“Tout, terriblement.” Apollinaire.
I have argued in my previous posts that we are forced to think about a multiplicity of blockchains and distributed ledgers solutions for the financial services industry. The universe of distributed ledgers can be represented in its globally as a new layer which can be represented as an additional layer of the Open Systems Interconnection Model (OSI) or as the OSI is applied to the internet and the TCP/IP model.
We could call this additional layer the “Financial Transactions” layer or the Internets of Values layer.
What are the implications if this layer is multiple instead of being unified? Does it necessarily mean the layer will be balkanized and siloed? This is certainly a risk.
Efficiency dictates balkanization will be avoided. It might certainly take a long time though. Efficiency will bring a set of interoperability standards which will allow distributed ledgers to talk to one another, networks of distributed ledgers to talk to other networks. Interoperability will become key to success. Distributed ledgers will have to easily connect and talk to one another at the data and metadata level. Winners will espouse openness and interoperability thereby gaining more market share.
How can this be achieved? Either top down or bottom down. I have argued in previous posts that top down may not be the right approach – too much friction and also too many risks, one of them being monopolistic behaviors. The bottom up appeals to my libertarian views.