In this talk in Berlin, Andreas looks at the inner structure of bitcoin and how high-level financial and trust applications are composed from smaller elements. Using analogies from Lego blocks to a chef creating new recipes, this talk highlights the connection between creativity and the flexibility offered by fine-grained components.
Transcript
[AUDIENCE] Hi. What would you think of a world where banks become technology companies, not [just] banks? Then we give them smart contracts on blockchains as a tool [through] which we avoid this control. [ANDRES] I think we will see- First of all, banks are already technology companies today, with parts based on 1970s technology, which touches the most government.
Another part of the banks is cutting-edge machine learning technology, which skews the stock market, and screws you out of all your savings, very effectively with high-frequency trading. Banks are technology companies. They are [not just] financial companies, they are fundamentally software engineering companies and have been for more than two decades now. The vast majority of banks will adapt when they are pressured to, when they need to, for a world in which digital currencies are [one of the tools] that their customers need and use.
When that is the case, some of them will adapt and even thrive in this new world of transparent digital currency, decentralized ledgers, transferable assets and tokens. If you talk to some of them, banks are not bankers. Bankers, for the most part, are not evil people. They have some sociopaths at the CCO level, but most of them are nice people just trying to pay their mortgage and raise a family.
Some of them are really cool geeks [researching] quantitative algorithmic trading. When they look at Bitcoin, they say, "Wow, I would love to play in that with a lot of money." So they will adapt. I remember when phone companies were still very proud of the 'telegraph' or 'telephone' part in their name. Today, all phone companies are internet service providers first, and voice-calls is one of the applications they [offer].
They were the biggest opponents of the internet. Now they are the internet. Don't be surprised if, two decades from now, a chunk of infrastructure and liquidity in decentralized currencies... is offered by transformed banks that learned this [same] lesson.
Keep in mind that, in that process, some will go out of business very quickly.