Don Tapscott is CEO of the Tapscott Group and the chancellor of Trent University. With over 15 books on topics ranging from privacy to the digital economy and the Blockchain, he is one of the leading business thinkers in the world.
FactorDaily caught up with him ahead of his talk at the Nasscom India Leadership Forum 2018 to get a sense of where the blockchain revolution is heading.
With his son Alex Tapscott, he wrote the book ‘Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World.’ He is also the co-founder of the Blockchain Research Institute, a think-tank looking into application and projects involving blockchain across sectors.
Excerpts from an e-mail interview.
Blockchain is a buzzword being used by technocrats and businessmen across the industry? How would you explain what blockchain technology is to a layman?
Quite simply, it’s a distributed ledger of thousands of computers, enabling people to exchange things of value without the need for intermediaries like banks to establish trust. You know you can trust the party you’re transacting with because trust is native to the system. That’s why my son Alex Tapscott and I have taken to calling it the “trust protocol.”
(Edit Note: For those who aren’t familiar with the Blockchain yet, read this explainer: Blockchain for noobs: A definitive guide)
Some say blockchain technology is as powerful as the internet. Why is blockchain technology so important in today’s business and tech world?
Well it does what the internet has been unable to do, provide a platform for peer-to-peer value exchanges. This is nothing less than the second era of the internet. Whereas the first internet was an internet of information, this is an internet of value.
When I send an email, I’m actually sending you a copy of an email. That’s fine for sharing information, but when I send something of value – like money, stocks, or votes – it’s important that I not still have a copy. Right now, we depend on big intermediaries to make sure that doesn’t happen, but that’s inefficient, expensive and susceptible to hacking.
What are the industries that you see will most benefit from blockchain technology and what are the applications that you think will not work well?
Well, every industry is going to be affected by this technology. There are some that have seen the more immediate impacts, however. Obviously, the financial industry has already been turned on its head because of this technology. Last year more money was raised through Initial Coin Offerings – basically blockchain-based IPOs – than through traditional venture capital.
(Edit Note: ICOs are not only booming all over the world, there is a strong surge of appetite among Indian investors and, lately, issuers from this country. Read our detailed report here.)
Some describe blockchain as a technology solution looking for a problem. Are there use-cases where blockchain clearly triumphs other technologies available?
We are already seeing several use-cases where blockchain is clearly making an enormous impact. IBM and Walmart recently launched a pilot using blockchain to assure food safety. It enabled them to trace foods back to their source within seconds, whereas in the past it could take days or even weeks.
Remittances, global clearing and settlement, and logistics are all already undergoing serious transformations, as all of these involve a complex series of non-value-adding intermediaries.
What in your opinion is one of the best or most innovative implementations or use of blockchain technology you have seen so far?
It’s difficult to pick just one. I personally just recently announced that I would become an advisor for Sweetbridge, who have found a way for companies to essentially self-fund their supply chains and unlock the dead capital sitting in unmoved trucks or shipping containers that’s just one example though.
India has an identity management program called Aadhaar which many technocrats believe will benefit by being powered by the blockchain. With India’s population of over 1.3 billion people do you think that blockchain is the right way to develop an identity management solution in India? If yes, why?
Yes, absolutely, if for no other reason than the fact that blockchain is an immutable ledger. Putting sensitive data related to your identity on centralized servers that are susceptible to hacks is risky. The public is generally uncomfortable with that sort of thing, and for good reason. Having control over your identity, and exercising your privacy, is foundational to freedom. Blockchain allows you to reclaim control over your identity, and that’s a truly powerful thing.
Are there any challenges or drawbacks of implementing blockchain technology?
There are certainly a number of implementation challenges, which Alex Tapscott and I address in the book. In particular, governance issues are proving rather tricky, as well as scalability. These can all be addressed in time, and some projects are already addressing them.
Centralised vs. Decentralised is the big debate. Are blockchain and cryptocurrencies a solution for all centralization issues?
I think the majority of people who foresaw the digital age and the power of the internet, myself included, were most excited by the decentralized nature of that technology. Nearly thirty years later, and I’m not sure it’s quite as decentralized as we had hoped for it to be. Blockchain indeed presents a solution to that.
How do you see governments and regulators the world overreacting to blockchain technology and, separately, cryptocurrencies? During the recent Indian government’s budgetary presentation, finance minister Arun Jaitley said (and I paraphrase) ‘cryptocurrencies are bad but blockchain is good’. What is your take on this?
I think it’s short-sighted to try to separate blockchain from cryptocurrencies entirely. That greatly minimizes the potential of this new technology, and it drives innovators away. I would suggest some regulation is absolutely necessary and quite welcome. But it has to be sensible. Or else countries risk falling behind in the next era of the internet. Regulation should encourage, not discourage, innovation.
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