What is it you think Investment Banks do?
What is unclear to me is how many of these financial services (e.g., assisting with stock transfer, IPOs, raising capital, etc.) will continue to thrive in the same way that they have been, mostly unchanged for the past several years, when they can be executed in cheaper, more efficient, decentralized marketplace.
I'd love to expand my understand and be proven wrong though so I welcome feedback on this line of thinking.
Or trading derivatives? Derivatives are either traded on extremely efficient exchanges already (the automation of which put a squeeze on IB profits) or are for very bespoke products. I suppose in this area you can come up with a process for making the bespoke products more efficient via the blockchain but the actual ledger on those things isn't the hard part, its the contracts and risk pricing. Even then, the banks customers seem likely to continue to go to them for the expertise in the bespoke products.
For underwriting securities its not clear how the blockchain makes transactions less risky? Again the mechanics of the ledger are fairly easy and efficient already. I suppose there is room for improvement, but the thing people are going to the IB for, and what generates their profits in this area is actually taking on the risk, which the blockchain does not mitigate.
What a blockchain is useful for is eliminating the need for a centralized, trusted third party. Where I could see this being very helpful, and a potentially disruptive force is in areas like IPOs, mitigating counterparty risk, reducing conflict of interests, etc.
For example, if companies can raise capital and create liquidity for themselves with ICOs, the demand for IPOs will decrease. If investment banks break the "Chinese" wall and engage in market manipulation, then having public companies put their accounting on a public ledger will reduce the dependence on quarterly earnings reports. If more players are able to access the financial systems because they are on public ledgers rather than private ones, it will make it harder to banks to engage in oligopolistic behavior.
None of these things are guaranteed to happen, and certainly they won't all happen overnight. I do see though, the potential for these types of changes to slowly chip away at some of the revenue streams that banks have enjoyed for a long time.