In this final episode of the trilogy, LinkedIn's Read Hoffman and Joi Ito, director of the Media Lab at MIT, concluded their discussion before the Churchill Club in San Jose, Calif., and made profound points on the disruptive effect bitcoin can have on the financial services industry as well as changes looming for the traditional model of university education:

Hoffman eventually came to the question everyone was waiting for: what is the Lab doing with bitcoin, and how have accountants become sexy?

Ito explained that students formed a Bitcoin Club and raised $500,000 from philanthropists to pursue what Ito calls the "hacking" of ledger-based bookkeeping, to replace a bearer-based cash system into a ledger system, which he sees as the essence of Bitcoin.

A friend of Ito named Jay Dwivedi, CIO of Shinsei Bank, has devised a way to eliminate 90 percent of the cost of banking in 18 months by completely redesigning the systems. Ito stressed that the only reason this could be done is that the designer is an accounting genius and a computer science genius. Dwivedi had flunked an accounting course, but then he realized how important it is and became obsessed by it. (Writer's note: Bankers, banking regulators and financial lobbies abhor accounting and have waged a campaign against it for years.)

Ito blames a lack of appreciation of accounting for keeping the banking industry "so behind." He predicted that bitcoin would touch off a wave of renewed attention that would divert more brainpower to the neglected area of accounting. Ito himself is on the audit committee of The New York Times, and he said the experience has made him more aware of "how unviewable our financial system is."

Hoffman foresees a network of distributed systems that will grow out of these studies.

Finally, Hoffman addressed the implications of the reduction of computing cost for the universities themselves as they are subjected to Schumpeterian disruption.

Ito's analysis is that the educational system is "not preparing people to be fully functional." He blamed this on companies that are hiring based on the credentials of individuals, conferred on the basis of standardized tests, with little weight given to collaboration, whereas success depends on the ability to aggregate knowledge in a way that adds value based on "the ability to produce, the ability to think, the ability to ask questions."

He contended that the robotic memorization that occurs in universities is of less importance now that the basic documents are close at hand through mobile devices that enable people "to move away from packing knowledge into your brain into being creative."

Hoffman faulted universities by asking, are massive open online courses (MOOCs) sufficient, a question he dismissed with, "Of course they're not sufficient." Hoffman called for innovation that can "change the path of outcomes, both in cost and results."

Ito sees MOOCs as a more efficient way of delivering knowledge, but he argued that the accessibility of knowledge enables more time to be spent applying it, as in designing open-source software, and engaging in group teaching and learning. He also criticized the emphasis by students on getting the degree so that they can get out of school.

(Archived video can be found here.)