Why Satoshi Nakamoto doesn’t matter
All eyes should be on the emerging technology’s disruption of the banking technology instead of finding the Bitcoin founder
The financial industry is increasingly shadowed by the image of Satoshi Nakamoto; the supposedly reclusive Bitcoin digital currency inventor who has been publicly outed by the press on numerous occasions, only to find once the headlines have ceased that the person in question was not Satoshi Nakamoto. The latest Nakamoto? Australian Craig Wright claimed to be the Bitcoin founder last year, but his claims were largely rebuffed by the Bitcoin community and by the press. Now he is back and begging the world to believe he created Bitcoin, claiming he has ‘extraordinary proof’ to back up his claims.
I say, who cares? The founder of Bitcoin doesn’t matter in the greater scheme of the financial world. What really matters is Bitcoin’s disruption of a technology resistant financial industry, which is taking place on a scale that goes beyond just digital currency.
In fact, 60 Minutes ran a groundbreaking story about fintech’s disruption of the financial arena recently and it pointed out something key to the fintech debate — the banks, by and large, are not mapping to the trends and changes happening in just about every industry that are being caused, not by technology, but by banking customers’ adoption of technology into their everyday lives. One of the fintech startups featured in the story, Stripe, was founded by a couple of millennials from Ireland. Their view of the world is focused on the internet-driven society they were raised in, but is also surprisingly customer focused. Founder Patrick Collison said the following to 60 Minutes’ Leslie Stahl:
“In a world where people can send a Facebook message or sort of upload an Instagram photo and have it available to anyone anywhere in the world [snaps] like that, I think the fact that that doesn’t work for money is something that seems kind of increasingly, honestly, unacceptable to people. And so, I think the question for banks is just — can they get there first in providing these services? Or will it be somebody new?”
Without customers a bank is just an empty, expensive building
Hopefully those influencers who run the banking and financial industry were really listening to Collison. As Stahl pointed out during the interview, the basic fear of a fintech revolution is that subsequent innovation could cost the banking industry jobs, similar to what has happened in the travel and retail industries. A financial industry veteran interviewed for the story, Vikram Pandit, the former CEO of banking giant Citigroup, admitted that the banks are still in discovery mode in regards to fintech:
“It’s early days. And you know, banks are thinking about it, and they’re trying to understand what all this new technology can mean. . .It could mean trouble with millennials willing to ditch brand-name companies for new apps on their phone.”
The banks should be way past this point right now. In fact, based on the size of the larger bank’s financial resources I think the entire lot of them should already be in acquisition mode of fintech players like Stripe. As Collison mentioned, if the banks don’t map to customer needs quickly, another system will replace those banks by stealing unsatisfied customers, not just banking jobs.
PayPal co-founder, Max Levchin, was also interviewed by Stahl. During the interview Levchin, an investor in Stripe, cited a survey that said 70 percent of young adults would rather go to the dentist than to a bank.
“The banks have not realized how different this [millennial] generation is,” Levchin said to Stahl. “They don’t really have a problem putting their social security number into a web form, but they have a terrible problem going up to a teller in a bank, and trying to figure out what exactly you’re supposed to do. ‘This is so inefficient. Why am I in this stogy outdated room that is empty and marble-laden?’”
Our world is changing drastically as a result of technology advances. In many cases innovation has provided consumers with better options, like the music industry, but often sacrificing those who built those industries. Who gets hurt most by streaming services like Spotify? The music industry and the musicians — the operators — are losing ground daily. Lest the recording companies come to grips with the technology shift in music, there will be no more recording companies in the near future.
I think is important that readers see through headlines, like the one’s spouting the discovery of Satoshi Nakamoto. Headlines are not objective, and in this day and age are typically created and verified by analytical headline tools rather than humans — essentially more technology disruption. The objective coverage of the Roberts/Nakamoto story, for example, fell to the very bottom of the vast majority of articles covering the story, a place modern readers rarely scroll. I encourage modern readers to scroll more when sensational headlines are in play. And look at the big picture in relation to the headline, because the Roberts/Nakamoto is story is about more than who really founded Bitcoin. It is more a story about innovation and progress, and a regulated industry’s attempts to stymie that progress for a, ‘few more weeks.’
Here’s a link to the 60 Minutes interview in its entirety for your viewing pleasure: http://www.cbsnews.com/videos/fintech