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Kindle Notes & Highlights
by
Don Tapscott
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March 25 - April 13, 2018
In other words, we can’t trade what isn’t ours on the blockchain, whether it’s real property, intellectual property, or rights of personhood.
Proof of Existence doesn’t maintain a copy of any original document; the hash of the document is calculated on the user’s machine, not on the PoE site, thus ensuring confidentiality of content.
So the blockchain provides means of proving ownership and preserving records without censorship.
A smart contract provides a means for assigning usage rights to another party, as a composer might assign a completed song to a music publisher.
The bitcoin system provides a very high degree of certainty as to the outcome of a contract.”
The contract couldn’t be seized, stopped, or redirected to a different bitcoin address.
As long as someone on the other end could decode the transaction and record it in the blockchain, I could effect the [smart contract].
Most financial institutions have mobile payment apps that combine cameras and QR codes. However, the fees needed to support these intermediaries make micropayments impractical.
Consumers at the bottom of the pyramid still can’t afford the minimum account balances, minimum payment amounts, or transaction fees to use the system.
“The potential of using the blockchain for property records in the emerging world, where that’s a huge issue related to poverty,” is significant,
so allowing people to actually say, ‘I own this property,’ and then use that for collateral to improve them and their family situation is a fascinating use case.”
blockchain technology could be an important tool for protecting and preserving humanity and the rights of every human being, a means of communicating the truth, distributing prosperity, and—as the network rejects the fraudulent transactions—of rejecting those early cancerous cells from a society that can grow into the unthinkable.
If we design for integrity, power, value, privacy, security, rights, and inclusion, then we will be redesigning our economy and social institutions to be worthy of trust.
When one of its customers taps her credit card on a state-of-the-art card reader to buy a Starbucks grande latte, her money passes through no fewer than five different intermediaries before reaching Starbucks’s bank account. The transaction takes seconds to clear but days to settle.
They are among the 2.2 billion people who live on less than two dollars a day.
Banks simply don’t view serving these people as a “profitable proposition,” according to a recent Harvard Business School study.
The global financial crisis of 2008 was a case in point. Excess leverage, a lack of transparency, and a sense of complacency driven by skewed incentives prevented anyone from identifying the problem until it was nearly too late.
Why, for example, does Western Union need 500,000 points of sale around the world, when more than half the world’s population has a smart phone?
banks “were doing everything they could to increase transaction costs in every way possible.”
Capital and sheer scale, combined with a regulatory and social license to operate allows banks to extract as much as they can, in country after country, especially in the United States, making billions of dollars of profits.”
Because of their monopoly position, many incumbents have no incentive to improve products, increase efficiency, improve the consumer experience, or appeal to the next generation.
For the first time in history, two parties who neither know nor trust each other can transact and do business. Verifying identity and establishing trust is no longer the right and privilege of the financial intermediary.
The blockchain can also establish trust when trust is needed by verifying the identity and capacity of any counterparty through a combination of past transaction history (on the blockchain), reputation scores based on aggregate reviews, and other social and economic indicators.
banks harnessed that capability, they could eliminate an estimated $20 billion in back-office expenses without changing their underlying business model, according to the Spanish bank Santander, though the actual number is surely much greater.12
The bitcoin network takes an average of ten minutes to clear and settle all transactions conducted during that period.
the shift to instant and frictionless value transfer would free up capital otherwise trapped in transit, bad news for anyone profiting from the float.
Irrevocability of a transaction and instant reconciliation of financial reporting would eliminate one aspect of agency risk—the risk that unscrupulous managers will exploit the cumbersome paper trail and significant time delay to conceal wrongdoing.
blockchain could reduce inefficiencies and costs “by allowing multiple parties to rely on the same information rather than duplicating and replicating it and having to reconcile it.”
what interests financial executives everywhere is the notion of using the blockchain to process any trade securely from beginning to end, which could dramatically lower costs, increase speed and efficiency, and mitigate risk in their businesses.
R3 Consortium.
Hyperledger Project counts R3 as a founding member, along with Accenture, Cisco,
demonstrates how seriously the industry is taking this technology and also how reluctant it is to embrace fully open, decentralized blockchains like bitcoin.
industry players suggest that the technology itself functions like a regulation.
“Amazon was not an HTTP company and Google was not an SMTP company. Circle is not a bitcoin company,”
financial products.” Though he wouldn’t speak to it specifically, the financial data of millions of customers could become more valuable to the company than their financial assets.
Banks, despite their enthusiasm for blockchain, have been wary of these companies, arguing blockchain businesses are “high-risk” merchants. Perhaps their reluctance stems from the fear of hastening their own demise.
If every transaction is available on a shared, globally distributed ledger, then why would we need public accountancies to translate for us?
human error is a leading cause of accounting mistakes, according to AccountingWEB.
“We do a lot of regulatory reporting where we’re basically saying, here’s everything we’ve done, because what we’ve done sits inside a system that nobody else can see.”
“A public ledger that is constantly audited and verified means you don’t have to trust the books of your partner; there is integrity in the statements or the transaction logs, because the network itself is verifying it.
After all, he argues, “Who is going to invest in a company that shows you what’s going on quarterly, compared to one that shows you what’s going on all the time?”
Once the votes are in, the decision as well as the board meeting minutes would be time-stamped and recorded in an immutable ledger.
“I can create different personas that represent different sides of myself, and I choose the persona that interacts with the company.”
Imagine getting credit based on shared values, where the people loaning you money appreciate your role in the community and your goals.
Prediction markets would inform the insurance of value and the hedging of risk, potentially even displacing esoteric financial instruments like options, interest rate swaps and credit default swaps.
Ethereum was conceived in 2013 by then-nineteen-year-old Vitalik Buterin, a Canadian of Russian descent.
Even in the technology industry, many argue that monopolies may help with innovation in the short term but may harm society in the long term.
Unlike incumbent firms, they don’t need a brand to convey the trustworthiness of their transactions.
entities are nothing more than a collection of contracts and relationships.
ConsenSys, for example, can architect complex relationships with a diverse set of members, some inside its boundaries, some outside, and some straddling walls, because smart contracts govern these relationships rather than traditional managers.
