It’s no news that the finance industry has been facing a lot of threats and challenges, and in the last few years, especially around cyber-security, and more recently with legislative changes that promise to end the record-breaking profits the biggest financial institutions on the planet report year after year.
Bitcoin can be the first sign of a long-time predicted change in the sector. It wasn’t coded by a few geeks in a rented garage, nor crowdfunded in Kickstarter, but the principles resemble the meaning and impact Napster had in the music industry.
It’s basically “a peer-to-peer payment system and digital currency introduced as open source software in 2009 by developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.”
This is a wikipedia quote but there’s a much more detailed page with all you need to know to get started on cryptocurrency/bitcoin.
That probably wasn’t much appreciated by banking institutions that saw parallel market transactions suddenly emerging in the laundered side of the economy. And even worse, they weren’t getting their cut. That sounds pretty much like Napster, in which P2P music filesharing originated a path for piracy to proliferate, at the same time it challenged the status quo of a stale industry.
With the growing need for flexibility and openness required by the digital, cloud-powered and data-driven economy the financial institutions are going to lag behind their consumers and change is bound to happen.
Would you believe in 2001 if I told you the biggest music business on the planet in 10 years was a mobile app that allows you to pay a fixed monthly fee for an all-you-can-eat music catalogue? Napster wasn’t it, but it got a lot of people thinking differently, and with the support of artists like Radiohead, the movement just keeps growing.
Could bitcoin be the first outburst of revelry from the world towards financial transactions? Something is bound to happen and I can’t wait to be free to transfer money to anywhere in the world in exchange for a service without the fees you pay today – that would make a fair global & digital open market – no barriers, no small print!
The million dollar question: how would you regulate it?
Maybe one of the ways could be the creation of a reporting framework that startups can use instead of demanding upfront licenses and unrealistic commissions – data reporting sdk instead of fees and bureaucracy.
The current scenario can only push towards a new form of oligopoly, instead of an open, innovative and dynamic industry, and this only helps maintain a chain of value that like in the music industry, is bound to be disrupted – whether the industry wants it or not.
How do you see the market evolving and what groundbreaking initiatives have you come across lately?
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