Technology has changed the way every aspect of business is done – with the exception of financial services. Financial services had not been fundamentally transformed by technology because the Internet did little to reduce the cost of establishing trust, said the author of 2016’s runaway best-selling business book.
That is, until blockchain entered the scene, said Alex Tapscott, , author of last month’s Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World.
About how and why blockchain technology – which is public, encrypted, and allows transactions to be simultaneously anonymous and secure by maintaining a tamperproof public ledger of value – will change business, Blockchain Revolution discusses what Tapscott calls “unequivocally” the most important advancement in fintech.
Blockchain is going to be the next big change in technology and will change the way businesses will be run, said Tapscott.
Best known for its use in the digital currency Bitcoin, blockchain is a public ledger. Because every transaction is recorded – and publicly visible – in the currency’s blockchain, parties do not need to know each other to do business online.
“Blockchain allows new entrants can finally compete with incumbents in a wide variety of areas, from retail banking to wholesale finance and everything in between,” said Tapscott.
For that reason, blockchain is more than just a fintech innovation, Tapscott said. “Blockchain represents nothing short of the second generation of the Internet.”
For Alex and his co-author and father, Don – who happens to be the bestselling author of Wikinomics, CEO of the Tapscott Group and an expert on the intersection of media, innovation and technology – the idea for the book began on a ski trip to Quebec, when the two began discussing how Bitcoin could change the way business is done.
Tapscott – the president and CEO of consulting firm Northwest Passage Ventures – and his father embarked on a 10-city tour to promote the book last month. They believe that eventually, everyone will be affected by blockchain technology, which would give people a way to move, store and manage their finances.
“Maybe you’re one of the two billion people with no access to financial services,” Tapscott said. “Maybe you’re a bank executive trying to eliminate billions of back office expense and reduce risk to your business. Maybe you’re a regulator who wants better transparency and accountability in the system. Maybe you’re an über driver tired of giving up 20 percent and getting cut out of wealth creation, or a musician who wants to get fairly compensated for the value you create,” Tapscott said. “These are but a few of dozens of applications for blockchain to transform financial services, the world of business, and society.”
Examples of Blockchain technology include Bitcoin and Ethereum. Both will be transformative, said Tapscott.
“Bitcoin could be a global settlement system for all cross border money transfers and Ethereum will be the basis for a dizzying array of new retail and enterprise finance applications. Private consortium blockchains will find important applications, specifically in the clearing and settlement of financial assets like stocks, bonds, swaps and more.”
According to Tapscott, Consensus Systems is the current leader in the blockchain space, counting among its enterprise clients Microsoft, Deloitte, and Manulife.
Blockchain is already seeing widespread adoption in a number of areas, as it has the ability to record all kinds of information. Dozens of the world’s biggest financial institutions, including Goldman Sachs, JPMorgan Chase, and Credit Suisse, are now in the process of exploring the possible use of blockchain in their companies for faster and more secure transactions.
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