Before we write off a future of crypto-currencies based on the fragility of Bitcoin, we would do well to remember other innovations that the experts dismissed.
“Authorities agree that automobile transportation is suitable only where fixed train routes are either not available or not suitable,” wrote a letter-writer to The Age in 1904.
The correspondent was none other than John Monash, Australia’s most distinguished engineer, whose expertise in re-enforced concrete helped the allies break through the seemingly impenetrable fortified German defences in World War 1.
Monash’s indifference towards the early versions of vehicles powered by the internal combustion engine came to mind as we discussed a report on crypto-currencies in the January edition of Scientific American. “Bitcoin was only the beginning,” the authors claim. “Machines that broker trust without human intermediaries could fix the financial system's biggest flaws, but they also raise unnerving questions.
“Are we ready for a world in which any asset — from currency to personal identity — can be traded and tracked in an indelible ledger? What if a technology designed to strip banks and governments of power ends up giving them unprecedented control?”
We’ve suggested before (link) that crypto-currencies has the potential to do to banking what Uber has done to the taxi industry.
Disruptive technology setting its own rules has caught many industries flat-footed. The Financial Services Royal Commission that began hearings in Melbourne this week may not, after all, be the bank’s biggest problem. - Nick Cater