The way we pay and transact is one of the underlying foundations of our society is one of our basic utilities. I believe we are going to see some drastic changes in this foundation in the coming 5 to 10 years. Because of the transaction cost and settlement time we try bulk our orders, we don’t pay for a page we read we buy a book. Once transaction cost disappears and clearance times will drop to minutes and second and not hours and days a lot of business models with change. Many payments will become more granular. New business model will become possible like paying 1 cent for every article you read online, instantly and automatically will change how content producers are rewarded. Instant free transfer to a foreign country will change how we employ people for our businesses. Decentralisation of payments will fuel the changes even further. Fintech is at the forefront of this evolution and I’m really excited to witness these changes shaping up first hand.
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Summary for this week
A Brief History of Blockchain
By Vinay Gupta
Many of the technologies we now take for granted were quiet revolutions in their time. Just think about how much smartphones have changed the way we live and work. It used to be that when people were out of the office, they were gone, because a telephone was tied to a place, not to a person. Now we have global nomads building new businesses straight from their phones. We’re now in the midst of another quiet revolution: blockchain, a distributed database that maintains a continuously growing list of ordered records, called “blocks.” These changes, and others, represent a pervasive lowering of transaction costs. When transaction costs drop past invisible thresholds, there will be sudden, dramatic, hard-to-predict aggregations and disaggregations of existing business models. For example, auctions used to be narrow and local, rather than universal and global, as they are now on sites like eBay. As the costs of reaching people dropped, there was a sudden change in the system. Blockchain is reasonably expected to trigger as many of these cascades as e-commerce has done since it was invented, in the late 1990s.
How Blockchain Is Changing Finance
By Alex Tapscott and Don Tapscott
It begs the question: Why is our financial system so inefficient? First, because it’s antiquated, a kludge of industrial technologies and paper-based processes dressed up in a digital wrapper. Second, because it’s centralized, which makes it resistant to change and vulnerable to systems failures and attacks. Third, it’s exclusionary, denying billions of people access to basic financial tools. Bankers have largely dodged the sort of creative destruction that, while messy, is critical to economic vitality and progress. But the solution to this innovation logjam has emerged: blockchain.
In Praise Of Cash
By Sam Haselby
The cashless society – which more accurately should be called the bank-payments society – is often presented as an inevitability, an outcome of ‘natural progress’. This claim is either naïve or disingenuous. Any future cashless bank-payments society will be the outcome of a deliberate war on cash waged by an alliance of three elite groups with deep interests in seeing it emerge. The defence of cash will be simple and intuitive. As unsexy and analogue as cash is, it is resilient. It is easy to use. It requires little fancy infrastructure. It is not subject to arbitrary algorithmic glitches from incompetent programmers. And, yes, it leaves no data trail that will be used to project the aspirations and neuroses of faceless technocrats and business analysts into my daily existence. It comes with criminals, but hey, it’s good old friendly normal capitalism rather than predictive Minority Report surveillance-capitalism.
How Insurers Can Implement Tech Companies’ Tactics
By Joe McKendrick
In 2011, venture capitalist Marc Andreessen famously coined the phrase “Software is Eating the World” in a Wall Street Journal article. The point: Companies across industries are doing so much digital and tech work that they are, essentially, becoming software providers in addition to their original businesses. And, we’re seeing that happen in the insurance industry as well. Disruptions are coming in fast and technology-savvy companies are moving to shake up the insurance business. While there are signs all around that as insurers are moving ahead in adopting digital technologies to streamline and energize their businesses, we’re also seeing insurance business models being altered by the tech sector. Insurance, in some ways, is becoming another data-driven service that can be added to digital platforms.
Also published on Medium.