This week on The Tech Cat Show…
Announcer: Welcome to the Tech Cat Show, with host Lori H Schwartz. Each week we hear from established leaders in the technology and consumer industry. Finding out the scoop should never be this much fun. Now, here is your host, Lori H Schwartz.
Lori Schwartz: Hi everybody, and welcome back to the show, and this week we are kicking off a month-long series on the blockchain. We’re gonna get into a whole description of what it’s about, and why that is the hot new buzzword, and why so many businesses, so many strategists and technologists are foaming at the mouth about the blockchain right now.
And so to help sort of set the tone for this conversation, and really help us understand what this is all about is, ladies and gentlemen, Mr. Seth Shapiro. Let’s have a Big Tech Cat Welcome!
Now Seth is the CEO and founder of Alpha Networks, which is a blockchain powered platform for the creation and optimization of new and existing video networks. He’s also a two time Emmy winner, and he’s a leading adviser in Business Innovation, media, and technology. He has his hands in a lot of different things, including teaching at USC in cinema arts, he’s written a well-known book on television called Television Innovation Disruption and the world’s most powerful medium. And now he’s digging deep into the world of blockchain, so Seth is going to fill us in.
So Seth, welcome to the show.
Seth Shapiro: Well hello, Lori, it’s good to be back.
Lori Schwartz: Now you were on the show a couple of years ago when you were more focused on the future of television and you were governor at the Television Academy, and you were in the midst of writing your book and you were really sort of helping us understand the future of where the entertainment industry was going. And now here we are about two years later and so many things have been disrupted including the very nature of how we move content around, and how what we know is the internet what we know as distribution is working, so much of that is what the blockchain is all about. So maybe you can sort of set the stage for us about what this is all about.
Seth Shapiro: Yeah. 100% Can you hear me okay by the way?
Lori Schwartz: Yeah, you sound great.
Seth Shapiro: Okay, good. So we talked about this a little bit last time but if you look at the media it kind of divides into these discrete eras, which I kind of think of as broadcast being the first era, and then we have the cable era, and now we’re in this thing, which I would call the broadband era, and at the end of all of these cycles you can kind of see these things coming off the rails a little bit.
So at the beginning of these kind of eras everything’s working great and everybody’s making money and people are happy. And it’s firing on all cylinders and it feels like it’s going to go on forever. And then there’s enough things that don’t work that you really need a new era of innovation. So if you think about it from a broadcast perspective, we had three networks and then four networks. And the issue there was it was great for a while where people got acclimated to the idea of TV and loved TV, but eventually they start to feel like there was just no choice, right. There just weren’t enough choices.
And so that’s when cable really came in and greatly expanded the number of options that people had, and you didn’t necessarily need the huge audience you could do really well with a smaller audience. And it’s an example of that when the team that built ESPN first started thinking about doing it everybody thought they were crazy, like the idea of a 24/7 sports network. Everybody in the television business thought was the stupidest idea they’d ever heard.
But that was a real sea change where something like ESPN or MTV didn’t need the huge audience that CBS and NBC did back in their 50s and 60s and 70s. They just needed a specific audience that could reach a certain kind of demographic and a certain type of advertiser. And because you had so many channels in the cable bundle, each of which was getting a license fee, it turned out to be a really huge business.
Then that sort of got disrupted by the internet, where all of a sudden cable and traditional TVs have huge competitor in online delivery, and so what you and I have been living through that like let’s just say last 15 years, is the movement of content from cable or satellite delivery to IP delivery, internet delivery, which is obviously where everything is going.
And we’re solidly in that era now, but there are problems, right. Piracy is rampant. You’ve still got these huge bundles of channels that people pay for a lot of which they never watch. You’ve got these weird situations where you pay for a certain channel on traditional TV still can’t really get it online or you can’t get on your device. You’ve got all these multiple complicated logins, advertisers aren’t super happy because the traditional kind of major, what are called MVPDs the kind of Comcast DirecTV Spectrum guys. Their numbers are going down. So the models breaking in a lot of ways now and I think what I’m really bullish on is that this blockchain era will be the next thing that follows this broadband era in media.
Lori Schwartz: And give us, just because this is really the first time we’re digging into it, and of course everyone has heard a lot about Bitcoin. Bitcoin certainly has made the news, and everybody’s trying to figure it all out and that’s lives off the blockchain but I don’t think a lot of people really understand what the blockchain is. So maybe you can give us sort of a simplified explanation of it.
Seth Shapiro: Yeah. So, that’s a great question. So the easiest way to begin to understand the implications of the blockchain usually are to think about it’s killer app to date, which is Bitcoin, relative to banking. So let’s just think about how money works, as opposed to the way that the Internet has changed other businesses.
So right now if you deposit a check and write a check in the same day there is a very good chance that, depending on how much funding you have, they’re gonna send you a bounce. Right. You’re going to get the thirty five dollar bounce fee even though you deposited money the same day. And a lot of people have had that experience right. You write a check, you deposit.
You’ve got $100 in the bank account and you deposit a check for $1000, and at the same time you write a check for $500. And for some reason the bank debits your 500 bucks before they deposit your 1000. And so you kind of gnash your teeth but there’s really not a lot you can do about it.
The reason for that is that the banking system is really based on a ledger , a ledger being like for anybody who uses QuickBooks or Quicken or any kind of money tracking program, a ledger is basically a list of transactions and in a banking situation, a traditional banking situation, that ledger is owned by the bank. So you can complain and you can sort of say hey, how come you did this, but there’s not a lot of recourse.
One of the fascinating things about the blockchain is that what it does is it creates if you can imagine a ledger, so like a series of transactions that instead of living in Lori Schwartz’s Quicken account, which connects to Bank of America, it actually lives out in the cloud and there is a complete sort of Ledger in the sky, which is available to everybody that records every transaction made in that ledger.
Now it’s anonymized, so it doesn’t say Lori Schwartz, it’s a series of digits, but essentially it moves economic transactions from being controlled by a bank to sort of being in a what’s called a triple ledger system, where the actual internet is out there sort of the way that peer to peer works. Where you’ve got multiple people looking at the same files or voting on the same stuff.
Essentially the real revolution of Bitcoin was it created a system where you didn’t need a bank, where money became peer to peer. And the actual series of transactions that happened live in a completely distributed ledger that was available to everybody, so that if Lori sends five bitcoin, that transaction is permanently written into the Bitcoin ledger, which is available to anyone in the world. Again, it won’t say you Lori and it won’t say Seth, but you’ll know that it’s you and I’ll know that it’s me, but various parties to the ledger then authenticate that transaction. I know that sounds complicated and it sounds complicated because it really is big idea.
If you think about the way that things worked before the internet, relative to the way that things worked after, so like Lori when you and I were kids, if we wanted to get a Beatles record right we went to Corvettes or whatever, and we bought the record at the store. Like, if I had said to you when you and I were kids, hey one day you’re just going to be looking to go onto a computer and download any song anywhere in the world you are, for free. You kind of … it would take you a while to get your head around that idea, right.
That’s kind of the level of leap that the blockchain represents. Instead of you going to a single source for information or having a transaction that just lives between two people, there’s sort of a third party in the middle of all these transactions, and the third party is the consensus of a distributed list of transactions that is pretty hard to hack and pretty hard to manipulate.
And so what happened was around the time of the original financial meltdown in 2008 when it became clear that the banks were kind of at it again, which they are. Every 20 years or 80 years or so there’s a major financial meltdown and every 40 years or so there’s a significant one that’s sort of on off cycle in that. But banks do what they can. Banks are in the business of making money.
And so there was actually an unknown figure named Satoshi Nakamoto, who is a person or persons who we don’t we don’t actually know who it was. There are a lot of theories. And what he hypothesized was a way of creating a digital form of currency that could not be manipulated. That in order to get this currency to sort of win it, or to acquire it, you had to have computers solve an increasingly complex set of problems, a puzzle essentially, in cryptography.
So computers do a certain amount of work, and it yields a bitcoin. And so what he hypothesized is that the idea that you could actually have a form of money that nobody could manipulate, that nobody could game, that you couldn’t print more of, that a central bank couldn’t get fancy with. And over time, given the banking crisis, the idea got more and more credence.
And so, there are these two sort of ideas that are in parallel. One is the underlying watching technology, which is this distributed ledger technology that basically kind of creates a whole new world of sort of crowdsourced opportunities and all sorts of businesses that we can talk about. And the killer [inaudible 00:12:13] was this idea of bitcoin, which is a specific form of digital currency similar to gold that obviously we read a lot about.
And so I mean we could take this conversation whichever way you want but those are the two big ideas. There’s blockchain, which is the underlying technology and then Bitcoin, which is the most famous application of it.
Lori Schwartz: That’s fantastic, and that’s a great summary. Right before we need to take a break. So when we come back I want to move away from Bitcoin and talk really about how blockchain is basically going to disrupt how we do business in a lot of different categories. And specifically on the content and entertainment side, since that’s where you live, I want to talk about the businesses and the new companies that you’re building that are helping to leverage blockchain.
So we’re going to be back in a moment digging into the future of our world with Seth Shapiro, who is the CEO and founder of Alpha networks. We’ll be back in a moment on the Tech Cat Show.
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This is the Tech Cat Show with Lori H Schwartz. If you want to find out more about our show, or to leave a comment or question, send an email to Lori@TechCat.tv. That’s Lori@TechCat.tv.
Lori Schwartz: Ladies and gentlemen we are back on The Tech Cat Show with Seth Shapiro, who’s a two time Emmy Award winner and a leading advisor in business innovation media and tech. And right now he’s very focused in the world of blockchain, and Seth just gave us a great summary of what the blockchain really is and also how the more sort of famous piece of the puzzle, Bitcoin, which has been really talked about so much in the last six months in the news where people are making a lot of money and some people are not. But Seth has a particular interest, I think, in this space.
You have your hands in a lot of different businesses as an adviser, so maybe you can tell us about where some of this is going for you and the areas that you’re playing in.
Seth Shapiro: So the one that I’m involved in, that’s the best known and is going to be a big story in the coming months is something called VideoCoin. VideoCoin is essentially sort of a competitor to the Amazon in a way that you’ll understand. But just to explain kind of where the media business finds itself right now, as I was saying, the media business has really had to adapt to the huge growth of viewing of content online.
And so if you think about this, if you are a TV network or a movie studio or something. But let’s just talk about TV networks, because it’s actually really interesting. So, you’ve got a TV network and people are paying Comcast or DirecTV or whoever to get access to your network, but you or your kids, and definitely your kids, are like hey, I don’t want to watch this on the big TV, I want to watch it on my tablet or my phone. So increasingly there’s pressure on the owners of all these TV networks to get their content available online.
So here’s the issue for them, there’s not a lot of incremental revenue around that. So, essentially, most TV networks are being hosted by Amazon Web Services or AWS. AWS is by far the largest source of revenue for Amazon, and it’s kind of an open secret in the media business that …. I mean, even Netflix, which is kind of shocking. But even Netflix comes on Amazon Web Services, so they really have this huge infrastructural advantage in the fact that they’ve got so much scale in serving Internet video and files.
So basically most of the TV network groups that put their networks online use Amazon. So what that means is that Amazon is essentially setting a rate card for serving TV networks, and every stream that you serve a particular network whether it’s MTV or FX or whoever it is or Netflix even Amazon is getting paid for every stream.
And so what we’re doing at VideoCoin where I’m head of strategy, is [inaudible 00:17:34] who the most famously is the founder of CNN and was co-founder of Salesforce, real visionary within in the last Internet era, got together with a great CTO named [inaudible 00:17:50] who had been the head of Intel video. Intel video actually was sold and became Facebook Video. So Intel divested the group, and that became the basis of Facebook Video.
The hypothesis of our company, of Videocoin, is really … because all of these video networks are paying so much to have their stuff hosted by Amazon. What if we could kind of decentralize that, which is a big theme in blockchain, in other words instead of having one central authority … whether it’s a bank or in this case Amazon, what if you could incentivize all sorts of people that have server capacity … Whether it’s a server farm that has extra servers or somebody at home that just has a lot of computers, and say hey if you serve our video using our solution we’re going to pay you in tokens. So we’re going to give you micro-transactions for every video stream you serve on our behalf. And so that’s actually the infrastructure that we’ve built.
And what’s really fascinating is we expect that when the system is fully deployed we’ll be reducing the cost of serving video for major enterprises from 60 to 80%. And the reason is because, again, it’s kind of a central theme of blockchain, we’re going to decentralize it.
Instead of going to one central source for doing your video serving, storage, and trans coding, which in this case would be Amazon Web Services, we’re going to empower people all over the world, and server farms, and meet in small businesses to serve video and then get compensated in our currency, which is just kind of a fascinating direction.
I think that you’re going to see more and more of that. You’ll see-
Lori Schwartz: Because other business categories, taking the monopoly away from companies. So are you’re basically taking Amazon, down in a way.
Seth Shapiro: Well we’re going up against it, and I mean obviously they’ve got plenty of business although like I said guess today they take a little bit of a hit to apparently Trump have some issues with them. But I mean Amazon is a juggernaut it’s the number two … I think it’s the number two market tech company now, and a huge piece of that is the fact that when you factor financials, 80 % of Internet traffic is really video.
I mean internet from a business perspective in many ways is a video delivery system. Netflix in peak hours in the United States is like 50% of Internet traffic at certain times, so that’s a huge market. And that’s the one that we’re taking on. But exactly your point Lori. That’s true across all sorts of verticals, you see it in banking, you see it in insurance, you see it in different forms of asset servers, you see it in all kinds of different businesses.
Lori Schwartz: So, I’m looking at some stats here. So it’s estimated that the world will reach three trillion Internet video minutes per month by 2020. And then we’re looking at HD and ultra HD, which is going to suck up more bandwidth, and then when you start to think about 4K and what’s going on with VR, all that storage and moving that stuff around. So you’re basically positioning VideoCoin to be in that game and to handle this growing market.
Seth Shapiro: Yes, that’s exactly right, because if you think about, to your point about 4K and HDR and VR frankly, 360 video, I work with a lot of the major studios and as we started VideoCoin I talked to a bunch of them and I said what are your issues relative to video storage and serving. And it’s not just trans coding, and it’s not just the cost for the stuff they have to do like putting various networks online. It’s all the really cool stuff that they can’t try because it’s just so expensive.
So, for example, some serving in HD stream of a TV show is one level of data expense. But if you get into VR in 360 or 4K you’ve got a whole other … the more bandwidth you have, the more expensive it is. So one of the things we’re really excited about is the notion of doing trials, and we’ll start announcing them.
But what’s public is some of our advisers who’ve come on board are [inaudible 00:22:08] the CTO of Fox, of 20th Century Park. It’s part of our team. John Ward, who is head of video operations for ATT&T DirecTV is with us, [inaudible 00:22:19] futurist at Paramount.
And so what we’re looking at is things that we can do to reduce the cost of trying really cool stuff. So we’ve got a related entity to Videocoin called LivePlanet, which has developed like a whole 360 camera through solution. And what happened was as this team and related teams started doing more work with VR, they found out that their Amazon Web Services bills were just huge. So the more VR you tried to serve over the net, you wind up with these huge service bills. So what we’re going to do is really actively try to bring the costs down so people can try all sorts of really new cool stuff. And that’s what’s really exciting about this, as well.
Lori Schwartz: And are you at all concerned that just like you can’t keep track of the new coins being launched these days, are you at all concerned that there are going to be competitors to VideoCoin that other folks are putting together, blockchain-like solutions for video distribution, as well? I mean what’s to stop a studio from building their own?
Seth Shapiro: That’s a great question. I mean, there will be competitors. In this particular case, really world-class video engineering talent is pretty hard to come by, actually. And so, we’ve got the team that built as I said, basically the infrastructure that powers Facebook video with Intel’s team first, so that’s a pretty big moat. There, no doubt, will be other people that try and do it, but we think between having a really great tech team and having really deep business relationships, as , understanding the problems of the actual clients is a big part of this.
One of the things that’s interesting about blockchain is it’s a very global business right. And in many ways America is frankly, unfortunately pretty far behind. So I meet regularly and my other role is being part of a fund in this space, with companies in Asia and Argentina and South America and all over the world and a lot of them have great tech but Hollywood is a pretty specific culture, so you’ve got a lot of people that are trying to solve problems for industries that they really don’t understand. And so I think a lot of these kind of new blockchain companies or ICOs, they may be addressing a problem that’s real but whether or not they have the expertise to actually solve it is a completely different question-
Lori Schwartz: And when you say ICO, which stands for Initial Coin Offering, is that how you would also refer to something on the blockchain that’s getting funded, or is that only related to bitcoin solutions?
Seth Shapiro: Okay, so going back to the currency issue of this, Bitcoin is the best known cryptocurrency but the notion of the blockchain is that you can have a potentially infinite number of different persons. So a way to think about it is we’ve got the US dollar. We’ve got the pound, we’ve got the euro we’ve got the Won. There’s a series of global currencies, which are generally associated with particular regions or nationalities. What the potential for cryptocurrencies is to create units of exchange that are specific to specific use cases.
So let me give you an example that’s kind of hard to get your head around. So when we were kids and you went to Disneyworld or Disneyland. Right. Remember you had A tickets, and B tickets, and C tickets, and E tickets and all that?
So, you don’t buy a Disneyland ticket with the expectation of being able to sell it later for more money. Right. It’s just silly. You buy Disneyland tickets so you can go to Disneyland and use them. And so a lot of the better currencies are really about creating a specific use for a specific … specific solution for a specific problem.
So, for example, if you are helping people in the process of surveying and storing and transferring video, or you are helping people to complete invoices, or you are helping people to source talent, or to pay people in a micro transactional way that would be completely impractical if you had to cut them a check every time, because it might be the equivalent of two and a half cents, each time, where writing a check is actually much more expensive than it’s worth .
So a lot of these currencies are just about solving specific problems. And it’s kind of a wild west situation, where to your point, you’ve got hundreds and hundreds of different entities. And so the term ICO refers to an initial coin offering, and it’s not actually … the term is not beloved by everybody, but it kind of comes from the notion of an IPO, initial public offering where you offer stock. The notion became well what if we just sell we sell tokens in order to raise money for a particular project. And so that’s been a big industry.
Various American regulatory agencies are weighing in on how the view that the American climate around that is actually definitely more sober than it is in a lot of other places in the world. You’ve got all sorts of different pieces, and in a way of kind of what we had during the Internet bubble, where you had all of these companies and all these companies and all these companies and frankly a lot of them didn’t last, but in a way, out of that kind of wild period, we wind up with Google and Amazon and a lot of the companies that dominate today.
So we will wind up with a new crop of really transformational companies, and then a lot of other stuff that sort of falls by the wayside.
Lori Schwartz: And that’s a great note for this sectio. We’re going to be back in a moment with Seth Shapiro who is really laying out the future of the infrastructure, I think, of a lot of the content money all the different business categories that we all live in. CEO and founder of Alpha networks, we’ll be back in a moment on the Tech Cat Show.
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The key point of contact between consumers and brands is technology. Story Tech, a boutique agency, empowers you to use that tech to deliver your message, engage your customers, and raise the bottom line. How do you track and exploit the trends? How do you stay ahead of industry disruption? And how do you maximize profit from content?
From strategy to execution, the answer is Story Tech, Inform, Innovate. Create. Visit us at Story-tech.com, that’s story-tech.com.
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This is the Tech Cat Show with Lori H Schwartz. If you want to find out more about our show or to leave a comment or question, send an email to Lori@TechCat.tv. That’s Lori@TechCat.tv
Lori Schwartz: Now, Seth, you also have your hands in a lot of different funds and companies as an adviser, so I know that you learn a lot from that. And what we’re often hearing about all these different companies, like you mentioned, is this global footprint, and we keep hearing about China.
Now I also know that you recently returned from Puerto Rico, where there was a big week long multitudes of conferences around cryptocurrencies and Bitcoin and blockchain. So I’m just wondering, in the globe, is there a region that right now seems to be doing the most in this? Is it really coming from all over the place? Where do you focus in this exploding marketplace.
Seth Shapiro: That’s a great question, and the answer is it changes a lot. And part of the wild thing about this industry is you spend a lot of time on the road, because you can’t throw a rock without hitting a blockchain conference, in L.A. there’s probably one every day but I mean you multiply that by the number of regions where this is a real big thing.
So for example, I’m part of fund called Alphabet Fund, which is out of the UAE, and it’s a fully regulated crypto currency hedge fund, and the benchmark for the fund is to return Alpha above Bitcoin. So in other word, we have to outperform Bitcoin or we don’t make anything. And so, our fund is constantly investing in new companies but also trading different currencies and doing the kind of things that traditional hedge funds do.
So yeah we see a lot of different deals coming in and you’re looking at all the things that people are applying this to and it’s it’s amazing because it’s everything from trying to make the insurance industry more efficient to creating a token innovations for patents and IP, and to create faster processes for remittance payments.
Which is kind of … that’s a good one to talk about. So, one of the really inefficient businesses in the world, we’re lucky not to have to deal with this, but if you are an expat living in one territory where you’ve migrated to try and make more money to send money home, you really do get gouged. So there’s remittance [inaudible 00:32:58] you obviously we know about sort of the American Mexican one. But there are a number of them all over the world with people sending money back home. It’s very expensive to do it. The Western Unions of the world take a really big piece. You have to wait online for a long time.
So, one of the great promises that the other parts of the world really get, that we don’t have to get here because we’re not dealing with this is for people who are un-banked. Who don’t have the ability to wire money. , these kind of currencies are a godsend because if I’m going to send 500 dollars back to my family in India, and I’m looking at giving up 10 to 15% of that money and waiting online for two hours, if I could just buy one of the crypto currencies that are optimized to be very fast. I could send that money back home in 10 minutes with virtually no cost.
And so in Africa and India there’s a huge, I think, understanding that this stuff is not just sort of an interesting business but it’s really potentially life changing for people who have tremendous trouble losing money, and I know the ones who really pay exorbitant fees to move money around.
So depending on where you are in the world there’s a different perspective. Actually two the really active countries in this market are Korea and Japan, and China, to your point, has been heavily involved. There are a number of currencies issuing out of China, NEO was the big one, Bitcoin cash as a huge component in China.
And so different parts of the world are competing to sort of become homes of this kind of new business, and it is a little bit sad because America’s Silicon Valley was the undisputed home of the Internet. And in this new internet of money, the US is not being a super competitive, so you’ve got all sorts of other regions that are sort of jumping into the fray.
Puerto Rico, to your point, is actually a really interesting place because there’s actually a tax treaty between Puerto Rico and the United States, so that companies that are in this area can get tremendous tax advantages by moving to Puerto Rico and building their businesses there. And so that’s kind of become a hotbed for Americans. But there are places like Malta, that are a hotbed for Canadians. There’s Switzerland, which has a huge role. And Eastern Europe is actually turning out to be a really interesting market, and in a lot of the investments that we see, a lot of the money is coming in to Western companies from Asians.
So it’s kind of an unprecedented global mix of different parts of the world trying to figure out how they can leverage this new opportunity.
Lori Schwartz: So is there then, in this new world, is there such a thing as regions? I mean, are we looking at this like we’re in China , we’re in Puerto Rico, we’re in Silicon Valley? Because does anything have a home if it’s a sort of cloud-based ledger that has no base?
Seth Shapiro: The answer is yes, and it’s interesting. It’s definitely a good question. Every company that sort of exists right, just because we’re still living in the physical world, everything is domiciled somewhere. So you can be, if you’re going to create one of these entities, you’ve got to house it somewhere.
And so what’s happening is, in the same way that famously Apple money goes to Dublin. There’s all sorts of offshore entities that American companies use to pay less less tax back to Uncle Sam, and that’s not illegal that’s just the way the system is set up. And so what’s happening right now is different parts of the world are saying hey this is a really exciting industry. Let’s create incentives to get more of this stuff to happen here. So that’s happening in some cases.
In smaller nations that are looking at this as a potential kind of huge net win for their economies, for the local economies, on the part of the larger companies … So China for example, there’s a few currencies that China has not necessarily actively backed as a nation, but for example there’s something called NEO. The number two currency globally is called Ethereum. Ethereum is, in many ways, the platform or the currency that powers a lot of these new companies. And that’s probably a separate conversation, but China has effectively backed its own forces, unofficial, in this race.
So there are major Chinese currencies and there are different advantages to putting your company here. So it’s amazing time. One of those periods where the cards are up in the air and it’s not clear how they’re going to settle when they all fall back down. But the UAE is looking at this as a potential thing. As the as the sort of fossil fuels industry that’s been so good to them declines. Maybe they want to be kind of in an area that houses blockchain based companies.
And again, Switzerland is [inaudible 00:38:26] called crypto-valley. Liechtenstein, which is near Switzerland, is thinking how do we get into this business? So it’s an extraordinary time-
Lori Schwartz: Are you flying all over the place now, literally? Like it’s just everywhere.
Seth Shapiro: You kind of have to be, it’s a bit much but like said I was just in Puerto Rico, I’ll probably be heading to Dubai. I’ll be in San Francisco next week. There’s one in Korea that I was supposed to be at next week. You kind of can’t do them all. But this won’t last forever, but for now it’s a tremendously exciting time where it’s kind of like you need to be in the room where it happened.
Lori Schwartz: And are these basically conferences, and that’s why you’re bopping around because that’s where all the deals are being made?
Seth Shapiro: Yeah there are conferences, which are obviously the forums for these ideas. It’s kind of a common meeting ground for people, so it’s easier to read a bunch of respective deals at a conference than it is to fly to a ton of different places. It’s sort of like in the venture model, traditionally, partners would have a specific territory because you can’t just be everywhere at once. That’s harder now because this is such a global industry, so you kind of just try to maximize your firepower and meet with as many people as you can in a couple of days at a conference.
Lori Schwartz: And so my other question for you is just, in terms of the types of people that you’re dealing with now. Is it CTOs, is it chief technology officers? Is it investors? Who is the sort of profile of the individuals that are jumping into this space?
Seth Shapiro: I mean, primarily it’s an entrepreneurial climate, just by definition you’ve got this essentially relatively new industry that’s going to attract people who are interested in building new stuff.
But by and large, there are entrepreneurs who hopefully have subject matter expertise in a specific are. Whether it’s insurance or computer viruses-
Lori Schwartz: Or like your video, [crosstalk 00:40:55] you have a video background. So yeah.
Seth Shapiro: Exactly. And some of these people have really figured out amazing ways to reinvent their incumbent business or improve on their business using either either form of currency or new technology or reinventing their infrastructure on the blockchain.
And then a lot of them are frankly similar to what you may have read about WITH what was it called [inaudible 00:41:27] by the company that renamed itself a block inside the company and their stock tripled.
So this is a good example, so there’s a lot of people jump on the bandwagon.
Lori Schwartz: But I think if you added CBD to the name of anything blockchain, you would really make a lot of money right now. Seems like everything is blockchain and everything has CBD in it.
And for you as a strategist, as an investor, as someone who sits on a lot of different boards, does this look like this is going to be where your career sort of stays is in these different blockchain businesses? Is this the final sort of tier for distribution?
Seth Shapiro: Well I think this stuff is now where the Internet was in maybe … 95 or 96, So if you think about that era there were still a lot of naysayers there, there’s still a lot of people that didn’t get it, and there were some people who were like yeah, this Internet thing is going to be really transformative.
But it was before, for example, Internet video was so powerful that you’ve had the complete undeniable game changer. Amazon hadn’t really happened yet. So I think with this point now where is this kind of potential for all sorts of amazing stuff, but it’s going to have peaks and valleys. And it’s not going to be like a downhill cruise.
So yeah, I’m committed to it for the long term because I think this is the next great era of the redefinition of the stuff. It’s almost this is the next era of the Internet. What do you call it the amount of money or the centralized era. This is the era where a lot of things are getting a lot of opportunities are going to open up a lot of businesses that resisted the first that resisted disruption in the last the Internet era are going to get reinvented this time. I think media will be a big part of that.
So yeah, I can’t think of anything as interesting as this stuff.
Lori Schwartz: And on that note we’re going to take one more break. As Seth sort of sets the stage for us for the world that we’re living in, so we’re going to be back in a moment on the Tech Cat Show, and really digging into how to play in this game with blockchain. Back in a moment on the Tech Cat Show.
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Lori Schwartz: And we’ve been getting down low on the blockchain from Mr. Seth Shapiro, who is the CEO and founder of Alpha Networks, which is a blockchain-powered platform for the creation and optimization of new and existing video networks. Seth also is head of strategy at VideoCoin, head of business development at Alphabet Digital Currency Fund. And of course, an advisor to a number of other companies who are starting to look at new models and leveraging the blockchain to create new businesses.
So where can someone learn about this? Say they understand that they need to jump in and they want to figure out how to get into the blockchain and maybe take their category expertise. What would you suggest to them? I know that you talked a lot about how you attend a lot of conferences where the business is actually getting done. But what would you suggest to someone?
Announcer: Yeah that’s a great question. I mean we are actually developing a new service for that. So I’ll come back and we can see more about it. I do think that this industry suffers from not having kind of a clean well in place for really good information. The issue is people go to YouTube and it’s luck of the draw. They may want something that’s really informative and accurate or they just may watch something that’s basically a scam a kind of a thing where somebody is pumping something.
So I mean, unfortunately at this point, we’re in the early days where you kind of need to look at a lot of different sources. And I mean the best thing is to actually find somebody that you know, that understands something about that space and have them kind of walk us through the process.
There’s like four kinds of things you can do to really understand this stuff from a functional perspective. One is: There is a very famous company called CoinBase, which is I think actually the number one app and the App Store now. So you can go and open a Coinbase account, it’s super easy. And I would say buy ten dollars of Bitcoin and buy ten dollars of Ethereum, and just let it sit there and watch it.
If you get more adventurous there’s a number of exchanges where you can actually … So from CoinBase there’s only three or four different agencies, but from these exchanges there’s hundreds and hundreds. And so the best way to learn about something is to kind of stick your toe in and do it, so if you’re feeling adventurous the most advanced, the most famous American exchange is called Bittrex, B-I-T-T-R-E-X. The most famous Asian what is called Binance, like finance with a B. I would say you could open an account with one of those and then just kind of look around and one step at a time, buy a little bit of this stuff. Not a lot. Just enough. Then read about it more.
Go to places like [inaudible 00:49:02] coin telegraph and there’s a number of these letters. I mean there’s an endless avalanche of stuff out there on the open Internet about this stuff. But I would say if you know somebody who’s interested in this stuff have them point you towards some good sources.
I’ll come back when we have more that we can share about what we’re doing, and then people call for consent. If they send me an email actually at info@SethShapiro.com, with just my name. We could put together maybe a list of resources to pass on to Tech Cat readers, how about that?
Lori Schwartz: Golden golden Golden. And what else just in the area of trends, is interesting to you right now, because you’re always sort of at the edge of something. So if we moved away from blockchain for a minute, is there anything else that you’re keeping your eyes open on? I know for a while you were exploring VR pretty deeply and AR. Is there any other areas of new tech that you think are going to revolutionize business categories or even entertainment as we know it?
Announcer: Yes I think the big one is going to be the intersection of VR, AR, AI, and blockchain and I think I think when those three things start to come together which is just slowly happening. Because when you go into a virtual world you’re not going to use dollars, it doesn’t make any sense.
So what will happen in virtual worlds like it’s kind of auspicious timing right. Ready Player One opens tomorrow. Like when you go into these virtual worlds you’re going to you’re going to conduct transactions using not using dollars.
There’s all sorts of amazing things that happen when you can do micro transactions. I mean it’s we’ve set up a blog network with like a thousand bloggers and every month as well. What am I going to do right somebody a check for 20 cents and another person a check for $15,000. There’s all sorts of things. Money is still a very very analog thing and I think that’s one of the things that’s really holding up the are the VR revolution.
It’s just economically dollars are just a little bit too [inaudible 00:51:09] for virtual worlds and I think you’re going to see more things … and it’s going to sound really abstract when I say it now but you’re going to see things where things like AI and machine learning and VR and crypto currencies come together and suddenly you’re going to go into this other world that just kind of works. And there’s going to be a tremendous number of people that are just not going to want to come out again, which is obviously the kind of thing that Ready Player One gets into.
But I think those three, the convergence of those three areas, VR, AR, AI, and blockchain that that’s going to be the that’s the trend of the decade.
Lori Schwartz: Wow I love how you summarized it like that because certainly a lot of the conversations we’ve been having in the last six months sort of has been hacking away at all those various topics. And it’s interesting to watch how the conversations all lead to them all converging.
And just on a last note before we wrap up, where can we just read more about what you’re doing? are you tweeting, are you still writing on your own site SethSHapiro.com, where can we keep up with you?
Announcer: I mean it’s it’s kind of crazy right now. I’m still in session at USC, we’re actually writing a bunch of stuff that’s gonna come out soon. I mean, people could definitely go to my site and we actually do tweet pretty often things that are just of general interest. But I guess one thing that I would throw in here that’s kind of interesting for people to check out in our industry. Another company that we didn’t mention that I’m an adviser to is called Kodak coin. Kodak coin made a big splash yes because it was sort of the first kind of blockchain companies that got affiliated with a major kind of brands like Kodak.
And what’s really interesting is there’s been all this stuff about in the press about what Kodak coin is or isn’t, but what it really is, is a company that has the ability to actually go out and really clean up digital rights. So for example, part of the problem has been for content creators in the internet age what the Internet allows you to do is to make a copy of a copy of a copy of a copy. And that’s great if you’re a user. But if you’re somebody who owns a piece of property who wants to get compensated for that, then that’s tough.
And so I think you’re going to see this whole era of new companies come on line. That’s going to kind of make things more efficient. Put the genie back in the bottle a little bit. And what my dream would be that these kind of blockchain related companies we created an economy where people actually get paid real money for their creative work and that they can do it directly from the audience. So that instead of having to wait for your check to come from Comcast or Disney, you can actually do something amazing, creative. Put it out on their on line. And then get compensated directly from your users in a fair way without the stuff being pirated to death.
And so that’s that’s kind of an overall trend that I’m really excited about, and I’ll come back and talk more about it when we can share more of what we’re doing.
Lori Schwartz: Cool well ladies and gentlemen we have been getting the down low on blockchain and cryptocurrency and a number of interesting ways to think about what’s really happening in our world, and how everything that we sort of understand is being disrupted. And we have to start paying more attention to where we can take our businesses.
With Seth Shapiro, the CEO and founder of Alpha Networks a two time Emmy Award winner, a friend and buddy of mine. Seth thanks so much for taking time to talk to us. I know you’re all over the place. You’re somewhere else right now, too.
Announcer: Yes, I’m in beautiful downtown Burbank right now but I’m on a plane. So thanks for having me, Lori.
Lori Schwartz: It’s great to have you.
And this is Lori on the Tech Cat Show. Next week we’re going to continue digging into the world of the blockchain. And we’re going to be talking to somebody from soft vision and how they are looking at the blockchain. And all month long we’re going to be digging more into the future of distribution of all things, really. So it’s been great talking to you and we’ll be back next week on the Tech Cat Show.
Announcer: Thanks so much for listening to Tech Cat Show. Please join Lori H Schwartz again for another great program next Wednesday at 4:00 p.m. Eastern time 1:00 p.m. Pacific time on the Voice America business channel and syndicated to the Voice America women’s channel.