Banks Are Inviting The Trojan Horse In...And It Will Destroy Them
The history of the Internet is littered with a few lessons that we cannot ignore.
Lesson #1:
Whatever the Internet enters, it creates an abundance of.
We saw this with information, music, video, and communication. A few decades ago, all these things were at a premium. Now, we see services that provide unlimited amounts for nothing or minimal cost.
Netflix, Spotify, Pandora, YouTube (and now D.Tube), and all the instant messaging apps coupled with a trillion websites means that all these areas are now abundant. Each of them provides more than any of us could consume or use in 1,000 lifetimes.
Lesson #2:
The established companies tend to be destroyed when the Internet enters their realm.
Since money is taken out of the process, the Internet tends to upend whatever is in existence. Again, looking at the areas where it created abundance, we see Blockbuster, record companies, newspapers, magazines, Telcos long distance phone service, and many retailers destroyed.
Lesson #3:
The incumbents often invite the Internet in before it crushes them.
This was most true in the information age of the 1990s. Many of the first websites were set up by the purveyors of information. These companies, typically magazines and newspapers. embraced the Internet only to see it destroy many of them. While there are still a number of them around, they are much smaller in scope (and influence) than they were 30 years ago.
Lesson #3 is the point of this article. I believe we are starting to see a repeat of this.
The banks and other financial institutions are starting to embrace blockchain. Just today, there were two major announcements which could radically affect that industry.
HSBC conducted the first ever trade finance transaction on the blockchain. This opens up a potential market of $9T.
“We don’t envisage the platform as anything other than a utility,” the FT quotes Vivek Ramachandran, head of innovation and growth for commercial banking at HSBC as saying in a statement.
That “utility” could however ultimately involve some of the world’s largest corporations looking to save on processing costs and improve security over paper-based deals.
Basically, the banks are looking to blockchain because it saves them money on fees. Even money moved between banks is costly since they all charge each other insane amounts. Blockchain is a way to speed up the process while making it less costly. Of course, the goal is to increase the bank's profits.
The second piece of news is that it was announced that an exchange is opening up to trade Cryptocurrency using NASDAQ's technology. This exchange will launch next month.
Nasdaq, the second largest stock exchange in world by market capitalization after the New York Stock Exchange (NYSE), is providing the technology to power the new centralized crypto exchange, DX, according to the project’s CEO Daniel Skowronski. Skowronski called the upcoming exchange a “one-stop-shop” for “exchanging fiat and crypto, holding coins and as well as wallet services.”
Both of these moves are big for the cryptocurrency industry. The blockchain technology offers so many benefits that these large corporations, especially in the financial world, are realizing what is offered. In the short term, this will help the adoption of blockchain and cryptocurrency across the entire spectrum. Mass adoption, in my view, will be sped up because of the moves these large companies are making. Let us be honest, their reach and marketing power is enormous.
The problem for these financial institutions is that all they are proposing comes at a cost. While the fees will be less than traditional banking, they are more than if done on an open, decentralized blockchain. These institutions exist to make money. Therefore, while cutting fees, they are still going to make money.
This creates a situation for them since there will come a point in time when people will realize that paying the fees to these companies makes no sense. Individual companies are going to be able to do get what they need simply by going to a blockchain directly. There is not going to be a need to go through a HSBC or centralized exchange.
At the same time, what the NASDAQ technology using company does not realize is that all they are proposing can be picked up and dumped on the Bitshares blockchain. In fact, the entire NASDAQ and NYSE could operate on there. Ultimately, there is no need to go through them and have them take a cut of each transaction.
This is what I mean by saying the banks are inviting the Trojan Horse in....
Just like the information purveyors embracing the Internet only to see it destroy many of them, we are going to see the same thing. Banking is about to be upended because of blockchain and cryptocurrency. Some of these institutions will prevail as they adopt a new way of doing things. Most, however, will operate in the business as usual mode meaning they are going to try and get as much out of their customers as they can.
This will backfire on them.
There is an alternative system being erected as we speak. In fact, there is a conference going on as I type these words which, I am sure, has a lot of ideas about projects that will be a part of this system going forward.
The lessons of the Internet are clear.
Next up after the banks, governments.
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The blockchain will be looked at in hindsight as the greatest invention humanity has ever seen. We live in a very corrupt world, and the blockchain seeks to shed transparency on that corruption and become resistant to it.
When I was a kid my dad would watch Star Trek: The Next Generation. In this sci-fi utopia, money doesn't exist, and they never explain how society operates. How could they, I thought, because that is impossible.
The blockchain is showing us that not only is a world without money possible, it's probable. Even cryptocurrency will be outdated by the blockchain in the future. All that will remain are our decentralized reputations across multiple chains. This is a truly mind blowing revelation if you can actually believe that it will happen.
In Star trek,it's a honor to do something in your life.They have replicators,and unlimited energy.
Right, so what is the population of Earth? How do you stop overpopulation when everything is free? When you see that Captain Picard has a huge plot of land (that he almost never uses) how does society decide that he gets that and someone else doesn't? There is no money to determine these things. Blockchain reputations make a lot of sense in these contexts.
Fascinating. I've never seen this said before. Have you written anything about it?
Yep, two months ago.
https://steemit.com/cryptocurrency/@edicted/cryptocurrency-is-the-first-step-to-no-currency
I think the blockchain's ability to gauge reputation and trust is far more valuable than its ability to track money.
That's a fucking crazy thought; I can't wait to read that.
Maybe you're right, because the blockchain is advancing by leaps and bounds and every time there are more transactions and negotiations that are made through them. If it continues like this, the banks will go into the background. we will pay for basic services such as electricity, water, telephone and trapsorte with cryptocurrency.
It is a pity for the owners of the banks, however they must be aware of this and must have their investment secured, the era of the cryptocurrency has arrived and is NOW.
Hi @taskmaster4450. Great and insightful article. It puts a bit of perspective on the whole idea. It’s almost as if they have fomo but at the same time have the power to destroy the system. I think many institutions and even professions will become obsolete in the near future at the rate at which this new industry is moving. Thanks again for a quality article!
"The established companies tend to be destroyed when the Internet enters their realm." - very true !
Banks know how useful the blockchain technology is they just don't want to admit it because admiting it means they will be seen as a slow, expensive and highly redundant system that the blockchain can do with more transparency, speed and less cost.
You're brilliant. I'm so glad to have you as part of this community and in the blockchain.
Well, I must admit it would be a welcome wonder to see the tide turn on the Banksters and Elites. I like to think that we here on Steemit have a small part in their demise. Let it be so. Thanks once more for your posts.
Yah, blockchain will remove many hessels in forex trsansaction but we have to wait to see which currency will fit most to operate this activity. What do you think about this?
great information....