In 1999, David Bowie was interviewed by Jeremy Paxman on Newsnight.

They were talking about the internet, which completely baffled Paxman at the time.

“You don’t think people are making outrageous claims about this thing?”, he asked.

“No, I don’t,” says Bowie.

“I think we’re actually on the cusp of something exhilarating and terrifying.

I don’t think we’ve even seen the tip of the iceberg. I think the potential of what the Internet is going to do to society, both good and bad, is unimaginable. I think we’re actually on the cusp of something exhilarating and terrifying.

I’m talking about the actual context and the state of content is going to be so different to anything that we can really envisage at the moment where the interplay between the user and the provider will be so in simpatico that it is going to crush our ideas of what mediums are all about.”

Bowie saw it all

It’s a great interview.

It’s clear that Bowie saw it all coming.

And you wonder what he might have made of the internet today.

He would have recognised that crypto is creating a platform for a new type of internet.

He would see that this new internet is tapping into many of the same emotions: greed, fear, uncertainty, and the need for trust.

And as a ferocious reader, he would probably have a strong opinion on how this story will develop.

Bowie talked about resetting the relationship between the user and the provider.

And it’s the same story again, isn’t it?

Instead of exchanging content over the internet: emails, pictures, videos, links to news etc.

This next internet, “Web 3”, is about exchanging value.

It started with Bitcoin…

Which inspired the likes of Ethereum…

And now we have a whole system of competing projects that offer a way for people to transact without a central authority.

OK, some of the terminology is quite confusing.

But basically it boils down to trust.

We exchange Bitcoin and Ethereum with other strangers because we trust that an accurate record of the transaction will be stored on a blockchain.

And this unhackable, immutable record of transactions is really useful.

It’s an engine for trust.

As of 2023, there are estimated to be over 420 million crypto users worldwide.

And that number will surely be in the billions within the next few years: a whole economy of strangers who can exchange value without any central authority.

Bowie Bonds

That’s an idea that would probably appeal to Bowie.

In 1997, seeking more control over his songwriting catalogue, he raised $55 million by issuing “Bowie Bonds”.

The bonds paid 7.9% interest over a 10 year-long term.

And for collateral, he staked the future royalties of his music (which was obviously going to continue to have value.)

Bowie had to rely on all sorts of middlemen to issue this bond.

As Scott Galloway pointed out, “In order to connect his art and potential investors, Bowie had to rely on the (expensive) apparatus of traditional gatekeepers in finance and entertainment to imbue his bonds with the essential attributes of trust and scarcity. 

The royalty stream (trust) was mediated by lawyers and accountants in big publishing houses, and the legitimacy of each individual bond (scarcity) was dependent on the financial powers of Wall Street.”

Today, if he was still with us, he might launch a Bowie Coin, staking future royalties on his music…

But this time without the need for lawyers (because the smart contracts would be self-executing).

And without the need for accountants (because the chain would record all transactions).

And without the need for publishing houses because, as the ultimate owner of his music rights, he was free to stake the value of his data as he saw fit.

The value of owning your own data

In fact, this idea of owning your own data is another big idea that defines Web 3.

It runs through many of the big use cases for cryptocurrencies.

We think in the next five years, millions of people will have their own “blockchain identity”.

You will use this identity to sign into the internet.

And instead of being bombarded by ads on every page you visit, you will be paid by advertisers to interact with them: a bit like the way you get paid on Coinbase to watch videos on new coins.

What’s more, you will own all the data on your activities – your banking, buying, browsing.

This data will be private and encrypted.

And you will be able to sell it to anyone you choose.

So instead of your information being sold to all comers, as happens today, you’ll own your own information.

Once again, this flips the relationship between the user and provider.

It means you can sell or protect information that has value to you.

That applies to the personal information that the likes of Google and Meta use to target ads. Or it can mean money, currencies, stocks, futures, rent, art, collectables, or gaming artefacts.

Since the blockchain is permanent and immutable, it can serve as the most secure digital option for maintaining records of all your activity.

And you’ll use this single identity to port from one page to the next: no more signing into every single website with different usernames and passwords.

You’ll have one single identity, with all your data owned and available to use as you see fit.

The key takeaway

We think that’s a really big idea.

And it will take some time for the full implications of this to catch on.

The evidence so far is that the pace of adoption for crypto use cases is staggering, even if the market is very volatile from one year to the next.

Soon we will be our own bankers, lawyers, accountants and dealers.

And it will be easy to transact and safely exchange value with any other stranger on the internet.

We can’t say exactly where that will take us, as a society.

It is too early to tell.

But it’s impressive the way people have adapted to using Bitcoin and Ethereum so far.

You can already use DeFI protocols, built on ETH, to act as your own bank, for example.

You simply stake some coins.

The “loan” is executed automatically.

And critically, you could get your money back just as quickly.

As new DeFi protocols emerge, users are getting more and more confident that they’ll be paid back in full… earning 5, 6, 7 times more interest than they’ll get from a bank.

And that idea will spill over into other areas where trust needs to be established between strangers.

Identities, entertainment, gaming, the global supply chains for goods…in the coming weeks, we’ll delve further into some of the impressive use cases for crypto.

The key takeaway for now: it’s early in this story.

It’s 1999. We are at the tip of the iceberg and what follows will be terrifying (for some) and exhilarating (for us and many others).