably deploying capital and has exposure to digital assets. I would not be surprised, guaranteed he's getting some. Oh, not saying going like I know. But looking at where he's directly or indirectly involved. That's a big one, indirectly involved, but actually involved, I think he does have some form of exposure. What that exposure is, is it something within the smart contract realm? Is it something within the NFT realm? Is it something within the infrastructure realm? I have no clue.
But again, publicly, can he beat the drum? Probably not, right? Because he's on the board of Microsoft, he's probably in other public positions, where he can't talk about this, again, because it's probably going against his book of business.
Alex: And they actually have enough capital to get to keep the later you know. Like, if you have like billions of dollars, you can basically come later and still benefit from the industry.
Ray: Alex, great point. Fantastic point. When things get to more of the early majority, stroke mid majority, they can jump right in and go, hey, go. Still make 100x, maybe even make 1,000x. We're at the beginning of this journey. We even, this is like to me, this whole space Alex. People say what year of the internet it is. I mean, people are talking that book, and this space will say oh, it's too late 90s. To me, it's bullshit. I think we're like in 1996.
But when it was like, we're right in the middle, we're not like 2000. No way! Anyone who says that they're talking their book, it's basically like 95, 96.
Alex: Maybe even a bit early. So, we just don't know. You know like, it's hard to imagine what it can bring. Because like, it was really hard to imagine for people before the internet, what the internet can bring. And we have the internet already.
And we're already familiar with all these things. And still, it feels like Web3 brings in even, even bigger change, even bigger impact to the world. And it's really hard to imagine what it is.
Ray: Well, I was Googling something the other day, Alex, it was. There's no publication. It's too late. It's called Popular Mechanics. It's a big publication. I'm sure you might have seen some of their stuff in the past. And it was a screenshot from their May 95 edition.
Basically, a magazine, Alex. And on the front page. I'm going to post this on LinkedIn because it was freaking hilarious. It's got the internet. It's got the phrase, you might be too young for this Alex, I'm old enough to remember, information superhighway. Like, that was the phrase when I was like 15, 16. Literally, you're probably freaking laugh. But it was called the information superhighway.
And he had a couple of these like, cartoon type pictures of like little use cases. No one had a clue what the internet was really going to be. Even if you look back at it, Microsoft was late to it. Yeah! Microsoft was late to cloud computing. I mean, Steve Ballmer had to leave. Yeah.
Steve Balmer is quoted as oh the iPhone 8 gonna be shit. It's not a big deal. He's publicly quoted saying that. What he left and what? What 2012, 2013? Yeah, I think so.
And then we have the new CEO jumped on Cloud all in and completely turned around Microsoft. But Microsoft in the early 2000s were late on Cloud in particular, particular Cloud, really late, like scary late. So, and they'd had a head start, if anyone was going to dominate Cloud, it wasn't gonna be Amazon, it should have been Microsoft really, as a first mover.
…So even when you're in the game, you can miss the bigger picture. Look at the learning curve, most people have to go through right now with Web3. That's why most people don't really kind of get it. Because they've got a day job right, they've got bills to pay, one last thing to think about is what the Web3 is going to be. That's why the actual entrepreneurs, the builders in this space, people like you Alex, companies like as we're exploring this, and, and try to help the entrepreneurs in this space by giving them access to our software, we're hopefully going to be the folks who enable that education, build off of value, and then we'll go from there.
So. So I've rambled on a lot there. But we are bloody early.
Alex: Yeah, it's actually like now a good time to ask the last question. And this is a special one. So, I think from your experience, from your point of view, it will be very valuable to share this, like, what do you think about this? And like, what, what can you give us as advice?
So, this is actually, the last question about advice, and advice to the world Web3 industry.
So, I believe that innovation is all about collaboration, hence we need competition, but collaboration is crucial. And I believe there's a need for more collaboration in Web3 industry, more collaboration to drive adoption, to bring the regulators to the discussion to, to basically organize world Web3 industry in kinda like into a force where in, which can be directed to specific issues we are tackling, but is there, it looks like there's still not enough collaboration space?
So, what do you think it can bring, and what will be your advice for every leader in Web3 space to what to consider to become more collaborative, like what they should do? What's your general advice?
Ray: I definitely think Web3 entrepreneurs, I mean you're the hardcore contingent, who don't even want to speak to or interact with Web2 entrepreneurs or Web2.5 entrepreneurs. I think that's a blind spot, because both can learn from each other.
Let's face it, Web2 entrepreneurs, Web2.5 entrepreneurs call it, they've got experience, right? They've got companies, large employee base, some of them are public, some of them are part private, some of them already worth over a billion dollars, some of over $100 million in recurring revenue. There's lots of learning there, which Web3 entrepreneurs can, can lean on and learn from right. Especially when we go into some form of cooling phase of the economy and we're not printing money like crazy, and hopefully interest rates slightly do creep up, where it's a phrase where I call it, it's time to leave home. You can't live at your parents' house forever.
If you look at the last 11 years, some of it's not real; the price action, how assets are inflated. If we strip it back down, and there's been amazing education being done by the likes of obviously real vision who are brilliant.
You've got Pomp. Anthony Pompliano, the team at Bankless - an amazing investment group, Arc Invest, Kathy Wood, obviously, the folks at Massari which are like the Bloomberg, of the whole digital asset space, Crypto EQ are really cool. Block Works are more kind of long form research, the Block.
All of these kinds of deep dive intelligence organizations like, like the Block and the Messari: they are, they're educating the world now and, and talking about the insane money printing, QE, fiscal stimulus MMT. I mean, look at the Fed's balance sheet, it's off the chart. But all of that does link back to the world of startups, the world of, the world of raising capital, all the crazy price action in the era of Web3 is insane. If you really look at it, it's crazy. Some of the market caps like come on, simple. Everyone kind of knows it.
So to answer your question, I think what will be really healthy for the community is when you've got Web2 and Web3 entrepreneurs say, you know, we've got synergies here, I'll give you a working example. I'll tell you, someone's doing really well in this space. The team at chain link, specifically what they're doing around hybrid smart contracts.
They're cutting deals with large public groups like LexisNexis, who are owned by a company called Relics were a huge Information Services conglomerate, kind of my sector, the information services world. Been around for years, massive multibillion euro business, multibillion dollar business. You've got groups like Chain link, actually cutting deals with them, where they're feeding into their hybrid smart contracts, being a node operator, Chain link are dropping partnerships like that literally every two weeks.
So, Chain link is one example of an organization saying yeah, yeah, we're Web3 but we're partnering with folks from Web2 they're our customer. They're feeding in external data from the real world and feeding it into various use cases of hybrid smart contracts. They're a really good example.
So, I think if more Web3 companies can bridge partnerships with Web2 organizations and more institutions, that's going to be healthy,
Alex: Actually, I think it's actually great advice. And I totally agree there should be more collaboration not only within the Web3 industry, but also with Web2 . And like, it's extremely important to talk to successful people fromWeb2 industry, successful entrepreneurs who have achieved a lot already and know how to build a business.
And you are a perfect example of this profile as well. I'm looking forward to what we can do together, all of us like in the Web2 industry, Web3 industry, maybe at some point, we will not be able to even distinguish them anymore. And all the businesses will have bought Web2 and Web3 products.
And thank you for sharing your insights. It was lovely having you here. And I hope we can have another, another chat, maybe not on a podcast already. But as we always do, and explore some new ideas and will, we will continue talking to each other and be an example to others.
So yeah, thank you for coming.
Ray: Nice Alex, you have a great day. Cheers!
Alex: Cheers! Bye
So, we see now this battle between infrastructure players, like Layer 1, Layer 2, data providers, and so on. And it seems to me that a similar thing was in the beginning of the internet, there were many infrastructure providers before we had major use cases, but after all, the biggest winners are those who came up with the most scalable and most appealing for early users use cases.
And for example, Amazon is a good example of this one, it's infrastructure provider already, but it started just by selling books.
So do you think this is something which can happen as well to the Web3 space that some company which will have the most breakthrough use case like in a real industry was a, was a most of connection it was really industry will eventually decide on what infrastructure to use for Web3.
Ray: I mean, if we just take a couple of steps back, this is how people call it a myth, right? Infrastructure phase leads to the application infrastructure cycle phase, right? I recommend everyone check out a really good post by a chap called Packy McCormick. It's notboring.co. And he has a brilliant, I think one newsletter a week or two, called the interface phase, and specifically looks at Web3.
And he actually talks about how within Web3, this myth of we need infrastructure phase, then app phase, what's actually happened, and it happened in the internet, we sometimes had an app phase before there was infrastructure.
So, if we look at, let's say, Web3 in particular, so in 2017, we had the crazy stuff around crypto kitties, prediction markets, like augur. But actually, later on, we had upgrades within side chains, para chains, drive chains, certain new ERC standards that came later, right.
So sometimes we have an application stage where people just get too excited, build out an application layer, but the actual picks and shovels and plumbing isn't there. But then the infrastructure is built in due course.
So, this kind of thesis on, you have an initial infrastructure phase, and then an app phase, sometimes actually isn't the case, sometimes have an app phase, jump the gun and get really excited, nothing wrong with that they just get really excited. But then what that leads to is what, really high gas fees, poor coordination between DAOs, scams. Sadly, a lot of hacks where the infrastructure isn't there, but the apps there. So that's what I'm observing. Within Web3, you're kind of getting a mix.
What is good now, though, especially from say, and correct me if I'm wrong, Alex, second half of 2018, some really strong infrastructure being built out. Yeah, that's right. The likes of Solana, Polkadot, really picking up pace. You've got LTS like Arbitrum. And a bunch of others.
I actually think 2018 and 2019 was a really strong phase for the infrastructure, part of the story. And that was the quiet phase, right? When all the price action was down, it was never covered in the press.
To be fair, I actually think 2018 and 2019 were good years, because it was nice and quiet, no freaking price, action, noise and all hype and craziness. People were just doing the work.
Alex: I think it also was triggered mostly by NFT right now, because it's kind of a next driver for use cases and maybe like, maybe the next use case which will be like a breakthrough for the world Web3 industry.
Ray: But it's interesting. Obviously, we've had this huge hype cycle around non fungible tokens, NFTs, but, and I could be completely wrong here, I actually think this hype cycle's got some legs. Yeah. These are legit businesses.
Specifically, what's happening within social tokens? You've got teams like Socios, SoRare within Premier League soccer, La Liga Soccer. Alex, these are legit businesses with legit revenue with legit investors driving legit customer value and fat fandom and fan engagement.
So, this time round, the hype cycle around NFTs actually, obviously, there's some there's a lot of fat around the hype that will get trimmed away, but the fundamental pillars around growth within the NFT space and what open sees doing and all the other players, this has got legs,
Alex: I think it's kind of you know, like, we're getting like use cases which are closer, closer to real industries and like NFTs are closer and actually infrastructure for NFT also has been built for last, like four years because CryptoKitties were like way earlier and nobody was talking about NFT at that time.
And now everyone talks about NFTs. It looks like it's very got into synergy with creator economy and creator economy also got a boost from startups like Patreon and others who like we're really focused on how to unlock creative potential of like specific group of people, specific industries.
And it looks like more and more industries from, from the creator economy, adopting NFTs for their use cases in like in it's also been populated with OpenSea, and they basically did push on the industry. They did trigger many people to start exploring what is crypto?
And, here I want to ask you one question like. For example, we have many people who are still skeptical like Bill Gates, Buffett, and maybe they have their own interest in being skeptical. Maybe they have some bets against crypto. And they have the financial motivation of being skeptical.
Ray: Yeah, that's an interesting one. Obviously, you've got some of them, I mean, it's amazing. It's spectacular what they've achieved, right, Bill Gates. I mean, he's an absolute icon. Warren, when it comes to capital allocation and investing. Those are Michael Jordan's of their respective industries, right? Absolute legends. First and foremost.
However, I have more understanding and compassion from where they come from. You just have to take a couple of steps back. Warren Buffett, I mean, what is he 90? His memories are of the nifty 50. I mean, even before that, right? He's an absolute legend. His returns are spectacular. As I say, he is a Michael Jordan on investing. Yeah.
But the way he would have been coached and raised in the world of investing is solar systems away from Web3, right?
So, I just think at that age, the capacity to maybe have the incentive, have the motivation to learn about this new world and embrace it, and go down the rabbit hole. It's probably not really there. Also, he has to talk his book, right? He has to talk about Berkshire Hathaway's book, he can't go on CNBC and say, Yeah, this is the future of yep, BTC is the new store value when he's probably got a huge gold position. Like he has to talk his book, right?
He's got 1000s of shareholders, his business has been around for multiple decades, he's not gonna go in public and start raving about a new technology which basically, at an exponential level could impact his book. And that's just not going to happen.
So that I understand that to be fair. If I was in his shoes, I'd probably do the same thing. And then just go, have my McDonald's, have my ice cream and have a lovely evening, right? Why am I gonna have that headache? Especially in your 90s?
Like, and to be fair, I actually think he's super curious. Like, because he's a really dynamic person and someone I really respect and admire. I actually think secretly, he does look at this, but he can't publicly talk about it. Cuz he's really bright. He reads a lot. If he's, he's an amazing individual. To be fair, I think secretly, he knows what it really is. But he's like, God, amazing technology. I wish this was 50 years ago.
But now I've got all the shareholders and all these investors and all of this social pressure, I can't go on CNBC or Fox or, and get really excited about this probably caused me a lot of headache, and I don't want that headache at 90, relax.
With Bill Gates. I actually think he's just got probably more of a thoughtful, patient way to look at this. So, is he exploring this, looking at Web3 as a whole. I probably think, I think he is, I actually think, directly or indirectly, he's probably deploying capital and has exposure to digital assets. I would not be surprised, guaranteed he's getting some. Oh, not saying going like I know. But looking at where he's directly or indirectly involved. That's a big one, indirectly involved, but actually involved, I think he does have some form of exposure. What that exposure is, is it something within the smart contract realm? Is it something within the NFT realm? Is it something within the infrastructure realm? I have no clue.
But again, publicly, can he beat the drum? Probably not, right? Because he's on the board of Microsoft, he's probably in other public positions, where he can't talk about this, again, because it's probably going against his book of business.
Alex: And they actually have enough capital to get to keep the later you know. Like, if you have like billions of dollars, you can basically come later and still benefit from the industry.
Ray: Alex, great point. Fantastic point. When things get to more of the early majority, stroke mid majority, they can jump right in and go, hey, go. Still make 100x, maybe even make 1,000x. We're at the beginning of this journey. We even, this is like to me, this whole space Alex. People say what year of the internet it is. I mean, people are talking that book, and this space will say oh, it's too late 90s. To me, it's bullshit. I think we're like in 1996.
But when it was like, we're right in the middle, we're not like 2000. No way! Anyone who says that they're talking their book, it's basically like 95, 96.
Alex: Maybe even a bit early. So, we just don't know. You know like, it's hard to imagine what it can bring. Because like, it was really hard to imagine for people before the internet, what the internet can bring. And we have the internet already.
And we're already familiar with all these things. And still, it feels like Web3 brings in even, even bigger change, even bigger impact to the world. And it's really hard to imagine what it is.
Ray: Well, I was Googling something the other day, Alex, it was. There's no publication. It's too late. It's called Popular Mechanics. It's a big publication. I'm sure you might have seen some of their stuff in the past. And it was a screenshot from their May 95 edition.
Basically, a magazine, Alex. And on the front page. I'm going to post this on LinkedIn because it was freaking hilarious. It's got the internet. It's got the phrase, you might be too young for this Alex, I'm old enough to remember, information superhighway. Like, that was the phrase when I was like 15, 16. Literally, you're probably freaking laugh. But it was called the information superhighway.
And he had a couple of these like, cartoon type pictures of like little use cases. No one had a clue what the internet was really going to be. Even if you look back at it, Microsoft was late to it. Yeah! Microsoft was late to cloud computing. I mean, Steve Ballmer had to leave. Yeah.
Steve Balmer is quoted as oh the iPhone 8 gonna be shit. It's not a big deal. He's publicly quoted saying that. What he left and what? What 2012, 2013? Yeah, I think so.
And then we have the new CEO jumped on Cloud all in and completely turned around Microsoft. But Microsoft in the early 2000s were late on Cloud in particular, particular Cloud, really late, like scary late. So, and they'd had a head start, if anyone was going to dominate Cloud, it wasn't gonna be Amazon, it should have been Microsoft really, as a first mover.
…So even when you're in the game, you can miss the bigger picture. Look at the learning curve, most people have to go through right now with Web3. That's why most people don't really kind of get it. Because they've got a day job right, they've got bills to pay, one last thing to think about is what the Web3 is going to be. That's why the actual entrepreneurs, the builders in this space, people like you Alex, companies like as we're exploring this, and, and try to help the entrepreneurs in this space by giving them access to our software, we're hopefully going to be the folks who enable that education, build off of value, and then we'll go from there.
So. So I've rambled on a lot there. But we are bloody early.
Alex: Yeah, it's actually like now a good time to ask the last question. And this is a special one. So, I think from your experience, from your point of view, it will be very valuable to share this, like, what do you think about this? And like, what, what can you give us as advice?
So, this is actually, the last question about advice, and advice to the world Web3 industry.
So, I believe that innovation is all about collaboration, hence we need competition, but collaboration is crucial. And I believe there's a need for more collaboration in Web3 industry, more collaboration to drive adoption, to bring the regulators to the discussion to, to basically organize world Web3 industry in kinda like into a force where in, which can be directed to specific issues we are tackling, but is there, it looks like there's still not enough collaboration space?
So, what do you think it can bring, and what will be your advice for every leader in Web3 space to what to consider to become more collaborative, like what they should do? What's your general advice?
Ray: I definitely think Web3 entrepreneurs, I mean you're the hardcore contingent, who don't even want to speak to or interact with Web2 entrepreneurs or Web2.5 entrepreneurs. I think that's a blind spot, because both can learn from each other.
Let's face it, Web2 entrepreneurs, Web2.5 entrepreneurs call it, they've got experience, right? They've got companies, large employee base, some of them are public, some of them are part private, some of them already worth over a billion dollars, some of over $100 million in recurring revenue. There's lots of learning there, which Web3 entrepreneurs can, can lean on and learn from right. Especially when we go into some form of cooling phase of the economy and we're not printing money like crazy, and hopefully interest rates slightly do creep up, where it's a phrase where I call it, it's time to leave home. You can't live at your parents' house forever.
If you look at the last 11 years, some of it's not real; the price action, how assets are inflated. If we strip it back down, and there's been amazing education being done by the likes of obviously real vision who are brilliant.
You've got Pomp. Anthony Pompliano, the team at Bankless - an amazing investment group, Arc Invest, Kathy Wood, obviously, the folks at Massari which are like the Bloomberg, of the whole digital asset space, Crypto EQ are really cool. Block Works are more kind of long form research, the Block.
All of these kinds of deep dive intelligence organizations like, like the Block and the Messari: they are, they're educating the world now and, and talking about the insane money printing, QE, fiscal stimulus MMT. I mean, look at the Fed's balance sheet, it's off the chart. But all of that does link back to the world of startups, the world of, the world of raising capital, all the crazy price action in the era of Web3 is insane. If you really look at it, it's crazy. Some of the market caps like come on, simple. Everyone kind of knows it.
So to answer your question, I think what will be really healthy for the community is when you've got Web2 and Web3 entrepreneurs say, you know, we've got synergies here, I'll give you a working example. I'll tell you, someone's doing really well in this space. The team at chain link, specifically what they're doing around hybrid smart contracts.
They're cutting deals with large public groups like LexisNexis, who are owned by a company called Relics were a huge Information Services conglomerate, kind of my sector, the information services world. Been around for years, massive multibillion euro business, multibillion dollar business. You've got groups like Chain link, actually cutting deals with them, where they're feeding into their hybrid smart contracts, being a node operator, Chain link are dropping partnerships like that literally every two weeks.
So, Chain link is one example of an organization saying yeah, yeah, we're Web3 but we're partnering with folks from Web2 they're our customer. They're feeding in external data from the real world and feeding it into various use cases of hybrid smart contracts. They're a really good example.
So, I think if more Web3 companies can bridge partnerships with Web2 organizations and more institutions, that's going to be healthy,
Alex: Actually, I think it's actually great advice. And I totally agree there should be more collaboration not only within the Web3 industry, but also with Web2 . And like, it's extremely important to talk to successful people fromWeb2 industry, successful entrepreneurs who have achieved a lot already and know how to build a business.
And you are a perfect example of this profile as well. I'm looking forward to what we can do together, all of us like in the Web2 industry, Web3 industry, maybe at some point, we will not be able to even distinguish them anymore. And all the businesses will have bought Web2 and Web3 products.
And thank you for sharing your insights. It was lovely having you here. And I hope we can have another, another chat, maybe not on a podcast already. But as we always do, and explore some new ideas and will, we will continue talking to each other and be an example to others.
So yeah, thank you for coming.
Ray: Nice Alex, you have a great day. Cheers!
Alex: Cheers! Bye
