The Most Powerful Thing About Blockchain

There is a lot of hype about different things regarding blockchain technology.  There are a lot of opinions out there about what it can do.  Some think in the extreme it can get rid of governments, borders and all kinds of institutions.  I don’t think that will prove out.

The most compelling thing to me is the fact that blockchain networks can be trust networks.  That’s huge.

We spend a lot of money around trust.  Lawyers, accountants, bankers, investment bankers and other occupations all charge some fees because clients need to trust one another to transact.  Blockchain can blow that up.  That is really really interesting when you start to expand it.

I take a very different view of trust.  When I walked on the trading floor and I had a jacket and a badge on, I immediately was showered with all the trust and responsibility that came with wearing that badge.  If you had a jacket and a badge on, I knew that I could buy or sell from you and the trade was going to be good because we both were part of the blockchain-which was really the clearinghouse.

I could search that blockchain, sometimes on the same day, to make sure trades were cleared at certain prices.  I could see if other traders traded at that price, and how many.  Full transparency.

On the trading floor, out trades happened.  In an electronic blockchain transaction, there will be very few out trades.

Think about a permission less, blockchain where you buy a token to have access.  I can transact with anyone in the world as long as they have that token.  I immediately trust them.

That has huge implications for supply chains and other sorts of transactions.