Why The Blockchain Is Past Being Just A Fad

Blockchain technology is being touted by people everywhere to be a bubble, a tulip craze and a fad.

Posted by Jonathan on January 25, 2018

Image Credit: geckoandfly.com

Blockchain technology is being touted by people everywhere to be a bubble, a tulip craze and a fad. While some of these people actually do think that way, the other people in this group include existing giants attempting to halt or slow the progress of blockchain technology because they see that it’s precisely the opposite of a fad. These are angry giants that have built up empires in their respective industries which will be challenged and disrupted by blockchain, and these giants have giant toes that do not like being stepped on. Realistically, these angry giants are a real barrier to widespread adoption and have the money and power to stand their ground for some time. But as the technology continues to improve and as existing blockchain projects mature and create highly-efficient new markets, this barrier will begin to diminish. Since the birth of Bitcoin in 2008, blockchain technology has come a long way. Just look at the explosion of companies and projects exploring and going deep into blockchain, including existing giants like IBM, Wal-Mart and Visa, and you can see that we’re long past the stage of being just a fad.

To help illustrate the stage of growth of blockchain technology today, I’ll be using ideas borrowed from this beautiful article on Neuralink, a company started by Elon Musk looking to create Brain-Machine Interfaces (BMIs) written by Tim Urban. These BMIs essentially allow us to transmit ideas to each other at a pace limited not by our reading and typing speeds, but only by the speed at which we can convey ideas via the neurons in our brains from one person to another directly via these BMIs. It’s an incredibly lengthy article, but the main concepts I will be borrowing will be the idea of improving the bandwidth of humans to perform more meaningful tasks by automating/eliminating less meaningful ones, and Elon’s strategy of catalysing the world’s next major project by showing the world that his grandiose visions are actually achievable. I’m not at all saying that Elon Musk is working on blockchain technology, he isn’t (as far as I’m aware) and prefers not to comment on it because it’s not his area of expertise. Instead, I’m drawing parallels in Elon’s strategy and how it is already being applied to blockchain technology today.

Elon Musk Company Formula
Elon Musk is working on 3 main goals: cleaner, sustainable energy through electric cars (Tesla), Planetary travel/colonisation (SpaceX), and enhancing human collaboration by linking us directly via the brain (Neuralink). After solidifying each of these goals, he then works backwards to create a catalyst that in turn engages an entire industry to work on said technology together. See the image below for an illustration.

Image credit: https://waitbutwhy.com/2017/04/neuralink.html

Starting Point (blue circle):
This represents the beginning of an idea/technology. In the blockchain world, the starting point of this whole revolution was Satoshi Nakamoto’s paper on Bitcoin and the world’s first distributed ledger. There’s no need for me to go too deeply into this.

Sustainable Business Model (red box):
This represents an operation or business that utilises the idea/technology in the starting point. The sustainable business model in this case are cryptocurrencies. I’m not referring to a specific cryptocurrency in particular, it really doesn’t matter. Cryptocurrencies are being used to fund blockchain projects all over the world, opening up new possibilities that allow the projects with the best potential to scale even larger and do so faster. Cryptocurrencies as an application of blockchain is so sustainable that the creator of Litecoin, Charlie Lee, has decided that he doesn’t need to hold on to any of his personal Litecoins anymore. He decided to sell (almost) all his Litecoins away and donate to the Litecoin Foundation to further support its development, while at the same time dispelling negative rhetoric that he’s in it for personal monetary benefit. He’s spending his time focusing on using Litecoin in the way it’s meant to be used, for day-to-day transactions.

Match That Ignites An Industry (Pink Box):
This represents a catalyst that could be a breakthrough in a technology, whereby this breakthrough opens up massive disruptive potential in an industry. The match that ignites an industry would be Smart Contract and Decentralized Application (dApp) platforms like Ethereum, NEO, et cetera. It’s the platform that is currently driving and enabling blockchain innovation and applications, with worldwide collaboration since it’s decentralised in nature. Since the advent of these platforms, thousands of dApps have begun development, some with excellent potential and some others are just scams.

Goal, Results Of The Goal, Increased Chance Of A Good Future (Top Row):
All the positive benefits of blockchain will be in the top row of the illustration. Decentralisation is one of the goals of blockchain technology, automation of various tedious processes is a result of said goal, which will lead to an increased chance of a good future due to better utilisation of the human brain by increasing humanity’s total bandwidth. Bandwidth is one big challenge cited by Elon in his pursuit for these Brain-machine Interfaces. Blockchain tech is as a whole getting rid of as many middlemen and fostering much closer collaboration with as little administrative paperwork as possible performed by humans. Instead, it utilizes the capacity and creativity that we harness on ideas and further development, hopefully to a point that helps make these BMIs a reality.

Where We’re At Today

Currently, blockchain in the media is all about Bitcoin / Ethereum / Litecoin’s massive rise or dips due to news that governments are looking to ban it, and most people are getting on the train for financial reasons. The cryptocurrency market is now large enough to support hundreds of multi-million dollar projects. Actual utility is being built and is being supported by some entrepreneurs with the vision and resolve to improve society, and let’s be frank, the opportunity to make it big. In starting a company, you first need money. To start the cycle of disruption with blockchain, you’ll first need financial backing. The first applications were cryptocurrencies and they targeted and worked on the foundations of financial infrastructure which would feed the development of applications. The match has just been ignited and the ICO boom we’re in is the reaction of the technology industry to the match being lit. We’re at the pink box “match that ignites an industry” and are only starting up the yellow arrow  of Industry Innovation (see “Elon Musk Company Formula” image).

Even if Bitcoin does crash, a more efficient cryptocurrency will rise from the ashes and take its place before you can even say the words “I told you so”.

Gutenberg’s press revolutionized the circulation of information and ideas. The industrial revolution multiplied human productivity through automation. The internet cut out tons of middlemen and accelerated human collaboration via email and instant messaging. Blockchain is going to further improve our collaboration by another order of magnitude by further automation and smart contracts, but don’t just take my word for it. Follow the money, follow the trail of innovation and human effort.

Soon, it’ll be an indispensable part of our lives without us even realising it.