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 an I and you might be surprised to know that it's the underlying technology of digital currencies. like Bitcoin. It's now called

blockchain

blockchain

, it's 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. In the last 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's deals with 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 don't do it I still have

money

and I can't send it to you, so cryptographers have long called it the double spam problem, so today we are completely dependent 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, arte and jpmorgan, the US federal government, linkedin, Home Depot and others have found that, the hard way, they exclude billions of people from the global economy, 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 money can take days or weeks to move through the banking system across the city and they take a big chunk of the action, between ten and twenty percent, just to send it. money to another country capture our data and that means we can't monetize it or use it to better manage our lives and our privacy is being undermined and the biggest problem is that they have generally appropriated the bounty of the digital age in an asymmetrical way and we have creation of wealth, 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 all kinds of people? 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 fortunately, an unknown anonymous person or persons 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 transact without a third party and the seemingly simple act set off a spark that ignited the world that has everyone either excited or terrified. or interested in many places, now don't be confused with bitcoin, ok, 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, think of a fiat currency controlled by a stage national. and that's 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 and conduct peer-to-peer transactions and the Trust is established not as a big institution but by collaboration using cryptography and buying some smart code and because trust is native to technology, I call this the trust protocol now you're probably wondering how this works.

Fair enough assets, digital assets like money, music and everything else, are not stored. in one central place but they are 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 They are not Young people are Bitcoin miners and they have at their disposal enormous computing power ten to a hundred times greater than all of Google in the entire world and these miners do a lot of work and every ten minutes, like the heartbeat of 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 in 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 and the preview block to create a chain of blocks and they all have a timestamp like with a digital wax seal, so if you would like to enter 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 is difficult to do and this is infinitely more secure than the computer systems we have bought today Jane, this is how it works, so the Bitcoin blockchain is just one, there are many, the chain of etherium blocks. 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 something like it sounds like a contract that runs automatically and the contract handles The compliance and performance of management and payment, the contract has a kind of bank account, in a sense, 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 until a new model is created. of democracy where politicians are accountable to the citizens, so to understand the radical change that this will bring, let's recognize with the financial services industry this Rube Goldberg machine, it is a ridiculously complicated machine that does something really simple like crack an egg well. or a door.

Honestly, it reminds me of the financial services industry, meaning you tap your card at the corner store and a stream of bits goes through a dozen companies each with their own computer system, some of which are mainframe computers. 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 worldwide financial industry is in a great crisis. People wonder 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 inequality is growing and this is at the center of all the anger, extremism, protectionism, xenophobia and things worst we are seeing growing in the world today, Brexit being the most recent case, so could we develop some new approaches to this inequality problem because the only current approach is to redistribute the wealth tax so that people be better. 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? describes five ways this can be done.

Number one, did you know that seventy percent of the people in the world who own land have fragile land titles, so you get a small farm and in Honduras a dictator comes to power and says, I know you? I 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 de Soto, the great Latin American economist, says that this is the number one problem in the world in terms of economic mobility is more important than having a bank account because if you do not have a valid title to your land you can borrow and you cannot plan the future, that's why companies are working today. with governments to put land titles on a blockchain and once it's there, this is mutable, it can't be hacked, this creates the conditions for prosperity for potentially billions of people, secondly , many writers talk about uber and Airbnb and taskrabbit and lift and so as part of the sharing economy, there is a very powerful idea that peers can come together and create and share.

Wells, my opinion is that these companies don't really share the fact that they are successful precisely because they don't share, aggregate services together and sell to them, what if instead of Airbnb being a 25 billion dollar corporation there was a application distributed on a blockchain that would be called air B&B and would essentially be activated by all the people who have 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 that handles payments only through digital payments are integrated into the system and It even manages reputation because if you rate a room as a five-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 it is not even foreign aid, it is 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. year and it's growing and these people are being scammed Annalee Domingo is a housekeeper and lives in Toronto and every month she goes to the Western Union office with some cash to send remittances to her mother and Manila, it costs her 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 Analy Domingo used a blockchain application called Abra and from our mobile device she said 300 dollars directly to the device her mother's mobile without going through an intermediary and then her mother looked at her mobile device it is like a super interface Open the ATMs they move she clicks on an ATM that is a five star ATM in seven minutes a guy appears at the door she You give one Philippine peso, you put them in your wallet, everything took minutes and a cost of two percent.

This is a huge prosperity number opportunity for the most powerful asset of the digital age: data, and data is truly a new asset class. be larger than previous asset classes like land in the agrarian economy or in industrial plants or even money and all of you create this data, create this asset and guide this trail of digital crumbs behind us as we move along life and these crumbs are compiled into 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 a year ago or your exact location ago. a year and the virtual you.

It is not your property, that is the big problem, so today there are companies that work to create an identity in a black box, the virtual one that you own and this black box moves with you as you travel all over the world. world and is very, very stingy, it only gives you the scrap of information that is required to do something, many transactions, the seller doesn't even need to know who you are, he just needs to know that you were paid and then this avatar sweeps up all this data and allows you to monetize them. and this is a wonderful thing because it can also help us protect 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 lot of content creators who are not compensated fairly because the intellectual property system isbroken broke it the first era of intranets take music musicians are left with crumbs at the end of the entire food chain you know if you are a composer 25 years ago you wrote a hit song you got a million singles you could get royalties around 45 thousand dollars today you're a songwriter you write a hit song you get a million shouts you don't get 45k you get $36 is 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 my helium and music like a smart contract that surrounds it and music protects its intellectual property rights. listen to the song it's free or maybe it's some micro senses flowing into a digital account you want to put the song in your movie that's different and the IP rights are all specified you want to make a ringtone that's different she describes what it's about converts the song a

business

that is on this platform is marketed protecting the copyright and because the song is a payment system in the sense of a bank account, all the money goes back to the artists and they control the industry instead of these powerful intermediaries.

Isn't it just composers, is it any content creator as art? Like inventions, scientific discoveries, journalists, these are all kinds of people who don't receive fair compensation and with blockchains they're going to be able to make it rain on the blockchain. blocks and that is a wonderful thing, so these are five opportunities out of a dozen to solve a problem prosperity, which is one of the countless problems that blockchains are applied to now technology does not create prosperity, of course people Yes it does, but my case to you is that once again Genie technology has 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 opportunity to rewrite the economic energy grid and the old order of things and to solve some of the world's most difficult problems, if we want that thank you