It’s time to rewrite the game rules! Are you ready for this groundbreaking new system?
Yiğit Kulabaş, PhD.*
When we talk about the new technologies that are changing the world, everyone suggests the similar ones. Cloud, big data, the Internet of Things, augmented reality, autonomous tools, artificial intelligence and others… And now, we have a new addition to the list. It is pretty assertive, yet quite modest at the same time. It is called Blockchain. You may have heard of it for the first time, but don’t be sad, because you are not the only one. For now, entrepreneurs and fintech world are interested in Blockchain. Yet, the realization of Blockchain power is not that far considering that people started to understand the size of this craze. Moreover, it will not only change the business world but the world in general.
In order to understand the potential of Blockchain you have to study a lot, because when you simply google Blockchain all you will find is that Blockchain is the same with Bitcoin. This information is partially true though. Bitcoin is a system that functions on Blockchain platform. And yes, you are right again: Bitcoin is an unusual case. Some people just dislike the idea of Bitcoin while some loves it. While some people consider it as nonsense, some thinks it is revolutionary. Yet, none of these thoughts change the fact that the system behind Bitcoin as known as Blockchain has some amazing talents. Let’s say you didn’t fall in the trap, distinguished Blockchain from Bitcoin and continued to do your research. In the second phase of your research you will learn that Blockchain is a distributed database. You may think that it is not as a big deal as you have thought. Don’t give up! Do some more research! Explore this new system! Blockchain is willing to revolutionize the Internet. Try to explore the Blockchain potential, so you can explore yours. Get ready! 2017 will be the year of Blockchain. Let’s have a look at the Blockchain revolution under 7 headings.
1- #TheNewInternet: Yes, the Internet is being redefined. And this time this transformation is even more ambitious than Web 2.0. The new Internet is built on trust and it brings both opportunities and threats for the game players that aims to provide security on online platforms. The first players that pop into the mind are banks, intermediaries, notaries, clearing houses, credit card companies, land offices. When I say intermediaries, don’t think about financial ones only. AirBnb and Uber are on the list as well. We are talking about a revolution storm that can even threat the disruptive innovation leaders.
2- #TrustProtocol: Let’s say you went to a corner shop, did your shopping and gave the cashier $10 cash. The cashier asked neither your name nor your mother’s maiden last name. He didn’t call your bank or checked your credit score. The only thing matters for him to get his money. Okay, now let’s imagine that you preferred to use your credit card to pay. The situation is completely different now. Just because you want to buy some eggs, there is a never ending process at the backstage to prove that you have that $10. The minute you give your card to the cashier, he starts to talk with the bank and the credit card company. Maybe not right in front of your eyes, but on the virtual system. They confirm the existence of yourself, your bank account and the money to pay for your eggs. All this hard work is just to link your existence with your identity and your identity with your financial situation. Blockchain annihilates this artificial system. It proves all the information needed for money exchange without the need of intermediaries or middlemen and thereby it creates a new trust protocol.
3- #SayNoToMiddlemen: Today we have the need of middlemen to provide the trust between parties that don’t know each other. Yet, with the trust protocol there’s no need for middlemen. Think about Airbnb for a second. If the host is sure that the guest is reliable enough to pay his money and won’t cause any damages to the house, why would he pay additional commissions to AirBnb?
4- #VirtualMe: Trust protocol is not only about financial issues. It also protects your identity, existence and personal information. With Blockchain revolution you step into the trace free system and are not obligated to give all your personal information to other companies/parties anymore. In this new system virtual you is under protection.
5- #Ledger: Blockchain introduces us with global ledger. We are talking about a system that links all the books to each other as a chain instead of everyone having their individual ones. The financial structures of companies will change in this direction as well.
6- #NewMoney: The Blockchain revolution triggers the emergence of new currencies as well. What makes these new currencies different is their independence from countries or central banks. Bitcoin is just one of them. Even though it is the most known one, it is for sure not the only one. There are many more alternatives to Bitcoin.
7- #ANewSystem: Most of the institutions that are under Blockchain threat chose to adapt themselves and their business models under the light of this new technology instead of fighting against it. That’s why financial institutions and fintech companies started to pay more attention to Blockchain. AirBnb has already transferred its users’ identity information to Blockchain platform. While Swedish land office is testing Blockchain, the Bangko Sentral ng Pilipinas (the central bank of The Republic of Philippines) is working on their new currency which supports Blockhain. Yes, a new system and thereby a new era is on its way and we have to move quickly.
*Yiğit Kulabaş is a businessman, academician and author. He is the CEO and founding partner of RE/Design Business. This article of him is translated from Capital. It was published in December 2016.