Distributed Networks and Finance 2020: Blockchain Grows Up

The hype of blockchain has ebbed in the past few years but its promises are still very real. Cost savings, transparency, and new paradigms for financial services (i.e. new sources of revenue) are closer than most people would imagine — even though countless, over-hyped proofs of concept have led to more reluctance than revenue.

But to borrow and appropriate the wise words of René Descartes:

“It is not enough to have a good mind; the main thing is to use it well.”

In blockchain, it’s not enough to have a great idea, you must demonstrate real-world value to deliver on its promise.

In the past, the technology and knowledge base were not yet mature enough to meet the demands of the global financial system. But that future is here now.

The Blockchain Dream

While the technology behind blockchain is complex, the value that blockchain provides is simple and powerful. Blockchain removes the need for third party trust.

Legacy technology systems trust third parties to monitor and verify honest dealing. It is the foundation of bureaucracy, left over from a time when we did not have a better way. The blockchain dream is to use technology to reduce, or even remove these expensive, slow processes to vastly improve the capabilities of commerce. To unlock capital that is currently ground away in the slow-turning gears of this massive machine.

Essentially, blockchains enable ledgers that are monitored by a network and can be audited by anyone with permission in the system at any time. The network monitors the transactions and has an incentive to maintain honest records and seek out bad actors who would deceive or compromise the network. The individual incentives are aligned with the desired state of the network, and so maintains an honest record by building consensus with other nodes on the network.

This structure enables organizations or even individual actors to monitor and verify the state of the network, including the collateral and assets available for an institution in a set of transactions. This removes much of the need for slow human institutions to verify (and often be deceived by) illicit actors in finance who create billions in losses.

Instead, the technology creates a verifiable system for consensus.

The Future of Finance

As the hype cycle for blockchain wound down in 2018, the builders never stopped building — and that’s why I joined Ava Labs.

We’re not just a blockchain company. We have the technology, talent, and business acumen to bring the dream to reality. The Avalanche platform will empower blockchains to be efficient, secure, and meaningful at the speed and scale of global finance — while also enabling both private and permissionless smart contract networks to interoperate.

Institutions will no longer have to choose between the massive network effects of truly decentralized systems or the data and jurisdictional controls they need to securely operate their businesses. By combining brilliant engineering and business perspectives, Avalanche is enterprise-grade at a global scale.

Settle trades in two seconds instead of two days (or up to 3 months for private markets). Complete due diligence by sharing a single line of code. Create new financial vehicles that can borrow, leverage, and repay in seconds for unique arbitrage opportunities.

Imagine what we can’t even imagine yet. That future, the future of finance, is here.

Let’s talk — get in-touch to see how we can partner and build the future of finance together. Email me at john@avalabs.org.