The Blockchain has the potential to change our world. It is hiring humans, true but at the moment it is not even a Vector of Disruption.
If you are interested in Bitcoin, the more famous sibling of the Blockchain, you should read this article Bitcoin’s Value Isn’t Currency, It’s Technology which sums up almost all that you need to know.
The article does not mention three fundamental flaws to Bitcoin:
- It has a shady past. Invented by an unknown figure or figures who disappeared. Who knows when they will re-appear?
- It depends on bitcoin miners (video) to spend energy (literally) to keep it going. At some point the energy costs will become higher than the amount gained from producing the bitcoin.
- What happens when all the bitcoin are in circulation (there is a real limit of 21 million bitcoin). At that point the block chain runs out of money to pay the humans with. Even now the number of bitcoins paid to miners is dropping by half every four years.
But really you need to think a bit deeper about the Blockchain.
To me the Blockchain is interesting as it is the first software that is autonomous
- It is not controlled (as far as we know) by anyone now that it is distributed on the internet.
- It would be extremely hard for anyone to eradicate. No Government would have the power to eradicate it.
- It produces bitcoins which it pays humans to keep itself going.
Sound a bit like SkyNet – the autonomous network that fought the humans in Terminator films?
Well it is not sentient so I think we have a few more iterations to work out some of the issues before we have to worry about that. However not everyone agrees:Elon Musk funding AI-related R&D programs to combat the creation of Skynet.
But it is a harbinger of things to come. Why should autonomous, self owning, trading platforms be impossible? How about autonomous cars that work as taxis to pay for their own fuel and repairs. After a while a taxi could save up and have another taxi built.
But these are not Vectors of Disruption. Yet.
At Manage Disruption we look at technology which Corporates and Startups can use to develop new business models. You cannot take technology in isolation so one must also consider what is often termed “timing”. “Timing” is a simple term to incorporate the environment and the attitudes of the moment. I call all of these Vectors of Disruption.
Recently we have seen powerful Vectors of Disruption based on “reducingFriction” and the “Network effect“. These will continue to be really powerful for years to come. This is especially true when combined with other Vectors of Disruption such as data to drive personalisation and sensors by the million.
The Blockchain has the potential to be a Vector of Disruption but it is not there yet. It is at the Friendster stage of evolution. It is not a FaceBook. Ethereum is the best proponent so far and really – it’s just not that compelling.
One of the features of Vectors of Disruption is that they gain exponential power to be disruptive when they are combined. See this for a worked example.
When the Blockchain is used well to enforce radical transparency we will see vast changes to business models. We can foresee that we are moving away from privacy, recording everything that has happened. This will be moving towards honesty enforced by transparency. I wonder how that will feel.
In conclusion, the Blockchain is interesting but we don’t include it in our “PathFinder” reports (where we make clients aware of new Vectors of Disruption and business models in their markets). Bitcoin, and other crypto currency, can be used as a Vector of Disruption right now (video). But its use is specific and the business advantage is transitory and moving fast – we don’t advise it.