This post explores the benefits of blockchain, how blockchain might fit into business strategy, and sticks to the conclusions and implications of blockchain realizing its potential.
Very roughly — blockchain is the idea that, in ten to twenty years, a farmer in a developing country will have access to better and cheaper financial services than upper middle class Americans do today.Blockchain creates benefits for consumers and businesses.
1. Self-sovereign assets and identity
Blockchain enables personal, absolute control of your digital cash and assets. The “password” to these assets is a short sentence of random words. No thumb drive needed.
A refugee can walk over a border with her life savings in her head. A Venezuelan can’t have his assets seized by the bank or government. A borrower can keep secret her “identity password” when applying for credit, mitigating identity theft.
2. Fractional assets
Blockchain facilitates ownership of less than one unit of an asset. You can own $100 worth of Bitcoin (even as one Bitcoin is currently priced at ~$4000); half a Netflix share; 2% of a Manhattan real estate deed; or transfer of half a penny.
An extended family can jointly own a vacation home without a c-corp and shares. A young investor can buy 0.1% of one share of Berkshire Hathaway. Vanguard can reduce costs by replacing index fund machinery with asset slices owned directly by clients.
3. Automated financial agreements
Blockchain automates many types of financial agreements. This automation will interact with, not replace, our existing legal system and traditional contracts.
A farmer’s crop insurance settlement cannot be withheld or delayed if it rains less than three inches. A “decentralized autonom...