Blockchain and Financial ServicesEverything could be differentTHE IMPACT OF TECHNOLOGY ON SERVICES DELIVERY
Mark Mueller-Eberstein Rutgers UniversityThe Innovation Economy InstituteCEO of Adgetec Corporation@MarkMeberstein
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“Every inefficiency in a system will be removed (by technology)
sooner or later.”
Mark Mueller-Eberstein
3Organizations that benefit from inefficiencies
will see their business models disappear when customers have the option to get
“better (experience)” for “cheaper.” Ecommerce: Amazon; Alibaba,…
Cellphones vs. land lines / phone boothCalls & emails vs. WeChat or WhatsApp
On premise computing vs. cloud computingTrying to call a taxi or requesting an “Uber”
Owning a car or paying for transportation (incl. car sharing…)Cars & trucks with drivers vs. driverless vehicles
…….
Financial Services Industry?
Mark Mueller-Eberstein & Adgetec Corporation
What differentiates Winners from Losers?
Low IT Capability Maturity HIGH IT Capability Maturity
Mark Mueller-Eberstein & Adgetec Corporation
“Top Companies in 2007”
Low IT Capability Maturity HIGH IT Capability Maturity
Mark Mueller-Eberstein & Adgetec Corporation
“….. And where they are in 2015”
Low IT Capability Maturity HIGH IT Capability Maturity
7Opportunity for Everybody !
Organizations size doesn’t really matter (anymore) Geographical location is less relevant Access and Connectivity are key enablers Agile and creative people will seize the opportunities
(if allowed and enabled) People need to be able to challenge and voice even
stupid ideas for discussion Often new players take on (and out) the established
incumbents
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It’s the F A S T who eat the SLOW
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The trick is being open to changing your mind, and more importantly, knowing when
to do so.
George Bernard Shaw
“Those who cannot change their minds cannot change anything."
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11At least $1.7 trillion in “inefficiencies” up for grabs…
The Economist, 2014
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And that is only the banking system…
Think any kind of transaction and related services…
13… for example….
Records of estates Records of shares Any financial transaction Voting Domain control (DNS) Central Trust (“Escrow”) for any kind of deals Messaging (“signed and unchangeable”) IP management …
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The more you learn, the more opportunity you will see.
Nobody knew in early 1990s what the Internet was or would lead to.
Milton Friedman: “Eventually, there will be a digital value system beyond the nation state.”
16Blockchain
Blockchain is like the Internet (it changed everything)
The implications for traditional financial services are massive
The end of banks? The end of central banks? Big implications for regulators.
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The “technical stuff”…
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Networking….
Old school computing and business
Changed computing and business over the last 20 years
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Peer-to-Peer (P2P)
Peer-to-Peer (P2P) Networking is everywhere
P2P(structured & Unstructured)
File Sharing• Napster• BitTorrent Media
• Spotify• Popcorntime• PPLive (TV)
Marketplaces• BitCoin• “Sharing
Economy”
Cryptography
Storage & Search• Minerva Project
Communication• Skype• Google Talk• I MMobile
• WeChat• WhatsApp• Line
Messaging as Payment
E-Commerce• E-Bay• AirBnB• Uber
Defense• DARPA
High Performance Computing• Grid
Computing• HIVE• SETI@home
Analytics techniques exchange• Chinook
Many commercial or government services are basically “databases”
that are centrally owned and managed.
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Transactions are recorded in a “Ledger”
23Central Control = Central Point of Failure
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Blockchain technology allows a distributed ledger vs. a centrally managed ledger.
All transactions within a block are recorded and visible. And can never be changed.
Blockchain with out a “token” is just a database
25Blockchain – in 2 minutes
26Benefits of Blockchain secured distributed leger vs. central ledger
Information can be put on block chain and can never be changed
Worldwide ledger: IP, land titles, art,...Full transparency for every transaction"Record every information forever"
27Bitcoin vs. Blockchain
Bitcoin is (currently the best know) usage of blockchain technology
One of many digital currencies using blockchain technology Many more uses for blockchain technology other than
“currency” Why digital currency is used?
No need to use exchange (e.g. banks) for people who know/use Bitcoin
Direct exchange between individuals is possible
28Bitcoin basics Insider: "It feels like when we first developed the
Internet" It is a way to transfer value in the Internet Bitcoin can not be copied. First "scarce" digital asset. Bitcoin protocol (blockchain) is final piece of Internet
puzzle Very early and experimental stage As longer as Bitcoin exists, the stronger it gets 60% of all Bitcoin mining done in China (up from 40% 8
months ago) New block created every ten minutes
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How “real” is Bitcoin?
... Most virtual believe might be "love"
Virtual goods are as real as people believe in them...
There is very little “real money”. Most are “0s””1s” on some bank’s database
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How “real” is blockchain?
Goldman-Sachs invest $500+ Million Microsoft declares “blockchain” as one of
the key “must win” workloads for their Azure platform and business (and announced collaboration with many US banks)
Some governments invest into developing their own “local” blockchains
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Understanding change
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is scaryChange
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have emotions
People
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Is constantUncertainty
Endings Exploration New Beginnings
Reconciliation Reorientation Recommitment
DenialAnxiety
Shock
FearAnger
FrustrationConfusion
StressCreativity
Approach-Avoidance
SkepticismAcceptance
ImpatienceHope
EnergyEnthusiasm
ProductivityMorale
Theory of Transition
Schlossberg; 1981 & 1995
37Regulations and restrictions?
From an economist perspective: Every restriction (and forced inefficiency) comes with a cost.
Lets be clear who carries the cost and if that is in the best interest of an economy and society.
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Your Opportunity!
1.Change will be fundamental on business, technology, processes, structures and people.
2.Technology leaders are positioned to drive and realize the vision and image of the future.
©Mark Mueller-Eberstein & Adgetec Corporation
“IT TAKES TEAMWORK DO MAKE THE DREAM WORK!”
John C. Maxwell; Walt Disney; Martin Luther King Jr.; Captain Kirk;…
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NOW … “MAKE IT SO!”
THANK YOU!
[email protected] Twitter: MarkMEberstein US +1 855.423.4383
Mark Mueller-Eberstein The Innovation Economy Research Institute
CEO of Adgetec Corporation
Bestselling Author
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