What is it and why businesses need to adapt to the new age of transparency, accessibility, and speed
By Vanessa Malone
A paradigm shift, made popular by American physicist and philosopher Thomas Kuhn, originally detailed Kuhn’s observation of how science changes over time. A shift happened when dominant conceptual ideas, under which normally accepted science operated, became incompatible with new phenomena.
For example, the Copernican Revolution reflected a paradigm shift from the idea that Earth was the center of the universe to the discovery that the Sun was actually the center of the Solar System.
The “paradigm shift” concept quickly took on a life of its own and the meaning broadened to represent an important change that happens when the usual way of thinking about or doing something was replaced by a new and different way.
A prime example of this is the internet, which fundamentally changed how the world interacts and operates. With the expansion of this technology came an unprecedented amount of connectivity, transparency and information people all over the world gained access to.
The internet was the first distributed and open systems technology that stretched globally, and in this regard the blockchain is merely an incredible byproduct of this paradigm shift.
In 2008, blockchain technology made its debut in Bitcoin’s whitepaper describing a peer-to-peer electronic cash system. This system was built on decentralized distributed ledger technology called the blockchain. Through blockchain technology, people were given the ability to transact with one another directly, removing the need for a “centralized”, trusted authority.
Instead, a ledger of all transactions and verifications democratized the data and shared it across each person in the network, allowing for a true exchange of value, rather than just information, over the internet for the first time.
This idea of decentralization and democratization of wealth shook the world and sparked innovation. Thousands of cryptocurrencies exist today. Separately, the technology underlying these digital currencies has proven its ability to bring speed, efficiency and transparency to a plethora of industries, including the world of investing and capital markets.
Blockchain-enabled securities, or digital securities, offer unparalleled transparency, especially when incorporating a large, public blockchain. For example Horizon’s blockchain solutions are based on the Ethereum public blockchain, and records of all transactions from issuance through to secondary trading are immutably and securely stored for everyone to see. This protects investors and ensures issuers are held accountable.
Another key benefit is increased speed and liquidity potential as investors are able to trade globally 24/7, with T+0 settlements through a much more efficient and transparent process. Horizon is working to make this vision of trading on the blockchain a reality through our Open Order Book technology. The goal is to create an interconnected network of digital marketplaces around the globe which investors can access from their smartphones.
Kuhn’s original theory of paradigms when a shift occurs, in some sense the world changes as well. While we’re only at the beginning of the blockchain evolution, we can say that it has the potential to change the world, and has already begun shaping how markets around the world are operated and connected.
How fast companies and individuals react to key paradigm shifts is critical for those who want to remain competitive, which is why we’re working with issuers, banks, broker-dealers, and other financial industry participants to equip them with the tools needed to transition and excel in this exciting paradigm shift.
Horizon is a one-stop-shop for digital securities, offering integrated blockchain solutions covering issuance through to secondary trading. Visit https://www.horizon-globex.com/ to learn more.