Feb 20, 2020
Why reimagine our financial services using blockchain technology
What decentralized blockchain-enabled applications can we build to help with this growing marketplace and lead to universal prosperity for all?
We can no longer answer the question of what exactly is money. What I mean by this is how money is created and valued. Money is perceived value and not guaranteed by anything physical and scarce. Its creation is complex and varies by country.
Robust cryptocurrency project’s value is linked to the limited supply that will circulate in the market. Attributing this finite supply gives scarcity and adds value — preventing the cryptocurrency from being devalued by a limitless quantity.
I make this point as society needs new innovative solutions as our lives increasingly move online and become more fragile. Our systems have become more interconnected and less secure.
I believe blockchain can help bring about change to our foundational systems and create a more transparent, stable, and inclusive future of all.
Blocking innovation
While out walking, a writer often encountered a man walking his four dogs. Three of the dogs ran and played through the fields, but one stayed near its owner, running in circles. When the writer finally stopped and asked about this odd behavior, the owner explained that it was a rescue dog that had spent most of his life locked in a cage. The rescue dog continued to run in circles as though contained inside a confined box.
How are we running in circles confined to a box blocking innovation?
When a task is narrowly defined, we require no creativity, which is how most of our working environments have been formed in the last century.
As we transition into the future of work and adopt new working practices where narrowly defined tasks will be automated, we need to start overhauling our education systems and future-proofing out businesses now in 2020.
The future of work has the potential to be more creative, collaborative, and interconnected and solve problems across nations and borders. Competition and combative markets that served us in the past will not help us well in the future. Collaboration is critical, and blockchain is one limitless global collaborative digital tool that can be used to help with this problem.
Acknowledging this change will give everyone higher capacity and time to future-proof their careers and hopefully to the benefit of all global citizens.
Intangibles economy an abstract concept
With the adoption of emerging technologies and society becoming more aware of their data usage by third-parties, the potential is here in the next decade to lay the foundations that will enable a more comprehensive intangibles-based economy.
The intangibles economy is an abstract concept, but one that is driving the 21st-century economy and fuelling exciting technological innovations, such as blockchain and decentralized applications.
This invisible marketplace is one area I think peer-to-peer payments enabled by blockchain will become an essential part of our society’s financial fabric and the future of better inclusion.
In the post-bitcoin innovation world and the growth of the intangibles-based economy, it appears society is already reimagining money and our global footprint.
Intangible-concepts become tangible
Companies like Airbnb and Uber were once concepts, and these companies do not own the assets they sell. They developed highly scalable digital products that innovatively enable the buying and selling of services globally — all without owning any of the real assets and the financial risk associated with doing so.
According to Reuters, Airbnb’s revenue for 2017 topped $2.5 billion, more than 50 per cent increase over 2016. Regardless of the abstract nature of companies like Airbnb and Uber, they are now companies that have delivered global success.
Abstract ideas are hard to value by finance professionals and investors, and we have seen this with over-inflated valuations of ideas-only based companies and the blockchain concepts that have failed.
Nonetheless, estimates are that by 2040 the intangibles-based marketplace could generate a new global wealth value estimated at a staggering US$ 1,281 trillion, an industry that is ripe for disruption.
Reinventing our financial systems
The adoption of blockchain technologies is here to help reinvent the financial payments system as we currently know it. The convergence of new technologies is why it is only now blockchain visionaries, developers, entrepreneurs and academics can come together to innovate at a scale and pace not seen before.
Blockchain was around before bitcoin’s invention in 2008. Still, the acceptance of other technologies, such as cloud computing, was not universally accepted as a standard business practice until late in the last decade.
These advances in other technologies out with blockchain and hope to make the world a better place is why it is only now we have the right technological tools at our disposal to reimagine e-commerce and even our digital selves.
Why reimagine our financial services?
The benefit of reinventing our current financial systems and using blockchain technology is a more inclusive future for all.
The efficiencies and capabilities blockchain technology offer is the potential to lower operating costs in areas such as transaction fees. For example, when you pay for your coffee by card, your payment goes through approximately five to seven intermediaries.
Blockchain can help replace legacy centralized operating systems that are continuously under cyberattacks, where malicious actors are primarily after your data. Institutions incur high costs to their business to secure the centralized systems that protect your data.
In a blockchain world, our financial systems could become more secure, efficient, inclusive, and user-friendly. Your data is your data and on a blockchain that is not susceptible to a malicious attack and protected at the highest level by complex mathematical problems that require solving to penetrate the perimeter — a virtually impossible endeavour.
Decentralized applications
Decentralized applications or dApps are applications built on top of a blockchain infrastructure layer. Think of blockchain infrastructure like building a house. The builders who lay the foundation are not the same as the joiners who are the carpenters of the house frame.
Each specialist builder has a part to play and the home cannot be built without each person and their specialist skill doing their part.
The blockchain foundation layer allows developers in conjunction with the blockchain community and business specialists to create a user-friendly portal to utilize blockchain technology for anyone without the need to understand the underlying technology.
However, we have also seen the emergence of scams where malicious actors are luring customers to believe their company has built on a blockchain — manipulating a traditional database located on central servers.
Before taking part in the blockchain or crypto economy, please do your due diligence.
In summary
Blockchain has the potential to be the foundational layer for a new era of e-commerce, one which is more inclusive and sustainable.
As we reimagine money, the future of work, and the foundations that could help society with this transition, we should not dismiss bitcoin, cryptocurrencies, and blockchain because they are complex concepts.
Dismissing blockchain at this stage would be a lost opportunity our community has for evolving our financial and banking systems in the next decade.
The applications that we build on reputable blockchain systems can unlock the growing intangibles economy and enable inclusion and reimagining our world for all.
What decentralized blockchain-enabled applications can we build to help with this growing marketplace and lead to universal prosperity for all?
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