Blockchain — Why does it matter?

Blockchain is not merely yet another technology. Imagine being born in the time when a combustion engine was invented and railroads were mass adopted in the 1800s. It fundamentally transformed trade, commerce, transportation, travel, and war. It impacted how we as humans exchanged ideas, how we created people connections, what we bought, what we ate, where we migrated and essentially life as we knew it. Some call that ‘state of civilization’.

Think if the invention of the engine and railroads revolution didn’t happen, industrial revolution may not have happened. We stand at the same juncture of human evolution.

To view Blockchain, made possible by advances in ‘military grade’ cryptography, as yet another incremental technology is sadly myopic. It ushers with it a sense of inclusiveness, global impact and an openness, in-fact eagerness, to collaboration, further enabling application in adjacent spaces like Artificial Intelligence (AI), Internet of Things (IOT), Distributed computing, Virtual Reality (VR), and Augmented Reality (AR). Producing a ripple effect that cannot but capture our imagination. Imagination was perhaps the key element in the Wright brother’s quest to fly in the early 1900s.

Beyond merely a technical wave, it unleashed grassroots innovation with the spirit of ease of spinning up business models as experiments and learning from them at a rate and scale we haven’t seen before. When we look back upon this era, the Internet age will seem to pale in comparison. To me “Business” is perhaps the only discipline where we don’t just “experiment” and are “allowed” to fail and learn from it. Well, I can hear Silicon Valley folks disagreeing, but you get the point.

Blockchain coupled with the power of immutability, provenance, cryptographically codifying assets, propagated by a socially diverse inclusive network, a defined consensus mechanism, tokenization, emerging crypto-economics opens doors to trustless decentralized economic models.

Now I am certainly not the first one to say this or see this. I think a lot of people have had this experience of when it clicks, they just see visions. I join the legion of believers. You might find me screaming from the rooftop, evangelizing, praising the virtues, making the skeptics see the light. Maybe even find love in their hearts. Yet my faith isn’t blind.

So a few days ago I was having a meeting in a local Atlanta coffee shop with some clients.

As I get into to parking lot, I feel a tap on my shoulder. A young lanky man says that he heard the stuff I was preaching and it fascinated him. He continued, in a frantic voice, that he was inside the coffee shop with his ‘manager’ and was supposed to be working but he has these 12 tabs open about blockchain/cryptocurrencies and can’t stop researching on it. He’s a recent graduate, a transplant to Atlanta, and wanted to pick my brain to learn more about this.

I admired his curiosity and initiative and agreed to meet him in a few days. Secretly, I enjoy these freewheeling brainstorming intellectual debates anyways. The man true to his word sent me an email outlining a few questions he has been wondering about in his quest to seek answers.

Let’s explore his questions (with his permission)

-How do you react when Beijing announces they will shut down Bitcoin trading and Jamie Dimon reacts as harshly as to say “Bitcoin is a fraud”?

Jamie Dimon: ”Bitcoin is fraud”.
Me: Sure, I’ll let Bitcoin know.
Bitcoin: You think I care bro?

The algorithm does not care.

Jamie Dimon: ”Bitcoin is fraud”.
Bitcoin: Jamie who?

This is what feeling powerless sounds like. This is what slowly being obsolete sounds like.

Bitcoin as a technology stack and dominant cryptocurrency have different avatars. Distinct and linked trajectories.
Bitcoin, as an adopted cryptocurrency with the biggest market cap may fail someday. Some other better version would emerge.

Bitcoin has been the most successful, most brand-recognized, most secure ( fingers crossed) implementation of blockchain now for almost 8 years in a row. Its specific implementation of Blockchain with following design features — borderless peer-to-peer third party interference resistant permission-free immutable cryptographic protocol connecting nodes.
Try putting this genie back in the bottle!

Regulatory framework response usually lags a couple of phases behind innovation. It is usually is triggered by some dramatic event. Theoretically, it does have potential to enhance or kill innovation. In a lot of cases, it did.

-Remember the prohibition? If you tell me not to do something, I’ll find a way to do it.

-This Cryptocurrency space is geopolitical chess. It has been since perhaps the days when precious metals were used as currency. One country’s ban is another country’s boon. Fearless explorers will find lands to seek treasures. That’s what explorers do. To counter, as they say, all politics is local. Each country would look at these developments, and proclaim policy from their inside-out prism.

Case in point, review these various country’s ICO outlooks:

Thailand
China
Estonia

Bitcoin and Ethereum, are essentially a borderless peer-to-peer network of nodes. Mining does bring in a certain degree of centralization, hence when regulation becomes an obstacle, I see the ecosystem nimble enough to find an oasis in new far away distant lands.

If regulatory climate becomes harsh, in the boundaries of one country, you will see the rise in anonymous technologies like Monero, Dash and Z-cash etc.

-How much trust can we place in a system whose creator is anonymous and whose infrastructure is bound to have bugs that could be exploited?

In the words of my favourite​ author and speaker on the topic — Andreas m. Antonopoulos — paraphrased — “We don’t know who Euclid was. Was he a pervert or a saint? Euclidean geometry works regardless! ”

Sidenote — I’m a big fan of Mr. Andrea’s work. My thinking has been influenced by his ideas and articulation on the topic.

-What if governments and financial institutions, instead of opposing Bitcoin like they have traditionally done, embrace Bitcoin and blockchain and become the biggest owners, funders, and drivers of the development? Does that not defeat the purpose of blockchain as a means of establishing trust and breaking from the traditional model (Dubai blockchain goal by 2020)? Is blockchain prepared to counter that?

Some will. They should. Not because it’s Us vs Them. More prudently because the technology stack allows to do things cheaper, better, faster. Infact it enables them to do things they didn’t think can be done.

Let me introduce you to a technology called “Car” —  Now does the Car care about the intended destination of its driver? Does its operational ability change based on moral, political, social state of the driver?
The “purpose” of Blockchain and the Car is to function as designed.

The philosophy, ideals, vision of the first explorers, early believers in the space might seem anarchist, utopian or radical from some perspective. Regardless it provided for incubation, chaotic experimentation, genetic adaptation, deployment, and adoption of this technology and its ecosystem. This book chronicles the journey -

Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper

That vision will thrive. What will also thrive is, the deployment of these technologies, for different use cases with a set of distinct values, with new participants, for a varied archetype of users. Like with the internet, people will envision their world while pushing the envelope. Mark of human ingenuity. Don’t worry humans are still in charge. Okay well at-least involved. Not for long though. I digress.

This is just the beginning.I believe we will see all of those formats evolve. We’ll live in the world of multiple options. The good news is now a non-third party trust option exists.

-For blockchain more broadly, are there any industries it would not touch and revolutionize? How quickly do you see this technology moving forward and being adopted by businesses and society?

Any intermediaries will be disintermediated. Companies that are in the middle of supply chain and do not add value, are in the path of this hurricane. You know who you are.

Companies that were the only ( read monoployish) “trusted third parties” to enable exchange between buyers and sellers are at risk. They will be made obsolete. Unless to choose to cannibalize their own business models, restructure their supply chains, and execute with the speed of tiger pouncing on its prey. Its Darwinism in wild. The most adaptable will survive. The rest will be put on the plaque along with RIM, Blockbuster, Lotus, Tower Records.
-How do you think the world of business will change moving forward and what can I do now to prepare and adapt to those changes?

The best way to prepare is to quit being a mere amused spectator, watching the game being played on your screen. Jump on the field, be a participant, a player, find the plays that work. As they say at Burning Man, this is not a spectator sport. * You are the art. You are the experience.
The ten principles of burning man.