Blockchain comes to Davos

Wednesday 27 January 2016

If you needed proof that blockchain technology is hitting the mainstream, take a look at this video.

Last week the World Economic Forum took place in Davos. It’s a meeting of the world’s financial elites, the richest and most influential people on the globe: a highly exclusive clique of politicians and businesspeople, hidden away from the world’s media - unless they have expressly been invited - in the mountains of Switzerland.

Traditional finance has been slow to catch on to the benefits of bitcoin - or, at least, the promise of blockchain technology that bitcoin pioneers. But well they might. As one article on the World Economic Forum website points out, ‘Banks are now racing to harness the power of the blockchain technology, in a belief that it could cut up to $20bn off costs and transform the way the industry works.’ In fact, the WEF names blockchain-based currencies as one of the key features or technologies of the Fourth Industrial Revolution (others include Big Data, 3D printing and the sharing economy).

This video, featured on the World Economic Forum’s YouTube channel, is a pretty good introduction to the potential of blockchain technology. It recognises the huge benefits and makes some bold but entirely reasonable predictions, which are all the more surprising given where they’re coming from. For example, ‘The future global economy will move towards one of distributed property and trust.’ Scary stuff if your billions rely on providing trust services.

'Get ready, because change is coming'

There’s a heads-up for the existing financial system: ‘A huge proportion of trust services, from banking to notaries, will face challenges on price, volume and in some cases their very survival.’

Bitcoin itself is even explicitly mentioned, albeit only once: in the context of the ‘difficulties’ that traditional financial intermediaries may find they soon have in collecting money. Odd that the only time the most successful implementation of blockchain technology is mentioned, it’s in the context of fraud…

And herein lies a hint for what the future holds. We are going to see much more about blockchain solutions for the banking industry, and much more besides, over the coming months and years. ‘Blockchain’ is becoming the new buzzword (and it is just ‘blockchain’, not ‘the blockchain’ or ‘a blockchain’, in the marketing materials).

But it’s not going to be a blockchain that many who started out their blockchain careers with bitcoin will recognise. The debate that is now hotting up is between ‘permissioned’ and ‘unpermissioned’ distributed ledgers. The differences are profound, and are going to shape our world in the coming decade - but that’s a topic for another article.

 


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