[QUESTIONER]: Banks, they play a huge role in our economy. [ANDREAS]: So far. [QUESTIONER]: So far. What is going to happen with them?
What is going to be the bank’s role in 2018? Are they going to disappear? [ANDREAS]: No, they’re not gonna disappear.
If you go to Central Park, New York… You go there with your wife or your significant other,
and you’re visiting Central Park, they have these beautiful horse carriages
that you can ride around Central Park in. Apparently, horse carriages didn’t disappear
with the invention of the automobile. So banks won’t either. They’ll be the kind
of institution that has significantly less power, and is mostly used for legacy applications.
Maybe governments will use them more. [QUESTIONER]: That’s actually what they’re doing
right now, with the blockchain that they’re building. The centralised blockchain. [ANDREAS]: Well, the centralised blockchain
is a contradiction in terms. The purpose of a blockchain is to
increase decentralisation. A centralised blockchain is like
a horseless carriage with a horse. If you do a horseless carriage
with a horse, that’s a horse carriage… and we already have those,
so you didn’t really change anything. It’s like saying, “The technology behind
the automobile is the pneumatic tire.” “Let’s adopt pneumatic tires
and put horses in front of them.” It won’t work. Now, I hope they spend
another billion dollars trying to figure out .. that it won’t work, training lots and lots
of blockchain engineers who will eventually .. come to Bitcoin and Ethereum,
and do some interesting projects. But banking as an institution is obsolete.
Banking is now a protocol, banking is an app. That world is never going to go back.
It just may take 20-30 years until you see .. that ripple through the world. But it will,
and there’s absolutely nothing that can stop it. [QUESTIONER]: In Sydney, there’s a lot of
talk about blockchain, because there’s a lot .. of fear from the banks. They’re investing
a lot of money in the ecosystem. [ANDREAS]: Yes. [QUESTIONER]: How can we use the fear from
the banks to make sure we build the ecosystem .. and do all the great things that we want to do? [ANDREAS]: Oh, we don’t need to persuade
the banks to do this right. They’re putting hundreds of millions of dollars into things that, as they’re building them now, won’t work. Absolutely. They’re training
tens of thousands of developers on .. how blockchains work. There are [only] a few very
interesting, open, borderless, decentralised, .. open innovation, open permission blockchains.
I’m hoping the best of the best of these developers – after getting bored for a couple of years
doing proof-of-concept on reinventing spreadsheets – will take their Christmas bonus, and on
January 1st use it to fund a startup .. to compete against the banks
that taught them how to do this. I’ve seen this! I’ve talked to people from these banks, telling me, “I got my Christmas bonus on January 1st.” “I started a Bitcoin startup to
compete against my former employer.” This is going to happen. The beauty is:
we just cracked the market wide open. When it comes to an open market,
competition will determine the outcome. If you continue to build horse buggies
in the age of the automobile, you go out of business. Simple as that, and most of them will.
The dinosaurs will survive, but they will .. but they will change and lose enough power
until they become chickens. That’s what happened to the dinosaurs. [laughter]
We have their children for breakfast every morning!