Video - Bitcoin Q and A The End of Vampire-Squid Financing

We all know that banks are very powerful and they're not going down very easily. What will happen to banks in the next 5-10 years? Are they going to fight disruption? The caricature of banks as being entirely filled with "evil people" is not true.

The banking industry has institutional inertia, where even if tens of thousands of people in are good, minute everyday actions sum up to an empire which engages in racial profiling, illegal foreclosures, and robbery through socialised losses. During organizational crisis, they are very slow to respond; the very architecture of that business model and culture is embedded so deeply.

They will be affected by cryptocurrency just as the media industry was affected by the internet. Bankers ask me if they should get a "blockchain consultant." I say, "No, get a former newspaper editor and ask them 1) when did you know the internet would eat your business 2) what did you do to prevent it 3) now that you've failed, what would you do differently?" Because software is coming to eat our industry for the first time.

The banks will still be here, they'll just be very different and offer services that have to be there (ex. fractional reserve lending). Customer service / interpersonal relationship management is considered a lost business right now because it's less profitable than underwriting a loan for a war dictator. Maybe they can reform their operations. There is no "right to maintain a business" or "right to guarantee a profit."

If banks are terrified of competition in a free market, then something seriously wrong has happened to banking. If your last resort is a government decree that will prevent competition, you've already lost. Banks will be fine - as long as their business model is in building productive relationships that serve the community and not vampire-squid financing of war dealers and dictators (if that's you, good riddance).

What's going to happen to the dinosaurs? They're still here; I had one of their eggs for breakfast. Chickens are the closest descendant of those once mighty beasts, and we are the descendants of the furry things they crushed underfoot.


Written by Andreas M. Antonopoulos on May 30, 2017.