Jan 2, 2019 · 39m · a16z
a16z Podcast | Banking on the Blockchain
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Author William Mougayar joins the a16z podcast to discuss the business potential of blockchain technology, exploring how decentralized applications, digital identity, enterprise strategies, and automated microtransactions will reshape traditional finance and broader industries.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 18.4% of the talking time here. How this is scored →
The host as informed peer 5.7 Guest teaching 3.3 Guest disagreement 1.1 The host pushing back 2.6
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 6:53 Dismissing Scalability as a Showstopper
William directly rejects the host's premise that scalability will derail enterprise blockchain adoption, asserting that six engineers in a room can easily solve it as occurred with early internet networking.
Hardest push from the host ▶ 14:33 Challenging the Web-Bypass Value PropositionMichael refuses to take the technical architecture at face value, explicitly challenging William on whether end-users actually derive any real benefit from bypassing the traditional web.
Biggest teaching moment ▶ 9:11 Explaining Multi-Sig Escrow MechanicsWilliam educates the hosts on how OpenBazaar eliminates middleman listing fees by utilizing multi-signature smart contracts as automated escrow rather than depending on raw transaction speed.
The host holds their own ▶ 22:27 Citing Christensen's Innovator's DilemmaSonal demonstrates strong industry expertise by quoting Clay Christensen's frameworks and synthesizing them with Marc Andreessen's historical examples of corporate intranet adoption.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Debating Blockchain Scalability and Exploring OpenBazaar | 6 | 3 | 2 | 2 | Sonal demonstrates strong familiarity with the space by invoking Vitalik Buterin's crypto roadmap to frame the scalability question. William counters that scalability is an engineering problem rather than a dealbreaker, drawing parallels to early internet networking. | |
| Bypassing the Web for Decentralized Applications | 4 | 4 | 1 | 3 | Michael presses William on why bypassing the Web matters to average users beyond technical novelty. Sonal connects the OpenBazaar discussion to international trade dynamics while William details how native blockchain apps avoid central platforms. | |
| User Experience, Proof as a Service, and Digital Identity | 6 | 3 | 1 | 3 | Sonal pushes back on technical idealism by highlighting that past decentralized apps failed due to poor user experience. William agrees and outlines future proof-as-a-service applications like digital identity and art provenance. | |
| Incumbent Banks and the Innovator's Dilemma | 7 | 3 | 1 | 2 | Sonal shows high expertise by referencing Clay Christensen's Innovator's Dilemma and Marc Andreessen's observations on 1990s intranets. William explains why banks prefer minor process improvements like distributed ledgers over true disruption. | |
| Reimagining the Role of Banks and the Startup Zoo | 6 | 2 | 1 | 2 | Sonal uses the analogy of early media companies failing to go native on mobile to urge banks toward first-principles thinking. William articulates how banks risk becoming hidden back-ends for consumer apps and shares his startup zoo metaphor. | |
| Organizational Strategies and the Blockchain Czar | 5 | 4 | 1 | 2 | Sonal warns against siloing innovation in corporate committees without directional leadership. Drawing on his time at HP, William educates the host on corporate structural strategies and proposes creating a dedicated Blockchain Czar. | |
| Business Models, Microtransactions, and Real-World IoT | 6 | 4 | 1 | 4 | Michael cuts straight to business viability by asking how blockchain startups actually intend to generate revenue. Sonal connects William's microtransaction examples to IoT sensors and the machine-payable web. |
Statements from this episode (20)
Mougayar: Blockchain unbundles trust, threatening traditional intermediaries
“Because what the blockchain does, it unbundles trust. And whoever was performing a trust function now is going to be threatened because trust can be accomplished by the network.”
Mougayar: Blockchain scalability will not be a showstopper
“Right now, I don't think scalability is, is going to be a showstopper. It is a challenge, but you put six engineers in a room and they will solve the problem.”
Mougayar: OpenBazaar eliminates marketplace fees, saving sellers 8% to 10%
“In the, on, on OpenBazaar, and there are no listing fees. There are no fees that eBay or Etsy, whoever is in the middle, is going to be asking the sellers typically. So off the bat, there's like eight to nine to 10% that you can save initially.”
Mougayar: Future blockchain apps will bypass the World Wide Web
“So we're going to be seeing in the future blockchain applications, and blockchain applications do not need the web. They go and attach themselves directly on the internet.”
Mougayar: The World Wide Web has become too centralized
“So we could argue that the web as it is today 20 plus years after its first commercialization has become a bit too, too centralized for our liking.”
Mougayar: Every existing web service will get a decentralized version
“So just about every version of anything that we see today on the web will have and might have a version of a decentralized version of it.”
Mougayar: Blockchains will eventually become invisible to users
“In the long term, blockchains are going to be invisible. And when they become invisible, then I think we will know that they are doing something useful.”
Mougayar: Blockchain will replace physical in-person identity verification
“All of those old ways of verifying things by being physically present are going to be replaced by the blockchain.”
Mougayar: Identity on the blockchain will be a major emerging sector
“There are probably, there's probably at least a dozen companies I know of that are tackling the identity issue on the blockchain in a different way, and there will be different ways to skin that kind cat, but identity on the blockchain is, is going to be a big…”
Mougayar: Banks seek self-improvement, not self-disruption from blockchain
“My observation is that the banks want to improve themselves. But they don't want to disrupt themselves.”
Mougayar: Banks will become back-end infrastructure for digital front-end apps
“There will be many scenarios, but one of them is that they become more of a back end. If you think about it, now we are connecting more and more services to our bank account, and we are manipulating this money, but without touching the bank account itself. And…”
Mougayar: Banks struggle to integrate startup culture into corporate environments
“Yeah, but then the real task is to bring the animal home and see if you can domesticate them or not. That is the real task because a startup is wild. And so can they bring something wild into the domesticated environment and let them thrive or not? Or will the…”
Mougayar: Enterprise blockchain strategies based only on cost savings are weak
“If your blockchain strategy is, is about saving costs and then doing things a little bit faster, I would say it's a weak blockchain strategy. There has to be an innovation component in your strategy.”
Mougayar: Enterprise blockchain adoption is 80% business and 20% technology
“I keep saying this is about 80% business and 20% technology.”
Mougayar: Corporate blockchain labs should aim to obsolete themselves quickly
“Their job should be to obsolete themselves very quickly because their job is to infiltrate, to make all, to make this blockchain thing infiltrate everywhere. And that's, their job will be done when they are out of a job.”
Mougayar: Half of current blockchain innovations are projects, not startups
“Right now, maybe half of the innovation that I'm seeing in the blockchain space, I would label them more as projects as opposed to startups.”
Mougayar: German utility RWE partners with Slock.it for automated EV charging
“There's a company, there's an energy company in Germany, AWE that's going to be working with a company called Slocket, where they're going to allow electric vehicles to charge themselves when they are stopped, let's say, at a red light And automatically it's g…”
Mougayar: Brooklyn neighbors are trading excess energy via Ethereum
“Today, there's a street in Brooklyn where neighbors are selling and buying excess energy from each other on an Ethereum-enabled blockchain service. So they are going peer-to-peer. And this is happening right now.”
Mougayar: Active blockchain networks cannot be stopped
“No, it doesn't matter because the technology is already in the wild. It's already on wheels. It's flying. It's a nonstop kind of set of computers. Blockchains, once, once you turn them on and they are bona fide blockchains, it's, that's it. They cannot be stop…”