FINTECH: The Value of Centralized Vision

Source: SpaceX

Source: SpaceX

Elon Musk launched the Falcon Heavy rocket into space with a Tesla car carrying an astronaut dummy, blasting David Bowie. His competitors spend about $500 million per launch, because the very expensive boosters which get the payload away from Earth's gravity fall back down and explode. Musk's boosters are smart -- they can land and be re-used. As a result, his cost is $90 million per launch. Good luck competing against a 5x advantage. 

We don't bring this up to point to the cult of personality, but instead to the power of a determined, clear vision backed by well-funded and functional organizations. While Fintech has been about democratizing access to financial services for customers, Crypto has been about decentralizing production to the community. Decentralization is useful and can create certain desired attributes, but it is not always strictly better. The Falcon Heavy did not come from design by committee, crypto consensus mechanisms, or votes from survey groups about what features customers would like. It came from reverse-engineering the future based on a purpose, levered with human and financial capital.

In Finance, the West is failing to have any coherent vision of the future. Few of our financial leaders have articulated anything close to an artificial intelligence or crypto strategy that coordinates across divisions to build a coherent future. Nobody has bet the farm. Compare for example with China. Hyperledger's executive director Brian Behlendorf recently discussed why operational progress in blockchain adoption among existing industry is far ahead in Asia. Money is moving through productions systems. $2 billion is being spent on artificial intelligence research and education. Americans are still debating coal.

In that light, we have to give credit to Overstock, which continues to move in the fintech direction that Amazon is avoiding for now. The online retailer has 40 million unique visitors per month. They can buy goods using Bitcoin, and now for $9.95 a month they can get a roboadvisor offering. That's right -- in addition to launching it's own blockchain-based trading system tZero and pursuing an ICO, the company is offering investment product portfolios constructed from baskets of stocks. The custody comes from Apex, and the algorithms from FusionIQ. And who knows -- maybe Bowie's playing in the background.