Financial Services Revolution: How Blockchain is Transforming Money, Markets, and Banking by Alex Tapscott

CHAPTER 1
THE COMING CATACLYSM
Blockchain and Financial Services
Alex Tapscott

FINANCIAL SERVICES IN BRIEF
•In the first era of the Internet, software ate the world, transforming many
industries in the process, from advertising and television to retail and
education.⁶ The second era of the Internet will make those changes look
quaint, as blockchain disrupts finance, the foundation of all industries and
human economic activity. It will rewire the deep structures of our economy.
•The stakes are high: the next era of money, commerce, and economic
activity hangs in the balance. The dominant landlords of today’s digital
estate—Facebook, Google, and others—will no doubt use blockchain to
control tomorrow’s digital world. They will confront the keepers of the
status quo: big banks with vast financial empires to protect and
governments with systemic power and monetary policy to preserve.
•Banks and other financial intermediaries move money. The more they
move, the more they store and the more they lend. Payment rails are the
cardiovascular system of the industry’s corpus, and money is the blood of
global commerce. Without them, no other organ can function. Thus, the
digitization of value is the first step to decoupling intermediaries from
assets and migrating them to this native digital medium for value.
•We look at five disruptions to the industry: open finance and the
digitization of financial assets; the “financialization” of everything;
blockchains as trusted shared registers of truth; the strengths and limitations
of decentralized finance (DeFi); and the role of self-sovereign identities.

Financial Services Revolution: How Blockchain is Transforming Money, Markets, and Banking by Alex Tapscott