Agenda, World Economic Forum

You might not realise it yet, but blockchain could switch your life

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

It shows up that once again, the technological genie has been extracted from its bottle. Summoned by an unknown person or persons at an uncertain time in history, the genie is now at our service for another kick at the can- to convert the economic power grid and the old order of human affairs for the better.

We’re not talking about the social web, artificial intelligence, big data, robotics, or even self-driving cars. We’re talking about the blockchain, the technology behind digital currencies like Bitcoin. Block. Chain. OK, not the most sonorous word ever– it sounds like a combination of blocking and tackling and chain gang. Sonorous or not, this technology represents nothing less than the 2nd generation of the Internet, and it holds the potential to convert money, business, government and society. Let us explain.

The Internet today connects billions of people around the world. It’s fine for communicating and collaborating online. But because it’s built for moving and storing information and not value, it has done little to switch how we do business. When you send someone information like an email, PDF, PPT, or JPG, you’re truly sending a copy not the original. Depending on the rights granted to recipients, they may be able to print a copy of these files.

But under no circumstances should you print, say, money. So with the Internet of information we have to rely on powerful intermediaries to establish trust. Banks, governments, and even social media companies like Facebook work to establish our identity and ownership of assets. They help us transfer value and lodge transactions.

Overall, they do a pretty good job — with limitations. They use centralized servers, which can be hacked. They take a fee for their services – say ten percent to send money internationally. They capture our data, not just preventing us from monetizing it, but often undermining our privacy. They are sometimes unreliable and often slow. They exclude two billion people who don’t have enough money to justify a bank account. In sum, they capture a lopsided share of the benefits of the digital economy.

Come in the blockchain, the very first native digital medium for peer to peer value exchange. Its protocol establishes the rules—in the form of globally distributed computations and strenuous duty encryption—that ensure the integrity of the data traded among billions of devices without going through a trusted third party. Trust is hard-coded into the platform. That’s why we call it the Trust Protocol. It acts as a ledger of accounts, a database, a notary, a sentry, and clearing house, all by consensus.

Every business, institution, government, and individual can benefit in profound ways. The blockchain is already disrupting the financial services industry.

How about the corporation, a pole of modern capitalism? With this global peer-to-peer platform for identity, reputation, and transactions, we will be able to re-engineer deep structures of the stiff for innovation and collective value creation.

How about these billions of connected brainy things that will be sensing, responding, sharing data, generating and trading their own tens unit, protecting our environment, managing our homes and our health? And this Internet of Everything will need a Ledger of Everything.

And how about growing social inequality? Through the blockchain, we can go from redistributing wealth to distributing value and chance fairly in the very first place, from cradle to grave. Including billions of people in the global economy: protecting rights through immutable records like land titles; creating true sharing economy by substituting service aggregators like Uber with distributed applications on a blockchain; ending the remittance rip-off and helping diasporas come back funds to their ancestral grounds; enabling citizens to own and monetize their data (and protect privacy) through possessing their private identities rather than identities being possessed by big social media companies or governments; uunleashing a fresh halcyon age of entrepreneurship by enabling puny companies to have all the capabilities of large companies; helping build accountable government through transparency, wise contracts and revitalized models of democracy.

So rather than just re-distributing a posteriori, wealth we can pre-distribute a priori by democratizing the creation of wealth in the very first place.

As with all major paradigm shifts, there will be winners and losers. But if we do this right, blockchain technology can usher in a halcyon age of prosperity for all.

Don Tapscott is the author of fifteen widely read books about technology in business and society, including The Digital Economy, Growing Up Digital and Wikinomics. His son Alex Tapscott is CEO of Northwest Passage Ventures, a rigid that helps startups in the blockchain space. Their book Blockchain Revolution: How the Technology Behind Bitcoin is Switching Money, Business and the World was released May Ten, 2016. Parts of this article were previously published in Time.

Alex Tapscott, Chief Executive Officer (CEO), Northwest Passage Ventures

The views voiced in this article are those of the author alone and not the World Economic Forum.

Agenda, World Economic Forum

You might not realise it yet, but blockchain could switch your life

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

It shows up that once again, the technological genie has been let out from its bottle. Summoned by an unknown person or persons at an uncertain time in history, the genie is now at our service for another kick at the can- to convert the economic power grid and the old order of human affairs for the better.

We’re not talking about the social web, artificial intelligence, big data, robotics, or even self-driving cars. We’re talking about the blockchain, the technology behind digital currencies like Bitcoin. Block. Chain. OK, not the most sonorous word ever– it sounds like a combination of blocking and tackling and chain gang. Sonorous or not, this technology represents nothing less than the 2nd generation of the Internet, and it holds the potential to convert money, business, government and society. Let us explain.

The Internet today connects billions of people around the world. It’s excellent for communicating and collaborating online. But because it’s built for moving and storing information and not value, it has done little to switch how we do business. When you send someone information like an email, PDF, PPT, or JPG, you’re indeed sending a copy not the original. Depending on the rights granted to recipients, they may be able to print a copy of these files.

But under no circumstances should you print, say, money. So with the Internet of information we have to rely on powerful intermediaries to establish trust. Banks, governments, and even social media companies like Facebook work to establish our identity and ownership of assets. They help us transfer value and lodge transactions.

Overall, they do a pretty good job — with limitations. They use centralized servers, which can be hacked. They take a fee for their services – say ten percent to send money internationally. They capture our data, not just preventing us from monetizing it, but often undermining our privacy. They are sometimes unreliable and often slow. They exclude two billion people who don’t have enough money to justify a bank account. In sum, they capture a lopsided share of the benefits of the digital economy.

Inject the blockchain, the very first native digital medium for peer to peer value exchange. Its protocol establishes the rules—in the form of globally distributed computations and mighty duty encryption—that ensure the integrity of the data traded among billions of devices without going through a trusted third party. Trust is hard-coded into the platform. That’s why we call it the Trust Protocol. It acts as a ledger of accounts, a database, a notary, a sentry, and clearing house, all by consensus.

Every business, institution, government, and individual can benefit in profound ways. The blockchain is already disrupting the financial services industry.

How about the corporation, a pile of modern capitalism? With this global peer-to-peer platform for identity, reputation, and transactions, we will be able to re-engineer deep structures of the rigid for innovation and collective value creation.

How about these billions of connected clever things that will be sensing, responding, sharing data, generating and trading their own electrical play, protecting our environment, managing our homes and our health? And this Internet of Everything will need a Ledger of Everything.

And how about growing social inequality? Through the blockchain, we can go from redistributing wealth to distributing value and chance fairly in the very first place, from cradle to grave. Including billions of people in the global economy: protecting rights through immutable records like land titles; creating true sharing economy by substituting service aggregators like Uber with distributed applications on a blockchain; ending the remittance rip-off and helping diasporas comeback funds to their ancestral grounds; enabling citizens to own and monetize their data (and protect privacy) through wielding their individual identities rather than identities being possessed by big social media companies or governments; uunleashing a fresh halcyon age of entrepreneurship by enabling puny companies to have all the capabilities of large companies; helping build accountable government through transparency, wise contracts and revitalized models of democracy.

So rather than just re-distributing a posteriori, wealth we can pre-distribute a priori by democratizing the creation of wealth in the very first place.

As with all major paradigm shifts, there will be winners and losers. But if we do this right, blockchain technology can usher in a halcyon age of prosperity for all.

Don Tapscott is the author of fifteen widely read books about technology in business and society, including The Digital Economy, Growing Up Digital and Wikinomics. His son Alex Tapscott is CEO of Northwest Passage Ventures, a rock-hard that helps startups in the blockchain space. Their book Blockchain Revolution: How the Technology Behind Bitcoin is Switching Money, Business and the World was released May Ten, 2016. Parts of this article were previously published in Time.

Alex Tapscott, Chief Executive Officer (CEO), Northwest Passage Ventures

The views voiced in this article are those of the author alone and not the World Economic Forum.

Agenda, World Economic Forum

You might not realise it yet, but blockchain could switch your life

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

It shows up that once again, the technological genie has been whipped out from its bottle. Summoned by an unknown person or persons at an uncertain time in history, the genie is now at our service for another kick at the can- to convert the economic power grid and the old order of human affairs for the better.

We’re not talking about the social web, artificial intelligence, big data, robotics, or even self-driving cars. We’re talking about the blockchain, the technology behind digital currencies like Bitcoin. Block. Chain. OK, not the most sonorous word ever– it sounds like a combination of blocking and tackling and chain gang. Sonorous or not, this technology represents nothing less than the 2nd generation of the Internet, and it holds the potential to convert money, business, government and society. Let us explain.

The Internet today connects billions of people around the world. It’s superb for communicating and collaborating online. But because it’s built for moving and storing information and not value, it has done little to switch how we do business. When you send someone information like an email, PDF, PPT, or JPG, you’re truly sending a copy not the original. Depending on the rights granted to recipients, they may be able to print a copy of these files.

But under no circumstances should you print, say, money. So with the Internet of information we have to rely on powerful intermediaries to establish trust. Banks, governments, and even social media companies like Facebook work to establish our identity and ownership of assets. They help us transfer value and lodge transactions.

Overall, they do a pretty good job — with limitations. They use centralized servers, which can be hacked. They take a fee for their services – say ten percent to send money internationally. They capture our data, not just preventing us from monetizing it, but often undermining our privacy. They are sometimes unreliable and often slow. They exclude two billion people who don’t have enough money to justify a bank account. In sum, they capture a lopsided share of the benefits of the digital economy.

Inject the blockchain, the very first native digital medium for peer to peer value exchange. Its protocol establishes the rules—in the form of globally distributed computations and powerful duty encryption—that ensure the integrity of the data traded among billions of devices without going through a trusted third party. Trust is hard-coded into the platform. That’s why we call it the Trust Protocol. It acts as a ledger of accounts, a database, a notary, a sentry, and clearing house, all by consensus.

Every business, institution, government, and individual can benefit in profound ways. The blockchain is already disrupting the financial services industry.

How about the corporation, a pole of modern capitalism? With this global peer-to-peer platform for identity, reputation, and transactions, we will be able to re-engineer deep structures of the rigid for innovation and collective value creation.

How about these billions of connected brainy things that will be sensing, responding, sharing data, generating and trading their own tens unit, protecting our environment, managing our homes and our health? And this Internet of Everything will need a Ledger of Everything.

And how about growing social inequality? Through the blockchain, we can go from redistributing wealth to distributing value and chance fairly in the very first place, from cradle to grave. Including billions of people in the global economy: protecting rights through immutable records like land titles; creating true sharing economy by substituting service aggregators like Uber with distributed applications on a blockchain; ending the remittance rip-off and helping diasporas comeback funds to their ancestral grounds; enabling citizens to own and monetize their data (and protect privacy) through wielding their private identities rather than identities being wielded by big social media companies or governments; uunleashing a fresh halcyon age of entrepreneurship by enabling petite companies to have all the capabilities of large companies; helping build accountable government through transparency, wise contracts and revitalized models of democracy.

So rather than just re-distributing a posteriori, wealth we can pre-distribute a priori by democratizing the creation of wealth in the very first place.

As with all major paradigm shifts, there will be winners and losers. But if we do this right, blockchain technology can usher in a halcyon age of prosperity for all.

Don Tapscott is the author of fifteen widely read books about technology in business and society, including The Digital Economy, Growing Up Digital and Wikinomics. His son Alex Tapscott is CEO of Northwest Passage Ventures, a hard that helps startups in the blockchain space. Their book Blockchain Revolution: How the Technology Behind Bitcoin is Switching Money, Business and the World was released May Ten, 2016. Parts of this article were previously published in Time.

Alex Tapscott, Chief Executive Officer (CEO), Northwest Passage Ventures

The views voiced in this article are those of the author alone and not the World Economic Forum.

Agenda, World Economic Forum

Blockchain: the ledger that will record everything of value to humankind

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

The internet is coming in a 2nd era that’s based on blockchain. The last few decades brought us the internet of information. We are now witnessing the rise of the internet of value. Where the very first era was sparked by a convergence of computing and communications technologies, this 2nd era will be powered by a clever combination of cryptography, mathematics, software engineering and behavioural economics. It is blockchain technology, also called distributed ledger technology. Like the internet before it, the blockchain promises to upend business models and disrupt industries. It is pushing us to challenge how we have structured society, defined value and rewarded participation.

Blockchain emerged in the wake of the global economic crisis, when a pseudonymous person or persons named Satoshi Nakamoto released a fresh protocol for “A Peer-to-Peer Electronic Cash System” using a cryptocurrency called bitcoin. Cryptocurrencies (digital currencies) are different from traditional fiat currencies because no government issues or controls them. They’re not saved in a file somewhere; they’re represented by transactions recorded in a blockchain – like a global spreadsheet or ledger, which leverages the resources of a large peer-to-peer bitcoin network to verify and approve each bitcoin transaction. Satoshi’s protocol established a set of rules – in the form of distributed computations – that ensured the integrity of the data exchanged among billions of devices without going through a trusted third party. This fresh resource has six critical qualities.

Each blockchain, like the one that uses bitcoin, is distributed: it runs on computers provided by volunteers around the world; there is no central database to hack or shut down. We can send money and soon any form of digitized value – from stocks and bonds to intellectual property, art, music and even votes – directly and securely inbetween us without going through a bank, a credit-card company, PayPal or Western Union, social network, government or other middleman. Of course, this does not mean that middlemen will vanish. Rather the technology provides profound opportunities for innovative companies and institutions in the middle to streamline processes, increase their metabolism, create fresh value and inject fresh markets.

Blockchain is encrypted: it uses heavy-duty encryption involving public and private keys (rather like the two-key system to access a safety deposit box) to maintain virtual security. We needn’t worry about the feeble firewalls of the US Democratic National Party, or rogue bank employees.

In many cases, blockchain is public: anyone can view it at any time because it resides on the network, not within a single institution charged with auditing transactions and keeping records. No one can hide a transaction, and that makes bitcoin more traceable than cash. It is open-source code: anyone can download it for free, run it and use it to develop fresh devices for managing transactions online. Private blockchains have emerged that don’t use cryptocurrency for consensus.

Blockchain is, for the most part, inclusive. Satoshi imagined that the typical person would be interacting with the blockchain through what he called “simplified payment verification” mode that can work on a mobile device. Now anyone with a spin phone can participate in the global economy; no documentation is required to be trusted.

Blockchain is immutable. Within minutes or even seconds, all the transactions conducted are verified, cleared and stored in a block that is linked to the preceding block, thereby creating a chain. Each block must refer to the preceding block to be valid. This structure permanently timestamps and stores exchanges of value, preventing anyone from altering the ledger.

Blockchain is historical. If we desired to steal a bitcoin, we’d have to rewrite a coin’s or asset’s entire history on the blockchain in broad daylight. So the blockchain is a distributed ledger indicating a network consensus of every transaction that has ever occurred. Therefore, we must preserve the blockchain in its entirety. That’s why storage matters.

This is much more than the financial services industry. Innovators are programming this fresh digital ledger to record anything of value to humankind – birth and death certificates, marriage licenses, deeds and titles of ownership, rights to intellectual property, educational degrees, financial accounts, medical history, insurance claims, citizenship and voting privileges, location of portable assets, provenance of food and diamonds, job recommendations and spectacle ratings, charitable donations tied to specific outcomes, employment contracts, managerial decision rights and anything else that we can express in code.

Have you read?

So significant is this fresh resource that some have called the blockchain a public utility like the internet, a utility that requires public support. Paul Brody, principal and global innovation leader of blockchain technology at Ernst & Youthfull, thinks that all our appliances should donate their processing power to the upkeep of a blockchain: “Thanks to the smartphone business driving very low-cost systems, your lawnmower or dishwasher is going to come with a CPU that is very likely a thousand times more powerful than it actually needs, so why not have the appliance mine? Not to make money, but to contribute to the security and viability of the blockchain as a entire,” he said.

We’ve never had this capability before – trusted transactions directly inbetween two or more total strangers, authenticated by mass collaboration and powered by collective self-interests, rather than by corporations motivated by profit or governments motivated by power. It is the culmination of what Alan Turning embarked, a true paradigm shift ushered in by decentralized ledger technologies.

Agenda, World Economic Forum

Blockchain: the ledger that will record everything of value to humankind

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

The internet is coming in a 2nd era that’s based on blockchain. The last few decades brought us the internet of information. We are now witnessing the rise of the internet of value. Where the very first era was sparked by a convergence of computing and communications technologies, this 2nd era will be powered by a clever combination of cryptography, mathematics, software engineering and behavioural economics. It is blockchain technology, also called distributed ledger technology. Like the internet before it, the blockchain promises to upend business models and disrupt industries. It is pushing us to challenge how we have structured society, defined value and rewarded participation.

Blockchain emerged in the wake of the global economic crisis, when a pseudonymous person or persons named Satoshi Nakamoto released a fresh protocol for “A Peer-to-Peer Electronic Cash System” using a cryptocurrency called bitcoin. Cryptocurrencies (digital currencies) are different from traditional fiat currencies because no government issues or controls them. They’re not saved in a file somewhere; they’re represented by transactions recorded in a blockchain – like a global spreadsheet or ledger, which leverages the resources of a large peer-to-peer bitcoin network to verify and approve each bitcoin transaction. Satoshi’s protocol established a set of rules – in the form of distributed computations – that ensured the integrity of the data exchanged among billions of devices without going through a trusted third party. This fresh resource has six critical qualities.

Each blockchain, like the one that uses bitcoin, is distributed: it runs on computers provided by volunteers around the world; there is no central database to hack or shut down. We can send money and soon any form of digitized value – from stocks and bonds to intellectual property, art, music and even votes – directly and securely inbetween us without going through a bank, a credit-card company, PayPal or Western Union, social network, government or other middleman. Of course, this does not mean that middlemen will vanish. Rather the technology provides profound opportunities for innovative companies and institutions in the middle to streamline processes, increase their metabolism, create fresh value and come in fresh markets.

Blockchain is encrypted: it uses heavy-duty encryption involving public and private keys (rather like the two-key system to access a safety deposit box) to maintain virtual security. We needn’t worry about the powerless firewalls of the US Democratic National Party, or rogue bank employees.

In many cases, blockchain is public: anyone can view it at any time because it resides on the network, not within a single institution charged with auditing transactions and keeping records. No one can hide a transaction, and that makes bitcoin more traceable than cash. It is open-source code: anyone can download it for free, run it and use it to develop fresh instruments for managing transactions online. Private blockchains have emerged that don’t use cryptocurrency for consensus.

Blockchain is, for the most part, inclusive. Satoshi imagined that the typical person would be interacting with the blockchain through what he called “simplified payment verification” mode that can work on a mobile device. Now anyone with a roll phone can participate in the global economy; no documentation is required to be trusted.

Blockchain is immutable. Within minutes or even seconds, all the transactions conducted are verified, cleared and stored in a block that is linked to the preceding block, thereby creating a chain. Each block must refer to the preceding block to be valid. This structure permanently timestamps and stores exchanges of value, preventing anyone from altering the ledger.

Blockchain is historical. If we wished to steal a bitcoin, we’d have to rewrite a coin’s or asset’s entire history on the blockchain in broad daylight. So the blockchain is a distributed ledger signifying a network consensus of every transaction that has ever occurred. Therefore, we must preserve the blockchain in its entirety. That’s why storage matters.

This is much more than the financial services industry. Innovators are programming this fresh digital ledger to record anything of value to humankind – birth and death certificates, marriage licenses, deeds and titles of ownership, rights to intellectual property, educational degrees, financial accounts, medical history, insurance claims, citizenship and voting privileges, location of portable assets, provenance of food and diamonds, job recommendations and spectacle ratings, charitable donations tied to specific outcomes, employment contracts, managerial decision rights and anything else that we can express in code.

Have you read?

So significant is this fresh resource that some have called the blockchain a public utility like the internet, a utility that requires public support. Paul Brody, principal and global innovation leader of blockchain technology at Ernst & Youthful, thinks that all our appliances should donate their processing power to the upkeep of a blockchain: “Thanks to the smartphone business driving very low-cost systems, your lawnmower or dishwasher is going to come with a CPU that is very likely a thousand times more powerful than it actually needs, so why not have the appliance mine? Not to make money, but to contribute to the security and viability of the blockchain as a entire,” he said.

We’ve never had this capability before – trusted transactions directly inbetween two or more total strangers, authenticated by mass collaboration and powered by collective self-interests, rather than by corporations motivated by profit or governments motivated by power. It is the culmination of what Alan Turning embarked, a true paradigm shift ushered in by decentralized ledger technologies.

Agenda, World Economic Forum

Five ways digital currencies will switch the world

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

When I look at digital money, I see a revolutionary technology that permits people or institutions to transfer funds instantly, securely and without a middleman. Digital money can potentially expand international commerce, support financial inclusion, and convert how we shop, save and do business in ways we very likely cannot even yet fully understand. From programmable money to fresh forms of e-commerce, here are five ways the fresh technology will switch the world:

The way banks stir money today is archaic. International bank transfers can take up to a week, with correspondent banks and country-specific clearing houses involved at both finishes. Even the cross-border sharing of payment data faces challenges and frictions. By using a digital currency such as bitcoin, bank transfers could be made instantly, cheaply and securely. In fact, such transfers could even happen without using fresh currencies. Ripple Labs, for which I am an adviser, supports a protocol that permits clients to transfer funds from one currency to another (say, dollars to euros) using a secure digital ledger. Their technology moves money around the globe in seconds by very first finding the most efficient path inbetween trading fucking partners, where the path might consist of a series of transactions among foreign exchange traders who have accounts in a diversity of banks, and then confirming all required transactions at the same time.

Every year, migrants from developing countries send home more than $500 billion in remittances, a sum that exceeds foreign direct investment. With total fees for international transfers averaging 6-10% for sending $200, the cargo on some of the world’s most vulnerable people is substantial. Technology has the potential to help these transfers become prompt and cheap. Using virtual currency, private users could even send money directly to their families via mobile phone, with the only remaining fees being those charged by the currency exchanges. While traditional money transfer companies have to carry capital to compensate for delays in international money movement, capital requirements are much lower for firms using digital currencies. Of course, capital carrying costs and the cost of money movement comprise only part of the cost for remittance businesses. Nonetheless, reducing these costs might make it lighter for smaller players to inject and establish fresh remittance corridors or for existing players to serve smaller towns or fresh countries.

The explosion of mobile technology in Africa has already shown that developing countries can lead when it comes to sophisticated technology. Estimates suggest that 60% or more of commerce in Kenya takes place using mobile phone credits as a medium of exchange. Anyone with a mobile phone can store money there, and send credits to another user. The problem is that the fees are large: cashing out has historically cost as much as 20%, albeit the widespread acceptance of the credits means that many consumers are able to spend the credits directly without incurring large fees. Digital currencies could become another convenient and safe form of payment in countries where most citizens don’t have bank accounts. While using bitcoin as a 2nd currency in a country would expose citizens there to a certain amount of currency risk, it might be better than the existing options, particularly in high-inflation countries. For example, it would be physically safer than storing cash at home or buying gold jewellery. In addition, someone holding bitcoin could exchange it for a more stable currency on one of the global bitcoin exchanges. In this way, it could expand access to international financial markets, permitting even the unbanked a way to save and protect against inflation. One implication may be that capital controls become tighter to enforce.

Today, concerns over credit card fraud are forcing many online merchants to turn away good business. Such fraud is more common in global transactions, and so many firms do not accept international payments. With a digital currency such as bitcoin, the transfer cannot be undone once it has been made. This eliminates the risk of fraud for merchants and thus permits them to sell worldwide. And since virtual currencies let customers send funds as lightly as email, online shopping would turn into a much smoother process. Digital currency could also permit petite businesses in developing countries to engage more in global e-commerce. Latin American vendors could sell hand-crafted goods globally, Chinese teenagers could suggest Mandarin tutoring over Skype, and African firms wanting to market their products through online advertising marketplaces would have a payment option that is unavailable today. Petite value transactions are a particularly salient use case, as low transaction fees could enable low-value in-app purchases or micro-payments for reading online news articles from media outlets around the globe.

Once an asset is purely digital, it can be moved in automated ways. This paves the way for “programmable money” and “smart contracts”. One practical example would be escrow accounts. Such accounts are already used in large transactions, such as property deals. The buyer puts money into escrow, and it only goes to the seller when he or she mitts over the title to the property. In the digital age, where the issue of trust can be a key impediment for individuals wishing to transact at arm’s length, this system could be used for much smaller sums. Another example is multisig, where money can only be disbursed from an account when numerous individuals authenticate. This could be used to prevent the theft of digital funds, but it could also help firms ensure that money is not “lost” or stolen when it moves across borders, inbetween divisions of a rock hard, or among charitable organizations and contractors in developing countries.

Programmable money could also have a role in much more complicated contracts, such as financial contracts involving numerous parties and elaborate derivatives. You might put some money in a financial contract which will pay out according to what happens to certain stock prices. A computer program could be linked to stock prices from the Bloomberg terminal feed and then, depending on what happens to certain stocks or certain combinations of stocks, different individuals receive funds.

Author: Susan Athey is The Economics of Technology Professor at the Stanford Graduate School of Business.

Picture: Bitcoins created by enthusiast Mike Caldwell are seen in a photo illustration at his office in Sandy, Utah, September 17, 2013. REUTERS/Jim Urquhart

Agenda, World Economic Forum

You might not realise it yet, but blockchain could switch your life

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

It emerges that once again, the technological genie has been extracted from its bottle. Summoned by an unknown person or persons at an uncertain time in history, the genie is now at our service for another kick at the can- to convert the economic power grid and the old order of human affairs for the better.

We’re not talking about the social web, artificial intelligence, big data, robotics, or even self-driving cars. We’re talking about the blockchain, the technology behind digital currencies like Bitcoin. Block. Chain. OK, not the most sonorous word ever– it sounds like a combination of blocking and tackling and chain gang. Sonorous or not, this technology represents nothing less than the 2nd generation of the Internet, and it holds the potential to convert money, business, government and society. Let us explain.

The Internet today connects billions of people around the world. It’s fine for communicating and collaborating online. But because it’s built for moving and storing information and not value, it has done little to switch how we do business. When you send someone information like an email, PDF, PPT, or JPG, you’re indeed sending a copy not the original. Depending on the rights granted to recipients, they may be able to print a copy of these files.

But under no circumstances should you print, say, money. So with the Internet of information we have to rely on powerful intermediaries to establish trust. Banks, governments, and even social media companies like Facebook work to establish our identity and ownership of assets. They help us transfer value and lodge transactions.

Overall, they do a pretty good job — with limitations. They use centralized servers, which can be hacked. They take a fee for their services – say ten percent to send money internationally. They capture our data, not just preventing us from monetizing it, but often undermining our privacy. They are sometimes unreliable and often slow. They exclude two billion people who don’t have enough money to justify a bank account. In sum, they capture a lopsided share of the benefits of the digital economy.

Come in the blockchain, the very first native digital medium for peer to peer value exchange. Its protocol establishes the rules—in the form of globally distributed computations and strenuous duty encryption—that ensure the integrity of the data traded among billions of devices without going through a trusted third party. Trust is hard-coded into the platform. That’s why we call it the Trust Protocol. It acts as a ledger of accounts, a database, a notary, a sentry, and clearing house, all by consensus.

Every business, institution, government, and individual can benefit in profound ways. The blockchain is already disrupting the financial services industry.

How about the corporation, a pile of modern capitalism? With this global peer-to-peer platform for identity, reputation, and transactions, we will be able to re-engineer deep structures of the rigid for innovation and collective value creation.

How about these billions of connected wise things that will be sensing, responding, sharing data, generating and trading their own violet wand, protecting our environment, managing our homes and our health? And this Internet of Everything will need a Ledger of Everything.

And how about growing social inequality? Through the blockchain, we can go from redistributing wealth to distributing value and chance fairly in the very first place, from cradle to grave. Including billions of people in the global economy: protecting rights through immutable records like land titles; creating true sharing economy by substituting service aggregators like Uber with distributed applications on a blockchain; ending the remittance rip-off and helping diasporas come back funds to their ancestral grounds; enabling citizens to own and monetize their data (and protect privacy) through wielding their private identities rather than identities being wielded by big social media companies or governments; uunleashing a fresh halcyon age of entrepreneurship by enabling puny companies to have all the capabilities of large companies; helping build accountable government through transparency, wise contracts and revitalized models of democracy.

So rather than just re-distributing a posteriori, wealth we can pre-distribute a priori by democratizing the creation of wealth in the very first place.

As with all major paradigm shifts, there will be winners and losers. But if we do this right, blockchain technology can usher in a halcyon age of prosperity for all.

Don Tapscott is the author of fifteen widely read books about technology in business and society, including The Digital Economy, Growing Up Digital and Wikinomics. His son Alex Tapscott is CEO of Northwest Passage Ventures, a rock-hard that helps startups in the blockchain space. Their book Blockchain Revolution: How the Technology Behind Bitcoin is Switching Money, Business and the World was released May Ten, 2016. Parts of this article were previously published in Time.

Alex Tapscott, Chief Executive Officer (CEO), Northwest Passage Ventures

The views voiced in this article are those of the author alone and not the World Economic Forum.

Agenda, World Economic Forum

You might not realise it yet, but blockchain could switch your life

Your company must tell you if it's monitoring your emails, says the European Court of Human Rights

It shows up that once again, the technological genie has been pulled out from its bottle. Summoned by an unknown person or persons at an uncertain time in history, the genie is now at our service for another kick at the can- to convert the economic power grid and the old order of human affairs for the better.

We’re not talking about the social web, artificial intelligence, big data, robotics, or even self-driving cars. We’re talking about the blockchain, the technology behind digital currencies like Bitcoin. Block. Chain. OK, not the most sonorous word ever– it sounds like a combination of blocking and tackling and chain gang. Sonorous or not, this technology represents nothing less than the 2nd generation of the Internet, and it holds the potential to convert money, business, government and society. Let us explain.

The Internet today connects billions of people around the world. It’s superb for communicating and collaborating online. But because it’s built for moving and storing information and not value, it has done little to switch how we do business. When you send someone information like an email, PDF, PPT, or JPG, you’re truly sending a copy not the original. Depending on the rights granted to recipients, they may be able to print a copy of these files.

But under no circumstances should you print, say, money. So with the Internet of information we have to rely on powerful intermediaries to establish trust. Banks, governments, and even social media companies like Facebook work to establish our identity and ownership of assets. They help us transfer value and lodge transactions.

Overall, they do a pretty good job — with limitations. They use centralized servers, which can be hacked. They take a fee for their services – say ten percent to send money internationally. They capture our data, not just preventing us from monetizing it, but often undermining our privacy. They are sometimes unreliable and often slow. They exclude two billion people who don’t have enough money to justify a bank account. In sum, they capture a lopsided share of the benefits of the digital economy.

Inject the blockchain, the very first native digital medium for peer to peer value exchange. Its protocol establishes the rules—in the form of globally distributed computations and mighty duty encryption—that ensure the integrity of the data traded among billions of devices without going through a trusted third party. Trust is hard-coded into the platform. That’s why we call it the Trust Protocol. It acts as a ledger of accounts, a database, a notary, a sentry, and clearing house, all by consensus.

Every business, institution, government, and individual can benefit in profound ways. The blockchain is already disrupting the financial services industry.

How about the corporation, a pole of modern capitalism? With this global peer-to-peer platform for identity, reputation, and transactions, we will be able to re-engineer deep structures of the hard for innovation and collective value creation.

How about these billions of connected wise things that will be sensing, responding, sharing data, generating and trading their own violet wand, protecting our environment, managing our homes and our health? And this Internet of Everything will need a Ledger of Everything.

And how about growing social inequality? Through the blockchain, we can go from redistributing wealth to distributing value and chance fairly in the very first place, from cradle to grave. Including billions of people in the global economy: protecting rights through immutable records like land titles; creating true sharing economy by substituting service aggregators like Uber with distributed applications on a blockchain; ending the remittance rip-off and helping diasporas come back funds to their ancestral grounds; enabling citizens to own and monetize their data (and protect privacy) through possessing their individual identities rather than identities being wielded by big social media companies or governments; uunleashing a fresh halcyon age of entrepreneurship by enabling petite companies to have all the capabilities of large companies; helping build accountable government through transparency, brainy contracts and revitalized models of democracy.

So rather than just re-distributing a posteriori, wealth we can pre-distribute a priori by democratizing the creation of wealth in the very first place.

As with all major paradigm shifts, there will be winners and losers. But if we do this right, blockchain technology can usher in a halcyon age of prosperity for all.

Don Tapscott is the author of fifteen widely read books about technology in business and society, including The Digital Economy, Growing Up Digital and Wikinomics. His son Alex Tapscott is CEO of Northwest Passage Ventures, a rock-hard that helps startups in the blockchain space. Their book Blockchain Revolution: How the Technology Behind Bitcoin is Switching Money, Business and the World was released May Ten, 2016. Parts of this article were previously published in Time.

Alex Tapscott, Chief Executive Officer (CEO), Northwest Passage Ventures

The views voiced in this article are those of the author alone and not the World Economic Forum.

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