Blockchain: what’s between today and a fully decentralized future?
By now, most of us, citizens of the Internet, have heard the term ‘blockchain’. Some of us know it is the technology behind Bitcoin, others heard it is deemed to disrupt the centralized economy we still live in, others just followed the hype and thought it would be a good thing to add to their LinkedIn profile.
On the contrary, large organizations, who are largely responsible for the centralized economy of nowadays, are well aware of the potential that blockchain has to disrupt their current business models.
One of the original thoughts behind blockchain was to reduce, or even eliminate, the need for intermediaries, which means that if Bob wants to buy Alice’s car, but can only pay it over 3 months, he doesn’t need to get a loan from the bank and pay interest anymore. Instead, Bob and Alice code a contract where for the next 3 months Bob will pay one-third of the value to Alice. Whenever he is done with the payments, the property is automatically transferred from Alice to Bob. Welcome to the age of smart contracts!
Now, picking the previous example, one may imagine that there are at least 2 entities that will certainly not be happy about this new way of doing transactions: banks and notaries.
Interestingly enough, these institutions, which we used to see as slow old behemoths, have already realized that their businesses may be facing serious risks in a not so distant future.
Personally, I find this amazing. Look at how long it took these same big century-old institutions to surrender to the fact that they had to be online to survive. It wasn’t until the year 2000 that most banks provided online banking services. Yet, with blockchain, we are seeing a completely different attitude. Just recently, 6 large banks joined forces to develop a blockchain-based system to allow them to speed up their internal operations. Lawyers, rather than fighting the technologies that threaten to make their jobs obsolete, are looking for ways to fill the gaps that artificial intelligence and Blockchain can’t yet fill.
Now the big question is whether the fact that these traditional institutions are trying to be ahead of the curve and embrace these technologies, rather than fighting them, is going to defeat their original purpose or not.
Blockchain, which was initially thought as a completely decentralized mechanism deemed to eliminate intermediaries at multiple levels of our economy, may start to be used by large banks in their backbone, to speed up our/their transactions, well ahead of the revolution that threatens to disrupt their current business models.
Is this good? My guess is that only time will tell. As long as these technologies are used to provide better and faster services that we can all benefit from, I see it with good eyes that big institutions look forward to adopting them. This will help boost the confidence of the general public in the technology and, ultimately, speed up the inevitable transformation of tomorrow’s economy. Or should I say the day after tomorrow’s economy?
DISCLAIMER: The views and opinions expressed in this blog post are those of the author and do not necessarily reflect the official policy or position of any other agency, organization, employer or company.
