During a Q&A session, Andreas M Antonopoulos, a Bitcoin [BTC] Advocate and the author of Mastering Bitcoin, spoke about financial institutions hopping onto the blockchain bandwagon in the future.
Andreas was asked about the implications on space if financial institutions joined the bandwagon. In addition, financial institutions would be faster than the rest of the industry even if individuals can create their own financial instruments on the blockchain.
The author said:
“… I’m not particularly worried because the fundamental issue here is that what most financial institutions are trying to do is take the fundamental idea and use it to do business as usual without changing the fundamental practices.”
He continued to say that the most important factor about the blockchain technology is decentralization. This system’s architecture says that there is no one in charge and no one in control. This is because it is a collaborative project where everyone participates and because of this, the truth gets recorded on the blockchain and it is not controlled by any single entity.
Andreas stated that the financial institutions would not adopt decentralization as a principle even if it would make the economy “far more robust”. According to him, they are going to “try to pretend” to adopt the principle while creating “something” that can be controlled because the nature of corporations is centralization and the nature of financial corporations is even “more so centralization.”
He further adds:
“… as to the fact that they will be able to move faster there is this pervasive idea that just because financial services companies have all the money, quite literally, because they made it themselves that they can simply buy their way into the future fortunately for us, unfortunately for them, there are a few things you can’t buy innovation and creativity is one of them.”
The author stated that these companies strangle innovation within 72 hours if it arises in their company by deciding to create an innovation committee to study it. Moreover, if the innovation arises outside the company which is not too disruptive, they would end up buying it or suing it and it would reach to a point where all the creative and innovative people would have left.
For innovation which is too disruptive which these companies would not even consider buying, they will “try and snuff it out” with the help of governments. He said:
“… their favorite technique, have the government’s turn off their disruptive competitor for them by making sure that there are enough regulations in the way that the smaller competitor can’t compete”
However, these techniques could not be used on Bitcoin. This is because the financial institutions cannot buy Bitcoin because it is not an ‘it’. They cannot sue it because there is ‘nowhere to sue’ and the governments cannot regulate it as users did not seek for the government’s permission to use it.
Andreas said:
“now they’re faced with in the first time in maybe 75 years of traditional financial services with the one competitor they can’t do any of those things. they haven’t started panicking yet because hubris is a pretty big mountain to overcome but at some point they will”