In a recent interview by McKinsey’s Rik Kirkland with Don Tapscott – author of The Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World – Tapscott explains why Blockchain technology has the potential to revolutionize the world economy.
You pick any industry, and this technology holds huge potential to disrupt it, creating a more prosperous world where people get to participate in the value that they create. The music industry, for example, is a disaster, at least from the point of view of the musicians. They used to have most of the value taken by the big labels. Then, along came the technology companies, which took a whole bunch of value, and the songwriters and musicians are left with crumbs at the end. What if the new music industry was a distributed app on the blockchain, where I, as a songwriter, could post my song onto the blockchain with a smart contract specifying how it is to be used?
Maybe as a recording artist posting my music on a blockchain music platform, I’ll say, “You listen to the music, it’s free. You want to put it in your movie? It’s going to cost you this much, and here’s how that works. You put it in the movie, the smart contract pays me.” Or how about using it for a ring tone? There’s the smart contract for that.
This is not a pipe dream. Imogen Heap, who’s a brilliant singer-songwriter in the United Kingdom, a best-selling recording artist, has now been part of creating Mycelia, and they’re working with an amazing company called Consensus Systems, that’s all around the world, blockchain developers, using the Ethereum platform; Ethereum is one blockchain. She has already posted her first song onto the Internet. I fully expect that many big recording artists will be seriously investigating a whole new paradigm whereby the musicians get compensated for the value that they create.
Tapscott says he’s not a futurist and he thinks the future is not something to be predicted but rather something to be achieved.
“What we’re arguing is that this technology is revolutionary and holds vast potential to change society.”
“It feels a lot like the early ’90s to me. You’ve got all the smartest venture capitalists, the smartest programmers, the smartest business executives, the smartest people in banking, the smartest government of people, the smartest entrepreneurs all over this thing. That’s always a sign that something big is going on. Is it an irrational exuberance? I don’t know. Last year, $1 billion went into venture alone in this area. I’m more hopeful because I can see the power of the applications to disrupt things for the good. Rather than just redistributing wealth, maybe we could change the way wealth is distributed in the first place. Imagine a Kickstarter-like campaign to launch a company where you have 50 million investors and everybody puts in a couple of dollars, or very small amounts.”
“Imagine all those people who have a supercomputer in their pocket, who are connected to a network but don’t have a bank account, because they only own a couple of pigs and a chicken. That’s their bank account. Imagine if they could be brought in, 2 billion people, into the global financial system. What could that do? Seventy percent of all people who own land have a tenuous title to that land. And you’re in a developing-world country in Latin America, and some dictator comes to power and he says, “Well, you may have a piece of paper that says you own your little farm, but my central computer says my friend owns your farm.”
“Imagine a world where foreign aid didn’t get consumed in the bureaucracy but went directly to the beneficiary under a smart contract? Rather than a $60 billion car-service aggregation, why couldn’t we have a distributed app on the blockchain that manages all these vehicles and handles everything from reputation to payments? Ultimately, they’ll be autonomous vehicles moving around. Or blockchain Airbnb? This is all about the value going to the creators of value rather than to powerful forces that capture it. In the process, we can protect our privacy. Privacy is a basic human right, and people who say “It’s dead—get over it” are deeply misinformed. It’s the foundation of a free society.”
“Imagine each of us having our own identity in a black box on the blockchain. When you go to do a transaction, it gives away a shred of information required to do that transaction and it collects data. You get to keep your data and monetize it if you want, or not. This could be the foundation of a whole new era whereby our basic right to privacy is protected, because identity is the foundation of freedom and it needs to be managed responsibly.”
“We’ve been unable to do that, so far. I’m compelled most by the power of this opportunity. I’ve been at this 35 years, writing about the digital age. I’ve never seen a technology that I thought had greater potential for humanity.”
For full transcript go to McKinsey site here.