Blockchain Inside Regulations Is NOT Innovation

Posted by Claudio Migliore on

I agree with the thesis of this article by William Mougayar.  However, in my view, a definitional point is in order to be fair to all involved.  Financial firms have innovated, or at least evolved their product lines.  As someone old enough to have had his tongue gummed up with stamp glue from mailing checks, things have indeed come a long way.

What is incompatible with regulated enterprises, though, is disruption. Regulators and their charges can hardly destroy their business model, after all.  As Shumpeter had pointed out way before we entered this current age of acceleration, creative destruction is not a gradual, but a traumatic phenomenon.  As for permissioned blockchains, I struggle to find parallels from the past, but I have this image of chariot makers adding speedometers to their horse drawn vehicles to compete.

 

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3 responses to “Blockchain Inside Regulations Is NOT Innovation”

  1. Pingback: Why I’m Being Tough on the Banks Re: Blockchain-IT大道

    • Well, I would have hoped for respect even if I had disagreed, but, seriously, I took the central point of your excellent post to be that industries that are regulated by the government cannot REALLY innovate, because if they pierce the envelope of their established practices, both they and their regulators are out of their jobs, so they don’t, and they fight it like they are doing you a favor.
      At the same time, some improvement has come to banking services. I did lick a lot of stamps to pay my bills, not to speak of writing checks, lining up to deposit them, or, as an eighteen year old part-time accounting clerk, reconciling by hand hundreds of pages of paper statements. All those activities went on just a few years ago and were a freaking nightmare, and have disappeared by virtue of the, admittedly limited, competition among banks. So licking stamps is a shorthand for all manual and paper intensive activities that have happily gone away. I think that is a good thing. That clarified, couldn’t agree more with your main thesis.
      Claudio

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  2. Pingback: Why I'm Being Tough on the Banks Re: Blockchain - Bitcoin XYZ

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