ALSOBY DonTapscott ParadigmShift:TheNewPromiseofInformationTechnology(1993) Coauthor,ArtCastonTheDigitalEconomy:PromiseandPerilintheAgeof NetworkedIntelligence(1995)GrowingUpDigital:TheRiseoftheNet Generation(1997) WhoKnows:SafeguardingYourPrivacyinaNetworkedWorld(1997) Coauthor,AnnCavoukianDigitalCapital:HarnessingthePowerofBusiness Webs(2000) Coauthors,DavidTicollandAlexLowyTheNakedCorporation:HowtheAge ofTransparencyWillRevolutionizeBusiness(2003) Coauthor,DavidTicollWikinomics:HowMassCollaborationChanges Everything(2006) Coauthor,AnthonyD.WilliamsGrownUpDigital:HowtheNetGenerationIs ChangingtheWorld(2008)Macrowikinomics:New Solution sforaConnected Planet(2010) Coauthor,AnthonyD.Williams Portfolio/Penguin AnimprintofPenguinRandomHouseLLC 375HudsonStreet NewYork,NewYork10014 Copyright©2016,2018byDonTapscottandAlexTapscottPenguinsupportscopyright.Copyright fuelscreativity,encouragesdiversevoices,promotesfreespeech,andcreatesavibrantculture. Thankyouforbuyinganauthorizededitionofthisbookandforcomplyingwithcopyrightlawsby notreproducing,scanning,ordistributinganypartofitinanyformwithoutpermission.Youare supportingwritersandallowingPenguintocontinuetopublishbooksforeveryreader. ISBN9781101980149(tradepaperback) LibraryofCongressCataloging-in-PublicationDataNames:Tapscott,Don,1947–author|Tapscott, Alex,author. Title:Blockchainrevolution:howthetechnologybehindbitcoinischangingmoney,business,and theworld/DonTapscottandAlexTapscott. Description:NewYork:Portfolio,[2016]|Includesbibliographicalreferencesandindex. Identifiers:LCCN2016008427(print)|LCCN2016014933(ebook)|ISBN9781101980156 (ebook)|ISBN9781101980132(hardcover)|ISBN9780399564062(internationaledition) Subjects:LCSH:Electronicfundstransfers.|Bitcoin.|Electroniccommerce.|Mobilecommerce.| Banksandbanking—Technologicalinnovations.|Financialinstitutions—Technological innovations. Classification:LCCHG1710(ebook)|LCCHG1710.T3852016(print)|DDC332.1/78—dc23 LCrecordavailableathttps://lccn.loc.gov/2016008427 FirstPortfolio/Penguinhardcoveredition:May2016 FirstPortfolio/Penguintradepaperbackedition:June2018 Whiletheauthorhasmadeeveryefforttoprovideaccuratetelephonenumbers,Internetaddresses, andothercontactinformationatthetimeofpublication,neitherthepublishernortheauthorassumes anyresponsibilityforerrors,orforchangesthatoccurafterpublication.Further,thepublisherdoes nothaveanycontroloveranddoesnotassumeanyresponsibilityforauthororthird-partywebsites ortheircontent. Version_2 https://lccn.loc.gov/2016008427 ToAnaLopesandAmyWelsmanforenablingthisbook,andfor understandingthat“it’sallabouttheblockchain.” “Amasterpiece.Gracefullydissectsthepotentialofblockchaintechnologytotakeontoday’smostpressing globalchallenges.” —HernandoDeSoto,EconomistandPresident,InstituteforLibertyandDemocracy,Peru“The blockchainistotrustastheInternetistoinformation.LiketheoriginalInternet,blockchain haspotentialtotransformeverything.Readthisbookandyouwillunderstand.” —JoichiIto,Director,MITMediaL.

1. ALSOBY
DonTapscott
ParadigmShift:TheNewPromiseofInformationTechnology(1993)
Coauthor,ArtCastonTheDigitalEconomy:PromiseandPerilintheA
geof
NetworkedIntelligence(1995)GrowingUpDigital:TheRiseoftheNe
t
Generation(1997)
WhoKnows:SafeguardingYourPrivacyinaNetworkedWorld(1997)
Coauthor,AnnCavoukianDigitalCapital:HarnessingthePowerofB
usiness
Webs(2000)
Coauthors,DavidTicollandAlexLowyTheNakedCorporation:How
theAge
ofTransparencyWillRevolutionizeBusiness(2003)
Coauthor,DavidTicollWikinomics:HowMassCollaborationChang
es
Everything(2006)
Coauthor,AnthonyD.WilliamsGrownUpDigital:HowtheNetGener
ationIs
ChangingtheWorld(2008)Macrowikinomics:New

2. Solution
sforaConnected
Planet(2010)
Coauthor,AnthonyD.Williams
Portfolio/Penguin
AnimprintofPenguinRandomHouseLLC
375HudsonStreet
NewYork,NewYork10014
Copyright©2016,2018byDonTapscottandAlexTapscottPenguinsu
pportscopyright.Copyright
fuelscreativity,encouragesdiversevoices,promotesfreespeech,and
createsavibrantculture.
Thankyouforbuyinganauthorizededitionofthisbookandforcomplyi

3. ngwithcopyrightlawsby
notreproducing,scanning,ordistributinganypartofitinanyformwith
outpermission.Youare
supportingwritersandallowingPenguintocontinuetopublishbooksf
oreveryreader.
ISBN9781101980149(tradepaperback)
LibraryofCongressCataloging-in-
PublicationDataNames:Tapscott,Don,1947–author|Tapscott,
Alex,author.
Title:Blockchainrevolution:howthetechnologybehindbitcoinisch
angingmoney,business,and
theworld/DonTapscottandAlexTapscott.
Description:NewYork:Portfolio,[2016]|Includesbibliographicalr
eferencesandindex.
Identifiers:LCCN2016008427(print)|LCCN2016014933(ebook)|I
SBN9781101980156
(ebook)|ISBN9781101980132(hardcover)|ISBN9780399564062(i
nternationaledition)
Subjects:LCSH:Electronicfundstransfers.|Bitcoin.|Electroniccom

4. merce.|Mobilecommerce.|
Banksandbanking—
Technologicalinnovations.|Financialinstitutions—Technological
innovations.
Classification:LCCHG1710(ebook)|LCCHG1710.T3852016(prin
t)|DDC332.1/78—dc23
LCrecordavailableathttps://lccn.loc.gov/2016008427
FirstPortfolio/Penguinhardcoveredition:May2016
FirstPortfolio/Penguintradepaperbackedition:June2018
Whiletheauthorhasmadeeveryefforttoprovideaccuratetelephonen
umbers,Internetaddresses,
andothercontactinformationatthetimeofpublication,neitherthepub
lishernortheauthorassumes
anyresponsibilityforerrors,orforchangesthatoccurafterpublicatio
n.Further,thepublisherdoes
nothaveanycontroloveranddoesnotassumeanyresponsibilityforaut
hororthird-partywebsites
ortheircontent.
Version_2

5. https://lccn.loc.gov/2016008427
ToAnaLopesandAmyWelsmanforenablingthisbook,andfor
understandingthat“it’sallabouttheblockchain.”
“Amasterpiece.Gracefullydissectsthepotentialofblockchaintechn
ologytotakeontoday’smostpressing
globalchallenges.”
—
HernandoDeSoto,EconomistandPresident,InstituteforLibertyand
Democracy,Peru“The
blockchainistotrustastheInternetistoinformation.LiketheoriginalI
nternet,blockchain
haspotentialtotransformeverything.Readthisbookandyouwillunde
rstand.”
—JoichiIto,Director,MITMediaLab
“Inthisextraordinaryjourneytothefrontiersoffinance,theTapscotts
shednewlightontheblockchain

6. phenomenonandmakeacompellingcaseforwhyweallneedtobetteru
nderstanditspowerandpotential.”
—DaveMcKay,PresidentandCEO,RoyalBankofCanada
“Deconstructsthepromiseandperiloftheblockchaininawaythatisat
onceaccessibleanderudite.
BlockchainRevolutiongivesreadersaprivilegedsneakpeakatthefut
ure.”
—AlecRoss,author,TheIndustriesoftheFuture
“Ifevertherewasatopicfordemystification,blockchainisit.Togethe
r,theTapscottshaveachievedthis
comprehensivelyandindoingsohavecapturedtheexcitement,thepot
ential,andtheimportanceofthis
topictoeveryone.”
—BlytheMasters,CEO,DigitalAssetHoldings
“ThisisabookwiththepredictivequalityofOrwell’s1984andthevisi
onofElonMusk.Readitorbecome
extinct.”
—

7. TimDraper,Founder,DraperAssociates,DFJ,andDraperUniversity
“Blockchainisaradicaltechnologicalwaveand,ashehasdonesooften
,Tapscottisoutthere,nowwith
sonAlex,surfingatdawn.It’squitearide.”
—
YochaiBenkler,BerkmanProfessorofEntrepreneurialLegalStudies
,HarvardLawSchool
“Ifyouworkinbusinessorgovernment,youneedtounderstandtheblo
ckchainrevolution.No
onehaswrittenamorethoroughlyresearchedorengagingbookonthist
opicthanTapscott
andTapscott.”
—
ErikBrynjolfsson,ProfessoratMIT;coauthorofTheSecondMachine
Age
“Anindispensableandup-to-the-
minuteaccountofhowthetechnologyunderlyingbitcoincould—and
should—
unleashthetruepotentialofadigitaleconomyfordistributedprosperit
y.”

8. —
DouglasRushkoff,authorofPresentShockandThrowingRocksatthe
GoogleBus
“Technologicalchangethatusedtodevelopoveragenerationnowhits
usinarelativeblinkof
theeye,andnoonetellsthisstorybetterthantheTapscotts.”
—EricSpiegel,PresidentandCEO,SiemensUSA
“FewleaderspushustolookaroundcornersthewayDonTapscottdoes.
WithBlockchainRevolutionhe
andhissonAlexteachus,challengeus,andshowusanentirelynewway
tothinkaboutthefuture.”
—BillMcDermott,CEO,SAPSE
“BlockchainRevolutionisabrilliantmixofhistory,technology,ands
ociologythatcoversallaspectsofthe
blockchainprotocol—
aninventionthatintimemayproveasmomentousastheinventionofpri
nting.”
—JamesRickards,authorofCurrencyWarsandTheDeathofMoney
“BlockchainRevolutionservesasanatlastotheworldofdigitalmoney

9. ,masterfullyexplainingthecurrent
landscapewhilesimultaneouslyilluminatingapathforwardtowarda
moreequitable,efficient,and
connectedglobalfinancialsystem.”
—JimBreyer,CEO,BreyerCapital
“BlockchainRevolutionistheindispensableanddefinitiveguidetoth
isworld-changingtechnology.”
—JerryBrito,ExecutiveDirector,CoinCenter
“Incredible.Reallyincredible.TheTapscotts’examinationoftheblo
ckchainasamodelforinclusioninan
increasinglycentralizedworldisbothnuancedandextraordinary.”
—SteveLuczo,ChairmanandCEO,SeagateTechnology
“Makesapowerfulcaseforblockchain’sabilitytoincreasetransparen
cybutalsoensureprivacy.Inthe
authors’words,‘TheInternetofThingsneedsaLedgerofThings.’”
—
ChandraChandrasekaran,CEOandManagingDirector,TataConsult

10. ancyServices
“Theepicenteroftrustisabouttodiffuse!Thedefinitivenarrativeonth
erevolutionarypossibilitiesofa
decentralizedtrustsystem.”
—FrankD’Souza,CEO,Cognizant
“Identifiesaprofoundnewtechnologymovementandconnectsittoth
edeepestofhumanneeds:trust.
Thoroughlyresearchedandprovocativelywritten.Everyseriousbusi
nesspersonandpolicymakerneedsto
readBlockchainRevolution.”
—
BrianFetherstonhaugh,ChairmanandCEO,OgilvyOneWorldwide
“BlockchainRevolutionsetsthetableforawaveoftechnologicaladva
ncementthatisonlyjustbeginning.”
—
FrankBrown,ManagingDirectorandChiefOperatingOffice,Genera
lAtlantic
“Amustread.You’llgainadeepunderstandingofwhytheblockchaini
squicklybecomingoneofthemost

11. importantemergingtechnologiessincetheInternet.”
—
BrianForde,DirectorofDigitalCurrencyInitiative,MITMediaLab
“Blockchaintechnologyhasthepotentialtorevolutionizeindustry,fi
nance,andgovernment—amustread
foranyoneinterestedinthefutureofmoneyandhumanity.”
—
PerianneBoring,FounderandPresident,ChamberofDigitalCommer
ce
“Whengenerationaltechnologychangestheworldinwhichwelive,w
earetrulyfortunatetohave
cartographerslikeDonTapscott,andnowhissonAlex,toexplainwher
ewe’regoing.”
—
RayLane,ManagingPartner,GreatPointVentures;PartnerEmeritus,
KleinerPerkins
“DonandAlexhavewrittenthedefinitiveguidebookforthosetryingto
navigatethisnewandpromising
frontier.”

12. —
BenjaminLawsky,FormerSuperintendentofFinancialServices,Stat
eofNewYork;CEOof
TheLawskyGroup“BlockchainRevolutionisanilluminating,critica
llyimportantmanifesto
forthenextdigitalage.”
—
DanPontefract,authorofThePurposeEffect;ChiefEnvisioner,TEL
US
“Themostwell-
researched,thorough,andinsightfulbookonthemostexcitingnewtec
hnologysincethe
Internet.Aworkofexceptionalclarityandastonishinglybroadanddee
pinsight.”
—AndreasAntonopoulos,authorofMasteringBitcoin
“BlockchainRevolutionbeautifullycapturesandilluminatesthebrav
enewworldofdecentralized,trustless
money.”
—

13. TylerWinklevoss,Cofounder,GeminiandWinklevossCapital“Afas
cinating—and
reassuring—
insightintoatechnologywiththepowertoremaketheglobaleconomy.
Whata
prize.Whatabook!”
—PaulPolman,CEO,Unilever
CONTENTS
AlsobyDonTapscott
TitlePage
Copyright
Dedication
PraiseforDonTapscottandAlexTapscott
Acknowledgments
Preface
PARTI:SayYouWantaRevolution
CHAPTER1:TheTrustProtocol
InSearchoftheTrustProtocol

14. HowThisWorldwideLedgerWorks
ARationalExuberancefortheBlockchain
AchievingTrustintheDigitalAge
ReturnoftheInternet
YourPersonalAvatarandtheBlackBoxofIdentity
APlanforProsperity
PromiseandPeriloftheNewPlatform
CHAPTER2:BootstrappingtheFuture:SevenDesignPrinciplesof
theBlockchainEconomy
TheSevenDesignPrinciples
1.NetworkedIntegrity
2.DistributedPower
3.ValueasIncentive
4.Security
5.Privacy
6.RightsPreserved
7.Inclusion
DesigningtheFuture

15. PARTII:Transformations
CHAPTER3:ReinventingFinancialServices
ANewLookfortheWorld’sSecond-OldestProfession
TheGoldenEight:HowtheFinancialServicesSectorWillChange
FromStockExchangestoBlockExchanges
Dr.Faust’sBlockchainBargain
TheBankApp:WhoWillWininRetailBanking
GoogleTranslateforBusiness:NewFrameworksforAccountingand
CorporateGovernance
Reputation:YouAreYourCreditScore
TheBlockchainIPO
TheMarketforPredictionMarkets
RoadMapfortheGoldenEight
CHAPTER4:Re-architectingtheFirm:TheCoreandtheEdges
BuildingConsenSys
ChangingtheBoundariesoftheFirm
DeterminingCorporateBoundaries
CHAPTER5:NewBusinessModels:MakingItRainonthe
Blockchain
bAirbnbVersusAirbnb
GlobalComputing:TheRiseofDistributedApplications
TheDAppKings:DistributedBusinessEntities

16. AutonomousAgents
DistributedAutonomousEnterprises
TheBigSeven:OpenNetworkedEnterpriseBusinessModels
HackingYourFuture:BusinessModelInnovation
CHAPTER6:TheLedgerofThings:AnimatingthePhysical
World
PowertothePeople
TheEvolutionofComputing:FromMainframestoSmartPills
TheInternetofThingsNeedsaLedgerofThings
TheTwelveDisruptions:AnimatingThings
TheEconomicPayoff
TheFuture:FromUbertoSUber
HackingYourFutureforaWorldofSmartThings
CHAPTER7:SolvingtheProsperityParadox:EconomicInclusion
andEntrepreneurship
APigIsNotaPiggyBank
TheNewProsperityParadox
RoadMaptoProsperity
Remittances:TheStoryofAnalieDomingo
BlockchainHumanitarianAid

17. SafeasHouses?TheRoadtoAssetOwnership
ImplementationChallengesandLeadershipOpportunities
CHAPTER8:RebuildingGovernmentandDemocracy
SomethingIsRottenintheState
High-PerformanceGovernmentServicesandOperations
EmpoweringPeopletoServeSelvesandOthers
TheSecondEraofDemocracy
BlockchainVoting
AlternativeModelsofPoliticsandJustice
EngagingCitizenstoSolveBigProblems
WieldingToolsofTwenty-first-CenturyDemocracy
CHAPTER9:FreeingCultureontheBlockchain:MusictoOur
Ears
FairTradeMusic:FromStreamingMusictoMeteringRights
ArtleryforArtLovers:ConnectingArtistsandPatrons
Privacy,FreeSpeech,andFreePressontheBlockchain
GettingtheWordOut:TheCriticalRoleofEducation
CultureontheBlockchainandYou
PARTIII:PromiseandPeril

18. CHAPTER10:OvercomingShowstoppers:TenImplementation
Challenges
1.TheTechnologyIsNotReadyforPrimeTime
2.TheEnergyConsumedIsUnsustainable
3.GovernmentsWillStifleorTwistIt
4.PowerfulIncumbentsoftheOldParadigmWillUsurpIt
5.TheIncentivesAreInadequateforDistributedMassCollaboration
6.TheBlockchainIsaJobKiller
7.GoverningtheProtocolsIsLikeHerdingCats
8.DistributedAutonomousAgentsWillFormSkynet
9.BigBrotherIs(Still)WatchingYou
10.CriminalsWillUseIt
ReasonsBlockchainWillFailorImplementationChallenges?
CHAPTER11:LeadershipfortheNextEra
WhoWillLeadaRevolution?
TheBlockchainEcosystem:YouCan’tTellthePlayersWithoutaRost
er
ACautionaryTaleofBlockchainRegulation
TheSenatorWhoWouldChangetheWorld
CentralBanksinaDecentralizedEconomy

19. RegulationVersusGovernance
ANewFrameworkforBlockchainGovernance
ANewAgendafortheNextDigitalAge
TheTrustProtocolandYou
Afterword
Notes
Index
ACKNOWLEDGMENTS
Thisbookcamefromthemeetingoftwomindsandtwolifetrajectories.
Don
hadbeenleadinga$4millionsyndicatedresearchprogramcalledGlob
al