How the blockchain is changing money and business Don Tapscott

The technology that will likely have the biggest impact in the coming decades has arrived and it's not social media, it's not big data, it's not robotics, it's not even AI, and you might be surprised to know that it's the underlying technology of currencies. digital like Bitcoin. Called

blockchain

blockchain

is now not the loudest word in the world, but I believe that this is now the next generation of the Internet and that it holds great promise for all companies, all societies and for all of you individually, as you know in the past. In a few decades we've had the Internet of information and when I send you an email or a PowerPoint file or something like that, I don't actually send you the original, I send you a copy and that's great, it's democratized information, but when it comes to assets things like

money

financial assets like stocks and bonds loyalty points intellectual property music art a vote carbon credit and other assets sending you a copy is a very bad idea if I send you a hundred dollars it is very important that I do not have them yet

money

and that I can't send it to you, which is why cryptographers have long called it the double spam problem, which is why today we rely entirely on large intermediaries, intermediaries like banks, governments, large social media companies, credit card companies, etc They establish trust in our economy and these intermediaries perform all the commercial and transaction logic of all types of commerce, from authentication, identification of people to clearing, settlement and record keeping and generally do a job Pretty good, but there are growing problems in starting your centralized work.

That means they can be hacked and increasingly are, and JP Morgan, the US federal government, LinkedIn Home Depot and others have found that they lock billions of people out of the global economy the hard way, for example, people who do not have enough money to have a bank. Mind you, they slow things down, an email might take a second to go around the world, but it can take days or weeks for money to move through the banking system across the city and they take a big chunk of the action, including 10 and 20 percent, just to send money to another country, they capture our data and that means that we cannot monetize it or use it to better manage our lives and our privacy is being undermined and the biggest problem is that, in general, it is have appropriated the generosity of the digital age. symmetrically and we have wealth creation, but we have growing social inequality, so what would happen if there was not only an Internet of information?

What if there was an Internet of Value, a kind of vast distributed global ledger running on millions of computers and available to everyone and where all types of assets, from money to music, could be stored, transacted, exchanged? and managed, all without powerful intermediaries, what if there was a native medium for value? Well, in 2008 the financial industry collapsed and perhaps auspiciously, an unknown anonymous person or persons named Satoshi Nakamoto created a document. where he developed a protocol for a digital cache that used an underlying cryptographic currency called Bitcoin and this cryptocurrency allows people to establish trust and make transactions without a third party and the seemingly simple law set off a spark that ignited the world that has everyone excited or terrified or interested in many places now don't get confused with Bitcoin, it's okay, bitcoin is an asset that goes up and down and that should be of interest to you if you are a speculator in general, it is a cryptocurrency, not a fiat currency controlled by a nation. stage and that's of most interest, but the real pony here is the underlying technology which is called blockchain, so for the first time in human history, people everywhere can trust each other and transact peer-to-peer and trust is not established by a large institution, but by collaboration through cryptography and through some clever code, and because trust is native to technology, I call it the trust protocol.

Now you're probably wondering how this works. Digital assets, like money, music, and everything else, are not. They are stored in a central place but distributed on a global ledger using the highest level of cryptography and when a transaction is made it is published globally on millions and millions of computers and all over the world there is a group of people called miners, These are not young people, they are Bitcoin miners and they have at their disposal enormous computing power between ten and a hundred times greater than all of Google in the entire world and these miners do a lot of work and every ten minutes is like the heartbeat of a network, a blog.

It is created to have all the transactions from the previous ten minutes and then the miners get to work trying to solve some difficult problems and they compete and the first miner to discover the truth and validate the block is rewarded in digital currency in the case. of the Bitcoin blockchain with Bitcoin and then this is the key part, that block is linked to the previous block and the preview block to create a blockchain and they all have a timestamp like with a digital wax seal , so if I wanted to go in and hack a block and say pay you and you with the same money.

You would have to hack that block plus all previous blocks, the entire history of commerce on that blockchain, not just on one computer but on millions of computers simultaneously, all using the highest levels of encryption in light of the most powerful computing resource. of the world that is looking at me difficult to do and this is infinitely more secure than the computer systems that we have bought from Jane today, that's how it works, so the Bitcoin blockchain is just one of those that exist. Many, the etherium blockchain was developed by a Canadian named vitalik boot Aaron, he is 19 years old and in this blockchain it has some extraordinary capabilities, one of them is that you can create smart contracts, it is kind of like it sounds, it is a contract which is executed automatically and the contract takes care of execution, management, performance and payment.

The contract has a kind of bank account, in a sense, agreements between people. Today on the etherium blockchain there are projects underway to do everything from creating a new replacement for the stock market to creating. a new model of democracy where politicians are accountable to citizens, so to understand the radical change that this will bring, let's go with the financial services industry that recognized this Rube Goldberg machine, it is a ridiculously complicated machine that does something really simple Like Breaking an Egg or The Rolling Shutter Door reminds me a little of the financial services industry. Honestly, it means you tap your card at the corner store and a stream of bits passes through a dozen companies, each with its own computer system, some of which are mainframe computers from the '70s older than many of the people. in this room and three days later there was a deal with a blockchain financial industry, there would be no deal because payment and settlement are the same activities, just a change in the ledger, so Wall Street and around the world The financial industry is in A large population is wondering if we can be replaced or how we adopt this technology to be successful now.

Why should they care? Let me describe some applications. Prosperity. The first era of the Internet. The Internet of information brought us wealth, but not shared prosperity because social networks. Inequality is growing and this is at the heart of all the anger, extremism, protectionism, xenophobia and worse that we are seeing growing in the world today. Brexit is the most recent case, so could we develop some new approaches to this inequality problem? Because the only focus today is to redistribute the wealth tax. It's better for the people. Could we predistribute wealth? Could we change the way wealth is created by first democratizing wealth creation by involving more people in the economy and ensuring they are fairly compensated?

Let me describe five ways this can be done. Number one. Did you know that 70 percent of people in the world who own land have precarious property titles? Then you have a small farm and in Honduras a dictator comes to power, he says. I know you have a piece of paper that says you're on your farm, but the government computer says my friend owned your farm. This happened on a large scale in Honduras and this problem exists everywhere. Hernando DeSoto, the great Latin American economist, says. This is the number one problem in the world in terms of economic mobility, more important than having a bank account because if you don't have valid title to your land you can't borrow and you can't plan for the future.

So today companies are working with governments to put property titles on a blockchain and once it's there, it's a blockchain that can't be hacked, this creates the conditions for the prosperity of potentially billions. of people. Secondly, many writers talk about Uber and Airbnb and TaskRabbit and lyft etc. as part of the sharing economy, it's a very powerful idea that peers can come together and create and share wealth. My opinion is that these companies don't really share the fact that they are successful precisely because they don't share it. They aggregate services together and sell them, what if instead of Airbnb being a twenty-five billion dollar corporation there was a distributed application on a blockchain that we'll call Airbnb and it was essentially owned by everyone who has a room to rent? and when someone wants to rent a room, they go to the blockchain database and all the vetted criteria help them find the right room and then blockchain helps with hiring, it identifies the party that handles the payments only through digital payments integrated. the system and even manages the reputation because if she rates a room as a 5 star room, that room is there, it is rated and it is immutable, so the big disruptors of the sharing economy in Silicon Valley could be disruptive and this would be good for prosperity number three.

The largest flow of funds from the developed world to the developing world is not corporate investment and not even foreign aid, but remittances. This is the global diaspora. People have abandoned their ancestral lands and are sending money to their families back home. It's six hundred billion dollars a year and it's growing and these people are being scammed. Annalee Domingo is a housekeeper who lives in Toronto and every month she goes to the Western Union office with some cash; she sends remittances to her mother and to Manila. It costs you about 10 percent the money takes four to seven days to arrive mom you never know when it's going to arrive it takes five hours of your week to do this six months ago Annalee Domingo used a blockchain application called Abra and from her mobile device she said 300 dollars directly to her mother's mobile device without going through a middleman and then her mother looked at her mobile device it's like a super interface Open the ATMs moving she clicks on an ATM that is a 5 star ATM in seven minutes a guy shows up at the door you give her a Philippine peso she puts them in her wallet everything took minutes and a cost of two percent this is a great opportunity for prosperity number four the most powerful asset of the digital age is data and data is really , a new asset class can be larger than previous asset classes, like land in the agrarian economy or in an industrial plant or even money, and all of you create this data, create this asset and lead this digital crumb trail behind us as we go.

Life and these crumbs are collected in a mirror image of you, the virtual you and the virtual you, you may know more about yourself than yourself because you can't remember what your body said or said a year ago or your exact location a year ago. and the virtual you is not yours, that is the big problem, so today there are companies that work to create an identity in a black box, the virtual you is yours and this black box moves with you as you travel the world and it's very very stingy, it only reveals a sliver of information that is required to do something, a lot of transactions, the seller doesn't even need to know who you are, they just need to know that you were paid and then this avatar sweeps up all this data and allows you to monetize it and This is a wonderful thing because it can also help us protect our privacy and privacy is the basis of a free society.

Let's put this asset we created back under our control, where we can own our own identity and manage it. responsibly finally finally number five there are a large number of content creators who do not receive fair compensation because the intellectual property system is broken it was broken by the first era of theintranet takes music musicians are left with crumbs at the end of the entire food chain you know if you are a songwriter 25 years ago you wrote a hit song you got a million singles you could get royalties around $45,000 today you are a songwriter you write a hit song you get a million whoops you don't do it you get 45k you get $36 enough to buy a good pizza so Imogen Heap the Grammy winning singer-songwriter is now putting music on a blockchain ecosystem she calls it mycelium and the music has a contract intelligent surroundings and music protects its intellectual property rights. you want to listen to the song it's free or maybe it's a few micro cents going into a digital account you want to put the song in your movie that is different and the IP rights are all specified you want to make a ringtone that is different she describes that The song becomes a

business

, it is available on this platform that is marketed protecting the copyright and because the song is a payment system in the sense of a bank account, all the money returns to the artist and they control the industry instead of these powerful middlemen.

Now this isn't just composers, it's any creator of content as art. Like inventions, scientific discoveries, journalists, there are all kinds of people who don't get fairly compensated and with blockchains they're going to be able to make it rain on blockchain and that's something. wonderful, so these are five opportunities out of a dozen to solve a prosperity problem, which is one of the countless problems that blockchains are applied to now, technology does not create prosperity, of course people do ago, but my case to you is that once again the technology genie escaped from the bottle and was summoned by an unknown person or persons at this uncertain time in human history and is giving us another kick in the can. , another chance to rewrite the economic energy grid and the old order of things and solve some of the world's toughest problems, if we thank them.