Alex Tapscott - From MAG7 to DAG7: Identifying Tomorrow’s Champions - TOKEN2049 Singapore 2025

I'm absolutely delighted to be with you all today at this very important moment in human history. You see, every so often a new technology emerges that transforms the economy and the old order of human affairs in ways that are both profound and often unexpected. We saw it most recently with the rise of the internet. Before that, the computer, the TV, the radio, all the way back to the printing press. And now we're in this very interesting moment where there's not one new technology, but several.

And they're all hitting their stride at exactly the same moment. AI is allowing us to rethink what we thought computers could do. From devices that process information, that are communicating machines to devices that can think, reason, plan, do tasks, maybe even act like a person. Breakthroughs in energy and battery technology are unleashing a second industrial revolution. Biotechnology is promising uh potential end to death or at least a cure to most diseases.

Extended reality is changing how we interact not just with the web and with technology, but also how we interact with the world around us. and robotics are changing how we move uh uh assets, goods, and ourselves. But there's one technology in particular that's likely to have a bigger impact than all of these. And of course, it's the technology behind cryptocurrencies like Bitcoin, and it's called blockchain. So, I've been at this for a while.

In 2014, I first learned about Bitcoin. This is before the word blockchain entered the vernacular or web 3 or tokens or crypto assets. There was this one single thing and like a lot of people I became quite interested in it. Uh I was working in financial services at the time and the idea of an asset that you could trade that might go up in value was appealing. But the more I looked into it the more convinced I became that blockchain technology was ushering in nothing short of a second era of the internet.

I followed up Blockchain Revolution with another book in 2023 called Web 3 which built on these themes and is available in six different languages. And the key insight here is that for 30 years we've had the internet, the internet that we know it, but it's not an internet for assets. It's an internet for information. So when you use the web to send and move and share information, you're not sending an original unique thing. You're sending a version or a copy.

So if you send an email to someone, you can send the same email to someone else. If you put an attachment in that email, then you can copy it over and over again. The same is true for websites. If you put something on a website, it's available for all to see. If you post something on Twitter or X, I should say, or Instagram, anyone can access it.

So the web, the internet as we know it, is this amazingly powerful tool, but it is effectively a printing press for information. And just like the first printing press which came about hundreds of years ago, it has helped to democratize access to information at least for those who have an internet connection and has had a broadly positive impact on the world. Except when it comes to things that have value, things like money or stocks and bonds or titles and deeds or other real world assets or votes in an election. It's very uh challenging if you have a platform that allows you to copy those things, right? Because if you can copy money and assets the way you can copy information, then those money uh that money and those assets become worthless.

And this is a very specific computer science problem that many smart people tried to figure out for decades. You know, in the 1990s, Mark Andre, the inventor of the web browser, said the original sin of the web was that we couldn't find a way to program money natively into the internet. Bill Gates wrote in 1997 that every person should have a wallet and that that wallet should contain an internet native currency. Elon Musk, the precursor to PayPal, was an attempt at building internet money. But each of these very smart people who understood and appreciated that the web was this amazingly powerful platform that could change not only how we access information but how we move and store value.

They couldn't figure out this double spend problem. And as a result, as the first era of the web matured and scaled, we actually became more reliant on middlemen than we were before, not less reliant. A lot of folks hoped that the web would decentralize power, that it would put more control into the hands of individuals. The cipher pump manifesto of the 1990s captured this ethos. But what do we have today?

Well, what we have today is that banks, brokerages, and other financial intermediaries um are more central to the economy than they ever have been. And more importantly, a new class of digital conglomerates has emerged. The internet giants of the second um of the of web two of this first uh internet of information. And these giants whether they're financial giants or technology giants play an essential role in the economy both online and offline. They validate transactions.

They perform all the business logic. They store and manage user data. They establish trust between parties and transactions. And for doing that, they capture a huge economic down from the internet. Now, these intermediaries do a decent job, but they have some big limitations.

They're centralized, which makes them vulnerable to hacking or to attack. We've seen that with every single internet company. Even the State Department got hacked. They add cost and friction and slow things down. They extract userous rents in the case of technology companies.

That's often in the form of fees paid by web developers to access application ecosystems. And most troubling, they capture all this data which they use and monetize for their own benefit. Which means you as the individual who owns and who created that data can't control it and can't manage it. And these companies have become enormous, bigger than any companies in human history. And it's actually not even close.

So much so that they have this name. They're known as the Magnificent 7 or Mag Seven for short. Who's heard of this term Magnificent 7? Don't be shy. Okay.

So, used to be called the fang stocks, but more and these of these things emerged and got bigger and bigger. Each of these different companies became a natural monopoly in the core industry verticals of the web. And as a result, all of them are worth trillions of dollars with the exception of one which is close to a trillion dollars. So, in online retail, Amazon became the everything store. In online media, Netflix became the streaming platform of choice.

online search, Google, 80% of search volumes, compute, Nvidia, SAS and the enterprise, Microsoft, the mobile internet, Apple, more people are on Android devices, but Apple captures the vast majority of actual profit that's generated from mobile, hence the social web, Facebook. So, how big are these things really? uh really big um bigger than um than any company in history and actually larger than most global stock markets. So Nvidia, Microsoft, Google, Amazon, Apple, these companies are larger than the Toronto Stock Exchange. They're bigger than the 40 biggest companies in all of France.

They're larger than the entire market value of all publicly listed companies in Germany. Saudi Aramco went public I think around a decade ago. And I remember at the time everyone said this will be the biggest company in the world because it's the oil reserves of the largest producer with all of this oil and it's going to absolutely trounce all these others and today it barely cracks the top 10. So this magnificent 7 has contributed most of the performance to the S&P 500. So the the key index they are more than twothirds of the market value of all publicly listed securities and collectively they're worth 20 trillion dollars more than the GDP of China.

Okay, these are colossuses which is weird because they're middlemen ultimately they're platforms that got rich because of the rise of the web something that was supposed to decentralize power and economic opportunity. So what if the internet was entering a new era from an internet of information to an internet of value? So Bitcoin invented in 2008 2009 by Satoshi Nakamoto. Bitcoin for all of the amazing growth it's seen and some of its controversy was actually designed to solve a very simple problem. It was designed to be cash for the internet.

a way to move value over the web between two people without the need for a middleman. Just like the internet allowed us to move information. And what was remarkable about it is that it worked. And it worked so well that it set off this spark that's caught on like wildfire and um engaged all of these uh great developers and smart people like yourselves to think, well, what else could we do? If we had an internet of value, if we had a way to move and store and manage assets to do contracts to engage in business on online and onchain, could we enable other kinds of use cases?

And the answer to that is yes. So the MAG 7 were the giants of the internet of information and they were based on a concept known as platform economics. They were highly centralized and in large part they relied on individuals handing over involuntarily I might add all of their data which was sold to advertisers. The number one business model of the web of the first era of the web is advertising. This time is different.

This next era of the internet is still going to create huge giants. There are going to be platforms and protocols that capture trillions of dollars of value, but they are going to look very different than what came before. The Mag 7 were all publicly traded companies and all of them were started in Silicon Valley or somewhere else in the US. The DAG 7, none of them are companies. They are all protocols.

They are all crypto assets. And this isn't speculation. If you look at the market value today of the entire crypto asset complex, it's around $4 trillion. If you were to add up the market cap of all of the publicly traded companies that are in this industry, and there are some great ones, Circle, Coinbase, uh, Gemini, Galaxy, Bullish, and all the private companies, too, at their highest valuation from their past funding rounds. It would be a tenth of the size of the value of crypto.

Bitcoin alone is five times bigger than all crypto companies combined. So value in crypto acrru to the protocol to the underlying technology and these are decentralized permissionless networks that are accessible to anyone to build to iterate and to develop. The first of these DAG 7 these champions of the second era of the internet is of course Bitcoin. Now, Bitcoin was designed to be cash for the internet, but it has evolved into that and much more. It has evolved into digital gold.

For centuries, we had a store of value for the industrial economy. Gold. In fact, the feudal economy used gold. In fact, gold has been a store of value that humans have relied on for 10,000 years. It's a technology in a way, a store of value technology that has proved very, very useful.

There's another technology that humans have used and harnessed for 10,000 years that has proved very useful as well. Horses. And people still ride horses today. And horses are important part of culture in a lot of parts of the world. But the automobile disrupted the horse.

Bitcoin is going to disrupt gold. The digital economy needs a digital store of value. Ethereum. Ethereum. We heard from some terrific people uh and saw what the Ethereum Foundation is doing, which is quite remarkable given this is this vast open application ecosystem that has tens of thousands of developers running 80 million plus smart contracts.

And despite the growth of all of these different platforms in crypto, Ethereum is still responsible for more than half of all stable coin volumes, all TVL, so total value locked, and has uh most of the applications in crypto. And I would say that it's also the place where a lot of people in business go first to start. And that's because it's this open, programmable, battle tested platform. It's been around for 10 years. It's decentralized, but that doesn't mean it's disorganized.

It is a platform where today the people are building applications in a dozen different industries. DeFi decentralized finance, DPIN, decentralized physical infrastructure. The idea that we can use the power of mass collaboration to get everybody working on the same problem together like building a Wi-Fi network or building out a mapping network. um web 3 gaming. People already spend a hundred billion dollars on goods that they buy but they don't actually own inside of video game environments.

So the thesis is pretty simple. If you're going to buy something, you might as well own it. Decentralized science and decentralized AI. Two concepts that are helping us to reimagine how we fund science and how we do compute and so on and so forth. And Ethereum also helped to launch the what I call the web 3 toolkit.

decentralized applications, decentralized autonomous organizations, smart contracts, atomic transactions, and so forth. This is all part of a collection of technologies. So no matter what gets built on Ethereum, value acrru to the platform. It'd be like in the '90s, instead of buying stocks, you could just buy a share of the internet. Wouldn't you have liked to do that?

But Ethereum is not the only game in town. Of course, I'm a big Ethereum bull, but I also understand that this is an evolving market and there are other platforms. Salana does something very interesting which is it does a lot of transactions very fast. In fact, the Salana network can handle more transaction volume on a daily basis than the equity markets. So, stocks, uh, fixed income, bonds and foreign exchange combined.

So, as the demand for uh use cases in finance scales, we need a network that can scale with it. Salana has that capacity. In my first book, Blockchain Revolution, we talked about this um idea that you know, the financial services industry for for all of the um you know, for all the attention that it gets, it really just does like a few really important functions in the economy. It gives us a way to store money, to move money, to access credit, to uh unlock investor capital, right? like the IPO market, venture capital, uh to exchange assets, to ensure against risk, to analyze, and to organize financial information, and to do identity.

I don't have time today, but I could tell you a dozen or more projects built on Solana that are each trying to tackle one or more of those different functions. So, this is the DAG 7. Bitcoin, an onchain store of value in digital gold. Ethereum, the online application ecosystem. Salana onchain capital markets but there are others as well and I have some ideas I put a question mark but we have some ideas of what some of these other DAG seven names might be but I think it's kind of up for grabs not to say that Salana is therefore you know destined for 100 years of glory but it's quite clear at this point that Salana is the preferred platform for experimentation and high throughput transactions right Ethereum is the preferred platform form for building decentralized censorship resistant applications.

Bitcoin is clearly the winner in terms of a digital store of value. But there are all of these other use cases within blockchain, these um new ways that we can unlock value where there are some leaders and some really interesting leaders, but not clear winners yet. So at CMCC Global Capital Markets, we think deeply about this issue and we spend a lot of time analyzing it. We actually have a track record of uh identifying emerging champions before they reach scale. And so we're interested in what of these platforms is going to be used by the enterprise.

Enterprises want to control their own destiny. Maybe they want to build their own blockchain. So they're going to need a platform that allows them to do that. What is the opportunity for onchain social? The web 2 model is we own your identity.

You are a digital surf. you know, you give us all your data, we give you back something in the form of a free service. The onchain version is one where individuals own and custody their own data and can do transactions and manage their own assets. Um, the onchain by AI opportunity. Pretty soon, we're going to have more agents than people, and those agents are going to need a way to do transactions and to create value.

They can't open a bank account. They can't incorporate a business. They can't sign a contract. They're not legal persons. But they can have a wallet, they can sign a smart contract, they can send crypto.

And so the opportunity for crypto and AI is, I think, the biggest of all of these. And then the everything exchange, they called Amazon the everything store where you could go and buy everything, right? One of the other things Amazon did was it actually helped uh springboard thousands, maybe millions of small businesses. Almost half of all the goods you see on Amazon, they're not in Amazon's inventory. They're thirdparty sellers and exchanges are becoming a very powerful platform that's allowing new kinds of businesses and projects to get started.

You know, initial exchange offerings, what they used to call ICOs. So, this is the DAG 7 and we're thinking, as I said, we're thinking deeply about what these other ones are. By the way, I'm going to put my contact information up at the end and so if you have any ideas of what names ought to be included and why, and we like your reasoning, then you might get added to this slide. So, a question I often get is, well, why won't Facebook or Google or Amazon or one of these guys just like do this themselves? You know, they're these powerful companies.

Isn't it sort of naive to think some startup or founder can do it on their own or some decentralized community can compete with the biggest and most powerful companies in the world? And this is something that has been central to how economies develop for a very long time, which is that leaders of the old paradigm are often the last to embrace the new. oftentimes they have vested interests to protect. Oftentimes they suffer from a legacy culture which makes innovation difficult and also sometimes they look at new technology and say maybe that's not such a big opportunity because they're looking at it through an old lens. This is Klay Christensen who invented this concept of the innovator's dilemma and he said markets that do not exist cannot be analyzed.

Not only is the opportunity unknown at the time but unknowable, right? What is the opportunity for blockchain? Is it to tokenize dollars into stable coins and change how we move money around the world and unleash trillions of dollars of economic capacity? Yeah, but that's sort of an old school way of looking at it. What are the other things we haven't thought of yet that can use this technology to change things hopefully for the better.

In the last minute I have, I want to conclude um on a reflective note which is that the entire mag 7 came out of the states and they once called Silicon Valley a technology Galapagos because of the unique combination of features that existed there and nowhere else. Kind of like in the Gapagos Islands, you know, the the access to government R&D. The internet was originally a DARPA project. the access to the university system to technology to talents to capital and so forth. And so as a result the first era of the internet scaled and to be sure there are Chinese internet companies and European companies that have done well but the biggest winners of all have come out of one single place.

This time is different. It's not one island of innovation but a global archipelago. Singapore is on this archipelago and actually you don't really need to be in one of these places because it's both an online and an onchain community. So no matter who you are, wherever you are, you can contribute to these networks, you can launch applications, you can own the underlying assets, you can be part of the second era of the web. Let me conclude with an analogy.

There's a story about the invention of chess goes something like this. The king of the land, I think some people in China claimed this as their own. A Spanish guy once said it came from Seville. It's not important. The story goes like this.

The king of the land, the emperor, he's so pleased with this new invention of chess that he offers the creator whatever he wants as a reward. And the creator who invented chess is clearly a very bright person. And he says, "Sire, I'm a humble servant and I have humble desires. All I want is some rice to feed my family. But I want you to give it to me in the following way.

One grain on the first piece of the chessboard, two grains on the second, four grains on the third, and so on and so forth. So an exponential growth. And the king, who like is obviously not a math guy, uh says, "Yeah, sure, whatever. How much rice could that be? A barrel of rice?"

You know, uh a humble request from a humble servant indeed. before becomes 8 becomes 16 becomes 32 becomes 64 and so forth. So by the middle of the chessboard it's more rice than the kingdom can produce in an entire year. And by the end of the chessboard it's enough rice to cover the entire planet in 2 m of rice. Now in the end of the story depending on who tells it uh the king gets very pissed off and chops this guy's head off.

That that is actually not the moral of the story. The moral of the story is about exponential growth. The first era of the internet, the internet of information, which has minted these seven colossal companies that have created trillions of dollars of value, that has taken us to the middle of the chessport, right? The kind of growth that we've seen is unprecedented in human history. But we are standing on the middle looking at the second half of the chessport.

And the growth opportunity there will not belong to the leaders of the past. It will belong to the leaders of the future. Tell us what you think about this concept. We'd love to get in touch. And thank you very much for your time.

Thank you.