This post is my notes on the A16z podcast covering blockchains and bitcoin which can be found here. I found it a very worthwhile listen.
The interviewee is Adam Lundwin, cofounder of Chain, who argues that blockchain technology will be applied to more than just Bitcoin, and will become an integral part of financial markets in the future.
The shift is from analog to digital assets, the defining feature of the latter being that with digital assets, or digital bearer tokens, the owner is always the bearer. This is a disruptive shift because it eliminates a lot of middlemen, and should reduce the cost and time of performing financial transactions.
This is because traditional asset markets (e.g. the stock market) include settlement processes that add risk, and therefore cost. Digital asset markets allow for instantaneous trading (buying/selling) and therefore remove that risk. Middlemen are replaced with cryptography.
The blockchain is the digital ledger for such transactions.
Lundwin makes an analogy to VOIP, whereas the experience should be similar to the end-user, but should be faster and cheaper.
Bitcoin is the first asset to use blockchain technology, but there is no reason why other assets could be handled with blockchain, and that is what Chain is seeking to enable.
Blockchain is a database that is shared amongst all users, and where the assets are controlled by the owners of the assets. In a traditional database, the assets are controlled by the owner of the database. That is the fundamental difference.
Have you seen the opportunity to leverage blockchain technology in your sector? What are your thoughts about its use in the future?