The Role of Blockchain, DeFi and Decentralization in the Digital Economy
Blockchain is a key emerging technology in realizing the full potential of the digital economy and driving fintech innovation. Blockchain is very interesting in and of itself however, because of it’s potential not only technology-wise but economics-wise.
How Blockchain Disrupts Governance Models
Public Blockchains have mainly been associated with cryptocurrencies only, however they are much more expansive than just cryptocurrencies. Public Blockchains such as Bitcoin and Ethereum that can onboard millions of open-source developers successfully are resulting in disruptive innovation in the way organizations are built, in the way financial services are offered and in the way employees and community members collaborate through more flatter, decentralized, digitized and open-source mechanics.
They also solve several problems with current market-capitalism in which a few Big Technology Firms and a few Big Banks dominate and monopolize the global economy.
I talk about how Decentralized Finance (DeFi) aspects of Bitcoin and other Blockchains/Cryptocurrencies disrupt banking, financial services, monetary systems and central banks in my other article linked below and provide other related articles.
How Blockchain Disrupts Big Data Monopolization
But another profound ramification is how decentralized blockchains can disrupt Big Technology companies and fix some of the negative externalities they have created which include data security, data privacy, data ownership as well as negative aspects of the gig economy which has been created as a result.
Currently, most of our data which is created every second is controlled in the hands of a few big technology corporations.
While there is no doubt that big technology corporations and the monopolies that have been created have created ultra-convenient products and tremendous innovation for users and customers for “free”, there is also no doubt that users deserve to be in control of their data, own their data and have privacy as well as a decentralized identity that they deserve (vs having their data and identity profiles stored on big tech company servers).
Now this disruption won’t all happen overnight but the innovations created from the blockchain space will have an exponential impact over time on governance models and creating multi-stakeholder capitalism and decentralization as blockchain adoption increases exponentially transferring control from large corporations to smaller businesses, entrepreneurs and developers and moving from centralization to decentralization.
Embracing Decentralization, New Business Models which don’t rely on predatory corporations can give power back to the people. Cryptocurrency, Smart Contracts, Tokenization, Blockchain and Bitcoin are great examples of a political and economy power shift back towards people. Decentralized Exchanges (DEXs) and Decentralized Autonomous Organizations (DAOs) can replace stock exchanges and multinational corporations in which a few uber-elites hoard most of the wealth and power over big business, the stock market and the economy.
Decentralized forms of governance can level the playing field and disintermediate political and economic asymmetries that are common in our institutions from big tech corporations to large banks and decentralize power from institutions to individuals.