blockchain technology has relevance for
most all areas but because of its nature
as a secure value exchange protocol the
most readily identifiable ones are
within finance business and economy as
with other areas the blockchain has the
capacity to decentralize economic
activity creating distributed
peer-to-peer networks of exchange and in
so doing greatly expand the scope and
extent of economic markets and finance
with the ongoing developments of
economic globalization were in the
process of a massive scaling up of the
global economy of exchange since the
fall of the Berlin Wall over 100
countries have come into the global
economy and the global middle class is
growing rapidly already about a hundred
and forty million people are joining the
middle class annually and by 2030 it
will be more than double its size from
just over two billion today to almost
five billion according to routers
although we're all becoming connected
through urbanization and
telecommunications many remain excluded
from the formal global economy the
distributed web offices the capacity to
link individuals and small organizations
directly into the global economy greatly
expanding their opportunity for economic
developments the blockchain has many
applications for enabling the global
economy of exchange including its
capacity to establish property rights
where previously there were none in
enabling supply chain provenance in
business collaboration across industries
and in enabling its peer platforms for
commerce and trade the first components
in enabling economic exchange in
developments is the capacity to define
and enforce property rights in this
respect
Hernando DeSoto has been a prominent
economist in highlighting the importance
of ownership in economic developments
the main message of de Soto's work is
that no nation can have a strong market
economy without adequate participation
in an Information framework the records
ownership property and other
Namah cassettes unrecorded economic
activity results in many small
entrepreneurs who lack legal agreements
of their property making it difficult
for them to obtain credits sell their
business or expands they can't seek
legal remedies to business complex in
courts since they do not have legal
ownership lack of information on income
prevents governments from collecting
taxes and acting in the public welfare
as he writes the existence of such
massive exclusion generates two parallel
economies one legal and the other extra
legal an elite minority enjoys the
economic benefits of the law and
globalization while 5/6 of humanity are
stuck in poverty without property rights
and access to formal agreements to
enable exchange traditional top-down
attempts have been both costly to
implement on large scale and have been
unsuccessful at increasing global
property rights a bottom-up approach
instead follows a process wherein claims
are made by individuals verified by
those affected aggregated by the
community and then brought to the legal
authority the blockchain user monitored
digital registry is a kind of tool that
allows communities to serve themselves
in the face of unresponsive governments
as one example of this we might take
Honduras a country with nearly 60
percent of its land undocumented and an
antiquated artisanal land registry that
is about bureaucrats to oversee land
seizures for their personal use with a
total lack of accountability under
foreign pressure a digital registry for
the country using blockchain technology
is being built in the coming years which
will enable the people of Honduras to
switch over to a system with the self
verification features of the blockchain
supply chains are one of the primary
areas of the blockchain has found
application in largely due to the fact
that they involve many different
organizations here it works to improve
collaboration by creating a single
database and source of truth it can
reduce fraud and corruption automate
manual process
and control for issues of
authentification and trust making what
are currently obscure supply chains
transparent and visible to end users
with blockchain technology we can get a
much more granular view of the complete
supply chain we could record things like
all of the manufacturing data for an
aircraft assembly where all the elements
are or the subsystems have been in its
journey from the original manufacturer
all the way through to integration into
the final aircrafts the hashing and time
stamping capacity of the bulk Jane mean
we can record exactly who does what the
asset over its lifecycle with all the
parties having access to and being able
to trust this data currently supply
chains for many organizations are very
complex in a pack given the fact that
they have many tiers to them with many
different parties involved when
something goes wrong like a supermarket
discovering food contamination it can
take weeks for them to dig through the
complicated layers to find exactly where
that issue came from with the blockchain
registry you could know this information
almost immediately a london-based
company called ever ledger has put more
than 1.6 million diamonds onto a
blockchain entries on the digital record
include dozens of attributes for each
diamonds including the color carat and
their certificate numbers which can be
inscribed into the stone by laser they
do this to make sure that there's no
false diamonds synthetic diamonds or
blood diamonds entering into the supply
chain so effectively the retailer can be
sure of the complete audit trail or
provenance of the diamonds they're
buying and hence increase the net value
of that diamond through the improvement
of trust and transparency there are many
more examples of supply chain use cases
across product based industries as the
advantages for businesses are quite
clear the trust between parties goes up
because everyone knows who's done what
to each asset as it goes through its
lifecycle everyone including the
end-user can know who's owned each asset
where it's been geographically and hence
the whole supply chain
becomes much more efficient transparent
likewise many regulatory activities
along the value chain that are currently
time-consuming and costly can be
automated for example in order to move
containers through a shipping port you
need a paper document called the debtor
of credits the processing of this
document from issuing to approval
usually takes between 7 to 10 days a
ship from Africa to Europe can require a
small pile of paper documents the
shipping company mask Lines has been
participating in a proof of concepts
with the University of Copenhagen to
digitalize the Bill of Lading enabling
the transaction times to be reduced to
less than four hours at the end of the
supply chain process in commerce
blockchain can enable frictionless
exchanges of value here to appear
blockchain commerce platforms like open
Bazaar connect people directly into
peer-to-peer networks it does not
require a middleman which means no
platform fees and payments being cleared
via Bitcoin data is distributed across
the network instead of stored in a
centralized database each user conch
bits the network equally and is in
control of their own store and private
data setting up an open Bazaar store is
quite simple you just download the
program run the installer and you can
have your items listed within minutes
likewise the network has a for
protection system very distributed aspro
system a multi signature scroll where
buyers and sellers agree who mutually
trusted their party to hold the funds
the applications of blockchain
technology to Finance are far too many
for the scope of this course here we'll
just touch upon the subject of payment
clearance the incumbent banks have spent
centuries building up physical
structures for the distribution of
finance in paper form that's focused on
buildings and humans and then they apply
technology on top of this while the back
end remains hugely overcomplicated
clearing a simple credit card
transaction while the purchase of a
security requires bouncing it around
through half a dozen intermediaries it
takes days in its cost
to achieve a very simple activity of
paying someone a whole pile of
complicated things have to happen often
at different points on the planets
global credit card payments account for
seven point seven trillion dollars a
year with users paying hundreds of
billions of dollars in fees at the same
time many remain locked outside of this
formal financial system for the first
time in human history two or more
parties be there businesses or
individuals who may not even know each
other
conforte greement s-- make transactions
and bill value without relying on inch
medius in a world where payments can
happen here it appear as simple as
sending an email with the trust and
transactions being handled automatically
transferring money around the worlds is
as simple as updating two records on a
blockchain as payments go digital in the
coming decades no one pays for anything
anymore
it just happens around them it's digital
debits and credits on distributed
Ledger's the applications are blockchain
to finance and numerous in providing a
framework for supporting capital markets
to a new model of venture capital in the
form of initial coin offerings to
prediction markets but going into this
would be the subject of a whole nother
course just as the web leveled the
playing fields for information
exchanging communications so that now
the same bandwidth of connectivity
enters the financial center in London as
the east coast of Africa the president
of America has the same iPhone as the
immigrant worker in southern China so
too
by adding a layer of automated trust and
building market platforms blockchain
technology offers the real possibility
like never before to really reach out to
what has previously been the edges of
the global economy and directly connect
those people into the same platform of
exchange as everyone else just as using
the blockchain to expand the accounting
systems of our global economy to
incorporate natural capital is critical
to enabling environmental sustainability
so to using the blockchain as an
infrastructure to expand the
opportunities of the global market
economy to all is critical to enabling
social
stainability through inclusion online
blockchain enabled platforms could
provide the tools to take us from a
world of trickle-down economics to a
world of trickle-up economics