NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, December 8, 2014

Can an open protocol-based network technology transform a cartelized, oligopolistic and highly regulated industry by transferring power from large corporations to individuals?

This isn’t a prediction about the future—it’s something the world has already seen with what the Internet has done to the global media industry. There was a time when media corporations set the agenda for public discourse—the advent of the Internet broke down barriers and empowered individuals to express themselves and share information with unimaginable reach and unprecedented freedom.

Today, in most countries where a large segment of the population is connected to the Internet, it is netizens that drive public discourse and media companies are struggling to reinvent their advertising-based broken business models. The technological change wrought by the Internet has eroded the grip of old media brands and opened up for competition an industry that was prone to be oligopolistic, thus enabling entrepreneurs to create pioneers such as Twitter, Facebook and Google.

A new protocol holds the potential to transform financial services in the way the Internet changed media. Cryptocurrencies like bitcoin can disaggregate, decentralize and disintermediate financial services.