The Torrent Parallel

In 2008 I was a junior product manager at Universal in Oslo, right in the middle of the torrent years. The product had become a file anyone could copy for free, and the industry answered with lawsuits, copy protection and campaigns telling people that downloading was theft. All of it was about protecting distribution, because distribution was the business.

Then streaming made paying easier than pirating, and the industry came back on completely different terms. The labels that had spent a decade fighting the new rails ended up licensing their catalogues to them.

I think finance is following the same script, ten or fifteen years behind. Money became information a long time ago. Banks are distribution businesses: they control the rails, the custody and the access. Bitcoin does to those rails what BitTorrent did to the CD. It makes them optional.

And the reaction looks very familiar. Lawsuits, warnings, campaigns about criminals and scams, years of trying to protect the old distribution model. Then the ETFs came, which to me looks a lot like the labels licensing their catalogue to Spotify. The incumbents stopped fighting the new rails and started selling through them.

The parallel has limits. Governments depend on money in a way they never depended on CDs, so this fight will be harder and longer. Still, if you want to guess what happens next in finance, the music industry from 2000 to 2015 is the best map I know.