Blockchain, Banks, and the Innovator’s Dilemma

The tools that are being used to organize and facilitate the very functioning of the human societies, along with the bureaucracies that happen to manage them, have indeed failed to keep pace with the rate of digital transformation. The contracts that are set up, the records that we keep, and the transactions that are being thought of and crafted in new digital formats are also linked up to blockchain technology. The focus is also upon digital recreation of human society in relation to blockchain technology.

Many often do believe that blockchain will be having its most profound effect on financial services i.e. banks, insurance companies and other large financial institutions. Trillions of dollars, in fact, flow through these global financial systems every day. Banks do perform a number of critical functions that does impact one’s daily lives and does play a key role in the stability of one’s communities, countries, and continents.

Blockchain vis-à-vis banks

Transactions do take place between willing participants without the help of a trusted third party intermediary, such as banks. It does allow for transactions to be transparent as well as visible to all concerned parties thus offering anonymity when required. Similarly, it does reduce the risk of fraud, as records are unalterable after the accounts that have been settled.

Blockchain — A Foundational Technology

The blockchain is more of a foundational rather than disruptive technology.The main difference between the two is the actual depth of transformation that usually takes place and the time that it will also take to do so.

Foundational technologies do recreate the foundations of one’s economy and social reality.

Blockchain technology was actually created to facilitate the transferring of Bitcoin from one peer to another. Today of course more than half of the worlds most valuable companies do have internet-driven, platform-oriented business models. In fact, the foundations of our respective economy and society have indeed undergone a change.

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About the Author: Nagendra Gadamsetty

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