A fork to the history of banking
The logic behind the current banking system has remained pretty much the same since the mid 14th century when the early financing institutions, established at the Renaissance-leading city-states such as Florence, Venice and Genoa, were catapulted throughout the rest of Europe thanks to the rising of the new Holy Roman Empire.
In essence, a few powerful families involved in sea-trading activities, offered interests and issued notes for protecting and holding gold and other assets of the less powerful, or less resourceful, such as merchants, craftsmen, farmers, livestock farmers, organized looters, sorry, I meant, world explorers, adventurers and raiders. Oops, sorry again.
The commercial activity of safeguarding assets for others relied exclusively on the “physical” ability to store and protect value; such leverage was then used by these few powerful families to invest such “protected assets” on additional mercantile activities favoring their own personal interests, and it has pretty much remained the same for seven centuries.
It is about time, thanks of course to the industrial revolution, but more importantly, to the digital revolution which is now reaching its seventieth birthday, that our luck, and I mean the luck for the rest of us who do not belong to the few powerful families, is finally changing: the middlemen´s ability to store and protect value is not longer exclusive.
Investors from all latitudes and of all types can now screen and select by themselves which men and women they can trust their funds with, in order to materialize projects closer to their personal interests, and of course, to get a much more gratifying reward beyond the 1%–2% relative annual yields for their saving deposits.
Blockchain ledgers and Smart Contracts running on decentralized networks, that allow to store and safely exchange value peer to peer while safeguarding the terms in which parties convene into an agreement, are changing the course of the banking and financial institution forever. I am not certain if JP Morgan´s CEO is getting the point, but some of the rest of us do.
It takes time and courage from both sides of the equation, investors and entrepreneurs, to seriously leverage this opportunity, to facilitate awareness and drive mass adoption. Its hard work and implies commitment and involvement. This fork will also change the history of the world economy.
