Nikhil Vadgama (editor) - Enabling the Internet of Value: How Blockchain Connects Global Businesses (Future of Business and Finance)

The Future of Business and Finance book series features professional works aimed at defining, describing and charting the future trends in these fields. The focus is mainly on strategic directions, technological advances, challenges and solutions which may affect the way we do business tomorrow, including the future of sustainability and governance practices. Mainly written by practitioners, consultants and academic thinkers, the books are intended to spark and inform further discussions and developments.

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It is easy to imagine one of humankinds earliest transfers of value happening over a campfire on a grassy plain or within a cave offering protection from the elements. One human passing food or clothing to another in exchange for something in kind.

For most of humanitys existence, transactions and the sharing of value were like this: payment delivered at the point of exchange; even long-distance transfers of money often involved the actual unit of value with coins or money crossing bodies of water via ocean liners or miles of the Old West on the backs of ponies. Theres a reason treasure hunters invest huge sums of money to explore ancient shipwrecks as gold coins still lay at the bottom of the sea where they sank in transit.

For centuries, goods, information, and stores of value all travelled in the physical realm, conveyed by people from one destination to another. The advent of the telegram broke that cycle with information able to travel far ahead of individuals. Today, information can bounce electronically around the world in seconds, free to access, and share with no restrictions.

Unfortunately, stores of value even when represented as ones and zeros on an electronic ledger are still subject to outmoded rules of transfer. Unable to move freely, traditional value must stop and start between countries and currencies. Like the hare in its race against the tortoise, speed remains unrealised, instead traveling in fits and starts on its way to its final destination.

This current day, yet thoroughly unmodern, the mismatch between the speed of transit for information, goods, and value persists because todays payment systems were built for yesterdays companies. Todays companies like Amazon, Airbnb, and Uber need to make instant payments to customers, contractors, and small businesses around the world.

On its face, this is impossible because of the patchwork quilt of payment systems that cover the globe, each with distinct rules, processes, and currencies. To compensate, companies and providers must build bridges across these systems manned by payment teams that can sometimes grow to hundreds of employees. And to improve the speed of transactions, each bridge requires pools of money on either end in the local countrys currency to create liquidity.

The end result is an enormous investment of cost and effort that is impossible for small companies or providers to match. This leaves the reality of instant value transfer over the worlds antiquated money networks the domain of only the largest and wealthiest organisations; todays equivalents of the Medici family or other well-known financial brokers of the past.

However, a new reality for value is growing that has the potential to penetrate these walls and deliver a system of value that once again matches the speed at which goods and information can flow.

Blockchain technology allows for trust-minimised systems without central operators, breaking the monopoly of those able to straddle disparate payment networks by virtue of their size and wealth. Paired with digital assets designed for cross-border transactions, blockchain-based systems can deliver instant transfers of value anywhere in the world.

But we are not there yet. There are still missing pieces to the puzzle. Just as you require a specific address to send physical mail, a phone number to call someone, or an email address to send an email, so we all need unique digital wallet identifiers to send point to point value.

And the networks themselves still cannot work seamlessly in conjunction. Payment systems whether traditional or blockchain based have dozens of different methods of integration. We are still missing the Rosetta Stone for value the piece that will make it possible to unify all of these different networks.

In short, we do not yet have our Internet of Value. But we know we need it. And that is progress.