Software will eat banking!
Marc Andreessen wrote his classic, Why software is eating the world, in 2011 and in that piece he discusses why and what business areas are being “eaten” by software companies.
And I believe that we have come to the point that insurance companies and banks are next in line, trust-less transactions, Peer2Peer lending, consensus-based insurance, is already here maybe not at scale yet but they are here and they are changing the world.
Trust-less transactions as in Bitcoin and cryptocurrency might be the most tangible of these, and when a proper use case outside of direct payments is established we will see huge growth, first in adaptation and secondly in value.
The idea that for example IKEA as a multinational company creates a Coin is not a that strange thought, but this coin would never reach the public instead it would be tethered to a fiat and just be used to transfer internal value without needing to care about currency exchange, instead they can create a stable economy inside of the company and be in total control of how the internal economy meets the external and where.
But what will be the public use case that creates mass adaptation. Some say that what we need is a financial crash and that will get people to jump ship on fiat, we need though to remember that financial crashes are created by humans, mostly by over promising and under delivering, and that can happen and is happening just as much in cryptocurrency.
Real use and adaptation needs to come from making things cheaper, more accessible, and convenient.
Cryptocurrency has all the potential of doing all three of those, cheaper as can scale internationally without any of the inherent costs of fiat, accessibility through that anyone can generate or download a wallet and start using a Cryptocurrency, and convenient by becoming a part of our daily life’s through smartphones.
So all the ingredients are in place, so lets figure out some ways we can start eating banking and not just replicate, copy and slapping a crypto sticker on it, we need some real innovation, if the solutions come out of the banking industry, then so be it, we missed the chance of external disruption and it became an internal evolution of banking.
The insurance industry is ripe for the picking, and I for one is looking forward to seeing great innovative solutions in this area, as I do not believe that we will see any internal evolution in this industry, here I’m counting on external disruption, so again, dazzle me with your innovations.