The Second Era of the Internet and the new Economy.
we have to be getting excited about the fact that the internet is entering a second era and we need to transform our businesses around that. for the last 30 years, we’ve had the internet of information but now when I send some information I’m actually sending you a copy, a PDF, a PowerPoint even with a website I keep the original that’s fine for information, but when it comes to the things that business leaders really care about assets, things of value, money, stocks, bonds, the intellectual property even cultural assets like art and music or votes sending a copy of those is a terrible idea. you don’t want someone copying your vote. you don’t want someone copying your identity and if I send you a 100$, it’s really important that I don’t still have that money.
Enter Blockchain Satoshi Nakamoto 2008, an anonymous person came up with this way of people transacting doing business with assets peer-to-peer and trust is not achieved by a middleman. it’s achieved by cryptography by collaboration and by some clever code. what that means is that we now have a native digital medium for value.
So what does this mean for you as a business leader?
This is not about Bitcoin or crypto assets, it’s the underlying Blockchain Technology. now people can trust each other and they can transact with anything from money, to music, to votes, to their identities peer-to-peer. so, what that means is that the nature of the corporation and the nature of competitiveness is going to change.
This is a time of great transformation. first of all, every industry will go through huge convulsions. not just financial services. Resources, retail, manufacturing, transportation, logistics, marketing even the government will be transformed.
secondly, it means that every business function will change. consider a CFO with Blockchain, you have something that we call Triple entry Accounting and double-entry accounting for a long time. now there’s automatically a third entry on the Blockchain that means that you have a real-time audit so, you’re not going to need an auditor at the end of the year to come and sample what you did there’ll be a real-time story of everything that happened that you can check throughout the year.
The same is true for all the other c-suite activities. consider the operations person in charge of logistics or supply chain. the supply chain is a 64trillion dollar industry and all of that is going to move on to Blockchain.
The biggest supply chain ever probably the ‘One Belt One Road’ project linking Hong Kong and Rotterdam is using blockchain for trade finance and all kinds of other applications. and that’s a great example because you can see Trade Finance you have a buyer, a seller, and there are various shippers there are escrow agents and authorities and all kinds of players rather than handing off pieces of paper, faxes, emails, and so on everyone has a shared network state where they can look real-time at everything that’s happening.
small companies can be the biggest beneficiaries of blockchain because little companies can now have all the capabilities of big companies without the main liabilities of bureaucracy, legacy systems, culture, and so on and the reason is that Blockchain drops transaction costs in the open market. The cost of the search for finding the right assets, the right money, the right people you don’t have to go to a venture capitalist to raise the money you can do a crowdfunding campaign called an Initial Coin Offering.
Blockchain also drops the cost of collaboration and contracting in an open market because of something called smart contracts. just like what they sound like contracts that self-execute. it’s sort of like a contract with a lawyer, a bank, and a government in software inside the contract.
Companies are going to become more decentralized and they’re going to start to look like networks. business leaders that can figure that out now and take steps now can get the jump.
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