Bitcoin visionary Andreas Antonopoulos recently stated that blockchains would “suck” at doing the things the world’s biggest banks hope to achieve. Moreover, the futile effort of creating private blockchains is just one of the “five stages of grief” that traditional finance is going through as they come to grips with the open-access, decentralized, peer-to-peer Bitcoin network.
Antonopoulos Outlines Banks’ 5 Stages of Grief
Responding to questions from Barcelona’s Bitcoin community, Bitcoin expert Andreas Antonopoulos outlined the differences between consumer-serving banks and those that focus on “investments and large concentrations of wealth.”
Specifically, it is the latter type to which the idea of Bitcoin is “inconceivable,” as he described it. Indeed, Bitcoin’s neutrality, which he equated to the internet, along with its borderless nature, would be something of a black swan for too-big-too-fail banks, in particular, who will go through what he dubbed as the “five stages of grief,” which are as follows:
- Bargaining (we are here)
“They started with denial,” he explained. “‘Heh, Bitcoin. Go play you little hackers.’ Then they noticed it wasn’t going away. So they started getting angry. ‘Err, Bitcoin… Criminals! Pedophiles! Terrorists! The world will end if we allow normal people to control their own money.’”
Today, the banks are in the third bargaining stage as they pick and choose which aspects of this disruptive technology to laud and accept, i.e. the blockchain, or perhaps the even more market-ready term, distributed ledger technology.
He mockingly continued:
‘So that nice open, decentralized, borderless, peer-to-peer, open-innovation, open-access system you built. Well, we can build one that is not open, not decentralized, not borderless, not open-innovation, and not open-access that we control completely… blockchain!’ And they’re missing the point.
It is these features specifically that banks intend to nix that make Bitcoin powerful. “And so they’re bargaining,” he continued. “And I can tell you, it’s not going to work because blockchains suck at doing the things banks want to do.” He further explained:
Blockchains in the use of Bitcoin with a decentralized consensus algorithm are inefficient because the inefficiency is the price you pay to get freedom. And if you don’t care about freedom, why take the inefficiency? Install a database.
Antonopoulos then explained that next comes depression, a stage where traditional financial services begin to lose ground to innovative fintech platforms and smaller banks. These new players will be more willing to embrace this open-access, network-centric cryptocurrency to incorporate the so-called “black market,” which comprises over half of the current global economy and includes over 4 billion unbanked people.
“So which economy would you want to serve with your network-centric currency?” he asked the audience. “The big one? Or the little one that’s broken, corrupt, and dying?”
After this, the final stage would be the banks’ acceptance of the new paradigm, where control over money is transferred to the individuals themselves. This would open up access to a slew of financial services to anyone in the world with a smartphone and give them “not a bank account, but a bank in their pocket.”
Do you agree with Andreas? Or will the banks succeed in creating their own blockchain platforms? Let us know in the comments section below!
Images courtesy of bitcoinbarcelona.cat, twitter, espaciobit.com.ve