Technology start-ups are driven by disruption. The objective is to turn the Status Quo on its head, to re-shape, re-purpose and re-engineer old ideas, re-moulding them into new paradigms that lead to highly profitable outcomes for all stakeholders involved. It’s a simple formula. With Fintech and, more recently, Blockchain start-ups, this formula is more challenging.
Fintech blends finance and technology toegther, all within the landscape of the risk of loss. If a start-up messes up badly and investors lose money they can expect little forgiveness from the regulators, whose role it is to uphold and protect financial markets – especially from bad actors. The same is being seen in the Blockchain industry.
The Blockchain industry is entering its next massive, disruptive, but regulated wave. This disruptive wave is more about capital markets and regulation than it is about technology. As a result, the Blockchain industry is entering the environment of Fintechs, which requires a markedly different approach compared to that of the somewhat anarchic past.
We are entering an environment of evolution and not revolution. Evolution means the transformation of industries not their destruction. The libertarian mantra of destroying existing financial markets and the unleashing of censorship-free money just won’t cut it. Unregulated Initial Coin Offerings (ICO’s), 10X returns and the promise of Lambos just won’t cut it. Instead, we are entering an environment of traditional acronyms – AML (Anti-money Laundering) and KYC (Know Your Customer) together with the traditional vernacular of Custodianship and Regulation. Facebook’s recent announcement of their Libra stable coin is just the beginning of this evolution.
Libra is the first tip of a very significant collection of icebergs, that are heading towards the banking and financial sectors on a catastrophic collision course. Holistically, we are entering the core phase where we are shifting from
“The Internet Of Information To The Internet Of Value“
where financial layers seamlessly blend into existing technology layers, with severe casualties for those that fail to adapt.
In this series of 4 articles we will be exploring the concept of “Transruption”, where start-ups and early-adopting industry incumbents actively work together to embrace disruptive technologies to help transform industries. There are synergistic benefits to Transruption that make it worthwhile for all stakeholders – where the dynamism and power of blockchain technologies meets the traditional and highly conservative capital markets in a way that works for all. Indeed, both sides have so much to offer to each other – they just don’t know it yet…
The first part of this four-part series looks at the where the disruptive/destructive forces within the cryptocurrency space have emanated from. Check out part 2 of the four-part series – Transruption #2 of 4 Inside the DNA of Blockchain Disruption – Bitcoin
Tim Lea is the CEO of Fractonium. Fractonium is developing a funding platform that turns traditional Corporate Funding on its head, by tokenising the fractional ownership of assets, revenue flows and debt and blending them together into the traditional capital stack of debt and equity. This creates new financing models and markets globally, creating new opportunities for ambitious corporates and their shareholders.