Whilst doing some research around Bitcoin and the Blockchain I have come across some fantastic ideas and innovations on how this technology has the potential to disrupt some pretty well established institutionalised ways of doing things.
Bitcoin itself is probably not the revolution itself. Looking beyond the digital currency and at the mechanism that is being used to enable it we find a system of decentralised trust. The Blockchain, a public ledger that holds account all transactions undertaken on the peer to peer network. Let's now abstract that concept away from currency transactions and think of the Blockchain as a risk transfer vehicle. Individuals on the network want to exchange trust. Trust that Alice will provide Bob with something of value to him in exchange of something valuable to Alice. Essentially, swapping contracts of trust. The article that crystallised these thoughts for me was in a recent Bloomberg Markets magazine.
There is a lot of activity in the Fintech space at the moment around these concepts of using the Blockchain for streamlining asset management. Take a look at Everledger using the technology to track Diamonds, making this precious commodity traceable back to the stone's origin by building a ledger of assets.
One of the ideas I'm interested in is that of an "Insurance Risk Exchange”. By decentralise the risk capital held by large insurers and reducing capital costs there must be some benefit to pass on by reducing premiums to users on the network.
I'm sure you could continue to refine these ideas and start to create some real positive disruption. There are many hurdles along the way, with financial regulation and a few other elephants in the room. I hope we do not stifle our innovation for the sake of the status quo.
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