Alex Tapscott: Blockchain is Eating Wall Street at TEDxSanFrancisco (Transcript)

Here is the full transcript of Blockchain Revolution author Alex Tapscott’s TEDx Talk: Blockchain is Eating Wall Street at TEDxSanFrancisco conference. This event occurred in October 2016. To learn more about the speaker, read the full bio here.


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Alex Tapscott – Author, advisor and public speaker

It’s been over eight years since Lehman Brothers went bankrupt. But the financial crisis still continues to cast a long shadow over all of our lives.

What began as an economic calamity has morphed into something that’s more corrosive and arguably more dangerous — a crisis of legitimacy, not just in banks but in many of our institutions, including governments. We’re feeling now that globalization, capitalism, even democracy are in retreat while populism, nativism, protectionism are on the rise.

And really who is to blame the people who support these kinds of ideologies? Europe has lost an entire generation to economic stagnation. Social and economic inequality is at the highest level it’s been since the Great Depression. In October, this month, Spain’s youth unemployment rate is at 45%, eight years after the crisis.

Now there is no silver bullet to fix the many problems that ail society. But why not start with where it all began? We have an opportunity — arguably once in a generation opportunity, to reinvent financial services for a new era of trust and legitimacy.

Now the leaders of the industry today, many of the banks and others have a choice to make. They can either do it themselves or have it done to them, because we are entering a new era of technology. You’ve heard the expression “software is eating the world”. Well, software is finally eating Wall Street.

And the technology likely to have the greatest impact on the world of financial services for the next 20 years has arrived. But it’s not big data, the cloud, Robo-advisors, collaborative finance or new entrants like Tencent and Apple Pay. It’s actually the technology behind crypto currencies like Bitcoin and it’s called the Blockchain. This technology will transform the industry, but it also represents nothing short of the second generation of the Internet.

So when you use the Internet today to send and move and share information, you’re not actually sending an original; you’re sending a copy and you’re retaining an original. And generally speaking, that’s okay. In fact, one of the great advantages of the Internet is that we have this publishing platform that allows us to democratize information. Except when it comes to things that have value like, say, money, sending a copy is a bad idea. If I give you $20 in payment for something, it’s really important that you know you have it and I don’t still have it, because if I could send the same $20 to every single person in this room, the $20 becomes worthless.

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So it turns out, it’s great to have a printing press for information but it’s not so great to have a printing press for money. And this is a problem that cryptographers and technologists have been trying to resolve for years: How do you prevent this digital trail of breadcrumbs from accumulating every time you move information? Turns out it’s difficult. And as a result, we rely on middlemen, intermediaries, to perform a whole bunch of important roles in business and society. And these intermediaries would be well known to many of you banks but also governments and big technology firms.

And these intermediaries perform essential roles. They establish the identity of parties in a transaction. They create trust. They perform what’s called the business logic, the clearing and the settling. And they keep records that can be validated by the counterparties in the transaction, by auditors, regulators, and other stakeholders. And they do an okay job but they have some very serious limitations.

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