Eric Schmidt. Source: Vox
Eric Schmidt – Google’s CEO from 2001 to 2011 – recently revealed that he’s put a “little bit of money” into cryptocurrencies. However, he said he’s most fascinated in the web 3 ecosystem, with less interest in Bitcoin or other virtual assets of themselves.
In an interview with CNBC, Schmidt showed curiosity about Web 3’s ability to grant users control of their identity, without relying on a “centralized manager”.
Web 3 is the crypto community term for the hypothetical next generation of the internet. It is ideally just as functional as the “web 2” internet we know today, underpinned by more decentralized governance using the power of smart contract blockchains and advanced “tokenomics”.
Tokenomics are the supply and demand dynamics that blockchain ecosystems and apps use to compensate their users. They’re intended to create stronger, more objective incentives for building digital value.
“It’s very seductive and it’s very decentralized,” Schmidt told CNBC. “I remember that feeling when I was 25 that decentralized would be everything.”
Though Schmidt’s time as Google CEO was over a decade ago, he still served as its executive chairman until 2017, and its technical advisor until 2020. Since leaving the company, he’s spent most of his time funding research in artificial intelligence, biology, and energy. However, on the cryptocurrency front, he also became a strategic advisor for Chainlink labs in December.
Was he still serving as a software engineer, he claims he’d be working on AI algorithms for Web 3. While he believes the platforms and economics of web 3 “don’t work yet” he calls them all “interesting” and thinks that they eventually will.
Schmidt didn’t name any of the specific cryptocurrencies that he owns, but did identify one he takes issue with: Bitcoin.
Specifically, he claimed that the primary cryptocurrency, alongside some other blockchains today, spends too much time focused on security. “They’re incredibly wasteful,” he said.
Bitcoin has been labeled “wasteful” in more ways than one: New York State Assembly just passed a moratorium on Bitcoin mining over environmental concerns.
Ripple’s co-founder has even launched a $5 million campaign to have Bitcoin transition to proof of stake – a newer consensus model that doesn’t rely on energy production for security.
However, dedicated Bitcoiners like “Block Head” Jack Dorsey maintain that Bitcoin’s security focus is more than worth it. By contrast, he’s previously called non-Bitcoin projects and the web 3 ecosystem insufficiently decentralized, and VC controlled.