The blockchain ecosystem is as wild as one of those gigantic inflatables at the car dealership, with the debut of a billion NFT initiatives and other crypto experiments (DeFi apps, DAOs, etc.). But there’s one company that’s giving it a leg up: Alchemy. Founded in August 2017, the company was valued at more than $10 billion in February and has been dubbed the “Amazon Web Services of crypto” by some investors.
Morning Brew spoke with Alchemy’s co-founders, Nikil Viswanathan and Joe Lau, to understand more about the “Web3” buzzword and what the company actually does.
So, for the uninitiated, what does Alchemy entail?
Nikil: There have been three major technological advances in the last 100 years: personal computers, the internet, and now blockchain or web3. Each of them had a developer platform that allowed anyone to create apps. For a computer, that’s your operating system, such as Windows or iOS, which allows you to develop apps like Excel or Chrome on top of it. It accomplishes this by abstracting the underlying technology and making it extremely simple to construct.
Alchemy is a blockchain developer platform layer for Web3. As a result, we make it simple for users to create applications [such as NFTs].
The term “Web3” was mentioned. Could you explain what you mean by that?
Nikil: Computers were created on the premise that machines could be programmed to follow human directions. The internet then provided it this additional capability: two machines could now exchange information and communicate with one another.
Web3 introduces a new building block: machines may now transact, which means they can conduct business and move money to and from one another. And I understand there’s some misunderstanding because we have PayPal and Venmo, but that’s not truly being able to transact, without getting into technical intricacies. That’s just a programme that’s been installed. You can now take money and turn it into code, which was previously impossible.
Do you think blockchain will face a shakeout comparable to what happened during the dot-com boom, given its rapid growth?
Nikil: In 1999, a large number of businesses closed their doors. But that didn’t mean the internet was no longer alive, did it? Certain concepts may not have worked out, or they may have been implemented too early. And when it comes to crypto, a lot of people are experimenting, and just because something is “experimental” doesn’t imply it will work. But it does mean that there are a lot of new ideas, ingenuity, and products entering the space. And, at its core, Web3 and blockchain are attractive and helpful not because of the technology, but because it allows for new forms of products that were previously unthinkable. When you consider NFTs, for example… a truly amusing story: We now conduct over $100 billion in transactions each year. Our first user, though, was a person who constructed a side project that we thought no one would ever use. CryptoPunks was his creation.
Do you have any recommendations for other co-founder teams like yours?
Joe: One lesson is to work with friends whom you carefully select.
Nikil: This is how we think about hiring and how we advise people to think about product–market fit, which is the most difficult thing to achieve [right] in a company. The answer is no if you’re wondering, “Is this the correct co-founder fit or do we have product–market fit?” You’re not there if you have to ask that question.