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Notes: Whether you think of it as a distributed ledger, decentralized database, computing infrastructure, open source/ software development platform, cryptocurrency, transaction platform, or financial services marketplace, the bitcoin blockchain is driven by two key features: that it is a peer-to-peer network, and that it unbundles trust. Imagine moving from Googling for things to offering proof-as-a-service instead (which itself begins with rethinking identity). In fact, there's a lot of parallels -- both in evolution and development -- with the blockchain and the internet before it. Only the blockchain doesn't need the web. And that has profound implications for what applications and new businesses are now possible, especially in financial services. But if "the worst place to develop a new business model is from within your existing business model", then how can banks move beyond mere process innovations to offering entirely new services built on the blockchain? Many financial institutions are trying to get ahead of the blockchain disruption by exploring it proactively, but how do they overcome the innovator's dilemma and looking at startups like animals in a zoo? In this episode of the a16z Podcast, William Mougayar, the author of the new book The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology shares how traditional, established industries can overcome the innovator's dilemma in this case; what the future of banks might be; and what new applications, services, and startups are possible due to the features -- really, benefits -- of the blockchain. Because the blockchain, ultimately, is an innovation platform.
I'm really happy to see the blockchain concept picking up in popularity! Identity was one of the first and most difficult problems we collectively tried to solve with online services, and in some sense we never really did (other than with those little blue verification check marks for a few of us). The blockchain is going to pave the way for that and a lot of other solutions to problems that centralized architectures have struggled to solve both online and offline.
Was lucky enough to receive a copy of William's new book at Consensus 2016 last week. Definitely a great read, articulates some of the core practical business challenges around blockchains. It really is a landscape like the early internet- confusing but with a ridiculous number of possibilities. I'm also confident that we're going to be seeing many more amazing applications like OpenBazaar hit public blockchains in 2016. I'd be interested to get @wmougayar's take on the permanence of smart contracts: how do you see the market addressing those smart contracts that don't perform as intended, whether through bugs or malfunctioning oracles? Do we have to let developers maintain (multisig) access to change the core code? Do we just try to update the addresses in customer-facing GUIs?