The Blockchain Part Two: 4 Ways Blockchain Technology Will Disrupt Banking and Financial services

1. Crypto-equity for small business

We are all aware the blockchain can be applied to small business loans, but imagine if a small business could issue its own equity to finance. Imagine being able to sell a small stake in your business, and by doing so give people a guaranteed small share of the profits made by the business in perpetuity rather than having to pay off a loan.

How is this possible I hear you ask? The main reason this cannot be done currently is due to the need for an underwriter to manage the ownership stakes and document the share agreements. With the Blockchain, it may be possible to issue equity and record the share trades without the need for a guarantor (as the Blockchain is an irrefutable ledger). There are a lot of questions yet to be answered, but the possibility is there. 

2. Bitcoin

This is clearly the most matured disruptor, but it is still early days for this disruptive technology. To refresh, Bitcoin is a digital payment system, founded (allegedly) by Craig Steven Wright. Bitcoin uses the Blockchain to record a payments ledger. Currency units are stored in digital wallets, and no transaction fees are taken during payment (but, there are no refunds).

Bitcoin has the potential to challenge the very essence of banking. While it is currently on the fringe, if it manages to be taken mainstream, banks in their current form will cease to exist.

3. Crypto-equity for physical assets

In the not too distant future, with the ease of equity management coming from the Blockchain we may even see equity available for houses, boats, wine, cars, artworks, just to name a few. We may already be seeing the early aspects of this concept already taking shape, with equity crowdfunding platforms such as BrickX and CrowdfundUp already gaining momentum in financial markets. If equity crowdfunding for physical assets could be tied together with Blockchain technology, we could see a very big market spring up virtually overnight.  

4. Ledger “mining” as a viable business

Part of the beauty of Blockchain technology is the fact that there is no need for expensive servers to host the database. This doesn't mean there isn’t large amounts of computing power needed to maintain this decentralised database, in a process known as “mining” the Blockchain. If the future is made of large, complex crypto-equity systems, there may be the need for smaller businesses to be hired to help maintain the ledger systems. This may also end up being a future business for banks and financial services firms.


Crypto-equity for small business will provide genuine alternatives for small business finance. Bitcoin has the potential to revolutionise banking. Physical assets may end up having their own alternative stock market. Banks and financial services firms may host the ledger for equity transactions, as Blockchain technology enters into the mainstream.