The Internet is entering a Second Era. The first was the Internet of Information, and with blockchain we are entering the Internet of Value. But where are the most important opportunities and how do we anticipate and harness these seismic shifts?
For the last few decades we’ve had the Internet of information: a platform for everyone to publish and distribute information. Though it transformed how we communicate, its impact on business, commerce and prosperity ended up being quite limited. Why? Establishing identity and trust online still requires validation from a trusted third party like a bank, government, credit card company or big technology company. There are many drawbacks to relying heavily on intermediaries to secure our relationships. For one, they are centralized, making them vulnerable to attack or failure. They add cost and friction to our economy for consumers and businesses alike. They exclude 2 billion people from the global financial system. They capture vast amounts of data about citizens and organizations — which can undermine privacy, corrosive to a free society. Most troubling, power and prosperity are channelled to those who already have it. The upshot is that there is wealth creation but declining prosperity and the largesse of the digital age is being captured asymmetrically.
Today we’re seeing the rise of the Internet of Value. At the core is the biggest innovation in computer science in a generation — the technology underlying the digital currency networks like Bitcoin and Ethereum — the blockchain. This technology platform is open and programmable, leading to an explosion of innovation, including support from the technology sector, the Linux Foundation, the banking sector, global governments, and business leaders everywhere. Blockchain holds the potential to unleash countless new applications and as yet unrealized capabilities that have the potential to transform everything in the next 25 years.
Broadly speaking, blockchain technology describes a distributed, highly secure platform, ledger or database where value – everything from money, stocks, bonds, intellectual property, and deeds, to music, art and even votes – can be stored and exchanged without powerful intermediaries. Trust and collective self-interest, hard-coded into this new native digital medium for value, ensures the safety, security and reliability of commerce online. Trust is programmed into the technology, and is achieved not by big institutions but by cryptography, collaboration and clever code. Moreover, it is incredibly malleable to suit the many challenges of different industries and institutions. Public blockchains, such as Bitcoin and Ethereum, could open the doors to the worlds unbanked, whereas private blockchains (like those being advanced by leaders on Wall Street) could remove hundreds of billions of dollars from financial infrastructure, making the industry faster, more efficient, more secure, and less risky.