Interview
a16z Podcast | Blockchain vs/and Bitcoin
- A total shift to IP-based, internet-enabled financial architecture is expected, modeled after the transition to voice over IP, leading to the eventual disappearance of traditional credit card and securities settlement processes in favor of near-instant asset swaps and landing in custodial accounts.
- Financial systems are projected to contract with fewer intermediaries as cryptographic networks replace clearing, settling, and reconciling roles, while securities and products are issued digitally from the outset to eliminate delays between digital messages and fund movement.
- Blockchain technology is predicted to extend beyond Bitcoin to other asset classes including gift cards, airtime, energy credits, and stock certificates, with interoperability anticipated to be straightforward across networks due to their shared handling of cryptographically issued assets.
- Central governments are expected to mint currency digitally as a fourth medium of exchange in the very long term, where users hold dollars as digital tokens, while the broader market moves toward lower costs, higher transparency, and near-zero settlement times.
- Strategic deployment is critical as early movers are predicted to set terms and capture market structure changes before competitors, with the first few networks launching next year and the first "winner-take-most" networks emerging by 2017, leaving institutions without running networks behind their peers.
- The market is forecasted to cool off from rhetoric over the next year before shifting to genuine infrastructure investment, though many companies taking half-measures within the next year and a half are expected to fail and conclude the technology offers no value.
- Ultimately, the market will likely consolidate around a handful of healthy blockchain companies rather than 50, with no single entity deploying all networks for all non-Bitcoin asset classes, as only serious deployments by established firms will prove the technology's value.