Ducatus - how the blockchain is changing money and business by 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 voting art 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 called it the double spam problem for a long time, which is why today we are completely dependent on large intermediaries, intermediaries like banks, governments, large social media companies, credit card companies , etc., to establish We trust our economy and these intermediaries perform all the commercial and transaction logic of all types of commerce, from identifying the location of people to clearing, settlement and record keeping and, above all All in all, they do a pretty good job, but there are growing problems to get started.

They are centralized, which means they can increasingly be hacked. Our US federal government and JP Morgan, LinkedIn Home Depot and others have found that they are locking billions of people out of the global economy the hard way - for example, people who don't have enough money to have a bank account. They slow things down, an email may take a second to go around the world, but it can take days or weeks for money to move through the banking system throughout the city and they get a big piece of the action, between a 10 and 20 percent. just to send money to another country they capture our data and that means 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 they have appropriated the generosity of the The digital age is symmetrical 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 that runs on millions of computers and is 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 named Satoshi Nakamoto created a paper where he developed a protocol for a digital cache that used an underlying cryptocurrency called Bitcoin and this cryptocurrency allows people to establish trust and make transactions without a third and the seemingly simple act set off a spark that ignited the world that has them all. excited or terrified or otherwise 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, it is not a fiat currency. controlled by a nation-state and that is of greater 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 on peer-to-peer transactions and trust is not established. by some big institution, but by collaboration through cryptography and some clever code, and because trust is native to technology, I call this the trust protocol.

Now you're probably wondering, how does this work? Fair enough assets, digital assets like money, music and everything in between are not stored in a central location, but rather 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 ten to one hundred times greater than all of Google in Everyone and these miners do a lot of work and every ten minutes is like a heartbeat.

From a network a block is created that has 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 digital currency in the case of Bitcoin blockchain with Bitcoin and then this is the key part, that block is linked to the previous block in the previous block to create a chain of blocks and they all have a timestamp like with a digital wax seal , so if I wanted to hack a block and say pay you and you with the same money.

You would have to hack that block plus all the previous blocks, the entire history of commerce on that blockchain, not just on one computer but on millions of computers simultaneously. using the highest levels of encryption in light of the most powerful computing resource in the world which is looking at me hard to do and this is infinitely more secure than the computing systems we have today blockchain this is how it works so the blockchain Bitcoin is just a There are many, the etherium blockchain was developed by a Canadian named Vitalik boo Turin, he is 19 years old and this blockchain has some extraordinary capabilities, one of them is that you can create smart contracts, it is something like It seems, a contract that executes itself. and the contract handles the execution and performance of management and payment, the contract has a kind of bank account in a sense of agreements between people and today on the etherium blockchain there are projects underway to do everything from creating a new replacement for the stock market.

To create a new model of democracy in which politicians are accountable to citizens, to understand the radical change this will bring, let's look at a financial services industry. Recognize Rube Goldberg, a machine, it's a ridiculously complicated machine that does something really simple like break an egg or close a door reminds me a little bit of the financial services industry. Honestly, I mean, 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 mainframes from the '70s. people in this room and three days later an agreement occurs with a blockchain financial industry, there would be no agreement because the payment and the agreement are the same act, it is just a change in the ledger, so Wall Street and all the around the world the financial industry is in big trouble for this wondering if we can be replaced or how do we adopt this technology to be successful now why should you care well let me describe some applications prosperity the first era of internet which brought internet of information wealth to us, but not shared prosperity because social 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 approach today is to redistribute the wealth tax to the people and spread it out more. Could we predistribute wealth? Could we change the way wealth is created in the first place, democratizing wealth creation by involving more people in the economy and to ensure they get fair compensation, let me outline five ways this can be done. First of all, did you know that 70 percent of the people in the world who have land have precarious property titles, so they have a little bit of a farm and Honduras some dictator comes to power he says I know you have a piece of paper that says that you are on your farm but the government computer says that my friend owned your farm this happened on a large scale in Honduras and this problem that exists everywhere Hernando de Soto the great Latin American economist says that this is the number one issue 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 borrow against it and you can't plan for the future, so today companies are working with the governments to put property titles on a blockchain and once it's there it's immutable, it can't be hacked, this creates the conditions for the prosperity of potentially billions of people, secondly, a lot. of writers talk about uber, Airbnb, TaskRabbit and lyft, etc., as part of the sharing economy.

This is a very powerful idea that peers can come together and create and share wealth. My opinion is that these companies do not actually share, in fact, They are successful precisely because they do not share, they aggregate services 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 examined criteria help them find the right room and then blockchain helps with hiring, identifies the party handles payments only through digital payments, they are integrated into the system and it even manages reputation because if you rate the 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 disrupted 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 it is not even foreign aid their remittances this is the global diaspora people have abandoned their ancestral lands and are sending money to their families back home this is six hundred billion dollars a year and growing and these people are getting scammed.

Annalee Domingo is a housekeeper living in Toronto and every month she goes to the Western Union office with some cash. sending remittances to her mother and Manila costs about ten percent the money takes four to seven days to arrive mom never knows when it will arrive it takes five hours of her week to do this six months ago Anna Lee Domingo used a blockchain app called Abra and from her mobile device she said that 300 dollars went directly to her mother's mobile device without going through an intermediary and then her mother looked at her mobile device it is like a super interface Abra the ATMs move, she clicks on an ATM that a 5 star ATM is seven minutes away the guy shows up at the door he gives her a Philippine peso she puts them in her wallet everything took minutes and a cost of 2% this is a great opportunity for prosperity number four the most powerful The asset of the digital age is data and data is really a new asset class, perhaps bigger than previous asset classes, like land in the agrarian economy or in an industrial plant or even money, and you all create this data, we create this asset and leave this.

A trail of digital crumbs behind us as we move through life and these crumbs are collected into a mirror image of you, the virtual you and the virtual you, you may know more about yourself than yourself because we don't you can remember what you bought a year ago or said a year ago or your exact location a year ago and the virtual you is not your property, that's the big problem, that's why today there are companies working to create an identity in a box black box, the virtual you is your property and this black box moves with you as you travel around the world and it is very, very stingy, it only reveals the minimum information that is required to do something, many transactions, the seller does not even need to know who you are, you just need to know what you have paid for and then these avatars sweep up all this data and allow you to monetize it and this is a wonderful thing because it can also help us protect our privacy and privacy is the foundation of a free society.

Let's get this asset we created back under our control. control everything where we can own our own identity and manage it responsibly finally finally number five there are a large number of content creators who are not compensated fairly because the intellectual property system is not working, it was with the first Internet eraTake music, musicians are left with crumbs at the end of the entire food chain. You know, if you're a songwriter, 25 years ago, you wrote a hit song, you got a million singles, you could get royalties of about $45,000 today, you're a songwriter. You write a hit song, it gets a million shouts, you don't get 45k, you get $36, enough to buy a good pizza, so imagine the heat, the Grammy-winning singer-songwriter is now putting music on a blockchain ecosystem, she does it called mycelium and the music has a smart contract surrounding it and the music protects its intellectual property rights you want to listen to the song it's free or maybe a few micro cents flow to a digital account you want to put the song in your movie that is different and the intellectual property rights are all specified, you want to create a different ringtone.

She describes the song becoming 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 flows. We go back to the artist and they control the industry instead of these powerful middlemen. Now, this isn't just composers, it's any person, creator of content like art, 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 problem, prosperity, which is one of the countless problems that blockchains can be applied to now, technology does not create prosperity, of course people yes it does, but my case to you is that once again the technology genie has escaped from the bottle and was summoned by an unknown person or persons at this uncertain time in human history and it 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 yes we will thanks